Electrolux 2010 Annual Report Download - page 50

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The financial goals of Electrolux are intended to enable the generation of added shareholder value. In
addition to maintaining and strengthening the Group’s leading global position in the industry, achieving
these goals contributes to generating a healthy total return for shareholders. The extensive restructuring
program carried out in the Group and an improved mix has led to a higher operating margin and return,
thus creating better prerequisites for profitable growth in future years.
Financial goals
Operating margin of at least 6% over a business cycle
Efforts to transform Electrolux into an innovative, consumer-focused
company have yielded results. Electrolux is now one of the stron-
gest companies in the appliance industry in terms of market share,
brand recognition and profitability. In 2010, Electrolux succeeded in
achieving an operating margin of 6,1%, excluding items affecting
comparability, primarily through lower costs and an improved prod-
uct mix. By maintaining its focus on innovative products, a strong
brand in the premium segment and competitive production,
Electrolux has achieved its current level of profitability despite weak
markets in the west and an industry that continues to be character-
ized by overcapacity and price pressure. Over the past two years,
average Group utilization of production capacity was about 60%
compared with the normal level of about 85%.
Electrolux operating margin will continue to fluctuate due to gen-
eral economic conditions and trends in the household appliance
market. Electrolux specifies an average goal for its operating margin
measured over the current business cycle.
OPERATING MARGIN
Operating margin
0
1.5
3.0
4.5
6.0
7.5
05 06 07 08 09 10
%
In 2010, Electrolux succeeded in achieving
an operating margin of 6.1%, despite increased
competition and higher costs for raw materials.
>6
%
46
annual report 2010 | part 1 | strategy | financial goals