Q2 Results
July 19, 2013
Keith McLoughlin, President and CEO
Tomas Eliasson, CFO
Q2 Highlights
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
0
1
2
3
4
5
6
2
(SEKm) Q2 2012 Q2 2013
Sales 27,763 27,674
E...
Sales and EBIT bridge Q2
3
SEKm Q2 2012 Organic
Currency
translation
Currency
Transaction
Acquisitions/
Divestments
Q2 201...
4
44
Jack Truong
Head of Electrolux Major Appliances North America
Electrolux Investors’ Meeting
July 19, 2013
• Electrolux North American Company
• Market Growth
• Growth Drivers
• Extending Brand Portfolio
• Delivering Consumer-Dri...
Strength in North American Market
3
ONE
out of every
THREE
Cooking
Products
SIX
out of every
TEN
Freezers
ONE
out of every...
Full Line Supplier
Major Appliances
4
Full Line Supplier
Small Appliances
5
Full Line Supplier
Professional Appliances
6
7
Two Iconic Brands
Invested in North America
8
North American infrastructure providing speed to market and relevant innovation
Headquarters: ...
Billions
$4.3
$4.6
$2.5
$0
$1
$2
$3
$4
$5
2011 2012 1H 2013
9
Net Sales EBIT
-0.1%
6.8%
7.2%
0.9% 4.7% 6.9%EBIT %
Six Cons...
• Electrolux North American Company
• Market Growth
• Growth Drivers
• Extending Brand Portfolio
• Delivering Consumer-Dri...
Improving Market Conditions
Housing Inventory
• Rising consumer confidence
• Housing inventory is at 2005 levels
• New hou...
30
35
40
45
50
2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: AHAM, EMA BI Analysis
Annual US Total Core Shipments
A...
Our Path to Value Creation
Sustainable, Profitable Growth
13
• Electrolux North American Company
• Market Growth
• Growth ...
John Weinstock
VP Marketing, Major Appliances North America
Electrolux Investors’ Meeting
July 19, 2013
Our Path to Value Creation
Sustainable, Profitable Growth
15
• Electrolux North American Company
• Market Growth
• Growth ...
Appliance Market
Growth Drivers
U.S. Population Growth
310.0 321.3
333.9
358.5
380.0
399.8
420.3
200
250
300
350
400
450
2...
Extending Brand Portfolio
17
Price
Value
Our brand portfolio provides a broad range of innovation, from basic to high value
Home
• Latest technology
• Showcases latest interior design trends
Appliances
• Enable great entertaining
• Have high-tech...
2012
• Viewed as Innovative +60%
• Brand Awareness +21%
• Brand Consideration +12%
• Viewed as Reliable/Durable +11%
2013
...
• Two TV advertisements
• French door bottom mount refrigerator
• Induction cooking
• Featuring Kelly Ripa
• July through ...
Our Path to Value Creation
Sustainable, Profitable Growth
21
• Electrolux North American Company
• Market Growth
• Growth ...
22
1918 1998
First
Filtered
Ice & Water
1970
First
Laundry
Center
1938
First
Room
A/C
1929
First
Home
Freezer
1947
First
A...
Delivering Consumer-Driven Innovation
23
Develop innovative products based on consumers’ future needs
North American Desig...
Generate
Ideas
Define
Concept
Develop
Concept
Launch
Market
Success
Delivering Consumer-Driven Innovation
Focus on Quality...
Frigidaire Product Innovation
Cooking
25
50/50 Symmetry Double Oven
• Multiple dishes at multiple temperatures
2012
Frigidaire Brand Product Innovation
Dish Care
26
OrbitClean™ Wash System
• 4x water coverage
• Leverage Electrolux global ...
Frigidaire Brand Product Innovation
Refrigeration
27
100 Ways to Organize
Smudge-Proof™ Stainless Steel
2013
Electrolux Brand Product Innovation
Cooking
28
Induction Freestanding Range
• Boils water in 90 seconds
• Leverage Electro...
Electrolux Brand Product Innovation
Cooking
29
Fresh CleanTM Technology
• Removes odors during self-cleaning cycle
Electrolux Brand Product Innovation
Refrigeration
30
Perfect Temp® Drawer
• Adjustable to keep food &
beverages at their i...
Mark Chambers
SVP Sales, Major Appliances North America
Electrolux Investors’ Meeting
July 19, 2013
Our Path to Value Creation
Sustainable, Profitable Growth
32
• Electrolux North American Company
• Market Growth
• Growth ...
