Electrolux to lift sales growth

PORDENONE: Electrolux expects to lift sales growth at its professional products business above 7 per cent after spinning off the unit next year, its executives told Reuters, citing opportunities to buy US targets and add fast-food customers.

The Swedish appliances maker announced plans this year to hand over the unit, which makes commercial kitchen and laundry equipment, to investors, allowing the business to access capital and chase the costly acquisitions in its specialist market.

Chief Executive Jonas Samuelson told Reuters the professional unit - the group’s most profitable - had achieved a compound annual growth rate of 7 per cent since 2013. That was thanks in part to organic - or internally-generated - growth, which he expects to continue to outpace the wider market.

“That’s an indication of the potential that the professional business already has and I think there are significant opportunities to accelerate growth, mainly on the inorganic side,” he said at Electrolux’s capital markets day on Wednesday.

The professional business reported 2018 net sales of 8.67 billion Swedish crowns ($935 million) and operating income of 1.13 billion crowns, accounting for about 7 per cent and 21 per cent of group’s respective totals.

Sources familiar with the matter told Reuters the business is expected to be valued at a mid to high teens multiple of EBIT (earnings before interest and tax), in line with peers Welbilt, MiddleBy and Rational.

Alberto Zanata, head of professional products, said the unit was keen to secure restaurant chain customers, moving beyond its stronghold with hotels and institutions, and was currently rolling out beverage stations at sandwich chain Subway.

Reuters