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Electrolux Professional Interim / Quarterly Report 2021
2909_10-q_2021-10-28_75187639-192a-4101-9db9-82b4ea8b80a6.pdf
Interim / Quarterly Report
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Electrolux PROFESSIONAL
Interim report
Third quarter, July–September 2021
> Net sales amounted to SEK 1,935m (1,748). Sales increased by 10.7%. Currency contributed negatively by 2.1%. Organically sales increased by 12.8%. Last year the quarter was more impacted by the pandemic than this year.
> EBITA amounted to SEK 199m (96), corresponding to a margin of 10.3% (5.5). Last year the quarter included items affecting comparability of SEK -77m.
> Operating income amounted to SEK 183m (81), corresponding to a margin of 9.5% (4.6). Last year the quarter included items affecting comparability of SEK -77m.
> Operating cash flow after investments amounted to SEK 412m (63).
> Income for the period amounted to SEK 135m (77), and earnings per share was SEK 0.47 (0.27).
> On October 12, Electrolux Professional signed an agreement to acquire Unified Brands, a leading US-based manufacturer of food service equipment, for approximately SEK 2,140m.
Key ratios
| SEKm | Third quarter | Nine months | ||||
|---|---|---|---|---|---|---|
| Jul–Sep 2021 | Jul–Sep 2020 | Change, % | Jan–Sep 2021 | Jan–Sep 2020 | Change, % | |
| Net sales | 1,935 | 1,748 | 10.7 | 5,554 | 5,328 | 4.2 |
| EBITA* | 199 | 96 | 107.3 | 499 | 313 | 59.3 |
| EBITA margin, %* | 10.3 | 5.5 | 9.0 | 5.9 | ||
| Operating income* | 183 | 81 | 126.1 | 451 | 268 | 68.4 |
| Operating margin, %* | 9.5 | 4.6 | 8.1 | 5.0 | ||
| Income after financial items | 178 | 73 | 145.0 | 436 | 250 | 74.9 |
| Income for the period | 135 | 77 | 76.0 | 358 | 208 | 72.4 |
| Earnings per share, SEK† | 0.47 | 0.27 | 1.25 | 0.72 | ||
| Operating cash flow after investments* | 412 | 63 | 657 | 110 | ||
| Operating working capital % of net sales* | n/a | n/a | 16.0 | 20.2 |
*) Alternative performance measures used in this report are explained on pages 24–25.
1) Basic number of outstanding shares.
Electrolux Professional – Interim Report, Q3 2021
Message from the CEO:
Continued sales recovery
Alberto Zanata, President and CEO
The market recovery that started six months ago has continued during the third quarter. In some countries the market is now back to pre-pandemic levels, spear-headed by the US.
Sales in the quarter increased organically by 12.8% compared to last year driven by increased demand, especially in the US. Europe also showed good growth while Asia-Pacific, Middle East and Africa only had moderate growth. China continued to have strong growth while South East Asia was weaker.
Order intake continue to be strong and our order stock is on a record high level. Sales have not followed as fast as order intake, partly due to shortage of craftsmen among our customers, which leads to their projects and refurbishment plans being delayed.
The market recovery that started six months ago has continued during the third quarter.
EBITA for the third quarter was SEK 199m (96) with a corresponding margin of 10.3% (5.5). The result improvement was driven by increased sales volumes and last year's restructuring charges of SEK -77m. Operating costs have increased since our investments in marketing, IT and R&D have increased as well as provisions for variable pay.
Operating cash flow after investments improved substantially and amounted to SEK 412m (63).
Sales of Food & Beverage continued to demonstrate a strong sales recovery with an organic growth of 15.7%, reporting an
EBITA-margin of 10.5%. Sales of Laundry grew organically by 8.2% and is now almost back to 2019 levels. The EBITA-margin landed at 15.2%.
The global pressure on component and container availability continues. So far, we have been able to secure components, but at a higher cost. The higher raw material prices this year are partially being offset by the price increase in July. Most of the raw material for the first half of 2022 has been secured but at a higher cost than this year's average. Therefore, we have announced additional price increases from January 2022.
On October 12, we announced that we have signed an agreement to acquire Unified Brands, a leading US based manufacturer of food service equipment. This is an important step in our strategy to grow in food service chains and will significantly strengthen our position in the US. Read more on page 10.
We have now experienced several months of sales recovery and strong order intake. This in combination with our announced acquisition of Unified Brands makes me confident about our next phase development. However, new setbacks from the pandemic, the shortage of components and raw material prices still constitute a risk.
Alberto Zanata, President and CEO
Electrolux Professional - Interim Report, Q3 2021
Financial overview
Third quarter development
Net sales
Net sales for the third quarter amounted to SEK 1,935m (1,748), an increase of 10.7% compared to the same period last year. Organically, sales increased by 12.8% while currency had a negative impact of 2.1%.
The sales increase was driven by a continued comeback of the hospitality industry as pandemic restrictions have been eased. Sales of Food & Beverage increased organically by 15.7%. Sales of Laundry increased organically by 8.2%. Organically, sales in Europe increased by 9%, in Americas by 48% and in Asia-Pacific, Middle East and Africa by 1%.
| Changes in net sales, % | Jul-Sep 2021 | Jul-Sep 2020 |
|---|---|---|
| Organic growth* | 12.8 | -16.1 |
| Acquisitions* | - | -0.6 |
| Changes in exchange rates | -2.1 | -3.5 |
| Total | 10.7 | -20.2 |
*) Alternative performance measures used in this report are explained on pages 24-25.
