Keith McLoughlinHow will Electrolux createsustainable economic value?Capital Markets dayNovember 15, 2011
The transformation        A tough startis paying off                        2
Earnings is down byapproximately 50%      2011, Q3 YTD (SEKm)      EBIT                          EBIT excluding items     ...
Earnings drop causedby three factors     Volume         Raw material          Price  Weak demand       Increased costs    ...
Significant deterioration ofconsumer confidence in US…        Consumer confidence, US 160 140 120 100  80  60  40  20     ...
…as well as in Europe       Consumer confidence, Italy 110 105 100  95  90       Dec                          Jun    Oct  ...
...which generated weakdemand in the mature markets Mature markets      Change    Growth markets      Change (Core applian...
No US recovery in short term       US Quarterly comparison y-o-y15%10% 5% 0% -5%-10%-15%-20%       Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4...
Southern Europe isdown 12% YTD       Western Europe Quarterly comparison y-o-y 6% 4% 2% 0%-2%-4%-6%-8%-10%       Q1 Q2 Q3 ...
… and we needed to adaptour estimate for 2011 Electrolux expectations for market development FY 2011 Core appliances      ...
Raw material prices are comingdown…but from a high level         Market prices for steel                                  ...
Prices are down in 2011, but actionsare being taken to increase them            Europe               North AmericaSEKm    ...
Share price is down by 1/3 –as the rest of the industry       Electrolux B vs AFG Whirlpool and Indesit250225             ...
The transformation  But we are not standing stillis paying off                                  14
Actions taken•   Acquisitions•   Taking out costs•   Increasing prices•   Launching new    products                       ...
Delivering on our growthstrategy in emerging markets                               Sales 2010:                            ...
Exposure toemerging markets   35%
Continuing to take out costs                       2011 actions Disposal of     Factory in      Factory in     Improved pr...
Increasing prices Announced price          Announced price       Gradual price increases in the US,     increases in Europ...
The transformation   Launching new productsis paying off                            20
AEG Neue Kollektion
AEG Neue Kollektion
FILM 1 AEG
Frigidaire
Frigidaire
FILM 2The transformation       Jennifer Garneris paying off          Frigidaire                         26
Ultra Clean Washing Machine
UltraOne
The transformation          Film 3is payingUltraOne          off                     29
Ergothree
Ergorapido Green
Keyhole Hob
Professional Food Services
Professional Laundry
The transformation      The core strategyis payingthe same…       is off                          35
Phases in Electroluxdevelopment                       Today                               36
Strategic direction – with increasedfocus on growth, acceleratedexecution and peopleOur Core Values& Principles           ...
We will pursue our dual businessmodel while leveraging global scaleand operational synergies Shared global strength    Sha...
We will continue optimizingour manufacturing footprint andimprove capacity utilization                                  Op...
Husqvarna spin-off – the finalstep in a focused companySales SEKbn Disposal of 22 companies                               ...
We will build the winners and addresscore categories through innovationand cost competitiveness                 •   Tradit...
We will pursue the alignment of our brandarchitecture, connecting business modelsto brand, product/services and cost      ...
Growth will come from value share incore markets and expanding in emergingmarkets, new channels and adjacencies Markets/Ch...
We will invest in benchmark customercare to enhance service and seizebusiness opportunitiesService ascompetitivedifferenti...
Electrolux sustainabilitystrategyOur mission:“making appliances that are more resource efficient, moreaffordable and avail...
Recognition of sustainabilityleadershipSustainability sector leader in the US (2006-2010) and Germany (2010)Component of t...
Attracting, retaining and developingthe best people fundamentalin realizing our strategic objectives   Values       Passio...
Summary                     GROWTH         PRODUCT &         SERVICES    • Grow Value Share in                       Matur...
Desired Position 2015Best Appliance Company in the world:                                       49
…and we need to speed upThe transformation      implementationis paying off   – Innovation   – Operational Excellence   – ...
New Group Management                       51
75% of Group Managementmembers have worked and livedin two or more continents                                52
Accelerate innovationand time to marketIncreased focus on ”Innovation      “Best-in-Class” ProductsTriangel”, new members ...
Develop “Best-in-class” products• Identify consumer needs  and segments• Develop products with innovative  design and func...
Speed up product innovation• Accelerate consumer insight driven  differentiation• Tailor products with high consumer  pref...
Investments in premium brands                     • Invest in premium brands                       across all markets     ...
The transformation       Adjust our capacityis paying off    - manufacturing footprint                                57
North America  k units                   Market volumes in North America  60 000  55 000  50 000                          ...
Western Europe  k units          Market volumes in Western Europe  90 000  85 000  80 000                                 ...
The transformation       Accelerate efficiency improvements and cost reductionsis paying offoperations        - global    ...
Accelerate activitiesto bring down cost…                                                 Total savings SEK 5.1bn          ...
Coming from heavy exposureto mature markets…                             62
…with tremendous growthopportunities in emerging markets                                    63
The transformation to   Electrolux will continueis paying off      create sustainable       economic value                ...
Consensus gives a margin of 4% for 2011 – Electrolux normal earnings some years ago%                                  EBIT...
EBIT Target   6%
Capital Turnover   4
ROCE Target   25%
Organic Growth   4%
The transformation         We are ais paying off    healthy company…
The transformation    … and we still haveis paying off to do        work
72
Factors affecting forward-looking statementsFactors affecting forward-looking statementsThis presentation contains “forwar...
Jonas SamuelsonFocus on cost to staycompetitiveCapital Markets dayNovember 15, 2011
The transformation   What we have achievedis paying off                           2
Status of manufacturing programCurrent status                        Our journey since 2004• Total costs: SEK 8.1 billion ...
Restructuring time line –Costs9,000        SEKm                                                  50                       ...
Restructuring time line – Savings3,000        SEKm                                600                         500         ...
Restructuring time line –Capacity in low-cost areas    Percentage of Capacity in LCC                                      ...
We have been able to deliver   on previous cost-savings programs                                             Approx. 15%  ...
New production centershave been built and acquired                             Eastern Europe                             ...
Current activities• Closure of L’Assomption in Canada (2013)• Build Memphis plant in the US  (to receive L’Assomption volu...
The transformation       Moving forward,is paying have changed    things off                         10
We need to furtheradapt our capacity• Regional vs global manufacturing  strategy• Declining demand in mature markets• Impr...
Broadening drivers formanufacturing strategy                         • Costs COSTS                   • Global manufacturin...
Adapt our production capacityto current demand                  Market volumes in North America  60,000  55,000  50,000   ...
