Electrolux 1996 Annual Report Download

Download and view the complete annual report

Please find the complete 1996 Electrolux annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 66

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66

Annual Report 1
996
The
Global Appliance Company
Household Appliances Commercial Appliances
Outdoor Products The Global Appliance Company
Household Appliances Commercial Appliances Outdoor
Products The Global Appliance Company Household Appliances
Commercial Appliances Outdoor Products The Global Appliance
Company Household Appliances Commercial Appliances Outdoor Products The
Global Appliance Company Household Appliances Commercial Appliances
Outdoor Products The Global Appliance Company Household Appliances
Commercial Appliances Outdoor Products The Global Appliance Company
Household Appliances Commercial Appliances Outdoor Products The Global Appliance
Company Household Appliances Commercial Appliances Outdoor Products The
Global Appliance Company Household Appliances Commercial Appliances Outdoor
Products The Global Appliance Company Household Appliances Commercial
Appliances Outdoor Products The Global Appliance Company Household Appliances
Commercial Appliances Outdoor Products The Global Appliance Company Household
Appliances Commercial Appliances Outdoor Products The Global Appliance Company
Household Appliances Commercial Appliances Outdoor Products The Global Appliance
Company Household Appliances Commercial Appliances Outdoor Products The
Global Appliance Company Household Appliances Commercial Appliances
Outdoor Products The Global Appliance Company Household Appliances
Commercial Appliances Outdoor Products The Global Appliance Company
Household Appliances Commercial Appliances Outdoor Products The
Global Appliance Company Household Appliances Commercial
Appliances Outdoor Products The Global Appliance Company
Household Appliances Commercial Appliances Outdoor
Products The Global Appliance Company Household
Appliances Commercial Appliances Outdoor
Products The Global Appliance
Company
Electrolux
glo
bal
appliance
the
company

Table of contents

  • Page 1
    Annual Report 1996 appliance company The Global A ppliance C ompany Household Appliances Commercial Appliances Outdoor Products The Global A ppliance C ompany Household Appliances Commercial Appliances Outdoor Products The Global A ppliance C ompany Household Appliances Commercial Appliances ...

  • Page 2
    ...' report St atement of added value Eleven-year review Definitions of financial concept s and key ratios Sales and average number of employees, by country Electrolux shares Board of Directors Group st ructure Group management The Group's environment al activities Human resources Annual General...

  • Page 3
    ... mainly white goods, i.e. refrigerators, freezers, cookers, washing machines and dishwashers. In 1996, white goods accounted for 74 % of sales in Household Appliances, and for half of t ot al Group sales. Ot her product lines include ï¬,oor-care product s, component s, absorption refrigerators for...

  • Page 4
    Sales by region Market position White goods Market leader in Europe, t hird largest producer in US Floor-care products World leader, global market share approximately 20% Components World's largest producer of compressors for refrigerators, market leader in Europe and US Leisure appliances World ...

  • Page 5
    ... producer of ï¬,oor-care product s, absorption refrigerators for caravans and hotel rooms, and compressors for refrigerators and freezers. Electrolux is also t he largest or second largest company in t he world market for food-service equipment , industrial laundry equipment , and forestry and...

  • Page 6
    ... market s. Acquisition of majority st ake in Refripar, Brazil' s second largest white-goods company, wit h annual sales of approximately SEK 5,300m and about 5,000 employees. â- Divestment of non-strategic operations, primarily in Industrial Product s business area. â- In January, 1997, t he Board...

  • Page 7
    ... 6.2% 1) As of 1996, Household Appliances includes t he electric-motor operation in FHP Motors, which was previously reported according t o t he equity met hod in Industrial Product s. 2) Excluding capit al gain. 1) For sales and employees by country, see page 50. 3 Electrolux Annual Report 1996

  • Page 8

  • Page 9
    Electrolux - The Global Appliance Company

  • Page 10
    ... presented to t he Electrolux Annual General Meeting on April 29. If t he proposal is approved, t he t ransaction will be completed and Gränges shares will be listed on t he Stockholm Stock Exchange by t he end of May. In addition t o distribution of t he shares in Gränges, t he Board has decided...

  • Page 11
    ... sales and administration. In order t o achieve a similar increase in efficiency wit hin t he Nort h American organization, at t he close of t he year we combined t he white-goods operation in t he Frigidaire Company wit h our t wo companies in Outdoor Product s, Poulan/Weed Eater and American Yard...

