Electrolux - Keith McLoughlins speech at the AGM 2011
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Annual General Meeting 2011 Keith McLoughlin President and CEO March 31, 2011
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Electrolux - Keith McLoughlins speech at the AGM 2011
Transcript of Electrolux - Keith McLoughlins speech at the AGM 2011
Annual General Meeting 2011Keith McLoughlinPresident and CEOMarch 31, 2011
EBIT Target %
3
Capital TurnoverTarget
4
RONA Target %
5
Summary of 2010
Record year– Earnings & Returns
– Productivity
– Product Mix Impact
– Safety & Quality
All business areas outperformed previousyear’s results
Solid cash flow generated by operating incomegrowth and balance sheet productivity
6
20
15
10
5
0
A Look Back– Despite headwinds, we have improved
our profitability
EBIT %
Rawmaterials
Improve-ments
2001 2010Othercost increases
4.2
6.1
+ –
–
*) Excluding items affecting comparability.
Approx. SEK 11bn in raw-materialcost headwind since 2002
Approx.16% improvements
7
Phases in Electroluxdevelopment
Acquisitions & Growth
Up until 1990’s
Consolidation
Up until early 2000’s
Globalization
Transformation
2000’s
Growth
Onwards
Today
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Global Appliance Industry
A very large market: >$100bn– Large installed base
That is growing– Population growth– GDP per capita
Not overly capital intensive– Asset turnover >3
Competitive landscapechangingSignificant over capacityManufacturers “in-the-middle”Heavily promoted/discountedRising raw-material prices
1. The winners can generate significant free cash flows to bere-invested and/or returned to the shareholders
2. Not much left for the non-winners
9
Our Point-of-View
Best Appliance Company in the world:
10
How to do it?
Profitablegrowth
ProductivityInnovation– Product– Brand– Design
Growth Target %
12
First margin expansion then profitable growth
Ope
ratin
g m
argi
n %
Growth %0 1 2 3 4
8
7
6
5
4
3
2
1
Maximizeshareholdervalue
13
How we accelerate growth
Growth in emerging markets
Develop adjacent product opportunities
Value share growth in mature markets
Selective acquisitions in strategically important categories and markets
14
Value share growth
“Best-in-Class” Products Consumer Insight
Design
Marketi
ng
R&D
Phase-out
Product Creation Process
Intent Commercial Launch Process
Strategicmarket plan
Consumeropportunities
Primarydevelopment
Conceptdevelopment
Productdevelopment
Commerciallaunch preparation
Launchexecution
Rangemanagement
19
21
22
Growth in emerging markets
23
Develop adjacent productopportunities
24
Sustainable productsget a boost
26
How to do it?
Profitablegrowth
ProductivityInnovation– Product– Brand– Design
Innovation– Product– Brand– Design
Productivity Profitablegrowth
27
The final phase of ourrestructuring program
28
Utilizing global strength and customer focus
Sharp customer focusShared global strength Premium
Mass
Differentiation
Low cost
Benefits of scale in:ManufacturingR&DPurchasing Common components/modulesCommon processes and shared services
29
We need the right people to continue to develop Electrolux
30
Foundation Ethics & IntegrityRespect & Diversity Safety & Sustainability
Our values
32
Our Point-of-View
Best Appliance Company in the world:
33
Shareholder value
Electrolux B 20%
SIX RX index 16%
100
150
200
250
300
350
400
450
2003 2004 2005 2006 2007 2008 2009 2010
0
50
Total return to shareholders
34
35
Factors affecting forward-looking statements
Factors affecting forward-looking statementsThis presentation contains “forward-looking” statements within the meaning of the US Private Securities Litigation Reform Act of 1995. Such statements include, among others, the financial goals and targets of Electrolux for future periods and future business and financial plans. These statements are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially due to a variety of factors. These factors include, but may not be limited to the following: consumer demand and market conditions in the geographical areas and industries in which Electrolux operates, effects of currency fluctuations, competitive pressures to reduce prices, significant loss of business from major retailers, the success in developing new products and marketing initiatives, developments in product liability litigation, progress in achieving operational and capital efficiency goals, the success in identifying growth opportunities and acquisition candidates and the integration of these opportunities with existing businesses, progress in achieving structural and supply-chain reorganization goals.
