Profit increase turns Electrolux positive, however…

Electrolux exceeded expectations in the first quarter. The Swedish home appliance manufacturer is positive for the rest of the year but is concerned about the shortage of electronic components.

Thanks to Covid

During the first three months of the year, sales increased by 9 per cent to 29 billion Swedish kronor (3 billion euros). Net profit amounted to the equivalent of 150 million euros. Both turnover and profit thus exceeded analysts’ expectations, writes Belgian newspaper Le Soir. In the same period last year, the group recorded a greater net profit, but that was mainly because of the separation from ‘Electrolux Professional’, which provided a one-time bonus of 2.4 billion Swedish kronor (250 million euros).

According to CEO Jonas Samuelson, the strong results were mainly thanks to the Covid-19 crisis. As consumers spent more time at home, they used their appliances more intensively and bought more new appliances, says the CEO. The white goods manufacturer was also able to compensate for rising raw material prices by increasing its sales prices.
 

Shortage of raw material

Although the company operated nearly at full capacity during the first quarter, it could not fully keep up with the demand. Production was also hindered by a tight supply chain for electronic components and certain plastics. Samuelson is concerned that the situation may worsen as global industrial activity recovers. “Capacity and the availability of electronic components will remain limiting factors throughout the second half of the year,” he said.

Electrolux expects “positive demand” in its main markets for the remainder of the year. The Swedish group generates about 40 per cent of its sales in Europe and 31 per cent in North America.