The Electrolux Group. the World's No.1 Choice. Our Goal Is to Make Daily Life Easier and More Convenient for Consumers As Well
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The Electrolux Group. Electrolux The world’s No.1 choice. Annual Report 2000 Annual Report 2000 Every year, people in more than 150 countries buy more than 55 million of our products. Our goal is to make daily life easier and more convenient for consumers as well as professional users. AB Electrolux SE-105 45 Stockholm, Sweden Visiting address S:t Göransgatan 143, Stockholm Telephone +46 8 738 60 00 Telefax +468 656 44 78 The Electrolux Group. The world’s No.1 choice. www.electrolux.com 5991413-68/2 Contents Annual General Meeting 1 Report by the President and CEO The Annual General Meeting PARTICIPATION DIVIDEND will be held at 5 p.m. on Tuesday, In addition, notice of intent to participate The Board has proposed Friday,April 27, April 24, 2001 at the Berwald Hall, must be given to Electrolux not later than 2001 as record day, after which it is 20 Business area Consumer Durables Dag Hammarskjölds Väg 3, 4 p.m. on Wednesday,April 18, 2001, expected that dividends will be paid by Stockholm. when also the number of advisors should VPC on May 3, 2001. be stated. Notice of intent to participate April 24, 2001 is the last day for 24 Business area Professional Products can be made by mail to AB Electrolux, trading in Electrolux shares that entitle Dept. C-J, SE-105 45 Stockholm, Sweden, a dividend for 2000. 26 Electrolux IT Solutions REGISTRATION or by telephone at +46 8 738 61 30. Shareholders who intend to participate Notice can also be given at: in the Annual General Meeting must www.electrolux.com/agm 28 Report by the Board of Directors for 2000 be registered with VPC AB (Securities Notice should include the shareholder’s Register Center) on Thursday,April 12, name, registration number, if any, address 2001. Shareholders whose shares are regis- 38 Consolidated income statement and telephone number. Shareholders par- tered through banks or trustees must have ticipating by proxy should submit a copy their shares temporarily registered in their of the proxy authorization prior to the 39 Consolidated balance sheet own names at VPC on that date. date of the AGM. 40 Consolidated cash flow statement 41 Parent company income statement 42 Parent company balance sheet 43 Parent company cash flow statement 44 Notes to the financial statements 58 Proposed distribution of earnings 59 Auditors’ report Financial reports in 2001 60 Eleven-year review Consolidated results February 9 Annual report Early April Form 20-F April 60 Definitions of financial concepts and key ratios Quarterly report, 1st quarter April 25 Quarterly report, 2nd quarter July 20 Quarterly report, 3rd quarter October 26 62 Quarterly figures The above reports are available on request from AB Electrolux, Investor Relations and Financial Information, SE-105 45 Stockholm, Sweden. Tel. +46 8 738 60 03 or 64 Electrolux shares 738 61 41. Financial information from Electrolux is also available on the Internet at www.electrolux.com 66 Board of Directors Investor Relations and Financial Information This annual report is produced with technology that minimizes Production: Electrolux Investor Relations 68 Group management Åsa Stenqvist Tel. +46 8 738 64 94 Enrique Patrickson Tel. +46 8 738 65 49 environmental impact. It is printed on Gothic Silk, a paper that Graphic design: Intellecta Corporate, Stockholm and Pauffley, London, UK meets the criteria of the Nordic Environmental Label. License Technical production and printing: Intellecta Corporate and Fax +46 8 738 70 90 70 Environmental activities No. 444015. Cover 250 g, inside pages 170 g. Tryckindustri Information, Stockholm/Solna 2001 I welcome the opportunity to share my views on Electrolux with you once again, although as you will see we have chosen a slightly different approach for this year’s report. The focus is still very much on how we create value for shareholders, customers and other stakeholders. But the way we tell the story is new. In the first section of the report you’ll find a comprehensive picture of Electrolux – its performance, its strategy and the context in which it operates. You’ll also find my comments on various aspects of our operations and our future prospects. As CEO it is both my responsibility and my pleasure to provide you with the information you need to understand Electrolux. I want you to have the full picture – after all, it’s your company. Michael Treschow President and CEO REPORT BY THE PRESIDENT AND CEO 1 Electrolux is a changed company. With sales of SEK 124 billion in 2000, Electrolux is the world’s Group sales 2000: SEK 124,493m Operating income 2000: SEK 8,050m1) largest producer of appliances and equipment for kitchen, cleaning and outdoor use, such as refrigerators, cookers, wash- Net sales by business area ing machines, chainsaws, lawn mowers and garden tractors. Electrolux is also one of the world’s largest producers of similar Consumer Durables 79.1% equipment for