Electrolux 2009 Annual Report Download - page 68

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The household appliances sector was affected by the continued recession in 2009. Demand
continued to decline in several of the Group’s major markets. Retailers were affected by
turbulence in financial markets and reduced access to credit.
Other macroeconomic factors had a positive effect on the Group in 2009. Prices of raw
materials declined, for the first time in many years. Price stability in various markets was good
on the whole. Future trends are uncertain, however, which means there is a greater need for
effective risk management.
Electrolux has implemented a number of measures to meet major risks. Capacity has been
adjusted to match the weak demand, working capital has been structurally improved, the focus
on price has been intensified, and the purchasing process for raw materials has been further
streamlined. The text below describes the major risks and the Group’s response in order to
manage and minimize them.
Managing risks to
maximize returns
Examples of management of risks
• Financial policy • Credit policy • Pension policy • Code of Ethics • Environmental policy
• Variations in demand
• Price competition
• Customer exposure
• Commodity prices
• Restructuring
• Financing risks
• Interest-rate risks
• Pension commitments
• Foreign-exchange risks
Financial risks
and commitments
Operational risks
• Regulatory risks
Other risks
annual report 2009 | part 1 | risks
In general, there are three types of risks: Business risks, which are normally managed by the Group’s operational units; financial
risks, which are handled by Group Treasury; and other risks.
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