Source: EMA BI Analysis, AHAM Manufacturer Dollar Valuation, Traqline
Billions
Expectation - Positive Trend in Market Dema...
Transforming Our Business
Route to Market
34
Factory Direct
Consumer
High Velocity
RDC
Regional Distribution
Just In Time
Sears
30.5%
Lowe's
18.7%
The Home
Depot
11.4%
Best Buy
7.4%
Dealers
21.0%
Other
11.0%
Growth via New Customer
US Retailers...
Housing Starts
Industry Mix Shift
Source: McGraw-Hill
2011 – 2015 Single
Family Growth
+166%
Thousands
Single Family Growt...
57%
43%
48%
52%
63%
37%
2010 2015
600k Housing Starts
Source: Hanley Wood, Strategia Research 37
2012
800k Housing Starts ...
Transforming Our Business
Route to Market
38
Factory Direct
Consumer
High Velocity
RDC
Regional Distribution
Just In Time
...
Contract
Invest for Growth
39
Distribution
and Service
Sales and
Marketing
Broad
Brand Portfolio
Daren Couture
SVP End-to-End Supply Chain,
Major Appliances North America
Electrolux Investors’ Meeting
July 19, 2013
Our Path to Value Creation
Sustainable, Profitable Growth
41
• Electrolux North American Company
• Market Growth
• Growth ...
Invest in World Class Manufacturing
Memphis Facility
42
Invest in World Class Manufacturing
Memphis Facility
43
• Cycle Time – 50% Reduction
• Lot Size – 75% Reduction
• Conversi...
Our Path to Value Creation
Sustainable, Profitable Growth
• Electrolux North American Company
• Market Growth
• Growth Dri...
59.5%
14.5%
26.0%
0%
25%
50%
75%
100%
10.5%
34.2%
23.5%
8.6%
16.5%
4.1%
2.6%
0%
10%
20%
30%
40%
Same
day
Next
day
2
days
3...
Managing Price, Mix, and Promotions
46
Kitchen packages across broad consumer segments
~ $1,800
~ $2,900
~ $3,800
~ $7,000...
Managing Price, Mix, and Promotions
Results
Net Sales Dollars +29%
Gross Margin Dollars +40%
Average Net Sales Price +12%
...
Our Path to Value Creation
Sustainable, Profitable Growth
48
• Electrolux North American Company
• Market Growth
• Growth ...
Electrolux North America
Sustainable and Profitable Sales Growth
• 2013 US market demand is growing 5-7%; 2014 and beyond ...
Forward Looking Statement
50
This presentation contains information and statistics relating to the industries in which Ele...
Electrolux Investor Day in New York, July 19 2013
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Electrolux Investor Day in New York, July 19 2013

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Electrolux seminar on the North American Operations on July 19 in New York.

The seminar was hosted by Keith McLoughlin, President and CEO, Tomas Eliasson, CFO, Jack Truong, Head of Major Appliances North America together with parts of the North American management team.

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Electrolux Investor Day in New York, July 19 2013

  1. 1. Q2 Results July 19, 2013 Keith McLoughlin, President and CEO Tomas Eliasson, CFO
  2. 2. Q2 Highlights 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 0 1 2 3 4 5 6 2 (SEKm) Q2 2012 Q2 2013 Sales 27,763 27,674 EBIT* 1,112 1,037 Margin* 4.0 3.7 EBIT (SEKm) Margin (%) 4.0 3.7 * Excluding items affecting comparability. Non-recurring items are excluded in all figures. 2012 2013 • Organic growth of 5.9% – Strong growth in Latin America and Asia/Pacific • EBIT of SEK 1,037m – Improved results in North America and Small Appliances – Results offset by soft markets in Europe – Negative currency impact of SEK 181m • Strong cash flow driven by inflow from changes in WC
  3. 3. Sales and EBIT bridge Q2 3 SEKm Q2 2012 Organic Currency translation Currency Transaction Acquisitions/ Divestments Q2 2013 Net sales 27,763 1,545 -1,634 - - 27,674 Growth % - 5.9% -6.2% - - -0.3% EBIT 1,112 106 -56 -125 - 1,037 EBIT % 4.0% 6.9% 3.2% - - 3.7% Dilution/accretion % 0.2% 0.1% -0.5% 0.0%
  4. 4. 4 44
  5. 5. Jack Truong Head of Electrolux Major Appliances North America Electrolux Investors’ Meeting July 19, 2013
  6. 6. • Electrolux North American Company • Market Growth • Growth Drivers • Extending Brand Portfolio • Delivering Consumer-Driven Innovation • Winning New Customers and Channels • Operational Excellence • Driving Price Mix Gains • Summary Our Path to Value Creation Sustainable, Profitable Growth 2
