Electrolux: Consolidated results 2009
Consolidated results 2009
Stockholm, February 3, 2010
Highlights of the fourth quarter of 2009 Net sales amounted to SEK 28,215m (28,663) and income for the period was SEK 664m (-474), or SEK 2.34 (-1.68) per share. Net sales declined by 1% in comparable currencies, due to continued weak markets. Price and mix continued to have a positive effect on sales. Operating income amounted to SEK 2,023m (-389), corresponding to a margin of 7.2%, excluding items affecting comparability. Results improved across all business areas. Lower costs for raw materials positively impacted income. However, costs for raw materials increased in the quarter compared to the third quarter of 2009. Cost savings, sales prices and lower costs for raw materials contributed
strongly to the improvement in income. Extra contributions of SEK 3,935m to Group pension funds in fourth quarter resulting in appropriate funding levels and reduced balance- sheet risk exposure to pension commitments. Continued strong operating cash flow in the quarter, excluding extra pension contributions, resulted in a very strong cash flow for 2009. The Board proposes a dividend for 2009 of SEK 4.00 (0.00) per share.
Contents Net sales and income 2 Market overview 3 Business areas 3 Cash flow 6 Financial position 6 Structural changes 7 Proposed dividend 8 Financial statements 11
Change SEKm Q4 2009 Q4 2008 % Change 2009 2008 % Net sales 28,215 28,663 -1.6 109,132 104,792 4.1 Operating income 805 -347 n/a 3,761 1,188 216.6 Margin, % 2.9 -1.2 3.4 1.1 Income after financial items 801 -530 n/a 3,484 653 433.5 Income for the period 664 -474 n/a 2,607 366 612.3 Earnings per share, SEK1) 2.34 -1.68 9.18 1.29 Return on net assets, % - - 19.4 5.8 Excluding items affecting comparability Items affecting comparability -1,218 42 -1,561 -355 Operating income 2,023 -389 n/a 5,322 1,543 244.9 Margin, % 7.2 -1.4 4.9 1.5 Income after financial items 2,019 -572 n/a 5,045 1,008 400.5 Income for the period 1,583 -516 n/a 3,851 656 487.0 Earnings per share, SEK1) 5.57 -1.82 13.56 2.32 Return on net assets, % - - 26.2 7.2
1) Basic, based on an average of 284.4 (283.6) million shares for the fourth quarter and 284.0 (283.1) million shares for the full year of 2009, excluding shares held by Electrolux. For earnings per share after dilution, see page 11. For definitions, see page 19.
For further information, please contact Peter Nyquist, Head of Investor Relations and Financial Information, at +46 8 738 60 03. AB ELECTROLUX (PUBL) Postal address Media hotline Investor Relations E-mail SE-105 45 Stockholm, Sweden +46 8 657 65 07 +46 8 738 60 03 [email protected] Visiting address Telefax Website Reg. No. S:t Göransgatan 143 +46 8 738 74 61 www.electrolux.com 556009-4178
Net sales and income Fourth quarter of 2009 Net sales for the Electrolux Group in the fourth quarter of 2009 amounted to SEK 28,215m (28,663). Sales were adversely impacted by lower volumes, while price and mix had a positive impact. Net sales decreased by 1% in comparable currencies.
Change in net sales Q4 2009 % 2009 Changes in Group structure 0.0 0.0 Changes in exchange rates -1.0 8.9 Changes in volume/price/mix -0.6 -4.8 Total -1.6 4.1
Operating income Operating income for the fourth quarter of 2009 increased to SEK 805m (-347) and income after financial items to SEK 801m (-530). Lower costs for raw materials had a positive impact on operating income. However, costs for raw materials increased in the fourth quarter compared to the third quarter of 2009. Previous price increases and cost savings also contributed to the improvement in income. Income for the period amounted to SEK 664m (-474), corresponding to SEK 2.34 (- 1.68) in earnings per share. In the light of the sharp market decline by the end of 2008, a costs savings program was initiated in the fourth quarter to reduce the number of employees by approximately 3,000. All operations on a global basis were affected. In the fourth quarter of 2008, non-recurring items were charged against operating income in the total amount of approximately SEK -1,115m, see table below.
Impact of Electrolux US launch and cost-reduction measures Q4 2009 Q4 2008 SEKm, approximately Net impact of the launch of Electrolux, appliances North America - -70 Cost-savings program: Consumer Durables, Europe - -800 Consumer Durables, North America - -45 Consumer Durables, Latin America - -10 Consumer Durables, Asia/Pacific - -110 Professional Products - -40 Group staff - -40 Total - -1,115
Items affecting comparability Operating income for the fourth quarter of 2009 includes items affecting comparability in the amount of SEK -1,218m (42), referring to restructuring provisions related to appliances plants and consolidation of corporate operations in North America, see page 7 and table on page 11. Excluding items affecting comparability, operating income amounted to SEK 2,023m (-389). Effects of changes in exchange rates Changes in exchange rates compared to the previous year, including both translation and transaction effects, had a positive impact of SEK 304m on operating income for the fourth quarter of 2009, compared to the same period in the previous year. Transaction effects net of hedging contracts amounted to SEK 358m, and referred mainly to the strengthening of the Australian dollar and the Brazilian real against the US dollar. Translation of income statements in subsidiaries had an impact of SEK -54m. The effect of changes in exchange rates on income after financial items amounted to SEK 311m.
Financial net Net financial items for the fourth quarter of 2009 amounted to SEK -4m, compared to SEK -183m for the corresponding period in the previous year. The improvement is mainly due to lower interest rates on borrowings and lower net borrowings.
Full year of 2009 Net sales for the Electrolux Group in 2009 amounted to SEK 109,132m, as against SEK 104,792m in the previous year. Sales were adversely impacted by lower volumes, while higher prices and an improved mix had a positive impact. In comparable currencies, net sales declined by 5%.
Operating income Operating income for 2009 increased to SEK 3,761m (1,188) and income after financial items to SEK 3,484m (653). Previous price increases, an improved mix, lower costs for raw materials and cost efficiency measures contributed to the improvement in income. Income for the period increased to SEK 2,607m (366), corresponding to SEK 9.18 (1.29) in earnings per share. Operating income in the first quarter of 2009 was negatively impacted by the North American launch in the net amount of SEK -200m. In 2008, non-recurring items were charged against operating income in the total amount of approximately SEK -1,945m, see table below.
Impact of cost-reduction measures, Electrolux North American launch and non-recurring items
2009 SEKm, approximately 2008 Cost-reduction measures due to sharp decline in demand - -1,045 Net impact of the launch of Electrolux, appliances North America -200 -470 Cost-cutting program, appliances Europe - -360 Cost for a component problem for dishwashers, - -120 appliances Europe Capital gain, real estate, appliances Europe - 130 Cost for litigation, appliances North America - -80 Total -200 -1,945
Items affecting comparability Operating income for 2009 includes items affecting comparability in the amount of SEK -1,561m (-355), see table on page 11. Excluding items affecting comparability, operating income for 2009 increased to SEK 5,322m (1,543) and income after financial items to SEK 5,045m (1,008). Income for the period was SEK 3,851m (656), corresponding to SEK 13.56 (2.32) in earnings per share.
Effects of changes in exchange rates Changes in exchange rates compared to the previous year, including both translation and transaction effects, had an impact of SEK -295m on operating income for 2009. Transaction effects net of hedging contracts amounted to SEK -333m, and referred mainly to changes in exchange rates related to the US dollar and the euro against several other currencies. Translation of income statements in subsidiaries had an effect of SEK 38m. The effect of changes in exchange rates on income after financial items amounted to SEK -278m.