Share of sales by segment, July-September 2021
Share of sales by region, July-September 2021
Operating income and EBITA
Operating income excluding amortization of intangible assets (EBITA) amounted to SEK 199m (96) corresponding to a margin of 10.3% (5.5). Operating income amounted to SEK 183m (81), corresponding to a margin of 9.5% (4.6). The improved operating income is mainly due to higher sales volumes and last year's restructuring charges of SEK -77m. EBITA in the quarter also includes acquisition cost of SEK -6m and a gain of SEK 13m from the sale of the old factory property in Thailand.
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 135m (77), corresponding to SEK 0.47 (0.27) in earnings per share. Income tax for the period amounted to SEK -43m (4).
Group common cost
Group common cost was SEK -39m (-26).
Electrolux Professional - Interim Report, Q3 2021
P. 3
Development during the year, January–September 2021
Net sales
Net sales for January–September amounted to SEK 5,554m (5,328), an increase by 4.2% compared to the same period last year. Organically, sales increased by 9.1% and currency contributed negatively by 4.9%.
The sales increase was driven by an increased sales demand as pandemic restrictions have been eased. Sales of Food & Beverage increased organically by 11.7%. Sales of Laundry increased organically by 5.6%. Sales in Europe increased by 8%, in Americas by 19% and in Asia-Pacific, Middle East and Africa by 4%.
| Changes in net sales, % | Jan–Sep 2021 | Jan–Sep 2020 |
|---|---|---|
| Organic growth* | 9.1 | -23.5 |
| Acquisitions* | - | 0.5 |
| Changes in exchange rates | -4.9 | -0.3 |
| Total | 4.2 | -23.3 |
*) Alternative performance measures used in this report are explained on pages 24–25.
Share of sales by segment, January–September 2021
Share of sales by region, January–September 2021
Operating income and EBITA
Operating income excluding amortization of intangible assets (EBITA) amounted to SEK 499m (313) corresponding to a margin of 9.0% (5.9). Operating income amounted to SEK 451m (268), corresponding to a margin of 8.1% (5.0). The improved operating income is mainly due to higher sales volumes and benefits from the 2020 restructuring program. Last year included items affecting comparability of SEK -77m for restructuring.
Government support of SEK 31m (77) together with benefits from the 2020 restructuring program of approximately SEK 90m contributed to EBITA. Currency burdened the result with approximately SEK 20m. EBITA includes acquisition cost of SEK -6m, relocation cost of SEK -12m related to the new factory in Thailand, but also a gain of SEK 13m from sale of the old factory property in Thailand.
Financial net
Net financial items amounted to SEK -14m (-18).
Income for the period
Income for the period amounted to SEK 358m (208), corresponding to SEK 1.25 (0.72) in earnings per share. Income tax for the period amounted to SEK -78m (-42). The effective tax rate was 17.9% (16.7).
Group common cost
Group common cost was SEK -97m (-81).
Electrolux Professional - Interim Report, Q3 2021
Segment Food & Beverage
In the third quarter, sales for Food & Beverage were SEK 1,211m (1,070), an increase of 13.3% compared to the same period last year. Organically sales increased by 15.7% and currency had a negative effect of 2.5%.
Sales increased organically by 13% in Europe, by 42% in Americas, and by 3% 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 127m (42), corresponding to a margin of 10.5% (4.0). EBITA includes a gain of SEK 13m from the sale of the old factory property in Thailand. Last year EBITA included items affecting comparability of SEK -55m for restructuring.
Operating income amounted to SEK 115m (31), corresponding to a margin of 9.5% (2.9).
Sales and EBITA margin
1) The third quarter 2020 includes items affecting comparability of SEK -55m.
| SEKm | Third quarter | Nine months | Full year | ||||
|---|---|---|---|---|---|---|---|
| Jul-Sep 2021 | Jul-Sep 2020 | Change, % | Jan-Sep 2021 | Jan-Sep 2020 | Change, % | 2020 | |
| Net sales | 1,211 | 1,070 | 13.3 | 3,327 | 3,151 | 5.6 | 4,198 |
| Organic growth, % | 15.7 | -19.6 | 11.7 | -30.1 | -28.1 | ||
| Acquisitions, % | - | -0.9 | - | 0.7 | 0.5 | ||
| Changes in exchange rates, % | -2.5 | -3.9 | -6.1 | -0.4 | -1.2 | ||
| EBITA | 127 | 42 | 200.3 | 258 | 77 | 236.7 | 87 |
| EBITA margin, % | 10.5 | 4.0 | 7.7 | 2.4 | 2.1 | ||
| Operating income | 115 | 31 | 267.1 | 222 | 43 | 417.4 | 35 |
| Operating margin, % | 9.5 | 2.9 | 6.7 | 1.4 | 0.8 |
Electrolux Professional - Interim Report, Q3 2021
Segment Laundry
In the third quarter, sales for Laundry were SEK 723m (678), an increase of 6.6% compared to the same period last year. Organically sales increased by 8.2% and currency had a negative effect of 1.6%.
Sales increased organically by 2% in Europe, by 55% in Americas and was flat in Asia-Pacific, Middle East and Africa.
Operating income excluding amortization of intangible assets (EBITA) amounted to SEK 110m (79), corresponding to a margin of 15.2% (11.6). Last year EBITA included items affecting comparability of SEK -22m for restructuring.
Operating income amounted to SEK 106m (75), corresponding to a margin of 14.7% (11.1).
