Electrolux Interim Report Q1 2010 Presentation

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Highlights of the first quarter of 2010. Net sales amounted to SEK 25,133m (25,818) and income for the period was SEK 911m (-346), or SEK 3.20 (-1.22) per share. Net sales increased by 4.1% in comparable currencies, due to higher sales volumes.

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Electrolux Interim Report Q1 2010 Presentation

  1. 1. Q1 Results, April 27, 2010 Hans Stråberg, President and CEO Jonas Samuelson, CFO Peter Nyquist, IR
  2. 2. Q1 Highlights EBIT (SEKm) Margin (%) 2500 10 Net sales increased by 4% in comparable currencies 2000 8 Solid recovery in the US 1500 5,3 6 Strong demand in Brazil 1000 3,0 4 EBIT amounted to SEK 1,326m, 500 2 excluding items affecting 0,1 0 0 comparability -0,4 -500 -2 Increased efficiency Mix and price improvements -1000 -4 2007 2008 2009 2010 Favorable currencies (SEKm) Q1 2010 Q1 2009 Sales 25,133 25,818 EBIT 1,326 38 Margin 5.3% 0.1% 2
  3. 3. Rolling 12 months broke Electrolux EBIT margin target in March 2010 EBIT margin 8% 6.1 % 6% 4% 2% 0% Dec Jan Feb Mar Apr Maj Jun Jul Aug Sep Okt Nov Dec Jan Feb Mar Apr Maj Jun Jul Aug Sep Okt Nov Dec Jan Feb Mar 2008 2009 2010 3
  4. 4. Electrolux financial targets based on the last 12 months Financials Target Outcome Growth1) >4% -1.6% Gross margin >21% 21.4% EBIT >6% 6.1% Capital TO2) >4x 4.4x ROCE2) >25% 26.5% 1) Currency-adjusted growth 2) Capital employed defined as Equity + Net Financial Liabilities 4
  5. 5. Operating cash flow Q1, 2010 Stable cash flow 2500 Positive earnings 2000 contribution 1500 Build-up of inventories 1000 Low level at the end of 2009 500 Seasonal sales pattern Continued favorable 0 development of working -500 capital/net sales -1000 Low investment level -1500 -2000 Operations (excl. Change in assets Investments Operating cash assets and liab.) and liabilities flow Q1, 2010 Q1, 2009 5
  6. 6. An increase of max SEK 1 billion in cost for raw-material in 2010 Other 18% Raw material cost development Aluminium 4% Copper 7% 400 300 300 Plastics 23% 19 Billion SEK in 2009 0 Q1 Q2 E Q3 E Q4 E Steel 48% 2010 6
  7. 7. Limited correlation between results and raw-material cost increases Sell-side Dramatic estimate SEKm market demand April 22, 2010 decline 5000 3000 1000 -1000 Electrolux -3000 estimate 2004 2005 2006 2007 2008 2009 2010 EBIT* Raw material cost increase * Excluding items affecting comparability. In 2008, one-offs are excluded. 7
  8. 8. Consumer Durables Europe EBIT (SEKm) Margin (%) Lower sales 1200 12 Decline in private label sales 800 6,4 8 Strong EBIT improvement 4,5 Positive price/mix - strengthened 400 4 position within the built-in segment 1,5 Cost savings 0 0 Previous cost measures -1,8 -400 -4 Lower costs for raw materials compared to previous year -800 -8 2007 2008 2009 2010 Strong results for floor-care (SEKm) Q1 2010 Q1 2009 products – mix improvement and Sales 9,719 10,568 positive currency impact EBIT 620 160 Margin 6.4% 1,5% 2009-2010 numbers are restated due to new reporting structure 8
  9. 9. The European market stabilized in Q1, 2010 Quarterly comparison, year over year 10% 5% 0% -5% -10% -15% 2006 2007 2008 2009 2010 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 West. Europe 4% 1% 1% 5% 1% 1% -1% -5% -4% -4% -5% -8% -9% -9% -4% -2% 1% East. Europe 1% 9% 6% 7% 14% 5% 5% 10% 6% 5% 4% -15% -31% -30% -26% -17% -7% 9
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  11. 11. Consumer Durables North America EBIT (SEKm) Margin (%) Local currency sales in line with 10 previous year 600 Exited unprofitable volumes in 4,5 private label 5 350 Increased sales under the 3,0 Frigidaire and Electrolux brands 100 Strong improvement in earnings 0 Improved mix -150 -2,1 -1,9 Improved efficiency -400 -5 Higher costs for raw materials 2007 2008 2009 2010 (SEKm) Q1 2010 Q1 2009 Higher sales and improved operating Sales 7,995 9,144 income and for floor-care products EBIT 360 -177 Margin 4.5% -1.9% 11
  12. 12. In North America, we saw the second quarter of growth in three years… Quarterly comparison, year-over-year 10% 5% 0% -5% -10% -15% -20% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2006 2007 2008 2009 2010 12
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  16. 16. Consumer Durables Latin America EBIT (mSEK) Margin (%) 400 10,0 Continued strong demand in Brazil 300 6,5 7,5 5,5 In spite of expired tax 200 4,1 5,0 incentives 100 1,9 2,5 Improved operating income 0 0,0 Improved product mix -100 2007 2008 2009 2010 -2,5 Lower raw-material costs (SEKm) Q1 2010 Q1 2009 Positive currency impact Sales 3,998 2,625 EBIT 220 50 Margin 5.5% 1.9% 16
  17. 17. Consumer Durables Asia Pacific EBIT (SEKm) Margin (%) 250 10,0 Australia: Improved EBIT 8,4 200 9,0 8,0 despite market decline 7,0 Improved product mix 150 6,0 4,7 5,0 Positive currency impact 100 4,0 Improved effiency 3,0 50 1,4 2,0 Southeast Asia 0,1 1,0 0 0,0 Market share gain in a strong market 2007 2008 2009 2010 Product launches (SEKm) Q1 2010 Q1 2009 China Sales 1,912 1,752 EBIT 160 25 Positive impact of cost-cutting Margin 8.4% 1.4% measures 2009-2010 numbers are restated due to new reporting structure 17
  18. 18. Professional Products EBIT (SEKm) Margin (%) 250 12,0 Food service 10,4 10,0 Weak market demand 200 8,0 Improved operating income 150 6,1 6,1 6,1 6,0 through higher production 100 efficiency and lower costs 4,0 for raw materials 50 2,0 Laundry products 0 0,0 Weak market demand 2007 2008 2009 2010 Slight decline in operating (SEKm) Q1 2010 Q1 2009 income Sales 1,501 1,727 EBIT 91 105 Margin 6.1% 6.1% 18
  19. 19. 2010 going forward Top line development Product mix Launch of new products Volume + A stable market growth Price Defend current levels Support earnings Cost + Positive impact from savings Currency Tailwind first half peaked in Q1 Take into account Raw-material market Headwind starting in Q2 Investments in marketing - Increased support of product launches 19
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  21. 21. Factors affecting forward- looking statements Factors affecting forward-looking statements This presentation contains “forward-looking” statements within the meaning of the US Private Securities Litigation Reform Act of 1995. Such statements include, among others, the financial goals and targets of Electrolux for future periods and future business and financial plans. These statements are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially due to a variety of factors. These factors include, but may not be limited to the following: consumer demand and market conditions in the geographical areas and industries in which Electrolux operates, effects of currency fluctuations, competitive pressures 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 operational and capital efficiency goals, the success in identifying growth opportunities and acquisition candidates and the integration of these opportunities with existing businesses, progress in achieving structural and supply-chain reorganization goals. 21

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