Financial net Net financial items for the full year of 2009 decreased to SEK -277m, compared to SEK -535m for 2008. The improvement is mainly due to lower interest rates on borrowings and lower net borrowings.
Taxes Total taxes in 2009 amounted to SEK -877m (-287), corresponding to 25.2% (44.0) of income after financial items. The tax rate for 2009 was positively impacted by reversal of a tax provision following a tax settlement in Europe. The tax rate in 2008 was negatively impacted by the low level of earnings.
Market overview Some of Electrolux main markets started to show some recovery during the fourth quarter of 2009, although compared to a very weak fourth quarter of 2008. The North American market rose slightly after thirteen consecutive quarters with decline. In the fourth quarter, industry shipments of core appliances in the US increased by 4%. Demand in some markets in Europe, as Germany, France, and Italy showed some stabilization. However, most of Electrolux main markets continued to show a decline although at a lower rate than in previous quarters. The European market has been falling for nine consecutive quarters. Eastern Europe showed a continued downturn in the fourth quarter, declining by 17%. Demand in Western Europe declined by 2% and the total market in Europe by 7%. The market in Brazil continued to increase in the fourth quarter due to temporary tax reductions on domestically-produced appliances. There are no indications of a strong recovery in any of the Group’s main markets, and therefore we only expect a modest improvement from the currently low level of market demand for appliances in 2010. Business areas Changes in net sales and operating income by business area in comparable currencies are given on page 15.
Consumer Durables, Europe
SEKm Q4 2009 Q4 2008 2008 2009 Net sales 11,285 11,972 42,300 44,342 Operating income 829 -638 2,188 -22 Operating margin, % 7.3 -5.3 5.2 0.0
Operating income for the fourth quarter and the full year of 2008 includes non-recurring items and provisions for cost-cutting programs in the net amounts of SEK -800m and SEK -1,150m, respectively, see page 2.
Industry shipments of core appliances in Europe
Q4 2009 Units, year-over-year, % 2009 Western Europe -2 -6 Eastern Europe (excluding Turkey) -17 -25 Total Europe -7 -11
Core appliances Demand for appliances in Europe during the fourth quarter of 2009 continued to decline in comparison with the same period in 2008. The rate of decline was lower than in the first three quarters, how-ever. Demand declined by 7% compared to the last quarter of 2008. Shipments in Western Europe fell by 2% and demand continued to decline in several of the Group’s major markets, including the UK, Spain and the Nordic region. Demand rose in Germany, France and Italy. Industry shipments of appliances in Eastern Europe declined by 17%. Group sales showed a continued decline in both the fourth quarter and the full year of 2009, due to lower volumes, resulting from the weak market. Operating income was substantially higher for both the fourth quarter and the full year in comparison with 2008. Factors contributing to the improvement included a positive price and mix development and lower costs for raw materials. However, costs for raw materials increased in the fourth quarter compared to the previous quarter. Personnel cutbacks and other cost-cutting measures during the year also contributed to the improvement in income. Quelle of Germany, one of the Group’s major retailers, went into bankruptcy in the fourth quarter of 2009. This reduced the Group’s sales of appliances under private labels. At the same time, Electrolux strengthened its position in the market for built-in products. Floor-care products Demand for vacuum cleaners in Europe continued to decline in the fourth quarter and the full year of 2009 in comparison with 2008. The downturn in the fourth quarter was lower than in the first three quarters, however. Group sales in the fourth quarter were in line with the corresponding period in 2008, despite lower volumes, as sales in the premium segment increased. Operating income improved substantially due to an improved product mix. Mainly as a result of the launches of the premium vacuum cleaner UltraOne at the beginning of the year as well as other premium products during the second half of 2009. Demand for vacuum cleaners in the full year of 2009 was lower than in 2008. Group sales declined as a result of lower sales volumes, and operating income was lower. The decline in income was offset to some extent by an improved product mix, lower product costs, and cost savings.
Consumer Durables, North America
SEKm Q4 2009 Q4 2008 2008 2009 Net sales 7,865 8,928 35,726 32,801 Operating income 450 -43 1,476 222 Operating margin, % 5.7 -0.5 4.1 0.7
Operating income for 2008 includes the net impact of the launch in North America of the Electrolux brand, costs related to cost-cutting measures, and other non-recurring items in the amounts of SEK -115m for the fourth quarter and SEK -595m for the full year, see page 2.
Industry shipments of core appliances in the US
Q4 2009 Units, year-over-year, % 2009 Core appliances 4 -8 Major appliances 2 -14
Core appliances Market demand for core appliances in the US showed an increase in the fourth quarter of 2009, following thirteen consecutive quarters of decline. Demand increased by 4% in the fourth quarter in comparison with 2008. Group sales in comparable currencies were lower in both the fourth quarter and the full year in comparison with 2008. However, a positive price and mix development provided some compensation for lower sales volumes. Sales volumes were impacted by increased competition within the laundry-product category. Operating income rose considerably for both the fourth quarter and the full year in comparison with 2008, despite lower volumes. Factors contributing to the improvement in income included a positive price and mix development, higher internal efficiency and lower costs for raw materials. However, costs for raw materials increased slightly in the fourth quarter compared to the previous quarter. Income was positively affected by higher productivity at the Group’s plants despite lower utilization of capacity. The re-launch of new products under the Frigidaire brand during the year contributed to mix improvements, as well as the Electrolux brand which increased market share in the kitchen-product category.
Floor-care products Market demand for vacuum cleaners in North America increased in the fourth quarter in comparison with the corresponding period in 2008. Group sales rose as a result of higher sales volumes, particularly due to seasonally high volumes for Thanksgiving. Operating income improved on the basis of cost savings and lower product costs. For the full year 2009, demand for vacuum cleaners was lower than in the previous year. Group sales increased somewhat as a result of higher volumes, primarily in the low- and mid-range price segments. Operating income and margin were in line with 2008. Income was positively affected by cost-cutting measures and lower product costs.
Consumer Durables, Latin America
SEKm Q4 2009 Q4 2008 2008 2009 Net sales 4,401 3,305 14,165 10,970 Operating income 368 244 878 715 Operating margin, % 8.4 7.4 6.2 6.5
Operating income for the fourth quarter of 2008 includes costs related to cost-cutting measures, in the amount of SEK -10m, see page 2.
Market demand for appliances in Latin America is estimated to have risen during the fourth quarter of 2009 in comparison with the same period in 2008, on the basis of strong growth in Brazil. The increase in Brazil resulted from the Brazilian government’s stimulus package, in the form of lower taxes on domestically-produced appliances. Lower interest rates and greater access to credit also contributed to increased consumption. Market demand continued to decline in most of the other Latin American markets. The Group’s sales volumes showed a continued increase in both the fourth quarter and the full year in comparison with 2008. Sales were substantially higher, and the Group captured additional market shares in Brazil. Operating income for both the fourth quarter and the full year improved on the basis of positive price and mix development and lower costs for raw materials. Operating margin for the full year declined, following the weak performance in the first quarter. Launches of new products during the year contributed to the improvement in the product mix. For the second consecutive year, operating income for the Latin American operation was at a record high.
Consumer Durables, Asia/Pacific and Rest of world
SEKm Q4 2009 Q4 2008 2008 2009 Net sales 2,741 2,409 9,806 9,196 Operating income 254 16 619 369 Operating margin, % 9.3 0.7 6.3 4.0
Operating income for the fourth quarter of 2008 includes costs related to cost-cutting measures, in the amount of SEK -110m, see page 2.
