Electrolux 2001 Annual Report Download - page 40

36 ELECTROLUX ANNUAL REPORT 2001
Net financial items amounted to SEK
–1,066m (–1,072), which corresponds to
–0.8% (–0.9) of sales.The financial net
was positively impacted by lower interest
rates, while interest payments in foreign
currency had a negative effect.
Taxes
Total taxes for 2001 amounted to SEK
1,477m (2,121), which corresponds to
28.3% (32.5) of income after financial
items. Excluding items affecting compar-
ability, the actual tax rate was 32.0%
(32.4). See Note 8 on page 53.
Effects of changes in exchange rates
Changes in exchange rates as regards both
transactions and translation effects, had a
net positive impact on income after
financial items of approximately SEK
566m (375). Of this, SEK 479m (190)
referred to translation of income state-
ments in subsidiaries.
These effects are traceable mainly to
the weakening of the Swedish krona
against most currencies, and in particular
the US dollar and the British pound.
For key ratios in which liquidity, net
assets, inventories and accounts receivable
are stated in relation to net sales, the
effects of changes in exchange rates have
been eliminated by translating net sales at
year-end rates.
For additional information on the
effects of changes in exchange rates, see
the section on Currency rate risk, page 40.
Value creation
The total value created by the Group in
2001 amounted to SEK 262m compared
with SEK 2,423m in the previous year.
The decrease is traceable mainly to a
decline in operating margin to 4.7%
(6.5), excluding items affecting compara-
bility.The impact of the decline in oper-
ating margin was to some extent offset by
the growth in sales.The capital turnover
rate remained at 3.1 (3.1).
Operations by business area
Demand weakened during the year in
most of the Group’s product areas, in
both Europe and North America. Market
conditions in Asia improved over last year,
with the exception of India. Demand in
Latin America improved in the first half
of the year, but declined in the last two
quarters.
Group operating income was also
negatively affected by more severe price
competition and negative trends as
regards the product mix within several
operations. Costs for material and half-
finished goods were, however, lower than
last year.
Of the Group’s business areas, Consumer
Durables achieved higher sales, mainly as a
result of the acquisition of the Australian
appliance operation at the beginning of
the year, and changes in exchange rates.
Operating income and margin declined.
Professional Products reported higher
total sales, largely as a result of currency
effects. Operating income and margin
declined for indoor products, while out-
door products achieved continued good
growth in both income and margin.
Consumer Durables
Industry shipments of core appliances in
Western Europe increased in volume by
approximately 1% over the previous year.
Shipments in the fourth quarter showed
an upturn of about 3%. Group sales in
Europe through Electrolux Home
Products were higher than last year.
Operating income improved as a result
of higher volumes, as well as improved
productivity and cost reductions.Trends
for price and mix, in terms of both prod-
ucts and markets remained negative.
In the US, industry shipments of core
appliances declined by approximately 1%
compared with last year. Shipments of
major appliances, i.e. including room air-
conditioners and microwave ovens, also
declined by approximately 1%. In the
fourth quarter, shipments rose by approxi-
mately 6% for both core appliances and
major appliances compared with a weak
fourth quarter in the previous year.
Group sales of white goods in North
America through Electrolux Home
Products decreased from last year, primar-
ily due to lower sales of refrigerators.
Destocking at retail level, particularly
during the first half of the year, also had
a negative impact on sales. Operating
income showed a marked decline as a
result of lower volumes and substantial
non-recurring costs related to the phase-
in of a new generation of refrigerators.
Delivery failures and costs for additional
personnel and overtime within the refriger -
ator division had a total negative effect on
income of approximately USD 100m
(approximately SEK 1,050m).
In Brazil, industry shipments of major
appliances increased in the first half of the
year, but declined during the second half,
and were lower for the full year. Sales for
the Group’s Brazilian appliance operation
were largely unchanged over last year.
Operating income improved substantially
as a result of new products and internal
efficiency measures, but was still negative.
The Group achieved good growth in vol-
ume in China and the ASEAN countries.
Demand in India showed a major down-
turn, and Group sales were lower than last
year. Operating income for the Indian
operation showed a marked decline. Over-
all, sales and operating income for major
appliances outside Europe and North
America increased substantially as a result
of the consolidation of the Australian
operation, which was acquired at the
beginning of the year.
Demand for floor-care products rose
slightly in the US and declined somewhat
in Europe. Sales for the Group’s floor-
care product line increased over last year
as a result of higher volumes in both the
US and Europe. Operating income was
largely unchanged, but with a lower mar-
gin due to a less favorable product mix.
Demand for consumer outdoor prod-
ucts declined in both Europe and the US,
as a result of cold weather and inventory
reductions by retailers in both markets.
Pre-season deliveries in the fourth quarter
were also lower than in the previous year.
Group sales in Europe declined and oper-
Report by the Board of Directors for 2001
Value creation, SEKm1) 2001 2000 1999
Consumer Durables
Europe 1,172 986 1,224
North America –297 1,669 1,036
Rest of the world –1,023 –1,056 –1,398
Total Consumer Durables –148 1,599 862
Professional Products
Indoor 250 713 896
Outdoor 914 756 663
Total Professional Products 1,164 1,469 1,559
Common Group costs, etc. –754 –645 –639
Total 262 2,423 1,782
1)Excluding items affecting comparability. See definitions page 73.