[Foreign language]
Dear shareholders, my name is Staffan Bohman, and as Chairman of the Board of AB Electrolux, I would like to say welcome to you all to this annual general meeting of Electrolux that is very different in a very different time. I hereby declare the meeting open. Next to me, I have CEO Jonas Samuelson and Secretary to the Board Mikael Östman. The Board has asked Mikael Östman to be the minute keeper for today's meeting. We also have Eva Hägg, who is the proposed meeting chair. Before we proceed, I would like to comment on some of the changes we've had to make to this year's meeting because of the corona pandemic. The company, as you know, has already communicated a number of changes with the purpose of limiting the number of participants today to reduce the risk of spread of contagion.
Some of the measures have already been noticeable to you. Out of respect to the safety of all those present, we will do this meeting in a slightly different way. We will try to have a meeting that is as short as possible to limit the time we spend in the meeting room, which means that as far as possible we will make reference to distributed materials when we present proposals, and speeches will also be shorter than normal. We have also made plans for having presentations of proposals that are normally presented by others are this time presented by the meeting chair. Without any intention of restricting the speaking room of any of our shareholders, we would ask you to keep your comments and questions brief, and we hope that next year we will be back to normal circumstances.
I will also mention that only parts of the Board and the management team are present today to limit the number of people participating, and the proposed new members of the Board will not participate today either. To make it easier for all shareholders who are not personally present, the Board also suggests that the entire meeting is broadcast live through the company's website. The video recording will, however, only be of us up here on the podium, and there will be no filming of the audience. Shareholders who wish to ask questions will not be filmed, therefore, but the people watching the broadcast will be able to hear the questions asked. Therefore, I would like to ask the meeting to decide to broadcast the annual general meeting live in accordance with the proposal from the Board. Carried. Thank you.
The meeting has carried that proposal of the Board, and we will broadcast this live. We will now elect a meeting chair, and the nomination committee proposes member of the bar, Eva Hägg, to chair the meeting. Other proposals? Proposal carried. The meeting has elected Eva chairman of this meeting, and I will now give the floor to you.
Thank you very much. Before we start discussing the rest of the items on the agenda, I would like to mention some other points of order. We have some Electrolux employees and other officials present, and usually these guests are welcome to attend. In addition to the live broadcast decided by the Board, taking photographs or recording audio or sound or visuals are not permitted during the meeting. Can we decide that that is also not the case today? Carried.
We will now proceed to item two on the agenda, which concerns preparation and approval of the voting list. A list of the shareholders who've notified us of their attendance has been distributed at the meeting today. Those who arrived today have been marked on the list, and those who haven't arrived have had their names crossed out. We suggest that this adjusted notice of attendance list is adopted as the voting list for the AGM. We now have the adjusted list. The number of shares and votes represented at the meeting are 8,018,146 A shares, one vote each, and 148,260,487 B shares with one tenth of a vote per share. Total number of shares represented at the meeting is 156,278,633, which corresponds to 22,844,194.7 votes. Thank you very much. Can the meeting adopt the adjusted notice of attendance list to act as the voting list for the AGM? Carried.
Now we proceed to item three on the agenda, approval of the agenda. The Board's proposed agenda has been distributed at the meeting, and you can find it in the folder of materials that has been distributed for three of the items on the agenda. The proposals have been changed, but we will get to that when we arrive at that item of the agenda. Can we adopt this and approve the agenda for today's meeting? Carried. Now we will elect two people to verify the minutes. We have spoken to Johan Forssell from Investor and Sebastian Isokamala representing Skandia, and they are willing to take on the task of being minutes verifiers. And Johan is here, and Sebastian Isokamala is over there. Do we have any other suggested names? Can we appoint Johan Forssell and Sebastian Isokamala to be the verifiers of the minutes? Carried.
Now it is time for the meeting to determine whether the AGM has been duly convened. The notice for this year's AGM has been announced in the National Gazette on the 26th of February 2020 and has been available on the company website from the 21st of February. Ads that this notice had been posted has been brought in Svenska Dagbladet and Dagens Nyheter on the 26th of February 2020, so the notice has been announced five weeks before. We determined that it's been duly convened. Carried. Then we come to item six on the agenda, which is the presentation of the annual report and the audit report, as well as the consolidated accounts and the audit report for the group.