Adapt our production capacityto current demand                  Market volumes in Western Europe  90,000  85,000  80,000  ...
Electrolux Manufacturing System(EMS)• Standardized manufacturing  principles, tools and methods,  for all factories, using...
The transformation       Further actionsis paying off                         16
Further actionsCosts                    Savings                 Manufacturing footprint   SEK 3.5 billion          Annual ...
Restructuring time line –Costs   SEKm                               11,650                     3,500          8,150      2...
Restructuring –Savings   SEKm                    1,600     4,600          3,000      2011 YTD    2011-2015   2015         ...
Annual savings/Total costs       46%                        20
Target manufacturing footprintby 2015                       Manufacturing footprint HCA                           Declinin...
We need to increase currentcapacity utilizationCapacity utilization       • Decrease capacity                           • ...
In 2005-2006, we movedThe transformation    25% of our total Europeanis paying offnew plants in     volumes to          lo...
Will not buildThe transformation        new factoriesis paying off      to move capacity                         24
We are in the final phase ofour restructuring program                              Eastern Europe                         ...
The Global Operations –     transformationis paying off         an update                          26
We stick to our plan andaccelerate delivery• Ambitious targets for 2015• Rigorous plan; confident  in delivery• Visible re...
Outcome from the first modularizationdeep dive in Food Preparation                      Annual purchasing spend           ...
Modularization in Fabric CareWash Group example                                                            Impact on compl...
Global Operations  We have identified a greater  potential within modularization which  will generate higher savings      ...
Savings from Global Operations   Manufacturing                   17%                               Modularization         ...
Savings from theGlobal Operations programSEKbn             Savings (y-o-y)    Investments                                 ...
We stick to our plan and acceleratedelivery• Ambitious targets for 2015• Rigorous plan;  confident in delivery• Visible re...
34
Factors affecting forward-looking statementsFactors affecting forward-looking statementsThis presentation contains “forwar...
MaryKay KopfThe Innovation TriangleCapital Markets dayNovember 15, 2011
Innovation Strategic Prioritiesfor Marketing Differentiate Brand Platform          Streamlined Innovation Process • Target...
Accelerate Front End InnovationLinking insights to innovation to plans is keyto building‘best-in-class’product portfolio  ...
Streamlined Innovation ProcessInnovation ActivationKey Objectives            Accelerate Innovation             • Get relev...
Innovations in MarketingElectrolux Design Lab 2011•   Intelligent mobility•   Over 1300 entries•   Finals in London•   6 m...
Innovations in MarketingThe CubeImage of Cube in Milan:to open on December 1st• Experiential platform for  professional he...
The transformation           FILM 4is paying The cube          off                     7
Innovations in MarketingInstant Clean                                                                                     ...
Innovations in MarketingVac from the Sea StoryOctober 2010:• Electrolux relaunches its green  range of vacuum cleaners mad...
The transformation            FILM 5is paying off the sea       Vac from                        10
11
Factors affecting forward-looking statementsFactors affecting forward-looking statementsThis presentation contains “forwar...
Jan BrockmannThe Innovation TriangleCapital Markets dayNovember 15, 2011
Electrolux Dual Business Model – howProduct Development supports it  Shared global strength          Sharp customer focus ...
Automotive tools and methodsused in product development• Modularization• Cost-differentiated product platforms• Strengthen...
4
Factors affecting forward-looking statementsFactors affecting forward-looking statementsThis presentation contains “forwar...
Keith McLoughlinProfitable GrowthCapital Markets dayNovember 15, 2011
Growth                     Net sales growth                  (in comparable currencies)     5%     0%     -5%           20...
Growth Target   4%
Sell-sideConsensus            1-2%
Our strategic growth initiatives                                EMEA   NA   LA   APAC   Prof.   FC         Segments/Channe...
Film 6Film 6 MixerMixer
Electrolux exposure to emergingmarkets  2009                      2011  25%                        35%
The transformation      Acquisition of CTIis paying off                           8
Acquisition of CTI completed• Founded in 1905, CTI is the  leading manufacturer of large  household appliances in Chile• L...
CTI brands             10
Film 7CTI Gafa
CTI-Historical financial development                                                                                      ...
Strong synergies throughcombined footprint  Juárez                                         Snapshot of Combined Business  ...
The transformation    Acquisition of Olympicis paying off                             14
Film 8Describing Olympic
A solid result and growth           Sales Olympic Group, EGP million                  CAGR (Sales) ~6%  3,000             ...
Film 9 OlympicWater heater
Our Ukrainian acquisition positionsus for continued growth in the region                                Russia            ...
The transformation     What can we achieve?is paying off                            19
Our acquisitions supportgrowth in emerging markets Growth markets                  Organic growth                   Acquis...
Electrolux growthin BrazilElectrolux Net Sales Brazil(In SEKm)                                                            ...
Electrolux growth inSoutheast AsiaElectrolux Net Sales Southeast Asia(In SEKm)                                      CAGR: ...
If we fully utilize organic growth opportunity – more than 40% of sales could be in emerging markets by 2015              ...
Tremendous growthopportunities in Asia  Region/Country                                   Population (million)             ...
25
Gunilla NordströmEMA Asia/PacificCapital Markets dayNovember 15, 2011
Asia Pacific – a growth region- Over 1.2 billion people will be added to global   middle class in Asia Pacific    Global M...
2/3 of global appliance growth        will come from APAC                                           +3.8%              1 2...
EMA APAC has gone from turnaround to profitable growthTotal market at                      Electrolux NS        APAC EBIT ...
Asia/Pacific – key prioritiesFix China• Eliminate losses• Build a platform for profitable growth• Invest in design and BIC...
Asian consumers similarbut products differ from Western                                                           Market F...
Southeast Asia                                                                       SE Asia Economics                    ...
Southeast Asia growth strategyBackground & Position                                  Growth Strategy• Established early – ...
Marketing in SEAWashing Marathon        Asian Food Channel   Concept StoresCooking Demonstration   My Mobile Kitchen    Br...
Country overview - China                           Facts                           Population                   1.3bn     ...
The China market– A huge opportunity   Others                             • Competitive                    Gree           ...
EMA China – 2002 to 2011Net Sales vs Market Value                                    Electrolux Profitability Market value...
13
Factors affecting forward-looking statementsFactors affecting forward-looking statementsThis presentation contains “forwar...