  7. 7. Strength in North American Market 3 ONE out of every THREE Cooking Products SIX out of every TEN Freezers ONE out of every TWO Top Freezer Refrigerators Source: AHAM Rounded % of Manufacturer Share, May 2013 YTD
  8. 8. Full Line Supplier Major Appliances 4
  9. 9. Full Line Supplier Small Appliances 5
  10. 10. Full Line Supplier Professional Appliances 6
  11. 11. 7 Two Iconic Brands
  12. 12. Invested in North America 8 North American infrastructure providing speed to market and relevant innovation Headquarters: Charlotte, NC Design Center - 1 R&D Centers - 5 Customer Engagement Center - 1 Factories - 9 Regional Distribution Centers - 11 Employees - 14,800 Total Footprint (sq ft) - 11.3M Design, R&D, Sales & Marketing, Manufacturing, Customer Service and Distribution
  13. 13. Billions $4.3 $4.6 $2.5 $0 $1 $2 $3 $4 $5 2011 2012 1H 2013 9 Net Sales EBIT -0.1% 6.8% 7.2% 0.9% 4.7% 6.9%EBIT % Six Consecutive Quarters of Profitable Sales Growth $40 $216 $171 $0 $50 $100 $150 $200 $250 2011 2012 1H 2013 Millions Profitable Sales Growth +436% +89% -81% vs 3.9% PY
  14. 14. • Electrolux North American Company • Market Growth • Growth Drivers • Extending Brand Portfolio • Delivering Consumer-Driven Innovation • Winning New Customers and Channels • Operational Excellence • Driving Price Mix Gains • Summary Our Path to Value Creation Sustainable, Profitable Growth 10
  15. 15. Improving Market Conditions Housing Inventory • Rising consumer confidence • Housing inventory is at 2005 levels • New housing starts expected to reach 1.2 M in 2014 14 12 10 8 6 4 2 MonthsSupply 1,600 1,200 800 400 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Existing Homes New Homes 2007 2008 2009 2010 2011 2012 2013 2014 11 Housing Starts 1,355 906 554 587 609 781 980 1,207 Thousands Source: US Census, National Association of Realtors, June 2013
  16. 16. 30 35 40 45 50 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: AHAM, EMA BI Analysis Annual US Total Core Shipments AnnualShipments(Millions) +2.0% -0.7% -5.6% -9.9% -8.6% +4.6% -4.2% -2.1% +5% to +7% Revised expectation for industry core shipments to 5-7% from 3-5% 12
  17. 17. Our Path to Value Creation Sustainable, Profitable Growth 13 • Electrolux North American Company • Market Growth • Growth Drivers • Extending Brand Portfolio • Delivering Consumer-Driven Innovation • Winning New Customers and Channels • Operational Excellence • Driving Price Mix Gains • Summary
  18. 18. John Weinstock VP Marketing, Major Appliances North America Electrolux Investors’ Meeting July 19, 2013
  19. 19. Our Path to Value Creation Sustainable, Profitable Growth 15 • Electrolux North American Company • Market Growth • Growth Drivers • Extending Brand Portfolio • Delivering Consumer-Driven Innovation • Winning New Customers and Channels • Operational Excellence • Driving Price Mix Gains • Summary
  20. 20. Appliance Market Growth Drivers U.S. Population Growth 310.0 321.3 333.9 358.5 380.0 399.8 420.3 200 250 300 350 400 450 2010 2015 2020 2030 2040 2050 2060 Premium Segment Growth Renters Purchasing Population Aging Source: US Census 16 Millions
  21. 21. Extending Brand Portfolio 17 Price Value Our brand portfolio provides a broad range of innovation, from basic to high value
  22. 22. Home • Latest technology • Showcases latest interior design trends Appliances • Enable great entertaining • Have high-tech appeal Home • Well-run • Organized Appliances • Save time • Get it right the first time Our Brands Attract a Diverse Group of Consumers 18
  23. 23. 2012 • Viewed as Innovative +60% • Brand Awareness +21% • Brand Consideration +12% • Viewed as Reliable/Durable +11% 2013 • New Advertising – French Door Bottom Mount – Smudge ProofTM Stainless Steel • New Products – All Core Categories • Driving Mix to Frigidaire Gallery and Frigidaire Professional Extending Brand Portfolio Grow Frigidaire Brand 19Source: Internal Electrolux Tracking Data
  24. 24. • Two TV advertisements • French door bottom mount refrigerator • Induction cooking • Featuring Kelly Ripa • July through November New Advertising (2013 Q3 & Q4) 20 1. Add Electrolux Website 2. LiveLoveLux screen grabs • New website (electroluxappliances.com) • New post-purchase engagement program (livelovelux.com) Expanded Digital Programs Extending Brand Portfolio Grow Electrolux Brand
