Structural changes
As communicated in October 2013, Electrolux is taking actions to reduce annual costs by SEK 1.8bn for a charge of SEK 3.4bn.
Costs savings are planned to be achieved through manufacturing footprint restructuring as well as overhead-cost reductions. These actions relate mainly to Major Appliances Europe, Middle East and Africa, but also to other business areas and Group Staff. Approximately 2,000 employees are affected by these measures excluding any additional impact of the announced manufacturing investigation in Italy, see below.
In the fourth quarter of 2013, restructuring costs amounting to SEK 1.5bn were charged to operating income within items affecting comparability. In addition, in the fourth quarter, an impairment of parts of an IT platform in the amount of SEK 0.9bn was reported as items affecting comparability within operating income, see below.
The remaining part of the total restructuring charges, approximately SEK 2.0bn, is expected to be taken during 2014.
Manufacturing footprint
An investigation has been initiated regarding the competitiveness of the entire Italian manufacturing setup for major appliances, which includes all four plants.
The study of the future platform for food preservation products in Asia/Pacific resulted in the decision to close the factory in Orange, Australia, and to concentrate production to the plant in Rayong, Thailand. Execution started in the fourth quarter of 2013.
Overhead-cost reduction
In order to adapt the overhead-cost structure to the current market situation in Europe, a cost-reduction program was initiated in the fourth quarter of 2013. This mainly affects Major Appliances Europe, Middle East and Africa but also Group Staff and other business areas.
Items affecting comparability
SEKm | 2012 | 2013 |
---|---|---|
Restructuring provisions and write-downs1) |
|
|
Manufacturing footprint restructuring | -1,032 | -594 |
Program for reduction of overhead costs | - | -975 |
Impairment of ERP system | - | -906 |
Total | -1,032 | -2,475 |
ERP impairment
The implementation schedule for a new Enterprise Resource Planning (ERP) platform for the Group, developed over the years, has been revised and parts of the ERP platform were impaired in the amount of SEK 906m. This had no impact on cash flow.
Consolidation of operations within Small Appliances
To improve profitability and to further capitalize on global and regional synergies, measures have been taken to consolidate selected operations within Small Appliances.
StopSearchHereCEO Statement
In 2013 we continued to deliver above our growth target and delivered 4.5% in organic sales growth.
CEO Statement
I'm convinced that raising product efficiency for the growing middle class is where long-term shareholder value creation lies.
Our products
Electrolux is the only appliance manufacturer in the industry to offer complete solutions for both consumers and professionals. The focus is on innovative and energy-efficient products in the premium segments.
Sustainability
Achieving the Group's vision of sustainability leadership is crucial to realizing the business strategy. The objective is to develop smarter, more accessible, resource-efficient solutions that meet people's needs and improve their lives. Read the comprehensive sustainability performance review.
Awards & recognition
Financial Reporting
Net sales for the Electrolux Group in 2013 amounted to SEK 109,151m, as against SEK 109,994m in the previous year. The organic sales growth was 4.5%, while currencies had an impact of -5.3%.