Electrolux 2010 Annual Report Download - page 105

Electrolux to reduce workforce in Europe
In Europe, Electrolux will reduce its workforce within manufactur-
ing of appliances by approximately 800 employees in 2011 and
2012. No factory will be closed. Changes will be implemented
gradually, and fully finalized in the fourth quarter of 2012. The
redundancies will incur a total cost of approximately SEK 360m,
which was taken as a charge against operating income in the
fourth quarter of 2010, within items affecting comparability.
October 2010
Electrolux intends to acquire Olympic Group in Egypt
As part of Electrolux strategy to grow in emerging markets,
Electrolux last October announced its intention to acquire Olym-
pic Group for Financial Investments S.A.E. Olympic 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, refrigera-
tors, cookers and water heaters. In 2009, net sales amounted to
2.1 billion Egyptian pounds (EGP), approximately SEK 2.5 billion.
Olympic Group’s estimated volume market share of appliances in
Egypt is approximately 30%.
In October, Electrolux signed a Memorandum of Understanding
with Paradise Capital to acquire Paradise Capital’s 52% control-
ling interest in Olympic Group. Electrolux intends to launch a Man-
datory Tender Offer for the remaining shares in the company.
Upon completion of the transaction, the ownership in the associ-
ated companies Namaa and B-Tech will be acquired by Paradise
Capital.
The estimated enterprise value of Olympic Group, excluding the
above mentioned associated companies, is approximately
EGP 2.7 billion or SEK 3.2 billion. The acquisition is subject to
satisfactory completion of the due diligence process that has
been initiated, regulatory clearances and agreements on custom-
ary transaction documentation. Upon completion of the acquisi-
tion, Olympic Group will against a management fee enter into a
management agreement with Electrolux and Paradise Capital for
continued technical and management support.
Given recent turmoil in Egypt, Electrolux is assessing the situation.
August 2010
Electrolux acquires washer plant in Ukraine
Electrolux has signed an agreement to acquire a washing-machine
factory in Ivano-Frankivsk, Ukraine, with approximately 150
employees.
The acquisition strengthens Electrolux presence and manufac-
turing base in Central and Eastern Europe. Ukraine participates in
the free trade framework within the Commonwealth of Indepen-
dent States (CIS), which includes Russia, Kazakhstan, Armenia,
Azerbaijan and other countries.
The washer factory is acquired from Antonio Merloni S.p.A. and
the purchase price is EUR 19m. Closing of the deal is expected to
take place in the first quarter of 2011, and is subject to approval by
competition authorities.
April 2010
Improving efficiency in appliances plants in Italy and France
Electrolux is continuing its restructuring work in Europe. In the
second quarter of 2010, work was initiated on how efficiency at
the washing-machine plant in Revin, France, and at the cooker
plant in Forlì, Italy, can be improved. The costs are estimated at
approximately SEK 210m, which were charged against operating
income, within items affecting comparability, in the second quar-
ter of 2010.
January 2010
Production of cookers in Sweden to be phased out
It has been decided to discontinue the Group’s production of
cookers in Motala, Sweden. In the first quarter of 2011, the greater
part will be phased out and an external part will take over produc-
tion of large cookers and compact-kitchens. Approximately 240
people are employed at the plant. Costs for the discontinuation,
SEK 100m, were charged against operating income, within items
affecting comparability in the first quarter of 2010.
Relocation of production, items affecting comparability, restructuring measures 2007–2013
Authorized closures Estimated closure
Motala Sweden Cookers (Q1 2011)
Webster City USA Washing machines (Q1 2011)
Alcalà Spain Washing machines (Q1 2011)
L’Assomption Canada Cookers (Q4 2013)
Investment Effected
Porcia Italy Washing machines (Q4 2010)
Memphis USA Cookers (Q2 2012)
In 2004, Electrolux initiated a restructuring program to make the Group’s pro-
duction competitive in the long term. When it is implemented in 2011, more than
half of production of appliances will be located in low-cost areas. The total cost
of the program will be approximately SEK 8.5 billion and savings will amount to
approximately SEK 3.4 billion annually as of 2013. Restructuring provisions and
write-downs are reported as items affecting comparability within operating
income. For information on provisions in 2010, see table on page 8.
Plant closures and cutbacks Closed
Nuremberg Germany Dishwashers, washing
machines and dryers
(Q1 2007)
Torsvik Sweden Compact appliances (Q1 2007)
Adelaide Australia Dishwashers (Q2 2007)
Fredericia Denmark Cookers (Q4 2007)
Adelaide Australia Washing machines (Q1 2008)
Spennymoor UK Cookers (Q4 2008)
Changsha China Refrigerators (Q1 2009)
Scandicci Italy Refrigerators (Q2 2009)
St. Petersburg Russia Washing machines (Q2 2010)
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