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Annual Report 2010 1 Operations and strategy
INNOVATION
BRAND
OPERATIONAL EXCELLENCE
GROWTH

Table of contents

  • Page 1
    Annual Report 2010 1 Operations and strategy INNOVATION BRAND OPERATIONAL EXCELLENCE GROWTH

  • Page 2
    ... price/mix and falling input costs. Exceptionally strong cash ï¬,ow." Part 1 describes Electrolux operations and strategy. Part 2 consists of the financial review, sustainability report and corporate governance report. Contacts Peter Nyquist Senior Vice President Investor Relations and Financial...

  • Page 3
    ...of consumers and professionals. Electrolux products include refrigerators, dishwashers, washing machines, vacuum cleaners, cookers and air-conditioners sold under esteemed brands such as Electrolux, AEG, Eureka and Frigidaire. In 2010 Electrolux had sales of SEK 106 billion and 52,000 employees. 16%

  • Page 4
    ... for the floor-care operations declined, due to lower sales volumes, higher costs for sourced products and lower prices in the market. 38% 42% Consumer Durables North America 32% 24% Consumer Durables Latin America 16% 17% Electrolux sales volumes in Latin America increased in 2010, which...

  • Page 5
    ... cleaners, has strengthened the Group's leading position in sustainability. Five concept vacuum cleaners made of plastic found in the world's oceans are a part of the marketing strategy for Electrolux Green Range of vacuum cleaners. INNOVATION BRAND OPERATIONAL EXCELLENCE GROWTH 1 Sales increased...

  • Page 6
    ... of our brand positions in North America. The improvement in income for the vacuum cleaner business largely derived from an improved mix through the launch of new products. Moreover, new income and sales records were noted in Latin America and Southeast Asia and Professional Products recorded its...

  • Page 7
    ... in key growth markets. These include the washer plant in the Ukraine, providing us with better access to a large and expanding market in the east, and the signing of a Memorandum of Understanding covering the acquisition of the Egyptian company Olympic Group, making Electrolux a significant...

  • Page 8
    annual fepoft 2010 | part 1 | ceo statement We have a solid platform iith a clear and definite direction; to use consumer insight as a base for developing innovative products, strong brands and first-class service, supported by global operational excellence. Keith McLoughlin President and CEO 4 < ...

  • Page 9
    ... direction; to use consumer insight as a base for developing innovative products, strong brands and first-class service, supported by global operational excellence. Stockholm, February 2011 6.1 4.9 4.4 4.0 4.6 Operating margin, % 1.5 Hans Stråberg, President and Chief Executive Officer of AB...

  • Page 10
    ... household purchasing power in Eastern Europe. • Replacement. • New housing and renovations. • Design. • Energy- and water-efficient products. Mafket gfowth • Total demand in the European markets stabilized in 2010 and increased by 2%, after more than two years of decline. • Many small...

  • Page 11
    ... PRODUCTS LATIN AMERICA ASIA/PACIFIC PROFESSIONAL PRODUCTS 93 375 • No clear market leader in the region. • Southeast Asian consumers find European brands appealing, but their market shares are still small. 136 • Food service Half of all equipment is sold in North America. The European...

  • Page 12
    ... brand create a foundation for improving Group profitability. Pfoduct categofies - what we sell Share of sales See page 12 18% LAUNDRY 58% KITCHEN See page 16 8% 10% OTHER See page 18 FLOOR CARE 2% 4% LAUNDRY EQUIPMENT See page 30 FOOD-SERVICE EQUIPMENT See page 32 In 2010, Electrolux sold...

  • Page 13
    Business afeas - how we report NORTH AMERICA Share of sales See page 20 See page 22 32% 38% EUROPE, MIDDLE EAST AND AFRICA 16% 6% LATIN AMERICA ASIA/PACIFIC See page 26 See page 24 See page 28 8% PROFESSIONAL PRODUCTS The Group's products are sold in more than 150 mafkets. The largest of ...

  • Page 14
    ...% Kitchen, 62% Laundry, 20% Floor care, 8% Other, 10% 40 30 Electrolux household appliances command a strong position among the most energy-efficient products in the market. Kitchen appliances account for more than half of sales. 20 10 0 Share Share of units of gross profit sold Electrolux...

  • Page 15
    ... with experience from the Swedish Culinary Team and prize-winning restaurants in Sweden and France, has a complete kitchen solution supplied by Electrolux in his personal kitchen at home, just as in his restaurant Rolfs Kök in Stockholm, Sweden, see page 29. An increasing number of consumers desire...

  • Page 16
    ... Zanussi. In North America, the Electrolux brand is used for appliances in the premium segment and the Frigidaire brand for appliances in the mass-market segment. In Latin America and Asia, the majority of products are sold under the Electrolux brand. The Group's most important brands in Australia...

  • Page 17
    ...stofage spaces. Infinity has been a gfeat sales success and new vefsions afe constantly being feleased. The latest is the Infinity i-Kitchen that meets new consumef needs. The Infinity i-Kitchen is equipped with a full touchscfeen enabling usefs to download 600 fecipes fof evefything ffom cocktails...

  • Page 18
    ... requires refrigerators that can preserve the freshness of produce for a long time. Electrolux has developed a new technology that ensures that fresh produce retains nutritional value, taste and aroma irrespective of the external climate. The energy consumption during use of large kitchen appliances...

  • Page 19
    ... of new, innovative appliances in Gefmany and Austfia was initiated to stfengthen and diffefentiate the AEG bfand. The Neue Kollektion pfoduct fange fepfesents a mofe human bfand and stfongef design that utilizes only steel and glass. New intuitive contfols make the pfoducts easief to use. Perfect...

  • Page 20
    ... the largest market share being for front-loaded washing machines. Electrolux is also one of the leading manufacturers of energy- and water-efficient laundry products. Electrolux was the first company to develop a tumble-dryer that met Europe's highest energy classification, Class A, with the AEG...

  • Page 21
    ... Gafnef fof the Ffigidaife bfand. The pfoducts afe sold all ovef Nofth Amefica via independent fetailefs of household appliances and thfough the lafge chains, including Best Buy, Lowe's and Seafs. In 2010, sevefal mafketing campaigns wefe conducted that emphasized the pfoducts' unique functions and...

  • Page 22
    ... and small appliances Demand is increasing for green vacuum cleaners. Electrolux has developed energy-efficient models manufactured from recycled material. In autumn 2010, a completely new series of green vacuum cleaners was launched in Europe. Consumef tfends The trends for floor-care products have...

  • Page 23
    ...that could instead be feused fof mofe sustainable pfoducts. It also fofms paft of the mafketing stfategy of the Electfolux Gfeen Range of vacuum cleanefs. In 2010, the Vac ffom the Sea campaign home page was the second most visited page of all Electfolux web sites. Vac ffom the Sea is also possible...