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Electrolux Capital Markets Day 2011

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Electrolux Capital Markets Day 2011

  1. 1. Keith McLoughlinHow will Electrolux createsustainable economic value?Capital Markets dayNovember 15, 2011
  2. 2. The transformation A tough startis paying off 2
  3. 3. Earnings is down byapproximately 50% 2011, Q3 YTD (SEKm) EBIT EBIT excluding items 4,780 affecting comparability -47% 2,539 Europe 1,850 -51% North 1,151 -85% 911 America 174 2010 2011 3
  4. 4. Earnings drop causedby three factors Volume Raw material Price Weak demand Increased costs Decline in (mature markets) for steel and mature markets plastics North America: Headwind of Headwind of -5% in 2011 YTD ~SEK 1.8bn ~SEK 1bn Western Europe: in 2011 YTD in 2011 YTD -3% in 2011 YTD 4
  5. 5. Significant deterioration ofconsumer confidence in US… Consumer confidence, US 160 140 120 100 80 60 40 20 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2011 Oct 5
  6. 6. …as well as in Europe Consumer confidence, Italy 110 105 100 95 90 Dec Jun Oct 2010 2011 2011 6
  7. 7. ...which generated weakdemand in the mature markets Mature markets Change Growth markets Change (Core appliances) YTD (%) (Core appliances) YTD (%) US -5 Eastern Europe +10 Western Europe -3 Russia +21 Italy -9 Brazil +7 Spain -12 Southeast Asia +10 7
  8. 8. No US recovery in short term US Quarterly comparison y-o-y15%10% 5% 0% -5%-10%-15%-20% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2006 2007 2008 2009 2010 2011 8
  9. 9. Southern Europe isdown 12% YTD Western Europe Quarterly comparison y-o-y 6% 4% 2% 0%-2%-4%-6%-8%-10% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2006 2007 2008 2009 2010 2011 9
  10. 10. … and we needed to adaptour estimate for 2011 Electrolux expectations for market development FY 2011 Core appliances North 2011 Europe America February +3% +2% October -4-5% -1% 10
  11. 11. Raw material prices are comingdown…but from a high level Market prices for steel Market prices for plastics CRU US Midwest USD/t Indexed weighted average1 100 150 1401 000 Oct 130 Oct 900 120 800 110 700 100 600 90 Dec Jun Dec Jun Dec Jun Dec Jun 2010 2011 2010 2011 11
  12. 12. Prices are down in 2011, but actionsare being taken to increase them Europe North AmericaSEKm SEKm Q1 Q2 Q3 Q1 Q2 Q3 0 0-100 -100-200 -200-300 -300 12
  13. 13. Share price is down by 1/3 –as the rest of the industry Electrolux B vs AFG Whirlpool and Indesit250225 Indesit200175 Whirlpool150125 Electrolux10075 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct 2010 2011 13
  14. 14. The transformation But we are not standing stillis paying off 14
  15. 15. Actions taken• Acquisitions• Taking out costs• Increasing prices• Launching new products 15
  16. 16. Delivering on our growthstrategy in emerging markets Sales 2010: ~SEK 2.5 bnSales 2010:~SEK 2.9 bn 16
  17. 17. Exposure toemerging markets 35%
  18. 18. Continuing to take out costs 2011 actions Disposal of Factory in Factory in Improved production in Alcala closed Webster City purchasing Motala closed and manu- facturing Sweden Spain USA Globally 18
  19. 19. Increasing prices Announced price Announced price Gradual price increases in the US, increases in Europe increases in effective as of April, of 5-7% Latin America 2011 • Expected • Second round implementation in started in August Q1, 2012 • Third round announced for January 2012 19
  20. 20. The transformation Launching new productsis paying off 20
  21. 21. AEG Neue Kollektion
  22. 22. AEG Neue Kollektion
  23. 23. FILM 1 AEG
  24. 24. Frigidaire
  25. 25. Frigidaire
  26. 26. FILM 2The transformation Jennifer Garneris paying off Frigidaire 26
  27. 27. Ultra Clean Washing Machine
  28. 28. UltraOne
  29. 29. The transformation Film 3is payingUltraOne off 29
  30. 30. Ergothree
  31. 31. Ergorapido Green
  32. 32. Keyhole Hob
  33. 33. Professional Food Services
  34. 34. Professional Laundry
  35. 35. The transformation The core strategyis payingthe same… is off 35
  36. 36. Phases in Electroluxdevelopment Today 36
  37. 37. Strategic direction – with increasedfocus on growth, acceleratedexecution and peopleOur Core Values& Principles Our Strategy Our PurposeValues VisionPassion for Innovation Products The worldwide leaderCustomer Obsession & Services in making life easierDrive for Results and more enjoyable with the help ofFoundation Brand powered appliancesRespect & Diversity GrowthEthics & IntegritySafety & Sustainability Cost People 37
  38. 38. We will pursue our dual businessmodel while leveraging global scaleand operational synergies Shared global strength Sharp customer focus Premium Benefits of scale in: Focus on differentiated  Manufacturing branded product offer  R&D  Purchasing  Common components / Low cost, lean modules go-to-market  Common processes and shared services Market set price Mass 38
  39. 39. We will continue optimizingour manufacturing footprint andimprove capacity utilization Opened plants in low- cost areas* 9 34 Closed plants in high-cost areas* *As of 1996 39
  40. 40. Husqvarna spin-off – the finalstep in a focused companySales SEKbn Disposal of 22 companies Growth 110 32 58 104 Professional Other Products 7% Small 7% 32 Appliances 8% 78% Husqvarna spin-off Major Appliances 1996 2006 40
  41. 41. We will build the winners and addresscore categories through innovationand cost competitiveness • Traditionally a strong category due to regional cooking habitsCooking • Steam ovens, induction hobs, hoods • Challenging category with over-capacityRefrigeration • Focus on pockets of growth and sub-categories • Low penetration and growth area; opportunity to convertDish Washing consumers to machine washingLaundry • Largest category driven by large capacity and high efficiency • Strong position in North America and Latin America,Air Care opportunity to grow • Strong position to build from in EuropeFloor Care & SDA • Profitable business sharing its global strength • Only Major Appliance company with a true professional baseProfessional • Large replacement market growth through the chain business 41
  42. 42. We will pursue the alignment of our brandarchitecture, connecting business modelsto brand, product/services and cost EU NA LA APNICHE Niche Brand Niche Brand Niche Brand Niche BrandPREMIUM (Australia)MASS (Brazil) (Australia) Tactical Brands 42
  43. 43. Growth will come from value share incore markets and expanding in emergingmarkets, new channels and adjacencies Markets/Channels Desired Position 2015 Emerging Markets/ New Products and New Channels Markets / Channels Electrolux New / Adjacent ProductsExisting Categories 2011 Enhance Product / Range Product Existing New 43
