In 2014, the Electrolux Group delivered positive organic growth and increased operating income while strengthening the cash flow. The Electrolux share showed strong performance with a total return of 42%. This was to a large extent driven by the Group’s operational recovery but also thanks to the positive reactions from the announced acquisition of GE Appliances.
The Electrolux B share increased by 36% in 2014, outperforming the broader Swedish market index, Affärsvärlden General Index, which rose by 10% over the same period. The performance reflects an operational recovery in the Group’s European operations, but also to most other business areas performing well. Towards the latter part of the year, the share price benefitted from expectations of lower costs for raw materials in 2015 compared with 2014.
During the year, Electrolux performed better than the market expectations in terms of profitability and cash-flow generation. Furthermore, the share price reacted positively on the announcement of the acquisition of GE Appliances in September.
Following a negative share price reaction in connection with the announcement of the results for the fourth quarter of 2013 in late January, the share price performance was positive when announcing results for the first, second and third quarters of 2014.
The opening price for the Electrolux B share in 2014 was SEK 168.50. The highest closing price was SEK 231.10 on December 29. The lowest closing price was SEK 135.30 on February 4. The closing price for the B share at year-end 2014 was SEK 228.80, which was 36% higher than at year-end 2013.
Total shareholder return during the year was 42%. Over the past ten years, the average total return on an investment in Electrolux B shares has been 17% annually. The corresponding figure for the SIX Return Index was 12%.
Over the past years, the Electrolux share has shown a volatility of about 40% (daily values), compared with an average volatility of 25% for Nasdaq Stockholm. The beta value of the Electrolux B shares over the past five years is 1.39. A beta value of more than 1 indicates that the share’s sensitivity to market fluctuations is above average.
| 2005 | 20069) | 20079) | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Year-end trading price, B shares, SEK1) | 89.50 | 116.90 | 108.50 | 66.75 | 167.50 | 191.00 | 109.70 | 170.50 | 168.50 | 228.80 |
| Year-end trading price, B shares, SEK | 206.50 | 137.00 | 108.50 | 66.75 | 167.50 | 191.00 | 109.70 | 170.50 | 168.50 | 228.80 |
| Highest trading price, B shares, SEK | 90.50 | 119.00 | 190.00 | 106.00 | 184.10 | 194.70 | 195.60 | 179.00 | 192.70 | 231.10 |
| Lowest trading price, B shares, SEK | 62.00 | 78.50 | 102.00 | 53.50 | 57.50 | 142.50 | 95.30 | 111.50 | 153.70 | 135.30 |
| Change in price during the year, % | 36 | 319) | –7 | –38 | 151 | 14 | –43 | 55 | –1 | 36 |
| Equity per share, SEK | 88 | 47 | 57 | 58 | 66 | 72 | 73 | 55 | 50 | 58 |
| Trading price/equity, % | 234 | 2471) | 191 | 116 | 253 | 264 | 151 | 310 | 338 | 398 |
| Dividend, SEK | 7.50 | 4.00 | 4.25 | 0 | 4.00 | 6.50 | 6.50 | 6.50 | 6.50 | 6.502) |
| Dividend as % of net income3) 4) | 47 | 37 | 36 | 0 | 29 | 39 | 86 | 57 | 66 | 58 |
| Dividend yield, %5) | 3.6 | 3.41) | 3.9 | 0 | 2.4 | 3.4 | 5.9 | 3.8 | 3.9 | 2.8 |
| Earnings per share, SEK | 6.05 | 9.17 | 10.41 | 1.29 | 9.18 | 14.04 | 7.25 | 8.26 | 2.35 | 7.83 |
| Earnings per share, SEK4) | 15.82 | 10.89 | 11.66 | 2.32 | 13.56 | 16.65 | 7.55 | 11.36 | 9.81 | 11.30 |
| Cash flow, SEK6) | 2.45 | 7.53 | 4.54 | 4.22 | 29.16 | 26.98 | 18.97 | 24.74 | 15.57 | 27.35 |
| EBIT multiple7) | 16.1 | 8.01) | 7.9 | 19.8 | 12.8 | 10.8 | 13.4 | 14.6 | 38.8 | 22.4 |
| EBIT multiple4) 7) | 9.1 | 7.11) | 7.3 | 15.2 | 9.1 | 9.1 | 12.8 | 11.6 | 15.1 | 16.8 |
| P/E ratio8) | 34.1 | 12.71) | 10.4 | 51.7 | 18.2 | 13.6 | 15.1 | 20.6 | 71.7 | 29.2 |
| P/E ratio4) 8) | 13.1 | 10.71) | 9.3 | 28.8 | 12.4 | 11.5 | 14.5 | 15.0 | 17.2 | 20.2 |
| Number of shareholders | 60,900 | 59,500 | 52,700 | 52,600 | 52,000 | 57,200 | 58,800 | 51,800 | 51,500 | 46,500 |
1) Adjusted for distribution of Husqvarna in June 2006, and for redemption in January 2007.
