Electrolux 1999 Annual Report Download - page 17

Electrolux Annual Report 1999 15
Operations in 1999
Market conditions for food-service
equipment improved somewhat over
1998. Group sales rose, primarily in
southern Europe. Higher volumes and
implemented restructuring led to a
considerable increase in operating income
for this product line. Operating margin
improved despite divestment of the
profitable operation in food and beverage
vending machines.
Demand for laundry equipment was
largely unchanged. Sales for this product
line showed only a slight increase, although
an upturn was achieved in Eastern Europe
and Southeast Asia. Operating income and
margin improved, mainly as a result of
internal cost cuttings.
Demand for refrigeration equipment
was weaker than last year in most product
areas. Operating income declined as a
result of lower volumes, increased price
competition and a less favorable product
mix. Income was also adversely affected
by costs referring to continued stream-
lining of the organization for this prod-
uct line.
Restructuring
Five warehouses were shut down within
the framework of the Group’s restruc-
turing program. For Professional Appli-
ances, this program has thus involved
shutdown or divestment of 12 plants and
11 warehouses, as well as personnel cut-
backs totalling about 1,500.
Divestments
The operation in food and beverage
vending machines was divested as of
September 30, 1999. It is included in
Group sales for the year in the amount
of SEK 870m.
An agreement for divestment of the
operation in refrigeration equipment was
reached in November 1999.The major
part of this product line was divested as
of January 31, 2000. Divestment of the
remaining operations in Brazil, China and
Eastern Europe is scheduled for comple-
tion during the spring 2000. In 1999 this
product line had sales of SEK 2,279m
and about 2,000 employees.
Key data 19991) 19981) 1997 1996 1995
Net sales, SEKm 10,960 11,574 11,413 10,869 11,081
Operating income, SEKm2) 766 723 340 213 432
Operating margin, %2) 7.0 6.2 3.0 2.0 3.9
Net assets, SEKm 2,646 3,191 3,526 3,901 3,450
Return on net assets, %2) 25.9 21.2 8.9 5.5 11.6
Average number of employees 7,761 8,732 9,125 9,062 9,379
Capital expenditure, SEKm 124 215 274 300 364
1999 Share 1998 Share
Net sales by product line SEKm % SEKm %
Food-service equipment 6,131 55.9 5,891 50.9
Laundry equipment 2,406 22.0 2,380 20.6
Refrigeration equipment 2,279 20.8 2,564 22.2
Cleaning equipment3) 144 1.3 739 6.3
Total 10,960 100.0 11,574 100.0
1) Excluding items affecting comparability.
2) As of 1998 common Group costs are reported separately and are not distributed among the business
areas. The figures for the previous years have been adjusted accordingly.
3) Cleaning equipment with annual sales of about SEK 850m, was divested as of October 1, 1998.
95 96 97* 98* 99*
SEKm
0
150
300
450
600
750
900
0
5
10
15
20
25
30
Operating income, SEKm
Return on net assets, %
*Excluding items affecting comparability
%
Operating income and
return on net assets
9.2%
Share of total Group sales
95 96 97 98 99
SEKm
0
2,000
4,000
6,000
8,000
10,000
12,000
Net sales
The Group is the European leader in food-service equip-
ment, and is also the second largest producer in the
global market.
A new 30-liter oven that cooks with steam and hot air
received the 1999 APRIA EQUIP’HOTEL award in
France.