Electrolux Interim Report Q4 2009 Presentation

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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.

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Electrolux Interim Report Q4 2009 Presentation

  1. 1. Year Results, 2009 February 3, 2010 Hans Stråberg, President and CEO Jonas Samuelson, CFO Peter Nyquist, IR
  2. 2. Strong results for 2009 confirm the Group’s strategy EBIT, % Target of 6% over 6 a business cycle 6% 4.9% 4 4.6% 4.4% 2 1.5% 0 2006 2007 2008 2009 EBIT excluding items affecting comparability. 2
  3. 3. Through continuing launching products we have improved our mix Mix improvement (sales) 2% 1% 0% 2006 2007 2008 2009 3
  4. 4. Price development Drivers of price stability Price index 100 Competitors’ balance sheets Being aggressive on price very costly Record-low inventory levels 95 Industry shift towards LCC capacity almost finished – price cuts based on unique cost position will become less of an issue 90 2004 2005 2006 2007 2008 2009 Strong internal focus on price YTD 4
  5. 5. Reducing cost – profitability with capacity utilization of 60% 90% 80% 70% 60% 50% 40% 85% 30% 60% 20% 10% 0% Normal Current Only 20% of total cost is fixed 5
  6. 6. The raw-material markets are uncertain Plastic prices development Electrolux 100 Other 19% Cu&Al 11% 0 Plastics 23% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2009 Steel prices development Electrolux 100 Steel 47% 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2009 6
  7. 7. Focus on cash flow; structural improvements – lower inventories Cash flow from operations and investments 4000 Improved earnings 3500 Significant improvement in 3000 working capital strongly 2500 contributed to high cash flow 2000 Structural reduction of inventory 1500 level 1000 Reduction of past due 500 receivables 0 Improved accounts payable -500 Lower capital expenditure -1000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4* Proposal to pay dividend of SEK 2007 2008 2009 1.1 billion *) Pension contributions are excluded in Q4, 2009 figures Consistent with dividend policy 7
  8. 8. Further comments on the financial and balance sheet Contributions to pension funds Pension 2009 2008 funds Close to SEK 4 billion injections into pension funds Assets 19,008 13,989 Reduced pension net debt volatility Liabilities 22,399 23,185 Positive EBIT impact Pension 25% tax rate in 2009 -3,391 -9,196 net debt Reversal of tax provisions 8
  9. 9. Q4 Highlights EBIT (mSEK) Margin (%) Net sales declined by 1% in comparable 2500 10 currencies 7,3 7,2 2000 8 Continued weak market demand Maintained prices 1500 6 EBIT amounted to SEK 2,023m, 1000 4 excluding items affecting comparability 500 2 Improved results for all business areas despite continued weak markets 0 0 Cost savings -500 -2 Positive price and mix development -1,2 Lower raw-material costs 2007 2008 2009 -1000 -4 Continued strong cash flow (SEKm) Q4 2009 Q4 2008 Continued structural improvement of Sales 28,215 28,663 working capital EBIT 2,023 -389 Margin 7.2% -1.4% 9
  10. 10. Consumer Durables Europe EBIT (mSEK) Margin (%) 1200 12 Weak market demand 6,1 7,3 Stabilization in some 800 8 markets 400 4 Cost reductions 0 0 Positive price and mix development -400 -4 Lower raw materials costs -5,3 -800 2007 2008 2009 -8 Improved results for floor- (SEKm) Q4 2009 Q4 2008 care products Sales 11,285 11,972 EBIT 829 -638 Improved product mix Margin 7.3% -5,3% 10
  11. 11. The European market continued to decline in 2009… Quarterly comparison, year over year 10% 5% 0% -5% -10% -15% 2006 2007 2008 2009 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 West. Europe 4% 1% 1% 5% 1% 1% -1% -5% -4% -4% -5% -8% -9% -9% -4% -2% East. Europe 1% 9% 6% 7% 14% 5% 5% 10% 6% 5% 4% -15% -31% -30% -26% -17% 11
  12. 12. Consumer Durables North America EBIT (mSEK) Margin (%) 10 Cost reductions 8,6 Improved internal efficiency 600 5,7 Higher productivity despite 5 350 lower capacity utilization 100 Positive price and mix 0 development -0,5 -150 Lower raw material costs 2007 2008 2009 -400 -5 Improved operating income (SEKm) Q4 2009 Q4 2008 for floor-care products Sales 7,865 8,928 EBIT 450 -43 Margin 5.7% -0.5% 12
  13. 13. In North America, we saw the first quarter of growth in three years… Quarterly comparison, year-over-year 10% 5% 0% -5% -10% -15% -20% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2006 2007 2008 2009 13
  14. 14. Consumer Durables Latin America EBIT (mSEK) Margin (%) 400 8,4 10,0 Continued strong demand in Brazil 7,3 7,4 300 7,5 Tax incentives Interest rates 200 5,0 Consumer access to credit 100 2,5 Record high earnings Positive price/mix 0 0,0 Lower raw material costs 2007 2008 2009 -100 -2,5 (SEKm) Q4 2009 Q4 2008 Sales 4,401 3,305 EBIT 368 244 Margin 8.4% 7.4% 14
  15. 15. Consumer Durables Asia Pacific EBIT (mSEK) Margin (%) 300 9,3 10,0 Improved operating income 250 7,5 9,0 in Australia 8,0 7,0 Increased sales of air- 200 6,0 conditioners 150 5,0 4,0 Positive price development 100 3,0 Raw materials 2,0 50 0,7 1,0 Southeast Asia 0 0,0 Market share gain 2007 2008 2009 Profitable growth (SEKm) Q4 2009 Q4 2008 China Sales 2,741 2,409 Cost measures EBIT 254 16 Repositioning of Electrolux Margin 9.3% 0.7% brand 15
  16. 16. Consumer Durables Professional Products EBIT (mSEK) Margin (%) 250 11,1 11,7 12,0 Food-service 9,0 10,0 Weak market demand 200 8,0 Price pressure 150 6,0 Lower costs for raw 100 4,0 materials 50 2,0 Cost reductions 0 0,0 Laundry products Market share gain 2007 2008 2009 Cost reductions (SEKm) Q4 2009 Q4 2008 Sales 1,923 2,021 EBIT 225 181 Margin 11.7% 9.0% 16
  17. 17. 17
  18. 18. Factors affecting forward- looking statements Factors affecting forward-looking statements This presentation 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. 18

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