Australia and New Zealand Market demand for appliances in Australia continued to decline during the fourth quarter. Group sales were higher, mainly as a result of increased sales of air-conditioners. Operating income improved, primarily on the basis of higher sales volumes, positive development of sales prices, currency and raw materials. Market demand for appliances in Australia for the full year of 2009 is estimated to have been lower than in 2008. Group sales rose on the basis of higher sales volumes and maintained price levels. Operating income showed an improvement as a result of positive development of raw materials and sales prices as well as cost-cutting programs.
Southeast Asiaand China Market demand in Southeast Asia is estimated to have been somewhat higher in the fourth quarter, following three consecutive quarters of decline, compared to the same period in the previous year. Demand in the full year was unchanged. Group sales in Southeast Asia showed strong growth in several markets in the fourth quarter and the full year, and the Group captured market shares. The operation in Southeast Asia continued to show good profitability. The operation in China was positively affected by implemented cost- cutting measures as well as the repositioning of the Electrolux brand. Professional Products
SEKm Q4 2009 Q4 2008 2009 2008 Net sales 1,923 2,021 7,129 7,427 Operating income 225 181 668 774 Operating margin, % 11.7 9.0 9.4 10.4
Operating income for the fourth quarter of 2008 includes costs related to cost-cutting measures, in the amounts of SEK -40m, see page 2.
Estimates of market demand for food-service equipment indicate a continued decline in the fourth quarter of 2009 in comparison with the same period in the previous year. Group sales of food-service equipment declined in the fourth quarter as a result of lower sales volumes, a less favorable product mix, and downward pressure on prices. Despite lower sales and lower utilization of capacity, operating margin was in line with the fourth quarter of 2008, primarily on the basis of lower costs for raw materials, previous personnel cutbacks, and more efficient production. Group sales of food-service equipment declined for the full year 2009 in comparison with 2008, as a result of lower sales volumes, and operating income also declined. Estimates of market demand for laundry equipment indicate a continued decline in the fourth quarter of 2009 in comparison with the same period in the previous year. Group sales rose as a result of higher sales volumes, and market shares expanded. Operating income and margin improved, mainly on the basis of higher sales volumes, implemented cost- cutting measures and favorable exchange rates. Group sales of laundry equipment were lower for the full year 2009 in comparison with 2008, as a result of lower sales volumes. Operating income improved, however, on the basis of lower costs for raw materials, favorable exchange rates, price increases and lower costs for production and administration.
Cash flow Cash flow from operations and investments in the fourth quarter of 2009 amounted to SEK -1,440m (966). Exclusive of extra contribution to pension funds, the cash flow for the quarter was very strong, amounting to SEK 2,495m. SEK 3,935m was paid to the Group’s pension funds during the quarter. This included payments to pension funds in Germany, the US and the UK. The payments have reduced the Group’s pension net debt, limited risk exposure and volatility in pension liabilities. The strong cash flow was generated by the increased income from operations and by changes in operating assets and liabilities. Cash flow from working capital continued to be very positive in the fourth quarter. Seasonally lower sales and production in December had a positive effect on trade receivables and inventories. Inventory levels declined steadily during the year. The Group’s ongoing structural efforts to reduce tied-up capital also contributed to the strong cash flow in the quarter and the full year of 2009. The Group’s inventories, trade receivables and accounts payable developed favorably in relation to net sales, see table on page 14. Payments for previously delivered air-conditioners in the US had an adverse effect on cash flow in the amount of approximately SEK 900m during the quarter. Outlays for the ongoing restructuring and cost-cutting programs amounted to approximately SEK 220m. Investments during the fourth quarter of 2009 referred mainly to manufacturing systems for new products, and to reinvestment. In 2008, investments included new plants in connection with relocation of production. Cash flow from operations and investments for the full year 2009 amounted to SEK 9,265m, exclusive of pension payments.
Cash flow Q4 2009 Q4 2008 2008 SEKm 2009 Cash flow from operations, excluding change in operating assets and liabilities 2,171 594 6,378 3,446 Change in operating assets and liabilities 1,405 1,626 5,854 1,503 Extra contributions to pension funds -3,935 0 -3,935 0 Investments -1,081 -1,254 -2,967 -3,755 Cash flow from operations and investments -1,440 966 5,330 1,194 Dividend - - 0 -1,204 Sale of shares 10 - 69 17 Total cash flow, excluding change in loans and short- term investments -1,430 966 5,399 7
Financial position Total equity as of December 31, 2009, amounted to SEK 18,841m (16,385), which corresponds to SEK 66.24 (57.78) per share.
Net borrowings Dec. 31, 2009 Dec. 31, 2008 SEKm Borrowings 14,022 13,946 Liquid funds 13,357 9,390 Net borrowings 665 4,556 Net debt/equity ratio 0.04 0.28 Equity 18,841 16,385 Equity per share, SEK 66.24 57.78 Return on equity, % 14.9 2.4 Return on equity, excluding items affecting comparability, % 22.0 4.2 Equity/assets ratio, % 31.8 25.6
Net borrowings Net borrowings amounted to SEK 665m (4,556). The net debt/equity ratio was 0.04 (0.28). The equity/assets ratio was 31.8% (25.6). During 2009, SEK 1,639m of new long-term borrowings were raised. Long- term borrowings as of December 31, 2009, excluding long-term borrowings with maturities within 12 months, amounted to SEK 10,241m with average maturities of 3.9 years, compared to SEK 9,963m and 4.7 years by the end of 2008. During 2010 and 2011, long-term borrowings in the amount of SEK 2,217m will mature. Liquid funds as of December 31, 2009, excluding a committed unused revolving credit facility of EUR 500m, amounted to SEK 13,357m.
Net assets and working capital Average net assets for the period amounted to SEK 19,411m (20,538). Net assets as of December 31, 2009, amounted to SEK 19,506m (20,941). Adjusted for items affecting comparability, i.e., restructuring provisions, average net assets amounted to SEK 20,320m (21,529), corresponding to 18.6% (20.5) of net sales. Working capital as of December 31, 2009, amounted to SEK -5,154m (-5,131), corresponding to -4.5% (-4.4) of annualized net sales. The return on net assets was 19.4% (5.8), and 26.2% (7.2), excluding items affecting comparability.
Pension commitments The provisions for post-employment benefits as of December 31, 2009, decreased to SEK 2,168m (6,864), mainly as a result of extra contributions of SEK 3,935 to pension funds in December. Structural changes January 2010 Production of cookers in Sweden to be phased out In 2009, an analysis was performed of a possible phase-out of cooker production in Motala, Sweden. It was subsequently decided that the Group’s production of cookers in Motala will be discontinued. The greater part will be phased out and it is intended that an external part will take over production of large cookers and compact-kitchens. Approximately 240 people are employed at the plant. The cost of the discontinuation is estimated at approximately SEK 90m, which will be charged against operating income, within items affecting comparability in the first quarter of 2010.
December 2009 North American corporate office operations to be consolidated To take advantage of synergies, improve coordination and increase efficiencies, it has been decided to consolidate most of the US corporate office operations and support functions into one single location. The new corporate headquarters will be located in Charlotte, North Carolina. Consolidation will be done gradually and is scheduled to start in the third quarter of 2010. The cost for the consolidation is estimated to SEK 218m, which was charged to operating income of in the fourth quarter of 2009, within items affecting comparability.
October 2009 Production of laundry products in North America to be concentrated Decision has been taken to concentrate production of laundry products in North America to the Group’s factory in Juarez, Mexico, while ceasing production at the plant in Webster City and its satellite plant in Jefferson, Iowa. A total of approximately 950 employees will be affected. Production is expected to be discontinued at the Jefferson plant in the fourth quarter of 2010 and at the Webster City plant in the first quarter of 2011. The cost for the closures is estimated to SEK 560m, which was charged to operating income in the fourth quarter of 2009, within items affecting comparability.
