Interim report Electrolux Q2 2021: Strong growth and innovation momentum

dWeb.News Article from dWeb.News

By Daniel Webster, dWeb.News

STOCKHOLM – July 20, 2021 /PRNewswire/ — Highlights from the second quarter 2021
Net sales rose to SEK 30,303m (23.476) which corresponds to an organic growth of 39.1%, supported by strong market demand across all business areas. The pandemic severely affected the second quarter of last year.
Operating income rose to SEK 1,983m (+62), which corresponds to a margin 6.5% (-0.3). Strong price execution and a favorable product mix were key drivers.

After investments, operating cash flow was SEK 1,456m (122).

The Board adopted an adjusted dividend policy that approximates 50% of annual income. It also proposed an automatic redemption of SEK 17 per share and announced its intention to resolve any share buybacks in the future.
Commentary by Jonas Samuelson, President and CEO
We continued to enjoy a favorable market, strong momentum in the price and high demand for our innovative products in the second quarter. Operating income was SEK 1,983m which corresponds to a margin 6.5% and organic sales growth of 39.1%. Volume drops were evident a year ago due to restrictions related to the coronavirus epidemic. We partially mitigated this by temporary cost actions. Organic sales growth was 16.4% in the second quarter of 2019.
My colleagues’ hard work and close collaboration with our suppliers helped to address the strong demand and global supply shortages, particularly in electronic components. Unexpected deliveries had a negative impact on production efficiency and demand mix matching. We expect the market for electronic components to be more limited in the third quarter. Therefore, we anticipate difficulties to meet the market’s product mix needs. We will continue to keep in touch with our suppliers to address these supply issues. We expect the situation to remain uncertain for a long time.
We are continuing to offset the headwinds from external factors, electronic parts and logistics through price. This will continue for the entire year. We have begun to implement additional price increases that will take effect gradually over the course of the year. This is because the costs of raw materials, electronic parts, and logistics are rising further, which puts increased pressure on cost efficiency as well as external cost factors.
Despite limited visibility due to the ongoing pandemic, we maintain our 2021 regional market outlook. Market demand is expected increase in the second half 2021, with significant regional variations due to pandemic developments or impacts from stimulus programs. The second half of 2021 will see a greater impact from the global supply problems experienced in the first half.
Electrolux’s financial position and balance sheet is very strong thanks to increased profitability and high capital efficiency. Progress is being made in significant reengineering projects and product innovation programs. The Board has made a decision that we can combine ambitious growth investments with increased dividends to our shareholders. This will begin with adjusting the dividend policy at approximately 50% of income and a proposed automatic redemption of SEK 17 per shared in the second half 2021. This would be combined with the SEK 25 ordinary dividend that was approved by the AGM. The total cash distribution will be made in 2021. The Board intends to supplement ordinary dividends with ongoing buybacks. This will be done initially by using the mandate to repurchase up 9.4 million shares through the 2022 AGM.
I am confident that our strategy will allow us to continue to deliver shareholder value in a rapidly changing market.
Telephone conference 09.00 CET
Today, July 20, at 09:00 CET, a telephone conference will be held. Jonas Samuelson, President & CEO, and Therese Friberg CFO will comment on this report.
Here are the details for participation by phone:
Participants in Sweden: +46-8 566 426 51Participants from UK/Europe: +44 33333 000 804Participants from the USA: +1 631 9131 4422
Pin code: 67236691#
Slide presentation available for download at
http://www.electroluxgroup.com/ir
Link to webcast:
https://edge.media–server.com/mmc/p/spzkrugz
CONTACT:
For more information, please contact:
Sophie Arnius, Head Investor Relations +46 70590 80 72
Asa Ohman, Electrolux Press Hotline: +46 8 657 65 07
This information is required to be made public by AB Electrolux under the EU Market Abuse Regulation. The information was submitted to publication through the agency of above-mentioned contact person at 0800 CET, July 20, 2021.
This information was provided by Cision http://news.cision.com
https://news.cision.com/electrolux/r/electrolux q2-2021 – Interim Report-strong-growth & Innovation-Momentum, c3387240
These files can be downloaded:

https://mb.cision.com/Main/1853/3387240/1446596.pdf
Interim Report Q2 2021 Final

SOURCE Electrolux

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