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Electrolux Professional Interim / Quarterly Report 2020
2909_10-q_2020-05-06_40ec68a4-3ede-4312-b766-1ef8797de914.pdf
Interim / Quarterly Report
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Electrolux Professional – Interim report, Q1 2020
Interim report
First quarter, January–March 2020
> Net sales amounted to SEK 2,091m (2,302). Sales decreased by 9.2%. Organically sales decreased by 13.7%.
> EBITA amounted to SEK 221m (316), corresponding to a margin of 10.6% (13.7).
> Operating income amounted to SEK 205m (301), corresponding to a margin of 9.8% (13.1).
> Operating cash flow after investments amounted to SEK 16m (217).
> Income for the period amounted to SEK 159m (241), and earnings per share was SEK 0.55 (0.84).
> Net debt/EBITDA was 0.9x (0.8).
> On March 23, 2020 Electrolux Professional was listed on Nasdaq Stockholm.
Key ratios
| SEKm | First quarter | ||
|---|---|---|---|
| Jan–Mar 2020 | Jan–Mar 2019 | Change, % | |
| Net sales | 2,091 | 2,302 | -9.2 |
| EBITA | 221 | 316 | -30.0 |
| EBITA margin, % | 10.6 | 13.7 | |
| Operating income | 205 | 301 | -31.9 |
| Operating margin, % | 9.8 | 13.1 | |
| Income after financial items | 203 | 298 | -31.9 |
| Income for the period | 159 | 241 | -34.0 |
| Earnings per share, SEK¹ | 0.55 | 0.84 | |
| Operating cash flow after investments | 16 | 217 | |
| Operating working capital % of net sales | 18.2 | 16.6 |
1) Basic number of outstanding shares.
P. 1
Message from the CEO:
Stock-listing in a challenging time but with the right foundations to stand strong also after the crisis
Alberto Zanata, President and CEO
The listing of Electrolux Professional on March 23 occurred at an unprecedented time, with the global COVID-19 pandemic heavily affecting not just individuals, but communities and companies alike. Safety is our top priority during this time and several important measures have been taken to secure the health and safety of our employees, as well as that of our customers.
The coronavirus has already heavily affected the hospitality industry, such as hotels, restaurants and pubs, an area representing approximately 50% of our sales. Sales to institutions as well as sales in Laundry have, however, so far been less affected thanks to the installations in coin-operated and in institutional and multi-housing laundries. In total, sales for the quarter declined organically by 13.7%.
We have a strong balance sheet and access to credit lines which makes us resilient and well equipped to handle a longer period of downturn.
Consequently, several measures have been implemented to reduce cost and to apply stricter cash management. Actions have been put in place to secure the operational cash flow, with focus on accounts receivables and cash collection. All investments have been re-evaluated and product and purchasing plans have been adjusted.
EBITA for the period amounted to SEK 221m (316), representing a margin of 10.6% (13.7). The decline in EBITA is primarily impacted by lower volumes in Food & Beverage and higher cost for corporate functions related to operating as a stand-alone company. Savings and efficiency improvements contributed positively.
In January and February, sales and EBITA were only partly impacted by the coronavirus, driven by the development in China
and, to some extent, Italy. From March, the impact due to the coronavirus became more evident in most markets. Sales in March declined organically by approximately 25%.
Currently, all factories are operational, but with reduced production. Warehouses have increased stock to ensure quick delivery of parts and products, but also to handle potential supply chain disruptions.
The general market uncertainty is significant. Since the extent of the pandemic cannot be predicted, it is also not possible to make a forecast for the financial development.
We have a strong balance sheet and access to credit lines which makes us resilient and well equipped to handle a longer period of downturn.
The strategic direction presented in March remains valid. However, the short-term focus is on mitigating the sharp decline in demand. At the same time, it is important to emphasize that Laundry, the most profitable segment, so far has been less affected.
Many of us are currently living in what probably is the most challenging period of our lives, both professionally and personally. This said, once the crisis will end, companies with solid financials, committed employees and the right strategy will have an advantage. I am confident that we have the right foundations to stand strong, also after the crisis.
Alberto Zanata, President and CEO
Electrolux Professional - Interim report, Q1 2020
Financial overview
First quarter development
Net sales
Net sales for the first quarter amounted to SEK 2,091m (2,302), a decline by 9.2% compared to the same period last year. Organically sales decreased by 13.7%, acquisition contributed by 1.7% and currency contributed by 2.9%. The organic sales decline was primarily driven by lower volumes in Food and Beverage due to the coronavirus, but also less rollouts of products to food service chains in the U.S. Sales in Laundry declined only slightly. Overall, the sales decline was higher in the U.S and Asia-Pacific than in Europe.
| Changes in net sales, % | Jan-Mar 2020 | Jan-Mar 2019 |
|---|---|---|
| Organic growth | -13.7 | 9.4 |
| Acquisitions | 1.7 | 6.2 |
| Changes in exchange rates | 2.9 | 4.4 |
| Total | -9.2 | 20.1 |
Share of sales by segment, January-March 2020
Share of sales by region, January-March 2020
Operating income and EBITA
Operating income amounted to SEK 205m (301), corresponding to a margin of 9.8% (13.1). The decline in operating income is mainly due to lower volumes in Food & Beverage but also higher cost related to new corporate functions. The restructuring program announced in 2019 to compensate for the cost as a stand-alone company and short-term activities to cut cost contributed positively.
Operating income excluding amortization of intangible assets (EBITA) amounted to SEK 221m (316) corresponding to a margin of 10.6% (13.7).
Sales and EBITA margin
1) The second quarter 2019 includes items affecting comparability of SEK <90m and the third quarter includes items affecting comparability of SEK -122m.
Financial net
Net financial items amounted to SEK -2m (-3).
Income for the period
Income for the period amounted to SEK 159m (241), corresponding to SEK 0.55 (0.84) in earnings per share.
Income tax for the period amounted to SEK -44m (57). The effective tax rate was 21.7% (19.2).
Group common cost
Group common cost was SEK -28m (-5). The increase is driven by the new corporate functions needed as a stand-alone stock listed company.
Electrolux Professional - Interim report, Q1 2020
P. 3
Segment Food & Beverage
In the first quarter, sales for Food & Beverage was SEK 1,243m (1,456), a decline by 14.6% compared to the same period last year. Organically sales decreased by 20.4%, the acquisition of UNIC in April 2019 contributed by 2.7% and currency contributed by 3.1%. The decline in sales were primarily related to lower sales in southern Europe, China and the U.S related to the coronavirus, but in addition the U.S. also had less rollouts of products to food and beverage service chains.
