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Electrolux Professional Interim / Quarterly Report 2021
2909_ir_2021-07-22_f0353066-ee50-4390-a88f-3525752b99fb.pdf
Interim / Quarterly Report
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Electrolux Professional – Interim Report, Q2 2021
Interim report
Second quarter, April–June 2021
> Net sales amounted to SEK 1,958m (1,489). Sales increased by 31.5%. Currency contributed negatively by 7%. Organically sales increased by 38.4%. Last year the quarter was more impacted by the pandemic than this year.
> EBITA amounted to SEK 197m (-4), corresponding to a margin of 10.1% (-0.2).
> Operating income amounted to SEK 181m (-18), corresponding to a margin of 9.2% (-1.2).
> Operating cash flow after investments amounted to SEK 223m (31).
> Income for the period amounted to SEK 168m (-28), and earnings per share was SEK 0.58 (-0.10).
Key ratios
| SEKm | Second quarter | Six months | ||||
|---|---|---|---|---|---|---|
| Apr–Jun 2021 | Apr–Jun 2020 | Change, % | Jan–Jun 2021 | Jan–Jun 2020 | Change, % | |
| Net sales | 1,958 | 1,489 | 31.5 | 3,619 | 3,580 | 1.1 |
| EBITA* | 197 | -4 | 300 | 217 | 38.1 | |
| EBITA margin, %* | 10.1 | -0.2 | 8.3 | 6.1 | ||
| Operating income* | 181 | -18 | 268 | 187 | 43.4 | |
| Operating margin, %* | 9.2 | -1.2 | 7.4 | 5.2 | ||
| Income after financial items | 176 | -26 | 770.4 | 259 | 177 | 46.2 |
| Income for the period | 168 | -28 | 700.0 | 223 | 131 | 70.3 |
| Earnings per share, SEK† | 0.58 | -0.10 | 0.78 | 0.46 | ||
| Operating cash flow after investments* | 223 | 31 | 246 | 47 | ||
| Operating working capital % of net sales* | 17.4 | 19.9 |
*) Alternative performance measures used in this report are explained on pages 25–26.
† Basic number of outstanding shares.
First page
Message from the CEO
Financial overview
Financial reports
Definitions
Shareholders information
Message from the CEO:
Strong sales recovery
Alberto Zanata, President and CEO
The market recovery that started towards the end of the first quarter has continued and broadened geographically throughout the second quarter. The recovery was particularly strong in Europe and the US.
Sales in the quarter increased organically by 38.4% (-39.9) compared to last year driven by increased demand, especially in southern Europe. Despite the strong sales recovery year-over year, the level was still approximately 15% below 2019, however, the difference diminishing towards the end of the quarter.
EBITA for the second quarter was SEK 197m (-4) with a corresponding margin of 10.1% (-0.2). The result improvement was primarily driven by the sales volume and benefits from the restructuring plan announced in September 2020. Operating costs have also increased in order to meet the increase in demand. Operating cash flow after investments amounted to SEK 223m (31).
The Beverage and Food Preparation businesses, which constitute smaller parts of the larger Food and Beverage segment, are often operating with different dynamic and in other customer segments and channels than our Food and Laundry businesses. In order to increase focus and drive this part of our business, it will as of October 1, be managed as a separate division within the Food and Beverage segment.
As more and more people are vaccinated and restrictions are lifted, we can see that people start to socialize again which supports the comeback of the hospitality industry. This gives reason for optimism. Whereas we cannot ignore the risk for new pandemic setbacks, we remain confident given that we have demonstrated that our company is strong and able to navigate also in turbulent times.
The Market recovery that started towards the end of the first quarter has continued and broadened geographically throughout the second quarter.
Sales of Food & Beverage demonstrated a strong sales recovery with an organic growth of 53.9%, reporting an EBITA-margin of 9.1% (-7.7). The growth was particularly strong in southern Europe, the US and China while South East Asia was burdened by pandemic restrictions. Sales of Laundry grew by 19.1% (-21.9) driven by all regions, with the US having the highest growth rate. The EBITA-margin landed at 15.7% (13.5).
Our new state-of-the-art factory in Rayong, Thailand, is fully operational since June producing both Laundry and Beverage products. It offers higher efficiency, a sustainable approach and provides the ability to further scale-up for future expansion.
We have managed to handle the global pressure on component and container availability well and with limited customer impact. However, this area currently demands a lot of attention and the pressure is expected to continue during the fall. To compensate for the raw material price pressure, we have executed price increases across all product segments effective from July 1.
Alberto Zanata, President and CEO
Electrolux Professional - Interim Report, Q2 2021
Financial overview
Second quarter development
Net sales
Net sales for the second quarter amounted to SEK 1,958m (1,489), an increase by 31.5% compared to the same period last year. Organically, sales increased by 38.4% while currency had a negative impact of 7.0%.
The sales increase was driven by a strong comeback of the hospitality industry and pent-up demand as pandemic restrictions have been eased. Sales of Food & Beverage increased organically by 53.9%. Sales of Laundry increased organically by 19.1%. Organically, sales in Europe increased approximately 40%, in Americas approximately 75% and in Asia-Pacific, Middle East and Africa approximately 10%.
| Changes in net sales, % | Apr-Jun 2021 | Apr-Jun 2020 |
|---|---|---|
| Organic growth* | 38.4 | -39.9 |
| Acquisitions* | - | 0.8 |
| Changes in exchange rates | -7.0 | -0.3 |
| Total | 31.5 | -39.3 |
*) Alternative performance measures used in this report are explained on pages 25-26.
Share of sales by segment, April-June 2021
Share of sales by region, April-June 2021
Operating income and EBITA
Operating income excluding amortization of intangible assets (EBITA) amounted to SEK 197m (-4) corresponding to a margin of 10.1% (-0.2). Operating income amounted to SEK 181m (-18), corresponding to a margin of 9.2% (-1.2). The improved operating income is mainly due to higher sales volumes.
Government support of SEK 10m (52) together with benefits from the 2020 restructuring program of SEK 35m contributed to EBITA.
Sales and EBITA margin
1) The third quarter 2020 includes items affecting comparability of SEK -77m.
Financial net
Net financial items amounted to SEK -5m (-8).
Income for the period
Income for the period amounted to SEK 168m (-28), corresponding to SEK 0.58 (-0.10) in earnings per share. Income tax for the period amounted to SEK -8m (-2). The effective tax rate in 2021 is positively affected by revaluation of fixed assets in Italy.
Group common cost
Group common cost was SEK -30m (-27).
Electrolux Professional - Interim Report, Q2 2021
P. 3
Development during the year, January-June 2021
Net sales
Net sales for January-June amounted to SEK 3,619m (3,580), an increase by 1.1% compared to the same period last year. Organically, sales increased by 7.2% and currency contributed negatively by 6.1%.