These documents have been made available according to press release, and it's also been available on the company's website from the 28th of February 2020, and the printed version has been sent out to those who wanted it in advance and also distributed here at the meeting. The auditor's report as to whether the company's guidelines for remuneration to the group management has been complied with has been available at the company's website from the 21st of February and also in printed version at the company, and they have also been sent to the shareholder who wish so. So I conclude that these documents have been presented, and I hand over to Staffan Bohman. Please.
Thank you. Dear shareholders, I will now briefly describe the work of the Board for 2019.
As I previously mentioned about the shortened version of this AGM, my presentation will also be shorter than normal, and for a more detailed report on the work of the Board and the committees, as well as for corporate governance in general, I refer you to the annual report pages 101 to 118. But I'd like to mention a few things. One of the great focus areas for the Board in 2019 was the distribution and the listing of Electrolux Professional that was carried out on the 23rd of March this year. Given the situation that we currently see on the stock exchanges in the world and in society, we might possibly ask ourselves whether the timing for this was the best.
But for any doubting Thomases out there, I would like to say that the Board still finds that the reasons that formed the foundation for the decision to launch this project a little over a year ago are still valid. And since the values in Professional ended up in the shareholders' hands and not in the hands of an external buyer, it actually matters less in the short term what the share price is from one day to the next. The Board, therefore, is still of the opinion that this separation will generate considerable shareholder value. A few words about the corona situation, which is difficult to avoid commenting on at the moment. The economy in the wake of the pandemic is suffering from nothing less than a natural disaster.
We see in the world around us draconian measures implemented by governments and the impact on the society and on companies' risk being enormous if this continues with long-term threats to the very backbone of the Swedish economy. In light of that, the Board is directing all their focus on supporting the company management in the important work that is ongoing to ensure that Electrolux, in the best possible way, can manage the risks and the challenges that this coronavirus entails. During these very difficult times, it's safe for you to know that Electrolux is entering this stage with a very strong balance sheet, good credit rating, and excellent liquidity.
In light of the considerable uncertainty that prevails, the Board has decided to withdraw their proposal for a dividend as we considered it appropriate in this situation to act with caution to ensure that the company will continue to be well positioned in the future. The Board therefore proposes that no dividend will be paid out to the shareholders for the financial year 2019. We have also withdrawn the proposal of implementing a share program for the company's leading executives. If this global situation and market conditions stabilize at some point during this year and the company's financial position remains good, the Board will consider in the autumn to announce an extraordinary annual general meeting to decide on a potential dividend.
In conclusion, myself and the Board would like to extend our gratitude to Jonas, the management team, and all the employees of the company for their very skillful and very hard work in these very challenging times. Thank you.
Thank you for that. That brings us to item seven on the agenda, and I will now cede the floor to Jonas Samuelson, CEO.
Thank you, Eva, and thank you for what has been said, and I would also like to say welcome to the meeting. That is very different this year. We always put the health and well-being of our shareholders and employees in the first place, and that is why we are doing this in a slightly different way because of the COVID-19 virus. We also would like to welcome the visitors who are participating digitally at the AGM through our web broadcast. If I start by commenting a little bit on the developments because of the coronavirus, we have communicated to the market on the 15th and 23rd of March the effects of the pandemic on the results of 2020, and we do expect significant impacts on our income. It is to do with disruptions to our supply chain.
Primarily, the countermeasures of different authorities make it difficult to sell appliances in many countries, and also the changes in consumer behavior, both in the short term, and the risk is that this will prevail in the long term as well. We take very strong countermeasures to reduce the risks to our income and cash flow and the effects of the coronavirus, and it is, of course, in light of these uncertainties that the Board has suggested to withdraw the dividend this year. As Staffan also mentioned, we have carried out the separation and the distribution to the shareholders of Electrolux Professional on the 23rd of March. This separation means that it's possible for the two companies to focus on their respective businesses and can drive growth going forward. In this very turbulent situation that we're in, we can see that both companies are strengthened by the separation.
