Electrolux reported itds third quarter 2023 results. The company’s net sales amounted to SEK 33,427 million, recording an organic sales decline of 7.9%, mainly driven by continued weak market demand and consumers shifting to lower price points. Mix was positive, supported by the innovative product offering, despite this market shift. Price was negative year-over-year as promotional activity has returned to high levels this year.
«Organic sales declined by 7.9% in the third quarter – commented Electrolux president and CEO Jonas Samuelson –. Like in the previous quarter, volumes declined significantly and as expected, net price was negative. We continued to execute well on the Group-wide cost reduction and North America turnaround program. However, the challenging market environment with demand mainly driven by forced replacements, consumers shifting to lower price points and high promotional activity, offset most of the SEK 2.4bn cost savings. Underlying operating income increased to SEK 314m compared to break-even in the third quarter of 2022. Operating cash flow after investments was SEK 1.1bn».
«With today’s announcement – the president continued – we are stepping up our cost reduction efforts significantly. This also means that we focus our growth efforts on selected mid- and premium categories under our three main brands and drive even more targeted portfolio management and simplification enabling faster cost reductions. Hence, the cost reduction target for 2024 vs 2022 is increased to SEK 10-11bn, compared to the previous target of over SEK 7bn. The new target comprises net cost reductions from cost efficiency and investments in innovation and marketing, combined. For 2023 the target is to reach cost reductions of approximately SEK 6bn, year-over-year, compared to the previous target of at least SEK 5bn. Given the time lag before the actions now put in place will have full earnings impact, we do not expect sequential improvement of underlying operating income in the fourth quarter.»