The sales increase was driven by an increased sales demand as pandemic restrictions have been eased. Sales of Food & Beverage increased organically by 9.4%. Sales of Laundry increased organically by 4.3%. Sales in Europe increased by approximately 8%, in Americas by 4% and in Asia-Pacific, Middle East and Africa by 5%.
| Changes in net sales, % | Jan-Jun 2021 | Jan-Jun 2020 |
|---|---|---|
| Organic growth* | 7.2 | -27.1 |
| Acquisitions* | - | 1.3 |
| Changes in exchange rates | -6.1 | 1.1 |
| Total | 1.1 | -24.7 |
*) Alternative performance measures used in this report are explained on pages 25-26.
Share of sales by segment, January-June 2021
Share of sales by region, January-June 2021
Operating income and EBITA
Operating income excluding amortization of intangible assets (EBITA) amounted to SEK 300m (217) corresponding to a margin of 8.3% (6.1). Operating income amounted to SEK 268m (187), corresponding to a margin of 7.4% (5.2). The improved operating income is mainly due to higher sales volumes.
Government support of SEK 30m (56) together with benefits from the 2020 restructuring program of SEK 65m contributed to EBITA. Currency burdened the result with approximately SEK 20m. EBITA also includes relocation cost of SEK 12m related to the new factory in Thailand.
Financial net
Net financial items amounted to SEK -9m (-10).
Income for the period
Income for the period amounted to SEK 223m (131), corresponding to SEK 0.78 (0.46) in earnings per share. Income tax for the period amounted to SEK -35m (-46). The effective tax rate is positively affected by revaluation of fixed assets in Italy in the second quarter 2021.
Group common cost
Group common cost was SEK -58m (-55).
Electrolux Professional - Interim Report, Q2 2021
Segment Food & Beverage
In the second quarter, sales for Food & Beverage were SEK 1,210m (838), an increase of 44.3% compared to the same period last year. Organically sales increased by 53.9% and currency had a negative effect of 9.5%.
Sales increased by approximately 58% in Europe, by 79% in Americas, and by 18% in Asia-Pacific, Middle East and Africa. Sales were particularly strong in southern Europe, the US and China.
Operating income excluding amortization of intangible assets (EBITA) amounted to SEK 110m (-64), corresponding to a margin of 9.1% (-7.7). EBITA improved due to higher volumes. Operating income amounted to SEK 98m (-75), corresponding to a margin of 8.1% (-9.0).
Sales and EBITA margin
1) The third quarter 2020 includes items affecting comparability of SEK -55m.
| SEKm | Second quarter | Six months | Full year | ||||
|---|---|---|---|---|---|---|---|
| Apr-Jun 2021 | Apr-Jun 2020 | Change, % | Jan-Jun 2021 | Jan-Jun 2020 | Change, % | 2020 | |
| Net sales | 1,210 | 838 | 44.3 | 2,115 | 2,081 | 1.6 | 4,198 |
| Organic growth, % | 53.9 | -49.2 | 9.4 | -35.4 | -28.1 | ||
| Acquisitions, % | - | 1.3 | - | 2.0 | 0.5 | ||
| Changes in exchange rates, % | -9.5 | -0.3 | -7.8 | 1.2 | -1.2 | ||
| EBITA | 110 | -64 | 270.0 | 130 | 34 | 282.0 | 87 |
| EBITA margin, % | 9.1 | -7.7 | 6.2 | 1.6 | 2.1 | ||
| Operating income | 98 | -75 | 230.5 | 107 | 12 | 826.2 | 35 |
| Operating margin, % | 8.1 | -9.0 | 5.1 | 0.6 | 0.8 |
Electrolux Professional - Interim Report, Q2 2021
Segment Laundry
In the second quarter, sales for Laundry were SEK 748m (651), an increase of 14.9% compared to the same period last year. Organically sales increased by 19.1% and currency had a negative effect of 4.2%.
Sales increased by approximately 18% in Europe, by 74% in Americas and by 3% in Asia-Pacific, Middle East and Africa. Sales were particularly strong in southern Europe and the US.
Operating income excluding amortization of intangible assets (EBITA) amounted to SEK 117m (88), corresponding to a margin of 15.7% (13.5). Operating income amounted to SEK 113m (84), corresponding to a margin of 15.1% (13.1).
Sales and EBITA margin
1) The third quarter 2020 includes items affecting comparability of SEK -22m.
| SEKm | Second quarter | Six months | Full year | ||||
|---|---|---|---|---|---|---|---|
| Apr-Jun 2021 | Apr-Jun 2020 | Change, % | Jan-Jun 2021 | Jan-Jun 2020 | Change, % | 2020 | |
| Net sales | 748 | 651 | 14.9 | 1,504 | 1,499 | 0.3 | 3,065 |
| Organic growth, % | 19.1 | -21.9 | 4.3 | -11.9 | -8.7 | ||
| Changes in exchange rates, % | -4.2 | -0.3 | -4.0 | 1.0 | -0.8 | ||
| EBITA | 117 | 88 | 33.0 | 228 | 238 | -4.3 | 467 |
| EBITA margin, % | 15.7 | 13.5 | 15.2 | 15.9 | 15.2 | ||
| Operating income | 113 | 84 | 33.7 | 220 | 231 | -4.8 | 452 |
| Operating margin, % | 15.1 | 13.0 | 14.6 | 15.4 | 14.7 |
Electrolux Professional - Interim Report, Q2 2021
Net sales, EBITA and operating income by segment
| SEKm | Second quarter | Six months | Full year | ||
|---|---|---|---|---|---|
| Apr-Jun 2021 | Apr-Jun 2020 | Jan-Jun 2021 | Jan-Jun 2020 | 2020 | |
| Food & Beverage | |||||
| Net sales | 1,210 | 838 | 2,115 | 2,081 | 4,198 |
| EBITA | 110 | -64 | 130 | 34 | 87 |
| Amortization | -12 | -11 | -23 | -23 | -53 |
| Operating income | 98 | -75 | 107 | 12 | 35 |
| Laundry | |||||
| Net sales | 748 | 651 | 1,504 | 1,499 | 3,065 |
| EBITA | 117 | 88 | 228 | 238 | 467 |
| Amortization | -4 | -4 | -9 | -8 | -16 |
| Operating income | 113 | 84 | 220 | 231 | 452 |
| Group common costs | |||||
| EBITA | -30 | -27 | -58 | -55 | -99 |
| Amortization | -0 | -0 | -0 | -0 | -1 |
| Operating income | -30 | -27 | -58 | -55 | -100 |
| Total Group | |||||
| Net sales | 1,958 | 1,489 | 3,619 | 3,580 | 7,263 |
| EBITA | 197 | -4 | 300 | 217 | 456 |
| Amortization | -16 | -15 | -32 | -31 | -69 |
| Operating income | 181 | -18 | 268 | 187 | 387 |
| Financial items, net | -5 | -8 | -9 | -10 | -24 |
| Income after financial items | 176 | -26 | 259 | 177 | 363 |
| Taxes | -8 | -2 | -35 | -46 | -85 |
| Income for the period | 168 | -28 | 223 | 131 | 278 |
First page
Message from the CEO
Financial overview
Financial reports
Definitions
Shareholders information
Electrolux Professional - Interim Report, Q2 2021
Cash flow
Operating cash flow after investments amounted to SEK 223m (31) in the quarter. The improved cash flow is mainly due to improved EBITA.