Production at the washing-machine factory in Spain to be discontinued It has been decided to discontinue production at the washing-machine factory in Alcalà, Spain. A total of approximately 450 employees will be affected. Production is expected to be discontinued in the first quarter of 2011. The cost for the closure is estimated to SEK 440m, which was charged to operating income in the fourth quarter of 2009, within items affecting comparability.
April 2009 Washing-machine plant in Russia to be closed Electrolux will close the plant in St. Petersburg, Russia. Production comprises washing machines mainly for the Russian market, with approximately 250 employees. The closure is scheduled for completion in the second quarter of 2010. The shutdown involves a total cost of SEK 105m, which was taken as a charge against operating income in the first quarter of 2009, within items affecting comparability.
Refrigerator plant in China has been closed Electrolux discontinued production at the refrigerator plant in Changsha, China, in the first quarter of 2009. The closure of the factory involved a total cost of SEK 162m, which was taken as a charge against operating income in the first quarter of 2009, within items affecting comparability. About 700 employees were affected by the closure. Distribution of appliances is now concentrated to gain a strong position in the premium segment.
March 2009 Higher efficiency at the washing-machine plant in Italy Electrolux will re-engineer production at the washing-machine plant in Porcia, Italy, in order to increase efficiency and productivity. This involves a cost of SEK 132m, which was taken as a charge against operating income in the first quarter of 2009, within items affecting comparability.
Changes in Group Management Keith McLoughlin, new Chief Operations Officer Major Appliances Keith McLoughlin was appointed Chief Operations Officer Major Appliances in July 2009. Keith McLoughlin is responsible for a new global organization for R&D, purchasing and manufacturing, with the objective of taking full advantage of the Group’s global reach and economies of scale. Keith McLoughlin is a member of Group Management and reports to the President and CEO Hans Stråberg. Previously, Keith McLoughlin was head of Electrolux Major Appliances North America.
Kevin Scott, new head of Major Appliances North America Kevin Scott was appointed new head of Major Appliances North America in July 2009. He succeeded Keith McLoughlin, who has a new appointment as head of global operations for major appliances, see above. Kevin Scott is a member of Group Management and reports to the President and CEO Hans Stråberg. Previously, Kevin Scott has held various management positions within Electrolux Major Appliances North America. Prior to joining Electrolux, Mr Scott held senior positions with DuPont and Pepsi.
Alberto Zanata, new head of Professional Products Alberto Zanata was appointed new head of Electrolux Professional Products in June 2009. He succeeded Dr. Detlef Münchow, who has left the Group. Alberto Zanata is a member of Group Management and reports to the President and CEO Hans Stråberg. Previously, Mr Zanata has held various management positions within Electrolux operations for professional products.
Other items Electrolux has applied for delisting from the LSE Electrolux has applied for delisting from the London Stock Exchange (LSE). The Electrolux B-share has been listed on the LSE since 1928. The LSE listing has been a part of a strategy to increase international ownership in Electrolux. However, this listing is no longer deemed necessary due to the deregulation of international capital markets and the increased foreign ownership of shares on the Nasdaq OMX Stockholm. In recent years, trading of Electrolux shares on the LSE has been limited. Electrolux has also exited its other international listings in recent years, including those of Paris, Zurich and Geneva as well as New York’s Nasdaq. It is expected that the delisting will become effective during the first quarter 2010.
Asbestos litigation in the US Litigation and claims related to asbestos are pending against the Group in the US. Almost all of the cases refer to externally supplied components used in industrial products manufactured by discontinued operations prior to the early 1970s. Some of the cases involve multiple plaintiffs who have made identical allegations against many other defendants who are not part of the Electrolux Group. As of December 31, 2009, the Group had a total of 2,818 (2,639) cases pending, representing approximately 3,120 (approximately 3,200) plaintiffs. During 2009, 760 new cases with approximately 760 plaintiffs were filed and 581 pending cases with approximately 850 plaintiffs were resolved. Approximately 40 of the plaintiffs relate to cases pending in the state of Mississippi. Additional lawsuits may be filed against Electrolux in the future. It is not possible to predict either the number of future claims or the number of plaintiffs that any future claims may represent. In addition, the outcome of asbestos claims is inherently uncertain and always difficult to predict and Electrolux cannot provide any assurances that the resolution of these types of claims will not have a material adverse effect on its business or on results of operations in the future.
Conversion of shares According to the company’s articles of association, owners of A-shares have the right to have such shares converted to B-shares. Conversion reduces the total number of votes in the company. In January 2010, at the request of shareholders, 439,150 A-shares were converted to B-shares. The total number of votes thereafter amounts to 39,048,843. The total number of registered shares in the company amounts to 308,920,308 shares, of which 9,063,125 are A-shares and 299,857,183 are B-shares.
Repurchase and transfer of own shares For several years, Electrolux has on the basis of authorizations by the Annual General Meeting (AGM) acquired and transferred own shares. The purpose of the share-repurchase programs has been to enable adapting the capital structure of the Group and thereby to contribute to increased shareholder value, or to use the repurchased shares in conjunction with the financing of potential acquisitions and the Group’s share-related incentive programs. In accordance with the proposal by the Board of Directors, the AGM 2009 decided to authorize the Board to transfer own shares on the account of company acquisitions during the period up until the AGM in 2010. The Board of Directors did not request any mandate from the AGM to repurchase additional shares in the company. The AGM also authorized transfers of up to 3,000,000 repurchased B- shares to cover costs that may arise as a result of the previous employee stock-option programs for 2002-2003 and the Electrolux Performance Share Program 2007. As of December 31, 2009, Electrolux held 24,498,841 B-shares, corresponding to 7.9% of the total number of outstanding shares, see table on page 12.
Annual General Meeting 2010 The Annual General Meeting of AB Electrolux will be held on Tuesday, March 30, 2010, at the Berwald Hall, Dag Hammarskjölds väg 3, Stockholm, Sweden.
Proposed dividend The Board of Directors proposes a dividend for 2009 of SEK 4.00 (0) per share, for a total dividend payment of approximately SEK 1,138m (0). The proposed dividend corresponds to 30% of income for the period, excluding items affecting comparability. Tuesday, April 6, 2010, is proposed as record date for the dividend. The Group’s goal is for the dividend to correspond to at least 30% of income for the period, excluding items affecting comparability. Historically, the Electrolux dividend rate has been considerably higher than 30%. Electrolux also has a long tradition of high total distribution to shareholders that includes repurchases and redemptions of shares as well as dividends. No dividend was paid in 2008, as a consequence of the low income for the period, the sharp decline in demand and the great uncertainty on the development of the market for 2009.
Nomination Committee In accordance with the decision by the Annual General Meeting in March 2009, Electrolux shall have a Nomination Committee consisting of six members. The members should be one representative of each of the four largest shareholders in terms of voting rights that wish to participate in the committee, together with the Chairman of the Electrolux Board and one additional Board member. The members of the Nomination Committee have been appointed based on the ownership structure as of August 31, 2009. Petra Hedengran, Investor AB, is the Chairman of the committee. The other owner representatives are Ramsay J. Brufer, Alecta Pension Insurance; Marianne Nilsson, Swedbank Robur Funds, and Carina Lundberg Markow, Folksam Group. The committee also includes Marcus Wallenberg and Peggy Bruzelius, Chairman and Deputy Chairman, respectively, of Electrolux. The committee will prepare proposals for the AGM in 2010, regarding Chairman of the AGM, Board members, Chairman of the Board, remuneration for Board members, Auditor, Auditor’s fees and the procedure for electing nomination committee for the following year. Shareholders who wish to submit proposals to the nomination committee should send an email to [email protected]
Risks and uncertainty factors Risks in connection with the Group’s operations can, in general, be divided into operational risks related to business operations and those related to financial operations. Operational risks are normally managed by the operative units within the Group, and financial risks by the Group’s treasury department.