  • Page 12
    ...part s of Latin America. We aim at obt aining a position of leadership in t hese market s and est ablishing Electrolux as a global brand. In 1995 and 1996 we made a number of acquisitions and st arted joint ventures in several countries, including Brazil, China, India and Poland. Sales in new market...

  • Page 13
    ...market share of more t han 25%. Our goal is t o offer a complete range of white goods in bot h China and India. A new generation of Electrolux product s was launched in t he ASEAN countries, i.e. The Philippines, Indonesia, Malaysia, Singapore and Thailand. A small producer of food-service equipment...

  • Page 14
    ... simpler and easier in millions of homes t hroughout t he world. The Electrolux range of household appliances includes refrigerators, freezers, washing machines, dishwashers, driers, cookers, ovens, hobs, microwave ovens, vacuum cleaners, absorption refrigerators, room air-conditioners, and kitchen...

  • Page 15
    ...t he t hird largest white-goods company in t he US. White goods account for t he greater part of sales in t he Household Appliances business area, and for approximately half of tot al Group sales. Electrolux is also t he world's largest producer of ï¬,oor-care product s, absorption refrigerators for...

  • Page 16
    ...he US outdoor-product subsidiaries American Yard Product s and Poulan/Weed Eater in a single company, Frigidaire Home Product s. Like t he changes in t he European operation, t he merger will enable improved customer service and lower cost s in such areas as administration, logistics, purchasing and...

  • Page 17
    ... motors wit h annual sales of approximately SEK 1,800m and about 2,300 employees, which was previously part of a joint venture wit h AEG AG of Germany. This operation has been t ransferred t o t he compressors product line, which is now called component s. Profit ability for Household Appliances...

  • Page 18
    ... customer's t ot al needs. It includes food-service equipment for rest aurant s and industrial kitchens, food and beverage vendors, equipment for coin bars, apart ment-house laundry rooms and commercial laundries, refrigerators and freezers for food ret ailers, vacuum cleaners and wet /dry cleaners...

  • Page 19
    ... aimed at greater coordination of product lines 1. The new Wascator FLE400 FC washing machine. 2. Sales Maker is a patented system for displaying chilled products. 3. Euroclean's new, silent IQ 215 wet/dry cleaner. 4. The new Electrolux combi-ovens. 5. The Schiphol open-wall cabinet features top...

  • Page 20
    ... in t erms of exhaust emissions, noise and vibrations. The Group offers a broad product range t hat includes chainsaws for bot h professional and hobby use, brush cutters, lawn mowers, garden t ractors, trimmers and leaf blowers. comprehensive product range setting new environment al st andards

  • Page 21
    ... s in Europe. The US operation in American Yard Product s and Poulan/ Weed Eater has been merged as of 1997 wit h t he US white-goods operation in a new company, Frigidaire Home Product s. Husqvarna serves t he global market wit h a complete range of outdoor product s t hat focus on t he high end...

  • Page 22
    strong market position 1 2 4 3 high added value Industrial Products Light weight , high durability and resist ance t o corrosion make aluminium one of t he most commonly used met als. It is easily processed and recycled, and is a good conductor of bot h heat and electricity. Gränges is one of ...

  • Page 23
    ... areas Household Appliances, Commercial Appliances and Outdoor Product s. In 1996 t he Group divested t he Constructor group, one of t he leading European producers of materials-handling equipment , wit h annual sales of approximately SEK 1,750m. In January, 1997, t he Board of Electrolux decided...

  • Page 24
    .... The company has market shares of more t han 50% in Sweden and more t han 20% in t he UK, wit h production unit s in Sweden, t he UK, The Net herlands, Germany, Denmark, Poland and France. Strip & Foil Strip & Foil is t he second largest business area in Gränges, accounting for 24 % of sales in...

  • Page 25
    ... Elimination of inter-company profit Other companies Sales Operating income after depreciation Central costs Operating income after depreciation Consolidation adjustments Sales Operating income after depreciation Group Sales Operating income after depreciation 21 Electrolux Annual Report 1996

  • Page 26
    ... Sweden. Of t he 5% decline in sales, changes in exchange rates accounted for - 6%, acquisitions and divest ment s for +4% and volume and price/mix for - 3%. The Brazilian white-goods company Refripar is included in t he account s as of February 1, and t he Electrolux share in t he motor operation...

