Over the years, Electrolux has implemented restructuring programs for the purpose of optimizing its manufacturing footprint and reducing costs to improve competitiveness. Restructuring charges related to these programs have been presented separately as items affecting comparability in the income statement. Operating income by business area and selected key ratios have been reported excluding these costs. These major restructuring programs have come to an end and as of 2015, Electrolux has discontinued this accounting practice. Although there will likely be restructuring programs going forward, these are expected to be much less extensive.
For comparability purposes, the figures for 2014 have been restated to include restructuring costs. For a specification, read the press release; Restated figures for Electrolux for 2014, March 30, 2015, on www.electroluxgroup.com.
This change in accounting practice has no impact on the Group’s operating income, balance sheet or cash flow. The restatement of operating income by business area has mainly affected operating income for Major Appliances EMEA, which includes restructuring costs in the net amount of SEK 1.2bn for 2014.
Figures for 2011–2014 in this report are including restructuring costs, see specification.
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1) Restructuring costs have previously been reported as items affecting comparability and not included in operating income by business area and selective key ratios.
Electrolux announced in December 2015 that measures are being taken to structurally reduce costs within the business area Small Appliances. Operations continue to be negatively impacted by reduced volumes in several key markets, as well as unfavorable currency movements.
Measures to restore profitability are being taken, including staff reductions and downsizing of activities, mainly in the U.S., Sweden and China.
These actions are expected to reach full effect from end of 2016, with estimated annual cost savings of SEK 120m. Costs related to the program of SEK 190m have been charged to operating income within Small Appliances.
Once the program is completed, Small Appliances will have financial flexibility to continue to invest in profitable product categories.