Skip to main contentSkip to navigationSkip to search
Logotype

Financials

Path to profitable growth and targets

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.

6%
Operating Margin
4x
Capital turnover rate
>20%
Return on net assets
4%
Sales growth
=
Value creation

To achieve sustainable profitable growth, Electrolux applies a three-step model for all business units. This begins by ensuring the business operates with stability and predictability in all key processes together with a clear focus based on active choices to increase profitability.

The second step is about delivering this with sustainable profitability. This means that the focused business model is resilient to external factors and has clear competitive advantages that ensure long-term profitability.

In the third step, growth can be accelerated in a targeted way by leveraging its strength through selective investments with a clear return.

  1. 1Stability &
    Focus
  2. 2Sustainable
    Profitability
  3. 3Targeted
    Growth
  4. Profitable
    Growth

Operating margin - 6% over a business cycle

Electrolux is focused on achieving sustainable profitability, with high priority on securing an operating margin of at least 6% over a business cycle. This will be achieved through innovative product launches and active product portfolio management, in combination with product- and structural cost efficiencies.


1) Over a business cycle.

2) Operating income 2018 and 2019 included non-recurring items of SEK -1,343m and SEK -1,344m. For more information, see "Operations by business area, yearly" in the Annual Report.


Sales growth – 4% over a business cycle

As a sustainable profitability level is achieved, the business area moves into targeted profitable growth. In order to reach the growth target, the Group continues to strengthen its positions in core markets, new markets and segments. Organic growth is complemented by acquisitions and the target is a total sales growth of at least 4% over a business cycle.


1) Total sales growth excluding currency translation effects.

2) Over a business cycle.


Capital turnover – at least 4 times over a business cycle

Electrolux strives to achieve an optimal capital structure in relation to the Group’s goals for profitability and growth. In recent years, efforts to reduce working capital have been intensified. This has resulted in a lower level of working capital and the goal of at least 4 times capital turnover has been exceeded. Reducing the amount of capital tied up in operations creates opportunities for profitable growth.


1) Over a business cycle.


Return on net assets – at least 20% over a business cycle

Focusing on growth with sustained profitability and a small, efficient capital base enables Electrolux to achieve a high long-term return on capital. 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%.


1) Over a business cycle.