Financial position

• Equity/assets ratio was 24.7% (20.8).
• Return on equity was 29.4% (9.9).
• Return on net assets was 29.9% (11.0).
• Financial net debt decreased to SEK –3,809m (1,898).

 

Net assets and working capital

Working capital as of December 31, 2016 amounted to SEK –14,966m (–12,234), corresponding to –11.7% (–9.9) of annualized net sales.

Average net assets were SEK 20,957m (24,848), corresponding to 17.3% (20.1) of annualized net sales.

Return on net assets was 29.9% (11.0).

Net assets and working capital

SEKm	Dec. 31, 2016	% of annualized net sales	Dec. 31, 2015	% of annualized net sales
Inventories	13,418	10.5	14,179	11.5
Trade receivables	19,408	15.2	17,745	14.3
Accounts payable	–28,283	–22.2	–26,467	–21.4
Provisions	–8,044		–8,057
Prepaid and accrued income and expenses	–10,732		–9,406
Taxes and other assets and ­liabilities	–733		–228
Working capital	–14,966	–11.7	–12,234	–9.9
Property, plant and ­equipment	18,725		18,450
Goodwill	4,742		5,200
Other non-current assets	4,009		4,752
Deferred tax assets and ­liabilities	5,588		5,244
Net assets	18,098	14.2	21,412	17.3
Annualized net sales1)	127,490		123,772
Average net assets	20,957	17.3	24,848	20.1
Annualized net sales2)	121,093		123,511
Return on net assets, %	29.9		11.0

¹⁾ Calculated at end of period exchange rates.
²⁾ Calculated at average exchange rates.

 

Average net assets for 2016 declined to SEK 20,957m (24,848). Return on net assets was 29.9% (11.0).

 

Liquid funds

 

Liquidity profile

SEKm	Dec. 31, 2016	Dec. 31, 2015
Liquid funds	14,011	11,199
% of annualized net sales1)	19.5	17.5
Net liquidity	11,761	6,425
Fixed interest term, days	22	9
Effective annual yield, %	0.9	1.4

¹⁾ Liquid funds plus back-up credit facilities divided by annualized net sales, see below.
For additional information on the liquidity profile, see Note 18.

 

Liquid funds as of December 31, 2016, amounted to SEK 14,011m (11,199), excluding back-up credit facilities. Electrolux has one unused committed back-up multicurrency revolving credit facility of EUR 1,000m, approximately SEK 9,600m, maturing 2021 with two extension options of one year each, and one unused commited credit facility of USD 150m, approximately SEK 1,400m, maturing 2017.

The capital turnover-rate increased to 5.8 (5.0) times in 2016.

 

Net debt

Net debt

SEKm	Dec. 31, 2016	Dec. 31, 2015
Total borrowings	10,202	13,097
Liquid funds	14,011	11,199
Financial net debt	–3,809	1,898
Net provisions for post-employment benefits	4,169	4,509
Net debt	360	6,407
Net debt/equity ratio	0.02	0.43
Equity	17,738	15,005
Equity per share, SEK	61.72	52.21
Return on equity, %	29.4	9.9
Equity/assets ratio, %	24.7	20.8

As of December 31, 2016, Electrolux had a net cash position of SEK 3,809m compared with a net debt of SEK 1,898m as of December 31, 2015. This is a result of the strong cash flow in 2016. Net provisions for post-employment benefits declined to SEK 4,169m (4,509). In total, net debt decreased to SEK 360m (6,407).

During 2016, SEK 2,669m in long-term borrowings were amortized.

Long-term borrowings as of December 31, 2016, including long-term borrowings with maturities within 12 months, amounted to SEK 8,451m with average maturity of 2.7 years, compared to SEK 11,000m and 2.8 years at the end of 2015.

In 2017, long-term borrowings in the amount of approximately SEK 500m will mature.

The Group’s target for long-term borrowings includes an average time to maturity of at least two years, an even spread of maturities, and an average interest-fixing period between 0 and 3 years. A maximum of SEK 5,000m of the long-term borrowings is allowed to mature in a 12-month period. At year-end, the average interest-­fixing period for long-term ­borrowings was 0.8 years (0.8).

At year-end, the average interest rate for the Group’s total interest-bearing borrowings was 2.0% (2.7).

In 2017, long-term borrowings in the amount of approximately SEK 500m will mature. For information on borrowings, see Note 2 and 18.

Rating

Electrolux has investment-grade rating from Standard & Poor’s. In 2016, the rating was upgraded from BBB+ with a stable outlook to A- with a stable outlook. The A-2 short-term corporate credit rating was affirmed as was the short-term Nordic regional scale rating of K-1.

Rating

	Long-term  debt	Outlook	Short-term debt	Short-term debt, Nordic
Standard & Poor’s	A-	Stable	A–2	K–1

 

Net debt/equity and equity/assets ratio

The net debt/equity ratio was 0.02 (0.43). The equity/assets ratio was 24.7% (20.8).

 

Equity and return on equity

Total equity as of December 31, 2016, amounted to SEK 17,738m (15,005), which corresponds to SEK 61.72 (52.21) per share. Return on equity was 29.4% (9.9).

¹⁾ Both ratios were significantly affected from 2012 and onwards by the changed ­pension accounting from the updated IAS 19 Employee Benefits.