Post on 08-May-2015
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Q3 Results, October 28, 2011
Keith McLoughlin, President and CEO
Jonas Samuelson, Head of EMEA (Former CFO & COO)
Peter Nyquist, SVP IR and Financial Information
Q3 Highlights
7,5
4,3
0
500
1000
1500
2000
2500
0
2
4
6
8
EBIT declined to SEK 1,098m
– Weak demand
– Price pressure
– Higher costs for raw materials
– Higher costs for sourced products
Solid results for Professional Products and Latin America
Completion of acquisitions
Solid cash flow
Restore results going forward
– Increase prices
– Adapt cost structure
– Global Operations
2
* Excluding items affecting comparability
(SEKm) Q3 2011 Q3 2010
Sales 25,650 26,326
EBIT* 1,098 1,977
Margin 4.3 7.5
EBIT (SEKm) Margin (%)
Q3 Cash flow
Operating cash flow amounted to SEK –1,366m
– Payment of Olympic Group amounted to SEK –2,556m
– Excluding the payment, the operating cash flow amounted to
SEK 1,190m
Lower operating income than in Q3, 2010
Seasonally higher sales in the quarter
– High sales in September impacted inventories and accounts
receivable
Investments in new products
Continued structural improvement of working capital
3
4
Acquisition of
Olympic Group completed
280m EBIT
2.5bn Sales
Olympic Group 2010 (SEK, recurring figures, excluding Namaa & B-Tech)
Mandatory tender offer completed
– Electrolux now owns 98% of the shares
Consolidated as of September 2011
Intention to delist Olympic’s shares
in Q1, 2012 at the latest
11% EBIT margin
200m Net profit
Acquisition of CTI completed
5
Cerrillos Rosario
Curitiba
São Carlos
Juárez
Manaus
Maipú
450m EBIT
2.9bn Sales
CTI 2010 (SEK, recurring figures)
Cash tender offers closed
– Electrolux now owns 98% of the shares in CTI and
97% of the shares in CTI’s subsidiary Somela
Consolidated as of October 2011
Remaining shareholders will have the
opportunity to sell their shares over a limited
period of time
16% EBIT margin
330m Net profit
Consumer Durables
Major Appliances Europe,
Middle East & Africa
9,6
5,0
0
200
400
600
800
1000
1200
0
2
4
6
8
10
12
Demand weakened further
Lower sales as a result of lower
volumes and prices
Lower EBIT
– Lower volumes
– Lower prices
– Higher costs for raw materials
– Increased transportation costs
Positive mix contribution from
AEG launch
Price increases going forward
Positive one-off of SEK 150m in
Q3, 2010
6
(SEKm) Q3 2011 Q3 2010
Sales 8,964 9,395
EBIT 444 898
Margin 5.0 9.6
EBIT (SEKm) Margin (%)
Negative growth in Europe
Further weakning in Southern Europe and slow-down in
Eastern Europe
-20%
-15%
-10%
-5%
0%
5%
10%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Quarterly comparison y-o-y
7
2006 2007 2008 2009 2010 2011 Market Development %
W. Eur. +4 +1 +1 +5 +1 +1 -1 -5 -4 -4 -5 -8 -9 -9 -4 -2 +1 0 0 0 -2 -2 -3
E. Eur. +1 +9 +6 +7 +14 +5 +5 +10 +6 +5 +4 -15 -31 -30 -26 -17 -7 +1 +5 +13 +13 +12 +7
Consumer Durables
Major Appliances North America
5,4
1,5
-200
0
200
400
600
-2
0
2
4
6
Increased sales in comparable
currencies
EBIT declined to SEK 107m
– Negative price/mix
– Higher raw-material costs
– Higher transportation costs
– Higher product costs
– Extensive promotional activities
Prices sequentially higher than
in Q2 but lower than in Q3,
2010
8
(SEKm) Q3 2011 Q3 2010
Sales 7,122 7,604
EBIT 107 413
Margin 1,5 5.4
EBIT (SEKm) Margin (%)
Market in North America
continued to decline in Q3
-20%
-15%
-10%
-5%
0%
5%
10%
15%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Quarterly comparison y-o-y
9
2006 2007 2008 2009 2010 2011
Consumer Durables
Major Appliances Latin America
5,2 5,4
0
100
200
300
400
0
2
4
6
8
Market growth in Brazil and in
the rest of Latin America
EBIT improved to SEK 222m
– Higher volumes
– Negative customer mix due to
consolidation of retailers
10
(SEKm) Q3 2011 Q3 2010
Sales 4,101 3,810
EBIT 222 199
