Electrolux warns about its profit and announces a savings plan | Photo credits: A logo sign outside of a facility occupied by Electrolux in Charlotte, North Carolina SIPANY/SIPA
by Marie Mannes
COPENHAGEN, Sept 12 (Reuters) – Electrolux announced a cost-cutting plan on Monday and said it expects profit to fall as rampant inflation and cautious consumers dampen demand for its home appliances.
On the Stockholm Stock Exchange, the title lost 1.2% around 11:35 a.m., after having sold up to 7% in the first exchanges.
Demand for home appliances in Europe and the US declined at a significantly faster pace in the third quarter compared to the previous three months, with high retailer inventories and supply chain disruptions contributing to higher costs, said the Swedish group.
“The group’s profit in the third quarter is expected to decline significantly compared to the second quarter of 2022 also excluding the exceptional charge related to the exit from the Russian market,” he said.
Over the April-June period, Electrolux recorded a lower than expected operating profit of 560 million Swedish crowns (52.7 million euros), penalized by a loss in its business in North America as well as by problems in supply chains.
Europe’s largest home appliance maker, Electrolux said its cost savings program will mainly affect Europe and North America and will have a positive impact on 2023 earnings.
It will provide details on its 2023 cost reduction targets, and potential restructuring charges, when it releases its third quarter financial results on October 28. (Reporting Marie Mannes and Stine Jacobsen; French version Federica Mileo)