  • Page 24
    ... under the AEG brand in Germany and Austria. The launch continues in other markets in 2011. At the end of the year, a new range of energy-efficient premium vacuum cleaners, manufactured using up to 70% recycled plastic, was launched. A positive trend in terms of the mix and lower costs due to...

  • Page 25
    ... shares 16% core appliances 14% ï¬,oor-care products Acquisition Growth in Eastern Europe, excl. Turkey The acquisition of a iashing-machine factory in the Ukraine and a declaration of intent to acquire the Egyptian household appliance manufacturer Olympic Group is part of the Electrolux strategy...

  • Page 26
    ...Sears, Lowe's, Home Depot and Best Buy. Home Depot and Sears also hold strong positions in Canada. Vacuum cleaners are sold mainly through supermarkets. A large portion of retailer sales are driven by marketing campaigns. Kitchen specialists such as those in Europe account for only a small share of...

  • Page 27
    ... of appliances has changed. The share of replacement has increased, while the shares of discretionary sales and sales in connection with new housing have decreased. The value of the profitable premiumsegment has also declined. Electrolux will be able to benefit of its position in the premium segment...

  • Page 28
    ... 20% in 2010 and market shares strengthened in such countries as Mexico and Argentina, as well as in numerous product categories. The majority of Electrolux household appliances sold in Latin America is manufactured in Brazil or Mexico. Two of three vacuum cleaners sold in Brazil in 2010 carried the...

  • Page 29
    ... pen mounted directly on the machine. Brazil is the largest market for Electrolux in Latin America. The Electrolux brand has a strong position in household appliances and Electrolux is the market leader in vacuum cleaners. Strong position Markets, retailers and competitors Market penetration in...

  • Page 30
    ...a few international chains have as yet established operations in China. The Gfoup's position Approximately 70% of Electrolux sales of household appliances in the Asia/Pacific region is in Australia, where the Group is the market leader. The Electrolux brand is positioned in the premium-price segment...

  • Page 31
    ... for refrigerators. Consumer insight - the majority of inhabitants in large Asian cities iould find life iithout air-conditioning unbearable. Ebony Market shares in Australia 42% core appliances 21% ï¬,oor-care products Electrolux cordless vacuum cleaner Ergorapido continues to contribute to sales...

  • Page 32
    ... expect short delivery times. Customers expect service facilities to be available locally. Own-manufactured products have accounted for a growing proportion of Group sales in recent years. The Group currently operates its own production facilities in Sweden, France, Italy, Switzerland and Thailand...

  • Page 33
    ... Team and prize-winning restaurants in Sweden and France, has a complete kitchen solution supplied by Electrolux at his restaurant Rolfs Kök in Stockholm. At home, in Johan's personal kitchen, the equivalent consumer products can be found, see page 11. Electrolux is the only appliance manufacturer...

  • Page 34
    ...service, 4% laundry, 2% Share of operating income 2010 11% Operating income for food-service equipment improved considerably due to increased sales of own-manufactured products, an improved customer mix and cost efficiencies. Operating income for professional laundry products improved due to price...

  • Page 35
    ... Belgium equipped with laundry solutions from Electrolux Professional Products. This customer segment is one of the focus areas for growth in professional consumer-operated solutions. Markets and competitors FOOD-SERVICE EQUIPMENT Majof mafkets • Italy • France • Scandinavia • Asia and the...

  • Page 36
    ... sold in North America. The major restaurant chains are increasing their market shares in the US and are expanding rapidly in growth markets, including China and Eastern Europe, thus generating extensive opportunities for producers of food-service equipment for restaurant chains. The North American...

  • Page 37
    ... market share Food service Laundry The Electrolux High Speed Panini Grill is an example of an innovative product to meet the needs of fast-food chains. This product reduces grill time for a panini, thanks to a special combination of three heating sources (patented). Europe North America Asia...

  • Page 38
    ...being • Greater requirements for service & quality • More interest in food & interior decorating • Increasing brand significance  38 • Internet - main source of information Financial goals The financial goals set by Electrolux aim to strengthen the Group's leading, global position in the...

  • Page 39
    ... a premium brand that represents innovative, energy-efficient products with attractive design. Electrolux is now a leading brand in most major markets. Cost The Group has a competitive production structure in which all vacuum cleaners and approximately 55% of appliances are manufactured in low-cost...

  • Page 40
    annual fepoft 2010 | part 1 | stfategy | product development Product development based on consumer insight Energy-efficiency, speed, simplicity and individual solutions are some of the needs identified by Electrolux through interviews and home visits to users of household appliances. Consumer ...

  • Page 41
    ... the machine is loaded. RealLife® was launched in March 2010. TRADE CONSUMERS Different marketing tools have been activated to reach four key target groups. LAUNCH EXECUTION RANGE MANAGEMENT PHASE-OUT All market communication is designed to create a powerful image of Electrolux, irrespective...

  • Page 42
    annual fepoft 2010 | part 1 | stfategy | innovative products Innovative products "Thinking of you" is the core message of the Group's marketing communication. It lifts the strong consumer focus of Electrolux into prominence. "Thinking of you" applies equally to employees, suppliers, other ...

  • Page 43
    ... and the Hong Ding, an annual award by China's authority on Home Appliances. The Electrolux En:V Barbecue is the latest addition to the Electrolux premium outdoor collection. The sleek and stylish barbecue was designed with Australia's increasingly cosmopolitan approach to outdoor dining in mind...

  • Page 44
    ... segment. In North America, the share in the premium segment has grown continuously since the launch in 2008. At the end of 2010, an extensive launch of new innovative products for the rapidly growing and profitable European built-in segment was initiated. Kitchen specialists account for a growing...

  • Page 45
    ... the world. In Latin America and Southeast Asia, the majority of the Group's appliances and all vacuum cleaners are sold under the Electrolux brand. Investments in dual brands include primarily AEG-Electrolux, which is a major premium brand in several European markets. The Group also invests in...

  • Page 46
    ... SEK 3.4 billion with a full yearly effect from 2013. Approximately 60% of the Group's household appliances will be manufactured in low-cost areas that are near rapidly-growing markets for household appliances. During 2010, Electrolux acquired a washing-machine plant in the Ukraine and signed...

  • Page 47
    ... of the Group's vacuum cleaners is in low-cost areas. Electrolux currently has production facilities in 16 countries. Modern, highly-productive plants have been built in Asia, Mexico and Eastern Europe. In addition to producing innovative high-quality products for the Australian, North American and...

  • Page 48
    annual fepoft 2010 | part 1 | stfategy | costs Next step - shared global strength Having achieved a competitive production structure, a strong global brand and a profitable process for consumer-driven product development, the next step in the Group´s efficiency program is ready to be taken. ...