Going forward in my presentation, I will solely focus on our consumer operations. Let's take one step back and look at the profit and loss for 2019. We had net sales of SEK 119 billion in 2019. That was a negative sales growth of 1.3%, and that was mainly driven by our low sales in North America, where we've had a lot of transition both for the customers and in production. The operating income, extraordinary items, SEK 4.5 billion and an operating margin of 3.8%, which generated a return on operating capital of 12% and cash flow of SEK 2.3 billion. If we look at which items were behind this development, we've gone down by SEK 1 billion in the operating income.
In the consumer industry, we had a positive organic growth of 1.6%, driven by a very good reception of our newly launched innovative products and raising prices and improving our sales mix. This has also made it possible for us to entirely compensate for the very strong headwinds that we could see in the shape of increased raw material costs and trade tariffs and currency and negative currency effects of SEK 500 million. Over the year, we could see positive effects from cost efficiency, mainly driven by the large investments and measures that we've taken in North America to increase efficiency in our operations. But over the year, we had some double costs and some delays in our startup of our Anderson plant in South Carolina, which led to some cost inefficiency.
But these are the right measures to take for the future, and this will strengthen our position for the future. And if we now look to the future, we have a very clear strategy for profitable growth. We base this on three steps. First, we focus on stability and focus, a very clear focus in our operations, and then we focus on delivering with sustained profitability and primarily investing in targeted growth. And we've made progress in the last couple of years on this journey. Of course, now we are in a situation where we have to reassess our strategy in the short term and how we appropriate our resources, which means that we have to look at the instability at this stage and then start focusing again on achieving profitable growth.
But we have very clear ideas for how to counteract this, and we are taking strong countermeasures, as I've said. If we look to the future, we have kept our financial targets with an operating margin of 6%, sales growth of 4%, and RONA of 20%, which in practice means upping our ambitions because Professional has had higher profitability than Consumer, historically speaking. These are two important strategic initiatives that will drive us towards this profitable growth, which are to continue to develop sustainable and innovative products for enhancing consumer experience. We have made a lot of progress over the recent years, and we will continue to invest in streamlining through digitalization, automization, and modularization. And we do this with our basis being in a solid balance sheet, which contributes to profitable growth in very difficult external circumstances.
As I said, innovation when it comes to consumer experience is completely crucial to our future success. We had many very good examples of this in 2019. I think perhaps the best example is our new kitchen series in the Electrolux brand in Europe that has had a very good reception and has been a big factor behind the profitable growth that we could see in Europe in 2019. The new kitchen series received a 4.9 rating out of five in an online consumer survey. We also had very nice examples from North America. We were the first people to introduce the AirF ry technology to cookers and ovens, and that has been extremely successful and very well received by our customers in North America, where we've received a 4.6 star rating.
This innovation strategy has really enhanced our position on the market and had a positive contribution to it. But to us, this is about doing this in combination with sustainable development, which means that our possibilities of standing particularly strong against our competitors. We are leaders within sustainable development, and the biggest contribution we can make is to reduce energy use in our products. As you can see, energy use represents 85% of the carbon emissions in the total life cycle of our products. We've signed Science Based Targets. We were the first manufacturer in our industry to publish Science Based Targets where we've promised to reduce our carbon footprint from product use by 25% by 2025 and the carbon footprint from our internal operations by 80% by 2025. That is an initiative that we are forcefully driving and putting a lot of effort into.
But as a manufacturer that sells 60 million products every year, exists in millions of homes around the world, we have a much greater responsibility beyond just making our products as efficient as possible. We also have great opportunity and responsibility to help our consumers live more sustainable lives by being able to offer better solutions for better eating, to reduce food that goes to waste, cooking in better ways. We can help consumers care for their clothes in a better way, in a more sustainable way, making garments last longer and reducing our environmental footprint by half. We are also an important player when it comes to the home environment, and we can help our consumers make their homes more healthy by offering smart solutions for air conditioning, floor water, and floor care.
And of course, our own responsibility to make our own company more business, more circular, and climate neutral. These are our targets in our so-called Better Living Program that was launched in 2019 as part of our 100-year anniversary. This is something we are deeply committed to, and our employees are as well. This is a platform on which we can continue to grow profitable growth in a sustainable way in the future. In summary, Electrolux stands very strong in the face of the great challenge that we now face with the coronavirus. We have a solid balance sheet. We have incredibly competent and committed co-workers, and we have a clear strategy that we deliver to our consumers and to our shareholders.
