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Q2 Results,
July 19, 2010
Hans Stråberg, President and CEO
Jonas Samuelson, CFO
Peter Nyquist, IR
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
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
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
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
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
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
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
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
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
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
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
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
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

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Electrolux Interim Report Q2 2010 Presentation

  • 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