Sales and EBITA margin
1) The third quarter 2020 includes items affecting comparability of SEK -22m.
| SEKm | Third quarter | Nine months | Full year | ||||
|---|---|---|---|---|---|---|---|
| Jul-Sep 2021 | Jul-Sep 2020 | Change, % | Jan-Sep 2021 | Jan-Sep 2020 | Change, % | 2020 | |
| Net sales | 723 | 678 | 6.6 | 2,227 | 2,177 | 2.3 | 3,065 |
| Organic growth, % | 8.2 | -9.8 | 5.6 | -11.2 | -8.7 | ||
| Changes in exchange rates, % | -1.6 | -2.6 | -3.3 | -0.2 | -0.8 | ||
| EBITA | 110 | 79 | 39.4 | 338 | 317 | 6.6 | 467 |
| EBITA margin, % | 15.2 | 11.6 | 15.2 | 14.6 | 15.2 | ||
| Operating income | 106 | 75 | 41.6 | 326 | 306 | 6.6 | 452 |
| Operating margin, % | 14.7 | 11.1 | 14.6 | 14.0 | 14.7 |
Electrolux Professional - Interim Report, Q3 2021
Net sales, EBITA and operating income by segment
| SEKm | Third quarter | Nine months | Full year | ||
|---|---|---|---|---|---|
| Jul-Sep 2021 | Jul-Sep 2020 | Jan-Sep 2021 | Jan-Sep 2020 | 2020 | |
| Food & Beverage | |||||
| Net sales | 1,211 | 1,070 | 3,327 | 3,151 | 4,198 |
| EBITA | 127 | 42 | 258 | 77 | 87 |
| Amortization | -12 | -11 | -35 | -34 | -53 |
| Operating income | 115 | 31 | 222 | 43 | 35 |
| Laundry | |||||
| Net sales | 723 | 678 | 2,227 | 2,177 | 3,065 |
| EBITA | 110 | 79 | 338 | 317 | 467 |
| Amortization | -4 | -4 | -12 | -12 | -16 |
| Operating income | 106 | 75 | 326 | 306 | 452 |
| Group common costs | |||||
| EBITA | -39 | -26 | -97 | -81 | -99 |
| Amortization | -0 | -0 | -0 | -0 | -1 |
| Operating income | -39 | -26 | -97 | -81 | -100 |
| Total Group | |||||
| Net sales | 1,935 | 1,748 | 5,554 | 5,328 | 7,263 |
| EBITA | 199 | 96 | 499 | 313 | 456 |
| Amortization | -16 | -15 | -48 | -46 | -69 |
| Operating income | 183 | 81 | 451 | 268 | 387 |
| Financial items, net | -5 | -8 | -14 | -18 | -24 |
| Income after financial items | 178 | 73 | 436 | 250 | 363 |
| Taxes | -43 | 4 | -78 | -42 | -85 |
| Income for the period | 135 | 77 | 358 | 208 | 278 |
First page
Message from the CEO
Financial overview
Financial reports
Definitions
Shareholders information
Electrolux Professional - Interim Report, Q3 2021
Cash flow
Operating cash flow after investments amounted to SEK 412m (63) in the quarter. The improved cash flow is mainly due to higher operating income and changes in working capital.
Operating cash flow after investments
| SEKm | Third quarter | Nine months | Full year | ||
|---|---|---|---|---|---|
| Jul-Sep 2021 | Jul-Sep 2020 | Jan-Sep 2021 | Jan-Sep 2020 | 2020 | |
| Operating income | 183 | 81 | 451 | 268 | 387 |
| Depreciation | 53 | 54 | 162 | 171 | 228 |
| Amortization | 16 | 15 | 48 | 46 | 69 |
| Other non-cash items | -8 | 79 | 0 | 87 | 91 |
| Operating income adjusted for non-cash items | 244 | 229 | 661 | 571 | 775 |
| Change in inventories | -39 | 110 | -109 | -35 | 113 |
| Change in trade receivables | -31 | -109 | -206 | 253 | 362 |
| Change in accounts payable | 140 | -63 | 187 | -313 | -140 |
| Change in other operating assets, liabilities and provisions | 94 | -54 | 176 | -178 | -293 |
| Operating cash flow | 407 | 112 | 709 | 299 | 816 |
| Investments in tangible and intangible assets | -22 | -57 | -75 | -205 | -273 |
| Changes in other investments | 26 | 8 | 24 | 15 | 26 |
| Operating cash flow after investments | 412 | 63 | 657 | 110 | 570 |
Operating working capital
Operating working capital as percent of annualized net sales improved to 16.0% in the third quarter compared to 20.2% in the third quarter last year, 17.4% in the second quarter of 2021 and 19.4% in the first quarter of 2021. 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, Q3 2021
Financial position
Net debt
As of September 30, 2021, Electrolux Professional had a financial net cash position (excluding lease liabilities and post-employment provisions) of SEK 253m compared to a net debt position of SEK 202m as of December 31, 2020. Lease liabilities amounted to SEK 243m and net provisions for post-employments benefits amounted to SEK 44m.
In total, net debt amounted to SEK 33m as of September 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 15m. Total borrowings amounted to SEK 615m compared to SEK 1,012m as of December 31, 2020.
Liquid funds as of September 30, 2021, amounted to SEK 868m 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 September 30, 2021, EUR 0m of the revolving credit facility was utilized.
Acquisition of Unified Brands
On October 12, Electrolux Professional signed an agreement to acquire Unified Brands for SEK 2,140m, read more on page 10.
