STOCKHOLM, Feb. 2, 2021 /PRNewswire/ --
Highlights of the fourth quarter of 2020
- Net sales amounted to SEK 33,902m
(32,011). Organic sales increased by 17.5%, benefitting from
continued high levels of home-improvement spending as well as
positive mix and price development.
- Operating income amounted to SEK
2,498m (960), corresponding to a margin of 7.4% (3.0).
Higher prices and innovative high-margin products were key
drivers.
- Strong sales and earnings across all business areas.
- Income for the period amounted to SEK
1,860m (366) and earnings per share was SEK 6.47 (1.27).
- Operating cash flow after investments was SEK 5,364m (2,823).
- The Board proposes a dividend for 2020 of SEK 8.00 (7.00) per share, to be paid in two
equal installments.
President and CEO Jonas
Samuelson's comment
The coronavirus pandemic in 2020 had a severe impact on all
aspects of society. Our strategy and our agile ways of working
helped us to safely manage the challenges and respond to changing
consumer needs brought about by the pandemic.
The year was highly volatile with a challenging first half
followed by a significant recovery during the second half. This
resulted in a strong performance improvement for the full year,
with an operating margin of 5.0% (2.7). The organic sales growth of
3.2% was driven by improved mix through increased sales of
innovative premium products as well as by higher net prices.
Aftermarket sales, one of our strategic focus areas, increased by
13% and accounted for about 7% of Group sales.
Organic sales growth in the fourth quarter was 17.5%. Sales
continued to benefit from consumers allocating more of their
household budgets to home improvement and we also executed well on
price and mix. Operating margin increased significantly to 7.4%
(3.0) and all business areas improved their earnings and delivered
margins well above 6%.
Looking into 2021, visibility remains limited due to the ongoing
pandemic. However, for the first half of 2021 we anticipate that
the strong consumer demand from increased home-improvement spending
experienced during the second half of 2020 will remain to some
extent. In addition, retail inventories are currently low, in
general. We therefore expect demand for the first half of 2021 to
exceed normal seasonal levels across our main markets, although
capacity and component availability will likely remain constraining
factors. Assuming that consumer spending patterns start to
normalize by mid-year, we estimate that also market demand will
normalize during the second half of 2021. All together, we expect
market demand for appliances for the full year 2021 to be positive
in our main markets.
From 2021 we revise the format for how we communicate the
business outlook in order to link it more strongly to the key
drivers for profitable growth in our value creation strategy. Our
strategic initiatives to reach the operating margin objective of at
least 6% and sales growth of at least 4% generated significant
improvements in 2020.
For 2021 we expect a continued positive organic contribution
from volume, price and mix driven by a favorable market demand,
higher prices compensating for raw material headwind, and increases
in innovation/marketing investments, including a step-up in
digitalization of our consumer interactions. During the past three
years, mix improvements from innovation, brand and aftermarket
sales growth have in total contributed more than SEK 3bn to operating income, realizing a very
favorable return on investment.
Continuous cost improvements and execution of our re-engineering
program, mainly related to the Anderson facility, will increase
cost efficiency in 2021. However, these efficiency improvements
will be partly offset by higher logistic costs and transition
effects as we ramp-up more facilities in our re-engineering program
towards the latter part of the year. As we also plan to accelerate
innovation/marketing investments, given that market conditions
remain favorable, total net cost in 2021 is expected to
increase.
As a global appliance company, we are exposed to external
factors such as raw materials, tariffs, currency and excess
inflation. For 2021 we estimate a headwind, primarily due to raw
material costs. During the past two years we have fully offset
headwinds from raw material and currency with price increases and
we expect to do so also in 2021 through already announced price
increases.
I am proud of how we as an organization have navigated this
challenging year with a strong focus on health and safety. For me
it confirms that we have the right strategy and culture in place,
allowing us to quickly act on challenges as well as seize
opportunities. As the pandemic continues into 2021, we will
continue to create value - safely and sustainably.
Telephone conference 09.00 CET
A telephone conference is held at 09.00 CET today, February 2. Jonas
Samuelson, President and CEO and Therese Friberg, CFO will comment on the
report.
Details for participation by telephone are as follows:
Participants in Sweden: +46 8
566 426 51
Participants in UK/Europe: +44
3333 000 804
Participants in US: +1 631 9131 422
Pin code: 32090696#
Slide presentation for download:
www.electroluxgroup.com/ir
Link to webcast:
https://edge.media-server.com/mmc/p/oywjim24
For further information, please contact:
Sophie
Arnius
Head of Investor Relations
+46 70 590 80 72
Åsa Öhman
Electrolux Press Hotline
+46 8 657 65 07
This is information that AB Electrolux is obliged to make
public pursuant to the EU Market Abuse Regulation. The information
was submitted for publication, through the agency of the contact
person set out above, at 0800 CET on
February 2, 2021.
This information was brought to you by Cision
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SOURCE Electrolux