  25. 25. Our Path to Value Creation Sustainable, Profitable Growth 21 • Electrolux North American Company • Market Growth • Growth Drivers • Extending Brand Portfolio • Delivering Consumer-Driven Innovation • Winning New Customers and Channels • Operational Excellence • Driving Price Mix Gains • Summary
  26. 26. 22 1918 1998 First Filtered Ice & Water 1970 First Laundry Center 1938 First Room A/C 1929 First Home Freezer 1947 First Agitator Washer 1950 First Compact Range First Electric Refrigerator Frigidaire has been improving the lives of consumers for nearly 100 years A Legacy of Innovation
  27. 27. Delivering Consumer-Driven Innovation 23 Develop innovative products based on consumers’ future needs North American Design Center Electrolux Innovation Center
  28. 28. Generate Ideas Define Concept Develop Concept Launch Market Success Delivering Consumer-Driven Innovation Focus on Quality and Simplicity Unarticulated and articulated consumer needs Quantitative consumer insight Qualitative consumer insight Does it provide value? 24
  29. 29. Frigidaire Product Innovation Cooking 25 50/50 Symmetry Double Oven • Multiple dishes at multiple temperatures 2012
  30. 30. Frigidaire Brand Product Innovation Dish Care 26 OrbitClean™ Wash System • 4x water coverage • Leverage Electrolux global technology 2012
  31. 31. Frigidaire Brand Product Innovation Refrigeration 27 100 Ways to Organize Smudge-Proof™ Stainless Steel 2013
  32. 32. Electrolux Brand Product Innovation Cooking 28 Induction Freestanding Range • Boils water in 90 seconds • Leverage Electrolux Professional technology
  33. 33. Electrolux Brand Product Innovation Cooking 29 Fresh CleanTM Technology • Removes odors during self-cleaning cycle
  34. 34. Electrolux Brand Product Innovation Refrigeration 30 Perfect Temp® Drawer • Adjustable to keep food & beverages at their ideal serving temperature
  35. 35. Mark Chambers SVP Sales, Major Appliances North America Electrolux Investors’ Meeting July 19, 2013
  36. 36. Our Path to Value Creation Sustainable, Profitable Growth 32 • Electrolux North American Company • Market Growth • Growth Drivers • Extending Brand Portfolio • Delivering Consumer-Driven Innovation • Winning New Customers and Channels • Operational Excellence • Driving Price Mix Gains • Summary
  37. 37. Source: EMA BI Analysis, AHAM Manufacturer Dollar Valuation, Traqline Billions Expectation - Positive Trend in Market Demand $15.0 $17.0 $18.0 $3.9 $2.6 $3.2 $0 $5 $10 $15 $20 $25 2008 2012 2013E Retail Contract 33 US Appliance Market
  38. 38. Transforming Our Business Route to Market 34 Factory Direct Consumer High Velocity RDC Regional Distribution Just In Time
  39. 39. Sears 30.5% Lowe's 18.7% The Home Depot 11.4% Best Buy 7.4% Dealers 21.0% Other 11.0% Growth via New Customer US Retailers Value Share 35Source: EMA BI Analysis, AHAM Manufacturer Dollar Valuation, Traqline. Other includes HH Gregg, Super Stores, Key Accounts, Wholesalers, Internet and PC Richards. 2012 New Growth Opportunity with The Home Depot $17B
  40. 40. Housing Starts Industry Mix Shift Source: McGraw-Hill 2011 – 2015 Single Family Growth +166% Thousands Single Family Growth -21% 3% -7% 25% 22% 39% 26% Multi Family Growth -55% 15% 36% 29% 16% 14% 8% Capitalizing on the growth of single family home starts 36
  41. 41. 57% 43% 48% 52% 63% 37% 2010 2015 600k Housing Starts Source: Hanley Wood, Strategia Research 37 2012 800k Housing Starts 1,500k Housing Starts New Growth Opportunity in Contract Channel Contract Channel Growth Volume Share by Mix Indirect Manufacturer Direct
  42. 42. Transforming Our Business Route to Market 38 Factory Direct Consumer High Velocity RDC Regional Distribution Just In Time Electrolux Delivery Center
  43. 43. Contract Invest for Growth 39 Distribution and Service Sales and Marketing Broad Brand Portfolio
  44. 44. Daren Couture SVP End-to-End Supply Chain, Major Appliances North America Electrolux Investors’ Meeting July 19, 2013
