Q3 2024 Electrolux AB Earnings Call Transcript
Key Points
- Electrolux AB (ELRXF) reported a 6.2% increase in organic sales, driven by higher volumes across all business areas, particularly strong growth in Latin America.
- Operating income improved significantly in Europe-Asia and Latin America, with a notable increase in operating margin in Latin America from 5.6% to 6.5%.
- Cost reduction activities contributed positively, with cost efficiency improvements amounting to SEK1.2 billion year over year.
- Investments in innovation and marketing were increased to support the strong product range, contributing to a positive sales mix.
- The company maintained a solid liquidity position with SEK33.9 billion, including revolving credit facilities, and issued a sustainability-linked loan of USD100 million.
- Price was a negative factor, particularly in Europe and North America, due to weak consumer demand and increased promotional activity.
- Aftermarket sales decreased slightly year over year, mainly due to weather impacts on shipments in the US.
- Higher logistics costs negatively impacted earnings, despite cost reduction efforts.
- The potential divestment value is expected to be below the previously communicated SEK10 billion, affecting strategic divestment initiatives.
- Currency headwinds, particularly from Latin America, negatively impacted earnings, offsetting some of the benefits from lower raw material costs.
Good morning and a warm welcome to the third quarter 2024 results presentation. With me today I have Therese Friberg, CFO; and Oscar Stjerngren from Investor Relations. Before I continue, I'd like to mention that this session is recorded and will be available on our website as an on-demand version.
Organic sales increased by 6.2%, driven by higher volumes in all the group's business areas. Organic growth was strong in left in America, especially in Brazil, which continues on the trajectory started in the fourth quarter of 2023. In Europe, market demand declined slightly, with continued weakness in the important built-in kitchen category. Despite challenging market conditions, volume and mix were favorable, supported by the attractive product offer in the mass premium segment.
Price was negative. partly as a consequence of weak consumer demand in Europe; however, less negative than the market as a whole. In the US, promotional activity increased year over year, although continued to stabilize consequentially.
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