2) Proposed by the Board.
3) Dividend as percentage of income for the period.
4) Excluding items affecting comparability.
5) Dividend per share divided by trading price at year-end.
6) Cash flow from operations less capital expenditures, divided by the average number of shares after buy-backs.
7) Market capitalization excluding buy-backs, plus net borrowings and non-controlling interests, divided by operating income.
8) Trading price in relation to earnings per share.
9) Continuing operations.
Sales growth was impacted by weak European and Latin American markets and negative currency.
Organic growth in all business areas and EBIT recovery in Europe. Negative currency is being mitigated by price and mix.
Strong performance in major markets with improved earnings Solid cash flow generation.
A quarter with profit recovery in Europe. Improved product mix and cost savings are contributing positively.
Comments from analysts Electrolux B share Affärsvärlden General Index – price index
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Electrolux B share | 167.7 | 168.5 | 168.2 | 166.6 | 165 | 167.2 | 163.6 | 162.4 | 162.6 | 162.2 | 162 | 162.4 | 163.9 | 163.4 | 160.7 | 155.4 | 156.6 | 158 | 155.4 | 152.7 | 139.2 | 136.4 | 135.3 | 136.4 | 138 | 138.7 | 139.3 | 140.6 | 140 | 139.9 | 141.8 | 143.1 | 142.6 | 144 | 143.8 | 146.5 | 148.5 | 149 | 149.3 | 148.6 | 151.9 | 148.8 | 146.8 | 146.1 | 148.7 | 148.6 | 146.9 | 146.2 | 143.3 | 141.4 | 144.7 | 146.8 | 147.9 | 146.3 | 143 | 144.1 | 142.2 | 143.7 | 147.5 | 138.4 | 138.7 | 141.2 | 142.1 | 144.2 | 143.5 | 145.4 | 145.3 | 146.4 | 146.8 | 147.1 | 146.3 | 147.3 | 149.1 | 149 | 149.6 | 152.7 | 151.9 | 154.5 | 171 | 173.2 | 177.4 | 180.2 | 176.1 | 175.9 | 175.2 | 174.7 | 176.6 | 175.2 | 172.6 | 175.2 | 172.2 | 170.6 | 167.4 | 171.1 | 171.1 | 170.4 | 171.6 | 170 | 170.8 | 169.5 | 166.8 | 168.1 | 166.2 | 165.5 | 165.5 | 166 | 167.2 | 164.6 | 163.4 | 164.9 | 163 | 162.1 | 160.1 | 160.2 | 163.4 | 165.8 | 167.6 | 168.5 | 166.7 | 169.3 | 169 | 168.7 | 167.7 | 169.4 | 168.1 | 167.5 | 167 | 166 | 164.7 | 166.9 | 170.2 | 166.9 | 170.3 | 170.9 | 179.8 | 179.3 | 180.9 | 178.4 | 179.3 | 175.6 | 175.6 | 175.2 | 173.8 | 171.9 | 171.3 | 168.9 | 170.9 | 168.8 | 167.7 | 166.1 | 169.8 | 169.2 | 168.8 | 172.6 | 174 | 175.8 | 177.9 | 177.5 | 177.6 | 176.2 | 178.9 | 178.4 | 178.3 | 176.1 | 177.3 | 180.2 | 181.3 | 181.8 | 190.4 | 187.5 | 197.1 | 190.6 | 192 | 194.2 | 200.2 | 204.6 | 205.5 | 205.4 | 205.4 | 203.3 | 201 | 197.1 | 199.4 | 199 | 197.7 | 195.4 | 190.9 | 186.9 | 182.7 | 183.6 | 188.4 | 185.7 | 188.7 | 184 | 180.5 | 180.4 | 180.3 | 175.6 | 179.9 | 185.1 | 196.8 | 199.6 | 198 | 200.5 | 201.5 | 199.2 | 202.2 | 202.8 | 204.8 | 209.5 | 208 | 210 | 210 | 209.3 | 206.7 | 210.6 | 211.5 | 212.7 | 217.4 | 213.1 | 216.7 | 214.5 | 213.3 | 208.5 | 212.4 | 215.9 | 220 | 218.6 | 220 | 221.6 | 224.3 | 222.4 | 220.5 | 221.6 | 225.4 | 224.5 | 219.9 | 222.3 | 224 | 220 | 217.9 | 218.7 | 214.4 | 226.2 | 227.8 | 227 | 229 | 231.1 | 228.8 |