Operating income excluding amortization of intangible assets (EBITA) amounted to SEK 99m (183). EBITA declined, mainly due to lower volumes. Operating income amounted to SEK 87m (173), corresponding to a margin of 7.0% (11.9).
| SEKm | First quarter | ||
|---|---|---|---|
| Jan-Mar 2020 | Jan-Mar 2019 | Change, % | |
| Net sales | 1,243 | 1,456 | -14.6 |
| Organic growth, % | -20.4 | 11.0 | |
| Acquisitions, % | 2.7 | 6.1 | |
| Changes in exchange rates, % | 3.1 | 5.0 | |
| EBITA | 99 | 183 | -46.0 |
| EBITA margin, % | 7.9 | 12.5 | |
| Operating income | 87 | 173 | -49.8 |
| Operating margin, % | 7.0 | 11.9 |
1) The second quarter includes items affecting comparability of SEK >31m and the third quarter includes items affecting comparability of SEK ~98m.
Electrolux Professional - Interim report, Q1 2020
Segment Laundry
In the first quarter, sales for Laundry was SEK 848m (846), an increase by 0.2%. However, organically sales decreased by 2.1% and currency contributed by 2.4%. Sales increased in Europe and declined somewhat in the U.S. In Asia-Pacific sales declined substantially due to the restrictions in Japan and South Korea which created a large reduction in the number of people attending the consumer operated laundries. This reduced the demand for washers and dryers.
Operating income excluding amortization of intangible assets (EBITA) amounted to SEK 150m (138). EBITA improved due to lower product and development cost as well as improved mix. Operating income amounted to SEK 146m (134), corresponding to a margin of 17.3% (15.8).
| SEKm | First quarter | ||
|---|---|---|---|
| Jan-Mar 2020 | Jan-Mar 2019 | Change, % | |
| Net sales | 848 | 846 | 0.2 |
| Organic growth, % | -2.1 | 6.7 | |
| Acquisitions, % | - | 6.3 | |
| Changes in exchange rates, % | 2.4 | 3.5 | |
| EBITA | 150 | 138 | 8.5 |
| EBITA margin, % | 17.7 | 16.4 | |
| Operating income | 146 | 134 | 9.0 |
| Operating margin, % | 17.3 | 15.8 |
Sales and EBITA margin
1) The second quarter includes items affecting comparability of SEK -59m and the third quarter includes items affecting comparability of SEK -24m.
Electrolux Professional - Interim report, Q1 2020
Electrolux Professional – Interim report, Q1 2020
Cash flow
Operating cash flow after investments amounted to SEK 16m (217) in the quarter. The decline is mainly due to lower operating income and high investments in the building of the new factory in Thailand. Increased inventories also had a negative effect
Operating cash flow after investments
| SEKm | First quarter | Full year | |
|---|---|---|---|
| Jan-Mar 2020 | Jan-Mar 2019 | 2019 | |
| Operating income | 205 | 301 | 992 |
| Depreciation | 57 | 47 | 222 |
| Amortization | 16 | 15 | 66 |
| Other non-cash items | 3 | 6 | 7 |
| Operating income adjusted for non-cash items | 281 | 368 | 1,287 |
| Change in inventories | -125 | -52 | 139 |
| Change in trade receivables | -11 | -39 | 43 |
| Change in accounts payable | 75 | 41 | -23 |
| Change in other operating assets, liabilities and provisions | -108 | -79 | -47 |
| Operating cash flow | 113 | 239 | 1,399 |
| Investments in tangible and intangible assets | -104 | -22 | -257 |
| Changes in other investments | 7 | 0 | -4 |
| Operating cash flow after investments | 16 | 217 | 1,138 |
Operating working capital
Average working capital as a percent of sales increased to 18.2% (16.6) due to receivables and inventory being higher. Inventory is higher in the acquired businesses and increased also due to phasing of new product introductions. In addition, lower sales in the quarter had a negative effect
Operating working capital
P. 6
Financial position
Net debt
As of March 31, 2020, Electrolux Professional had a financial net debt position (excluding lease liabilities and post-employment provisions) of SEK 638m compared to SEK 588m as of December 31, 2019.
Lease liabilities decreased somewhat to SEK 230m and net provisions for post-employments benefits increased to SEK 221m.
In total, net debt amounted to SEK 1,088m as of March 31, 2020, an increase by SEK 63m compared to SEK 1,025m per December 31, 2019.
Long-term borrowings amounted to SEK 601m and short-term borrowings amounted to SEK 679m. Total borrowings are only somewhat higher compared to December 31, 2019. During the first quarter, loans to Electrolux Group was repaid and new external credit facilities were put in place.
Liquid funds as of March 31, 2020, amounted to SEK 643m compared to SEK 656m as of December 31, 2019.
Credit facilities and loans
On February 21, 2020, Electrolux Professional AB entered in to a EUR 250m multicurrency revolving credit facilities agreement with its core banking-group with Skandinaviska Enskilda Banken AB (publ) as arranger and on March 6, 2020 a bilateral term loan was entered in to with AB Svensk Exportkredit. The revolving credit facilities has a tenor of five years (with extension options) and the term loan has a tenure of seven years.
Net debt
| SEKm | Mar 31, 2020 | Mar 31, 2019 | Dec 31, 2019 |
|---|---|---|---|
| Short-term loans | 666 | 9 | 4 |
| Trade receivables with recourse | - | 20 | - |
| Short-term loans, Electrolux Group | - | 97 | 990 |
| Short-term borrowings | 666 | 126 | 994 |
| Financial derivative liabilities | 11 | - | 4 |
| Accrued interest expenses and prepaid interest income | 2 | 1 | 8 |
| Other financial liabilities, Electrolux Group | - | 30 | 234 |
| Total short-term borrowings | 679 | 158 | 1,241 |
| Long-term loans | 601 | 25 | 3 |
| Long-term loans, Electrolux Group | - | 41 | - |
| Long-term borrowings | 601 | 66 | 3 |
| Total borrowings^{1} | 1,280 | 224 | 1,244 |
| Cash and cash equivalents | 627 | 176 | 651 |
| Financial derivative assets | 14 | - | 4 |
| Prepaid interest expenses and accrued interest income | 1 | 2 | 2 |
| Prepaid interest expenses and accrued interest income, Electrolux Group | - | 0 | - |
| Cashpool accounts & other short-term financial receivables, Electrolux Group | - | 799 | - |
| Liquid funds | 643 | 978 | 656 |
| Financial net debt | 638 | -754 | 588 |
| Lease liabilities | 230 | 158 | 243 |
| Net provisions for post-employment benefits | 221 | 204 | 195 |
| Net debt | 1,088 | -392 | 1,025 |
| Net debt/EBITDA ratio | 0.9 | -0.3 | 0.8 |
| EBITDA | 1,196 | 1,438 | 1,280 |
1) Whereof interest-bearing liabilities amounting to SEK 1,267m as of March 31, 2020, SEK 173m as of March 31, 2019 and SEK 997m as of December 2019.
