Economic performance

Indirect economic impacts are an important part of the value the Group brings to society. These impacts occur both when consumers and professionals alike use Electrolux products and how the business is operated.

For 2012 information regarding economic management approach and reporting practices, see Accounting and valuation principles and Business areas in brief 2012. Financial objectives are presented in Financial goals.

Financial risks due to climate change

Electrolux identifies a one-to-five-year risk of change in precipitation extremes and droughts, resulting in some reduction or disruption to production capacity. The financial impacts of these risks are reported on at length in the Group's yearly reporting to the Carbon Disclosure Project. (See also Managing sustainability risks). These risks and their associated costs are currently small, but are likely to rise in the medium term.

Market presence

The Workplace Standard stipulates that all employees are expected to be remunerated at levels no less than local minimum wage based on legally stipulated working hours. Additionally, each operational unit is responsible for providing its employees with all legally mandated benefits to which they are entitled (i.e.: medical and social insurance and pensions). For more information, see the Workplace Standard. For more about how Electrolux reports, view Electrolux markets.

Six countries are represented in Group Management, with eight of 13 members coming from countries outside Sweden—a high number for a Swedish company. Additionally, five of six heads of business areas were locally recruited for their posts.

Indirect impact

Due to the nature of its operations, significant infrastructure investments are not material to the Group’s business. The Materiality section discusses how most the Group’s most significant issues are identified. Electrolux does however aim to have a positive impact in the communities where it is active. See more at Community.

Electrolux operations have both direct and indirect impacts on stakeholders such as customers, consumers, suppliers, employees, the public purse and investors. The indirect impacts occur when income earned by these stakeholders in turn circulates as transactions in the economy. Total taxes in 2012 amounted to SEK 879m (716), corresponding to 25.3% (25.8) of income after financial items.

The average number of employees during the year was 59,478 (52,916). See also how Electrolux regards its impact on local communities and in emerging markets in Management approach: Society and Community.

Statistics for local hiring and the use of locally based suppliers are not collated at Group level.

The proportion of procurement from low-cost countries increased from 30% in 2004 to more than 60% in 2012.

Economic contributions of Electrolux products

Indirect economic impacts are an important part of the value the Group brings to society. These impacts occur when consumers and professionals alike use Electrolux products. Small and major appliances—from ovens and refrigerators to washing machines and vacuum cleaners—have changed the way society cleans and launders, cooks and preserves food. By saving time and labor, they free people up to be more productive, fulfilled and empowered, enhancing gender equality.

Electrolux products also help cut public spending by enabling self-reliant lifestyles for the elderly and those with physical disabilities. Two-income families are the norm in Western households and increasingly so in emerging markets. Reduced workloads thanks to appliances are enablers for this lifestyle. This has impacted the workforce in many economies. These impacts have, however, not been formally calculated.

Particularly in emerging markets, billions of people worldwide still live without the benefits of electrical appliances. This is changing. Rising incomes around the world are driving demand, especially in high growth areas in Asia, Latin America and the Middle East. (See video).