| Affärsvärlden General Index – price index | 167.7 | 168 | 168.4 | 168.5 | 168.6 | 169.5 | 169.5 | 168.9 | 171.2 | 171.1 | 171.9 | 171.7 | 171.6 | 172.1 | 170.3 | 167.3 | 166.7 | 167.2 | 166.2 | 165.5 | 165.7 | 163.4 | 162.9 | 164.3 | 166.6 | 167.3 | 167.8 | 170.1 | 169.8 | 169.8 | 170.4 | 171.4 | 170 | 171.3 | 171.8 | 172.6 | 175.6 | 175.7 | 175.9 | 175.3 | 175.7 | 171.1 | 174.6 | 174.5 | 175.8 | 173.9 | 174 | 173.9 | 172.3 | 171.3 | 170.2 | 172.9 | 173.9 | 174.1 | 173 | 172.8 | 170.7 | 172.6 | 172.9 | 171.9 | 172.6 | 174.9 | 176.2 | 176.6 | 175.6 | 176 | 174.5 | 174.6 | 175.5 | 174.4 | 172.6 | 172.6 | 170.4 | 172.2 | 172.2 | 172.2 | 173.9 | 175.5 | 175.1 | 174.7 | 176.3 | 175.7 | 175.6 | 175.5 | 175 | 173.9 | 175.7 | 175.6 | 177.2 | 178.1 | 178.3 | 179.1 | 178.2 | 178.3 | 178.3 | 178.8 | 179.3 | 180.1 | 180.1 | 180.3 | 180.3 | 181 | 181 | 180.4 | 180.7 | 179.8 | 181.7 | 181.7 | 180.9 | 180.8 | 179.6 | 178.2 | 178.3 | 177.9 | 178.9 | 180.2 | 180.6 | 178.4 | 177.7 | 178.6 | 178.6 | 179.4 | 180 | 183 | 182.1 | 181.5 | 179.6 | 179.2 | 176.5 | 176.9 | 179.3 | 177.9 | 180 | 178.2 | 178.8 | 178.2 | 179.8 | 179.8 | 180.7 | 180.3 | 179.9 | 179.7 | 179.4 | 177.3 | 174.9 | 174.9 | 175.6 | 172.8 | 171.6 | 170.9 | 174.2 | 173.6 | 174.8 | 174 | 173.8 | 175.9 | 176.9 | 176.6 | 177.9 | 177.6 | 179 | 179.5 | 179.8 | 178 | 178.4 | 178.1 | 178.2 | 179.5 | 179.4 | 178.2 | 178.5 | 177.4 | 177.5 | 176.9 | 177.7 | 178 | 177.9 | 179.3 | 180.3 | 180.7 | 180.3 | 178.6 | 179.1 | 177 | 177.4 | 176.9 | 178.1 | 175.5 | 172.1 | 173.9 | 173.4 | 169.8 | 168.9 | 167.8 | 165.3 | 164.2 | 165.9 | 161.4 | 161.5 | 166.5 | 166.2 | 170.2 | 171.9 | 174 | 173.6 | 173.9 | 176.6 | 177.8 | 178.6 | 180.8 | 179.3 | 179.4 | 181.1 | 181.3 | 180.9 | 181.8 | 182.7 | 181.1 | 182.5 | 181.9 | 182.2 | 183.6 | 183.1 | 182.6 | 185.3 | 186.5 | 187.7 | 186.6 | 187.5 | 186.9 | 185.8 | 185.8 | 187.7 | 185.8 | 188.9 | 188.2 | 186.2 | 186.6 | 186.6 | 183.4 | 181.5 | 181.8 | 181.1 | 185.7 | 187.1 | 188.4 | 188.4 | 190.3 | 190.3 |
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
• Recovery in operations in Europe
• Dividend of SEK 6.50 per share
• Closure of plant in Canada and relocation to new cooking plant in Memphis, Tennessee
• Electrolux holds CMD in Charlotte, North Carolina with focus on strategy and future growth
• Launch of new Ergorapido in Asia
• Expanding the range of new products in Small Domestic Appliances
• Slow start in North America due to weather conditions
• Announcement to acquire GE Appliances
• Electrolux buys BeefEater in Australia
• Electrolux Professional serves in FIFA World Cup
• Cold winter affecting demand in North America
• 4th of July promotions in the US
• Strong US core appliance shipments
• Raw material prices continue to weaken
• Appreciation of the US Dollar versus emerging market currencies
• Brazilian Real stabilizing versus the US Dollar
• FIFA World Cup in Brazil
• New energy requirements for products in the US
• Southern European markets show continued recovery
• Signs of demand recovery in Europe
• Sharp weakening of the Brazilian Real against the US Dollar
• Black Friday promotions
• Slowing economy in Brazil
After Q4 | After Q1 2014 | After Q2 2014 | After Q3 2014 | After Q4 2014 | |
|---|---|---|---|---|---|
| Buy | 22% | 43% | 46% | 31% | 36% |
| Hold | 67% | 36% | 38% | 69% | 43% |
| Sell | 11% | 21% | 15% | 0% | 21% |