Electrolux Professional - Interim report, Q1 2020
Electrolux Professional – Interim report, Q1 2020
Other disclosures
Separation and stock listing of Electrolux Professional
At an Extraordinary General Meeting in AB Electrolux held on February 21, 2020, it was resolved to distribute all shares in the wholly-owned subsidiary Electrolux Professional AB to the shareholders of Electrolux. Consequently, Electrolux Professional was on March 23, 2020 listed on Nasdaq Stockholm and is since then a stand-alone company.
Related party transactions
Buying and selling services and products between Electrolux Professional and AB Electrolux and its subsidiaries were regarded as related party transactions up until March 23, 2020, see table on page 15. Transactions with related parties were on market based terms.
Employees
The number of employees at the end of the quarter was 3,608 (3,558).
Events after the balance sheet date
After the end of the reporting period, no significant events have taken place that could affect the company's operations.
Parent Company
The Parent Company's activities include head office as well as production and sales in and from Sweden.
On February 18, 2020, the Annual General Meeting of Electrolux Professional AB resolved on a bonus issue. The purpose of the bonus issue was to increase the share capital as well as the number of shares to reflect the share capital structure of Electrolux ahead of the separation of Electrolux Professional from Electrolux.
Net sales for the Parent Company, Electrolux Professional AB, for the period from January 1 to March 31, 2020 amounted to SEK 651m (547) of which SEK 270m (226) referred to sales to Group Companies and SEK 381m (321) to external customers.
Income after financial items was SEK 106m (61). Income for the period amounted to SEK 83m (61).
Capital expenditure and intangible assets was SEK 6m (5). Liquid funds at the end of the period amounted to SEK 297m, as against SEK 204m at the start of the year.
Undistributed earnings in the Parent Company at the end of the period amounted to SEK 7,760m, as against SEK 7,681m at the start of the year.
The income statement and balance sheet for the Parent Company are presented on page 18.
Risk and uncertainty factors
Electrolux Professional is an international group with a wide geographic spread and is thus exposed to a number of business and financial risks. Risk management in Electrolux Professional aims to identify, control and reduce risks. The risk factors are described in the Prospectus ahead of the listing of the shares in Electrolux Professional and consist of operational risk, industry risks, legal risks and financial risks. Compared to the Prospectus, which was issued on March 11, 2020, and the prospectus supplement that was published on March 20, 2020 no new material risks have been identified.
Stockholm, May 6, 2020
Electrolux Professional AB (publ)
Alberto Zanata
President and CEO
This report has not been audited or reviewed by external auditors.
P. 8
Customer experiences delivered by OnE integrated solutions
Food: Newly launched total concept with Skyline's innovative product range.
High productivity and performance paired with hygiene and safety. Lean workflow and lower running costs by using OnE partner for multiple operations, even in smaller spaces.
1. PREPARATION
2. BLAST CHILL
SkyLine Chill - 100 kg Blast Chiller
3. RE-HEATING
SkyLine Premium - 20GN 1/1 Combi Oven
4. SERVING
More than 1,000 main dishes
in less than 8 hours
Laundry: Reinforcing leadership in cleaning of micro-fibers such as floor mops.
Best hygiene performance on the market. Helps effective control of the spread of bacteria and virus at low maintenance costs.
1. CLEAN
Using micro-fiber mops provides by far the best cleaning and hygiene.
2. WASH
Electrolux Professional Mop Washer gives cleaner and faster washes.
3. RE-USE
Even after 450 washes, the micro-fibers still remain highly effective.
Electrolux Professional - Interim report, Q1 2020
Financial reports
Consolidated statement of total comprehensive income
| First quarter | Full year | ||
|---|---|---|---|
| Jan-Mar 2020 | Jan-Mar 2019 | 2019 | |
| Net sales | 2,091 | 2,302 | 9,281 |
| Cost of goods sold | -1,322 | -1,441 | -6,040 |
| Gross operating income | 769 | 861 | 3,241 |
| Selling expenses | -388 | -424 | -1,699 |
| Administrative expenses | -179 | -133 | -582 |
| Other operating income/expenses | 2 | -3 | 32 |
| Operating income | 205 | 301 | 992 |
| Financial items, net | -2 | -3 | -15 |
| Income after financial items | 203 | 298 | 978 |
| Taxes | -44 | -57 | -314 |
| Income for the period | 159 | 241 | 663 |
| Items that will not be reclassified to income for the period: | |||
| Remeasurement of provisions for post-employment benefits | 2 | 18 | -33 |
| Income tax relating to items that will not be reclassified | -1 | -4 | 6 |
| 1 | 14 | -27 | |
| Items that may be reclassified subsequently to income for the period: | |||
| Exchange-rate differences on translation of foreign operations | 186 | 94 | 101 |
| 186 | 94 | 101 | |
| Other comprehensive income, net of tax | 187 | 108 | 74 |
| Total comprehensive income for the period | 346 | 349 | 737 |
| Income for the period attributable to: | |||
| Equity holders of the Parent Company | 159 | 241 | 663 |
| Total | 159 | 241 | 663 |
| Total comprehensive income for the period attributable to: | |||
| Equity holders of the Parent Company | 346 | 349 | 737 |
| Total | 346 | 349 | 737 |
| Earnings per share, SEK | |||
| Basic, SEK | 0.55 | 0.84 | 2.31 |
| Diluted, SEK | 0.55 | 0.84 | 2.31 |
| Average number of shares | |||
| Basic, million | 287.4 | 287.4 | 287.4 |
| Diluted, million | 287.4 | 287.4 | 287.4 |
Electrolux Professional - Interim report, Q1 2020
Consolidated balance sheet
| SEKm | 31 Mar, 2020 | 31 Mar, 2019 | 31 Dec, 2019* |
|---|---|---|---|
| Assets | |||
| Non-current assets | |||
| Property, plant and equipment, owned | 1,336 | 1,084 | 1,214 |
| Property, plant and equipment, right-of-use | 226 | 160 | 238 |
| Goodwill | 1,946 | 1,470 | 1,821 |
| Other intangible assets | 399 | 390 | 388 |
| Deferred tax assets | 369 | 259 | 350 |
| Pension plan assets | - | 3 | 13 |
| Other non-current assets | 28 | 21 | 34 |
| Total non-current assets | 4,303 | 3,386 | 4,057 |
| Current assets | |||
| Inventories | 1,457 | 1,378 | 1,265 |
| Trade receivables | 1,774 | 1,722 | 1,687 |
| Tax assets | 92 | 30 | 102 |
| Other current assets | 237 | 170 | 273 |
| Short-term financial assets | - | 799 | - |
| Cash and cash equivalents | 627 | 176 | 651 |
| Total current assets | 4,187 | 4,276 | 3,978 |
| Total assets | 8,490 | 7,662 | 8,035 |
| Equity and liabilities | |||
| Equity attributable to equity holders of the Parent Company | |||
| Share capital | 29 | 25 | 25 |
| Other paid-in capital | 5 | 5 | 5 |
| Other reserves | 451 | 259 | 266 |
| Retained earnings | 2,572 | 3,519 | 2,415 |
| Equity attributable to equity holders of the Parent Company | 3,057 | 3,808 | 2,711 |
| Total equity | 3,057 | 3,808 | 2,711 |
| Non-current liabilities | |||
| Long-term borrowings | 601 | 66 | 3 |
| Long-term lease liabilities | 159 | 107 | 172 |
| Deferred tax liabilities | 160 | 141 | 144 |
| Provisions for post-employment benefits | 221 | 206 | 208 |
| Other provisions | 506 | 364 | 494 |
| Total non-current liabilities | 1,647 | 885 | 1,021 |
| Current liabilities | |||
| Trade payables | 1,627 | 1,580 | 1,606 |
| Tax liabilities | 78 | 61 | 73 |
| Other liabilities | 1,144 | 1,023 | 1,361 |
| Short-term borrowings | 666 | 126 | 994 |
| Short-term lease liabilities | 71 | 51 | 72 |
| Other provisions | 200 | 128 | 198 |
| Total current liabilities | 3,786 | 2,969 | 4,303 |
| Total equity and liabilities | 8,490 | 7,662 | 8,035 |
*Year 2019 includes related party balances, see page 15.
