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Electrolux Capital Markets Day 2013 - Presentation Tomas Eliasson, CFO
 

Electrolux Capital Markets Day 2013 - Presentation Tomas Eliasson, CFO

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Electrolux today at its capital markets day presents a status update on the Group’s strategy, focusing on actions to drive profitable growth and further improve operational excellence. President and ...

Electrolux today at its capital markets day presents a status update on the Group’s strategy, focusing on actions to drive profitable growth and further improve operational excellence. President and CEO Keith McLoughlin and members of senior management will hold presentations, including an in-depth view of the operations in North America.

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    Electrolux Capital Markets Day 2013 - Presentation Tomas Eliasson, CFO Electrolux Capital Markets Day 2013 - Presentation Tomas Eliasson, CFO Presentation Transcript

    • Q3 and YTD 2013 Financials Tomas Eliasson, CFO Capital Markets Day November 13, 2013
    • The transformation Financial Highlights is paying off 2
    • Sales and EBIT bridge Q3 SEKm Q3 2012 Organic Currency translation Currency Transaction Acquisitions Q3 2013 Net sales 27,171 1,301 -1,214 - - 27,258 Growth % - 4.9% -4.6% - - 0.3% EBIT 1,423 171 -71 -448 - 1,075 EBIT % 5.2% 13.1% 5.8% - - 3.9% 0.3% 0.0% -1.6% 0.0% Accretion % 3
    • Sales and EBIT bridge Jan-Sep SEKm Jan-Sep 2012 Organic Currency Translation Currency Transaction Acquisitions Jan-Sep 2013 Net sales 80,809 3,768 -4,317 - - 80,260 Growth % - 4.9% -5.5% - - -0.7% EBIT 3,442 408 -179 -840 - 2,832 EBIT % 4.3% 11.0% 4.2% - - 3.5% 0.3% 0.0% -1.0% 0.0% Accretion % 4
    • The transformation Currency Effects is paying off 5
    • Transactional Currency Effects  In general, earnings for Electrolux benefits from a:  Weak USD, EUR, HUF, THB, MXN and CNY (export countries)  Strong BRL, RUB, ARS, CAD, CHF, AUD and GBP (import countries)  In countries with large manufacturing and logistic centers effects over time will to a large extent balance out due to natural hedging. 6
    • Gross Currency Flows 10 000 8 000 6 000 4 000 SEKm  Largest currency flows over 12 months  In total 80 significant currency pairs  Total flows around SEK 37bn 2 000 0 -2 000 -4 000 -6 000 BRL AUD CHF GBP RUB THB HUF CNY EUR USD 7
    • The transformation Restructuring Update is paying off 8
    • Announced in Q3  Manufacturing footprint SEK 2.2bn  Overhead cost reduction SEK 1.2bn  Total savings end of 2016 SEK 1.8bn
    • Operational Excellence 2012-2016 Presented November 2011 Total annual savings: SEK 5.3bn One-time costs: SEK 5.1bn Mfg footprint Global Operations Overhead cost Saving 1.6bn Cost 3.5bn Saving 3.0bn Cost 1.2bn Saving 0.7bn Cost 0.7bn Full effect 2016 10
    • Operational Excellence 2012-2016 Savings and Cost Update Q3 2013 Total annual savings: SEK 5.9bn (5.3) One-time costs: SEK 6.0bn (5.1) Mfg footprint Overhead cost Overhead cost Saving 1.1bn Cost 3.2bn Status: Global Operations Saving 3.0bn Cost 1.2bn Saving 0.7bn Cost 0.7bn Saving 1.1bn Cost 1.2bn Majority done Starting now On-going, savings during latter part of the period 45% done Full effect 2016 11
    • The transformation Cash Flow is paying off 12
    • Cash Flow Free Cash Flow 4 000 Strong recovery in Q2 & Q3 after weak Q1 3 000 SEKbn 2 000 1 000 0 -1 000 -2 000 -3 000 -4 000 2011 2012 2013 13
    • Net Operating Working Capital 15 000 000 16% 14 000 000 13 000 000 12% 12 000 000 NOWC/Revenues % NOWC SEKk 14% 10% 11 000 000 10 000 000 8% 2010 2011 Total NOWC 2012 NOWC % NS 12 Months 2013 NOWC % NS 3 Months 14
    • The transformation the Understanding is paying off Income Statement 15
    • Understanding Electrolux (2012) 110bn Revenues 45bn Direct Material 18bn Sourced Products 42bn Salaries and Other Expenses = 5bn 16
    • Understanding Electrolux (2012) 110bn Revenues 45bn Direct Material 18bn Sourced Products 42bn Salaries and Other Expenses = 5bn 17
    • Understanding Electrolux (2012) Drop-through Price 0% or 100% Revenues 110bn Mix 20-50% Volume ~20% !
    • Understanding Electrolux (2012) 110bn Revenues 45bn Direct Material 18bn Sourced Products 42bn Salaries and Other Expenses = 5bn 19
    • Understanding Electrolux (2012) 40% Steel Direct Material 45bn 50% Raw Material 50% Added Value 30% Plastics 30% Other 20
    • Understanding Electrolux (2012) 110bn Revenues 45bn Direct Material 18bn Sourced Products 42bn Salaries and Other Expenses = 5bn 21
    • Understanding Electrolux (2012) Four major groups Sourced Products 18bn     Air conditioners Microwave owens Small Appliances Cooker hoods 22
    • Understanding Electrolux (2012) 110bn Revenues 45bn Direct Material 18bn Sourced Products 42bn Salaries and Other Expenses = 5bn 23
    • Understanding Electrolux (2012) 17bn Personnel Salaries and Other Expenses 42bn 3-4% inflation 22bn Expenses 3bn Depreciation 24
    • Understanding Electrolux (2012) 110bn Revenues 45bn Direct Material 18bn Sourced Products 42bn Salaries and Other Expenses = 5bn Variable cost to sales Fixed cost to sales 80% 15% 25
    • Summary of Major P&L Components Price 0% or 100% drop-through(!) Mix 20-50% drop-through Volume ~20% drop-through Total Sales SEK 110bn Salaries & expenses SEK 42bn, 3-4% inflation (1.2bn-1.5bn) Raw material SEK 45bn total material, raw material 50% Sourced products SEK 18bn Savings projects Cost programs/efficiency Fixed cost changes Planned changes Net organic Net before currency and acq Currency ~SEK 37bn in gross currency flows Total 26
    • The transformation Summary is paying off 27
    • Key Points Financial Development  Earnings     North America more than compensates for EMEA deterioration The rest is basically currency impacts Over time currency impacts are mitigated Cost reduction program/investigation, mainly for EMEA, initiated  Cash Flow performance strong in Q2 and Q3 after weak Q1  Going forward:  Growth according to strategy  Low fixed cost to sales (~15%) and high asset velocity (~4 times) provides flexibility  Cash Flow and Return on Net Assets  Restoring profitability in EMEA