  44. 44. We will invest in benchmark customercare to enhance service and seizebusiness opportunitiesService ascompetitivedifferentiator 2015 Today Lowest After-market cost business No focus After-market as a ambition key business area 44
  45. 45. Electrolux sustainabilitystrategyOur mission:“making appliances that are more resource efficient, moreaffordable and available to more people around the world”Our key strategic areas1. Products, 2. People & Operations 3. StakeholdersServices & Markets Alignment to our foundation & SocietyDriving innovation and by continuously improving Stakeholder dialog,growing the market for our operations for people raising awareness andmore resource efficient and the environment building partnerships forappliances sustainable solutions 45
  46. 46. Recognition of sustainabilityleadershipSustainability sector leader in the US (2006-2010) and Germany (2010)Component of the World’s Most Energy Star Partner (2011) “Best corporate commitment”Ethical Companies (2011) European Commission (2007) 46
  47. 47. Attracting, retaining and developingthe best people fundamentalin realizing our strategic objectives Values Passion for Innovation Customer Obsession Drive for Results Foundation Respect & Diversity Ethics & Integrity Safety & Sustainability 47
  48. 48. Summary GROWTH PRODUCT & SERVICES • Grow Value Share in Mature Markets • Grow in Emerging DesiredPEOPLE BRAND Markets Position 2015 • Grow in Adjacent Product Categories COST • Grow the ”Winners” 48
  49. 49. Desired Position 2015Best Appliance Company in the world: 49
  50. 50. …and we need to speed upThe transformation implementationis paying off – Innovation – Operational Excellence – Profitable Growth 50
  51. 51. New Group Management 51
  52. 52. 75% of Group Managementmembers have worked and livedin two or more continents 52
  53. 53. Accelerate innovationand time to marketIncreased focus on ”Innovation “Best-in-Class” ProductsTriangel”, new members ofGroup Management1. Develop best-in-class products2. Speed up product innovation3. Continue investing in premium brands R&D 53
  54. 54. Develop “Best-in-class” products• Identify consumer needs and segments• Develop products with innovative design and functions• Increase sales of premium products 54
  55. 55. Speed up product innovation• Accelerate consumer insight driven differentiation• Tailor products with high consumer preference• Increase innovation rate and reduce time to market Product Creation Process Primary Product development development 70%Strategic Consumer Launch Range Phase-market plan opportunities Concept Commercial execution management out consumer development launch preparation preference Intent Commercial Launch Process 55
  56. 56. Investments in premium brands • Invest in premium brands across all markets • Align Electrolux brand architecture and position globally • Leverage our knowledge in the professional business 56
  57. 57. The transformation Adjust our capacityis paying off - manufacturing footprint 57
  58. 58. North America k units Market volumes in North America 60 000 55 000 50 000 35% gap 45 000 from expected 40 000 development 35 000 30 000 25 000 1990 1995 2000 2005 2010 58
  59. 59. Western Europe k units Market volumes in Western Europe 90 000 85 000 80 000 25% gap from 75 000 expected 70 000 development 65 000 60 000 55 000 50 000 1990 1995 2000 2005 2010 59
  60. 60. The transformation Accelerate efficiency improvements and cost reductionsis paying offoperations - global 60
  61. 61. Accelerate activitiesto bring down cost… Total savings SEK 5.1bn Manufacturing Global footprint Operations Overhead cost 1.6 3.0 0.5 Costs, SEKbn 3.5 1.0* 0.5 Actions taken until 2015 2015 2012 Realized 2016 2015 2012 Total costs SEK 5.0bn* SEK 500m in 2011 and SEK 500m in 2012 61
  62. 62. Coming from heavy exposureto mature markets… 62
  63. 63. …with tremendous growthopportunities in emerging markets 63
  64. 64. The transformation to Electrolux will continueis paying off create sustainable economic value 64
  65. 65. Consensus gives a margin of 4% for 2011 – Electrolux normal earnings some years ago% EBIT-Margin10 8 6 Average ~4% 4 2 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2005 2006 2007 2008 2009 2010 2011-2 65
  66. 66. EBIT Target 6%
  67. 67. Capital Turnover 4
  68. 68. ROCE Target 25%
  69. 69. Organic Growth 4%
  70. 70. The transformation We are ais paying off healthy company…
  71. 71. The transformation … and we still haveis paying off to do work
  72. 72. 72
  73. 73. Factors affecting forward-looking statementsFactors affecting forward-looking statementsThis presentation contains “forward-looking” statements within the meaningof the US Private Securities Litigation Reform Act of 1995. Such statementsinclude, among others, the financial goals and targets of Electrolux forfuture periods and future business and financial plans. These statementsare based on current expectations and are subject to risks and uncertaintiesthat could cause actual results to differ materially due to a variety of factors.These factors include, but may not be limited to the following: consumerdemand and market conditions in the geographical areas and industries inwhich Electrolux operates, effects of currency fluctuations, competitivepressures to reduce prices, significant loss of business from major retailers,the success in developing new products and marketing initiatives,developments in product liability litigation, progress in achieving operationaland capital efficiency goals, the success in identifying growth opportunitiesand acquisition candidates and the integration of these opportunities withexisting businesses, progress in achieving structural and supply-chainreorganization goals. 73
  74. 74. Jonas SamuelsonFocus on cost to staycompetitiveCapital Markets dayNovember 15, 2011
  75. 75. The transformation What we have achievedis paying off 2
  76. 76. Status of manufacturing programCurrent status Our journey since 2004• Total costs: SEK 8.1 billion • 19 factories closed down – Booked as items affecting • 5 factories downsized comparability • 11 new factories – Current accumulated cash out: • Approximately 35% of SEK 5.5 billion production moved – Write downs: SEK 2.6 billion• Savings: Annual savings of SEK 3 billion (since 2004)• 62% of capacity in low cost areas 3
  77. 77. Restructuring time line –Costs9,000 SEKm 50 1,100 1,600 400 400 400 8,150 2,500 1,700 0 2004 2005 2006 2007 2008 2009 2010 2011 Total 4
