Electrolux 2005 Annual Report Download - page 41
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Electrolux Annual Report 2005 37
Operations in Asia/Pacific
Key data 1)
Consumer Durables, Asia/Pacific
SEKm 2005 2004
Net sales 9,276 9,139
Operating income 13 –289
Operating margin, % 0.1 –3.2
Net assets 3,616 3,330
Return on net assets, % 0.4 –10.0
Capital expenditure 328 319
Average number of employees 7,077 8,614
1) Excluding items affecting comparability.
Major appliances
Australia
The market for core appliances in Australia showed a downturn
for the year. Sales for the Group’s Australian operation declined
somewhat for both the full year and the fourth quarter, due to
lower volume. Operating income for 2005 improved considerably
as a result of price increases and restructuring.
China and India
The market for core appliances in China declined in 2005. Group
sales of core appliances in the Chinese market rose for the full
year, but declined in local currency during the fourth quarter in
comparison with 2004. Operating income for the full year showed
some improvement despite higher costs for materials. In the fourth
quarter, income improved substantially but remained negative.
In the course of the year, the Group has changed its business
model in India and divested its Indian appliance operation, which
had a positive impact on operating income for the region.
Quick facts
Consumer Durables, Asia/Pacific Location of Major
Products Key brands major plants competitors
Major appliances Electrolux, Australia, Fisher &
Westinghouse, China, Paykel, LG,
Simpson Thailand Haier,
Samsung,
Bosch-
Siemens,
Kelon,
Midea
Floor-care products Electrolux, Hungary Dyson, LG,
Volta, National,
AEG-Electrolux Samsung,
Haier
Divestment of the Indian operation
The Group changed its business model in India during the year
and divested its Indian appliance operation, including all three
production facilities to Videocon, one of India’s largest industrial
groups. The agreement involves a license for Videocon with the
right to use the Electrolux brand in India for a period of five years,
as well as the Kelvinator brand in India and selected markets for
an unlimited time. Cooperation with Videocon offers the Group
opportunities for continuing to strengthen the position for the
Electrolux brand in the Indian market.
The agreement involved a cost of SEK 419m, which was
taken as a charge against operating income in 2005 within items
affecting comparability.
Operations in Professional Products
Key data 1)
Professional Indoor Products
SEKm 2005 2004
Net sales 6,686 6,440
Operating income 463 445
Operating margin, % 6.9 6.9
Net assets 1,290 1,022
Return on net assets, % 40.1 41.9
Capital expenditure 156 144
Average number of employees 3,401 3,595
1) Excluding items affecting comparability.
Food-service equipment
Demand for food-service equipment in Europe in 2005 is esti-
mated to have increased somewhat in comparison with the previ-
ous year. Group sales and operating income improved. In the
fourth quarter, sales and income showed a considerable
improvement over the corresponding period in 2004, due to
some large projects.
Laundry equipment
Demand for laundry equipment in 2005 is estimated to have been
in line with the previous year. Group sales rose, but operating
income declined for the full year, mainly due to restructuring
costs. In the fourth quarter, sales and income rose in comparison
with the previous year.
Relocation of production
In the course of the year, production at the plant for tumble-dryers
in Tommerup, Denmark, was gradually transferred to a new plant in
Thailand and a plant in Sweden. The transfer will be completed in
2006 when all production at Tommerup will be discontinued.
Quick facts
Professional Indoor Products
Major Location of
Products Key brands major plants competitors
Food-service Electrolux, Italy, Enodis,
equipment Zanussi France, ITW-Hobart,
Professional, Switzerland Rachenel,
Dito-Electrolux, Ali Group
Molteni
Laundry equipment Electrolux Sweden, IPSO,
Denmark, Alliance,
France Miele,
Primus