Electrolux Professional - Interim report, Q1 2020
Change in consolidated equity
| First quarter | Full year | ||
|---|---|---|---|
| SEKm | Jan–Mar 2020 | Jan–Mar 2019 | 2019 |
| Opening balance | 2,711 | 3,527 | 3,527 |
| Total comprehensive income for the period | 346 | 349 | 737 |
| Dividend to equity holders of the Parent Company | – | – | –428 |
| Other transactions with equity holders of the Parent Company^{1} | –0 | –69 | –1,125 |
| Total transactions with equity holders | –0 | –69 | –1,553 |
| Closing balance | 3,057 | 3,808 | 2,711 |
1) Transactions related to transfer of assets and liabilities as part of the formation of the Electrolux Professional Group between Electrolux Group and Electrolux Professional Group have been classified as transactions with shareholders. During 2017, 2018 and 2019, asset and liabilities were transferred to Electrolux Professional without any consideration paid. During the latter half of 2019, a major legal restructuring was executed to form the legal Electrolux Professional group and a number of transactions took place where Electrolux Professional paid consideration for the asset and liabilities legally transferred, which, Electrolux Professional already had recognized in its combined financial statements.
Electrolux Professional – Interim report, Q1 2020
Consolidated cash flow statement
| SEKm | First quarter | Full year | |
|---|---|---|---|
| Jan-Mar 2020 | Jan-Mar 2019 | 2019 | |
| Operations | |||
| Operating income | 205 | 301 | 992 |
| Depreciation and amortization | 73 | 61 | 287 |
| Other non-cash items | 3 | 6 | 7 |
| Financial items paid, net¹ | -0 | -3 | -6 |
| Taxes paid | -18 | -22 | -275 |
| Cash flow from operations, excluding change in operating assets and liabilities | 263 | 344 | 1,006 |
| Change in operating assets and liabilities | |||
| Change in inventories | -125 | -52 | 139 |
| Change in trade receivables | -11 | -39 | 43 |
| Change in accounts payable | 75 | 41 | -23 |
| Change in other operating assets, liabilities and provisions | -108 | -79 | -47 |
| Cash flow from change in operating assets and liabilities | -169 | -130 | 112 |
| Cash flow from operations | 94 | 214 | 1,118 |
| Investments | |||
| Acquisition of operations | - | -35 | -441 |
| Capital expenditure in property, plant and equipment | -100 | -19 | -243 |
| Capital expenditure in product development | -1 | -3 | -9 |
| Capital expenditure in other intangibles | -3 | - | -5 |
| Other | 7 | 0 | -4 |
| Cash flow from investments | -97 | -57 | -702 |
| Cash flow from operations and investments | -2 | 158 | 417 |
| Financing | |||
| Change in short-term borrowings, net | 617 | 16 | -32 |
| New long-term borrowings | 600 | 1 | - |
| Amortization of long-term borrowings | -1 | -1 | -36 |
| Payment of lease liabilities | -23 | -21 | -83 |
| Dividend | - | - | -428 |
| Shareholders contribution | - | - | 5,702 |
| Change in financial liabilities, Electrolux Group | -1,224 | -183 | 1,672 |
| Cash flow from financing | -31 | -187 | 6,795 |
| Total cash flow | -33 | -29 | 7,211 |
| Cash and cash equivalents at beginning of period | 651 | 230 | 230 |
| Exchange-rate differences referring to cash and cash equivalents | 10 | 6 | 14 |
| Other cash flow from transactions with shareholders, Electrolux Group² | - | -30 | -6,804 |
| Cash and cash equivalents at end of period | 627 | 176 | 651 |
1) For the period January 1 to March 31: interest and similar items received SEK 2.6m (1.3), interest and similar items paid SEK -2.7m (-2.4) and other financial items received/paid SEK 1.2m (-0.3). Interest paid for lease liabilities SEK -1.6m (-1.3)
2) "Other cash flow from transactions with shareholders, Electrolux group" consists of effects on cash from cash flows presented in Electrolux Professional's combined financial statements belonging to legal entities remaining in the Electrolux Group following the separation. In 2019, it also includes cash paid by Electrolux Professional to the Electrolux Group, to acquire its group companies.