  78. 78. Restructuring time line – Savings3,000 SEKm 600 500 200 3,000 1,700 0 2008 2009 2010 2011 Total 5
  79. 79. Restructuring time line –Capacity in low-cost areas Percentage of Capacity in LCC 62% 53% 55% 51% 43% 39% 31% 28% 2004 2005 2006 2007 2008 2009 2010 2011 6
  80. 80. We have been able to deliver on previous cost-savings programs Approx. 15% improvements Approx. SEK 9bn in raw- EBIT % material cost headwind 20 2004-2010 16 12 Cost savings 2010: ~2/3 SEK 6.5bn* 8 4 4.5% SEK 4.8bn* 0 2003 Improve- Raw WEEE Brand Market 2010 ments materials and R&D related*) Excluding items affecting comparability 7
  81. 81. New production centershave been built and acquired Eastern Europe Asia Mexico South America Egypt • Reducing Global Manufacturing Costs • Supporting Strategic Growth Areas 8
  82. 82. Current activities• Closure of L’Assomption in Canada (2013)• Build Memphis plant in the US (to receive L’Assomption volume)• New refrigeration plant for SEA market in Thailand (starts operating in 2013)• Close down production line in Kinston• Olympic, Egypt• CTI, Latin America 9
  83. 83. The transformation Moving forward,is paying have changed things off 10
  84. 84. We need to furtheradapt our capacity• Regional vs global manufacturing strategy• Declining demand in mature markets• Improve manufacturing efficiency• Accelerate our efforts 11
  85. 85. Broadening drivers formanufacturing strategy • Costs COSTS • Global manufacturing strategy • Support strategic growth 2004 - 2010 2011 - 2015 12
  86. 86. Adapt our production capacityto current demand Market volumes in North America 60,000 55,000 50,000 35% gap from 45,000 expected development 40,000 35,000 30,000 25,000 1990 1995 2000 2005 2010 13
  87. 87. Adapt our production capacityto current demand Market volumes in Western Europe 90,000 85,000 80,000 25% gap from 75,000 expected 70,000 development 65,000 60,000 55,000 50,000 1990 1995 2000 2005 2010 14
  88. 88. Electrolux Manufacturing System(EMS)• Standardized manufacturing principles, tools and methods, for all factories, using best internal and external experiences• Continuous improvement of methodology – with full involvement of all employees Cost reduction and customer satisfaction Productivity Inventory Delivery Quality Safety improvement reduction on time 15
  89. 89. The transformation Further actionsis paying off 16
  90. 90. Further actionsCosts Savings Manufacturing footprint SEK 3.5 billion Annual savings • Cash out: ~2/3 of SEK 1.6 billion 70% of capacity • Write downs: ~1/3 • 2011 Volume in low-cost areas assumptions used 17
  91. 91. Restructuring time line –Costs SEKm 11,650 3,500 8,150 2011 YTD 2011-2015 2015 18
  92. 92. Restructuring –Savings SEKm 1,600 4,600 3,000 2011 YTD 2011-2015 2015 19
  93. 93. Annual savings/Total costs 46% 20
  94. 94. Target manufacturing footprintby 2015 Manufacturing footprint HCA Declining segments 5% Efficient and competitive 10% LCA 70% 30% Regionally specific 15% products 21
  95. 95. We need to increase currentcapacity utilizationCapacity utilization • Decrease capacity • Shift capacity to Growth Today Future 85% low-cost areas 75% 0% HCA LCA HCA LCA 22
  96. 96. In 2005-2006, we movedThe transformation 25% of our total Europeanis paying offnew plants in volumes to low-cost areas 23
  97. 97. Will not buildThe transformation new factoriesis paying off to move capacity 24
  98. 98. We are in the final phase ofour restructuring program Eastern Europe Asia Mexico South America Egypt 25
  99. 99. The Global Operations – transformationis paying off an update 26
  100. 100. We stick to our plan andaccelerate delivery• Ambitious targets for 2015• Rigorous plan; confident in delivery• Visible results, now – Accelerated manufacturing footprint improvement – Bottom-line impact from purchasing – Roll-out of modularization accelerated – Globalized governance in R&D 27
  101. 101. Outcome from the first modularizationdeep dive in Food Preparation Annual purchasing spend Percent of total spend, Impact on complexityModule 100% = SEK 1,344m From … … to Mechanical 41 Mechanical structure structure 11 10 concepts Glass pack 35 94 16 Glass width classes 12 Handle mounting Handle 58 5 positions 9 Hinge concepts Hinge 11 2 (bodies) 3 Door lock 20 1 Door locks 100 Total door 50 10 Door concepts Structural savings SEK 150 million 28
  102. 102. Modularization in Fabric CareWash Group example Impact on complexity Annual spend, share Number of parts Impact onModule 100% = SEK 2.1 billion From 2011 To 2016 differentiation Total Wash 100 1,027 891 Group Drum/Spin 40 346 337 bowl Tub/Outer 35 304 253 bowl Vibration 14 242 203 dampening Bellow 6 79 53 and clamp Heater 4 56 45 Structural savings of SEK 370 millionMAB Wash Group 29
  103. 103. Global Operations We have identified a greater potential within modularization which will generate higher savings 3 SEKbn 30
  104. 104. Savings from Global Operations Manufacturing 17% Modularization 50% 33%Purchasing 31
  105. 105. Savings from theGlobal Operations programSEKbn Savings (y-o-y) Investments 0,9 0,8 0,7 0,5 0,1 2011 2012 2013 2014 2015 -0,5 -0,5 32
  106. 106. We stick to our plan and acceleratedelivery• Ambitious targets for 2015• Rigorous plan; confident in delivery• Visible results, now – Accelerated manufacturing footprint improvement – Bottom-line impact from purchasing – Roll-out of modularization accelerated – Globalized governance in R&D 33
  107. 107. 34
  108. 108. Factors affecting forward-looking statementsFactors affecting forward-looking statementsThis presentation contains “forward-looking” statements within the meaningof the US Private Securities Litigation Reform Act of 1995. Such statementsinclude, among others, the financial goals and targets of Electrolux forfuture periods and future business and financial plans. These statementsare based on current expectations and are subject to risks and uncertaintiesthat could cause actual results to differ materially due to a variety of factors.These factors include, but may not be limited to the following: consumerdemand and market conditions in the geographical areas and industries inwhich Electrolux operates, effects of currency fluctuations, competitivepressures to reduce prices, significant loss of business from major retailers,the success in developing new products and marketing initiatives,developments in product liability litigation, progress in achieving operationaland capital efficiency goals, the success in identifying growth opportunitiesand acquisition candidates and the integration of these opportunities withexisting businesses, progress in achieving structural and supply-chainreorganization goals. 35