  • Page 49
    .... Currently, Electrolux has eight global product development centers for household appliances around the world that focus on areas including induction, built-in and front-loaded washing machines. The objective is to further increase the level of differentiation for new launches in the premium...

  • Page 50
    ... with the normal level of about 85%. Electrolux operating margin will continue to fluctuate due to general economic conditions and trends in the household appliance market. Electrolux specifies an average goal for its operating margin measured over the current business cycle. Opefating mafgin...

  • Page 51
    ... of past due receivables • Improved accounts payable 2010 Capital-tufnovef fate Impfovement in wofking capital Net operating capital, % of sales 6.0 20 18 16 4.5 3.0 The decline in capital-turnover between 2009 and 2010 relates primarily to extra pension contributions of SEK 4 billion at the...

  • Page 52
    ...| part 1 | stfategy | financial goals > Retufn on net assets of at least 25% Focusing on growth with sustained profitability and a small but effective capital base enables Electrolux to achieve a high long-term return on capital. With an operating margin in excess of 6% and a capital-turnover rate...

  • Page 53
    ... products, and strong brands. This will enable Electrolux to increase market shares in high-price segments and in growth markets. In 2010, Electrolux acquired a washing-machine plant in the Ukraine and entered a preliminary agreement to acquire the Egyptian appliance manufacturer Olympic Group...

  • Page 54
    ... Q1 Q2 Q3 Q4 2009 2010 Plastics Steel Indexed price development for Electrolux in North America and Europe (average). Rising faw-matefial costs have been offset by impfovements margin,% 20 15 + 10 5 - - 6.1 Electrolux can manage long-term, rising rawmaterial costs through cost-cutting measures...

  • Page 55
    ... risk of short-term downward price pressure due to manufacturers choosing to increase production to capture market shares through lower prices. For example, in North America, extensive price campaigns for washing machines resulted in downward price pressure in the segment in 2010. The vacuum-cleaner...

  • Page 56
    annual fepoft 2010 | part 1 | stfategy | our achievements Our achievements In accordance with the Group's strategy, Electrolux has implemented a dynamic transformation of its floor-care operations as well as operations in Latin America, Australia and Southeast Asia, and in Professional Products. A ...

  • Page 57
    annual fepoft 2010 | part 1 | stfategy | action plan Action plan - to generate added value Electrolux can increase the pace of future growth through innovative products, a strong brand in the premium segment and the utilization of global economies of scale. The aim is to grow faster than the market...

  • Page 58
    ... in 2010, the highest operating margin ever was recorded - 11.6%. 1 Investments in product development and concentration of product portfolio 2 Increased efficiency within production, marketing and sales organization 3 Focus on Electrolux as a global premium brand 4 Development of a global service...

  • Page 59
    ... a fecofd-high opefating mafgin. Streamlining, increasing efficiency and investments in marketing and product development have increased the operating margin from 6.9% in 2004 to 11.6% in 2010. The next step is to focus on profitable growth through sales to new markets and new customer groups. 55

  • Page 60
    ..., developed a management system and established global targets for health and safety. 2012 Enefgy-savings tafget (GRI EN18) % Target Appliances Europe, Middle East and Africa Appliances North America Appliances Asia/Pacific Appliances Latin America Floor Care and small appliances Professional...

  • Page 61
    ... energy-efficiency objectives, as part of the value chain approach. • Participation in Stockholm's Royal Seaport urban development project is one example of the Group's partnership approach. Electrolux is contributing with a cutting-edge application of smart-grid technology in household appliances...

  • Page 62
    ... pfoducts Tons 2 200 1,5 150 1 100 0,5 50 0 0 2008 2009 2010 2008 2009 2010 Sales of Floor Care's Green Range have increased from 1% to 2% of the total net sales of vacuum cleaners. The volume of recycled material used for the Floor Care's Green Range has increased over 190% in a three...

  • Page 63
    ... rather than disposability, recycled plastics have the potential to benefit society, reduce pollution and create more sustainable products. Electrolux is working with its suppliers to increase the availability and quality of post-consumer, recycled material. Eye-opener People feel connected to...

  • Page 64
    annual fepoft 2010 | part 1 | employees Working at Electrolux Electrolux aims to recruit, develop and retain the best talent for the long term. Our People Vision sets the direction: to create an innovative culture with diverse, outstanding employees who drive change and go beyond what is required ...

  • Page 65
    ... in 2009 was the European team behind a new environmentally friendly and energysaving technology for tumble-dryers incorporating a built-in heat pump. The Electrolux Manufacturing System (EMS) Global Best Practices Award recognizes significant and continuous improvement in safety, quality, cost and...

  • Page 66
    ... publication of interim reports, at which Group Management presents results and analyses. Additional market and financial information is available on the Group's website. The Electrolux Investor Relations department arranges approximately 300 meetings annually for investors and analysts. About one...

  • Page 67
    ... mix is central to our strategy. In recent years, despite weak markets, we have successfully launched new products at higher sales prices, which has also improved our results. In 2010, we relaunched the majority of our base offering in North America under the Frigidaire brand. Towards the end of the...

  • Page 68
    ...the Group also reconfirmed it could reach its goal of an operating margin of 6%, excluding items affecting comparability. However, the Electrolux share displayed slightly weaker development than the Affärsvärlden General Index, primarily due to market concerns surrounding sales prices and the cost...

  • Page 69
    ... of the shares traded on Nasdaq OMX Stockholm, of a total trading volume of SEK 3,627 billion (3,393). DJSI Wofld Index The Group's sustainability performance and strategy helps attract and strengthen relations with investors. In 2010 and for the fourth consecutive year, Electrolux was recognized...

  • Page 70
    ... Electrolux share-price development was strong in 2009. In 2010, expectations were high. The share price increased, however, and reached all-time high by the end of the year. Solid results and a strong stock market development were the main reasons. SEK 200 Q2 175 Q1 150 "Strong price mix. No risk...

  • Page 71
    ... in Eastern Europe. Launch of Frigidaire products in North America. Decision to phase out production of cookers in Motala, Sweden. Dividend of SEK 4.00 per share. Decision to enhance efficiency of appliance plants in Forli in Italy and Revin in France. Acquisition of manufacturing operations in...

  • Page 72
    ... for senior management. Since 2004, the Group has performancebased share programs. During 2010, senior managers in Electrolux purchased 243,756 B-shares under the terms of the employee stock option programs. No B-shares were allotted under the 2007 performance-based share program. At year-end 2010...

  • Page 73
    ...number of shares after buy-backs. 7) Market capitalization excluding buy-backs, plus net borrowings and non-controlling interests, divided by operating income. 8) Trading price in relation to earnings per share. 9) Continuing operations. Analysts who cover Electrolux Company Analyst Company Analyst...

