In its communication with the capital markets, Electrolux aims to supply relevant, reliable, accurate and updated information about the Group’s development and financial position.
On March 26, 2015, Electrolux held its AGM at the Brewery Conference Centre in Stockholm. More than 300 shareholders were present to listen to presentations by Electrolux Chairman Ronnie Leten and Chief Executive Officer Keith McLoughlin. At the AGM, the proposed dividend of SEK 6.50 was approved. The nine board members were re-elected.
Focus on the vision and strategy In his presentation, CEO Keith McLoughlin presented the company’s vision to be the best appliance company in the world, along with the Group’s key strategic pillars on how to achieve this goal. Electrolux continues to execute its strategy and support the creation of long-term sustainable economic value and return for its stakeholders. Moreover, Keith McLoughlin highlighted the key trends that are shaping the appliance industry. Increased global competition, the growing middle class in emerging markets, increased focus on innovation and industry consolidation, which is all taking place and will affect the market landscape in the near and long term, for both consumers and manufacturers. More information and documentation from the AGM 2015 is available at www.electroluxgroup.com/agm2015.
Electrolux Annual Report 2014 was ranked number two in the latest edition of the “Annual Report on Annual Reports” by Report Watch in a review of 1,500 annual reports of companies worldwide. Since 2007, Electrolux has claimed a top-five spot in this well-recognized ranking. The on-line version for 2014 was also rewarded at the International Business Awards.
Electrolux Annual Report was awarded the “Best reporting of value creation for 2013”– in a competition arranged by PwC. The contest aims to identify trends and practices developed within external reporting by Swedish listed companies to meet the information needs of corporate stakeholders.
AGM 2016
6April
The AGM 2016 will take place
on April 6, 2016 at
Stockholm Waterfront Congress Centre,
Stockholm.
Analysts engage in questions related to the development of the appliance market and the demand in Electrolux core markets. Price, mix and outlook are important topics on which analysts focus in order to gain a better understanding of the operation for which they can base their longer term projections of Electrolux future performance. The telephone conferences are available at www.electroluxgroup.com/ir.
| North America 32% | 32 |
| Acquisitions 13% | 13 |
| Price/Mix 10% | 10 |
| Europe 9% | 9 |
| Latin America 7% | 7 |
| Currency 6% | 6 |
| Asia 6% | 6 |
| Cost savings 4% | 4 |
| Other 13% | 13 |
In 2015, Electrolux core markets showed good demand while growth markets continued to weaken throughout the year. Demand for appliances in North America continued to be good following two consecutive years of healthy recovery. In Western Europe, market demand was better than expected and improved sequentially while markets in Eastern Europe continued to weaken due to the geopolitical uncertainty. The markets in Latin America showed a mixed pattern. Demand in Brazil declined sharply while other markets in the region were stable. The development in Asia/Pacific remained mixed with positive growth in Australia and Southeast Asia while demand in China slowed down.
The US market for appliances continued to be solid and grew by 6% for the full year 2015. Demand showed consistent strength, supported by improved consumer confidence and the gradually improving housing market. During the year, Electrolux achieved good organic growth and strengthened its position in several core categories. The work to restore profitability within cold products was successful. Earnings in this category were previously impacted by the transition of the product ranges, following the new energy requirements by the Department of Energy. This in combination with improved cost efficiency resulted in a positive development for our North American business during the latter part of the year.
On July 1, 2015, the US Department of Justice sued Electrolux and GE to stop the proposed acquisition, which then continued in a trial at a federal court. On December 7, GE notified Electrolux that it was terminating the agreement pursuant to which we had agreed to acquire the appliance business of GE. Therefore, the transaction will not be completed. Although we are disappointed that the acquisition will not be completed, we are convinced that the Group has strong capabilities to continue to grow and develop its position as a global appliances manufacturer. We aim to grow our operations globally both organically and through acquisitions, which is supported by a strong balance sheet and good cash generation.
The European appliance market is a highly fragmented market where the top five players have a share of less than 60%. For several years, the market has been characterized by overcapacity, low volume growth and persistent price pressure. Although it is difficult to predict the near-term implications of the consolidation that is taking place, in general, a market consolidation is a good thing and could be positive for the appliance industry and the consumers.
For the first time in many years, demand for appliances improved in almost all markets in Europe during the year. In Western Europe, there has been positive growth for several consecutive quarters. In this market, our European business has successfully managed the product portfolio and gained market share in profitable segments such as premium and built-in kitchen appliances. Our ongoing cost savings programs have continued to contribute to earnings and have in effect led to lower structural costs in our operations. As a result, the combined actions have helped the business to be more stable and resilient.
We have a high exposure to currency fluctuations since the Group operates in over 150 countries. Electrolux has approximately SEK 35 billion of annual currency in- and outflows. In 2015, the total negative impact from both currency transaction and translation effects to earnings was approximately SEK –1,400 million. A significant part of the negative impact was from Latin Amerian currencies, which depreciated against the USD. During the year, Electrolux was able to offset the negative currency effects by price and mix improvements.