Electrolux Presentation SEB Enskilda Capital Goods Seminar 2011

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Electrolux Presentation SEB Enskilda Capital Goods Seminar 2011, Stockholm, Sweden

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Electrolux Presentation SEB Enskilda Capital Goods Seminar 2011

  1. 1. How will Electroluxcreate sustainableeconomic value?Keith McLoughlinPresident and CEO
  2. 2. What should Electrolux priority areas tocreate further share holder values? Todays agenda 1. Return on Invested Capital 2. Growth 3. Current Reality 2
  3. 3. EBIT EBIT margin (excluding items affecting comparability) 6% 0% 2006 2007 2008 2009 2010 3
  4. 4. Capital Turnover Capital Turnover 4,0 0,0 2006 2007 2008 2009 2010 4
  5. 5. Return on net assets Return on net assets 30% 20% 10% 0% 2006 2007 2008 2009 2010 5
  6. 6. Growth Net sales growth (in comparable currencies) 5% 0% -5% 2006 2007 2008 2009 2010 6
  7. 7. Growth Target % 4
  8. 8. Sell-side Consensus 1-2% 8
  9. 9. Phases in ElectroluxdevelopmentUp until 1990’s Up until early 2000’s 2000’s Onwards Globalization Acquisitions & Growth Consolidation Today Growth Transformation 9
  10. 10. First margin expansionthen profitable growth Operating margin % 8 Maximize 7 shareholder 6 value 5 4 3 2 1 0 1 2 3 4 Growth % 10
  11. 11. How we accelerate growth  Growth in emerging markets  Selective acquisitions in strategically important categories and markets  Develop adjacent product opportunities  Value share growth in mature markets 11
  12. 12. Coming from heavy exposure tomature markets… 12
  13. 13. …with tremendous growthopportunity in emerging markets 13
  14. 14. Overview of CTI Founded in 1905, CTI is the leading manufacturer of large household appliances in Chile Listed on the Santiago Stock 78.5% Exchange, with controlling CST shareholder Sigdo Koppers Key subsidiaries: Frimetal and Somela (listed) Key Financials (SEK) (1) 2010, Y/e Dec Three production sites in Chile and Argentina Sales 2.9 bn EBIT 453 m Approx. 1,200 employees EBIT Margin 15.8 % Net Profit (2) 331 mNotes1) Converted at average 2010 rate CLP/SEK 70.82) Pre minority interest 14
  15. 15. CTI Historical FinancialDevelopment EBITDA Sales (USD M) (1) CAGR (Sales) ~15% Margin 500 20,0% 17,5% 17,2% 17,1% 375 15,5% 17,5% 16,0% 14,8% 250 15,0% 125 12,5% 0 10,0% 2005 2006 2007 2008 2009 2010 Sales EBITDA MarginNotes1) Converted at average 2010 rate CLP/USD 509 15
  16. 16. Leading Market Positions Company CTI Frimetal Somela% Total 2010 Revenue 48% 38% 14% Key Products  Refrigerators, stoves, washing  Refrigerators, freezers and  Small domestic appliances machines and heaters washing machines Brands Market Position  No. 1 in Chile  No. 1 in refrigeration &  No. 1 in Chile with an  Market leader across all key freezers in Argentina approximate 20% market categories with a volume share market share of 36% in Chile  Strong position in cookers 16
  17. 17. Strong synergies throughcombined footprint Juárez Snapshot of Combined Business  Combined sales in Latin America of >SEK 20 billion on a pro forma basis Manaus  Leading player in Brazil and Southern Cone region  Market-leading brands and São Carlos Curitiba complementary product portfolios Cerrillos Rosario  Seven manufacturing facilities Maipú  >12,000 employees  Strategic fit  Financial fit 17
  18. 18. Olympic Group a platform forgrowth in Africa and Middle East Commercial partnership with Electrolux established in the early 1980’s 18
  19. 19. Strong GDP per capita growth Egypt GDP per capita (US$) CAGR ~17% 3000 2779 2459 2500 2173 2000 1778 1504 1500 1279 1000 500 0 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 Commercial partnership with Electrolux established in the early 1980’s 19
  20. 20. A solid result and growth Sales Olympic Group, MEGP CAGR (Sales) ~6% 3000 13,6% 20,0% 14,2% 16,8% 16,5% 2500 15,0% 2000 1500 10,0% 1000 5,0% 500 0 0,0% 2007 2008 2009 2010 Sales EBITDA Margin 20
