Electrolux braces for more disruptions from global supply squeeze
Electrolux reported revenues above pre-pandemic levels earlier this month, but saw its shares slump 9% after it warned of worsening component supply problems in coming months.
Europe’s biggest home appliance maker posted an operating profit of €1.7 billion for the second quarter and said the rebound came on the back of a 39% sales increase as consumers kept spending more on home improvement during the pandemic.
However, irregular deliveries of electronic components – mainly microcontrollers – due to a global supply chain squeeze hampered production, and the April-June profit lagged analysts’ expectations for Electrolux.
In a statement, Electrolux said: “The global supply challenges experienced in the first half are expected to have a higher impact in the second half of the year. The market for electronic components is expected to be somewhat more constrained in the third quarter and, hence, we anticipate challenges to fully meet the market’s product mix requirements.”
Jonas Samuelson, Electrolux’s Chief Executive, said that sub-suppliers and suppliers were struggling to stock up on the various kinds of microcontrollers that are essential in most appliances.
“The supply chain has simply been drained,” Samuelson said. “The ability to respond quickly to swings in the demand mix is limited because there are no buffers in the system. This situation has gradually worsened this year and we will probably see even more of those effects.”