Electrolux Professional - Interim report, Q1 2020
Alternative performance measures key figures
| SEKm, if not otherwise stated | First quarter | Full year | |
|---|---|---|---|
| Jan-Mar 2020 | Jan-Mar 2019 | 2019 | |
| Net sales | 2,091 | 2,302 | 9,281 |
| Organic growth, % | -13.7 | 9.4 | -0.3 |
| EBITA | 221 | 316 | 1,058 |
| EBITA margin, % | 10.6 | 13.7 | 11.4 |
| EBITA margin excl. Items affecting comparability, %¹ | 10.6 | 13.7 | 11.7 |
| Operating income | 205 | 301 | 992 |
| Operating margin, % | 9.8 | 13.1 | 10.7 |
| Operating margin excl. Items affecting comparability, %¹ | 9.8 | 13.1 | 11.0 |
| Income after financial items | 203 | 298 | 978 |
| Income for the period | 159 | 241 | 663 |
| Capital expenditure | -104 | -22 | -257 |
| Operating cash flow after investments | 16 | 217 | 1,138 |
| Earnings per share, SEK² | 0.55 | 0.84 | 2.31 |
| Net debt | 1,088 | -392 | 1,025 |
| EBITDA³ | 1,196 | 1,438 | 1,280 |
| Net debt/EBITDA ratio | 0.9 | -0.3 | 0.8 |
| Operating working capital % of net sales | 18.2 | 16.6 | 17.7 |
| Average number of shares, million | 287.4 | 287.4 | 287.4 |
| Number of employees, end of period | 3,608 | 3,558 | 3,623 |
1) For information on items affecting comparability, see page 17.
2) Basic number of outstanding shares.
3) Rolling four quarters
For definitions, see page 22-23.
Electrolux Professional - Interim report, Q1 2020
Related party transactions, Electrolux Group
| SEKm | First quarter | Full year | |
|---|---|---|---|
| Jan-Mar 2020 | Jan-Mar 2019 | 2019 | |
| Income for the period | |||
| Purchase of goods | -15 | -13 | -50 |
| Interest income | - | 1 | 9 |
| Interest expense | -1 | -2 | -17 |
| Assets | |||
| Other current assets | |||
| Prepaid expenses and accrued income | - | 6 | - |
| Short-term financial assets | |||
| Cashpool account | - | 799 | - |
| Liabilities | |||
| Long-term borrowings | - | 41 | - |
| Trade payables | - | 71 | 121 |
| Other liabilities | |||
| Other financial liabilities | - | 30 | 234 |
| Other short-term operating liabilities | - | - | 4 |
| Accrued expenses and prepaid income | - | - | 23 |
| Derivatives | - | 2 | 1 |
| Short-term borrowings | |||
| Short-term loans | 97 | 990 | |
| Equity | |||
| Dividend to shareholders | - | - | -428 |
| Shareholders contributions received | - | - | 7,697 |
| Other transactions with shareholders | - | -69 | -8,822 |
First page
Message from the CEO
Financial overview
Financial reports
Definitions
Shareholders information
Electrolux Professional - Interim report, Q1 2020
Net sales, EBITA and operating income by segment
| SEKm | Q1 2020 | Full year 2019 | Q4, 2019 | Q3, 2019 | Q2, 2019 | Q1, 2019 |
|---|---|---|---|---|---|---|
| Food & Beverage | ||||||
| Net sales | 1,243 | 5,895 | 1,405 | 1,415 | 1,619 | 1,456 |
| EBITA | 99 | 568 | 82 | 58 | 245 | 183 |
| EBITA margin, % | 7.9 | 9.6 | 5.8 | 4.1 | 15.1 | 12.5 |
| Amortization | -12 | -45 | -10 | -13 | -12 | -10 |
| Operating income | 87 | 522 | 72 | 45 | 233 | 173 |
| Operating margin, % | 7.0 | 8.9 | 5.1 | 3.1 | 14.4 | 11.9 |
| Laundry | ||||||
| Net sales | 848 | 3,386 | 930 | 774 | 836 | 846 |
| EBITA | 150 | 507 | 120 | 76 | 173 | 138 |
| EBITA margin, % | 17.7 | 15.0 | 12.9 | 9.8 | 20.7 | 16.4 |
| Amortization | -4 | -20 | -6 | -4 | -5 | -4 |
| Operating income | 146 | 488 | 114 | 71 | 169 | 134 |
| Operating margin, % | 17.3 | 14.4 | 12.3 | 9.2 | 20.2 | 15.8 |
| Group common costs | -28 | -18 | -21 | 10 | -1 | -5 |
| Total Group | ||||||
| Net sales | 2,091 | 9,281 | 2,334 | 2,190 | 2,455 | 2,302 |
| EBITA | 221 | 1,058 | 181 | 144 | 418 | 316 |
| EBITA margin, % | 10.6 | 11.4 | 7.8 | 6.6 | 17.0 | 13.7 |
| Amortization | -16 | -66 | -16 | -18 | -17 | -15 |
| Operating income | 205 | 992 | 165 | 126 | 401 | 301 |
| Operating margin, % | 9.8 | 10.7 | 7.1 | 5.7 | 16.3 | 13.1 |
| Financial items, net | -2 | -15 | -7 | -4 | -1 | -3 |
| Income after financial items | 203 | 978 | 157 | 122 | 400 | 298 |
| Income for the period | 159 | 663 | 168 | 128 | 126 | 241 |
| Earnings per share, SEK¹ | 0.55 | 2.31 | 0.59 | 0.45 | 0.44 | 0.84 |
1) Basic number of outstanding shares.
Electrolux Professional - Interim report, Q1 2020
Items affecting comparability
| SEKm | Q1, 2020 | Full year 2019 | Q4, 2019 | Q3, 2019¹ | Q2, 2019² | Q1, 2019 |
|---|---|---|---|---|---|---|
| Food & Beverage | – | –67 | – | –98 | 31 | – |
| Laundry | – | 35 | – | –24 | 59 | – |
| Total Group | – | –32 | – | –122 | 90 | – |
1) The SEK -122m relates to restructuring charges for efficiency measures and are included in the functional lines cost of goods sold, marketing and administration.
2) The non-recurring item of SEK 90m relates to a pension plan settlement in Sweden and is included in the functional line administration.