Net debt
| SEKm | Sep 30, 2021 | Sep 30, 2020 | Dec 31, 2020 |
|---|---|---|---|
| Short-term loans | 0 | 664 | 403 |
| Short-term borrowings | 0 | 664 | 403 |
| Financial derivative liabilities | 13 | 9 | 6 |
| Accrued interest expenses and prepaid interest income | 2 | 2 | 2 |
| Total short-term borrowings | 15 | 675 | 412 |
| Long-term loans | 600 | 601 | 601 |
| Long-term borrowings | 600 | 601 | 601 |
| Total borrowings^{1} | 615 | 1,276 | 1,012 |
| Cash and cash equivalents | 852 | 640 | 797 |
| Financial derivative assets | 16 | 7 | 12 |
| Prepaid interest expenses and accrued interest income | 0 | 1 | 1 |
| Liquid funds | 868 | 648 | 810 |
| Financial net debt | -253 | 627 | 202 |
| Lease liabilities | 243 | 226 | 216 |
| Net provisions for post-employment benefits | 44 | 151 | 131 |
| Net debt^{*} | 33 | 1,004 | 549 |
| Net debt/EBITDA ratio^{*} | 0.0 | 1.4 | 0.8 |
| EBITDA^{*} | 860 | 744 | 684 |
*) Alternative performance measures used in this report are explained on pages 24-25.
1) Whereof interest-bearing liabilities amounting to SEK 600m as of September 30, 2021, SEK 1,264m as of September 30, 2020 and SEK 1,004m as of December 31, 2020.
Electrolux Professional - Interim Report, Q3 2021
Electrolux Professional – Interim Report, Q3 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. 447 shares were converted in the third quarter. The total number of registered shares in the company on September 30, 2021 amounted to 287,397,450 of which 8,049,218 are Series A and 279,348,232 are Series B. The total number of votes amounted to 35,984,041.2.
Employees
The number of employees at the end of the quarter was 3,408 (3,520).
Events after the balance sheet date
On October 12, 2021, Electrolux Professional signed an agreement to acquire Unified Brands Inc. and related assets, a leading US-based manufacturer of foodservice equipment. The acquisition will significantly strengthen Electrolux Professional’s presence in the US and supports Electrolux Professional’s focus on growth with the food service chains.
Electrolux Professional will acquire Unified Brands for approximately SEK 2,140m (USD 244m), on a cash and debt free basis including certain tax benefits, subject to customary post-closing adjustments, from Dover Corporation, a US-based diversified global manufacturer and solutions provider.
Closing is expected to take place during the fourth quarter of 2021, subject to customary regulatory approvals. Acquisition costs are expected to amount to approximately SEK -45m whereof SEK -40m in the fourth quarter.
Unified Brands, founded in 1907, has approximately 600 employees and is based in Conyers, Georgia. Unified Brands is expected to generate approximately SEK 1,150m (USD135 million) in revenue in 2021.
On October 20, Electrolux Professional AB and the Nordic Investment Bank signed a seven-year EUR 60m sustainability-related loan agreement related to the reduction of $\mathrm{CO}_{2}$ emissions, water consumption and the use of HFC gases.
Parent Company
The Parent Company’s activities include head office as well as production and sales in and from Sweden. During the second quarter, 2021 internal funding to some subsidiaries has been transferred from short- to long-term receivables amounting to SEK 439m.
Net sales for the Parent Company, Electrolux Professional AB, for the period from January 1 to September 30, 2021 amounted to SEK 1,664m (1,613) of which SEK 669m (673) referred to sales to Group Companies and SEK 995m (940) to external customers.
Income after financial items was SEK 167m (133). Income for the period amounted to SEK 152m (89).
Capital expenditure in tangible and intangible assets was SEK 12m (14). Liquid funds at the end of the period amounted to SEK 498m, 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 5,918m, 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 19.
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
Stockholm, October 28, 2021
Electrolux Professional AB (publ)
Alberto Zanata
President and CEO
This report has not been audited or reviewed by external auditors.
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.
P. 10
Electrolux Professional – Interim Report, Q3 2021
P. 11
TrinityPro
New range of vegetable slicers and cutter mixers
Vegetable slicers
Cutter mixers
Combined cutter-slicers
Compact and flexible
Space saving and fully accessorized, in different capacities and for multiple preparations.
High performing
High quality cuts at all times thanks to powerful high speed solutions with 22 different slicing options.
Certified ergonomics
ErgoCert 4-star certification for ergonomic design and ease of use less user fatigue thanks to the PATENTED lever pusher.
100% Safe and easy
Operator safety guaranteed, simple installation, intuitive control panel and easy cleaning with 100% dishwasher safe components
The OnE digital platform
New Self Service digital platform recently launched
> The platform has been launched as a pilot in UK. The next countries to go live are Germany and Sweden.
> Pivotal to enhance the customer experience and boost customer care.
> Built on SalesForce technology, cloud-based and available on any device, around-the-clock.
> A modern, one-stop shop with a seamless experience:
> - Place an order for products, spares, accessories and consumables
> - Track orders and find invoices
> - Search for documentation or products
> - Request for support and track the case
> The solution will be further enhanced, including connectivity solutions.
