Electrolux 1996 Annual Report Download - page 29

0
5
10
15
20
25
30
0
5,000
10,000
15,000
20,000
Inventories
Inventories, SEKm
As % of sales, adjusted for 
exchange-rate effects as of 1992
SEKm%
8887 89 90 91 92 93 94 95 96
0
5
10
15
20
25
30
35
40
0
5,000
10,000
15,000
20,000
Accounts receivable
Accounts receivable, SEKm
As % of sales, adjusted for 
exchange-rate effects as of 1992
SEKm%
8887 89 90 91 92 93 94 95 96
Shareholders’ equity
Group shareholders’ equity increased as
of December 31, 1996 to SEK 22,428m
(21,304), which corresponds to SEK 306
(291) per share.
Equity/assets and net debt/equity ratios
The equity/assets ratio improved to 33.8%
(31.8). Computation of this ratio involves
deducting liquid funds from short-term
borrowings.
The net debt/equity ratio, i.e. net bor-
rowings in relation to adjusted equity, was
0.80 (0.80). The Group’s goal is that the net
debt/equity ratio should not exceed 1.0.
For definitions of these ratios, see
page 48.
Net assets
Net assets, i.e. total assets less liquid funds
and all non-interest-bearing liabilities in-
cluding deferred tax on untaxed reserves,
rose to SEK 43,824m (39,422). The increase
is traceable mainly to the acquisition of
Refripar in Brazil and the take-over of the
electric-motor operation in FHP Motors.
Net assets adjusted for exchange-rate
effects amounted to 39.1% (36.1) of sales.
Net assets include assets referring to cus-
tomer financing in the amount of SEK
2,810m (2,525).
Inventories and accounts receivable
Inventories in 1996 amounted to SEK
17,334m (18,359) and accounts receivable
to SEK 20,494m (19,602), which after
adjustment for exchange-rate effects corre-
sponds to 15.5% (16.8) and 18.3% (18.0) of
Group sales, respectively.
The Group’s goal is that inventories
plus accounts receivable should not exceed
30% of sales.
Capital expenditure and R&D costs
Capital expenditure in 1996 amounted to
SEK 4,807m (5,115), of which SEK 527m
(583) referred to Sweden. Total capital
expenditure thus corresponded to 4.4%
(4.4) of Group sales.
More than one-third of the major
investments authorized in 1996 refer to
new products, and approximately one-
quarter to plants in new markets. Invest-
ment in IT accounts for an increasing share
of capital expenditure as the Group deve-
lops a more efficient infrastructure.
The largest projects in 1996 involved
the build-up of the production facility for
refrigerators in the Group’s joint venture
in China, and the expansion of production
capacity in the refrigerator plant in Hungary.
A substantial investment is also being made
in production of compressors in Italy.
Costs for research and development
in 1996 amounted to SEK 1,580m (1,636),
which corresponds to 1.4% (1.4) of sales.
Divestment of operations
In February, a final agreement was reached
on divestment of the operation in materials-
handling equipment, which had sales of
approximately SEK 1,750m and about 1,400
employees. The divestment was completed
on March 29, and did not have any signifi-
cant effect on the Group’s income or finan-
cial position.
As of April 1, the Group divested the
Swedish electronics operation in Electrolux
Average annual growth, 1987–1996
Sales 7.6%
Shareholders’ equity 6.8%
Equity per share 6.6%
Trading price, B-shares 2.4%
Effective yield, B-shares 6.8%
Capital expenditure by business area, SEKm 1996 % 1995
Household Appliances 3,633 75.6 3,579
Commercial Appliances 300 6.2 364
Outdoor Products 405 8.4 504
Industrial Products 469 9.8 668
Total 4,807 100.0 5,115
Inventories declined in 1996 to 15.5% of sales,
as against 16.8% in 1995.
Accounts receivable amounted to 18.3% of sales in
1996, as against 18.0% in 1995.
Capital expenditure in 1996 amounted to
SEK 4,807m, of which SEK 527m in Sweden.
0
1,000
2,000
3,000
4,000
5,000
Capital expenditure
Outside Sweden
Sweden
SEKm
8887 89 90 91 92 93 94 95 96
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Electrolux Annual Report 1996