At today’s capital markets day, the President and CEO of Electrolux Keith McLoughlin will present the Group’s strategy to create sustainable economic value. Management will present actions to improve operational excellence which are estimated to provide annual savings of SEK 5.1 billion, an increase of SEK 2.6 billion compared to what was previously communicated.
Today’s presentations will illustrate that the Electrolux core strategy remains unchanged, but that actions will be implemented at an increasing pace. Electrolux will create sustainable economic value by; capitalizing on profitable growth opportunities, speeding up the product-innovation cycle and continuing to improve operational excellence by adapting manufacturing capacity, taking out overhead costs and accelerating efforts to capitalize on the Group’s global strength and scope.
In 2011, sales volumes of household appliances in North America are expected to be 25% below the peak year of 2005. The corresponding figure for Western Europe is 15% below the peak year of 2006. Electrolux has been tangibly affected by the decline in consumer confidence in the mature markets. At the same time increased costs for raw materials have had a negative impact on earnings. Current expectations are that the headwind will continue in 2012, but that the impact will be less than half of the expectations of SEK 2 billion for 2011. To adapt the manufacturing capacity, further restructuring measures within manufacturing are needed which are estimated to generate annual savings of SEK 1.6 billion as of 2016. Costs for these measures amount to approximately SEK 3.5 billion. At the same time overhead costs will be reduced by approximately SEK 500 million through a review of staffing levels in all regions. Costs for these actions are estimated to approximately SEK 500 million.
Activities to capitalize on the Group’s shared global strength and scope will be presented and examples given of how Electrolux intends to escalate the pace in unlocking global synergies, increase modularization and optimize purchasing. As previously announced, costs for these activities will total about SEK 1 billion in 2011 and 2012. The annual savings are estimated to approximately SEK 3 billion as of 2015, which is SEK 500 million higher than previously anticipated.
Examples will be provided of how Electrolux is increasing its sales in emerging markets to capture the organic growth in these regions.
For further information
Contact Electrolux Press Hotline, +46 8 657 65 07.
Electrolux discloses the information provided herein pursuant to the Securities Market Act and/or the Financial Instruments Trading Act. The information was submitted for publication at 08.00 CET on November 15, 2011.
