Electrolux Group president and CEO, Jonas Samuelson, has quit with the business struggling both globally and in Australia. with sales for the last quarter with nett sales down 5%, Asia Pacific sales are believed to be down over 4%, with the numbers now included with other Countries, their US business fell 174% as consumers moved to brands than those sold by the Swedish Company.
It’s also been revealed that the business is facing thousands of asbestos claims against Electrolux in the USA.
Electrolux are not the only European appliance Company suffering with Miele described as a “basket case in Europe in particularly in their home Country Germany” claimed a senior Harvey Norman executive who recently spoken to a Miele board member.
Electrolux who are facing problems in Australia with both sales and the exit of several experienced executives recently split the business into three divisions in an effort to cut costs.
Currently the business that is losing traction with Australian retailers are still running ongoing cost reduction programs around the world.
The company’s outlook for 2024 anticipates a negative organic contribution from volume, price, and mix, though growth in focus categories and cost optimization efforts in the latter half of the year are expected to help earning which for the last two years have been in freefall.
Samuelson’s exit comes as rumours surface that Chinese Company Midea is still interested in buying the business.
Ironically Electrolux shares jumped on the news that Samuelson was leaving after eight years at the helm.
The shares were up as much as 7% despite the business reporting a loss of A$101M for the quarter.The company claims that that pricing pressure persists, and that weak residential construction and restrained demand in the building industry, is weighing on built-in kitchen demand.
In Australia, the business has resorted to “high promotional activity” during the last quarter.
Under Samuelson’s management Electrolux were forced to implement steep cost reductions, including the elimination of as many as 4,000 jobs announced in late 2022.
It’s also been revealed that the business is facing litigation and claims relating to asbestos in the USA.
As of March 31, 2024, the Group had a total of 3,669 (3,388) cases pending, representing approximately 3,676 (approximately 3,394) plaintiffs.
During the first quarter of 2024, 313 new cases with 315 plaintiffs were filed and 269 pending cases with approximately 269 plaintiffs were resolved.
“It is expected that additional lawsuits will be filed against Electrolux. It is not possible to predict the number of future lawsuits” the business claimed in their latest financials.
They claim that Electrolux cannot provide any assurances that the resolution of these types of lawsuits will not have a material adverse effect on its business or on the results of operations in the future.