| SEKm | Q1, 2020 | Full year 2019 | Q4, 2019 | Q3, 2019 | Q2, 2019 | Q1, 2019 |
|---|---|---|---|---|---|---|
| Total Group | ||||||
| Operating income excl. items affecting comparability | 205 | 1,024 | 165 | 248 | 311 | 301 |
| Operating margin excl.items affecting comparability, % | 9.8 | 11,0 | 7.1 | 11.3 | 12.7 | 13.1 |
| EBITA excl. items affecting comparability | 221 | 1,090 | 181 | 266 | 328 | 316 |
| EBITA margin excl. items affecting comparability, % | 10.6 | 11.7 | 7.8 | 12.1 | 13.3 | 13.7 |
Shares
| Number of shares | A-shares | B-shares | Shares total |
|---|---|---|---|
| Number of shares as of March 31, 2020 | 8,192,539 | 279,204,911 | 287,397,450 |
Exchange rates
| SEK | Mar 31, 2020 | Mar 31, 2019 | Dec 31, 2019 | |||
|---|---|---|---|---|---|---|
| Average | End of period | Average | End of period | Average | End of period | |
| CNY | 1.39 | 1.42 | 1.35 | 1.38 | 1.37 | 1.34 |
| CZK | 0.4147 | 0.4050 | 0.4035 | 0.4030 | 0.4113 | 0.4100 |
| DKK | 1.43 | 1.48 | 1.39 | 1.39 | 1.41 | 1.40 |
| EUR | 10.71 | 11.06 | 10.38 | 10.40 | 10.56 | 10.44 |
| GBP | 12.48 | 12.48 | 11.89 | 12.11 | 12.03 | 12.25 |
| JPY | 0.0892 | 0.0930 | 0.0827 | 0.0836 | 0.0864 | 0.0854 |
| NOK | 1.02 | 0.96 | 1.06 | 1.08 | 1.07 | 1.06 |
| RUB | 0.1440 | 0.1287 | 0.1374 | 0.1427 | 0.1455 | 0.1507 |
| THB | 0.3095 | 0.3079 | 0.2869 | 0.2918 | 0.3039 | 0.3119 |
| TRY | 1.57 | 1.53 | 1.70 | 1.64 | 1.67 | 1.57 |
| USD | 9.70 | 10.10 | 9.11 | 9.26 | 9.43 | 9.33 |
Electrolux Professional - Interim report, Q1 2020
Condensed Parent company income statement
| First quarter | Full year | ||
|---|---|---|---|
| SEKm | Jan-Mar 2020 | Jan-Mar 2019 | 2019 |
| Net sales | 651 | 547 | 2,361 |
| Cost of goods sold | -432 | -398 | -1,757 |
| Gross operating income | 219 | 149 | 604 |
| Selling expenses | -88 | -75 | -323 |
| Administrative expenses | -33 | -10 | -94 |
| Other operating income | 8 | 0 | 0 |
| Other operating expenses | 0 | -3 | -17 |
| Operating income | 106 | 61 | 170 |
| Financial income | 4 | 0 | 74 |
| Financial expenses | -4 | 0 | -9 |
| Financial items, net | 0 | 0 | 65 |
| Income after financial items | 106 | 61 | 235 |
| Appropriations | 0 | 0 | -252 |
| Income before taxes | 106 | 61 | -17 |
| Taxes | -23 | 0 | 16 |
| Income for the period | 83 | 61 | -1 |
Condensed Parent company balance sheet
| SEKm | Mar 31, 2020 | Mar 31, 2019 | Dec 31, 2019 |
|---|---|---|---|
| Assets | |||
| Non-current assets | 8,517 | 247 | 8,527 |
| Current assets | 1,888 | 562 | 1,543 |
| Total assets | 10,405 | 809 | 10,070 |
| Equity and liabilities | |||
| Restricted equity | 49 | 48 | 46 |
| Non-restricted equity | 7,760 | 44 | 7,681 |
| Total equity | 7,809 | 92 | 7,727 |
| Untaxed reserves | 109 | 78 | 109 |
| Provisions | 97 | 95 | 96 |
| Non-current liabilities | 600 | - | - |
| Current liabilities | 1,790 | 544 | 2,138 |
| Total equity and liabilities | 10,405 | 809 | 10,070 |
Electrolux Professional - Interim report, Q1 2020
Notes
Note 1 Accounting principles
Electrolux Professional applies International Financial Reporting Standards (IFRS) as adopted by the European Union. This report has been prepared in accordance with IAS 34, Interim Financial Reporting.
All financial information prior to 2020 is based on Combined financial statements. The basis of preparation of these Combined financial statements is described in the Prospectus.
Electrolux Professional interim reports contain a condensed set of financial statements. For the Group this chiefly means that the disclosures are limited compared to the combined financial statements presented in the prospectus. Enumerated amounts presented in tables and statements may not always agree with the calculated sum of the related line items due to rounding differences. The aim is for each line item to agree with its source and therefore there may be rounding differences affecting the total when adding up the presented line items.
The accounting principles adopted in the preparation of this interim report apply to all periods and comply with the accounting principles presented in the prospectus "Admission to trading of Shares in Electrolux Professional AB on Nasdaq Stockholm" in Note 1.
For the Parent Company financial statements in general are presented in condensed versions and with limited disclosures compared to the annual report. The interim financial statements of Electrolux Professional AB have been prepared in accordance with the Swedish Annual Accounts Act and the accounting standard RFR 2, accounting for legal entities. The most recent annual financial statements of Electrolux Professional AB have been prepared in accordance with the Annual Accounts Act and the standard from the Swedish Accounting Standards Board BFNAR 2012:1 Annual report and consolidated accounts (K3).
Reportable segments
Food & Beverage and Laundry represent the Group's reportable segments.
Note 2 Disaggregation of revenue
Sales of products are revenue recognized at a point in time, when control of the products has transferred. Revenue from services related to installation of products, repairs or maintenance service is recognized when control is transferred being over the time the service is provided. Sales of these services are not material in relation to Electrolux Professional total net sales.
Geography is considered to be an important attribute when disaggregating Electrolux Professional revenue. Therefore, the table below presents net sales per geographical region based on the location of the end customer.
| SEK | First quarter | |
|---|---|---|
| Jan-Mar 2020 | Jan-Mar 2019 | |
| Geographical region | ||
| Europe | 1,450 | 1,497 |
| Asia-Pacific, Middle East and Africa | 294 | 347 |
| Americas | 347 | 458 |
| Total | 2,091 | 2,302 |
Electrolux Professional - Interim report, Q1 2020
Note 3 Fair values and carrying amounts of financial assets and liabilities
| SEK | Mar 31, 2020 | Mar 31, 2019 | Dec 31, 2019 | |||
|---|---|---|---|---|---|---|
| Fair value | Carrying amount | Fair value | Carrying amount | Fair value | Carrying amount | |
| Per category | ||||||
| Financial assets at fair value through profit and loss | 1 | 1 | 1 | 1 | 0 | 0 |
| Financial assets measured at amortized cost | 2,402 | 2,402 | 2,698 | 2,698 | 2,339 | 2,339 |
| Derivatives, financial assets at fair value through profit and loss | 14 | 14 | 1 | 1 | 4 | 4 |
| Total financial assets | 2,416 | 2,416 | 2,699 | 2,699 | 2,344 | 2,344 |
| Financial liabilities measured at amortized cost | 2,894 | 2,894 | 1,803 | 1,803 | 2,837 | 2,837 |
| Derivatives, financial liabilities at fair value through profit and loss | 11 | 11 | 2 | 2 | 5 | 5 |
| Total financial liabilities | 2,905 | 2,905 | 1,804 | 1,804 | 2,843 | 2,843 |
The Group strives for arranging master-netting agreements (ISDA) with the counterparts for derivative transactions and has established such agreements with the majority of the counterparties, i.e., if a counterparty will default, assets and liabilities will be netted. Derivatives are presented gross in the balance sheet.