  • Page 74
    ... Group's major markets during 2010. Access to credit also improved after a period of turbulence in the financial markets. However, volatile patterns in raw-material prices and downward price pressure prevailed in the Group's major markets. Electrolux monitors and minimizes key risks in a structured...

  • Page 75
    ... cost-efficient operations. Realizing this potential requires effective and controlled risk management. The major risks at present are described below. Fluctuations in demand In 2010, demand for appliances stabilized in the major markets of Electrolux. Following three years of recession (2006-2009...

  • Page 76
    ... production costs). USD/BRL Latin Amefica The principal currency pair for the Latin American operations is the USD/BRL. Purchases of raw materials and components are priced to some extent in USD. The products are then sold in BRL. A strong BRL compared with the USD is positive for the Group. Main...

  • Page 77
    ... is the EUR. A weak EUR has a positive net effect on Group income, because European operations have greater expenses in EUR than sales in EUR. A majority of the purchases of raw materials and components is in EUR and significant production costs are also denominated in EUR. Principal currency pairs...

  • Page 78
    ... control and cost-effective management, the Group's pension commitments are handled centrally by Group Treasury. Electrolux uses interest-rate derivatives to hedge parts of the risks related to pensions. For additional information, see Note 22. Raw material exposure 2010 Long-term borrowings...

  • Page 79

  • Page 80
    ...5,330 50,633 Electrolux achieved its margin target Mafket demand incfeased in 2010 Demand in the North American market increased by 5% over the previous year and the European markets stabilized and increased by 2%. The market in Brazil grew in 2010, most other markets in Latin America also improved...

  • Page 81
    ... Group is the largest manufacturer of household appliances in the fast-growing Middle East and North Africa regions. Olympic Group, listed on the Egyptian Stock Exchange, has 7,300 employees and manufactures washing machines, refrigerators, cookers and water heaters. In 2009, net sales amounted...

  • Page 82
    ... largest customers at the end of 2009. Operating income improved considerably compared to the previous year, above all due to a positive mix development. Previous employee cutbacks and cost-saving measures continued to positively impact operating income. Group sales of floor-care products increased...

  • Page 83
    ... to price increases and increased cost efficiency. Operating income for 2010 was the best ever for the operations in Professional Products. Net sales and employees 10 largest countries SEKm Employees Operating income by business area SEKm 2010 2009 USA Brazil Germany Australia Italy Canada France...

  • Page 84
    ... 2010 | part 1 | financial feview in bfief Working capital and net assets Dec. 31, 2010 % of annualized net sales Dec. 31, 2009 % of annualized net sales Net borrowings SEKm Dec. 31, 2010 Dec. 31, 2009 SEKm Borrowings Liquid funds Net borrowings Net debt/equity ratio Equity Equity per share, SEK...

  • Page 85
    ...At year-end 2010, about 66% of the total share capital was owned by Swedish institutions and mutual funds, about 25% by foreign investors, and about 9% by private Swedish investors. 6.50 The Board proposes a dividend of per share SEK Net debt/equity ratio % Total distribution to shareholders SEKm...

  • Page 86
    ... iith a built-in icemaker. The user aliays has access to ice-cubes iithout having to remember to fill the container iith iater. Insight into consumer behavior is the basis for all product development iithin the Group. Electrolux developed Ergorapido, a cordless vacuum cleaner, for people iho iant...

  • Page 87
    ...in bringing a similar sleek elegance to home appliances. In fact, he had personally tracked doin the foremost industrial designers, so that life for Electrolux customers iould not only be cleaner and easier, but also more attractive. Looking at the Model xxx vacuum cleaner, Wenner-Gren said to Guild...

  • Page 88
    ... AB and Skyllbergs Bruk AB. Pfevious positions: Executive Vice-President and Head of Research and Development of Scania CV AB, 2001-2009. Founder of Mecel AB (part of Delphi Corporation). Senior management positions with Delphi Corporation, 1990-2001. Holdings in AB Electrolux: 4,000 B-shares...

  • Page 89
    ... Executive Officer of AB Electrolux during 2002-2010, left the company and the Board on December 31, 2010. As President and Chief Executive Officer he was succeeded by Keith McLoughlin from January 1, 2011. Anders Lundin PficewatefhouseCoopefs AB Born 1956. Authorized Public Accountant. Partner...

  • Page 90
    ...-2002. Managing Director of Electrolux Latin America and Caribbean, 2002-2008. Vice-President and General Manager for three business areas in Electrolux Major Appliances North America, 2008- 2010. Head of Electrolux Asia Sourcing Operations, 2009-2010. Executive Vice President of AB Electrolux, 2010...

  • Page 91
    ...as Chief Financial Officer, 2008. Boafd Membef of Polygon AB. Holdings in AB Electrolux: 3,490 B-shares. Kevin Scott Head of Majof Appliances Nofth Amefica, Executive Vice-Pfesident Born 1959. Ph.D. (Chem. Eng.). In Group Management since 2009. Technical, manufacturing, brand marketing and business...

  • Page 92
    ...new platform for financial statistics was launched. The platform allows for graphic illustrations of Electrolux development on annual or quarterly basis. Electrolux Annual Report 2010 consists of: • Operations and strategy • Financial review, Sustainability Report and Corporate Governance Report...

  • Page 93
    If you miss Part 2 of the annual report, please contact Electrolux IR department at [email protected]

  • Page 94
    Electrdlux Annual Repdrt 2010 www.electrdlux.cdm/annualrepdrt2010 AB Electrolux (publ) Mailing address SE-105 45 Stdckhdlm, Sweden Visiting address S:t Göransgatan 143, Stdckhdlm Telephone: +46 8 738 60 00 Telefax: +46 8 738 74 61 Website: www.electrdlux.cdm 599 14 14-26/8

  • Page 95
    Annual Report 2010 2 Financial review Sustainability report Corporate governance RESULT PERFORMANCE SUSTAINABILITY GOVERNANCE

  • Page 96
    ...time as there is a shortage of recycled plastic. The campaign, which is linked to the strategy surrounding the marketing of the ylectrolux Green Range of vacuum cleaners, has strengthened the Group's leading position in sustainability. Contacts Peter Nyquist Senior Vice President Investor Relations...

  • Page 97
    ... cost savings offset higher costs for raw materials and downward pressure on prices. • The Board of Directors proposes a dividend for 2010 of SEK 6.50 (4.00) per share. Key data SEKm, EURm, USDm, unless otherwise stated 2 010 2009 2010 EURm 2010 USDm Net sales and employees Ten largest countries...

  • Page 98
    ... to increase sales within the very important built-in segment for kitchen products. During the year, we also managed to further improve our product quality and cost base. In 2011, we will continue to introduce new premium products in the European market. The operations in Latin America succeeded...