With those words, I would like to say thank you for the year of 2019, and I look forward to tackling this crisis that we are currently in and to emerge even stronger afterwards.
Thank you for that, and this means that you have an opportunity to ask questions or if you would like to comment on any of the presentations heard or the business itself, you can please request to speak. We have roving microphones around the room, and I would ask you to introduce yourselves before you open with a question. We have a question here.
Yes, my name is Christoffer Ödman, and I represent the Swedish Shareholders' Association, Aktiespararna, and my own shares. I have three or four questions I'd like to ask each of them separately so we can take the answers one after another.
I would like to say, as usual, it's very pleasant to read the Electrolux annual report. It's very informative, and it's easy to track what has happened in the company and its wonderful sustainability investments that Electrolux is doing. And that, as far as I can remember, has always been the case, at least as long as I've followed Electrolux since 2002. But I do have some questions concerning the current situation because today I read that you have given notice to 300 people. And will you apply for participating in these short-term layoffs subsidized by the government? And are there any other similar efforts that are akin to those in the Swedish market?
Yes, we have filed an application with the Growth Agency applying for support for that short-term layoff. We did that last Friday. In several other European countries, they have similar programs in place.
For us, it's very important in particularly Germany and Italy where we have a number of employees and where we have already executed these types of programs. They exist in other countries as well, but those are the most important ones for us, and in the annual report, we can also see that Electrolux is well equipped to handle a recession, but recessions, you never really know when they arrive and how they will impact us, and we don't know when they end either, but it still feels good to see that Electrolux has the resources, and it's not the first time that the company has seen a considerable dip in the economy.
I would also like to ask, considering the current situation, very few of us are here, has the board discussed and considered how we can have more digital AGMs in the future, including an opportunity to vote remotely?
That might be something to consider for next year already or in the future. But this year, at least, that would have been a good opportunity. I know that there are some technical difficulties with that, but I'd say that most of those things can be resolved. Electrolux now is a global business, but if we could implement a method for voting remotely and asking questions remotely and following the AGM, then I think that would be a huge leap forward for increasing the interest in owning shares in Electrolux as well. Well, the answer is that the board has not discussed this specifically.
That has taken a backseat to the whole corona issue, but of course, in the light of what we're seeing now, we will have to assess that matter and come back to you on that.
What measures have the company implemented in the wake of the corona crisis, both on a financial level but also on a more practical level?
Well, we see this really in three stages. The first immediate stage is where we are now, where we see our operations closing down in large parts of the world for various reasons. And that is about preserving liquidity and our cash flow, inventory, accounts payable, accounts receivable, and make sure that we can reduce our cost as much as possible without taking desperate measures. Of course, there is a cash flow and liquidity focus in the short term, and we've done that in a fairly determined manner.
The slightly longer term, say stage two, will be about preparing the company for a more extended recession that we will probably see and primarily that we can influence the cost, that we can do something about in the short term. And the cash flow, that we can do something in the short term, is about product development projects, capital investments, marketing costs, and of course, things like travel, new employees, and reviewing a number of employees already. We're doing that currently. And thirdly, it is about preparing for coming out on the other side of this crisis and trying to anticipate trends that may already be in existence, that may strengthen even more. It could be consumer behavior, for example, that will be impacted by what we're going through right now.
We've started looking at that, but that is something that we will have to deal with after the initial crisis management. We are definitely seeing a high probability of, like you mentioned, say, digital or online trading, how that can grow because of the situation we're in right now. We are preparing for that.
The last question is about the coronavirus seems to have arrived in different phases around the globe. Have you also seen how you had to start closing plants first in one place and then another and how it can affect them differently? Could it be that different parts and different markets you might get started again a little bit earlier once you're through the worst phases? Could it be like that?
Yes, absolutely. For example, in China, we're back more or less.