Customer portal
All your tools in one place
Ecommerce
Easier, smarter, seamless
Service digitalization
Support when you need it
Connectivity
Save time, save money
Fir
Save time
Financial reports
Consolidated statement of total comprehensive income
| Third quarter | Nine months | Full year | |||
|---|---|---|---|---|---|
| Jul–Sep 2021 | Jul–Sep 2020 | Jan–Sep 2021 | Jan–Sep 2020 | 2020 | |
| Net sales | 1,935 | 1,748 | 5,554 | 5,328 | 7,263 |
| Cost of goods sold | -1,259 | -1,180 | -3,657 | -3,562 | -4,896 |
| Gross operating income | 675 | 568 | 1,897 | 1,766 | 2,367 |
| Selling expenses | -344 | -339 | -995 | -1,029 | -1,355 |
| Administrative expenses | -164 | -148 | -466 | -470 | -631 |
| Other operating income and expenses | 16 | 0 | 14 | 2 | 5 |
| Operating income | 183 | 81 | 451 | 268 | 387 |
| Financial items, net | -5 | -8 | -14 | -18 | -24 |
| Income after financial items | 178 | 73 | 436 | 250 | 363 |
| Taxes | -43 | 4 | -78 | -42 | -85 |
| Income for the period | 135 | 77 | 358 | 208 | 278 |
| Items that will not be reclassified to income for the period: | |||||
| Remeasurement of provisions for post-employment benefits | -9 | 31 | 70 | 69 | 83 |
| Income tax relating to items that will not be reclassified | 1 | -4 | -9 | -8 | -8 |
| -8 | 27 | 61 | 61 | 75 | |
| Items that may be reclassified subsequently to income for the period: | |||||
| Exchange-rate differences on translation of foreign operations | 45 | -41 | 96 | -62 | -263 |
| Other comprehensive income, net of tax | 37 | -14 | 156 | -2 | -188 |
| Total comprehensive income for the period | 172 | 62 | 515 | 206 | 90 |
| Income for the period attributable to: | |||||
| Shareholders of the Parent Company | 135 | 77 | 358 | 208 | 278 |
| Total | 135 | 77 | 358 | 208 | 278 |
| Total comprehensive income for the period attributable to: | |||||
| Shareholders of the Parent Company | 172 | 62 | 515 | 206 | 90 |
| Total | 172 | 62 | 515 | 206 | 90 |
| Earnings per share, SEK | |||||
| Basic, SEK | 0.47 | 0.27 | 1.25 | 0.72 | 0.97 |
| Diluted, SEK | 0.47 | 0.27 | 1.25 | 0.72 | 0.97 |
| Average number of shares | |||||
| Basic, million | 287.4 | 287.4 | 287.4 | 287.4 | 287.4 |
| Diluted, million | 287.9 | 287.4 | 287.6 | 287.4 | 287.4 |
Electrolux Professional - Interim Report, Q3 2021
Consolidated balance sheet
| SEKm | Sep 30, 2021 | Sep 30, 2020¹ | Dec 31, 2020² |
|---|---|---|---|
| Assets | |||
| Non-current assets | |||
| Property, plant and equipment, owned | 1,215 | 1,290 | 1,254 |
| Property, plant and equipment, right-of-use | 236 | 222 | 211 |
| Goodwill | 1,755 | 1,810 | 1,690 |
| Other intangible assets | 267 | 345 | 305 |
| Deferred tax assets | 370 | 381 | 344 |
| Pension plan assets | 85 | 7 | 21 |
| Other non-current assets | 26 | 29 | 27 |
| Total non-current assets | 3,954 | 4,083 | 3,853 |
| Current assets | |||
| Inventories | 1,213 | 1,288 | 1,086 |
| Trade receivables | 1,489 | 1,429 | 1,265 |
| Tax assets | 101 | 82 | 53 |
| Other current assets | 210 | 272 | 244 |
| Cash and cash equivalents | 852 | 640 | 797 |
| Total current assets | 3,865 | 3,710 | 3,444 |
| Total assets | 7,819 | 7,794 | 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 | 99 | 203 | 3 |
| Retained earnings | 3,139 | 2,663 | 2,747 |
| Equity attributable to shareholders of the Parent Company | 3,271 | 2,900 | 2,784 |
| Total equity | 3,271 | 2,900 | 2,784 |
| Non-current liabilities | |||
| Long-term borrowings | 600 | 601 | 601 |
| Long-term lease liabilities | 173 | 157 | 151 |
| Deferred tax liabilities | 119 | 143 | 135 |
| Provisions for post-employment benefits | 129 | 158 | 152 |
| Other provisions | 230 | 234 | 243 |
| Total non-current liabilities | 1,252 | 1,294 | 1,282 |
| Current liabilities | |||
| Trade payables | 1,483 | 1,171 | 1,289 |
| Tax liabilities | 373 | 343 | 324 |
| Other liabilities | 1,244 | 1,138 | 988 |
| Short-term borrowings | 0 | 664 | 403 |
| Short-term lease liabilities | 70 | 69 | 65 |
| Other provisions | 125 | 217 | 162 |
| Total current liabilities | 3,295 | 3,600 | 3,232 |
| Total equity and liabilities | 7,819 | 7,794 | 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, Q3 2021
Change in consolidated equity
| Nine months | Full year | ||
|---|---|---|---|
| SEKm | Jan–Sep 2021 | Jan–Sep 2020 | 2020 |
| Opening balance | 2,784 | 2,711 | 2,711 |
| Adjustment to opening balance¹ | – | –17 | –17 |
| Total comprehensive income for the period | 515 | 206 | 90 |
| Share-based payments | –27 | – | – |
| Total transactions with equity holders | –27 | – | – |
| Closing balance | 3,271 | 2,900 | 2,784 |
¹) Adjustment of deferred tax assets related to post-employment benefits for the years 2017–2019 related to the Combined Financial Statements.
