By Mauro Orru
European companies across sectors and markets are citing the
effects of supply chain issues in their latest earnings reports,
with some expecting pandemic-related disruptions, supply
bottlenecks and a shortage of semiconductors to stretch into the
new year. Below is a roundup of comments made by European companies
on supply-chain issues:
German chemicals company BASF SE posted higher sales in the
third quarter, citing significantly higher prices due to strong
demand alongside low product availability and higher prices for raw
materials.
However, it conceded that production and supply-chain
disruptions due to hurricanes in the U.S. and raw material
shortages harmed product market availability.
"BASF assumes that supply bottlenecks will continue to
negatively impact [the] global economic recovery in the fourth
quarter of 2021," it said Wednesday.
French energy-management company Schneider Electric SE said
Wednesday that pressure in global supply chains, such as from
component shortages, increased in the third quarter and are
unlikely to abate for at least another two or three quarters.
The company expects it will continue to face higher input costs
for raw materials, freight and the sourcing of electronic
components, despite the stabilization of some commodity prices in
the third quarter.
"We continue to operate in an increasingly constrained supply
chain environment, globally, resulting in shortages, and increased
input and freight costs, which we continue to manage with our
customers and suppliers. Against this backdrop, we confirm our full
year targets," said Chief Executive Jean-Pascal Tricoire.
German sporting-goods company Puma SE said Wednesday that gross
profit margin in the third quarter climbed but it confirmed that
higher freight rates had a negative effect.
"As a result of the longer-than-expected lockdown in South
Vietnam as well as port congestion and container shortages, the
industry faces delays, which are having a negative impact on Puma's
product supply in the short-term. Puma will continue to maneuver
through these challenges by building on its brand momentum and
operational flexibility," the company said.
Italian aperitif maker Davide Campari-Milano NV said Tuesday
that sales in Asia Pacific rose 30% organically in the first nine
months, with Australian sales up 5.7%. However, it attributed a
normalizing trend in the third quarter to an unfavourable
comparison base, snap lockdowns in the country and some supply
constraints.
"Regarding the outlook for the rest of the year, we expect the
positive brand momentum and favorable sales mix to continue in the
last quarter, helping to partially offset the intensifying input
cost pressure, particularly logistics costs, accelerated brand
building investments, as well as structure costs phasing. Looking
beyond the current year, whilst uncertainty remains in connection
with the evolution of the pandemic and its induced effects such as
logistic constraints and intensified input cost pressure, albeit
mitigated by the improving outlook for agave, we remain confident
of our solid business momentum," Chief Executive Bob
Kunze-Concewitz said.
Swedish home-appliance manufacturer Electrolux AB said Wednesday
that supply-chain constraints hit production output by an estimated
10% during the third quarter and will become even more challenging
in the fourth quarter.
"The tight conditions for electronics and ocean freight also led
to significant temporary cost increases, such as express logistics
and spot buys, of about SEK300 million that could not be fully
offset in the short term. In particular, our North American
business area was affected since the congestion at important U.S.
ports amplified the supply constraints. In addition to a negative
impact on volumes and mix, the business area also faced higher
costs, driven by the use of more express logistics and high
production inefficiency caused by limited planning visibility,"
said Chief Executive Jonas Samuelson.
"We continue to have a tight collaboration with suppliers to
mitigate global supply shortages, but we estimate that the fourth
quarter will be even more challenging than the third quarter.
Although we anticipate sequential improvements in 2022, we expect
challenging conditions to remain in meeting continued strong
demand," he added.
Sweden's lock maker Assa Abloy AB said Wednesday that material
shortages, supply-chain challenges and higher costs will continue
to harm its markets for the rest of the year.
"Thanks to several price adjustments and operational
improvements we achieved an operating leverage of 22%, despite the
significantly higher material costs, higher logistical costs, and
operational challenges linked to component shortages," Chief
Executive Nico Delvaux said.
"We also assume material shortages, logistic challenges and cost
inflation to continue to impact our markets during the rest of the
year," Mr. Delvaux added.
London-based book publisher Bloomsbury Publishing PLC said
Wednesday that pretax profit for the first half of fiscal 2022 rose
nearly four-fold, with revenue up 29%.
The company said it mitigated print supply chain challenges in
the first half, as it printed well in advance of its usual peaks in
the run-up to Christmas and the beginning of the academic year in
the fall.
"Retailers and online booksellers have significantly increased
stock levels over previous years to ensure they have sufficient
stock for Christmas given the supply chain problems. Our first-half
revenues have therefore been boosted by customers ordering earlier
than in previous years," the company said.
It said it is confident of achieving market expectations for the
year ending Feb. 28 despite supply chain impediments.
Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94
(END) Dow Jones Newswires
October 27, 2021 07:38 ET (11:38 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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