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36 Electrolux Annual Report 2003
Report by the Board of Directors for 2003
Net debt/equity and equity/assets ratios
The net debt/equity ratio was 0.00 (0.05). The equity/assets ratio
improved to 42.7% (39.7).
Net debt/equity and equity/assets ratios
Net debt in relation to equity has been reduced significantly over the past
ten years.
Minority interests
Minority interests decreased to SEK 27m (592), mainly as a result
of the divestment of the 50% shareholding in Vestfrost A/S, a
Danish producer of refrigerators and freezers, and the acquisition
of all outstanding shares in Electrolux Home Appliances Co. Ltd
in China.
Equity and return on equity
Group equity as of December 31, 2003, amounted to SEK 27,462m
(27,629), which corresponds to SEK 89.40 (86.80) per share.
Return on equity was 17.3% (17.2). Excluding items affecting
comparability, return on equity was 18.9% (18.6).
As of January 1, 2004, the Group implements the new Swedish
accounting standard RR 29, “Employee Benefits”. This has
incurred a one-time charge net of taxes of SEK 1,600m to Group’s
opening equity in 2004, and has no effect on the income state-
ment or cash flow.
For more information on the new accounting standard RR 29, see Note 1 on
page 46.
Borrowings
At year-end, the Group’s interest bearing liabilities, including
interest-bearing pension liabilities, amounted to SEK 12,501m
(15,698), of which SEK 8,173m (13,759) referred to long-term
borrowings with average maturities of 2.7 years (3.3). A significant
portion of the long-term borrowings are raised in the euro bond
market.
The Group’s goal for long-term borrowings includes an average
time to maturity of at least two years, an evenly spread of maturi-
ties, and an average interest-fixing period of one year. At year-end,
the average interest-fixing period for long-term borrowings was
1.1 years (0.9).
The average interest rate for the Group’s total interest-bearing
borrowings at December 31, 2003, was 4.9% (4.2).
Long-term borrowings, by maturity
During 2003, a total net of SEK 1,490m in borrowings matured or was amortized.
For more information on borrowings, see Note 18 on page 58.
Ratings
Electrolux has Investment Grade ratings from Moody’s and
Standard & Poor’s. The long-term ratings from both institutions
were unchanged during the year. Standard & Poor’s changed the
long-term outlook from positive to stable.
Ratings
Long- Short- Short-
term term term debt,
debt Outlook debt Sweden
Moody’s Baa1 Stable P-2
Standard & Poor’s BBB+ Stable A-2 K-1
0
1,000
2,000
3,000
4,000
5,000
6,000
SEKm
2,414
4,057
416 29
2,812
0
859
2004 2005 2006 2007 2008 2009 2010 and after
0
0.3
0.6
0.9
1.2
1.5
Equity/assets ratio
03020100999897969594
1.8 %
0
8
16
24
32
40
48
Net debt/equity ratio
For definitions, see page 77.