  • Page 99
    ... costs. It will take time to implement price increases and we will begin to see the positive effect in the second quarter. I see very good opportunities going forward to be able to continue to deliver a high return to our shareholders through profitable expansion. Demand in our largest markets...

  • Page 100
    ...visits to consumers' homes have enabled Electrolux to identify global social trends and needs, to which new products are tailored. Cost The Group has a competitive production structure in which all vacuum cleaners and approximately 55% of appliances are manufactured in low-cost regions. Utilization...

  • Page 101
    ... Consolidated cash flow statement Share capital and ownership Distribution of funds to shareholders Risks and uncertainty factors Employees Other facts Parent Company Notes page 6 7 10 14 15 17 18 19 20 21 22 23 25 27 31 Net sales Operating income Margin, % Income after financial items Income for...

  • Page 102
    ... net sales. Taxes Total taxes in 2010 amounted to SEK -1,309m (-877), corresponding to 24.7% (25.2) of income after financial items. Share of sales by business area Net sales and operating margin Consumer Durables, 94% Europe, Middle East and Africa, 38% North America, 32% Latin America, 16% Asia...

  • Page 103
    ... statement SEKm Note 2 010 2009 Net sales Cost of goods sold Gross operating income Selling expenses Administrative expenses Other operating income Other operating expenses Items affecting comparability Operating income Financial income Financial expenses Financial items, net Income after financial...

  • Page 104
    ...Electrolux consolidates cooking manufacturing in North America Electrolux is to consolidate its North American cooking manufacturing to Tennessee, USA, by building a new plant in Memphis. This site offers an optimal geographical location towards customers and suppliers. Electrolux currently operates...

  • Page 105
    ... Group is the largest manufacturer of household appliances in the fast-growing Middle East and North Africa regions. Olympic Group, listed on the Egyptian Stock Exchange, has 7,300 employees and manufactures washing machines, refrigerators, cookers and water heaters. In 2009, net sales amounted...

  • Page 106
    ... and cost-saving measures continued to positively impact operating income, while lower volumes, price pressure and higher marketing and brand investments had a negative impact. Floor-care products Market demand for vacuum cleaners in Europe increased in 2010, compared to 2009. Group sales increased...

  • Page 107
    ... Floor-care products Demand for vacuum cleaners in North America increased in 2010 in comparison with the previous year. Group sales declined on the basis of lower sales volumes and price pressure in the market. Operating income declined, due to lower sales volumes, higher costs for sourced products...

  • Page 108
    annual report 2010 | part 2 | board of directors report Consumer Durables, Asia/Pacific SEKm1) 2 010 2009 Professional Products SEKm1) 2010 2009 Net sales Operating income Operating margin, % Net assets Return on net assets, % Capital expenditure Average number of employees 1) Excluding items ...

  • Page 109
    OPERATIONS, BY BUSINESS AREA SEKm1) 2 010 2009 Consumer Durables Europe, Middle East and Africa Net sales Operating income Margin, % Consumer Durables, North America Net sales Operating income Margin, % Consumer Durables, Latin America Net sales Operating income Margin, % 40,038 2,703 6.8 44,073 ...

  • Page 110
    annual report 2010 | part 2 | board of directors report Financial position Working capital and net assets Dec. 31, 2 010 % of annualized net sales Dec. 31, 2009 % of annualized net sales • Equity/assets ratio was 33.9% (31.8). • Return on equity was 20.6% (14.9). • Average net assets, ...

  • Page 111
    ...assets Total non-current assets Current assets Inventories Trade receivables Tax assets Derivatives Other current assets Short-term investments Cash and cash equivalents Total current assets Total assets EQUITY AND LIABILITIES Equity attributable to equity holders of the Parent Company Share capital...

  • Page 112
    ... 13,357 16.2 9,576 100 2.1 Net liquidity Fixed interest term, days Effective annual yield, % 1) Liquid funds plus an unused revolving credit facility of EUR 500m and a committed credit facility of SEK 3,400m devided by annualized net sales. For additional information on the liquidity profile, see...

  • Page 113
    ... on translation of foreign operations Income tax relating to other comprehensive income Other comprehensive income, net of tax Total comprehensive income for the period Share-based payment Sale of shares Total transactions with equity holders Closing balance, December 31, 2009 Income for the period...

  • Page 114
    ..., plant and equipment in 2010 increased to SEK 3,221m (2,223). Capital expenditure corresponded to 3.0% (2.0) of net sales. Investments during 2010 referred mainly to investments for new products in Europe and North America, reinvestment and capacity expansions within manufacturing in Brazil. Costs...

  • Page 115
    ... provisions Share-based compensation Financial items paid, net Taxes paid Cash flow from operations, excluding change in operating assets and liabilities Change in operating assets and liabilities Change in inventories Change in trade receivables Change in other current assets Change in accounts...

  • Page 116
    ... 31, 2010. Investor AB is the largest shareholder, owning 13.6% of the share capital and 29.9% of the voting rights. Information on the shareholder structure is updated quarterly at www.electrolux.com. Major shareholders Share capital, % Voting rights, % One of the Group's pension funds owned 450...

  • Page 117
    ... adapt the Group's capital structure, thus contributing to increased shareholder value and to use these shares to finance potential company acquisitions and as a hedge for the company's share related incentive programs. In accordance with the proposal by the Board of Directors, the AGM 2010 decided...

  • Page 118
    ... appliances varies with general business conditions, and price competition is strong in a number of product categories. Electrolux ability to increase profitability and shareholder value is largely dependent on its success in developing innovative products and maintaining cost-efficient production...

  • Page 119
    ...increase refers mainly to growth in Brazil. At year-end, the total number of employees was 50,920 (51,750). Salaries and remuneration in 2010 amounted to SEK 12,678m (13,162), of which SEK 1,053m (973) refers to Sweden. Proposal for remuneration guidelines for Group Management The Board of Directors...

  • Page 120
    annual repor t 2010 | part 2 | board of directors report Short Term Incentive (STI) Group Management members shall participate in a STI plan under which they may receive variable compensation. The main objectives in the STI shall be on financial targets. These shall be set based on annual financial...

  • Page 121
    ... new head of Floor Care and Small Appliances Henrik Bergström was appointed Executive Vice President and head of Floor Care and Small Appliances in August, 2010. He succeeded Morten Falkenberg. Henrik Bergström has held various management positions within Electrolux Major Appliances North America...

  • Page 122
    annual repor t 2010 | part 2 | board of directors report Environmental activities At the end of 2010, Electrolux operated 49 manufacturing facilities in 16 countries. Manufacturing comprises mainly assembly of components made by suppliers. Other processes include metalworking, molding of plastics, ...

  • Page 123
    ...the Group's head office, as well as five companies operating on a commission basis for AB Electrolux. Net sales for the Parent Company in 2010 amounted to SEK 5,989m (5,928), of which SEK 3,396m (3,243) related to sales to Group companies and SEK 2,593m (2,685) to external customers. The majority of...