  • Page 27
    ... situation in Europe weakened during t he year in all Group business areas. However, t he American market showed good growt h in such areas as white goods, ï¬,oor-care product s and garden equipment . 1,156 1,481 1,246 1,449 913 955 1,133 1,426 4,448 5,311 901 1,045 797 1,023 502 582 6.90...

  • Page 28
    ... to food-service equipment , which reported a marked drop in income due t o lower sales volumes and t he cost s of current restructuring. Lower sales of heavy-duty unit s also involved a decline in operating income for industrial laundry equipment , alt hough from a high level. Commercial cleaning...

  • Page 29
    Average annual growth, 1987-1996 Capital expenditure by business area, SEKm 1996 % 1995 Sales Shareholders' equity Equity per share Trading price, B-shares Effective yield, B-shares 7.6% 6.8% 6.6% 2.4% 6.8% Household Appliances Commercial Appliances Outdoor Product s Industrial Product s Tot ...

  • Page 30
    ... freezers for commercial users. In February, 1996, t he Group acquired 20% of t he shares in Atlas Eléctrica S.A. in Cost a Rica, t he leading producer of refrigerators and cookers in Central America. On April 1, t he Group acquired a small producer of commercial appliances in Indonesia. Employees...

  • Page 31
    ... on t he number of employees, salaries and remuneration is given in Note 17 on page 41. The parent company's holdings in shares and participations are reported on page 45. Proposed cash dividend In addition t o dist ribution of all shares in Gränges, t he Board of Directors proposes an unchanged...

  • Page 32
    ...t hose related t o financing, interest rates, exchange rates and credit . A financial policy has been aut horized by t he Board for managing t hese risks. Implement ation of t he policy is continuously monitored and controlled t hrough t he Group's central functions, and is reported t o t he Board...

  • Page 33
    ... Electrolux is a separate product line wit h t hree main fields of activity: • Borrowing in order t o finance Group operations • Management of liquidity and liabilities • Financing of sales. This product line includes more t han t hirty unit s. Fifteen local financial centers are positioned...

  • Page 34
    ... Net income Net income per share, SEK (Note 1) 110,000 - 101,071 - 43 8,886 - 4,438 4,448 - 1,198 3,250 - 218 115,800 - 106,073 -9 9,718 - 4,407 5,311 - 1,295 4,016 - 69 3,947 - 1,199 2,748 (Note 2) (Note 3) (Note 4) 3,032 - 1,182 1,850 25.30 (Note 5) 37.50 30 Electrolux Annual Report 1996

  • Page 35
    ... 437 Notes receivable Long-term receivables Goodwill, etc. Advances t o suppliers Construction in progress Machinery, equipment and t ools Buildings Land and...liabilities Minority interests Shareholders' equity Restricted equity Share capit al St atutory reserves (Note 14...Electrolux Annual Report 1996

  • Page 36
    Parent company income statement (SEKm) 1996 1995 Operating income and expense Sales Group contributions Operating expense including head-office cost s Operating income ... 5,593 1,727 - 240 1,487 1,814 3,301 87 3,388 -2 3,386 (Note 2) (Note 3) (Note 13) (Note 4) 32 Electrolux Annual Report 1996

  • Page 37
    ...850 18,419 467 - Long-term receivables From subsidiaries Ot her Brand names, etc. Advances t o suppliers Construction in progress Machinery, equipment and t ools Buildings Land and land improvement s Total fi... 10,838 32,738 6,372 Contingent liabilities (Note 16) 33 Electrolux Annual Report 1996

  • Page 38
    ... Shares and participations Long-term notes receivable and account s receivable Change in intra-Group balances Goodwill Machinery, buildings, land, construction in progress, etc. Ot her fixed asset s Income on sales of fixed asset s Liquid funds generated by operations, after investments Financing...

  • Page 39
    ... of Zanussi, White and American Yard Product s. The depreciation according t o plan t hus computed is charged against operating income. In accordance wit h t he recommendations of t he Swedish Financial Accounting St andards Council for changes in reporting of goodwill in consolidated financial...

  • Page 40
    ... are reported in t he parent company at t he rate prevailing on t he date when t he loan or contract arose. Wit h regard to forward contracts intended as hedges for t he cross-border ï¬,ow of goods and services, account s receivable and account s payable are valued at contract rates. In cases where...

