Electrolux Interim Report Q2 2010 Presentation

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Highlights of the second quarter of 2010. Net sales amounted to SEK 27,311m (27,482) and income for the period was SEK 1,028m (658), or SEK 3.61 (2.32) per share. Net sales increased by 2.8% in …

Highlights of the second quarter of 2010. Net sales amounted to SEK 27,311m (27,482) and income for the period was SEK 1,028m (658), or SEK 3.61 (2.32) per share. Net sales increased by 2.8% in comparable currencies, due to higher sales volumes.

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  • 1. Q2 Results, July 19, 2010 Hans Stråberg, President and CEO Jonas Samuelson, CFO Peter Nyquist, IR
  • 2. Q2 Highlights EBIT (SEKm) Margin (%) 2500 10 Net sales increased by 3% in comparable currencies 8 2000 Solid recovery in the US on 5,4 6 the back of the rebate 1500 3,7 4 program 2 Southern Europe volatile 1000 0 EBIT SEK 1,477m, excluding 500 items affecting comparability -2 Volume growth 0 -4 2009 2010 Positive mix (SEKm) Q2 2010 Q2 2009 Raw-material headwind Sales 27,311 27,482 Increased marketing spend EBIT 1,477 1,027 Margin 5.4% 3.7% 2
  • 3. Operating cash flow Q2, 2010 Solid cash flow 4000 3500 Positive earnings 3000 contribution 2500 Seasonal build-up of 2000 inventories 1500 Higher level of investments 1000 500 compared to last year 0 -500 -1000 -1500 Operations (excl. Change in assets Investments Operating cash assets and liab.) and liabilities flow Q2, 2009 Q2, 2010 3
  • 4. Raw-material costs 2010 Other 18% Aluminum 4% Copper 7% 2010 ~ SEK 1 Billion in increase Plastics 23% Negative impact of 2009 SEK SEK 300m y-o-y in Q2 19 billion Raw-material y-o-y headwind expected to increase to SEK 500m in Q3 Steel 48% 4
  • 5. Consumer Durables Europe EBIT (SEKm) Margin (%) 1200 10 Lower sales Decline in private label sales 8 Price pressure 800 5,4 6 Strong EBIT improvement Strong mix – increased sales 4 400 2,9 within built-in segment 2 Cost savings – Previous cost measures 0 0 2009 2010 Increased marketing spend (SEKm) Q2 2010 Q2 2009 Strong results for floor-care Sales 9,349 10,452 products – mix improvement EBIT 504 300 Margin 5.4% 2.9% 5
  • 6. The European market continued to be unchanged in Q2 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 Q2 West. Europe 4% 1% 1% 5% 1% 1% -1% -5% -4% -4% -5% -8% -9% -9% -4% -2% 1% 0% East. Europe 1% 9% 6% 7% 14% 5% 5% 10% 6% 5% 4% -15% -31% -30% -26% -17% -7% 1% 6
  • 7. Consumer Durables North America EBIT (SEKm) Margin (%) Solid market growth led to higher 800 8 volumes 600 6 Exited unprofitable volumes 5,1 4,6 Increased sales under own brands 400 4 Improved earnings in comparable currencies 200 2 Improved mix Increased sales of air-conditioners 0 0 Extra consolidation and transition -200 -2 costs 2009 2010 Higher raw-material costs (SEKm) Q2 2010 Q2 2009 Lower sales and operating income for Sales 10,027 9,848 floor-care products EBIT 458 498 Margin 4.6% 5.1% 7
  • 8. Strong growth in US in the second quarter Quarterly comparison, year-over-year 15% 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 2006 2007 2008 2009 2010 8
  • 9. Consumer Durables Latin America EBIT (mSEK) Margin (%) 400 10,0 Slowdown of market growth in Brazil 300 7,5 Expired tax incentives 6,1 Rest of Latin America 200 4,3 5,0 showed strong growth Improved operating 100 2,5 income 0 0,0 Higher volumes 2009 2010 Improved effiency (SEKm) Q2 2010 Q2 2009 Positive currency impact Sales 3,905 3,326 EBIT 237 142 Margin 6.1% 4.3% 9
  • 10. Consumer Durables Asia/Pacific EBIT (SEKm) Margin (%) 250 10,1 12,0 Australia: Improved EBIT despite market decline 10,0 200 Improved product mix 8,0 150 Positive currency impact 6,0 Improved efficiency 100 3,0 4,0 Southeast Asia and China 50 Market-share gain 2,0 Positive impact of cost-cutting 0 0,0 measures 2009 2010 (SEKm) Q2 2010 Q2 2009 Sales 2,298 2,004 EBIT 231 61 Margin 10.1% 3.0% 10
  • 11. Professional Products EBIT (SEKm) Margin (%) 300 15,0 Stabilization of market 12,0 demand 250 12,0 Improved operating income 200 8,9 9,0 Food service 150 Improved product mix 6,0 100 Higher production efficiency 50 3,0 Lower costs for raw materials 0 0,0 2009 2010 Laundry products Improved cost efficiency (SEKm) Q2 2010 Q2 2009 Sales 1,730 1,850 Improved mix EBIT 207 165 Margin 12.0% 8.9% 11
  • 12. Third quarter Top line development Product mix; continues to have a positive impact Market volumes; flat year-over-year Price development; defend current levels Cost development Cost savings; positive impact from restructuring program Raw material prices; peak in Q3, y-o-y negative effect of SEK 500m Increase marketing and brand spend Take into account With more replacement business there is less seasonal variations between quarters The appliance industry is experience a shortage of components which is expected to continuo into the second half of 2010 12
  • 13. Full year 2010 “…….. I still think 2010 could be the year we approach our goal of an operating margin of 6% with continued improved capital efficiency.” 13
  • 14. 14
  • 15. 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. 15