  • Page 124
    annual report 2010 | part 2 | board of directors report Parent Company balance sheet SEKm Note December 31, 2 010 December 31, 2009 ASSETS Non-current assets Intangible assets Property, plant and equipment Deferred tax assets Financial assets Total non-current assets Current assets Inventories ...

  • Page 125
    Parent Company change in equity SEKm Restricted equity Share Statutory capital reserve Non-restricted equity Fair value Retained reserve earnings Total equity Opening balance, January 1, 2009 Income for the period Available for sale instruments Change in revaluation fund Cash flow hedges Group ...

  • Page 126
    annual report 2010 | part 2 | board of directors report Parent Company cash flow statement SEKm 2 010 2009 Operations Income after financial items Depreciation and amortization Capital gain/loss included in operating income Taxes paid Cash flow from operations, excluding change in operating assets...

  • Page 127
    ..., plant and equipment Goodwill and other intangible assets Other non-current assets Inventories Other current assets Trade receivables Financial instruments Assets pledged for liabilities to credit institutions Share capital, number of shares and earnings per share Untaxed reserves, Parent Company...

  • Page 128
    ... statements include AB Electrolux and all companies in which the Parent Company has the power to govern the financial and operating policies, generally accompanying a shareholding of more than 50% of the voting rights referring to all shares and participations. When the Group ceases to have control...

  • Page 129
    ... mainly are costs for Group functions. Sales between segments are made on market conditions with arm's-length principles. Revenue recognition Sales are recorded net of value-added tax, specific sales taxes, returns, and trade discounts. Revenues arise from sales of finished products and services...

  • Page 130
    ... in North America, acquired in May 2000, is regarded as an indefinite life intangible asset and is not amortized. One of the Group's key strategies is to develop Electrolux into the leading global brand within the Group's product categories. This acquisition has given Electrolux the right to use the...

  • Page 131
    ... losses from investment securities and reported as operating result. The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active, the Group establishes fair value by using valuation techniques. These include the use of recent arm's-length...

  • Page 132
    ... working lifetime of the employees participating in the plans. Net provisions for post-employment benefits in the balance sheet represent the present value of the Group's obligations at year-end less market value of plan assets, unrecognized actuarial gains and losses and unrecognized past-service...

  • Page 133
    ... and reporting of share-based payment transactions within a group of companies. After the implementation, Electrolux will show the cost of share-based payments for employees in subsidiaries as a liability to the Parent Company. This has no effect on the Group's financial statements. IFRS 3 Business...

  • Page 134
    ... net of allowances for doubtful receivables. The net value reflects the amounts that are expected to be Critical accounting policies and key sources of estimation uncertainty Use of estimates Management of the Group has made a number of estimates and assumptions relating to the reporting of assets...

  • Page 135
    ... accounts at year-end 2010 was SEK 783m. Post-employment benefits Electrolux sponsors defined benefit pension plans for some of its employees in certain countries. The pension calculations are based on assumptions about expected return on assets, discount rates, mortality rates and future salary...

  • Page 136
    ... statement presentation The Parent Company presents the income and balance sheet statements in compliance with the Swedish Annual Accounts Act (1995:1554) and recommendation RFR 2. control these risks. Each business sector has specific financial and credit policies approved by each sector board...

  • Page 137
    ... order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt. Financing risk Financing risk refers to the risk that financing of the Group's capital requirements...

  • Page 138
    ... in trade receivables Electrolux sells to a substantial number of customers in the form of large retailers, buying groups, independent stores, and professional users. Sales are made on the basis of normal delivery and payment terms. The Electrolux Group Credit Policy defines how credit management is...

  • Page 139
    ... the consumer-durables market, i.e., appliances and floor-care products, have four reportable segments: Europe; North America; Latin America and Asia/Pacific. Products within appliances comprise mainly of refrigerators, freezers, cookers, dryers, washing machines, dishwashers, room air-conditioners...

  • Page 140
    ..., material countries in this aspect are Italy with SEK 2,877m (3,208), USA with SEK 2,836m (3,025) and Mexico with SEK 2,098m (2,048), respectively. fOTE 6 Other operating expenses Group 2010 2009 Parent Company 2010 2009 Loss on sale Property, plant and equipment Operations and shares Other...

  • Page 141
    ... and financial expenses Group 2 010 2009 Parent Company 2010 2009 Items affecting comparability in 2010 relates to restructuring costs for the phase out of the cooker production factory in Motala, Sweden, and downsizing in several other production units within Major Appliances Europe. Included...

  • Page 142
    annual report 2010 | part 2 | notes, all amounts in SEKm unless otherwise stated fOTE 10 Taxes Group 2010 2009 Parent Company 2010 2009 Current taxes Deferred taxes Taxes included in income for the period Current tax related to OCI Deferred tax related to OCI Taxes included in total ...

  • Page 143
    ... installations Other equipment Plants under construction Group Buildings Total Acquisition costs Opening balance, January 1, 2009 Acquired during the year Transfer of work in progress and advances Sales, scrapping, etc. Exchange-rate differences Closing balance, December 31, 2009 Acquired during...

  • Page 144
    ... the financial lease for the North American head office in the US with SEK 153m. Property, plant and equipment in operations within appliances in Consumer Durables Europe and North America were impaired in 2010. Total impairments at year-end were SEK 236m (258) on buildings and land, and SEK 386m...

  • Page 145
    ... assets Group Other intangible assets Product development Program software Total other intangible assets Parent Company Trademarks, software etc. Goodwill Other Acquisition costs Opening balance, January 1, 2009 Acquired during the year Internally developed Reclassification Sold during the year...

  • Page 146
    annual report 2010 | part 2 | notes, all amounts in SEKm unless otherwise stated fOTE 14 Other non-current assets Group December 31, 2010 2009 Parent Company December 31, 2010 2009 fOTE 17 Trade receivables 2010 2009 Shares in subsidiaries Participations in other companies Long-term ...

  • Page 147
    ... trade receivables and related credit risks. The information in this note highlights and describes the principal financial instruments of the Group regarding specific major terms and conditions when applicable, and the exposure to risk and the fair values at year-end. fet borrowings At year-end 2010...

  • Page 148
    ...EUR SEK SEK THB USD SEK 500 20 200 250 965 45 399 - - - 255 217 306 399 1,177 501 211 200 - - - - 912 Commercial paper program Short-term bank loans in USA Other bank borrowings and commercial papers Total other short-term loans Trade receivables with recourse Short-term borrowings Fair value of...

  • Page 149
    ... for sale asset, was reclassified from Level 3 to Level 1. Prior to 2010, the valuation model included a reduction in the fair value due to a restriction for Electrolux to sell the shares. The restriction expired in 2010 and hence, the fair value at year-end 2010 is calculated based on quoted prices...