  • Page 41
    ...(SEKm) 1996 1995 Brand names, etc. Goodwill, etc. Machinery, equipment and t ools Buildings, leasehold right s, etc. Land improvement s Tot al - 272 3,739 412 15 4,438 Group - 282 3,699 410 16 4,407 67 - 193 5 0 265 Parent company 66 - 169 5 0 240 3. FIN A N C IA L IT EM S (SEKm) 1996 1995...

  • Page 42
    ... 181m (195) for machinery and equipment , SEK 2m (3) for buildings, and SEK 24m (45) for construction in progress, and advances t o suppliers. Tax assessment value: Buildings SEK 412m (411), land SEK 52m (51). Undepreciated portion of write-ups on land: SEK 9m (9). 38 Electrolux Annual Report 1996

  • Page 43
    ... of t he options is indexed t o t he Electrolux share price. The options cannot be used for purchase of t he company' s shares, but will be redeemed in cash by t he company. The change in t he value of t hese synt hetic options is included in t he annual Electrolux income st atement . At year-end...

  • Page 44
    ...Brand names Machinery and equipment Buildings Exchange-rate reserve Ot her financial reserves Tax allocation reserve Tot al 32 200 321 30 1 12 - 596 -7 - 66 9 1 -1 30 114 80 25 134 330 31 - 42 114 676 Ot her financial reserves include fiscally permissible allocations referring t o receivables...

  • Page 45
    ...11 17,760 20,788 USA Canada Brazil Mexico Colombia Peru Paraguay Chile Venezuela Ecuador Argentina Australia New Zealand Indonesia Thailand China Malaysia Japan India The Philippines Taiwan Singapore Hong Kong Sout h Korea Sout h Africa Countries wit h less t han 50 employees, t ot al Total outside...

  • Page 46
    ... ain individuals in Group management , normally st ipulating 60 years as t he age for early retirement pension. There are no agreement s for special severance pay. 18. C O N S O LID AT ED FIN A N C IA L STAT EM EN T S A C C O RD IN G T O U S G A A P The consolidated account s have been prepared in...

  • Page 47
    ... t he consolidated balance sheet s prepared in accordance wit h Swedish accounting principles and US GAAP. According t o Swedish principles 1996 According t o US GAAP 1995 1996 1995 Current asset s Real est ate, machinery and equipment Shares and participations Long-term receivables Goodwill Ot...

  • Page 48
    ...Minibar System Lt d, UK Cefemo S.A.R.L., France Eureka Forbes Lt d, India Friulia Factors S.p.A., It aly IVG Bulka-Lehel GmbH, Germany A/O Khimki Husqvarna, Russia MISR Compressor Manufacturing, Co., S.A.E., Egypt Raufors Plast al Component s AB, Sweden Saudi Arabia Refrig Mfg, Saudi Arabia Saudi It...

  • Page 49
    ... Electrolux UK Lt d 572,777,999 Germany Electrolux Deut schland GmbH FHP Motors GmbH FHP Motors Beteiligungsverwaltungs-GmbH Hungary Lehel Hüt ögepgyar Kft Austria Electrolux Austria G.m.b.H. Canada Euro White Invest ment Corp. 139,000 USA White Consolidated Industries, Inc. 100 Brazil Electrolux...

  • Page 50
    ... been prepared in accordance wit h t he Swedish Companies Act . We recommend t hat t he consolidated income st atement and t he consolidated balance sheet be adopted. Stockholm, March 6, 1997 Ernst & Young AB G U N N A R W ID H A G EN Authorized Public Accountant 46 Electrolux Annual Report 1996

  • Page 51
    ... represent s t he contribution made by a company's production, i.e. t he increase in value arising from manufacture, handling, etc. wit hin t he company. It is defined as sales revenues less t he cost s of purchased goods and services. Sales revenues for t he Electrolux Group in 1996 t ot alled SEK...

  • Page 52
    ... for share issues 5) Trading price of B-shares at year-end 7) Key ratios Return on equity, % 1) 2) 3) Return on net asset s, % 1) 2) 3) 10) Net asset s as a percent age of sales 2) 3) 6) 8) 10) Account s receivable as a percent age of sales 6) 8) Inventories as a percent age of sales 6) 8) Net...