The performance of the Electrolux share price showed strength throughout 2014 despite high market expectations. Positive product mix, higher profitability and cost savings mitigated weak demand and currency fluctuations in emerging markets, which resulted in the share price outperforming the Swedish market index during the year.
The Electrolux share is listed on Nasdaq Stockholm. The market capitalization of Electrolux at year-end 2014 was approximately SEK 71 bn (51), which corresponded to 2.1% (1.7) of the total value of Nasdaq Stockholm. The company’s outstanding shares are divided into A shares and B shares. A shares entitle the holder to one vote while B shares entitle the holder to one-tenth of a vote.
The Board of Directors proposes a dividend for 2014 of SEK 6.50 per share, equivalent to a total dividend payment of approximately SEK 1,861m. The proposed dividend corresponds to approximately 57% of income for the period, excluding items affecting comparability. Based on the share price of Electrolux B shares at the end of 2014, the dividend yield for 2014 was 2.8%.
The Group’s goal is for the dividend to correspond to at least 30% of income for the period, excluding items affecting comparability. For a number of years, the dividend level has been considerably higher than 30%.
The majority of the total share capital as of December 31, 2014, was owned by Swedish institutions, mutual funds and private investors amounting to 51%. During the year, the proportion of the capital held by foreign owners increased and amounted to approximately 49% (42) at the end of the year. The volume of shares traded by foreign owners has a significant effect on share liquidity. Foreign investors are not always recorded in the share register as foreign banks and other custodians may be registered for one or several customers’ shares, why the actual owners are then usually not displayed in the register.
Electrolux maintains a number of long-term incentive programs for senior management. Since 2004, the Group has three-year performance-based share programs.
At year-end 2014, the incentive programs had no effect on the dilution of the total number of shares.
In accordance with the Articles of Association of AB Electrolux, owners of A shares have the right to have such shares converted to B shares. Conversion reduces the total number of votes in the company. In 2014, no Class A shares were converted to Class B shares. The total number of registered shares in the company amounts to 308,920,308 shares, of which 8,192,539 are A shares and 300,727,769 are B shares.
| Share capital, % | Voting rights, % | |
|---|---|---|
| Investor AB | 15.5 | 29.9 |
| JP Morgan Asset Management | 5.0 | 4.0 |
| Nordea Investment Management | 4.5 | 3.6 |
| Alecta Pension Fund | 3.4 | 3.9 |
| Swedbank Robur Funds | 2.1 | 1.7 |
| Norges Bank Investment Management | 2.0 | 1.6 |
| Government of Singapore | 1.7 | 1.4 |
| SHB Funds | 1.4 | 1.2 |
| AMF Insurance & Funds | 1.1 | 0.9 |
| Unionen | 1.0 | 0.8 |
| Danske Invest Funds | 0.7 | 0.6 |
| Other shareholders | 54.3 | 50.4 |
| External shareholders | 92.7 | 100.0 |
| AB Electrolux | 7.3 | 0.0 |
| Total | 100.0 | 100.0 |
Source: Euroclear Sweden and SIS Ägarservice as of December 30, 2014. Information regarding ownership structure is updated quarterly on www.electroluxgroup.com/en/ownership-structure-392.
