Electrolux AB (ELUX_A) Q3 2023 Earnings Call

Investor webinar replay

Replay transcript excerpt

Good morning, and welcome to Electra's third quarter 2023 earnings presentation. With me this morning, I have Therese Fridberg, our CFO, Anna Olsson-Leon, Chief Commercial Officer, and Sofia Arnjus, Head of Investor Relations. I'd like to mention this session is recorded and will be available on our website as an on-demand version. Before we go into our performance in the third quarter, I'd like to take this opportunity to say a few words about the announcement we made earlier this morning. As we said in the Q2 call, we were evaluating further structural simplification and complexity reductions in order to execute our strategy with focus, speed, scale, and lower cost. This is even more vital in the current market situation. The weak market demand with consumers mixing down to lower price points has been accompanied by increasing price pressure in most markets globally, particularly impacting North America. This has been enabled by the resolution of post-pandemic supply chain constraints, significantly lower freight rates, a strong US dollar versus Asian currencies, and large cost inflation discrepancies between Europe and North America on one hand, and in certain parts of Asia on the other hand, resulting in high promotional activity with increased pressure on margins. To restore margins, with the objective to achieve an operating margin of at least 6% mid-term, We're both stepping up cost reductions and driving an even more targeted portfolio management. If we start with cost reductions, here we're accelerating structural cost reduction and execution of product cost measures. This is the ongoing substantial cost reduction progress while ahead of plan is not sufficient to restore margins given the price pressure from input cost discrepancies as I mentioned. The cost ...