Highlights of the full-year of 2021
- In full-year 2021, strong price execution and attractive product and brand offering resulted in record net sales of SEK 125,631m (115,960), operating income excl. non-recurring items of SEK 7,528m (5,778), and operating margin excl. non-recurring items of 6.0% (5.0). Income for the period excl. non-recurring items was SEK 5,220m (3,988).
Highlights of the fourth quarter of 2021
- In the fourth quarter 2021, net sales amounted to SEK 35,372m (33,902) and operating income to SEK 882m (2,498), corresponding to a margin of 2.5% (7.4).
- Operating income includes costs of SEK 727m, relating to arbitration in U.S. tariff case, impacting the business area North America. Excluding this non-recurring item, operating income amounted to SEK 1,609m, corresponding to a margin of 4.5% (7.4).
- Price offset significant cost inflation. Global supply chain constraints continued to limit product availability and result in higher costs.
- Income for the period amounted to SEK 596m (1,860) and earnings per share was SEK 2.09 (6.47).
- Operating cash flow after investments was SEK 2,103m (5,364).
- The Board proposes a dividend for 2021 of SEK 9.20 (8.00) per share, to be paid in two equal installments.
- The Board proposes the AGM 2022 to resolve on cancellation of repurchased shares and to renew the mandate to acquire own shares. The Board intends to thereafter initiate a new share buyback program for an amount of approximately SEK 2.5bn.
President and CEO Jonas Samuelson’s comment
I am proud of what we have achieved in 2021. We delivered record sales and earnings and met or exceeded all our financial targets through an attractive product and brand offering, and we successfully offset significant cost inflation through strong price execution. In 2021, sales growth was 14.3%, operating margin excl. non-recurring items 6.0% and return on net assets 28.5%. One other important achievement was that already this year we almost reached our 2025 science-based climate target for our own operations – to reduce CO2 emissions by 80%.
The second year of the pandemic presented different opportunities and challenges – increasing production to meet strong demand, while managing higher input material prices as well as global supply chain constraints. In the fourth quarter, these constraints resulted in significantly higher costs for express logistics and spot buys compared to an already high level in the third quarter, and had a similar impact with regards to planned production output. Despite this, I am pleased how we managed to increase sales of our higher margin products and started the ramp-up in three additional factories, on top of the two that are already up and running within our SEK 8bn re-engineering investment program. Sales growth in the fourth quarter was 4.9% and operating margin excl. non-recurring items was 4.5%.
Looking into 2022, we expect demand levels to be above pre-pandemic levels, as people are likely to continue to invest in their homes. We assess market demand in terms of value to increase in all regions in 2022. However, compared to strong 2021 levels we don’t expect demand growth in terms of units in all regions. Global supply chain constraints are expected to continue to impact the industry’s ability to fully meet demand. We are collaborating closely with our suppliers to mitigate these constraints, but we estimate that the first quarter will be at least as challenging as the fourth quarter 2021, with significant risks of disruptions relating to the resurgence of the coronavirus. We expect sequential improvements from mid-2022.
In 2021, the volume/price/mix contribution to operating income was nearly SEK 9bn. We expect this organic year-over-year contribution to be even higher in 2022, mainly driven by price but also increased sales of innovative high margin products and aftermarket solutions.
For the 2022 full year, price is estimated to fully offset cost inflation, mainly in raw material, electronic components and logistics. Over the past four years, we have offset this type of cost inflation with price. Given recent acceleration in cost inflation, we are implementing further price increases in early 2022. However, due to timing differences we expect price to only partly offset cost inflation in the first quarter.
Cost efficiency in 2022 is expected to be negative in total, as significant benefits from the re-engineering program are more than offset by the cost inflation on logistics and components.
2022 will be the most intense product launch year ever, partly enabled by our re-engineering program. This gives us confidence that consumer demand for our products will remain healthy and provides us with a great platform to drive mix improvements. We intend to invest more in innovation and marketing to support these launches. In recent years, mix improvements have contributed an average of SEK 1bn to operating income.
In addition to the total cash distribution of SEK 25 per share that was paid out in 2021, more than 4.3 million shares, corresponding to 1.4% of total shares, were bought back in the fourth quarter. As previously communicated, it is the Board’s intention to continue with share buybacks over time. In line with this, the Board has today announced its intention to proceed with a new share buyback program after the AGM 2022 for an amount of approximately SEK 2.5bn.
The increased distribution to shareholders underlines the efficiency and flexibility with which Electrolux has managed market volatility during the two pandemic years. I would therefore like to take this opportunity to thank all my colleagues warmly for their hard and diligent work. As the pandemic continues into 2022, we will continue to create value – safely and sustainably.
Telephone conference 09.00 CET
A telephone conference is held at 09.00 CET today, January 28. Jonas Samuelson, President and CEO and Therese Friberg, CFO will comment on the report.
Details for participation by telephone are as follows:
Participants in Sweden: +46 8 566 426 51
Participants in UK/Europe: +44 3333 000 804
Participants in US: +1 631 9131 422
Pin code: 33623325#
Slide presentation for download:
Link to webcast:
For further information, please contact:
Sophie Arnius, Head of Investor Relations +46 70 590 80 72
Åsa Öhman, Electrolux Press Hotline, +46 8 657 65 07
This is information that AB Electrolux is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 0800 CET on January 28, 2022.