In 2013, Electrolux communicated actions to reduce annual costs by SEK 1.8bn for a charge of SEK 3.4bn. Cost savings will be achieved through manufacturing footprint restructuring as well as through overhead-cost reductions. These actions relate mainly to Major Appliances EMEA, but also to other business areas and Group staff. During 2013 restructuring costs in the amount of SEK 1,6bn were charged to operating income.
The actions to reduce costs continued in 2014 and restructuring provisions amounting to SEK 1.2m were charged to operating income within items affecting comparability. These restructuring costs referred mainly to Major Appliances EMEA and included measures to improve competitiveness within manufacturing. An investigation regarding the competitiveness of the entire Italian manufacturing operations for major appliances, including all four plants was carried out and agreements to improve efficiencies were reached with Italian authorities and social partners. Consultations were initiated with employee representatives regarding the production in Mariestad, Sweden, and Schwanden, Switzerland. These processes also include reviews of potential alternative solutions for the plants. In the fourth quarter of 2014, a decision was taken to cease Electrolux production at the plant in Schwanden.
During 2014 there were also reversals of previous restructuring provisions not utilized.
In total, restructuring costs amounting to SEK 2.8bn of the SEK 3.4bn plan have been charged to operating income within items affecting comparability with annual cost savings of SEK 1.8 bn. This restructuring program has now come to an end. As previously communicated, Electrolux will eliminate the accounting practice of “items affecting comparability”. As of 2015, any potential future restructuring charges will be taken directly to earnings.
| SEKm | 2013 | 2014 |
|---|---|---|
| Restructuring provisions and write–downs1) | ||
| Manufacturing footprint restructuring | –594 | –1,173 |
| Program for reduction of overhead costs | –975 | –199 |
| Impairment of ERP system | –906 | — |
| Reversal of unused restructuring provisions | — | 173 |
| Total | –2,475 | –1,199 |
1) Of the total restructuring measures of SEK 3.7bn for 2013 and 2014 approximately SEK 2.5bn will have a cash-flow impact.