First page
Message from the CEO
Financial overview
Financial reports
Definitions
Shareholders information
Electrolux Professional – Interim Report, Q3 2021
P. 14
Consolidated cash flow statement
| SEKm | Third quarter | Nine months | Full year | ||
|---|---|---|---|---|---|
| Jul-Sep 2021 | Jul-Sep 2020 | Jan-Sep 2021 | Jan-Sep 2020 | 2020 | |
| Operations | |||||
| Operating income | 183 | 81 | 451 | 268 | 387 |
| Depreciation and amortization | 69 | 69 | 210 | 217 | 297 |
| Other non-cash items | -8 | 79 | 0 | 87 | 91 |
| Financial items paid, net¹ | -6 | -8 | -14 | -16 | -22 |
| Taxes paid | -29 | -33 | -122 | -50 | -66 |
| Cash flow from operations, excluding change in operating assets and liabilities | 209 | 187 | 525 | 506 | 687 |
| Change in operating assets and liabilities | |||||
| Change in inventories | -39 | 110 | -109 | -35 | 113 |
| Change in trade receivables | -31 | -109 | -206 | 253 | 362 |
| Change in accounts payable | 140 | -63 | 187 | -313 | -140 |
| Change in other operating assets, liabilities and provisions | 94 | -54 | 176 | -178 | -293 |
| Cash flow from change in operating assets and liabilities | 164 | -117 | 48 | -272 | 41 |
| Cash flow from operations | 373 | 71 | 573 | 234 | 729 |
| Investments | |||||
| Capital expenditure in property, plant and equipment | -21 | -56 | -73 | -201 | -267 |
| Capital expenditure in product development | - | 0 | - | -1 | -1 |
| Capital expenditure in other intangibles | -1 | -1 | -2 | -3 | -5 |
| Other | 26 | 8 | 24 | 15 | 26 |
| Cash flow from investments | 4 | -50 | -52 | -190 | -246 |
| Cash flow from operations and investments | 377 | 21 | 522 | 45 | 483 |
| Financing | |||||
| Change in short-term borrowings, net² | -253 | -198 | -385 | 657 | 413 |
| New long-term borrowings | - | - | - | 600 | 600 |
| Amortization of long-term borrowings | -0 | -0 | -0 | -1 | -1 |
| Payment of lease liabilities | -18 | -18 | -56 | -64 | -82 |
| Share-based payments | - | - | -30 | - | - |
| Change in financial liabilities, Electrolux Group | - | - | - | -1,224 | -1,224 |
| Cash flow from financing | -272 | -217 | -471 | -32 | -294 |
| Total cash flow | 106 | -196 | 51 | 12 | 189 |
| Cash and cash equivalents at beginning of period | 743 | 848 | 797 | 651 | 651 |
| Exchange-rate differences referring to cash and cash equivalents | 3 | -12 | 4 | -23 | -42 |
| Cash and cash equivalents at end of period | 852 | 640 | 852 | 640 | 797 |
1) For the period January 1 to September 30: interest and similar items received SEK 2.5m (4.2), interest and similar items paid SEK -6.2m (-9.9) and other financial items received/paid SEK -5.1m (-5.4). Interest paid for lease liabilities SEK -5.3m (-4.5)
2) Of which short-term loans with a duration of more than 3 months for the period January 1 to September 30, new loans SEK 277m (1,322), repaid loans SEK -661m (-666)
Electrolux Professional - Interim Report, Q3 2021
Alternative performance measures key figures
| SEKm, if not otherwise stated | Third quarter | Nine months | Full year | ||
|---|---|---|---|---|---|
| Jul-Sep 2021 | Jul-Sep 2020 | Jan-Sep 2021 | Jan-Sep 2020 | 2020 | |
| Net sales | 1,935 | 1,748 | 5,554 | 5,328 | 7,263 |
| Organic growth, %* | 12.8 | -16.1 | 9.1 | -23.5 | -21.0 |
| EBITA* | 199 | 96 | 499 | 313 | 456 |
| EBITA margin, %* | 10.3 | 5.5 | 9.0 | 5.9 | 6.3 |
| EBITA excl. items affecting comparability* 1 | 199 | 173 | 499 | 390 | 533 |
| EBITA margin excl. items affecting comparability, %* 1 | 10.3 | 9.9 | 9.0 | 7.3 | 7.3 |
| Operating income* | 183 | 81 | 451 | 268 | 387 |
| Operating margin, %* | 9.5 | 4.6 | 8.1 | 5.0 | 5.3 |
| Operating income excl. items affecting comparability* 1 | 183 | 158 | 451 | 345 | 464 |
| Operating margin excl. items affecting comparability, %* 1 | 9.5 | 9.0 | 8.1 | 6.5 | 6.4 |
| Income after financial items | 178 | 73 | 436 | 250 | 363 |
| Income for the period | 135 | 77 | 358 | 208 | 278 |
| Capital expenditure* | -22 | -57 | -75 | -205 | -273 |
| Operating cash flow after investments* | 412 | 63 | 657 | 110 | 570 |
| Earnings per share, SEK 2 | 0.47 | 0.27 | 1.25 | 0.72 | 0.97 |
| Net debt* | n/a | n/a | 33 | 1,004 | 549 |
| EBITDA* 3 | n/a | n/a | 860 | 744 | 684 |
| Net debt/EBITDA ratio* | n/a | n/a | 0.0 | 1.4 | 0.8 |
| Operating working capital % of net sales* 4 | n/a | n/a | 16.0 | 20.2 | 19.9 |
| Average number of shares, million 2 | 287.4 | 287.4 | 287.4 | 287.4 | 287.4 |
| Number of employees, end of period | 3,408 | 3,520 | 3,408 | 3,520 | 3,515 |
*) Alternative performance measures used in this report are explained on pages 24-25.