Margin 5.4 5.2
EBIT (SEKm) Margin (%)
Consumer Durables
Major Appliances Asia/Pacific
12,6
8,7
0
50
100
150
200
250
300
0
2
4
6
8
10
12
14
Lower sales and EBIT in
Australia
– Lower sales prices
– Negative product mix
– Lower capacity utilization
Southeast Asia and China
– Market-share gain in strong
markets
– Continued good profitability in
Southeast Asia
11
(SEKm) Q3 2011 Q3 2010
Sales 1,981 1,909
EBIT 172 241
Margin 8.7 12.6
EBIT (SEKm) Margin (%)
Consumer Durables
Small Appliances
9,4
8,2
0
50
100
150
200
250
300
0
2
4
6
8
10
12
Higher sales in comparable
currencies
Lower EBIT
– Higher product costs
– Higher costs for raw materials
– Higher volumes
– Lower transportation costs
12
(SEKm) Q3 2011 Q3 2010
Sales 2,056 2,106
EBIT 169 198
Margin 8.2 9.4
EBIT (SEKm) Margin (%)
Professional Products
Food-service & Laundry products
13,5 14,0
0
50
100
150
200
250
300
0
4
8
12
16
20
Lower sales and EBIT for Food-
service products
– Lower sales in Southern Europe
– Higher raw-material costs
– Price increases
– Improved mix
Solid results for Laundry
products
– Higher volumes
– Price increases
– Higher capacity utilization
– Higher raw-material costs
13
(SEKm) Q3 2011 Q3 2010
Sales 1,426 1,501
EBIT* 199 202
Margin 14.0 13.5
EBIT (SEKm) Margin (%)
We need to adapt our capacity to structural
changes in demand in mature markets
25000
30000
35000
40000
45000
50000
55000
60000
1990 1995 2000 2005 2010
Market volumes in North America (000' units)
14
30% gap from
expected
development
Strong decline during the last quarters in
Western Europe and no recovery in the
short term
Seasonally adjusted volumes in Western Europe, annualized (000' units)
46 000
48 000
50 000
52 000
54 000
56 000
58 000
60 000
2007 Q1
2007 Q2
2007 Q3
2007 Q4
2008 Q1
2008 Q2
2008 Q3
2008 Q4
2009 Q1
2009 Q2
2009 Q3
2009 Q4
2010 Q1
2010 Q2
2010 Q3
2010 Q4
2011 Q1
2011 Q2
2011 Q3
Q4 2011 y-o-y In accordance with forward-looking statements
in the CEO letter
Q4 2011 Comment
Volumes
Price
Mix
Raw-material costs
Negative
Slightly positive
Slightly negative
Costs from Global
Operations SEK 125m
Manufacturing
footprint savings
Higher
SEK 125m
Lower volumes in mature markets will
partly be offset by strong growth in
emerging markets
Year-over-year negative with some
sequential improvement
Mix improvement from product
launches offset by negative
country/customer mix
~SEK 300m in Q4
Approximately evenly
distributed between quarters
Approximately evenly
distributed between quarters
Contribution from
acquisitions SEK 100m Full impact from CTI and Olympic
17 17 17
18 18 18
Factors affecting forward-
looking statements
Factors affecting forward-looking statements
This presentation contains “forward-looking” statements within the meaning
of the US Private Securities Litigation Reform Act of 1995. Such statements
include, among others, the financial goals and targets of Electrolux for
future periods and future business and financial plans. These statements
are based on current expectations and are subject to risks and uncertainties
that could cause actual results to differ materially due to a variety of factors.
These factors include, but may not be limited to the following: consumer
demand and market conditions in the geographical areas and industries in
which Electrolux operates, effects of currency fluctuations, competitive
pressures to reduce prices, significant loss of business from major retailers,
the success in developing new products and marketing initiatives,
developments in product liability litigation, progress in achieving operational
and capital efficiency goals, the success in identifying growth opportunities
and acquisition candidates and the integration of these opportunities with
existing businesses, progress in achieving structural and supply-chain
reorganization goals.