Electrolux 2005 Annual Report Download - page 36
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Operating cash flow
Operating cash flow was SEK 1,083m as compared to
SEK 3,224m in 2004. The decrease refers mainly to changes in
working capital, particularly accounts receivable and accounts
payable. The increase in accounts receivable and inventory is pri-
marily driven by growth in sales. The change in accounts payable
is mainly due to a favorable one-time effect in 2004.
The divestment of the Group’s Indian operation as well as
increased capital expenditure also had a negative impact on cash
flow from operations and investments.
Improved cash flow from operations and lower taxes paid had
a positive impact on cash flow.
Cash flow
SEKm 2005 2004
Cash flow from operations, excluding
change in operating assets and liabilities 8,428 7,140
Change in operating assets and liabilities –1,888 1,442
Capital expenditure –4,765 –4,515
Other –692 –843
Operating cash flow 1,083 3,224
Divestment of operations –370 —
Cash fl ow from operations and investments 713 3,224
Operating cash flow
Operating cash flow deteriorated in 2005, mainly due to changes in working capital.
Capital expenditure
Capital expenditure in property, plant and equipment in 2005
increased to SEK 4,765m (4,515), of which SEK 260m (297)
referred to Sweden. Capital expenditure corresponded to 3.7%
(3.7) of net sales. The increase in comparison with the previous
year referred to Indoor Products and investments in new plants
within appliances in Europe and a new product platform within
consumer outdoor products in North America.
Approximately 35% of total capital expenditure in 2005
referred to new products. Major projects included development
of new products within the washing and cooking product areas in
North America and cooking products in Europe. Another major
project was the finalizing of a new platform for tractors within
consumer outdoor products in North America.
Approximately 20% of total capital expenditure referred to expan-
sion of capacity and new plants related mainly to relocation. The
major share referred to investments in new plants in Europe and
North America. About 20% referred to rationalization and
replacement of existing production equipment.
Capital expenditure, by business area
SEKm 2005 2004
Indoor Products
Europe 1,872 1,561
% of net sales 4.3 3.7
North America 1,108 1,439
% of net sales 3.2 4.7
Latin America 167 119
% of net sales 2.9 2.7
Asia/Pacific 328 319
% of net sales 3.5 3.5
Professional Products 156 144
% of net sales 2.3 2.2
Outdoor Products
Consumer Products 777 517
% of net sales 4.2 2.9
Professional Products 334 393
% of net sales 3.2 4.1
Other 23 23
Total 4,765 4,515
% of net sales 3.7 3.7
Capital expenditure
Capital expenditure increased somewhat to SEK 4,765m (4,515), corresponding to 3.7% of
net sales.
Costs for research and development
Costs for Research and Development in 2005, including capital-
ization of SEK 489m (486), amounted to SEK 2,187m (2,052),
corresponding to 1.7% (1.7) of net sales. R&D projects during the
year referred mainly to new products and design projects within
appliances, including development of new platforms. Major proj-
ects included new products within cookers and washing
machines in Europe and North America.
Cash flow
0504030201
Operating cash flow,
SEKm
SEKm
10,000
8,000
6,000
4,000
2,000
0
05040302010099989796
Capital expenditure,
SEKm
As % of net sales
SEKm
6,000
4,800
3,600
2,400
1,200
0
%
6.0
4.8
3.6
2.4
1.2
0
• Operating cash flow declined to SEK 1,083m (3,224), mainly due to changes in working capital
• Capital expenditure increased to SEK 4,765m, as against SEK 4,515m in 2004
• New products accounted for 35% of capital expenditure
• R&D costs increased by 6,6% to SEK 2,187m (2,052)