Operating cash flow after investments
| SEKm | Second quarter | Six months | Full year | ||
|---|---|---|---|---|---|
| Apr-Jun 2021 | Apr-Jun 2020 | Jan-Jun 2021 | Jan-Jun 2020 | 2020 | |
| Operating income | 181 | -18 | 268 | 187 | 387 |
| Depreciation | 54 | 60 | 108 | 118 | 228 |
| Amortization | 16 | 15 | 32 | 31 | 69 |
| Other non-cash items | 5 | 4 | 9 | 7 | 91 |
| Operating income adjusted for non-cash items | 256 | 61 | 417 | 342 | 775 |
| Change in inventories | -27 | -19 | -70 | -144 | 113 |
| Change in trade receivables | -172 | 373 | -175 | 363 | 362 |
| Change in accounts payable | 93 | -325 | 47 | -250 | -140 |
| Change in other operating assets, liabilities and provisions | 95 | -16 | 82 | -124 | -293 |
| Operating cash flow | 244 | 75 | 302 | 187 | 816 |
| Investments in tangible and intangible assets | -20 | -43 | -53 | -147 | -273 |
| Changes in other investments | -2 | -1 | -3 | 7 | 26 |
| Operating cash flow after investments | 223 | 31 | 246 | 47 | 570 |
Operating working capital
Operating working capital as percent of annualized net sales improved to 17.4% in the second quarter compared to 19.4% in the first quarter of 2021 and 19.9% in the fourth quarter of 2020. The improvement is mainly due to improvements in inventory and the reduction of receivables in relation to net sales.
Operating working capital of annualized net sales, %
Electrolux Professional - Interim Report, Q2 2021
Financial position
Net debt
As of June 30, 2021, Electrolux Professional had a financial net debt position (excluding lease liabilities and post-employment provisions) of SEK 109m compared to SEK 202m as of December 31, 2020. Lease liabilities amounted to SEK 247m and net provisions for post-employments benefits decreased to SEK 50m.
In total, net debt amounted to SEK 407m as of June 30, 2021, compared to SEK 549m as of December 31, 2020.
Long-term borrowings amounted to SEK 600m and short-term borrowings amounted to SEK 262m. Total borrowings amounted to SEK 862m compared to SEK 1,012m as of December 31, 2020.
Liquid funds as of June 30, 2021, amounted to SEK 752m compared to SEK 810m as of December 31, 2020.
Credit facilities and loans
Electrolux Professional AB has one term loan of SEK 600m with a tenure of seven years from 2020 and a revolving credit facility of EUR 200m with a tenure until 2026. As of June, 30, 2021, EUR 25m of the revolving credit facility was utilized.
Net debt
| SEKm | Jun 30, 2021 | Jun 30, 2020 | Dec 31, 2020 |
|---|---|---|---|
| Short-term loans | 253 | 872 | 403 |
| Short-term borrowings | 253 | 872 | 403 |
| Financial derivative liabilities | 6 | 9 | 6 |
| Accrued interest expenses and prepaid interest income | 2 | 3 | 2 |
| Total short-term borrowings | 262 | 884 | 412 |
| Long-term loans | 600 | 601 | 601 |
| Long-term borrowings | 600 | 601 | 601 |
| Total borrowings^{1} | 862 | 1,485 | 1,012 |
| Cash and cash equivalents | 743 | 848 | 797 |
| Financial derivative assets | 9 | 8 | 12 |
| Prepaid interest expenses and accrued interest income | 0 | 1 | 1 |
| Liquid funds | 752 | 857 | 810 |
| Financial net debt | 109 | 628 | 202 |
| Lease liabilities | 247 | 227 | 216 |
| Net provisions for post-employment benefits | 50 | 175 | 131 |
| Net debt^{*} | 407 | 1,030 | 549 |
| Net debt/EBITDA ratio^{*} | 0.5 | 1.3 | 0.8 |
| EBITDA^{*} | 758 | 786 | 684 |
*) Alternative performance measures used in this report are explained on pages 25-26.
1) Whereof interest-bearing liabilities amounting to SEK 854m as of June 30, 2021, SEK 1,473m as of June 30, 2020 and SEK 1,004m as of December 31, 2020.
Electrolux Professional - Interim Report, Q2 2021
Electrolux Professional – Interim Report, Q2 2021
Other disclosures
Conversion of shares
According to Electrolux Professional’s articles of association, 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. 2,089 shares were converted in the second quarter. The total number of registered shares in the company on June 30, 2021 amounted to 287,397,450 of which 8,049,665 are Series A and 279,347,785 are Series B. The total number of votes amounted to 35,984,443.5.
Employees
The number of employees at the end of the quarter was 3,407 (3,591).
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.
Annual General Meeting 2021
Electrolux Professional’s Annual General Meeting was held on April 28, 2021. Due to the COVID-19 pandemic, the meeting was conducted without the physical presence of shareholders who instead were able to exercise their voting rights only by post before the meeting. The parent company’s and the Group’s income statements and balance sheets were adopted and it was resolved that no dividend should be distributed. All members of the Board of Directors were re-elected. Deloitte AB was re-elected as auditor for a period until next Annual General Meeting. A performance based, long term share program for 2021 including hedging measures related thereto was approved. The meeting resolved to amend the company’s Articles of Association to hold general meetings by postal voting and/or by collecting proxies as well as for the Board of Directors to decide on attendance at a general meeting for persons not being shareholders.
Parent Company
The Parent Company’s activities include head office as well as production and sales in and from Sweden. During Q2, 2021 internal funding to some subsidiaries has been transferred from short- to long-term receivables amounting to 436m.
Net sales for the Parent Company, Electrolux Professional AB, for the period from January 1 to June 30, 2021 amounted to SEK 1,114m (1,137) of which SEK 465m (484) referred to sales to Group Companies and SEK 649m (653) to external customers. Income after financial items was SEK 49m (118). Income for the period amounted to SEK 37m (66).