  • Page 53
    .... 6) Sales for 1986 onward are annualized. 7) Last price paid for B-shares. 8) As of 1992, adjusted for exchange-rate effect s. 9) As of 1992, calculated as annual average. 10) As of 1993, minority interest s are included in adjusted equity. Return on equity Net income expressed as a percent age of...

  • Page 54
    Sales and average number of employees, by country 1996 EU Sales, SEKm %of Group total 1995 Sales, SEKm % of Group t ot al 1996 Number of employees 1995 Number of employees Germany Sweden United Kingdom France It aly Spain Denmark The Net herlands Finland Belgium Austria Ireland Greece Portugal ...

  • Page 55
    ..., SEKm %of Group total 1995 Sales, SEKm % of Group t ot al 1996 Number of employees 1995 Number of employees Far East Japan China Thailand Indonesia Malaysia Hong Kong Sout h Korea Taiwan Singapore The Philippines India Viet nam Ot her 1,099 808 800 438 423 269 225 182 148 92 81 59 46 4,670...

  • Page 56
    ...-out of t he fund was st arted in 1996, and by year-end it comprised about one hundred shareholders and about 15,000 shares. Loans t o employees t o acquire shares in t he fund were redeemed during 1996. Trading volume of Electrolux shares in Stockholm, London and New York (Thousands) 1996 1995...

  • Page 57
    ... hly high/low, SEK General index Number of shares t raded mont hly (t housands) Source: SIX AB Dividend, SEK Share of equit y, % In addition to distribution of shares in Gränges, the Board proposes an unchanged cash dividend for 1996 of SEK 12.50 per share. 53 Electrolux Annual Report 1996

  • Page 58
    ... and CEO, H&M Hennes & Maurit z AB. Board Member: IKEA, S-E-Banken Försäkring. Elected 1994. Shareholding in AB Electrolux: 1,500 shares. D EPU T Y M EM BER Shareholding in AB Electrolux: 0 shares. 6 Louis R. Hughes Born 1949, BS M.Eng., MBA. President , General Motors International Operations...

  • Page 59
    ... in AB Electrolux: 0 shares. 15 Mari-Ann Krantz Born 1948. Represent ative of t he Federation of Salaried Employees in Industry and Services. Elected 1990. Shareholding in AB Electrolux: 0 shares. Shareholding in AB Electrolux: 34 shares. 10 13 11 14 12 15 55 Electrolux Annual Report 1996

  • Page 60
    ... O LD A PPLIA N C ES Group management Corporate st aff Approximately 15 product lines wit hin four business areas Household Appliances Commercial Appliances Outdoor Product s Industrial Product s Multi-product line companies Single-product line companies Johan Bygge, Controller, Administration and...

  • Page 61
    ... of Frigidaire Company in USA, Product Line Manager for forestry and garden equipment in Nort h America 1991-1996. Shareholding in AB Electrolux: 21,700 shares and 20,000 options. 4 MatsOla Palm Executive Vice-President, M arketing Born 1941. Responsible for sales and marketing of white goods in...

  • Page 62
    ... in st ages, however, and varies bet ween product s and market s. The graph at left shows how demand for refrigerators in Germany and washing machines and dishwashers in The Net herlands shifted in 1995 and 1996 t oward more energy- and waterefficient product s. 58 Electrolux Annual Report 1996...

  • Page 63
    ...and Japan. Electrolux has started to set up a system for volunt ary reclaiming of used products in a number of countries, e.g. for white goods in Germany and Swit zerland, and industrial laundry equipment in Sweden and Finland. The launch in 1996 of t he market's first battery-driven vacuum cleaner...

  • Page 64
    ... level, and greater mobility for key personnel. Making interesting working t asks in different countries available t o everyone in t he Group provides personnel wit h better career opportunities and also stimulates internationalization of t he Group's management corps. 60 Electrolux Annual Report...

  • Page 65
    ... to receive shares in Gränges. Change of address Shareholders who have changed t heir names, addresses or bank account numbers should inform t heir t rustees or t he institute wit h which t hey have an account . Financial reports in 1997 Preliminary year-end result s Consolidated result s Annual...

  • Page 66
    ... C ompany Household A ppliance s C ommercial A ppliance s Outdoor Products The Global Appliance Company Household Appliances Commercial Appliances Outdoor Product s The Global A ppliance Company AKTIEBOLAGET ELECTROLUX Lilla Essingen, S-105 45 Stockholm, Sweden Telephone Int +46-8-738 60 00, Telex...