  109. 109. MaryKay KopfThe Innovation TriangleCapital Markets dayNovember 15, 2011
  110. 110. Innovation Strategic Prioritiesfor Marketing Differentiate Brand Platform Streamlined Innovation Process • Target More Consumers with • Leverage Local Consumer Insights Strategic Brands for More and Market Knowledge Products Consumers Prefer • More Inspired Thinking, More Ideas, Accelerate Front End Innovation More Innovations • Improved Collaboration across • Faster Marketing, R&D and Design for More Best in Class Products Faster Innovations Consumers Prefer • Prioritized Global Innovation and • 70 percent consumer preference rule Growth Areas • Ultra Clean • Streamlined Planning/Global Governance and Managing Innovations in Marketing Process (ITC) • Design Lab • Activate Innovation Triangle • The Cube Teams in the Sector • Instant Clean 2
  111. 111. Accelerate Front End InnovationLinking insights to innovation to plans is keyto building‘best-in-class’product portfolio Best-in-Class” Products & Consumer Insight Coordinated long term brand driven Product Ranges driven differentiation product planning & launching Generation Plan Food Preparation LA Generation Plan Food Preparation LA Hobs, Cookers, Ovens, MWOBrand Marketing Hobs, Cookers, Ovens, MWO Latin America Groups KH - Hobs Project name Electric, induction (Builtin hobs, with controls) Latin America FARRAH 2009 2010 2011 2012 2013 2014 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 CP3 2011 2012 2013 2014 2015 Gas Groups hobs, with controls) name (Builtin Project Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 KH - Hobs RENATA-II CP3 Electric, induction (Builtin hobs, with controls) KI - Freestanding Cookers FARRAH Double cavities (Freestanding cookers, gas) CP3 Gas (Builtin hobs,GLASS EXTENSION MARIANE with controls) CPCD RENATA-II Ministoves, Freestanding compact table-top ovens CP3 Consumer KI - Freestanding Cookers CINTIA II Double cavities (Freestanding cookers, gas) Single cavity (Freestanding cookers, gas) MARIA MARIANE GLASS EXTENSION Ministoves, Freestanding compact table-top ovens MEL UPDATE MARILENE CINTIA II CPCD CPCD CPCD CP3 Single cavity (Freestanding cookers, gas) VERA KM - Microwave ovens MARIA CP3 Microwave ovens MEL UPDATE CPCD MARILENE ANNE-I - Phase I CP3 CPCD JIA VERA CP3Market KM - Microwave ovens ANNE-I - Phase II CP3 Microwave ovens ODETTE CPCD JIA EXTENSION - Phase I ANNE-I CP3 CPCD JIA VICKY - MANAUS CPCD CP3 ITC ERICA ANNE-I - Phase II CPCD CP3 R&D ANNE II ODETTE CPCD CPCD JIA II JIA EXTENSION CPCD CINDY UPDATE - MANAUS VICKY CPCD ERICA ODETTE MANAUS CPCD Bread Maker ANNE II CPCDDesign WIDE SCREEN JIA II MWO KS - Cookers CINDY UPDATE ODETTE MANAUS Built-under gas cooker, (Swiss-German system) CLARICE Bread Maker II CP3 Ground or catalytic enamel, multifunction MWO(Builtin, electric, eye level/wall ovens) WIDE SCREEN oven KS - CookersESTELA III CPCD Built-under gas cooker, (Swiss-German system) Ground or catalytic enamel, traditional oven (Builtin, electric, eye level/wall ovens) CLARICE CLARICE II CP3 III CPCD Single cavity (Builtincatalyticgas) Ground or ovens, enamel, multifunction oven (Builtin, electric, eye level/wall ovens) CLARICE ESTELA III CPCD CP3 [EMPTY] Ground or catalytic enamel, traditional oven (Builtin, electric, eye level/wall ovens)Technology [EMPTY] MARIANE-GLASS III CINTIA SARAH 76 SARAH 56 CLARICE Single cavity (Builtin ovens, gas) MARIANE CLARICE MARIANE-GLASS CP3 CPCD CP3 CP3 CP3 KZ - Cooker hoods MARIANE Miscellaneous (Cooker hoods) CINTIA CP3 SARAH 76 CHER-I EXTENSION CP3 12 SARAH 56 KZ - Cooker hoodsCompetition AP / Int 2009 2010 2011 2012 2013 2014 2015 Groups Miscellaneous (Cooker hoods) Project name Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Design KI - Freestanding Cookers CHER-I EXTENSION CP3 12 Ministoves, Freestanding compact table-top ovens AP / Int CINTIA II 2009 2010 2011 2012 2013 2014 2015 Groups Project name Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 KI - Freestanding Cookers Ministoves, Freestanding compact table-top ovens CINTIA II Consumer Opportunity Concept Development Primary Development Product Development Commercial Launch Completed PD Consumer opp. leadtime Concept develop. leadtime Primary develop. leadtime Consumer Opportunity Concept Development Primary Development Product develop. leadtime Launch leadtime Completed PD leadtime Product Development Commercial Launch Completed PD Sector : EMA Latin America Consumer opp. leadtime Concept develop. leadtime Primary develop. leadtime Product line : Food preparation Product develop. leadtime Launch leadtime Completed PD leadtime Innovation Activation Sector : EMA Latin America Product line : Food preparation 3
  112. 112. Streamlined Innovation ProcessInnovation ActivationKey Objectives Accelerate Innovation • Get relevant and differentiated products into the hands of consumers faster by reducing time to market. Stronger Brands with More Products Consumers Prefer • Develop strong brands that our consumers aspire to own by launching new products and services they prefer over the best in class competition by 70%. Relentlessly Execute Growth Strategy • Operationalize our growth strategy by working within the Innovation Triangle Council and activating the Innovation Triangles in the Sector. Innovation Activation brings our strategy to life through best in class, insight-driven products and services. 4
  113. 113. Innovations in MarketingElectrolux Design Lab 2011• Intelligent mobility• Over 1300 entries• Finals in London• 6 month internship• Winner Portable washer• All to be admired outside 5
  114. 114. Innovations in MarketingThe CubeImage of Cube in Milan:to open on December 1st• Experiential platform for professional heritage• Pop up restaurant touring Europe• Exclusive location with unique view for 18 guests• Top chefs using professional and home appliances 6
  115. 115. The transformation FILM 4is paying The cube off 7
  116. 116. Innovations in MarketingInstant Clean Facelift (colors, 2004 Ergorapido 1st generation 2005 Range extension 2006 technical improvements) Ergorapido Special Edition 2nd generation, Centaur (High Gloss Paint, 2008 Mirror dust cup, 2007 (new colors, updated design, 100% technically improved product new metallic paint) Facelift (new colors, nozzle Range ext. (new colors, front lights, tech. 2009 improvements, Lithium-model 2011 special edition, green, more lithium models) with battery display)
