Swedish home appliance company Electrolux (ELUXB.SE) shares loses today almost 16% after the company reported a net loss of SEK 235 million for Q3 2024 vs SEK 123 million gain in Q3 2023. What's even harder for Electrolux is that operating margin contracted from 1.8% to 1% in still high interest rates environment.
- Sales of SEK 33.3 billion came in almost in line with last year result of SEK 33.4 billion; organic growth was offset by f/x losses. However, EBIT results contracted by 42% to 349 million crowns. Analysts at Citi Research flagged a more than 25% miss in operating profit as potentially the most negative surprise.
- Revenue from the North American business, felt by 0.3% YoY vs 0.2% rise expected; pressuring Electrolux pricing. A better-than-expected growth came in surprisingly in Europe and Latin America, and what's worth noting is that organic growth came in at 6.2% YoY cs 4.1% exp.
CEO Samuelson commented that 'Although market conditions remained difficult in Europe and North America, we continued to make progress on our cost-cutting initiatives. Operating income, excluding non-recurring items, improved to SEK 717 million in the quarter, with operating cash flow of SEK 1.1 billion and a strong liquidity position'. Samuelson will step back since 1 January 2025 and will be replaced by Yannick Fierling. Margins on European market came in at 4.2% vs almost 2.1% exp, but Latin America margins came in at 6.5%, below 7.2% estimates. Cash flow came in SEK 1.05 billion vs appx. SEK 500 million projected by Citi.
Start investing today or test a free demo
Open account Try demo Download mobile app Download mobile app- Electrolux downgraded its outlook on “external factors,” to neutral, citing raw material costs (which previously driven its margins). CAPEX for 2024 came in revised down to SEK 5 billion vs 5-6 billion expected earlier. Also, the company does not expect European market strength to persist, despite lower interest rates; it sees Europe as weaken and North America as neutral.
- The company expects pressure on both volumes and prices. Citi Research commented that: “We see double-digit % consensus downgrades for 2024; we’d see 2025 expectations under pressure too,”. Rising iron ore and steel prices as well as energy are the risks.
Electrolux (D1 chart)
Source: xStation5
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