Capital expenditure in tangible and intangible assets was SEK 6m (14). Liquid funds at the end of the period amounted to SEK 409m, as against SEK 425m at the start of the year.
Undistributed earnings in the Parent Company at the end of the period amounted to SEK 5,803m, as against SEK 5,794m at the beginning of the year.
The income statement and balance sheet for the Parent Company are presented on page 20.
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 Annual Report and consist of strategic risks, operational risks, industry risks, sustainability risks and financial risks. Compared to the Annual Report, which was issued on March 30, 2021, no new material risks have been identified. Electrolux Professional expects that its financial performance will continue to be affected by the pandemic related to the corona virus uncertainty as long as countries still have restrictions in place.
First page
Message from the CEO
Financial overview
Financial reports
Definitions
Shareholders information
P. 10
The Board of Directors and the President and CEO certify that the interim report gives a true and fair overview of the Parent Company Electrolux Professional AB and the Group's operations, their financial position and results of operations and describes significant risks and uncertainties facing the Parent Company and other companies in the Group.
Stockholm, July 22, 2021
Electrolux Professional AB (publ)
Kai Wärn
Chairman of the Board
Katharine Clark
Board member
Lorna Donatone
Board member
Ulf Karlsson
Board member,
Employee representative
Hans Ola Meyer
Board member
Daniel Nodhäll
Board member
Joachim Nord
Board member
Martine Snels
Board member
Carsten Voigtländer
Board member
Alberto Zanata
President and CEO
Review Report
Introduction
We have reviewed the interim report for Electrolux Professional AB (publ) for the period January 1 – June 30, 2021. The Board of Directors and the President are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
Scope of Review
We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and is substantially less in scope than an audit conducted in accordance with ISA and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not, in all material respects, prepared for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.
Stockholm, July 22, 2021
Deloitte AB
Jan Berntsson
Authorized Public Accountant
This is a translation of the Swedish language original. In the event of any differences between this translation and the Swedish language original, the latter shall prevail.
Electrolux Professional - Interim Report, Q2 2021
Electrolux Professional – Interim Report, Q2 2021
P. 12
Next-level connectivity and increased visibility of SkyLine
- Additional and improved connected solutions for SkyLine Ovens and Blast Chillers. Improved design elements and refresh to elevate the visibility of SkyLine.
- Keeping a close check over cooking processes to reduce risks associated with food safety, operators can manage HACCP protocols automatically.
- Especially targeted towards chains, supermarkets and staff canteens, with remote sharing of standardized recipes across every product location.
OnE Connected
Work a solid 8 hours with the new LiberoPro
Modular professional mobile system for indoor and outdoor cooking
- Freedom in cooking. A versatile, professional, mobile, plug & play solution.
- Championing efficiency with the full induction line, customers can reach up to 90% of energy efficiency*.
-
Packaging of the hobs is 100% recyclable and FSC compliant.
-
Libero potential customers: QSR, Streetfood, Hotel breakfast & buffet areas, Events, Bars, Cafés, Canteens, Food Corners.
-
Compared to Electrolux Professional traditional gas function.
Financial reports
Consolidated statement of total comprehensive income
| SEKm | Second quarter | Six months | Full year | ||
|---|---|---|---|---|---|
| Apr-Jun 2021 | Apr-Jun 2020 | Jan-Jun 2021 | Jan-Jun 2020 | 2020 | |
| Net sales | 1,958 | 1,489 | 3,619 | 3,580 | 7,263 |
| Cost of goods sold | -1,287 | -1,061 | -2,397 | -2,383 | -4,896 |
| Gross operating income | 671 | 428 | 1,222 | 1,197 | 2,367 |
| Selling expenses | -334 | -302 | -651 | -690 | -1,355 |
| Administrative expenses | -155 | -144 | -302 | -322 | -631 |
| Other operating income and expenses | -1 | -0 | -1 | 1 | 5 |
| Operating income | 181 | -18 | 268 | 187 | 387 |
| Financial items, net | -5 | -8 | -9 | -10 | -24 |
| Income after financial items | 176 | -26 | 259 | 177 | 363 |
| Taxes | -8 | -2 | -35 | -46 | -85 |
| Income for the period | 168 | -28 | 223 | 131 | 278 |
| Items that will not be reclassified to income for the period: | |||||
| Remeasurement of provisions for post-employment benefits | 33 | 36 | 79 | 38 | 83 |
| Income tax relating to items that will not be reclassified | -5 | -4 | -11 | -4 | -8 |
| 28 | 33 | 68 | 34 | 75 | |
| Items that may be reclassified subsequently to income for the period: | |||||
| Exchange-rate differences on translation of foreign operations | -64 | -206 | 51 | -21 | -263 |
| Other comprehensive income, net of tax | -36 | -174 | 120 | 13 | -188 |
| Total comprehensive income for the period | 132 | -202 | 343 | 144 | 90 |
| Income for the period attributable to: | |||||
| Shareholders of the Parent Company | 168 | -28 | 223 | 131 | 278 |
| Total | 168 | -28 | 223 | 131 | 278 |
| Total comprehensive income for the period attributable to: | |||||
| Shareholders of the Parent Company | 132 | -202 | 343 | 144 | 90 |
| Total | 132 | -202 | 343 | 144 | 90 |
| Earnings per share, SEK | |||||
| Basic, SEK | 0.58 | -0.10 | 0.78 | 0.46 | 0.97 |
| Diluted, SEK | 0.58 | -0.10 | 0.78 | 0.46 | 0.97 |
| Average number of shares | |||||
| Basic, million | 287.4 | 287.4 | 287.4 | 287.4 | 287.4 |
| Diluted, million | 287.5 | 287.4 | 287.5 | 287.4 | 287.4 |
Electrolux Professional - Interim Report, Q2 2021
Consolidated balance sheet
| SEKm | Jun 30, 2021 | Jun 30, 2020¹ | Dec 31, 2020² |
|---|---|---|---|
| Assets | |||
| Non-current assets | |||
| Property, plant and equipment, owned | 1,230 | 1,286 | 1,254 |
| Property, plant and equipment, right-of-use | 241 | 222 | 211 |
| Goodwill | 1,725 | 1,828 | 1,690 |
| Other intangible assets | 278 | 361 | 305 |
| Deferred tax assets | 384 | 345 | 344 |
| Pension plan assets | 93 | - | 21 |
| Other non-current assets | 30 | 30 | 27 |
| Total non-current assets | 3,983 | 4,072 | 3,853 |
| Current assets | |||
| Inventories | 1,164 | 1,405 | 1,086 |
| Trade receivables | 1,448 | 1,325 | 1,265 |
| Tax assets | 96 | 76 | 53 |
| Other current assets | 228 | 277 | 244 |
| Cash and cash equivalents | 743 | 848 | 797 |
| Total current assets | 3,678 | 3,930 | 3,444 |
| Total assets | 7,660 | 8,003 | 7,297 |
| Equity and liabilities | |||
| Equity attributable to shareholders of the Parent Company | |||
| Share capital | 29 | 29 | 29 |
| Other paid-in capital | 5 | 5 | 5 |
| Other reserves | 54 | 244 | 3 |
| Retained earnings | 3,009 | 2,559 | 2,747 |
| Equity attributable to shareholders of the Parent Company | 3,097 | 2,837 | 2,784 |
| Total equity | 3,097 | 2,837 | 2,784 |
| Non-current liabilities | |||
| Long-term borrowings | 600 | 601 | 601 |
| Long-term lease liabilities | 179 | 160 | 151 |
| Deferred tax liabilities | 140 | 138 | 135 |
| Provisions for post-employment benefits | 143 | 175 | 152 |
| Other provisions | 228 | 242 | 243 |
| Total non-current liabilities | 1,292 | 1,317 | 1,282 |
| Current liabilities | |||
| Trade payables | 1,339 | 1,239 | 1,289 |
| Tax liabilities | 339 | 358 | 324 |
| Other liabilities | 1,142 | 1,142 | 988 |
| Short-term borrowings | 253 | 872 | 403 |
| Short-term lease liabilities | 68 | 67 | 65 |
| Other provisions | 131 | 170 | 162 |
| Total current liabilities | 3,272 | 3,849 | 3,232 |
| Total equity and liabilities | 7,660 | 8,003 | 7,297 |
¹) Periods in year 2020 are restated due to an adjustment of deferred tax assets related to post-employment benefits for the years 2017-2019 related to the Combined Financial Statements, affecting deferred tax assets and equity by SEK -17m.