  • Page 150
    annual report 2010 | part 2 | notes, all amounts in SEKm unless otherwise stated Cont. Note 18 The table below presents the Group's financial assets and liabilities that are measured at fair value according to the fair value measurement hierarchy. Fair value measurement hierarchy 2 010 2009 Level 3...

  • Page 151
    ... instruments The table below presents the fair value of the Group's financial derivative instruments used for managing financial risk and proprietary trading. Financial derivatives at fair value December 31, 2010 Assets Liabilities December 31, 2009 Assets Liabilities Interest-rate swaps Cash flow...

  • Page 152
    ... is not applied, i.e., held-for-trading Currency derivatives related to commercial exposure where hedge accounting is applied, i.e., cash flow hedges Loans and receivables Trade receivables/payables Available-for-sale financial assets Other shares and participations Total net gain/loss, income and...

  • Page 153
    ... derivatives related to commercial exposure where hedge accounting is applied, i.e., cash flow hedges Net investment hedges where hedge accounting is applied Short-term investments Financial assets at fair value through profit and loss Loans and receivables Cash and cash equivalents Financial assets...

  • Page 154
    annual report 2010 | part 2 | notes, all amounts in SEKm unless otherwise stated fOTE 19 Assets pledged for liabilities to credit institutions Group December 31, 2010 Parent Company December 31, 2010 2009 2009 Real-estate mortgages Other Total 60 10 70 97 10 107 - 5 5 - 4 4 The major part...

  • Page 155
    ... and the rest of the plans are funded. A small number of the Group's employees in Sweden is covered by a multi-employer defined benefit pension plan administered by Alecta Pension Insurance. It has not been possible to obtain the necessary information for the accounting of this plan as a defined...

  • Page 156
    ... recognized in income statement Pension benefits December 31, 2010 Other postHealthcare employment benefits benefits Pension benefits December 31, 2009 Other postHealthcare employment benefits benefits Total Total Current service cost Interest cost Expected return on plan assets Amortization of...

  • Page 157
    ... of total plan assets % December 31, 2 010 2009 and payments of benefits directly to the employees. In 2010, this amounted to SEK 890m, of which SEK 579m were contributions to the Group's pension funds. • When determining the discount rate, the Group uses AA-rated corporate bond indexes which...

  • Page 158
    ... Parent Company's separate financial statements differ from the IFRS principles, mainly in the following: • The pension liability calculated according to Swedish accounting principles does not take into account future salary increases. • The discount rate used in the Swedish calculations is set...

  • Page 159
    ...'s Swedish defined benefit pension plan (PRI pensions) are funded through a pension foundation established in 1998. The market value of the assets of the foundation amounted at December 31, 2010, to SEK 2,086m (1,882) and the pension commitments to SEK 1,505m (1,447). The Swedish Group companies...

  • Page 160
    .... fOTE 26 Acquired and divested operations Divestments 2010 2009 Fixed assets Inventories Receivables Other current assets Liquid funds Loans Other liabilities and provisions Net assets Sales price Net borrowings in acquired/divested operations Effect on Group cash and cash equivalents 3 - 31...

  • Page 161
    ... the average number of employees by country has been submitted to the Swedish Companies Registration Office and is available on request from AB Electrolux, Investor Relations and Financial Information. See also Electrolux website www.electrolux.com/ir, Company overview. Europe North America Rest of...

  • Page 162
    ... employees in the Parent Company and the Group in Sweden is reported in the table above. The Parent Company comprises the Group's head office as well as a number of units and plants, and employs approximately 75% of the Group's workforce in Sweden. Compensation to the Board of Directors The Annual...

  • Page 163
    ...-term performance-share programs and other benefits such as pensions and insurance. Base salary is revised annually per January 1. The average base salary increase for members of Group Management in 2010 was 3.5% (0). Variable salary in 2010 is based on financial targets on sector and Group level...

  • Page 164
    ... of the Chief Operations Officer Major Appliances. Compensation cost incurred for Group Management 2010 Variable salary incurred 2010 but paid 2011 Total pension contribution3) Variable salary incurred 2009 but paid 2010 2009 Total pension contribution '000 SEK Annual fixed salary Longterm PSP...

  • Page 165
    ...based compensation Over the years, Electrolux has implemented several long-term incentive programs (LTI) for senior managers. These programs are intended to attract, motivate, and retain the participating managers by providing long-term incentives through benefits linked to the company's share price...

  • Page 166
    ... Each value is converted into a number of shares. The number of shares is based on a share price of SEK 85.39 for 2008, SEK 92.19 for 2009 and SEK 168.62 for 2010, calculated as the average closing price of the Electrolux B-share on the Nasdaq OMX Stockholm during a period of ten trading days before...

  • Page 167
    ..., as follows: 2009 Relation to Electrolux1) Participation‚% Carrying amount Receivables Liabilities Sales Purchases Income statement Net Income results Balance sheet Total Total assets liabilities Sidème, France European Recycling Platform, ERP, France Total 1) From Electrolux perspective. 39...

  • Page 168
    ... Electrolux Home Products Operations España S.L. Electrolux Laundry Systems Sweden AB Electrolux HemProdukter AB Electrolux Professional AB Electrolux Floor Care and Small Appliances AB Electrolux AG Electrolux Plc Electrolux Professional Ltd Electrolux Home Products Inc. Electrolux North America...

  • Page 169
    ... as interest rates, risk premiums, and tax rates. A higher return on net assets than the weighted average cost of capital implies that the Group or the unit creates value. Electrolux Value Creation model Net sales - Cost of goods sold - Selling and administration expenses +/- Other operating income...

  • Page 170
    ...Board of Directors has proposed that the Annual General Meeting 2011 resolves on a dividend to the shareholders of SEK 6.50 per share. On account hereof, the Board of Directors hereby makes the following statement according to Chapter 18 Section 4 of the Swedish Companies Act. The Board of Directors...

  • Page 171
    ... the shareholders of AB Electrolux (publ) Corporate identity number 556009-4178 We have audited the annual accounts, the consolidated accounts, the accounting records and the administration of the Board of Directors and the President of AB Electrolux for the year 2010. The company's annual accounts...

  • Page 172
    ... margin, % Financial position Total assets Net assets Working capital Trade receivables Inventories Accounts payable Equity Interest-bearing liabilities Net borrowings Data per share Income for the period, SEK Equity, SEK Dividend, SEK4) Trading price of B-shares at year-end, SEK Key ratios Value...

  • Page 173
    2005 20051) 20041) 20031) 20021) 20011) 20001) Compound annual growth rate, % 5 years 10 years 100,701 4.5 2,583 -2,980 1,044 494 -142 6,607 5,266 -1 804 3,462 -4,485 -3,654 -1,023 -653 -2,038 3.6 4.0 3.4 6.6 129,469 4.3 3,410 -3,020 3,942 3,215 1,763 10,372 8,...

