Electrolux 2013 Annual Report Download - page 98
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Structural changes
As communicated in October 2013, Electrolux is taking actions
to reduce annual costs by SEK1.8bn for a charge of SEK3.4bn.
Costs savings are planned to be achieved through manufac-
turing footprint restructuring as well as overhead-cost reduc-
tions. These actions relate mainly to Major Appliances Europe,
Middle East and Africa, but also to other business areas and
Group Staff. Approximately 2,000 employees are affected by
these measures excluding any additional impact of the
announced manufacturing investigation in Italy, see below.
In the fourth quarter of 2013, restructuring costs amounting
to SEK1.5bn were charged to operating income within items
affecting comparability. In addition, in the fourth quarter, an
impairment of parts of an IT platform in the amount of
SEK0.9bn was reported as items affecting comparability within
operating income, see below.
The remaining part of the total restructuring charges,
approximately SEK2.0bn, is expected to be taken during 2014.
Manufacturing footprint
An investigation has been initiated regarding the competitive-
ness of the entire Italian manufacturing setup for major appli-
ances, which includes all four plants.
The study of the future platform for food preservation prod-
ucts in Asia/Pacific resulted in the decision to close the factory
in Orange, Australia, and to concentrate production to the plant
in Rayong, Thailand. Execution started in the fourth quarter of
2013.
Overhead-cost reduction
In order to adapt the overhead-cost structure to the current
market situation in Europe, a cost-reduction program was initi-
ated in the fourth quarter of 2013. This mainly affects Major
Appliances Europe, Middle East and Africa but also Group Staff
and other business areas.
Items affecting comparability
SEKm 2012 2013
Restructuring provisions and write–downs1)
Manufacturing footprint restructuring –1,032 –594
Program for reduction of overhead costs ––975
Impairment of ERP system ––906
Total –1,032 –2,475
1) Of the total restructuring measures of SEK2.5bn in 2013 approximately SEK1.4bn will
have a cash-flow impact.
ERP impairment
The implementation schedule for a new Enterprise Resource
Planning (ERP) platform for the Group, developed over the
years, has been revised and parts of the ERP platform were
impaired in the amount of SEK906m. This had no impact on
cash flow.
Consolidation of operations within Small Appliances
To improve profitability and to further capitalize on global and
regional synergies, measures have been taken to consolidate
selected operations within Small Appliances.
board of directors’ report
96 ANNUAL REPORT 2013