Electrolux Professional - Interim Report, Q2 2021
Change in consolidated equity
| Six months | Full year | ||
|---|---|---|---|
| SEKm | Jan–Jun 2021 | Jan–Jun 2020 | 2020 |
| Opening balance | 2,784 | 2,711 | 2,711 |
| Adjustment to opening balance^{1} | – | –17 | –17 |
| Total comprehensive income for the period | 343 | 144 | 90 |
| Share-based payments | –29 | – | – |
| Total transactions with equity holders | –29 | – | – |
| Closing balance | 3,097 | 2,837 | 2,784 |
1) Adjustment of deferred tax assets related to post-employment benefits for the years 2017–2019 related to the Combined Financial Statements.
Electrolux Professional – Interim Report, Q2 2021
Consolidated cash flow statement
| SEKm | Second quarter | Six months | Full year | ||
|---|---|---|---|---|---|
| Apr-Jun 2021 | Apr-Jun 2020 | Jan-Jun 2021 | Jan-Jun 2020 | 2020 | |
| Operations | |||||
| Operating income | 181 | -18 | 268 | 187 | 387 |
| Depreciation and amortization | 71 | 75 | 141 | 148 | 297 |
| Other non-cash items | 5 | 4 | 9 | 7 | 91 |
| Financial items paid, net¹ | -5 | -6 | -8 | -7 | -22 |
| Taxes paid | -42 | 2 | -93 | -16 | -66 |
| Cash flow from operations, excluding change in operating assets and liabilities | 209 | 56 | 316 | 319 | 687 |
| Change in operating assets and liabilities | |||||
| Change in inventories | -27 | -19 | -70 | -144 | 113 |
| Change in trade receivables | -172 | 373 | -175 | 363 | 362 |
| Change in accounts payable | 93 | -325 | 47 | -250 | -140 |
| Change in other operating assets, liabilities and provisions | 95 | -16 | 82 | -124 | -293 |
| Cash flow from change in operating assets and liabilities | -11 | 14 | -116 | -155 | 41 |
| Cash flow from operations | 198 | 70 | 200 | 164 | 729 |
| Investments | |||||
| Capital expenditure in property, plant and equipment | -19 | -43 | -51 | -145 | -267 |
| Capital expenditure in product development | - | -0 | - | -1 | -1 |
| Capital expenditure in other intangibles | -1 | -0 | -2 | -2 | -5 |
| Other | -2 | -1 | -3 | 7 | 26 |
| Cash flow from investments | -22 | -44 | -56 | -140 | -246 |
| Cash flow from operations and investments | 176 | 26 | 145 | 24 | 483 |
| Financing | |||||
| Change in short-term borrowings, net² | 10 | 238 | -132 | 855 | 413 |
| New long-term borrowings | - | -0 | - | 600 | 600 |
| Amortization of long-term borrowings | -0 | -0 | -0 | -1 | -1 |
| Payment of lease liabilities | -19 | -23 | -37 | -45 | -82 |
| Share-based payments | -30 | - | -30 | - | - |
| Change in financial liabilities, Electrolux Group | - | - | - | -1,224 | -1,224 |
| Cash flow from financing | -39 | 215 | -199 | 184 | -294 |
| Total cash flow | 137 | 241 | -55 | 208 | 189 |
| Cash and cash equivalents at beginning of period | 616 | 627 | 797 | 651 | 651 |
| Exchange-rate differences referring to cash and cash equivalents | -10 | -21 | 1 | -11 | -42 |
| Cash and cash equivalents at end of period | 743 | 848 | 743 | 848 | 797 |
1) For the period January 1 to June 30: interest and similar items received SEK 2.6m (3.7), interest and similar items paid SEK -4.0m (-5.4) and other financial items received/paid SEK -3.5m (-2.2). Interest paid for lease liabilities SEK -3.5m (-3.1).
2) Of which short-term loans with a duration of more than 3 months for the period January 1 to June 30, new loans SEK 276m (856), repaid loans SEK -408m (-1).