  21. 21. Strong position in Egypt andsurrounding countries Product segment Cookers Refrigerators Washing machines % Total Revenue 16% 31% 36%Market share Egypt 32% 29% 46% Market Position  Distinct No 1 player in  Leading player in  Distinct No 1 player in Egypt and the largest Egypt and in the MENA region Egypt and the largest player in the MENA region player in the MENA region 21
  22. 22. Delivering on our GrowthStrategy in Emerging Markets Sales 2010: ~SEK 2.5 bnSales 2010:~SEK 2.9 bn 22
  23. 23. Develop adjacent productopportunities 23
  24. 24. Value share growth Consumer Insight “Best-in-Class” Products R&D Product Creation Process Primary Product Strategic Consumer development development Launch Range market plan opportunities execution management Phase-out Concept Commercial development launch preparation Intent Commercial Launch Process 24
  25. 25. 2011, First half (SEKm) 2010 2011 % Sales 52,444 47,579 -9.3% in comparable currencies -0.4% EBIT*) 2,803 1,441 -49% Europe 952 467 -51% North America 738 67 -91% *) EBIT excluding items affecting comparability
  26. 26. What have we seen? (SEKm) 2011 H1 Volumes +2% Europe -4% North America +1% Raw materials - SEK 1.2 billion Prices - SEK 650 million
  27. 27. Growth in Eastern Europe but weak demand in Southern Europe Quarterly comparison, year over year 10% 5% 0% -5% -10% -15% 2006 2007 2008 2009 2010 2011 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2W. Europe 4% 1% 1% 5% 1% 1% -1% -5% -4% -4% -5% -8% -9% -9% -4% -2% 1% 0% 0% 0% -2% -2%E. Europe 1% 9% 6% 7% 14% 5% 5% 10% 6% 5% 4% -15% -31% -30% -26% -17% -7% 1% 5% 13% 13% 12% 27
  28. 28. North America continued todecline in July Quarterly comparison, year-over-year 15% 10% YTD: -6% 5% 0% -5% -10% -15% -20% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 July 2006 2007 2008 2009 2010 2011 28
  29. 29. Raw material exposure Other 28% Steel 45% Plastics 27% In 2010, Electrolux purchased raw materials for approximately SEK 20 billion 29
  30. 30. Steel CRU US Midwest USD/t1 1001 000 900 800 700 600 Dec 09 June 10 Dec 10 June 11 30
  31. 31. Plastics US Market USD/MT3000250020001500 dec-09 jun-10 dec-10 jun-11 31
  32. 32. Key External DriversPrices Tough price environment Price increases in North America, Europe and Latin AmericaRaw-material prices Negotiations will start end of this year/beginning of next year Headwind or tailwind?Volumes Recovery in Southern Europe (Italy, France and Spain)? Improved demand in North America; Discretionary and New Housing?
  33. 33. Actions been takenInnovation/Mix Global R&D Marketing, Design, Engineering Best-in-class products Consumer insight processProductivity Global Operations LCC production and sourcing Leverage scale ModularizationGrowth Organically: Geographically, Segments, Channels Acquisitions: Olympic Group, CTI
  34. 34. Exposure toemerging markets % 35
  35. 35. 35
  36. 36. Factors affecting forward-looking statementsFactors affecting forward-looking statementsThis presentation contains “forward-looking” statements within the meaningof the US Private Securities Litigation Reform Act of 1995. Such statementsinclude, among others, the financial goals and targets of Electrolux forfuture periods and future business and financial plans. These statementsare based on current expectations and are subject to risks and uncertaintiesthat could cause actual results to differ materially due to a variety of factors.These factors include, but may not be limited to the following: consumerdemand and market conditions in the geographical areas and industries inwhich Electrolux operates, effects of currency fluctuations, competitivepressures 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 operationaland capital efficiency goals, the success in identifying growth opportunitiesand acquisition candidates and the integration of these opportunities withexisting businesses, progress in achieving structural and supply-chainreorganization goals. 36

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