Risks and uncertainty factors Electrolux operates in competitive markets, most of which are relatively mature. Demand for appliances varies with general business conditions, and price competition is strong in a number of product categories. Electrolux ability to increase profitability and shareholder value is largely dependent on its success in developing innovative products and maintaining cost-efficient production. Major factors for maintaining and increasing competitiveness include managing fluctuations in prices for raw materials and components as well as implementing restructuring. In addition to these operative risks, the Group is exposed to risks related to financial operations, e.g., interest risks, financing risks, currency risks and credit risks. The Group’s development is strongly affected by external factors, of which the most important in terms of managing risks currently include:
Variations in demand Demand for appliances is affected by the general business cycle. A deterioration in these conditions may lead to lower sales volumes as well as a shift of demand to low-price products, which generally have lower margins. Utilization of production capacity may also decline in the short term. The global economic trend is an uncertainty factor in terms of the development of earnings in 2010.
Price competition A number of the markets in which Electrolux operates features strong price competition. The Group’s strategy is based on innovative products and brand-building, and is aimed, among other things, at minimizing and offsetting price competition for its products. A continued downturn in market conditions involves a risk of increasing price competition.
Changes in prices for raw materials and components The raw materials to which the Group is mainly exposed comprise steel, plastics, copper and aluminum. Bilateral agreements are used to manage price risks. To some extent, raw materials are purchased at spot prices. There is considerable uncertainty regarding trends for the prices of raw materials.
Access to financing The Group’s loan-maturity profile for 2010 and 2011 represents maturities of approximately SEK 2,200m in long-term borrowings. Electrolux has an unused revolving credit facility for long- or short- term back-up.
Risks, risk management and risk exposure are described in more detail in the Annual report 2008, www.electrolux.com/annualreport2008. Parent company AB Electrolux The Parent Company comprises the functions of the Group’s head office, as well as five companies operating on a commission basis for AB Electrolux. Net sales for the Parent Company, AB Electrolux, in 2009 amounted to SEK 5,928m (5,808), of which SEK 3,243m (3,026) referred to sales to Group companies and SEK 2,685m (2,782) to external customers. Income after financial items was SEK 3,161m (575), including dividends from subsidiaries in the amount of SEK 3,178m (1,573). Income for the period amounted to SEK 3,355m (663). Capital expenditure in tangible and intangible assets was SEK 415m (453). Liquid funds at the end of the period amounted to SEK 3,869m, as against SEK 4,045m at the start of the year. Undistributed earnings in the Parent Company at the end of the period amounted to SEK 12,694m, as against SEK 9,110m at the start of the year. The income statement and balance sheet for the Parent Company are presented on page 18.
Stockholm, February 3, 2010 Hans Stråberg President and CEO
New accounting standards
IAS 1 Presentation of Financial Statements (Revised) The Group has implemented the revised IAS 1, which is effective as of January 1, 2009. As a consequence, the Group’s consolidated income statement includes items of other comprehensive income. Previously these items were reported within consolidated equity. Consequently, the consolidated equity statement is reported excluding these items. The change does not imply any new information or changes in key ratios.
IFRS 8 Operating Segments This new standard replaces IAS 14, Segment Reporting, and prescribes the measurement and presentation of segments. Electrolux will report the same segments as previously. The impact of the new standard will be disclosed according to the standard, e.g., sales per country in the Annual Report. The standard is effective for annual periods beginning on/or after January 1, 2009. The Group has applied the additional disclosure requirements in IAS 34, Interim Financial Reporting, in accordance with the new standard. As a consequence, assets and liabilities per segment are presented in the interim reports as from the first quarter of 2009.
Accounting and valuation principles This report has not been audited.
Electrolux applies International Financial Reporting Standards (IFRS) as adopted by the European Union. This report has been prepared in accordance with IAS 34, Interim Financial Reporting, and ÅRL, the Swedish Annual Accounts Act and recommendation RFR 2, Accounting for legal entities, issued by the Swedish Financial Reporting Board. There are no changes in the Group’s accounting and valuation principles compared with the accounting and valuation principles described in Note 1 of the Annual Report 2008 and the description on new accounting standards above.
Consolidated income statement
SEKm Q4 2009 Q4 2008 2008 2009 Net sales 28,215 28,663 109,132 104,792 Cost of goods sold -21,820 -24,129 -86,980 -86,795 Gross operating income 6,395 4,534 22,152 17,997 Selling expenses -2,819 -3,413 -11,394 -11,788 Administrative expenses -1,506 -1,540 -5,375 -4,839 Other operating income/expenses -47 30 -61 173 Items affecting comparability -1,218 42 -1,561 -355 Operating income 805 -347 3,761 1,188 Margin, % 2.9 -1.2 3.4 1.1 Financial items, net -4 -183 -277 -535 Income after financial items 801 -530 3,484 653 Margin, % 2.8 -1.8 3.2 0.6 Taxes -137 56 -877 -287 Income for the period 664 -474 2,607 366 Available for sale instruments1) 9 -11 138 -403 Cash-flow hedges2) 41 -32 -112 21 Exchange differences on translation of foreign operations3) 630 900 -264 1,589 Income tax relating other comprehensive income - - - - Other comprehensive income, net of tax4) 680 857 -238 1,207 Total comprehensive income for the period 1,344 383 2,369 1,573 Income for the period attributable to: Equity holders of the Parent Company 664 -474 2,607 366 Non-controlling interests in income for the period - - - - Total comprehensive income for the period attributable to: Equity holders of the Parent Company 1,344 383 2,369 1,573 Non-controlling interests in income for the period - - - - Earnings per share, SEK 2.34 -1.68 9.18 1.29 Diluted, SEK 2.33 -1.68 9.16 1.29 Number of shares after buy-backs, million 284.4 283.6 284.4 283.6 Average number of shares after buy- backs, million 284.4 283.6 284.0 283.1 Diluted, million 285.4 283.6 284.6 283.2
1) Available for sale instruments refer to the fair-value changes in Electrolux share holdings in Videocon Industries Ltd., India. The share holdings are classified as available for sale in accordance with IFRS. 2) Cash-flow hedges refer to changes in valuation of currency contracts used for hedging future foreign currency transactions. When the actual transaction occurs, the result is reported within operating income. 3) Exchange-rate differences on translation of foreign operations refer to changes in exchange rates when net investments in foreign subsidiaries are translated to SEK. The amount is reported net of hedging contracts. In September, the Group changed source for the exchange rate for the VEF (Venezuelan Bolivar Fuerte) from the official rate to the parallel bank-market rate. This change in consolidation rate reduced the SEK value of equity by SEK 179m in the third quarter. 4) These items were previously reported within the financial statement; Changes in consolidated equity.
