The CEO of Electrolux Professional has said the business will need to increase prices further in the current quarter to offset the rising cost of manufacturing and shipping.
Alberto Zanata said the business had taken “decisive actions” to combat growing costs since the start of the year. But the measures have not been enough to fully compensate for the increased component, raw material and logistic costs it has faced.
Mr Zanata said it had run up a deficit of SEK70m ($7m) in the current quarter, leaving it with little choice but to pass the costs on.
“Given further cost increases, we will implement additional price increases or surcharges during the second quarter,” he confirmed.
Despite the supply chain challenges, Electrolux Professional posted a 25% like-for-like increase in first quarter sales to SEK2.5 billion ($253m). Revenue rose 50% with the acquisition of Unified Brands included.
Mr Zanata said the volume of equipment it had sold in the last three months was equal to pre-Covid figures.
“The sales recovery that started last year has continued in the first quarter and we have now had four consecutive quarters of good sales growth.
“Sales in most countries are now back, or almost back, at 2019 pre-pandemic levels, with a few countries even ahead of pre-pandemic levels.”
Sales were particularly strong in the Americas, while Europe also saw very good growth. However, several countries in the Asia-Pacific region were still behind in sales.
EBITA for the first quarter reached SEK236m ($24m), with a corresponding margin of 9.5%.
Mr Zanata added: “Despite the uncertain geopolitical situation, the strong order intake trend has continued. Combined with the solid order stock, this gives us confidence for the second quarter, although we expect raw material and component supply challenges to persist.”