Solid balance sheet facilitates profitable growth

Financial strength and stability increase opportunities for growth

• A solid balance sheet helps us to execute our consumer experience driven strategy through:
  • Organic growth investments:
    • Capex to drive product innovation.
    • Capex for digitalization and automation to improve competitiveness.
  • Selective acquisition strategy:
    • Bolt-on acquisitions.
    • Strengthen growth in emerging markets and aftermarket.
    • Strengthen premium offering and solutions that improve the consumer experience.
    • Contribute to increasing consumer interaction and business model transformation.
• Net financial debt position of SEK 6.5bn as of December 31, 2019.
• Green bond financing
  • First green bond issued in 2019 – SEK 1bn.
  • Focusing on industrial and R&D projects, which have significant potential to enable Electrolux to reduce its climate impact.
• High return on net assets
  • Focusing on growth with sustained profitability and a small, efficient capital base enables Electrolux to achieve a high long-term return on capital.
  • Strong track record on reducing working capital over the last ten-year period. The objective is to maintain working capital at these healthy levels going forward.

Solid financial position

^{Illustrative capital structure showing a net debt position of SEK 6.5bn if separation of Electrolux Professional took place Dec 31, 2019}

High return on net assets fueled by capital turnover

^{Financial information refers to the consumer business, exclusive of business area Professional Products.}

Shareholder-friendly capital allocation

• Dividend target of at least 30% of net income.
  • Historically, the Electrolux dividend rate has been considerably higher than 30%.
• We have a long history of successful spin-offs, e.g. Autoliv and Husqvarna, by distributing the shares to Electrolux shareholders and listing them on the stock exchange.
• Following shareholder approval to distribute Electrolux Professional, the plan is to list the company on Nasdaq Stockholm on March 23, 2020.
• Total return and long-term value creation.
  • Average annual total return over ten-years has been 7%. 
  • Strong focus on consumer experience innovation and efficiency continues to be a solid platform for long-term value creation.

Dividend

^{Note: 2019 dividend proposed by the Board}