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Q2 23 was below expectation. The drop in organic sales (-8.4%) was due to the collapse in volume across all geographies except for Latin America, and higher promotions in North America. The restated operating margin was fairly stable (-0.1pt to 1.6% of sales). The strong cost efficiency was not enough to compensate for the negative volume/price/mix effect, labour-cost inflation and currency headwinds. In 2023, sales should be depressed while earnings will be sustained by cost reductions of SEK4.
Companies: Electrolux
AlphaValue
Q1 23 showed some positive items in North America and a good performance in Latin America. In North America, organic sales growth (+4.0%) was driven by higher volume and the gain of market share. 2022’s high embedded cost production in the products sold negatively impacted the group’s operating result (also the North American operations) and should be lower in Q2 23. The cost savings program is progressing as planned and should have a positive effect of SEK4-5bn in 2023.
In 2023, Electrolux will be penalized by a volume decrease due to inflation and lower consumption. Regarding costs, the picture looks better with the end of supply chain disruption and the turnaround programme in North America, the main black spot for Electrolux. The cost reduction is expected to be above SEK7.0bn in 2024 o/w SEK4.0-5.0bn in 2023. The targeted 6%-EBIT margin is also based on higher aftermarket sales where margins are more than four times those on major appliance sales.
The Q4 22 figures confirmed the profit warning in mid-January 2023. Organic sales dropped by 8.4% due to lower volume and cost inflation, irregular supply of components and manufacturing inefficiency led to an operating loss of SEK-612m, excluding the non-recurring items. The dividend is cut. The recovery should be gradual in 2023 considering low demand, promotions, and cost inflation not fully offset by price increases. Conversely, the SEK4.0-5.0bn cost savings related to the restructurings and
Electrolux reported a poor Q3 22 with low organic sales growth (+1.2%) and an operating loss of SEK-35m excluding the charge related to the exit from Russia. Electrolux was affected by the collapse of volume in Europe and North America and manufacturing inefficiency. The market outlook and business indicators remain negative for 2022. For 2023, Electrolux anticipates negative industry shipments of core appliances in Europe and North America, positive cost efficiency and lower capex due to an ump
Q2 22 was below expectations. Organic sales increased very slightly (+0.3%), reflecting strong price increases and the drop in volume. Electrolux was affected by weaker demand and still supply-chain constraints. The operating margin collapsed to 1.7% of sales (-4.8pts yoy) due to lower volume and inefficiencies. Europe and North America were the most impacted. A gradual improvement in the supply chain is anticipated in H2 22. On the other side, a further slowdown in demand is expected.
Organic sales decreased by -3.4% in Q1 22. Demand normalized and the decrease in volume was amplified by the constraints in the supply chain. The restated operating margin dropped to 3.1% of sales (-4.8pts). The cumulative price increase (>+8%) and positive mix effect offset cost inflation. Inversely, the negative cost efficiency related to the constraints in the supply chain weighted on performance. The outlook is mixed with a Q2 22 rather similar to Q1 22 and the assumption of a better H2 22.
In Q4 21, organic sales growth improved sequentially (+4.8% vs -0.3% in Q3 21) and reflected mainly price increases to offset cost inflation. Organic growth was spread across all geographies. The recurring EBIT margin of 4.5% (in line with expectation) supported a negative cost efficiency due to continuing constraints in the supply chain. Q1 22 should be similar to Q4 21 with cost inflation and disruptions in the supply chain. A sequential improvement is awaited from Q2 22.
The Q3 21 set of figures came in below our expectations. Organic sales were rather flat (-0.3%) and the operating margin dropped to 5.3% of sales (-4.8pts). Electrolux was impacted by constraints in meeting market demand, additional temporary electronic component cost increases and higher ocean freight rates. The group anticipates a more challenging Q4 21 than Q3 21. For 2021, Electrolux still expects positive volume/price/mix. Conversely, the group downgraded its expectation on cost efficiency
Q2 21 was strong vs Q2 20, the latter being impacted by the lockdowns. Organic sales surged by c.+39% and the operating margin jumped to 6.5% of sales, below the Q1 21 level. The positives, including volume growth, price increases, favourable product-mix and lower promotion, more than offset the negatives, i.e. higher raw material and logistic costs, adverse currency effect, and delays in delivery due to the shortage of electronic components. Given its strong balance sheet, Electrolux gave a hig
Organic sales growth accelerated sequentially (+22.8% vs +17.5% in Q4 20) and benefited from a low comparative in Q1 20 (-5.1%). The Americas was the most buoyant market (+22.9% in North America, +58.3% in Latin America). The operating income recovered and represented a record margin rate of 7.9% of sales. Electrolux benefited from high volume growth, price increases and an improved product mix but also the supply chain was under pressure. The normalisation of demand is still anticipated in H2 2
Electrolux had a very strong Q4 20. Organic sales grew by 17.5% and the operating margin surged to 7.4% of sales (+4.4pts yoy). The group benefited from strong spending in major appliances in H2 20 as the COVID-19 pandemic requires people to stay at home. For 2021, Electrolux is expecting a positive volume/price/mix effect, higher raw material costs and negative currency effects, offset by price increases, positive cost efficiency and an increase in innovation and marketing expenses.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Electrolux. We currently have 34 research reports from 2 professional analysts.
