Electrolux 2011 Annual Report Download - page 102

Relocation of production, items affecting comparability, restructuring measures
Authorized closures Estimated closure
L’Assomption Canada Cookers Q4 2013
Investment Starting
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. This program is in its final phase and has
so far yielded annual savings of about SEK 3bn. About 35% of manufacturing
in high-cost areas have been moved and more than 60% of the Group’s house-
hold appliances are currently manufactured in low-cost areas that are near
rapidly-growing markets for household appliances. In 2011, additional measures
were presented to further adapt capacity in mature markets to lower demand.
The total cost for the whole program will be approximately SEK 12bn and sav-
ings will amount to approximately SEK 5bn annually as of 2016. Restructuring
provisions and write-downs are reported as items affecting comparability within
operating income.
For information on provisions in 2011, see table on page 18.
Plant closures and cutbacks Closed
Torsvik Sweden Compact appliances Q1 2007
Nuremberg Germany Dishwashers, washing
machines and dryers 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
Motala1) Sweden Cookers Q1 2011
Webster City USA Washing machines Q1 2011
Alcalà Spain Washing machines Q1 2011
1) Divestment
CTI group is included in the consolidated accounts of Electrolux
as of October 1, 2011, within the business areas Major Appliances
Latin America and Small Appliances. The total consideration paid
for the acquired shares in CTI group is SEK3,804m, which was
paid in cash in October 2011. The preliminary purchase price allo-
cation concludes that goodwill mounts to a value of SEK 2,104m.
Expenses related to the acquisition amounted to SEK 56m in 2011
and has been reported as administrative expenses in Electrolux
income statement of 2011. The acquisition is described in more
detail in Note 26.
Acquisition of Olympic Group
During the third quarter, Electrolux completed the acquisition of
the Egyptian major appliances manufacturer Olympic Group for
Financial Investments S.A.E. (Olympic Group). Olympic Group is a
leading manufacturer of appliances in the Middle East with a vol-
ume market share in Egypt of approximately 30%. The company
has 7,100 employees and manufactures washing machines,
refrigerators, cookers and water heaters. The acquisition is part of
Electrolux strategy to grow in emerging markets like the Middle
East and Africa.
Olympic Group is included in the consolidated accounts of
Electrolux as of September 1, 2011, within the business area
Major Appliances Europe, Middle East and Africa.
The total consideration for the acquired shares in Olympic
Group is SEK 2,556m, which was paid in cash at the beginning of
September 2011. The purchase price allocation concludes that
goodwill amounts to a value of SEK 1,495m. Expenses related to
the acquisition amounted to SEK 24m in 2010 and to SEK 43m in
2011 and have been reported as administrative expenses in
Electrolux income statement. The acquisition is described in more
detail in Note 26.
Consideration
SEKm
Olympic
Group CTI Total
Cash paid 2,556 3,804 6,360
Total 2,556 3,804 6,360
Recognized amounts of identifiable assets acquired
and liabilities assumed at fair value
SEKm
Property, plant and equipment 555 382 937
Intangible assets 516 1,012 1,528
Inventories 577 734 1,311
Trade receivables 195 763 958
Other current and
non-current assets 236 310 546
Accounts payable –223 –189 –412
Other operating liabilities –574 –886 –1,460
Current assets classified
as held for sale 537 — 537
Total identifiable net
assets acquired 1,819 2,126 3,945
Cash and cash equivalents 34 114 148
Borrowings –723 –499 –1,222
Assumed net debt –689 –385 –1,074
Non-controlling interests –69 –41 –110
Goodwill 1,495 2,104 3,599
Total 2,556 3,804 6,360
Olympic Group and CTI are included in Electrolux consolidated accounts as of
September and October, respectively.
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