Fair value estimation
Valuation of financial instruments at fair value is done at the most accurate market prices available. Instruments which are quoted on the market, e.g., the major bond and interest-rate future markets, are all marked-to-market with the current price. The foreign-exchange spot rate is used to convert the value into SEK. For instruments where no reliable price is available on the market, cash-flows are discounted using the deposit/swap curve of the cash flow currency. If no proper cash-flow schedule is available, e.g., as in the case with forward-rate agreements, the underlying schedule is used for valuation purposes.
To the extent option instruments are used, the valuation is based on the Black & Scholes' formula.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities is estimated by discounting the future contractual cash flows at the current market-interest rate for similar financial instruments. The Group's financial assets and liabilities are measured according to the following hierarchy:
Level 1: Quoted prices in active markets for identical assets or liabilities. At March 31, 2020, the fair value for Level 1 financial assets was SEK 0m (0) and for financial liabilities SEK 0m (0).
Level 2: Inputs other than quoted prices included in Level 1 that are observable for assets or liabilities either directly or indirectly. At March 31, 2020, the fair value of Level 2 financial assets was SEK 14m (0) and financial liabilities SEK 11m (2).
Level 3: Inputs for the assets or liabilities that are not entirely based on observable market data. At March 31, 2020, the fair value of Level 3 financial assets was SEK 0m (1) and financial liabilities SEK 0m (0).
Note 4 Contingent liabilities
| SEKm | Mar 31, 2020 | Mar 31, 2019 | Dec 31, 2019 |
|---|---|---|---|
| Group | |||
| Guarantees and other commitments | 133 | 7 | 126 |
On January 21, 2020, a supplier filed a lawsuit in Italy against Electrolux Professional amounting to EUR 11.3m, approximately SEK 125m. The claimed amount covers alleged damages related to products and prices during the contractual period and compensation for costs resulting from allegedly wrongful termination of the supply agreement. Electrolux Professional rejects the claim but it cannot be ruled out that the final outcome could have a significant impact on Electrolux Professional's operating income and cash flow.
Electrolux Professional - Interim report, Q1 2020
Operations by segment yearly
| SEKm | 2019 | 2018 | 2017 |
|---|---|---|---|
| Food & Beverage | |||
| Net sales | 5,895 | 5,399 | 4,922 |
| EBITA | 568 | 629 | 607 |
| EBITA, % | 9.6 | 11.7 | 12.3 |
| Operating income | 522 | 599 | 572 |
| Margin, % | 8.9 | 11.1 | 11.6 |
| Laundry | |||
| Net sales | 3,386 | 3,267 | 2,801 |
| EBITA | 507 | 573 | 502 |
| EBITA, % | 15.0 | 17.6 | 17.9 |
| Operating income | 488 | 558 | 499 |
| Margin, % | 14.4 | 17.1 | 17.8 |
| Group common cost | |||
| Operating income | -18 | -14 | -11 |
| Total Group | |||
| Net sales | 9,281 | 8,666 | 7,723 |
| EBITA | 1,058 | 1,188 | 1,098 |
| EBITA, % | 11.4 | 13.7 | 14.2 |
| Operating income | 992 | 1,143 | 1,060 |
| Margin, % | 10.7 | 13.2 | 13.7 |
Three year overview
| SEKm, if not otherwise stated | 2019 | 2018 | 2017 |
|---|---|---|---|
| Net sales | 9,281 | 8,666 | 7,723 |
| Organic growth, % | -0.3 | 4.1 | 5.6 |
| EBITA | 1,058 | 1,188 | 1,098 |
| EBITA, % | 11.4 | 13.7 | 14.2 |
| Operating income | 992 | 1,143 | 1,060 |
| Operating margin, % | 10.7 | 13.2 | 13.7 |
| Income after financial items | 978 | 1,134 | 1,052 |
| Income for the period | 663 | 952 | 786 |
| Items affecting comparability | -32 | - | - |
| Capital expenditure | -257 | -169 | -167 |
| Operating cash flow after investments | 1,138 | 1,131 | 1,167 |
| Earnings per share, SEK¹ | 2.31 | 3.31 | 2.74 |
| Net debt | 1,025 | -226 | -481 |
| EBITDA | 1,280 | 1,363 | 1,253 |
| Net debt/EBITDA ratio | 0.8 | -0.2 | -0.4 |
| Average number of shares, million | 287,4 | 287,4 | 287,4 |
| Number of employees, end of period | 3,623 | 3,555 | 3,183 |
¹) Basic number of outstanding shares.
Electrolux Professional - Interim report, Q1 2020
Definitions
Definitions and reconciliation of alternative performance measures
Electrolux Professional presents certain measures that are not defined under IFRS (alternative performance measures – “APMs”). These are used by management to assess the financial and operational performance of the Group. Management believes that these APMs provide useful information regarding the Group’s financial and operating performance. Such measures may not be comparable to similar measures presented by other companies. Consequently, APMs have limitations as analytical tools and should not be considered in isolation or as a substitute for related financial measures prepared in accordance with IFRS. The APMs have been derived from the Electrolux Professional’s internal reporting and are not audited.
