STOCKHOLM, Jan. 30, 2025 /PRNewswire/ --
Highlights of the full-year of 2024
- In full-year 2024, net sales increased to SEK 136,150m (134,451) and operating income excl. non-recurring items was SEK 1,666m (414). Higher sales volumes and positive mix contributed positively to earnings, driven by the attractive product offering. Cost reduction measures contributed to a SEK 4.0bn positive impact from cost efficiency.
Highlights of the fourth quarter of 2024
- In the fourth quarter, net sales amounted to SEK 37,968m (35,636) and organic sales increased by 11.5% driven by higher volumes and positive mix. Operating income was SEK 1,052m (-3,215), corresponding to a margin of 2.8% (-9.0). Operating income included a non-recurring item of SEK -198m (-2,491) related to business area Europe, Asia-Pacific, Middle East and Africa, and the divestment of the water heater business in South Africa.
- Operating income excl. non-recurring items amounted to SEK 1,249m (-724), corresponding to a margin of 3.3% (-2.0). Higher volumes contributed positively to earnings and favorable mix offset negative price. The positive impact from cost efficiency was SEK 2.0bn. Currency headwinds had a significant negative impact.
- Operating margin excl. non-recurring items in business area Latin America was 8.0% (8.1). In business area Europe, Asia-Pacific, Middle East and Africa the operating margin excl. non-recurring items increased to 4.8% (1.9). Operating income improved in business area North America.
- In the fourth quarter, Electrolux Group divested all of its potential legacy asbestos exposure in the U.S. The transaction had a positive earnings impact of SEK 185m in business area North America in the quarter.
- Income for the period amounted to SEK 150m (-4,113) and earnings per share were SEK 0.56 (-15.23).
- Operating cash flow after investments was SEK 2,660m (3,871). Operating cash flow after investments for the full year was SEK 2,254m (3,064).
- The Board of Directors proposes that no payment of dividend will be made for 2024.
President and CEO Yannick Fierling's comment
After having spent 3 months getting to know Electrolux Group and its stakeholders, I assumed the position as CEO on January 1, 2025. In the fourth quarter, we continued to make good progress on our cost reduction initiatives, and the Group's attractive product offering contributed to an organic growth of 11.5%. Operating margin excluding non-recurring items improved to 3.3% with an operating cash flow after investments of SEK 2.7bn.
Enhanced consumer experiences, agility and speed
Key takeaways from my initial time with Electrolux Group are the strength of our product offering and the clear identity of our brands Electrolux, AEG and Frigidaire. We really know our consumer, evidenced by the high online consumer star ratings for our products. It is essential to truly nurture the local strengths and what differentiates us in the market, while further leveraging our global scale to drive innovation and mix – all in a cost-efficient manner. In addition to offering great products that help consumers make more sustainable choices at home, we need to move even further to experiences, by expanding our customized solutions throughout the consumer journey.
Electrolux Group has a unique culture and legacy that is important to safeguard, while at the same time further increasing speed and agility. A key element of the Group's culture that I aim to support and develop is entrepreneurship. By promoting ownership and accountability, we can empower the entire team, enhance operational efficiency, and improve financial performance.
Sales growth and cost reductions drove earnings improvement
In the fourth quarter, operating income improved significantly supported by a SEK 2.0bn contribution from cost efficiency and organic growth of 11.5%.
Business area Europe, Asia-Pacific, Middle East and Africa reached an operating margin, excluding non-recurring items, of 4.8% (1.9) despite continued subdued discretionary consumer spending in Europe.
In North America good momentum from our new products and improved productivity contributed to an improvement in operating income. I am also very pleased that all of the Group's potential legacy asbestos exposure in the U.S. was divested in the fourth quarter. This transaction provides improved long-term financial visibility for our investors and frees up operational resources. In Latin America performance remained strong in the quarter with an operating margin of 8.0%.
For the Group, the seasonal pattern of our earnings has started to normalize, with the fourth quarter being the strongest during the year. With that in mind, the first quarter is normally weaker than the other quarters.
Demand mainly driven by replacements
The market in Europe continued to be replacement driven and was relatively stable in the fourth quarter, with high promotional intensity. The built-in kitchen market in Europe stabilized at a low level. Promotional activity was high in North America, but Black Friday promotions did not continue throughout December as they did the year before. Despite weak housing markets and with some quarterly volatility, the market increased slightly in 2024, supported by the aggressive pricing environment. The main markets in Latin America grew in the quarter although growth in Brazil slowed somewhat as consumer demand started to accelerate in the fourth quarter 2023.
Outlook for 2025
Looking at 2025, there is an uncertainty stemming from potential impact on demand for home appliances from possible new trade policies in North America. In Europe demand has started to stabilize, but there is a time-lag before lower interest rates and potential improvements in disposable income support an increase in discretionary purchases. Following strong growth in Brazil during 2024 we expect market demand to stabilize in 2025.
On the back of this we expect market demand for core appliances to be relatively neutral in all regions in 2025 compared to 2024.
Organic earnings contribution from volume, price and mix combined for the Group is expected to be relatively neutral in full-year 2025. We anticipate that a high degree of demand will continue to be driven by replacement purchases, which are more price sensitive. Negative price is anticipated to be offset by growth in our focus categories such as premium laundry and kitchen products. Similar to 2024, investments in Innovation and marketing are projected to increase in full year 2025. The intent is to capitalize on the product and services leadership, supported by brand-building, to create value long term.
External factors are expected to be negative for the year, with significant headwinds from currencies. The impact from raw material costs is expected to be essentially neutral.
With reduced product cost across the value chain as the main driver, we anticipate SEK 3.5-4.0bn earnings contribution from cost efficiency in 2025.
Profitability and cash flow in focus
With a robust cash flow in the fourth quarter, a strong liquidity, and a well-balanced maturity profile, the Group's financial situation is stable. Improving earnings and cash flow are top priorities. In North America focus is to improve productivity and reduce cost further while continuing to support the strong product offering.
We will continue to develop and strengthen Electrolux Group for the years to come. Our attractive offering and strong brands together with effectively executed cost-reductions and high-performing organizational set-up, position us well for the future.
Telephone conference 09.00 CET
A telephone conference is held at 09.00 CET today, January 30. Yannick Fierling, President and CEO, and Therese Friberg, CFO, will comment on the report.
To only listen to the telephone conference, use the link:
https://edge.media-server.com/mmc/p/t5j746u2
OR
To both listen to the telephone conference and ask questions, use the link:
https://register.vevent.com/register/BIf2eec702a54847a6abf57e788d2c218c
Presentation material available for download
This disclosure contains information that Electrolux Group is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 30-01-2025 08:00 CET.
For more information:
Maria Åkerhielm, Investor Relations, +46 70 796 3856
Electrolux Group Press Hotline, +46 8 657 65 07
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The following files are available for download:
Interim Report Q4 2024_FINAL |
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