STOCKHOLM–Electrolux AB on Tuesday posted a forecast-beating fourth-quarter net profit as customers continued to allocate more of their household budgets to home improvement, but cautioned that visibility this year remains limited.
The Swedish home-appliance manufacturer posted net profit of 1.86 billion Swedish kronor ($220.7 million) in the quarter, up from SEK560 million last year, as sales rose 5.9% to SEK33.9 billion.
Analysts polled by FactSet had expected net profit of SEK1.64 billion on sales of SEK31.9 billion.
The company declared a full-year dividend of SEK8 a share, up from SEK7 last year.
For the first half of 2021, the company expects the strong consumer demand from increased home-improvement spending to remain. In addition, retail inventories remain low, it added.
“We therefore expect demand for the first half of 2021 to exceed normal seasonal levels across our main markets, although capacity and component availability will likely remain constraining factors,” Chief Executive Jonas Samuelson said.
“Assuming that consumer spending patterns start to normalize by mid-year, we estimate that also market demand will normalize during the second half of 2021.”
Electrolux expects market demand for appliances for the full year of 2021 to be slightly positive in Europe and positive everywhere else.
The company sees a negative impact from raw material costs, trade tariffs, currency and labor cost inflation of SEK1.6 billion to SEK2 billion in 2021, with currency effects hitting sales by 7% and operating income by SEK400 million. Capital expenditure is seen at around SEK7 billion.
Electrolux said it expects already announced price increases to fully offset raw material and currency headwinds in 2021.
Write to Dominic Chopping at [email protected]