  117. 117. Innovations in MarketingVac from the Sea StoryOctober 2010:• Electrolux relaunches its green range of vacuum cleaners made from up to 70% recycled plastics.• High grade recycled plastics are a scarce resource.• Plastic waste contaminates oceans and is becoming a growing threat to marine life all over the world.Launch communication:Electrolux inspires both industry and future generations to act responsibly.We improve our work every day and engage science, politics and consumersto join forces around the plastic issue. 9
  118. 118. The transformation FILM 5is paying off the sea Vac from 10
  119. 119. 11
  120. 120. Factors affecting forward-looking statementsFactors affecting forward-looking statementsThis presentation contains “forward-looking” statements within the meaningof the US Private Securities Litigation Reform Act of 1995. Such statementsinclude, among others, the financial goals and targets of Electrolux forfuture periods and future business and financial plans. These statementsare based on current expectations and are subject to risks and uncertaintiesthat could cause actual results to differ materially due to a variety of factors.These factors include, but may not be limited to the following: consumerdemand and market conditions in the geographical areas and industries inwhich Electrolux operates, effects of currency fluctuations, competitivepressures to reduce prices, significant loss of business from major retailers,the success in developing new products and marketing initiatives,developments in product liability litigation, progress in achieving operationaland capital efficiency goals, the success in identifying growth opportunitiesand acquisition candidates and the integration of these opportunities withexisting businesses, progress in achieving structural and supply-chainreorganization goals. 12
  121. 121. Jan BrockmannThe Innovation TriangleCapital Markets dayNovember 15, 2011
  122. 122. Electrolux Dual Business Model – howProduct Development supports it Shared global strength Sharp customer focus Premium Benefits of scale in: Focus on differentiated  Manufacturing branded product offer  R&D  Purchasing  Common components / Low cost, lean modules go-to-market  Common processes and shared services Market set price Mass Product concepts need to allow: • Brand differentiation in consumer relevant areas • Product innovation at a fast rate • Cost differentiation in non-consumer relevant areas and in the product and operations structure 2
  123. 123. Automotive tools and methodsused in product development• Modularization• Cost-differentiated product platforms• Strengthened internal innovation capabilities in core competence areas• Open innovation• Front loading of the product development-process – With marketing and design = winning product specifications – With advanced purchasing and manufacturing planning (simultaneous engineering) = cost effective, robust and scaled products 3
  124. 124. 4
  125. 125. Factors affecting forward-looking statementsFactors affecting forward-looking statementsThis presentation contains “forward-looking” statements within the meaningof the US Private Securities Litigation Reform Act of 1995. Such statementsinclude, among others, the financial goals and targets of Electrolux forfuture periods and future business and financial plans. These statementsare based on current expectations and are subject to risks and uncertaintiesthat could cause actual results to differ materially due to a variety of factors.These factors include, but may not be limited to the following: consumerdemand and market conditions in the geographical areas and industries inwhich Electrolux operates, effects of currency fluctuations, competitivepressures to reduce prices, significant loss of business from major retailers,the success in developing new products and marketing initiatives,developments in product liability litigation, progress in achieving operationaland capital efficiency goals, the success in identifying growth opportunitiesand acquisition candidates and the integration of these opportunities withexisting businesses, progress in achieving structural and supply-chainreorganization goals. 5
  126. 126. Keith McLoughlinProfitable GrowthCapital Markets dayNovember 15, 2011
  127. 127. Growth Net sales growth (in comparable currencies) 5% 0% -5% 2006 2007 2008 2009 2010 2
  128. 128. Growth Target 4%
  129. 129. Sell-sideConsensus 1-2%
  130. 130. Our strategic growth initiatives EMEA NA LA APAC Prof. FC Segments/Channels Geographic ExpansionGrowth M&A Product Expansion
  131. 131. Film 6Film 6 MixerMixer
  132. 132. Electrolux exposure to emergingmarkets 2009 2011 25% 35%
  133. 133. The transformation Acquisition of CTIis paying off 8
  134. 134. Acquisition of CTI completed• Founded in 1905, CTI is the leading manufacturer of large household appliances in Chile• Listed on the Santiago Stock 78.5% Exchange, with controlling shareholder Sigdo Koppers CST• Key subsidiaries: Frimetal and Somela (listed) Key Financials (SEK) (1)• Three production sites in 2010 Chile and Argentina Sales 2.9bn EBIT 453m• Approx. 2,200 employees EBIT Margin 15.8 % 1) Converted at average 2010 rate CLP/SEK 70.8 Net Profit (2) 331m 2) Pre minority interest 9
  135. 135. CTI brands 10
  136. 136. Film 7CTI Gafa
  137. 137. CTI-Historical financial development EBITDA Sales (USD M) (1) CAGR (Sales) ~15% Margin 500 20.0% 17.5% 17.2% 17.1% 375 15.5% 17.5% 16.0% 14.8% 250 15.0% 125 12.5% 0 10.0% 2005 2006 2007 2008 2009 2010 Sales EBITDA MarginNotes1) Converted at average 2010 rate CLP/USD 509 12
  138. 138. Strong synergies throughcombined footprint Juárez Snapshot of Combined Business  Combined sales in Latin America of >SEK 20 billion on a pro forma basis Manaus  Leading player in Brazil and Southern Cone region  Market-leading brands and São Carlos Curitiba complementary product portfolios Cerrillos Rosario  Seven manufacturing facilities Maipú  >12,000 employees  Strategic fit  Financial fit 13
  139. 139. The transformation Acquisition of Olympicis paying off 14
  140. 140. Film 8Describing Olympic
  141. 141. A solid result and growth Sales Olympic Group, EGP million CAGR (Sales) ~6% 3,000 13.6% 20.0% 14.2% 16.8% 16.5% 2,500 15.0% 2,000 1,500 10.0% 1,000 5.0% 500 0 0.0% 2007 2008 2009 2010 Sales EBITDA Margin 16
  142. 142. Film 9 OlympicWater heater
  143. 143. Our Ukrainian acquisition positionsus for continued growth in the region Russia no duties Belarus no duties Kiev Ukraine Laundry Factory EU 18
  144. 144. The transformation What can we achieve?is paying off 19