professional users. Today, Electrolux is a focused company with two busi- Professional Products 20.6% ness areas – Consumer Durables and Professional Products. Both areas include products and services for indoor and out- door use. Operating income by business area1) Consumer Durables 71.8% We’re proud to be the world’s Professional Products 33.9% No.1 choice. Common Group costs, etc. –5.7% Every year consumers in more than 150 countries buy more –10 0 10 20 30 40 50 60 70 % than 55 million Group products, which are sold under the Electrolux brand or other famous brands such as AEG, Zanussi, Net sales by geographical area Frigidaire, Eureka, Flymo and Husqvarna. By continuously increasing efficiency, developing innovative Europe 46.7% products and improving customer care, Electrolux shall be a North America 42.5% company with good growth and profitability. A company that Rest of the world 10.8% creates value for shareholders as well as for consumers, 0 1020304050% business partners and employees. Becoming a market-driven company involves doing our Operating income utmost to make daily life more convenient for consumers and by geographical area1) professional users. Europe 54.1% Which is perfectly logical for a company that is the world’s North America No.1 choice. 48.2% Rest of the world –2.3% –100 1020304050% 1) Excluding items affecting comparability. Leading positions in global markets Consumer Durables Indoor Products White goods Vacuum cleaners Room air-conditioners MARKET POSITION White goods Market leader in Europe, Floor-care products third largest producer in US, World leader, largest producer second largest in Brazil. in Europe, second largest in US. Outdoor Products Light-duty chainsaws Garden equipment MARKET POSITION World’s largest producer of such items as lawn mowers, garden tractors and trimmers. Professional Products Indoor Products Food-service equipment Laundry equipment Leisure appliances Components MARKET POSITION Food-service equipment Market leader in Europe, second largest in the world. Laundry equipment World leader in equipment for apartment-house laundry rooms, launderettes, hotels and institutions. Leisure appliances World leader in absorption Components refrigerators for caravans World’s largest producer of compressors and hotel rooms. for refrigerators and freezers. Outdoor Products Chainsaws Clearing saws Trimmers Turf-care equipment Power cutters MARKET POSITION World’s largest producer of chainsaws and trimmers. Today, Electrolux is more efficient and more profitable. Since 1997 we have implemented an extensive restructuring program Operating margin and return that has increased efficiency and reduced costs. on equity, 1997– 2000 We have also divested 14 non-core operations which together Operating margin % ROE % 20 accounted for annual sales of more than SEK 20 billion, operating income 8 of about SEK 1 billion, and about 22,000 employees. 6 15 Work on restructuring the Group and improving internal efficiency is 4 10 continuing at high speed. But at the same time we are positioning the 2 5 Group for growth, which means that we are now entering a new and 0 0 more dynamic phase of expansion. 1997* 1998* 1999* 2000* *Excluding items affecting comparability Return on equity Operating margin When the restructuring program was launched the Group’s operating margin was 4%, excluding items affecting comparability. During the next 14 consecutive quarters the Group reported higher Getting the job done operating income and margin than in the same quarter of the previous year. • Margin target 6.5–7% • Return on equity at least 15% • Restructuring program 1997–1999 • Divestment of non-core operations It’s profitability that defines a company’s success. When the program was launched our aim was to reach the Group’s long- term financial goal of an operating margin of 6.5–7% and a return on equity of at least 15%. We have met these targets. For the full year 2000, operating margin was 6.5% and return on equity was 18.5%, exclusive of items affecting comparability. This was the highest margin for the Group on an annual basis since 1985. 4 REPORT BY THE PRESIDENT AND CEO Restructuring and streamlining Divested operations Net sales, SEKm Aluminium products Sewing machines 140,000 Goods protection Agricultural implements Interior decoration articles Industrial laundry equipment Kitchen & bathroom cabinets Professional cleaning equipment Recycling & production of secondary aluminium Vending machines 120,000 Direct sales operation Professional Outdoor Professional refrigeration equipment +61% Products Heavy-duty laundry equipment Mixers for professional kitchens Professional Indoor +20% Products 100,000 Consumer Durables +34% 80,000 60,000 40,000 20,000 1996 2000 0 Extensive restructuring Growth in core areas The restructuring program and other adjustments 1997–1999 During 1996–2000 sales in the involved a reduction of approx. 13% in the total number of Group’s core areas grew from employees, as well as the shutdown of 18% of the Group’s SEK 93.9 bn to SEK 124.1 bn.