Items affecting comparability
SEKm Q4 2009 Q4 2008 2009 2008 Restructuring provisions and write-downs Appliances plant in Alcalà, Spain -440 0 -440 0 Appliances plants in Webster City and Jefferson, USA -560 0 -560 0 Office consolidation in USA -218 0 -218 0 Appliances plant in Changsha, China 0 0 -162 0 Appliances plant in Porcia, Italy 0 0 -132 0 Appliances plant in St. Petersburg, Russia 0 0 -105 0 Appliances plants in Scandicci and Susegana, Italy 0 -3 0 -487 Reversal of unused restructuring provisions 0 45 56 132 Total -1,218 42 -1,561 -355
Consolidated balance sheet
SEKm Dec. 31, 2009 Dec. 31, 2008 Assets Property, plant and equipment 15,315 17,035 Goodwill 2,274 2,095 Other intangible assets 2,999 2,823 Investments in associates 19 27 Deferred tax assets 2,693 3,180 Financial assets 434 280 Other non-current assets 1,745 1,472 Total non-current assets 25,479 26,912 Inventories 10,050 12,680 Trade receivables 20,173 20,734 Tax assets 1,103 511 Derivatives 377 1,425 Other current assets 2,947 3,460 Short-term investments 3,030 296 Cash and cash equivalents 9,537 7,305 Total current assets 47,217 46,411 Total assets 72,696 73,323 Equity and liabilities Equity attributable to equity holders of the Parent Company Share capital 1,545 1,545 Other paid-in capital 2,905 2,905 Other reserves 1,814 2,052 Retained earnings 12,577 9,883 18,841 16,385 Non-controlling interests 0 0 Total equity 18,841 16,385 Long-term borrowings 10,241 9,963 Deferred tax liabilities 819 840 Provisions for post-employment benefits 2,168 6,864 Other provisions 5,449 4,175 Total non-current liabilities 18,677 21,842 Accounts payable 16,031 15,681 Tax liabilities 2,367 2,329 Short-term liabilities 11,235 10,644 Short-term borrowings 3,364 3,168 Derivatives 351 784 Other provisions 1,830 2,490 Total current liabilities 35,178 35,096 Total equity and liabilities 72,696 73,323 Contingent liabilities 1,185 1,293
Shares
Shares held Outstanding Outstanding Shares held by by other Number of shares A-shares B-shares Electrolux shareholders Number of shares as of January 1, 2009 9,502,275 299,418,033 25,338,804 283,581,504 Shares sold to senior managers under the stock-option programs First quarter 0 0 Second quarter -533,285 533,285 Third quarter -180,878 180,878 Fourth quarter -125,800 125,800 Shares alloted to senior managers under the Performance Share Program 0 0 Number of shares as of December 31, 2009 9,502,275 299,418,033 24,498,841 284,421,467 As % of total number of shares 7.9%
Consolidated cash flow statement
SEKm Q4 2009 Q4 2008 2009 2008 Operations Operating income 805 -347 3,761 1,188 Depreciation and amortization 874 876 3,442 3,010 Capital gain/loss included in operating income 0 -31 0 -198 Restructuring provisions 941 729 434 1,134 Share-based compensation 7 0 18 -41 Financial items paid, net -128 -361 -348 -729 Taxes paid -328 -272 -929 -918 Cash flow from operations, excluding change in operating assets and liabilities 2,171 594 6,378 3,446 Change in operating assets and liabilities Change in inventories 1,271 2,165 2,276 923 Change in trade receivables 1,453 2,285 1,209 1,869 Change in other current assets 260 27 487 -178 Change in accounts payable -826 -1,634 628 -686 Extra contributions to pension funds -3,935 0 -3,935 0 Change in other operating liabilities and provisions -753 -1,217 1,254 -425 Cash flow from change in operating assets and liabilities -2,530 1,626 1,919 1,503 Cash flow from operations -359 2,220 8,297 4,949 Investments Divestment of operations 0 -34 4 -34 Capital expenditure in property, plant and equipment -815 -1,031 -2,223 -3,158 Capitalization of product development -57 -153 -370 -544 Other -209 -36 -378 -19 Cash flow from investments -1,081 -1,254 -2,967 -3,755 Cash flow from operations and investments -1,440 966 5,330 1,194 Financing Change in short-term investments -551 124 -2,734 -128 Change in short-term borrowings 194 166 -1,131 -681 New long-term borrowings 0 932 1,639 5,289 Amortization of long-term borrowings -473 -85 -1,040 -2,923 Dividend 0 0 0 -1,204 Sale of shares 10 0 69 17 Cash flow from financing -820 1,137 -3,197 370 Total cash flow -2,260 2,103 2,133 1,564 Cash and cash equivalents at beginning of period 11,579 4,937 7,305 5,546 Exchange-rate differences 218 265 99 195 Cash and cash equivalents at end of period 9,537 7,305 9,537 7,305
Change in consolidated equity
SEKm Dec. 31, Dec. 31, 2009 2008 Opening balance 16,385 16,040 Total comprehensive income for the period 2,369 1,573 Share-based payment 18 -41 Sale of shares 69 17 Dividend 0 -1,204 Total transactions with equity holders 87 -1,228 Closing balance 18,841 16,385
Working capital and net assets
% of % of annualized net annualized net SEKm Dec. 31, 2009 sales Dec. 31, 2008 sales Inventories 10,050 8.8 12,680 11.0 Trade receivables 20,173 17.7 20,734 17.9 Accounts payable -16,031 -14.1 -15,681 -13.6 Provisions -9,447 -13,529 Prepaid and accrued income and expenses -7,998 -7,263 Taxes and other assets and liabilities -1,901 -2,072 Working capital -5,154 -4.5 -5,131 -4.4 Property, plant and equipment 15,315 17,035 Goodwill 2,274 2,095 Other non- current assets 5,197 4,602 Deferred tax assets and liabilities 1,874 2,340 Net assets 19,506 17.1 20,941 18.1 Average net assets 19,411 17.8 20,538 19.6 Average net assets, excluding items affecting comparability 20,320 18.6 21,529 20.5
Key ratios
Q4 2009 Q4 2008 2009 2008 Net sales, SEKm 28,215 28,663 109,132 104,792 Operating income, SEKm 805 -347 3,761 1,188 Margin, % 2.9 -1.2 3.4 1.1 EBITDA, SEKm 1,679 529 7,203 4,198 Earnings per share, SEK¹) 2.34 -1.68 9.18 1.29 Return on net assets, % - - 19.4 5.8 Return on equity, % - - 14.9 2.4 Equity per share, SEK - - 66.24 57.78 Cash flow from operations, SEKm -359 2,220 8,297 4,949 Capital expenditure, SEKm -815 -1,031 -2,223 -3,158 Net borrowings, SEKm - - 665 4,556 Net debt/equity ratio - - 0.04 0.28 Equity/assets ratio, % - - 31.8 25.6 Average number of employees 51,058 54,043 50,633 55,177 Excluding items affecting comparability Operating income, SEKm 2,023 -389 5,322 1,543 Margin, % 7.2 -1.4 4.9 1.5 EBITDA, SEKm 2,897 487 8,764 4,553 Earnings per share, SEK¹) 5.57 -1.82 13.56 2.32 Return on net assets, % - - 26.2 7.2 Return on equity, % - - 22.0 4.2 Value creation, SEKm 1,447 -1,052 2,884 -1,040
1) Basic, based on average number of shares, excluding shares owned by Electrolux, see page 16.
