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.
Governor Olli Rehn: Dialling back monetary restraint
Electrolux Interim Report Q1 2010 Presentation
1. Q1 Results,
April 27, 2010
Hans Stråberg, President and CEO
Jonas Samuelson, CFO
Peter Nyquist, IR
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. 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. 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. 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. 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. 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. 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. 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
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. 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
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. 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. 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. 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
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