Electrolux 2011 Annual Report Download - page 10

annual report 2011 CEO statement
November 15
We host our capital markets day and
among other things announce measures
to reduce costs
Appliance volumes in North America in 2011 are on a par with 1998
levels and are down about 25% on the peak levels noted in 2006. Vol-
umes in Western Europe are in line with 1999 levels and are more than
10% lower than the corresponding peak level. For the years ahead, it is
difficult to see what could trigger a recovery in demand in our mature
markets that would return them to their former peak levels. In conjunc-
tion with our annual capital markets day, we therefore announced new
measures aimed at continuing to adapt production capacity, costs and
the organization to prevailing market conditions. We must put our foot
on the accelerator and brake at the same time, which is a difficult bal-
ancing act. It means that we accelerate our production capacity in
growth markets, such as Southeast Asia and China, to ensure that we
do not lose our positions. Over the past years, we have grown strongly
in Southeast Asia and, by adjusting our product offering, we are
achieving profitability in China. A globally optimized manufacturing
structure will ensure that we are more competitive in all of our markets.
February 2, 2012
We present our year-end report for 2011 and
summarize a tough but eventful year
We post an underlying operating income of SEK 4 billion
for 2012. Although this is SEK 2 billion below the
preceding year’s level, it is a solid result in light of
the challenges we faced in our major markets in
North America and Europe. Lower sale prices, increased raw-material
costs and weak demand in our key mature markets meant that we
experienced a headwind corresponding to nearly SEK 4 billion. As I
described earlier, we acted and took strategic decisions to
strengthen our competitiveness to reduce the impact on income
caused by these external circumstances. At the same time, we have
not been afraid to act aggressively by acquiring new companies and
investing in new products. Several of our businesses continue to
perform strongly. The operations in Latin America and Asia are
recording new solid results, and profitability for the professional
business and small appliances business remains at a very high level.
Although 2011 was an interesting and eventful year, it feels good
to leave it behind us and cast our gaze to the future. The implemen-
tation rate of our strategy is increasing in order to consolidate our
position as a global leader in appliances. In addition to integrating
the acquired companies, we will also accelerate the pace of produc-
tion launches in 2012. We will utilize the know-how we possess in
our professional business. We will be even better at leveraging our
position as the only company in our industry to offer products and
solutions for both consumers and professional users in over 150
countries.
We see a continued period of volatility and uncertainty ahead of us
in the socio-economic landscape. As such, we will manage the com-
pany in a way that keeps us prepared to address this unpredictability,
while keeping an eye on the horizon and investing in our future. By
maintaining strong control over costs and being receptive to new
business opportunities, we will further strengthen our positions in
growth markets and in new product areas. In one year’s time,
Electrolux will be an even stronger company. To assist me in
achieving this goal, I have a dedicated, international organiza-
tion with talented employees who work tirelessly to ensure
that Electrolux continues to generate sustainable value for all
shareholders.
Stockholm, February 2012
Keith McLoughlin
President and CEO
By maintaining strong control over
costs and being receptive to new
business opportunities, we will
further strengthen our positions in
growth markets and in new prod-
uct areas.
“By continuing to grow
organically, the share
of our sales in
growth markets
will reach 50%
within a ve-
year period.”
50%
Photographer: Victor Brott
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