Electrolux turns to profit in Q3 but sales down, 3,000 jobs to be cut
2023/10/27
The Electrolux logo at the IFA electronics fair. Fabian Sommer/dpa
Swedish home appliance major Electrolux reported on Friday that its third-quarter income amounted to 123 million Swedish kronor ($11 million), compared to last year's loss of 605 million kronor.
Earnings per share were 0.46 krona, compared to loss of 2.23 kronor a year ago.
Net sales amounted to 33.43 billion kronor, 5% lower than prior year's 35.24 billion kronor. The organic sales decline was 7.9 percent, mainly driven by continued weak market demand and consumers shifting to lower price points.
Separately, the company announced a new organizational setup amid continued weak consumer demand and competitive pressure in the market, which is expected to affect approximately 3,000 positions.
This would result in a restructuring charge in the fourth quarter of 2023 of 2 billion kronor to 2.5 billion kronor.
Electrolux said it is stepping up its cost reduction efforts to restore margins. The actions are expected to result in net cost savings of 10 billion kronor to 11 billion kronor in 2024 vs 2022, compared to the previous cost reduction target of over 7 billion kronor, the company said.
For 2023, the target is to reach cost reductions of approximately 6 billion kronor year-over-year, compared to the previous target of at least 5 billion kronor.
The company will reorganize into three regional business areas and two global product lines reporting to the CEO.
The new product line structure announced today will be effective as of November 1, and the new business area structure as of January 1, 2024.
© Deutsche Presse-Agentur GmbH
Swedish home appliance major Electrolux reported on Friday that its third-quarter income amounted to 123 million Swedish kronor ($11 million), compared to last year's loss of 605 million kronor.
Earnings per share were 0.46 krona, compared to loss of 2.23 kronor a year ago.
Net sales amounted to 33.43 billion kronor, 5% lower than prior year's 35.24 billion kronor. The organic sales decline was 7.9 percent, mainly driven by continued weak market demand and consumers shifting to lower price points.
Separately, the company announced a new organizational setup amid continued weak consumer demand and competitive pressure in the market, which is expected to affect approximately 3,000 positions.
This would result in a restructuring charge in the fourth quarter of 2023 of 2 billion kronor to 2.5 billion kronor.
Electrolux said it is stepping up its cost reduction efforts to restore margins. The actions are expected to result in net cost savings of 10 billion kronor to 11 billion kronor in 2024 vs 2022, compared to the previous cost reduction target of over 7 billion kronor, the company said.
For 2023, the target is to reach cost reductions of approximately 6 billion kronor year-over-year, compared to the previous target of at least 5 billion kronor.
The company will reorganize into three regional business areas and two global product lines reporting to the CEO.
The new product line structure announced today will be effective as of November 1, and the new business area structure as of January 1, 2024.
© Deutsche Presse-Agentur GmbH
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