STOCKHOLM, Feb 2 (Reuters) – Sweden’s Electrolux (ELUXb.ST) on Thursday predicted lower sales volumes in 2023 due to weak consumer confidence, and said it may not be able to fully pass on higher energy and labour costs, sending its shares to a near three-year low.
Europe’s biggest appliance maker said it expected slowing demand this year across Europe, North America and Latin America.
“Looking into 2023, consumer sentiment is anticipated to continue to be negatively impacted by a high inflation and interest rate environment,” Chief Executive Jonas Samuelson said in a statement.
He said the company saw “a challenge” in fully offsetting the impact of negative external factors on pricing in 2023.
The maker of brands such as Frigidaire and Anova proposed not to pay a dividend for 2022, after a 9.20 crown dividend the year before.
Brokerages Citi, JPMorgan and Credit Suisse were all surprised by the lack of dividend and pessimistic outlook.
For 2023, the negative impact of external factors “is a surprise given the market and us were expecting positive contribution from lower raw material costs”, JPMorgan said.
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Electrolux said in its report that while it did predict benefits from lower raw material costs, these would be reduced as most raw materials it will use in 2023 were bought at 2022 rates.
Shares in the group fell as much as 11% in early trade to their weakest since March 2020, and were down more than 8% at 0954 GMT, hitting the bottom of the Pan-European Stoxx 600 index (.STOXX).
Electrolux warned on Jan. 11 that continued high costs and weak demand would lead to an estimated fourth-quarter operating loss of around 2.0 billion Swedish crowns ($194.14 million).
Its biggest rival Whirlpool (WHR.N) however this week forecast a full-year profit above Wall Street estimates.
On Thursday Electrolux reported an operating loss of 1.96 billion crowns against 882 million crowns a year earlier. It flagged in September that it expected demand to remain weak in both Europe and North America in 2023.
($1 = 10.3021 Swedish crowns)
Reporting by Marie Mannes and Anna Ringstrom; Editing by Raissa Kasolowsky and Jan Harvey
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