1) For information on items affecting comparability, see page 18.
2) Basic number of outstanding shares.
3) Rolling four quarters.
4) Last twelve months currency adjusted
Electrolux Professional - Interim Report, Q3 2021
Quarterly data
| SEKm | Q3, 2021 | Q2, 2021 | Q1, 2021 | Full year 2020 | Q4, 2020 | Q3, 2020 | Q2, 2020 | Q1, 2020 |
|---|---|---|---|---|---|---|---|---|
| Food & Beverage | ||||||||
| Net sales | 1,211 | 1,210 | 905 | 4,198 | 1,047 | 1,070 | 838 | 1,243 |
| EBITA | 127 | 110 | 21 | 87 | 11 | 42 | -64 | 99 |
| EBITA margin, % | 10.5 | 9.1 | 2.3 | 2.1 | 1.0 | 4.0 | -7.7 | 7.9 |
| Amortization | -12 | -12 | -12 | -53 | -19 | -11 | -11 | -12 |
| Operating income | 115 | 98 | 9 | 35 | -8 | 31 | -75 | 87 |
| Operating margin, % | 9.5 | 8.1 | 1.0 | 0.8 | -0.8 | 2.9 | -9.0 | 7.0 |
| Laundry | ||||||||
| Net sales | 723 | 748 | 756 | 3,065 | 888 | 678 | 651 | 848 |
| EBITA | 110 | 117 | 111 | 467 | 150 | 79 | 88 | 150 |
| EBITA margin, % | 15.2 | 15.7 | 14.7 | 15.2 | 16.9 | 11.6 | 13.5 | 17.7 |
| Amortization | -4 | -4 | -4 | -16 | -4 | -4 | -4 | -4 |
| Operating income | 106 | 113 | 107 | 452 | 146 | 75 | 84 | 146 |
| Operating margin, % | 14.7 | 15.1 | 14.1 | 14.7 | 16.4 | 11.1 | 13.0 | 17.3 |
| Group common costs | -39 | -30 | -28 | -100 | -19 | -26 | -27 | -28 |
| Total Group | ||||||||
| Net sales | 1,935 | 1,958 | 1,661 | 7,263 | 1,935 | 1,748 | 1,489 | 2,091 |
| EBITA | 199 | 197 | 103 | 456 | 142 | 96 | -4 | 221 |
| EBITA margin, % | 10.3 | 10.1 | 6.2 | 6.3 | 7.3 | 5.5 | -0.2 | 10.6 |
| Amortization | -16 | -16 | -16 | -69 | -23 | -15 | -15 | -16 |
| Operating income | 183 | 181 | 88 | 387 | 119 | 81 | -18 | 205 |
| Operating margin, % | 9.5 | 9.2 | 5.3 | 5.3 | 6.1 | 4.6 | -1.2 | 9.8 |
| Financial items, net | -5 | -5 | -4 | -24 | -5 | -8 | -8 | -2 |
| Income after financial items | 178 | 176 | 83 | 363 | 113 | 73 | -26 | 203 |
| Income for the period | 135 | 168 | 55 | 278 | 70 | 77 | -28 | 159 |
| Earnings per share, SEK¹ | 0.47 | 0.58 | 0.19 | 0.97 | 0.24 | 0.27 | -0.10 | 0.55 |
1) Basic number of outstanding shares.
Electrolux Professional - Interim Report, Q3 2021
Items affecting comparability
| SEKm | Q3, 2021 | 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 | Q3, 2021 | Q2, 2021 | Q1, 2021 | Full year 2020 | Q4, 2020 | Q3, 2020 | Q2, 2020 | Q1, 2020 |
|---|---|---|---|---|---|---|---|---|
| Total Group | ||||||||
| Operating income excl. items affecting comparability | 183 | 181 | 88 | 464 | 119 | 158 | -18 | 205 |
| Operating margin excl. items affecting comparability, % | 9.5 | 9.2 | 5.3 | 6.4 | 6.1 | 9.0 | -1.2 | 9.8 |
| EBITA excl. items affecting comparability | 199 | 197 | 103 | 533 | 142 | 173 | -4 | 221 |
| EBITA margin excl. items affecting comparability, % | 10.3 | 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 | -71,309 | 71,309 | - |
| Number of shares as of September 30, 2021 | 8,049,218 | 279,348,232 | 287,397,450 |
Exchange rates
| SEK | Sep 30, 2021 | Sep 30, 2020 | Dec 31, 2020 | |||
|---|---|---|---|---|---|---|
| Average | End of period | Average | End of period | Average | End of period | |
| CNY | 1.31 | 1.36 | 1.34 | 1.33 | 1.33 | 1.25 |
| CZK | 0.3934 | 0.3988 | 0.4008 | 0.3882 | 0.3969 | 0.3831 |
| DKK | 1.36 | 1.37 | 1.42 | 1.42 | 1.41 | 1.35 |
| EUR | 10.15 | 10.17 | 10.56 | 10.57 | 10.48 | 10.06 |
| GBP | 11.71 | 11.82 | 11.98 | 11.59 | 11.83 | 11.14 |
| JPY | 0.0781 | 0.0784 | 0.0873 | 0.0854 | 0.0861 | 0.0795 |
| NOK | 0.99 | 1.00 | 0.99 | 0.95 | 0.98 | 0.95 |
| RUB | 0.1144 | 0.1206 | 0.1324 | 0.1152 | 0.1275 | 0.1095 |
| THB | 0.2694 | 0.2592 | 0.2981 | 0.2851 | 0.2938 | 0.2735 |
| TRY | 1.04 | 0.99 | 1.40 | 1.16 | 1.33 | 1.11 |
| USD | 8.48 | 8.78 | 9.37 | 9.03 | 9.18 | 8.19 |
Electrolux Professional - Interim Report, Q3 2021
Condensed Parent company income statement
| SEKm | Third quarter | Nine months | Full year | ||
|---|---|---|---|---|---|
| Jul-Sep 2021 | Jul-Sep 2020 | Jan-Sep 2021 | Jan-Sep 2020 | 2020 | |
| Net sales | 550 | 476 | 1,664 | 1,613 | 2,266 |
| Cost of goods sold | -385 | -343 | -1,175 | -1,118 | -1,556 |
| Gross operating income | 165 | 133 | 489 | 495 | 700 |