For definitions, see page 19. Net sales by business area
SEKm Q4 2009 Q4 2008 2009 2008 Consumer Durables, Europe 11,285 11,972 42,300 44,342 Consumer Durables, North America 7,865 8,928 35,726 32,801 Consumer Durables, Latin America 4,401 3,305 14,165 10,970 Consumer Durables, Asia/Pacific and Rest of world 2,741 2,409 9,806 9,196 Professional Products 1,923 2,021 7,129 7,427 Other 0 28 6 56 Total 28,215 28,663 109,132 104,792
Operating income by business area
SEKm Q4 2009 Q4 2008 2009 2008 Consumer Durables, Europe 829 -638 2,188 -22 Margin, % 7.3 -5.3 5.2 0.0 Consumer Durables, North America 450 -43 1,476 222 Margin, % 5.7 -0.5 4.1 0.7 Consumer Durables, Latin America 368 244 878 715 Margin, % 8.4 7.4 6.2 6.5 Consumer Durables, Asia/Pacific and Rest of world 254 16 619 369 Margin, % 9.3 0.7 6.3 4.0 Professional Products 225 181 668 774 Margin, % 11.7 9.0 9.4 10.4 Total business areas 2,126 -240 5,829 2,058 Margin, % 7.5 -0.8 5.3 2.0 Common Group costs, etc. -103 -149 -507 -515 Items affecting comparability -1,218 42 -1,561 -355 Operating income 805 -347 3,761 1,188
Change in net sales by business area
Q4 2009 2009 in in comparable comparable Year-over-year, % Q4 2009 currencies currencies 2009 Consumer Durables, Europe -5.7 -5.8 -4.6 -10.6 Consumer Durables, North America -11.9 -4.1 8.9 -4.8 Consumer Durables, Latin America 33.2 25.3 29.1 22.3 Consumer Durables, Asia/Pacific and Rest of world 13.8 5.4 6.6 -3.0 Professional Products -4.8 -4.5 -4.0 -11.1 Total change -1.6 -0.6 4.1 -4.8
Change in operating income by business area
Q4 2009 2009 in in comparable comparable Year-over-year, % Q4 2009 currencies currencies 2009 Consumer Durables, Europe n/a n/a n/a n/a Consumer Durables, North America n/a n/a 564.9 515.0 Consumer Durables, Latin America 50.8 47.8 22.8 18.3 Consumer Durables, Asia/Pacific and Rest of world 1,487.5 581.6 67.8 58.3 Professional Products 24.3 22.7 -13.7 -19.9 Total change, excluding items affecting comparability 620.1 574.2 244.9 236.7
Exchange rates
SEK Dec. 31, 2009 Dec. 31, 2008 AUD, average 5.98 5.56 AUD, end of period 6.43 5.34 BRL, average 3.80 3.62 BRL, end of period 4.13 3.30 CAD, average 6.68 6.21 CAD, end of period 6.86 6.26 EUR, average 10.63 9.67 EUR, end of period 10.33 10.93 GBP, average 11.84 12.11 GBP, end of period 11.41 11.19 HUF, average 0.0380 0.0385 HUF, end of period 0.0379 0.0411 USD, average 7.63 6.59 USD, end of period 7.19 7.70
Net sales and income per quarter
SEKm Q1 Q2 Q3 Q4 Full year Net sales 2009 25,818 27,482 27,617 28,215 109,132 2008 24,193 25,587 26,349 28,663 104,792 Operating income 2009 -386 1,052 2,290 805 3,761 Margin, % -1.5 3.8 8.3 2.9 3.4 2009¹) 38 1,027 2,234 2,023 5,322 Margin, % 0.1 3.7 8.1 7.2 4.9 2008 -5 254 1,286 -347 1,188 Margin, % 0.0 1.0 4.9 -1.2 1.1 2008¹) -39 793 1,178 -389 1,543 Margin, % -0.2 3.1 4.5 -1.4 1.5 Income after financial items 2009 -493 932 2,244 801 3,484 Margin, % -1.9 3.4 8.1 2.8 3.2 2009¹) -69 907 2,188 2,019 5,045 Margin, % -0.3 3.3 7.9 7.2 4.6 2008 -149 140 1,192 -530 653 Margin, % -0.6 0.5 4.5 -1.8 0.6 2008¹) -183 679 1,084 -572 1,008 Margin, % -0.8 2.7 4.1 -2.0 1.0 Income for the period 2009 -346 658 1,631 664 2,607 2008 -106 99 847 -474 366 Earnings per share, SEK²) 2009 -1.22 2.32 5.74 2.34 9.18 2009¹) 0.21 2.23 5.55 5.57 13.56 2008 -0.38 0.36 2.99 -1.68 1.29 2008¹) -0.50 1.74 2.90 -1.82 2.32 Value creation 2009 -619 389 1,667 1,447 2,884 2008 -695 175 532 -1,052 -1,040
1) Excluding items affecting comparability. 2) Basic, based on average number of shares, excluding shares owned by Electrolux.
Number of shares, basic Number of shares after buy-backs, million 2009 283.6 284.1 284.3 284.4 284.4 2008 283.4 283.6 283.6 283.6 283.6 Average number of shares after buy- backs, million 2009 283.6 283.9 284.2 284.4 284.0 2008 282.1 283.5 283.6 283.6 283.1 Items affecting comparability Restructuring provisions, write- downs and capital 2009 -424 25 56 -1,218 -1,561 loss on divestment, SEKm 2008 34 -539 108 42 -355
Net sales by business area per quarter
SEKm Q1 Q2 Q3 Q4 Full year Consumer Durables, Europe 2009 10,175 9,935 10,905 11,285 42,300 2008 10,525 10,500 11,345 11,972 44,342 Consumer Durables, North America 2009 9,144 9,848 8,869 7,865 35,726 2008 7,275 8,214 8,384 8,928 32,801 Consumer Durables, Latin America 2009 2,625 3,326 3,813 4,401 14,165 2008 2,404 2,548 2,713 3,305 10,970 Consumer Durables, Asia/ Pacific and Rest of world 2009 2,145 2,521 2,399 2,741 9,806 2008 2,228 2,369 2,190 2,409 9,196 Professional Products 2009 1,727 1,850 1,629 1,923 7,129 2008 1,753 1,944 1,709 2,021 7,427
Operating income by business area per quarter
SEKm Q1 Q2 Q3 Q4 Full year Consumer Durables, Europe 2009 125 257 977 829 2,188 Margin, % 1.2 2.6 9.0 7.3 5.2 2008 -192 294 514 -638 -22 Margin, % -1.8 2.8 4.5 -5.3 0.0 Consumer Durables, North America 2009 -177 498 705 450 1,476 Margin, % -1.9 5.1 7.9 5.7 4.1 2008 -154 113 306 -43 222 Margin, % -2.1 1.4 3.6 -0.5 0.7 Consumer Durables, Latin America 2009 50 142 318 368 878 Margin, % 1.9 4.3 8.3 8.4 6.2 2008 156 133 182 244 715 Margin, % 6.5 5.2 6.7 7.4 6.5 Consumer Durables, Asia/ Pacific and Rest of world 2009 60 104 201 254 619 Margin, % 2.8 4.1 8.4 9.3 6.3 2008 105 147 101 16 369 Margin, % 4.7 6.2 4.6 0.7 4.0 Professional Products 2009 105 165 173 225 668 Margin, % 6.1 8.9 10.6 11.7 9.4 2008 183 225 185 181 774 Margin, % 10.4 11.6 10.8 9.0 10.4 Common Group costs, etc. 2009 -125 -139 -140 -103 -507 2008 -137 -119 -110 -149 -515 Items affecting comparability 2009 -424 25 56 -1,218 -1,561 2008 34 -539 108 42 -355
Net assets by business area
Assets Equity and liabilities Net assets Dec. 31, Dec. 31, SEKm 2009 Dec. 31, 2009 Dec. 31, Dec. 31, Dec. 31, 2008 2008 2009 2008 Consumer Durables, Europe 33,633 28,345 25,982 21,104 7,651 7,241 Consumer Durables, North America 8,336 15,422 438 7,089 7,898 8,333 Consumer Durables, Latin America 5,854 6,536 2,664 2,971 3,190 3,565 Consumer Durables, Asia/Pacific and Rest of world 3,561 4,885 1,479 2,169 2,082 2,716 Professional Products 2,413 3,720 1,345 2,393 1,068 1,327 Other1) 5,738 4,938 6,685 6,596 -947 -1,658 Items affecting comparability -196 87 1,240 670 -1,436 -583 Total operating assets and 59,339 63,933 39,833 42,992 19,506 20,941 liabilities Liquid funds 13,357 9,390 — — — — Interest- bearing receivables — — — — — — Interest- bearing liabilities — — 14,022 13,946 — — Equity — — 18,841 16,385 — — Total 72,696 73,323 72,696 73,323 — —
1) Includes common Group functions. Parent Company, income statement
Q4 Q4 SEKm 2009 2008
2009 2008 Net sales 2,294 1,709 5,928 5,808
- - - - Cost of goods sold 1,321 1,345 4,368 5,046
Gross operating income 973 364 1,560 762
Selling expenses -410 -246 -865 -761
Administrative expenses -199 27 -367 -312
Other operating income -33 -64 160 33
Other operating - expenses -121 -319 1,083 -328
Operating income 210 -238 -595 -606
Financial income 2,071 946 3,989 2,643
- Financial expenses -109 -524 -233 1,462