Italy was the country that it was impacted first after China, where we can see without being an epidemiologist, it looks like they're spiking in Italy now while certain other countries still have some time before that happens. The challenge, of course, aside from our focus on keeping our employees as safe as possible, something that has gone very well, that is managing our fairly complex value chains where we purchase a lot of components and products from China. Italy is an incredibly important country for us, both in terms of production and for suppliers and also our R&D operations. These different stages are important to manage and very complex to manage for a global company like Electrolux globally integrated.
Thank you so much for those questions, and thank you and good luck.
Thank you for that. Do we have any additional questions?
[Foreign language]. I cannot see that. So that brings us to item eight on the agenda, and that's a resolution on the adoption of the income statement balance sheet. And we can see that the auditors recommend that we adopt them. Will the meeting adopt them? I find that it's carried. That brings us to the resolution on discharge from liability of the directors and the president in 2019. And in this decision, of course, members of the board or the CEO will not participate. We've seen that the auditors recommend that they are discharged of liability. And I ask the meeting whether you will discharge the board members and the CEO of liability. I find that is the case. That brings us to item 10, which is the resolution on dispositions in respect of the company's profit.
As we've heard, there will be no dividends paid, which means that the profit from the previous year, which is SEK 15,104,722,000 , will be carried forward. Any comments? Can I ask the meeting if you can decide in accordance with the board's proposal? I find that is carried. [Foreign language] . Now we reach a number of items on the agenda where we have proposals from the nomination committee, which has comprised this year Johan Forssell, Investor, chairman Kaj Thorén, Alecta, Marianne Nilsson, Swedbank Robur Fonder, Anders Oskarsson, AMF, and from the board, Staffan Bohman and Fredrik Persson. For description of the work of the nomination committee and the reasons behind the proposals, we have a recent statement from the nomination committee on the website.
We start with item 11 on the agenda, which is the determination of the number of directors and deputy directors. We suggest that the number of directors should be nine and no deputies. Do we have other proposals? Can we decide in accordance with the proposal from the nomination committee? Carried. We will now decide on fees for the directors and audits. This has been made clear in the press release of the 23rd of March that the board has withdrawn their suggestion of a minor raise of the fee and instead suggested unchanged fees for the members of the board of directors. So that means SEK 220,000 to the chairman of the board and SEK 640,000 to each of the other directors appointed by the annual general meeting, not employed by Electrolux.
For the committee work, we propose SEK 280,000 to the chairman of the audit committee and SEK 170,000 to each of the other members of the committee and SEK 150,000 to the chairman of the remuneration committee and SEK 100,000 to each of the other members of the committee. The nomination committee also proposes that the auditor's fee can be paid as incurred for the auditor's term of office on approved account. Do we have any other proposals? Does the meeting wish to resolve this item in accordance with the proposal from the nomination committee when it comes to fee to the members of the Board and the auditor's fee? That is carried. We now reach item 13 on the agenda, which is the election of Board of Directors and Chairman of the Board of Directors.
We suggest a re-election of Staffan Bohman, Petra Hedengran, Ulla Litzén, Fredrik Persson, David Porter, Jonas Samuelson, and Kai Wärn for the upcoming year. Hasse Johansson and Ulrika Saxon have notified the nomination committee that they decline to be re-elected. We also propose from the nomination committee that Henrik Henriksson and Karin Overbeck are elected to be new directors. Furthermore, the nomination committee suggests that Staffan Bohman is re-elected as the chairman of the board. In the distributed materials and on the website, there is a more extensive presentation of the proposed members of the board of directors with information about their other assignments for other companies. And I establish that the information about this has thus been presented. I now ask you if we have other proposals for this item on the agenda.
We will now proceed to hold elections, and the meeting has already decided to appoint nine directors, and I will ask for one candidate to be elected at a time. Do we elect Staffan Bohman? Does the meeting elect Petra Hedengran? Does the meeting elect Henrik Henriksson? Does the meeting elect Karin Overbeck and Ulla Litzén? Does the meeting want to elect Fredrik Persson? Does the meeting want to elect David Porter? Does the meeting want to elect Jonas Samuelson? Does the meeting want to elect Kai Wärn? That concludes the voting for all candidates, and I can establish that the meeting has elected the nine proposed candidates proposed by the nomination committee. Can we also decide to elect Staffan Bohman as the chairman of the board in accordance with the proposal from the nomination committee? Carried.