Electrolux Professional - Interim Report, Q2 2021
Alternative performance measures key figures
| SEKm, if not otherwise stated | Second quarter | Six months | Full year | ||
|---|---|---|---|---|---|
| Apr-Jun 2021 | Apr-Jun 2020 | Jan-Jun 2021 | Jan-Jun 2020 | 2020 | |
| Net sales | 1,958 | 1,489 | 3,619 | 3,580 | 7,263 |
| Organic growth, %* | 38.4 | -39.9 | 7.2 | -27.1 | -21.0 |
| EBITA* | 197 | -4 | 300 | 217 | 456 |
| EBITA margin, %* | 10.1 | -0.2 | 8.3 | 6.1 | 6.3 |
| EBITA excl. items affecting comparability*1 | 197 | -4 | 300 | 217 | 533 |
| EBITA margin excl. items affecting comparability, %*1 | 10.1 | -0.2 | 8.3 | 6.1 | 7.3 |
| Operating income* | 181 | -18 | 268 | 187 | 387 |
| Operating margin, %* | 9.2 | -1.2 | 7.4 | 5.2 | 5.3 |
| Operating income excl. items affecting comparability*1 | 181 | -18 | 268 | 187 | 464 |
| Operating margin excl. items affecting comparability, %*1 | 9.2 | -1.2 | 7.4 | 5.2 | 6.4 |
| Income after financial items | 176 | -26 | 259 | 177 | 363 |
| Income for the period | 168 | -28 | 223 | 131 | 278 |
| Capital expenditure* | -20 | -43 | -53 | -147 | -273 |
| Operating cash flow after investments* | 223 | 31 | 246 | 47 | 570 |
| Earnings per share, SEK2 | 0.58 | -0.10 | 0.78 | 0.46 | 0.97 |
| Net debt* | 407 | 1,030 | 549 | ||
| EBITDA*3 | 758 | 786 | 684 | ||
| Net debt/EBITDA ratio* | 0.5 | 1.3 | 0.8 | ||
| Operating working capital % of net sales*4 | 17.4 | 19.9 | 19.9 | ||
| Average number of shares, million2 | 287.4 | 287.4 | 287.4 | 287.4 | 287.4 |
| Number of employees, end of period | 3,407 | 3,591 | 3,407 | 3,591 | 3,515 |
*) Alternative performance measures used in this report are explained on pages 25-26.
1) For information on items affecting comparability, see page 19.
2) Basic number of outstanding shares.
3) Rolling four quarters.
4) Last twelve months currency adjusted
Electrolux Professional - Interim Report, Q2 2021
Quarterly data
| SEKm | Q2 2021 | Q1 2021 | Full year 2020 | Q4, 2020 | Q3, 2020 | Q2, 2020 | Q1, 2020 |
|---|---|---|---|---|---|---|---|
| Food & Beverage | |||||||
| Net sales | 1,210 | 905 | 4,198 | 1,047 | 1,070 | 838 | 1,243 |
| EBITA | 110 | 21 | 87 | 11 | 42 | -64 | 99 |
| EBITA margin, % | 9.1 | 2.3 | 2.1 | 1.0 | 4.0 | -7.7 | 7.9 |
| Amortization | -12 | -12 | -53 | -19 | -11 | -11 | -12 |
| Operating income | 98 | 9 | 35 | -8 | 31 | -75 | 87 |
| Operating margin, % | 8.1 | 1.0 | 0.8 | -0.8 | 2.9 | -9.0 | 7.0 |
| Laundry | |||||||
| Net sales | 748 | 756 | 3,065 | 888 | 678 | 651 | 848 |
| EBITA | 117 | 111 | 467 | 150 | 79 | 88 | 150 |
| EBITA margin, % | 15.7 | 14.7 | 15.2 | 16.9 | 11.6 | 13.5 | 17.7 |
| Amortization | -4 | -4 | -16 | -4 | -4 | -4 | -4 |
| Operating income | 113 | 107 | 452 | 146 | 75 | 84 | 146 |
| Operating margin, % | 15.1 | 14.1 | 14.7 | 16.4 | 11.1 | 13.0 | 17.3 |
| Group common costs | -30 | -28 | -100 | -19 | -26 | -27 | -28 |
| Total Group | |||||||
| Net sales | 1,958 | 1,661 | 7,263 | 1,935 | 1,748 | 1,489 | 2,091 |
| EBITA | 197 | 103 | 456 | 142 | 96 | -4 | 221 |
| EBITA margin, % | 10.1 | 6.2 | 6.3 | 7.3 | 5.5 | -0.2 | 10.6 |
| Amortization | -16 | -16 | -69 | -23 | -15 | -15 | -16 |
| Operating income | 181 | 88 | 387 | 119 | 81 | -18 | 205 |
| Operating margin, % | 9.2 | 5.3 | 5.3 | 6.1 | 4.6 | -1.2 | 9.8 |
| Financial items, net | -5 | -4 | -24 | -5 | -8 | -8 | -2 |
| Income after financial items | 176 | 83 | 363 | 113 | 73 | -26 | 203 |
| Income for the period | 168 | 55 | 278 | 70 | 77 | -28 | 159 |
| Earnings per share, SEK¹ | 0.58 | 0.19 | 0.97 | 0.24 | 0.27 | -0.10 | 0.55 |
1) Basic number of outstanding shares.
Electrolux Professional - Interim Report, Q2 2021
P. 18
Items affecting comparability
| SEKm | Q2, 2021 | Q1, 2021 | Full year 2020 | Q4, 2020 | Q3, 2020¹ | Q2, 2020 | Q1, 2020 |
|---|---|---|---|---|---|---|---|
| Food & Beverage | - | - | -55 | - | -55 | - | - |
| Laundry | - | - | -22 | - | -22 | - | - |
| Total Group | - | - | -77 | - | -77 | - | - |
¹) The SEK -77m relates to restructuring charges for efficiency measures and are included in the functional lines cost of goods sold, selling expenses and administrative expenses.
