Good progress in a challenging environment
Price increases, improved product mix and cost efficiencies partly offset lower volumes and significant headwinds, primarily from raw material and currency. Most business areas showed organic sales growth and a large number of new innovative products were launched.
Key highlights 2018
- Sales growth of 1.7% (0.5).
- Operating margin excluding non-recurring items of 5.4% (6.1).
- Earnings resilience despite strong external headwinds.
- Healthy cash flow generation and strong balance sheet.
- Two strategic acquisitions in Professional Products completed.
Sales growth was 1.7%. Organic growth across most business areas driven by price increases and mix improvements. Net contribution from aquisitions and divestments was 0.4%
Operating margin excluding non-recurring items was 5.4%. Price increases, improved product mix and cost efficiencies partly offset lower volumes and significant headwinds, primarily from raw material and currency.
Operating cash flow after investments amounted to SEK 3.6bn. Acquisitions and divestments impacted cash flow negatively by SEK 0.6bn.
Key figures 2018
Operating cash flow2)
SEK per share
1) Excl. non-recurring items.
2) After investments.
3) Proposed by the Board.
Sales by region
The Electrolux Group's financial targets contribute to maintaining and strengthening the company's leading, global position in the industry and generate a healthy total return for Electrolux shareholders.
An average annual total return of approximately 14%. Over the past ten years, Electrolux shareholders have received an average annual total return of approximately 14%. The Group’s capacity to create healthy cash flow and to enhance operational efficiency plays a major role in contributing to this value creation. There is further potential for profitability by increasing margins.
Outstanding consumer experiences contributes to higher profitability. Based on the strategic framework, innovative products for outstanding consumer experiences are to contribute to higher profitability and a margin of at least 6%. A capital turnover-rate of at least 4 times combined with an operating margin of at least 6% should yield a minimum return on net assets of 20%.
Continued profitable growth Further potential for value creation is possible if Electrolux can increase sales and improve its profitability level. The business has to achieve a sustainable profitability level before further investments are made in targeted profitable growth. The objective is an average annual sales growth of 4%.
For more information on the Electrolux business model and path to profitable growth, see Strategy.
Targets and 2018 execution
Return on net asset
1) Financial targets are over a
2) Engagement index
3) Halving the climate impact,
million tonne's CO2, by 2020
relative to 2005 levels
The increasing pace of change in the global market stems froma number of trends that influence volumes and the types of products that are in demand, but also how these products are produced, marketed and sold.