  145. 145. Our acquisitions supportgrowth in emerging markets Growth markets Organic growth Acquisitions 20
  146. 146. Electrolux growthin BrazilElectrolux Net Sales Brazil(In SEKm) 13,608 CAGR: 18.6% 2,473 00 01 02 03 04 05 06 07 08 09 10 21
  147. 147. Electrolux growth inSoutheast AsiaElectrolux Net Sales Southeast Asia(In SEKm) CAGR: 16.4% 2,500 2,000 1,500 1,000 500 0 2006 2007 2008 2009 2010 22
  148. 148. If we fully utilize organic growth opportunity – more than 40% of sales could be in emerging markets by 2015 Today Growth 2017 Mature Mature markets markets 1-2% 50% 65% Emerging Emerging markets 7-10% markets ~50% 35%Note: Estimated figures 23
  149. 149. Tremendous growthopportunities in Asia Region/Country Population (million) GDP (USD billion) China 1,340 5,900 India 1,210 1,600 Southeast Asia1) 594 1,700 US 313 14,500 Western Europe 413 15,0001) Includes: Brunei, Burma, Cambodia, East Timor, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, Vietnam 24
  150. 150. 25
  151. 151. Gunilla NordströmEMA Asia/PacificCapital Markets dayNovember 15, 2011
  152. 152. Asia Pacific – a growth region- Over 1.2 billion people will be added to global middle class in Asia Pacific Global Middle Class (millions) 2010 Penetration rate (Examples) Middle East & 2009 Australia China Indonesia North Africa 2020 Refrigerators 99 54 19 Sub-Saharan Washers 97 58 9 Africa Dryers 60 1 0.1 Central & South BI Hobs & Cookers 94 55 6 America Hoods 79 41 1 Asia Pacific Ovens 48 2 2 Air-con 78 53 8 Europe • Strong growth across Asia • APAC representing over 80% of North America the growth in the global middle class 0 50 100Source: OECD & The Economist 2
  153. 153. 2/3 of global appliance growth will come from APAC +3.8% 1 200 SEK 1,138bn Growth fueled by 1 100 emerging markets 1 000 SEK 944bn 900 Rest of Rest of 650 world 74 800Mkt. Size (SEKbn) world 700 576 600 SE Asia 27 500 70 SE Asia NE Asia 18 400 Australia 2 43 145 NE Asia 25 300 India 127 23 Australia 200 50 21 India 25 48 100 200 China 152 China APAC 0 2010 2015 62% Absolute Mkt. Growth (10-15%) 3
  154. 154. EMA APAC has gone from turnaround to profitable growthTotal market at Electrolux NS APAC EBIT APACNS value SEKbn (SEKbn) (SEKm) NOWC (%)600 10 1,000 25% Total 3% CAGR market 800 20%500 9 600 15%400 EBIT 400 10% 8 NOWC %300 200 5% 7 0 0%200 -200 -5% 6100 -400 -10% -600 -15% 0 5 2002 2003 2004 2005 2006 2007 2008 2009 2010 2002 2003 2004 2005 2006 2007 2008 2009 2010 4
  155. 155. Asia/Pacific – key prioritiesFix China• Eliminate losses• Build a platform for profitable growth• Invest in design and BIC products for ChinaBuild a double-digit position in SE Asia• Accelerate profitable growth in SEA• From niche to mass premium• Expand distribution and product rangeGrow value share in Australia• Defend profit pool and market leadership• Enter adjacent categories• Strengthen and grow Electrolux brand Accelerate Consumer Insight lead Product Innovation 5
  156. 156. Asian consumers similarbut products differ from Western Market Fresh Spiral Burner • Externally driven Affirmation Refrigeration • Prestigious Brands important • Technology Adopters • Asian Cooking • Fresh Food • Living Space • Design Deep Hood 6
  157. 157. Southeast Asia SE Asia Economics Population GDP 2006-11 Urban millions USDbn CAGR 24% 27% Indonesia 245 44% 707 5.7% Philippines 102 49% 189 4.9% Vietnam 90 30% 104 7.0% Thailand 67 34% 319 3.6% 22% Malaysia 28 72% 238 4.5% 27% Singapore 5 100% 223 6.5% USD 6.5bn USD 6.5bn Singapore Others Malaysia urban Air-con Wealthy Philippines Buyers Vietnam Washing provincial Indonesia Cooking Refrigeration First Time Buyers rural Thailand 7
  158. 158. Southeast Asia growth strategyBackground & Position Growth Strategy• Established early – long history • Category expansion• Strong premium brand position • Distribution expansion• Strong in high end / niche market • Strong trade relations• Market leadership in front load washers • In-store execution & promoter presence• Electrolux = High quality • Brand building – consistent campaigns Market shares Category mix LG 100% Other 80% 60% Panasonic Hitachi 40% Electrolux 20% Sharp Sanyo Toshiba Samsung 0% 2006 2009 2011 8
  159. 159. Marketing in SEAWashing Marathon Asian Food Channel Concept StoresCooking Demonstration My Mobile Kitchen Brand Corners 9
  160. 160. Country overview - China Facts Population 1.3bn Urban population 47% 2010 GDP USD 5,900 bn Population below 2.8% poverty line Inflation rate 3.2%GDP growth • Most populous country • 2nd largest economy • World leader in industrial output • World’s largest exporter • Labour force – Agriculture (38%), Industry (28%), Services (34%) 10
  161. 161. The China market– A huge opportunity Others • Competitive Gree • Challenging Suning Haier • Complicated Midea Gome China Suppliers China Retail Channels 11
  162. 162. EMA China – 2002 to 2011Net Sales vs Market Value Electrolux Profitability Market value Electrolux NS EBIT (RMBm) EBIT margin (RMBm) (RMBm) 2002 2004 2006 2008 2010350,000 2,500 0 0% China market CAGR 47% value -10%300,000 -50 2,000 EBIT % -20%250,000 Electrolux NS -100 -30% 1,500200,000 -40% -150 -50%150,000 1,000 -200 -60%100,000 -70% 500 -250 50,000 -80% 0 0 -300 -90% 2002 2004 2006 2008 2010 12
  163. 163. 13
  164. 164. Factors affecting forward-looking statementsFactors affecting forward-looking statementsThis presentation contains “forward-looking” statements within the meaningof the US Private Securities Litigation Reform Act of 1995. Such statementsinclude, among others, the financial goals and targets of Electrolux forfuture periods and future business and financial plans. These statementsare based on current expectations and are subject to risks and uncertaintiesthat could cause actual results to differ materially due to a variety of factors.These factors include, but may not be limited to the following: consumerdemand and market conditions in the geographical areas and industries inwhich Electrolux operates, effects of currency fluctuations, competitivepressures to reduce prices, significant loss of business from major retailers,the success in developing new products and marketing initiatives,developments in product liability litigation, progress in achieving operationaland capital efficiency goals, the success in identifying growth opportunitiesand acquisition candidates and the integration of these opportunities withexisting businesses, progress in achieving structural and supply-chainreorganization goals. 14
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