  45. 45. Our Path to Value Creation Sustainable, Profitable Growth 41 • Electrolux North American Company • Market Growth • Growth Drivers • Extending Brand Portfolio • Delivering Consumer-Driven Innovation • Winning New Customers and Channels • Operational Excellence • Driving Price Mix Gains • Summary
  46. 46. Invest in World Class Manufacturing Memphis Facility 42
  47. 47. Invest in World Class Manufacturing Memphis Facility 43 • Cycle Time – 50% Reduction • Lot Size – 75% Reduction • Conversion Cost – 25% Reduction Memphis facility improves speed, flexibility, and quality FROM: L’Assomption, Canada TO: Memphis, TN
  48. 48. Our Path to Value Creation Sustainable, Profitable Growth • Electrolux North American Company • Market Growth • Growth Drivers • Extending Brand Portfolio • Delivering Consumer-Driven Innovation • Winning New Customers and Channels • Operational Excellence • Driving Price Mix Gains • Summary 44
  49. 49. 59.5% 14.5% 26.0% 0% 25% 50% 75% 100% 10.5% 34.2% 23.5% 8.6% 16.5% 4.1% 2.6% 0% 10% 20% 30% 40% Same day Next day 2 days 3 days 4 - 7 days 8 - 14 days +14 days Source: Traqline 2012, EMA BI Analysis To capture new homes and replacement markets Consumer Purchase Drivers 45 Discretionary New Home Replacement 68+% of replacement buyers need their appliance within 2 days.
  50. 50. Managing Price, Mix, and Promotions 46 Kitchen packages across broad consumer segments ~ $1,800 ~ $2,900 ~ $3,800 ~ $7,000 ~ $12,000 Price Value
  51. 51. Managing Price, Mix, and Promotions Results Net Sales Dollars +29% Gross Margin Dollars +40% Average Net Sales Price +12% 2012 Black November Results 47
  52. 52. Our Path to Value Creation Sustainable, Profitable Growth 48 • Electrolux North American Company • Market Growth • Growth Drivers • Extending Brand Portfolio • Delivering Consumer-Driven Innovation • Winning New Customers and Channels • Operational Excellence • Driving Price Mix Gains • Summary
  53. 53. Electrolux North America Sustainable and Profitable Sales Growth • 2013 US market demand is growing 5-7%; 2014 and beyond >4% • Well-positioned to outgrow the market – Full-line supplier with extended brand portfolio – Proven consumer-driven innovation pipeline – Accelerating national channel growth – Transforming operations • Target profit margin expansion to >6% 49 BUILD STRENGTH ON STRENGTH
  54. 54. Forward Looking Statement 50 This presentation contains information and statistics relating to the industries in which Electrolux operates. Electrolux has derived some of this information from third party sources that it believes are reliable, but without independent verification. No representation or warranty, express or implied, is made as to, and no reliance should be placed upon, the fairness, accuracy, completeness or correctness of any information or opinions contained in this presentation. None of Electrolux, or any of its directors, officers, employees, agents or advisers, shall in any way be responsible for the contents of the presentation, or shall be liable for any loss arising from use of the information contained in the presentation or otherwise arising in connection therewith. In addition, this document contains forward-looking statements. Any such forward-looking statements are based on a number of assumptions about the operation of Electrolux and factors beyond Electrolux's control and are subject to significant risks and uncertainties, and accordingly, actual results may differ materially from these forward-looking statements. Such statements include, among others, the financial goals and targets of Electrolux or future periods and future business and financial plans. Electrolux undertakes no obligation to update these forward-looking statements for events or circumstances that occur subsequent to such dates. Please refer to the section in the AB Electrolux 2012 Annual Report that identifies factors that could cause actual results to differ materially. The presentation is for information purposes only and does not constitute an offer or invitation to apply for securities under any law and shall not form the basis of, or be relied on in connection with, any contract or commitment whatsoever. © Electrolux

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