AFC has made strong progress with products and its manufacturing strategy. Despite heavy investment, the cash position, at £27.4m, was slightly better than our estimate for £26.9m, demonstrating good discipline. The monthly cash burn rate (at c. £1.3m) is tracking in-line with our expectations. Generally, we maintain our estimates for significantly increased sales in FY24e and FY25e, with the cash position unchanged. Recent news on commercial progress has been positive. The 30kW H-Power Generato
Companies: AFC Energy plc
Zeus Capital
Spectra Systems (SPSY) has an excellent record in growing profits through its highly regarded technology and relationships with key clients, which include a prominent global central bank. Now, the company is ready for the next stage, and we see the acquisition of Cartor Security Printers as a game-changer in enhancing its ability to continue, and potentially accelerate, this momentum, even as it continues to benefit from a near-term, multi-million-dollar sensor refresh programme with a long-term
Companies: Spectra Systems Corporation
WHIreland
The group’s year-end update flags trading ahead of expectations, achieved by strong growth in its Systems division, with the earlier than expected delivery of a NATO contract just prior to the year-end that pulls forward profit into FY24 making it a record year. Components continue to see a normalisation of orders and slower demand as previously flagged. Order cover is strong and further opportunities in the defence/security sector are leading to investment in Integrated Systems capabilities. Re
Companies: Solid State plc
Cavendish
2023 was a challenging year for Tandem, with cost-of-living pressures impacting demand for many of the group’s products. This led us to downgrade our forecasts several times during the year (including in December), and today’s results are largely in line with those revised projections – revenue -17% YoY to £22.2m and an adj. LAT of -£1.0m (our forecast of -£0.9m). FY24E looks more positive, however: economic pressures are easing for consumers (inflation is falling, interest rate cuts are expecte
Companies: Tandem Group plc
Today’s trading update confirms FY24E profitability above the top end of previously guided range, with positive trading momentum building into FY25.
Companies: Revolution Beauty Group plc
Companies: FOG TND BVXP ACC HDD
Solid State is a specialist value added component supplier and design-in manufacturer of computing, power and communications products. This morning, the group has provided a trading update for the year ended 31 March 2024, reporting the earlier than expected delivery of specific contracts within its Systems division and resulting in the group's FY 2024E revenue and PBT outturn anticipated ahead of our forecasts, with a commensurate decrease in our FY 2025E estimates. The delivery of these contr
Encouraging FY23 results from SPSY this morning show profits and cash a touch ahead of expectation and position the company well for a year of strong growth in FY24E. SPSY leads the market in machine-readable high speed banknote authentication, brand protection technologies and gaming security software. The company grew the business robustly in FY23 (PBTA +6%, EPS pared by increased tax payments, progressive DPS), building on a decade of double digit CAGR; and closed the year with the transfor
Liberum
Companies: LPA SOLI NANO QTX
Finals from the leader in machine-readable high-speed bank note authentication, brand protection technologies, security printing, and gaming software, in line. FY23’s stand-out feature was December’s acquisition of Cartor Holdings, the security printing business. As discussed at the time, this has moved Spectra’s Fusion polymer substrate proposition substantially forward, strengthens its competitive position and provides access to state of the art manufacturing facilities. Extending up the suppl
Allenby Capital
While revenue fell short of expectations due mainly to self-tan weakness, progress on margins, cost synergies and efficiency enabled BAR to deliver a reduction in H1 losses. While growth and profitability in other high margin brands has progressed, Skinny Tan trading is not expected to improve until next year. With synergy benefits having mostly annualised, lower sales forecasts impact the timing of the inflection to profit. We now assume losses both this and next year, albeit net cash is mostly
Companies: Brand Architekts Group plc
Singer Capital Markets
Companies: Portmeirion Group PLC
Shore Capital
Dowlais Group’s first set of results were ahead of our expectations, with positive cash generation a highlight despite restructuring and demerger costs. Softer automotive markets will limit margin progress in FY24 towards the double-digit target. Despite this, margins of c 6.5% are still ahead of automotive peers, although the shares trade at a significant discount to our implied generic peer-based valuation.
Companies: Dowlais Group PLC
Edison
Games Workshop Group has reported that trading for the three months to the end of February 2024 is in line with expectations. The fourth dividend of the year has been declared at 105p/share, which takes the year-to-date total to 420p/share, marginally ahead of the 415p/share declared in FY23 at a similar stage. The declared dividend compares with our prior estimate of 425p/share, and we have therefore nudged our estimate down to be consistent with the amounts declared.
Companies: Games Workshop Group PLC
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