That brings us to item 14 on the agenda, which is the election of an auditor. The nomination committee has chosen to go with recommendations of the nomination committee that Deloitte is elected as an auditor for this financial year. Are there any additional proposals? Can the meeting decide in accordance with the nomination committee's proposal? I find that the meeting has decided to elect Deloitte as our auditor up until AGM 2021. Deloitte has also announced that Chartered Accountant Jan Berntsson will continue being the senior auditor, and then we come to item 15, which concerns remuneration to the group management. The proposal in its entirety has been presented in the notice, and it's been available for five weeks, and it's also included in the material distributed here today. Are there any questions or comments before we move on?
Then I ask the meeting if you agree with the board's proposal. I find that is the case. That brings us to item 16, where the board originally had presented a proposal for implementing a performance-based long-term share program for 2020. The board announced on the 23rd of March that they decided to withdraw the proposal of implementing a performance-based long-term share program for 2020. So there is no proposal anymore under this item. We'll not be resolving anything in this item, and with that concludes this particular matter. That brings us to item 17. This concerns making it possible for the board to acquire further Electrolux shares in the coming year and to use the repurchased shares to finance company acquisitions. These proposals are consistent with the resolutions adopted last year.
We also propose that the meeting decides about transfer of own shares on the stock exchange for the purpose of covering costs in connection with the allocations in the share program 2018. The complete proposals can be found in the convening notice, and the convening notice has been available on the website together with the statement from the board according to Chapter 19, Section 22 of the Companies Act for five weeks. The notice and the statement are in the materials distributed today, and therefore they have been presented. In order to have a valid decision regarding items 17, A through to C, we need an approval from shareholders with at least two-thirds of the represented shares and the votes cast at the meeting.
And because we don't have voting devices at this meeting for reasons that have to do with the risk of infection, I will adopt in other ways if we have the required majority. So now we proceed to 17, A, acquisition of own shares. Do we have any comments or questions? Can we decide that the board can acquire own shares in accordance with the proposal? Now we need to establish that we have achieved the required majority of two-thirds for this resolution, and I've seen the voting instructions from the proxies. And we have a very low number of shares, just much less than 1% voting no or abstain from voting here. And any other no votes? Any other abstention of votes? I then establish that the meeting has decided to carry this proposal from the board.
Now we reach item 17B, which concerns transfer of own shares on account of company acquisitions. Do we have any comments or views to voice on this item of the agenda? Can the board decide to authorize the board to decide on transfer of own shares in accordance with their own proposal? Now we need to establish that we have achieved the required majority of two-thirds. I've seen the voting instructions here as well. We have a very low number of shares voting no or abstaining. Do we have any other votes saying no? Do we have any other abstentions? I find that that proposal has been carried. Now we need to decide on 17C, which concerns transfer of own shares on account of the 2018 share program. Do we have any questions or views to express on item 17C?
Can we decide to give the company the right to transfer shares in accordance with the proposal? Let us establish that we have the required majority of two-thirds here. I've also seen the voting instructions from the proxies when we have a small number of shares and votes saying no to 3%. Do we have any other no votes? Do we have any other abstentions? I find that we've decided in accordance with the proposal put forth by the board. Now we reach the final item on our agenda, and that means that we have dealt with all items on the agenda, and before we close this year's meeting, I give the floor to Staffan Bohman.
Thank you, Eva.
I would like to take this opportunity to thank Hasse Johansson and Ulrika Saxon, who now lead the Electrolux board after having been on it 11 years for Hasse and nine years for Ulrika. Both Hasse and Ulrika have contributed a lot, and they've been very involved and committed in their respective fields. Hasse has primarily focused on development, modularization, and plant investments, and Ulrika has provided particular competence on marketing and digital issues connected to consumer centricity. And I also want to thank our two employee representatives, Ulf Carlsson and Joachim Nord, who will now go to the Electrolux Professional Board instead and therefore are leaving our board.
For the reasons I mentioned at the beginning, it is not possible for us to formally thank them for their work today because they're not present, but I wanted to go on record that the AGM has expressed their thanks to the four members that are leaving this year, and we will have a proper thanks given to them when we are back to normal again. Thank you very much, and I hereby declare this annual general meeting concluded.