| SEKm | Q2, 2021 | Q1, 2021 | Full year 2020 | Q4, 2020 | Q3, 2020 | Q2, 2020 | Q1, 2020 |
|---|---|---|---|---|---|---|---|
| Total Group | |||||||
| Operating income excl. items affecting comparability | 181 | 88 | 464 | 119 | 158 | -18 | 205 |
| Operating margin excl. items affecting comparability, % | 9.2 | 5.3 | 6.4 | 6.1 | 9.0 | -1.2 | 9.8 |
| EBITA excl. items affecting comparability | 197 | 103 | 533 | 142 | 173 | -4 | 221 |
| EBITA margin excl. items affecting comparability, % | 10.1 | 6.2 | 7.3 | 7.3 | 9.9 | -0.2 | 10.6 |
Shares
| Number of shares | A-shares | B-shares | Shares total |
|---|---|---|---|
| Number of shares as of January 1, 2021 | 8,120,527 | 279,276,923 | 287,397,450 |
| Conversion of shares | -70,862 | 70,862 | - |
| Number of shares as of June 30, 2021 | 8,049,665 | 279,347,785 | 287,397,450 |
Exchange rates
| SEK | Jun 30, 2021 | Jun 30, 2020 | Dec 31, 2020 | |||
|---|---|---|---|---|---|---|
| Average | End of period | Average | End of period | Average | End of period | |
| CNY | 1.30 | 1.32 | 1.37 | 1.32 | 1.33 | 1.25 |
| CZK | 0.3911 | 0.3967 | 0.4049 | 0.3925 | 0.3969 | 0.3831 |
| DKK | 1.36 | 1.36 | 1.43 | 1.41 | 1.41 | 1.35 |
| EUR | 10.13 | 10.11 | 10.64 | 10.49 | 10.48 | 10.06 |
| GBP | 11.64 | 11.78 | 12.19 | 11.50 | 11.83 | 11.14 |
| JPY | 0.0781 | 0.0769 | 0.0891 | 0.0870 | 0.0861 | 0.0795 |
| NOK | 0.99 | 0.99 | 1.00 | 0.96 | 0.98 | 0.95 |
| RUB | 0.1127 | 0.1165 | 0.1393 | 0.1318 | 0.1275 | 0.1095 |
| THB | 0.2726 | 0.2653 | 0.3057 | 0.3031 | 0.2938 | 0.2735 |
| TRY | 1.06 | 0.98 | 1.49 | 1.37 | 1.33 | 1.11 |
| USD | 8.40 | 8.51 | 9.63 | 9.37 | 9.18 | 8.19 |
Electrolux Professional - Interim Report, Q2 2021
Condensed Parent company income statement
| SEKm | Second quarter | Six months | Full year | ||
|---|---|---|---|---|---|
| Apr-Jun 2021 | Apr-Jun 2020 | Jan-Jun 2021 | Jan-Jun 2020 | 2020 | |
| Net sales | 574 | 486 | 1,114 | 1,137 | 2,266 |
| Cost of goods sold | -411 | -343 | -790 | -775 | -1,556 |
| Gross operating income | 163 | 143 | 324 | 362 | 700 |
| Selling expenses | -88 | -81 | -176 | -169 | -330 |
| Administrative expenses | -49 | -41 | -105 | -74 | -135 |
| Other operating income and expenses | -1 | -6 | 2 | 2 | -6 |
| Operating income | 25 | 15 | 45 | 121 | 229 |
| Financial income and expenses | 9 | -3 | 4 | -3 | -7 |
| Impairment of shares in subsidiaries | - | - | - | - | -2,039 |
| Financial items, net | 9 | -3 | 4 | -3 | -2,046 |
| Income after financial items | 34 | 12 | 49 | 118 | -1,817 |
| Appropriations | - | - | - | - | -5 |
| Income before taxes | 34 | 12 | 49 | 118 | -1,822 |
| Taxes | -8 | -29 | -12 | -52 | -64 |
| Income for the period | 26 | -17 | 37 | 66 | -1,886 |
Condensed Parent company balance sheet
| SEKm | Jun 30, 2021 | Jun 30, 2020 | Dec 31, 2020 |
|---|---|---|---|
| Assets | |||
| Non-current assets | 6,872 | 8,498 | 6,452 |
| Current assets | 1,550 | 2,123 | 1,885 |
| Total assets | 8,422 | 10,621 | 8,337 |
| Equity and liabilities | |||
| Restricted equity | 46 | 49 | 47 |
| Non-restricted equity | 5,803 | 7,744 | 5,794 |
| Total equity | 5,849 | 7,793 | 5,841 |
| Untaxed reserves | 114 | 109 | 114 |
| Provisions | 95 | 96 | 92 |
| Non-current liabilities | 600 | 600 | 600 |
| Current liabilities | 1,764 | 2,023 | 1,690 |
| Total equity and liabilities | 8,422 | 10,621 | 8,337 |
Electrolux Professional - Interim Report, Q2 2021
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.
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 annual report. 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 Group's Annual Report 2020.
During the year a share based long-term incentive program was introduced. The share-based compensation program is classified as equity settled transactions, and the cost of the granted instrument's fair value at grant date is recognized over the vesting period which is 2.6 years. At each balance sheet date, the Group revises the estimates to the number of shares that are expected to vest. The impact of the revision to original estimates, if any, is recognized in the income statement, with a corresponding adjustment to equity. In addition, the Group provides for social costs expected to be paid in connection with the share-based compensation programs. The costs are charged to the income statement over the vesting period. The provision is periodically revalued based on the fair value of the instruments at each closing date.
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 compliance with the Swedish Annual Accounts Act (1995:1554) and recommendation RFR2, Accounting for legal entities of the Swedish Financial Reporting Board.
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.
| SEKm | Second quarter | Six months | ||
|---|---|---|---|---|
| Apr-Jun 2021 | Apr-Jun 2020 | Jan-Jun 2021 | Jan-Jun 2020 | |
| Geographical region | ||||
| Europe | 1,417 | 1,055 | 2,576 | 2,506 |
| Asia-Pacific, Middle East and Africa | 285 | 277 | 559 | 571 |
| Americas | 256 | 157 | 483 | 503 |
| Total | 1,958 | 1,489 | 3,619 | 3,580 |
Electrolux Professional - Interim Report, Q2 2021
Note 3 Fair values and carrying amounts of financial assets and liabilities
| SEKm | Hierarchy level | Jun 30, 2021 | Jun 30, 2020 | Dec 31, 2020 | |||
|---|---|---|---|---|---|---|---|
| Fair value | Carrying amount | Fair value | Carrying amount | Fair value | Carrying amount | ||
| Per category | |||||||
| Financial assets at fair value through profit and loss | 3 | 0 | 0 | 0 | 0 | 0 | 0 |
| Financial assets measured at amortized cost | 2,191 | 2,191 | 2,173 | 2,173 | 2,062 | 2,062 | |
| Derivatives, financial assets at fair value through profit and loss | 2 | 9 | 9 | 8 | 8 | 12 | 12 |
| Total financial assets | 2,200 | 2,200 | 2,182 | 2,182 | 2,074 | 2,074 | |
| Financial liabilities measured at amortized cost | 2,190 | 2,192 | 2,712 | 2,712 | 2,289 | 2,293 | |
| Derivatives, financial liabilities at fair value through profit and loss | 2 | 6 | 6 | 9 | 9 | 6 | 6 |
| Total financial liabilities | 2,196 | 2,198 | 2,721 | 2,721 | 2,295 | 2,299 |
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.
Level 2: Inputs other than quoted prices included in Level 1 that are observable for assets or liabilities either directly or indirectly.
Level 3: Inputs for the assets or liabilities that are not entirely based on observable market data.
Electrolux Professional - Interim Report, Q2 2021
Note 4 Contingent liabilities
| SEKm | Jun 30, 2021 | Jun 30, 2020 | Dec 31, 2020 |
|---|---|---|---|
| Group | |||
| Guarantees and other commitments | 124 | 126 | 129 |
On January 21, 2020, a supplier filed a lawsuit in Italy against Electrolux Professional. The total claimed amount during 2020 was EUR 12.1m, approximately SEK 121m, and covers alleged damages related to products and prices during the contractual period and compensation for costs and damages resulting from the 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.
