Electrolux 2008 Annual Report Download - page 53

Cash flow and change in net borrowings
Operations
Operating assets and liabilities
Investments
Dividend
Exchange-rate differences
Sale of shares
Net borrowings Dec. 31, 2008
–6,000 –4,000
2,000 4,000
–2,000
0 SEKm
Net borrowings Dec. 31, 2007
Total distribution to shareholders
99 00 01 02 03 04 05 06 07
6,000
5,000
4,000
3,000
2,000
1,000
0
Redemption of shares
Repurchase of shares
Dividend
08
7,000
SEKm
Electrolux has a long tradition of
high total distribution to share-
holders that include repur-
chases and redemptions of
shares as well as dividends.
Financial position
The Group has prioritized efforts to mantain a strong balance
sheet. In spite of the weak result, the cash flow from operations
and investments was at the same level as in the previous year,
amounting to SEK 1 194m (1 277). By the end of the year, inven-
tories were reduced through extensive production shutdowns.
Working capital and net assets
SEKm
Dec. 31,
2008
% of
annual-
ized net
sales
Dec. 31,
2007
% of
annual-
ized net
sales
Inventories 12,680 11.0 12,398 11.1
Trade receivables 20,734 17. 9 20,379 18.3
Accounts payable –15,681 –13.6 –14,788 –13.3
Provisions –13,529 –11,382
Prepaid and accrued income
and expenses –7, 26 3 –6,445
Taxes and other assets and
liabilities –2,072 –2,291
Working capital –5,131 –4.4 –2 ,12 9 –1.9
Property, plant and equipment 17,0 35 15,205
Goodwill 2,095 2,024
Other non-current assets 4,602 4,437
Deferred tax assets and
liabilities 2,340 1,206
Net assets 20,941 18.1 20,743 18.6
Average net assets 20,538 19.6 20,644 19.7
Net borrowings
During 2008, SEK 2,923m of the long-term borrowings matured
and SEK 5,289m of new long-term borrowings were raised. The
maturity profile of the Group’s borrowings has improved substan-
tially.
Net borrowings
SEKm
Dec. 31,
2008
Dec. 31,
2007
Borrowings 13,946 11,163
Liquid funds 9,390 6,460
Net borrowings 4,556 4,703
Net debt/equity ratio 0.28 0.29
Equity 16,385 16,040
Equity per share, SEK 57.78 56.95
Return on equity, % 2.4 20.3
During 2009 and 2010, long-term borrowings in the amount of
SEK 1,979m will mature. Liquid funds as of December 31, 2008,
excluding a committed unused revolving credit facility of
EUR 500m amounted to SEK 9,390m.
Ownership structure
Investor AB is the largest shareholder, with approximately 12.7%
of the share capital and approximately 28.8% of the voting rights.
At year-end 2008, about 57% of the total share capital was
owned by Swedish institutions and mutual funds, about 34% by
foreign investors, and about 9% by private Swedish investors.
Major shareholders
Share
capital, %
Voting
rights, %
Investor AB 12.7 28.8
Capital Group Funds 9.2 7. 2
Alecta Pension Insurance 5.6 5.6
Swedbank Robur Funds 4.2 3.3
Second Swedish National Pension Fund 2.8 2.2
Barclays Funds 2.1 1.7
Fourth Swedish National Pension Fund 1.9 1.5
SEB Funds 1.8 1.4
Didner & Gerge Mutual Fund 1.6 1.3
AFA Insurance 1.3 1.0
Total, ten largest shareholders 43.2 54.0
Source: SIS Ägarservice as of December 31, 2008 and Electrolux.
The figures have been rounded off.
Proposed dividend
The Group’s goal is for the dividend to correspond to at least 30%
of income for the period, excluding items affecting comparability.
Historically, the Electrolux dividend rate has been considerably
higher than 30%. Electrolux also has a long tradition of high total
distribution to shareholders that include repurchases and redemp-
tions of shares.
Demand in the Group’s main markets declined sharply through-
out the world in 2008. The decline was particularly steep in the
fourth quarter. Global demand for appliances is expected to con-
tinue to deteriorate in 2009. Electrolux is implementing a number
of cost-reduction programs, which had an adverse effect on cash
flow in 2008 and will have a similar effect on cash flow in 2009.
As a consequence, the Board of Directors proposes that no
dividend will be paid for 2008. A zero dividend is in line with exist-
ing policy, with reference to the low income for the period.
49