| 2013 | 2014 | |
|---|---|---|
| Number of traded shares, million | 414.5 | 449,7 |
| Value of traded shares, SEKbn | 70.1 | 77.5 |
| Average daily trading volume, million | 1.6 | 1.8 |
| Average daily trading volume (value), SEKm | 280 | 311 |
| Number of issued/cancelled ADRs | 3,141,700 | 616,042 |
| Number of ADRs outstanding | 828,300 | 569,897 |
Source: Nasdaq Stockholm, Citi.
During 2014, 55% of Electrolux B shares were traded outside Nasdaq Stockholm, compared to 56% during 2013. In 2014, the Electrolux share accounted for 2.3% (2.4) of the shares traded on Nasdaq Stockholm, of a total trading turnover of SEK 3,321 bn (2,938).
| Share listing 1) | Stockholm |
|---|---|
| Number of shares | 308,920,308 |
| of which A shares | 8,192,539 |
| of which B shares | 300,727,769 |
| Quota value | SEK 5 |
| Market capitalization at December 31, 2014 | SEK 71 bn |
| GICS code 2) | 25201040 |
| Ticker codes | Reuters ELUXb.ST |
| Bloomberg ELUXB SS |
1) Trading in Electrolux ADRs was transferred from Nasdaq to the US Over-the-Counter market as of March 31, 2005. One ADR corresponds to two B shares.
2) MSCI’s Global Industry Classification Standard (used for securities).
| 2013 | 2014 | |
|---|---|---|
| Nasdaq Stockholm | 44.5 | 44.8 |
| BATS Chi-X | 21.5 | 38.8 |
| BOAT | 24.0 | 5.4 |
| Turqouise | 5.1 | 5.4 |
| Burgundy | 1.2 | 0.3 |
| Other | 3.7 | 5.3 |
| Total | 100.0 | 100.0 |
Source: Fidessa.
| SEK thousand | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|---|---|---|---|---|
| A shares | 148 | 109 | 93 | 127 | 146 |
| B shares | 435.958 | 357.075 | 310.501 | 280.457 | 311.398 |
In 2014, an average of 1.8 million Electrolux shares were traded daily on Nasdaq Stockholm.
| 2014 | |
| Sweden, 51% | 51 |
| USA, 20% | 20 |
| UK, 12% | 12 |
| Other, 17% | 17 |
As of December 30, 2014, approximately 49% of the total share capital was owned by foreign investors.
Source: Euroclear Sweden as of December 30, 2014.
| 05 | 06 | 07 | 08 | 09 | 10 | 11 | 12 | 13 | 14 | |
| P/E ratio, excluding items affecting comparability | 13.1 | 10.7 | 9.3 | 28.8 | 12.4 | 11.5 | 14.5 | 15 | 17.2 | 20.2 |
| Dividend yield, % | 3.6 | 3.4 | 3.9 | 0 | 2.4 | 3.4 | 5.9 | 3.8 | 3.9 | 2.8 |
At year-end 2014, the P/E ratio for Electrolux B shares was 20.2, excluding items affecting comparability. The dividend yield was 2.8% based on the Board’s proposal for a dividend of SEK 6.50 per share for 2014.
An increasing portion of Electrolux shares are traded on new trading platforms. Approximately 45% of total trading volume of Electrolux is handled through the Nasdaq Stockholm. BATS has increased its share to the second most traded platform with 39% of total trades.
The Group’s sustainability performance help attract and strengthen relations with investors. In 2014 and for the eight consecutive year, Electrolux was recognized as a leader in the consumer durables industry sector in the prestigious Dow Jones Sustainability Index (DJSI). Electrolux thereby ranks among the top 10% of the world’s 2,500 largest companies for social and environmental performance. Additionally, Electrolux has received recognition from other indexes and ranking organizations, including RobecoSAM and Oekom.