| Selling expenses | -76 | -84 | -252 | -253 | -330 |
| Administrative expenses | -52 | -32 | -157 | -106 | -135 |
| Other operating income and expenses | 1 | 1 | 3 | 3 | -6 |
| Operating income | 38 | 18 | 83 | 139 | 229 |
| Financial income and expenses | 80 | -3 | 84 | -6 | -7 |
| Impairment of shares in subsidiaries | - | - | - | - | -2,039 |
| Financial items, net | 80 | -3 | 84 | -6 | -2,046 |
| Income after financial items | 118 | 15 | 167 | 133 | -1,817 |
| Appropriations | - | - | - | - | -5 |
| Income before taxes | 118 | 15 | 167 | 133 | -1,822 |
| Taxes | -3 | 8 | -15 | -44 | -64 |
| Income for the period | 115 | 23 | 152 | 89 | -1,886 |
Condensed Parent company balance sheet
| SEKm | Sep 30, 2021 | Sep 30, 2020 | Dec 31, 2020 |
|---|---|---|---|
| Assets | |||
| Non-current assets | 6,867 | 8,498 | 6,452 |
| Current assets | 1,640 | 1,841 | 1,885 |
| Total assets | 8,507 | 10,339 | 8,337 |
| Equity and liabilities | |||
| Restricted equity | 48 | 48 | 47 |
| Non-restricted equity | 5,918 | 7,768 | 5,794 |
| Total equity | 5,966 | 7,816 | 5,841 |
| Untaxed reserves | 114 | 109 | 114 |
| Provisions | 92 | 101 | 92 |
| Non-current liabilities | 600 | 600 | 600 |
| Current liabilities | 1,735 | 1,713 | 1,690 |
| Total equity and liabilities | 8,507 | 10,339 | 8,337 |
Electrolux Professional - Interim Report, Q3 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 | Third quarter | Nine months | ||
|---|---|---|---|---|
| Jul-Sep 2021 | Jul-Sep 2020 | Jan-Sep 2021 | Jan-Sep 2020 | |
| Geographical region | ||||
| Europe | 1,317 | 1,232 | 3,893 | 3,738 |
| Asia-Pacific, Middle East and Africa | 275 | 279 | 834 | 849 |
| Americas | 342 | 237 | 826 | 740 |
| Total | 1,935 | 1,748 | 5,554 | 5,328 |
Electrolux Professional - Interim Report, Q3 2021
Note 3 Fair values and carrying amounts of financial assets and liabilities
| SEKm | Hierarchy level | Sep 30, 2021 | Sep 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 | 2,341 | 2,341 | 2,069 | 2,069 | 2,062 | 2,062 | |
| Derivatives, financial assets at fair value through profit and loss | 2 | 16 | 16 | 7 | 7 | 12 | 12 |
| Total financial assets | 2,357 | 2,357 | 2,077 | 2,077 | 2,074 | 2,074 | |
| Financial liabilities measured at amortized cost | 2,082 | 2,084 | 2,435 | 2,435 | 2,289 | 2,293 | |
| Derivatives, financial liabilities at fair value through profit and loss | 2 | 13 | 13 | 9 | 9 | 6 | 6 |
| Total financial liabilities | 2,095 | 2,096 | 2,444 | 2,444 | 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, Q3 2021
Note 4 Contingent liabilities
| SEKm | Sep 30, 2021 | Sep 30, 2020 | Dec 31, 2020 |
|---|---|---|---|
| Group | |||
| Guarantees and other commitments | 125 | 135 | 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 123m, 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. The expected credit loss provision has decreased to SEK 99m on September 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 September 30, 2021 the amount recognized in profit or loss is SEK 1m (21) in the quarter and SEK 31m (77) 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, Q3 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, Q3 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, Q3 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, Q3 2021
Shareholders information
President and CEO Alberto Zanata's comments on the third 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, October 28. 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 8 566 427 04
Participants in UK/Europe: +44 333 300 9269
Participants in US: +1 833 526 8382
Slide presentations for download:
www.electroluxprofessional.com/corporate
Link to webcast:
https://electroluxprofessional.creo.se/211028
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 Q4 2021 | January 28, 2022 |
| Interim report Q1 2022 | April 27, 2022 |
| Annual General Meeting | April 28, 2022 |
| Interim report Q2 2022 | July 22, 2022 |
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 October 28, 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, Q3 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