2010 – a summary of a record year
Five concept vacuum cleaners made of plastic found in the world's oceans are a part of the marketing strategy for Electrolux Green Range of vacuum cleaners. |
Electrolux is a global leader in household appliances and appliances for professional use, selling more than 40 million products to cust omers in more than 150 markets every year.
The company focuses on innovations that are thoughtfully designed, based on extensive consumer insight, to meet the real needs of consumers and professionals.
Electrolux products include refrigerators, dishwashers, washing machines, vacuum cleaners, cookers and air-conditioners sold under esteemed brands such as Electrolux, AEG, Eureka and Frigidaire.
In 2010 Electrolux had sales of SEK 106 billion and 52,000 employees.
Electrolux strategy focuses on: Product, Brand, Cost and Profitable growth.
The financial goals set by Electrolux aim to strengthen the Group’s leading, global position in the industry and assist in generating a healthy total yield for Electrolux shareholders. The objective is growth with consistent profitability. One of the financial targets is an operating margin of at least 6% over the cycle.
The financial goals set by Electrolux aim to strengthen the Group’s leading, global position in the industry and assist in generating a healthy total yield for Electrolux shareholders. The objective is growth with consistent profitability. Key ratios are excluding items affecting comparability.
Operating margin of 6% or greater over a business cycle. | ||
Capital-turnover rate of 4 or higher. | ||
Return on net assets of at least 25%. | ||
Average annual growth of 4% or more. |
Electrolux can increase the pace of future growth through innovative products, a strong brand in the premium segment and the utilization of global economies of scale. The aim is to grow faster than the market, at least 4% per year, and to achieve this while maintaining profitability. What is required to realize this target?
To be a leader in its industry, Electrolux must lead in sustainability. The Group therefore intensified its work with its sustainability strategy encompassing how the Group runs its operations, designs products, communicates with consumers and strengthens the brand.
Building leadership is a long-term commitment and the Group has demonstrated that it is up to the challenge. In 2010 and for the fourth consecutive year, Electrolux was recognized as leader in the consumer durables industry sector in the prestigious Dow
Jones Sustainability World Index. Electrolux thereby ranks among the top 10% of the 2,500 largest companies for social and environmental performance.
All product development at Electrolux is based on comprehensive insight into the sophisticated needs of consumers. Across the globe, interest is growing in products that are sustainably manufactured, use less energy and water, and can be recycled. As a leading brand of energy- and water-efficient products, both for consumers and professional users, Electrolux can capitalize on this trend.
With its Vac from the Sea campaign, Electrolux has raised people’s awareness of the impact of plastic waste in the world’s oceans at that same time as there is a shortage of recycled plastic. The campaign, which is linked to the strategy surrounding the marketing of the Electrolux Green Range of vacuum cleaners, has strengthened the Group’s leading position in sustainability.
Five concept vacuum cleaners made of plastic found in the world's oceans are a part of the marketing strategy for Electrolux Green Range of vacuum cleaners. |
Operating income improved substantially and Electrolux achieved in 2010 its operating margin target of 6% for the first time. All operations showed improvements. A better product mix and cost savings had a positive impact on income, compared to 2009.
Net sales increased by 1.5% in comparable currencies. Strong sales growth in Latin America and Asia/Pacific offset lower sales volumes in Europe and North America.
The Board of Directors proposes a dividend for 2010 of SEK 6.50 per share. The proposed dividend corresponds to approximately 40% of income for the period, excluding items affecting comparability.
The Group’s goal is for the dividend to correspond to at least 30% of income for the period, excluding items affecting comparability. Historically, the Electrolux dividend rate has been considerably higher than 30%. Electrolux has a long tradition of high total distribution to shareholders that includes repurchases and redemptions of shares as well as dividends.
The Electrolux share is listed on Nasdaq OMX Stockholm. In 2010, the Electrolux share celebrated 80 years of being listed on the Swedish stock exchange.
Over the past ten years, the average total return on an investment in Electrolux shares was 25.5%. The corresponding figure for SIX Return Index was 10.6%.
Highlights during the year:
1) Excluding items affecting comparability
2) Average number of employees.