Note 5 Covid-19
As a consequence of the Covid-19 pandemic, Electrolux Professional has assessed any potential impact on the carrying value of asset and liabilities.
Trade receivables
No material increase in actual credit losses has been experienced. Collection of trade receivables is carefully monitored. Management have stressed the need for even more focus on forward looking evaluation of the risk of not being able to collect payments and therefore the expected credit loss provision has increased to SEK 102m on June 30, 2021 compared to SEK 100m on December 31, 2020.
Credit insurance and other forms of collaterals, for example letter of credit and bank guarantees are used as a protection against credit risk. In addition, some sales are also made to governmental institutions which are deemed as secure.
Inventories
No extraordinary material write-down of finished goods inventories or supplies have been recognized as a consequence of the Covid-19 situation.
Impairment of assets
No material impairment of assets has been recognized in the consolidated financial statements as a direct consequence of Covid-19.
Government grants and government assistance
Companies within the Group have received or assume that they fulfil the requirements of monetary help from governments. As of June 30, 2021 the amount recognized in profit or loss is SEK 10m (52) in the quarter and SEK 30m (56) year to date and refers mainly to short-term furlough of personnel.
First page
Message from the CEO
Financial overview
Financial reports
Definitions
Shareholders information
Electrolux Professional - Interim Report, Q2 2021
Operations by segment yearly
| SEKm | 2020 | 2019 | 2018 | 2017 |
|---|---|---|---|---|
| Food & Beverage | ||||
| Net sales | 4,198 | 5,895 | 5,399 | 4,922 |
| EBITA | 87 | 568 | 629 | 607 |
| EBITA, % | 2.1 | 9.6 | 11.7 | 12.3 |
| Operating income | 35 | 522 | 599 | 572 |
| Margin, % | 0.8 | 8.9 | 11.1 | 11.6 |
| Laundry | ||||
| Net sales | 3,065 | 3,386 | 3,267 | 2,801 |
| EBITA | 467 | 507 | 573 | 502 |
| EBITA, % | 15.2 | 15.0 | 17.6 | 17.9 |
| Operating income | 452 | 488 | 558 | 499 |
| Margin, % | 14.7 | 14.4 | 17.1 | 17.8 |
| Group common cost | ||||
| Operating income | -100 | -18 | -14 | -11 |
| Total Group | ||||
| Net sales | 7,263 | 9,281 | 8,666 | 7,723 |
| EBITA | 456 | 1,058 | 1,188 | 1,098 |
| EBITA, % | 6.3 | 11.4 | 13.7 | 14.2 |
| Operating income | 387 | 992 | 1,143 | 1,060 |
| Margin, % | 5.3 | 10.7 | 13.2 | 13.7 |
Items affecting comparability
| SEKm | 2020 | 2019 | 2018 | 2017 |
|---|---|---|---|---|
| Food & Beverage | -55 | -67 | - | - |
| Laundry | -22 | 35 | - | - |
| Total Group | -77 | -32 | - | - |
Four year overview
| SEKm, if not otherwise stated | 2020 | 2019 | 2018 | 2017 |
|---|---|---|---|---|
| Net sales | 7,263 | 9,281 | 8,666 | 7,723 |
| Organic growth, % | -21.0 | -0.3 | 4.1 | 5.6 |
| EBITA | 456 | 1,058 | 1,188 | 1,098 |
| EBITA, % | 6.3 | 11.4 | 13.7 | 14.2 |
| Operating income | 387 | 992 | 1,143 | 1,060 |
| Operating margin, % | 5.3 | 10.7 | 13.2 | 13.7 |
| Income after financial items | 363 | 978 | 1,134 | 1,052 |
| Income for the period | 278 | 663 | 952 | 786 |
| Items affecting comparability | -77 | -32 | - | - |
| Capital expenditure | -273 | -257 | -169 | -167 |
| Operating cash flow after investments | 570 | 1,138 | 1,131 | 1,167 |
| Earnings per share, SEK¹ | 0.97 | 2.31 | 3.31 | 2.74 |
| Net debt | 549 | 1,025 | -226 | -481 |
| EBITDA | 684 | 1,280 | 1,363 | 1,253 |
| Net debt/EBITDA ratio | 0.8 | 0.8 | -0.2 | -0.4 |
| Average number of shares, million | 287.4 | 287,4 | 287,4 | 287,4 |
| Number of employees, end of period | 3,515 | 3,624 | 3,555 | 3,183 |
1) Basic number of outstanding shares.
Electrolux Professional - Interim Report, Q2 2021
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. The APM reconciliations can be found on Electrolux Professional website www.electroluxprofessional.com/corporate/interim-reports/
| 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 costs or income items. | 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 income excluding items affecting comparability | Operating income less items affecting comparability. | Operating income excluding items affecting comparability shows the operating income 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. |
Electrolux Professional – Interim Report, Q2 2021
| APM | Definition | Reason for use |
|---|---|---|
| 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. |
| 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 excluding items affecting comparability | Operating income less amortization and write-down related to intangibles assets (excluding right of use assets) and less items affecting comparability. | Items affecting comparability vary between years and periods and in order to analyze trends items affecting comparability are excluded from EBITA. |
| 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). | 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 | All months of the period are currency adjusted by applying the end of period average currency rate.Sum of currency adjusted last twelve months' average of trade receivables, trade payables and inventories (Operating working capital) as percentage of currency adjusted last twelve months' average net sales. | Used to evaluate how efficient the Group is generating cash in relation to net sales. |
Electrolux Professional - Interim Report, Q2 2021
Shareholders information
President and CEO Alberto Zanata's comments on the second quarter results 2021
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, July 22. 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 8 519 993 83
Participants in UK/Europe: +44 333 300 9274
Participants in US: +1 631 913 1422 PIN: 71597406#
Slide presentations for download:
www.electroluxprofessional.com/corporate
Link to webcast:
https://electroluxprofessional.creo.se/210722
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 Q3 2021 | October 28, 2021 |
| Interim report Q4 2021 | January 28, 2022 |
| Interim report Q1 2022 | April 27, 2022 |
This information is information that Electrolux Professional AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. 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 July 22, 2021.
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 percent of net income
Electrolux Professional - Interim Report, Q2 2021
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 11 plants in seven countries and sold in over 110 countries. In 2020, Electrolux Professional had global sales of SEK 7,3bn and approximately 3,500 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: Franzengatan 6,
SE-112 51 Stockholm
Telephone: +46 8 41056450
Website: www.electroluxprofessional.com/corporate