Electrolux’s Top Investor Content With Strategy Amid Share SlumpKatarina Gustafsson
Investor AB, the largest shareholder in Electrolux AB, said it’s confident that the Swedish maker of home appliances is taking the correct steps to meet weak demand even after its share price slumped by a third in three years.
“I think they’re doing the right things, and that’s the important thing,” Investor AB Chief Executive Officer Boerje Ekholm said in an interview after his company’s fourth-quarter results press conference in Stockholm today. “As for the share price -- Mr. Market gives and Mr. Market takes.”
Electrolux, the world’s second-biggest home-appliance manufacturer, has slumped more than 30 percent on the Stockholm stock exchange since Keith McLoughlin took over as CEO on Jan. 1 2011. In contrast, bigger rival Whirlpool Corp. gained 45 percent in the period while Stockholm’s OMX 30 index added 11 percent. Electrolux fell 8.8 percent on Jan. 31 after it reported fourth-quarter earnings that missed analyst estimates.
Electrolux, the maker of AEG stoves and Frigidaire refrigerators, said earnings before interest and taxes and one-time costs fell 23 percent to 1.22 billion kronor ($187 million) in the fourth quarter. That missed the average 1.38 billion-krona estimate in a Bloomberg survey of 11 analysts. The company is reducing expenditure and moving production to low-cost countries to counteract economic weakness in Europe.
“We always look at whether a company is taking the right measures,” Ekholm said, adding that Electrolux in Investor AB’s view has been doing the right thing both before and during McLoughlin’s leadership. “They are working with restructuring in Europe, they have stabilized and expanded the business in North America and they have grown outside the mature markets” through acquisitions in Latin America and Egypt, he said.
Investor AB, the Swedish Wallenberg family’s publicly traded holding company, owns 15.5 percent of the share capital in Electrolux and 30 percent of the company’s voting rights.