| APM | Definition | Reason for use |
|---|---|---|
| Organic growth % | Change in sales growth excluding net FX impact and acquisitions. | The Group’s presentation currency is SEK while the net sales are mainly in other currencies. Organic growth is dependent on fluctuations in SEK versus other currencies and in addition acquired business can have an impact on reported net sales. Organic growth adjusted for acquisitions and currency shows the underlying sales development without these parameters. |
| Acquisitions % | Change in net sales during the current period attributable to acquired operation in relation to prior period’s sales, following a period of 12 months commencing on the acquisition date. | See “Organic growth” above. |
| Operating income (EBIT) | Earnings before interest and tax. | Used as an indicator that shows the Group’s ability to make a profit, regardless of the method of financing (then determines the optimal use of debt versus equity). |
| Operating margin (EBIT margin) | Operating income as a percentage of net sales. | Operating margin shows the operating income in percentage of net sales. Operating margin is a key internal measure as the Group believes that it provides users of the financial statements with a better understanding of the Group’s financial performance both short and long term. |
| Items affecting comparability | Material profit or loss items such as capital gains and losses from divestments of product groups or major units, close down or significant down-sizing of major units or activities, restructuring activities, significant impairment, and other major non-recurring costs or income. | Summarizes events and transactions with significant effects, which are relevant for understanding the financial performance when comparing income for the current period with previous periods. |
| Operating margin excluding items affecting comparability | Operating income excluding items affecting comparability as a percentage of net sales. | Operating margin excluding items affecting comparability shows the operating income in percentage of net sales adjusted for items affecting comparability. This is a key internal measure, as the Group believes that it provides users of the financial statements with a better understanding of the Group’s financial performance both short and long term. |
| Capital expenditure | Investments in property, plant and equipment, product development and other intangible assets. | Used to ensure that cash spending is in line with Group’s overall strategy for the use of cash. |
Electrolux Professional – Interim report, Q1 2020
| APM | Definition | Reason for use |
|---|---|---|
| EBITA | Operating income less amortization and write-down related to intangibles assets (excluding right of use assets). | EBITA gives an indication of the operating income less amortization and write-down related to intangibles assets (excluding right of use assets) and is mainly used to follow up operating income without the distortion of amortization of surplus values related to acquisitions. |
| EBITA margin | EBITA expressed as a percentage of net sales. | Used to evaluate business performance in relation to net sales in order to measure the efficiency of the Company. |
| EBITDA | EBITA less depreciation of tangible assets (including right of use assets). | EBITDA is an indicator for business' cash generating capacity in relation to sales. |
| EBITA margin excluding items affecting comparability | EBITA excluding items affecting comparability, expressed as a percentage of net sales. | Items affecting comparability vary between years and periods and in order to analyse trends, items affecting comparability are excluded from EBITA margin. |
| Operating cash flow after investments | Cash flow from operations and investments adjusted for financial items paid, net, taxes paid and acquisitions/divestments of operations. | Used to monetarize the cash from core operation. |
| Net debt | Short-term borrowings (short-term loans and trade receivables with recourse), accrued interest expenses and prepaid interest income and long-term borrowings, lease liabilities, net provisions for post-employment benefits, less liquid funds (cash and cash equivalents, prepaid interest expenses and accrued interest income and cashpool accounts Electrolux Group). | Net debt describes the Group's total debt financing and is monitored by management. |
| Net debt/EBITDA | Net debt in relation to EBITDA (Net debt is based on the end of period balance and EBITDA is calculated based on last four rolling quarters). | A measurement of financial risk, showing net debt in relation to cash generation. |
| Operating working capital, % of net sales | Sum of currency adjusted last twelve months' average of inventories, non-related party trade receivables and trade payables (Operating working capital) as percentage of currency adjusted last twelve months' average net sales. All months of the period are currency adjusted by applying the end of period average currency rate. | Used to evaluate how efficient the Group is generating cash in relation to net sales. |
Electrolux Professional – Interim report, Q1 2020
Shareholders information
President and CEO Alberto Zanata's comments on the first quarter results 2020
Today's press release is available on the Electrolux Professional website www.electroluxprofessional.com/corporate
Telephone conference 09.00 CET
A telephone conference is held at 09.00 today, May 6. Alberto Zanata, President and CEO and Fabio Zarpellon, CFO will comment on the report.
Details for participation by telephone are as follows:
Participants in Sweden: +46 8 505 583 68
Participants in UK/Europe: +44 3333 009 266
Participants in US: +1 833 2498 406
Slide presentations for download:
www.electroluxprofessional.com/corporate
Link to webcast:
https://electroluxprofessional.creo.se/200506
For further information, please contact:
Jacob Broberg, Senior Vice President Investor Relations and Communications + 46 70 190 00 33
Financial calendar
| Financial calendar | Date |
|---|---|
| Interim report Q1 2020 | May 6, 2020 |
| Interim report Q2 2020 | July 24, 2020 |
| Interim report Q3 2020 | October 30, 2020 |
| Interim report Q4 2020 | February 3 2021 |
This information is information that Electrolux Professional AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person detailed in the column to the left, at 8:00 a.m. CET on May 6, 2020.
Mission
Making Electrolux Professional's customers' work-life easier, more profitable – and truly sustainable every day.
Strategy
Electrolux Professional's strategy focuses on four pillars, built on a foundation of operational excellence to improve sales productivity and cost efficiency within the supply chain.
GROW the business by developing sustainable, innovative low-running cost solutions: Set the pace of industry innovation in sustainability and energy efficiency, complemented with a connected and digital platform meeting customers' needs.
EXPAND in food service chains, especially in North America, grow in beverage and expand in emerging markets: Increase the global footprint and market position in selected industry verticals organically and through selective M&A as a further accelerator.
BOOST Customer Care (aftermarket sales) by further developing the global service network and competence as a full-service provider while increasing sales of accessories and consumables to enhance product performance and ownership experience.
LEVERAGE the OnE approach: Strengthen the position as a full-solution provider within food, beverage and laundry to cater for all customers' needs under one global brand and make customers' lives easier in a world of connected appliances.
Financial targets
Organic sales growth
Organic annual growth of more than 4 percent over time, complemented by value accretive acquisitions.
EBITA margin
EBITA margin of 15 percent
Operating
working capital
Operating working capital below 15 percent of net sales.
Net debt/EBITDA
Leverage ratio below 2.5x Net debt/EBITDA. Higher levels may be temporarily acceptable in case of acquisitions, provided a clear path to deleveraging.
Dividend policy
30% of net income
Electrolux Professional - Interim report, Q1 2020
About Electrolux Professional
Electrolux Professional is one of the leading global providers of food service, beverage and laundry for professional users.
Our innovative products and worldwide service network make our customers' work-life easier, more profitable and truly sustainable every day.
Our solutions and products are manufactured in 12 plants in seven countries and sold in over 110 countries. In 2019, Electrolux Professional had global sales of SEK 9,3bn and approximately 3,600 employees.
For more information, visit www.electroluxprofessional.com/corporate
This report contains 'forward-looking' statements that reflect the company's current expectations. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations prove to have been correct as they are subject to risks and uncertainties that could cause actual results to differ materially due to a variety of factors. These factors include, but are not limited to, changes in consumer demand, changes in economic, market and competitive conditions, currency fluctuations, developments in product liability litigation, changes in the regulatory environment and other government actions.
Forward-looking statements speak only as of the date they were made, and, other than as required by applicable law, the company undertakes no obligation to update any of them in light of new information or future events.
Electrolux
PROFESSIONAL
Electrolux Professional AB (publ), 556003-0354
Postal and visiting address: S:t Göransgatan 143,
SE-112 17 Stockholm
Telephone: +46 8 41056450
Website: www.electroluxprofessional.com/corporate