Financial items, net 1,962 422 3,756 1,181
Income after financial items 2,172 184 3,161 575
Appropriations 0 10 20 20
Income before taxes 2,172 194 3,181 595
Taxes 148 -3 174 38
Income for the period 2,320 191 3,355 633
Parent Company, balance sheet
SEKm Dec. 31, 2009 Dec. 31, 2008 Assets Non-current assets 26,901 26,493 Current assets 20,604 20,348 Total assets 47,505 46,841 Equity and liabilities Restricted equity 4,562 4,562 Non-restricted equity 12,694 9,110 Total equity 17,256 13,672 Untaxed reserves 684 704 Provisions 584 618 Non-current liabilities 9,512 9,244 Current liabilities 19,469 22,603 Total equity and liabilities 47,505 46,841 Pledged assets 4 36 Contingent liabilities 1,818 1,720
Five-year review
Including Husqvarna 2009 2008 2007 2006 2005 2005 Net sales, SEKm 109,132 104,792 104,732 103,848 100,701 129,469 Operating income, SEKm 3,761 1,188 4,475 4,033 1,044 3,942 Margin, % 3.4 1.1 4.3 3.9 1.0 3.0 Margin, excluding items affecting comparability, % 4.9 1.5 4.6 4.4 4.0 5.4 Income after financial items, SEKm 3,484 653 4,035 3,825 494 3,215 Margin, % 3.2 0.6 3.9 3.7 0.5 2.5 Margin, excluding items affecting comparability, % 4.6 1.0 4.2 4.2 3.4 4.8 Income for the period, SEKm 2,607 366 2,925 2,648 -142 1,763 Earnings per share, SEK 9.18 1.29 10.41 9.17 -0.49 6.05 Average number of shares after buy-backs, million 284.0 283.1 281.0 288.8 291.4 291.4 Dividend, SEK 4.001) - 4.25 4.00 7.50 7.50 Value creation, SEKm 2,884 -1,040 2,053 2,202 1,305 2,913 Return on equity, % 14.9 2.4 20.3 18.7 - 7.0 Return on net assets, % 19.4 5.8 21.7 23.2 5.4 13.0 Net debt/equity ratio 0.04 0.28 0.29 -0.02 - 0.11 Capital expenditure, SEKm 2,223 3,158 3,430 3,152 3,654 4,765 Average number of employees 50,633 55,177 56,898 55,471 57,842 69,523
1) Proposed by the Board of Directors. Definitions Capital indicators Annualized sales In computation of key ratios where capital is related to net sales, the latter are annualized and converted at year-end-exchange rates and adjusted for acquired and divested operations.
Net assets Total assets exclusive of liquid funds and interest-bearing financial receivables less operating liabilities, non-interest-bearing provisions and deferred tax liabilities.
Working capital Current assets exclusive of liquid funds and interest-bearing financial receivables less operating liabilities and non-interest-bearing provisions.
Total borrowings Total borrowings consist of interest-bearing liabilities, fair-value derivatives, accrued interest expenses and prepaid interest income, and trade receivables with recourse.
Net borrowings Total borrowings less liquid funds.
Net debt/equity ratio Net borrowings in relation to equity.
Equity/assets ratio Equity as a percentage of total assets less liquid funds.
Other key ratios Earnings per share Income for the period divided by the average number of shares after buy- backs.
Operating margin Operating income expressed as a percentage of net sales.
EBITDA Operating income before depreciation and amortization.
Value creation Operating income excluding items affecting comparability less the weighted average cost of capital (WACC) on average net assets excluding items affecting comparability: [(Net sales – operating costs = operating income) – (WACC x average net assets)]. The WACC rate before tax for 2009, 2008 and 2007 is calculated at 12% compared to 11% for 2006 and 12% for 2005.
Return on equity Income for the period expressed as a percentage of average equity.
Return on net assets Operating income expressed as a percentage of average net assets.
President and CEO Hans Stråberg’s comments on the fourth-quarter and full-year results 2009 Today’s press release is available on the Electrolux website www.electrolux.com/ir
Presentation at Electrolux headquarters A presentation will be held at 15.30 CET on February 3, 2010 at Electrolux headquarters, S:t Göransgatan 143 in Stockholm, Sweden. The presentation will be chaired by Hans Stråberg, President and CEO of Electrolux. Mr. Stråberg will be accompanied by Jonas Samuelson, CFO, and Peter Nyquist, Head of Investor Relations and Financial Information.
A slide presentation for the fourth-quarter and full-year results of 2009 will be available on the Electrolux website www.electrolux.com/ir
If you are not able to participate in person at Electrolux headquarters, you can also participate by telephone. The details for participation by telephone are as follows:
Participants in Sweden should call +46 (0)8 505 598 53 Participants in UK/Europe should call +44 (0)20 3043 2436 Participants in US should call +1 866 458 4087
You can also listen to the presentation at http://www.electrolux.com/webcast1
For further information Peter Nyquist, Head of Investor Relations and Financial Information: +46 (0)8 738 60 03.
Financial information from Electrolux is also available at www.electrolux.com/ir
Factors affecting forward-looking statements This report contains “forward-looking” statements within the meaning of the US Private Securities Litigation Reform Act of 1995. Such statements include, among others, the financial goals and targets of Electrolux for future periods and future business and financial plans. These statements are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially due to a variety of factors. These factors include, but may not be limited to the following; consumer demand and market conditions in the geographical areas and industries in which Electrolux operates, effects of currency fluctuations, competitive pressures to reduce prices, significant loss of business from major retailers, the success in developing new products and marketing initiatives, developments in product liability litigation, progress in achieving operational and capital efficiency goals, the success in identifying growth opportunities and acquisition candidates and the integration of these opportunities with existing businesses, progress in achieving structural and supply-chain reorganization goals. Calendar 2010 Financial reports 2010
Interim report January-March April 27 Interim report January-June July 19 Interim report January-September October 27
Annual Report 2009 Available at the Group’s website Week 10
Annual General Meeting 2010 The Annual General Meeting of AB Electrolux will be held on Tuesday, March 30, 2010, at the Berwald Hall, Dag Hammarskjölds väg 3, Stockholm, Sweden. Electrolux discloses the information provided herein pursuant to the Securities Market Act and/or the Financial Instruments Trading Act. The information was submitted for publication at 08.00 CET on February 3, 2010.
This information was brought to you by Cision http://www.cisionwire.com
The following files are available for download:
http://feed.ne.cision.com/client/waymaker1/f.aspx?id=1499158&fn=wkr0011.pdf
Electrolux: Consolidated results 2009
FINANCIAL STATEMENT OF TELESTE CORPORATION 1 JANUARY TO 31 DECEMBER 2009
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