Electrolux 2004 Annual Report Download - page 24
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Please find page 24 of the 2004 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.Electrolux is increasingly becoming a consumer- and customer-
driven company, with greater focus on product development
and marketing. We are improving our profitability and internal
efficiency by cutting costs in operations and turning unprof-
itable units around.
Our efforts are starting to generate results. The share of
new products was considerably higher in 2004, and we
achieved a better product mix in both Europe and the US.
Implemented restructuring also contributed to improving
performance for operations such as floor-care products in
North America and appliances in Australia during the latter
part of the year.
We are now accelerating restructuring with the goal of
completing most consolidation and relocation of production
by 2008. The costs of these changes are expected to amount
to approximately SEK 8–10 billion, and will be charged against
income on an on-going basis. These changes will gradually
generate savings that are expected to total approximately
SEK 2.5–3.5 billion annually as of 2009.
In February 2005 the Board announced its intention of
spinning off Outdoor Products as a separate unit. The aim
is to achieve a spin-off in a cost-efficient way to be finalized
no later than mid-2006. Outdoor Products has shown good
growth and high profitability, and is now large enough to
comprise a separate company.
The Electrolux Group’s operations will thus be concentrat-
ed to the core areas. I am convinced that the changes we are
making in these areas create a good foundation for long-term
and profitable growth.
20 Electrolux Annual Report 2004
Good foundation for
profitable growth
Hans Stråberg
President and CEO
Actions for profitable growth:
•
Increased investments in new products
•
Focus on the Electrolux brand, reduction of number of brands
•
Consolidation and relocation of production to low-cost countries
•
Fewer and global product platforms
•
Fewer product variants, greater standardization of components
•
Better coordination through global product councils
•
More efficient purchasing
•
Outsourcing
•
Cost savings in marketing organization
Spin-off of Outdoor Products
Spin-off to be achieved in a cost-efficient way
no later than mid-2006
Sales: Total approx. SEK 27 billion, of which 65%
consumer products, 35% professional products
Operating income: Approx. SEK 3 billion
Number of employees: Approx. 11,500
World’s largest producer of chainsaws for
professional users and consumers, and of
garden tractors, lawn mowers, and other
portable petrol-driven garden equipment.
One of the world’s largest producers of
diamond tools for the construction and
stone industries.
Brands: Husqvarna,
Jonsered, Partner Industrial
Products, Dimas, Diamant
Boart, Flymo, Partner,
McCulloch, Poulan,
Weed Eater.