  • Page 174
    annual report 2010 | part 2 | quarterly information, all amounts in SEKm unless otherwise stated Quarterly information NET SALES AND INCOME SEKm Q1 Q2 Q3 Q4 Full year Net sales Operating income 2010 2009 2010 Margin, % 20101) Margin, % 2009 Margin, % 20091) Margin, % 2010 Margin, % 20101) Margin,...

  • Page 175
    NET SALES, BY BUSINESS AREA SEKm Q1 Q2 Q3 Q4 Full year Consumer Durables Europe, Middle East and Africa Consumer Durables North America Consumer Durables Latin America Consumer Durables Asia/Pacific Professional Products 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 9,719 10,568 7,995 9,144 ...

  • Page 176
    ... Electrolux: ethical business practices and safe working conditions; climate change; responsible sourcing; and managing the Group's restructuring process. The issues were defined by gauging the opinions of stakeholders, including employees, governments, opinion leaders, business partners, investors...

  • Page 177
    ... employees can anonymously and confidentially register incidents of non-compliance to codes and policies. Safety net With the objective to operate 25% of Group manufacturing facilities at best practice levels by 2016, a global health and safety management system has been developed and short-term...

  • Page 178
    ...Asia/Pacific Appliances Latin America Floor Care and small appliances Professional Products Electrolux Group Savings (in %) compared to 2005 0 2010 2009 2008 2007 2006 % 40 30 20 10 0 Share of units sold Share of gross profit Consumer products with the best environmental performance accounted...

  • Page 179
    ... number of employees at Juarez, Mexico, increased by approximately 400 employees to some 3,350 between year-end 2009 and 2010. At the plants, all staff is informed of the Code of Conduct at induction. Code of Conduct audits were also completed during the year by external and internal auditing teams...

  • Page 180
    ... finance, credit, accounting manual, etc • Processes for internal control and risk management • Electrolux Code of Ethics, Policy on Bribery and Corruption and Workplace Code of Conduct President and Group Management Major external regulations Business Sector Boards • Swedish Companies Act...

  • Page 181
    AB Electrolux (publ) is registered under number 556009-4178 with the Swedish Companies Registration Office. The registered office of the Board of Directors is in Stockholm, Sweden. The address of the Group headquarters is S:t Göransgatan 143, SE-105 45 Stockholm, Sweden. reliable shareholder ...

  • Page 182
    ... years with the company and nine years as President and CEO. He resigned as President and Chief Executive Officer and Board member of Electrolux on December 31, 2010. For additional information regarding the Board of Directors, see page 88. The information is updated regularly at the Group's website...

  • Page 183
    ...'s website, www.electrolux.com/corporate-governance. The Board deals with and decides on Group-related issues such as: • Main goals • Strategic orientation • Essential issues related to financing, investments, acquisitions and divestments • Follow-up and control of operations, communication...

  • Page 184
    ... AB and Skyllbergs Bruk AB. Previous positions: Executive Vice-President and Head of Research and Development of Scania CV AB, 2001-2009. Founder of Mecel AB (part of Delphi Corporation). Senior management positions with Delphi Corporation, 1990-2001. Holdings in AB Electrolux: 4,000 B-shares...

  • Page 185
    ...at the washing-machine plant in Revin in France and at the cooker factory in Forli in Italy. • Decision to close the cooker factory in L'Assomption in Quebec, Canada, during 2013 and to build a new cooker factory in Memphis, Tennessee, USA, to consolidate the production of cookers in North America...

  • Page 186
    ... are held annually. Additional meetings are held as needed. In 2010, the Audit Committee held five meetings. Electrolux managers have also had regular contacts with the Committee Chairman between meetings regarding specific issues. The Group's Chief Financial Officer and the Head of Internal Audit...

  • Page 187
    ...purchasing and manufacturing within Major Appliances. The Group has a decentralized corporate structure in which the overall management of operational activities is largely performed by sector boards. Gr2up policies and guidelines Electrolux aims at implementing strict norms and efficient processes...

  • Page 188
    ...Manager for three business areas in Electrolux Major Appliances North America, 2008-2010. Head of Electrolux Asia Sourcing Operations, 2009-2010. Executive Vice President of AB Electrolux, 2010. Holdings in AB Electrolux: 12,297 B-shares. Jan Brockmann Chief Technology Officer, Senior Vice President...

  • Page 189
    ..., head of Communications and Branding, has left Electrolux. • Henrik Bergström has been appointed head of Floor Care and Small Appliances. Electrolux shall strive to offer total remuneration that is fair and competitive in relation to the country of employment or region of each Group Management...

  • Page 190
    ... doubtful trade receivables. Internal Control Policy Details responsibility for internal controls. Controls should address the Minimum Internal Control Requirements (MICR) within every applicable process, for example order to cash. Credit Policy Rules for customer assessment and credit risk that...

  • Page 191
    ... major processes Closing Routine, Order to Cash, Manage Inventory and Procure to Pay and predetermined key risks within these. Control activities Control activities mitigate the risks identified and ensure accurate and reliable financial reporting as well as process efficiency. Control activities...

  • Page 192
    ... are made. Guidelines for financial reporting are communicated to employees, e.g., by ensuring that all manuals, policies and codes are published and accessible through the group-wide intranet as well as information related to the Electrolux Control System. This information includes the methodology...

  • Page 193
    ... communications policy meeting the requirements for a listed company. Financial information is issued regularly in the form of: • Full-year reports and interim reports, published as press releases • The Annual Report • Press releases on all matters which could materially affect the share price...

  • Page 194
    ... fluctuations, competitive pressures to reduce prices, significant loss of business from major retailers, the success in developing new products and marketing initiatives, developments in product liability litigation, progress in achieving operational and capital efficiency goals, the success in...

  • Page 195
    ..., a new platform for financial statistics was launched. The platform allows for graphic illustrations of Electrolux development on annual or quarterly basis. Electrolux Annual Report 2010 consists of: • Operations and strategy • Financial review, Sustainability Report and Corporate Governance...

  • Page 196
    Complete solutions for professionals and consumers 100

  • Page 197
    ... the Swedish Culinary Team and prize-winning restaurants in Sweden and France, has a complete kitchen solution supplied by Electrolux at his restaurant Rolfs Kök in Stockholm (left). At home, in Johan's personal kitchen (above), the equivalent consumer products can be found. An increasing number of...

  • Page 198
    AB Electrolux (publ) Mailing address SE-105 45 Stockholm, Sweden Visiting address S:t Göransgatan 143, Stockholm Telephone: +46 8 738 60 00 Telefax: +46 8 738 74 61 Website: www.electrolux.com 599 14 14-26/8