Hans Stråberg, President and CEOJonas Samuelson, CFOPeter Nyquist, IR
Q2 Results, July 19, 2010
2
Q2 Highlights
3,7
5,4
0
500
1000
1500
2000
2500
-4
-2
0
2
4
6
8
10 Net sales increased by 3% in comparable currencies
Solid recovery in the US on the back of the rebate programSouthern Europe volatile
EBIT SEK 1,477m, excluding items affecting comparability
Volume growthPositive mixRaw-material headwindIncreased marketing spend
(SEKm) Q2 2010 Q2 2009
Sales 27,311 27,482
Margin 5.4% 3.7%
EBIT 1,477 1,027
2009
EBIT (SEKm) Margin (%)
2010
3
Operating cash flow Q2, 2010
Solid cash flow
Positive earnings contribution
Seasonal build-up of inventories
Higher level of investments compared to last year
-1500
-1000
-500
0
500
1000
1500
2000
2500
3000
3500
4000
Operations (excl.assets and liab.)
Change in assetsand liabilities
Investments Operating cashflow
Q2, 2009 Q2, 2010
4
Raw-material costs 2010
Steel 48%
Plastics 23%
Copper 7%Aluminum 4%
Other 18%
2009SEK
19 billion
2010 ~ SEK 1 Billion in increaseNegative impact of SEK 300m y-o-y in Q2Raw-material y-o-y headwind expected to increase to SEK 500m in Q3
5
Consumer DurablesEurope
2,9
5,4
0
400
800
1200
0
2
4
6
8
10 Lower salesDecline in private label sales
Price pressure
Strong EBIT improvementStrong mix – increased sales within built-in segment
Cost savings – Previous cost measures
Increased marketing spend
Strong results for floor-care products – mix improvement
(SEKm) Q2 2010 Q2 2009
Sales 9,349 10,452
EBIT 504 300
Margin 5.4% 2.9%
EBIT (SEKm) Margin (%)
20102009
6
Quarterly comparison, year over year
-15%
-10%
-5%
0%
5%
10%
East. Europe
West. Europe
The European market continued to be unchanged in Q2
2006 2007 2008 2009
6%
-4%
Q1
10%
-5%
Q4
5%
-1%
Q3
5%
1%
Q2
14%
1%
Q1
7%
5%
Q4
6%
1%
Q3
9%
1%
Q2
1%
4%
Q1
5%
-4%
Q2 Q3
-5%
4%
Q4
-8%
-15%
Q1
-9%
-31%
Q2
-9%
-30%
Q3
-4%
-26%
Q4
-2%
-17%
Q1
1%
-7%
2010
Q2
0%
1%
7
Consumer DurablesNorth America
5,14,6
-200
0
200
400
600
800
-2
0
2
4
6
8Solid market growth led to higher volumes
Exited unprofitable volumes
Increased sales under own brands
Improved earnings in comparable currencies
Improved mix
Increased sales of air-conditioners
Extra consolidation and transition costs
Higher raw-material costs
Lower sales and operating income for floor-care products
(SEKm) Q2 2010 Q2 2009
Sales 10,027 9,848
EBIT 458 498
Margin 4.6% 5.1%
2009
EBIT (SEKm) Margin (%)
2010
8
Quarterly comparison, year-over-year
-20%-15%-10%
-5%0%5%
10%15%
2006 2007 2008
Strong growth in US in the second quarter
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2009Q2 Q3 Q4 Q1
2010Q2
9
Consumer DurablesLatin America
4,3
6,1
0
100
200
300
400
0,0
2,5
5,0
7,5
10,0 Slowdown of market growth in Brazil
Expired tax incentivesRest of Latin America showed strong growth
Improved operating income
Higher volumesImproved effiencyPositive currency impact(SEKm) Q2 2010 Q2 2009
Sales 3,905 3,326
EBIT 237 142
Margin 6.1% 4.3%
2009
EBIT (mSEK) Margin (%)
2010
10
Consumer DurablesAsia/Pacific
3,0
10,1
0
50
100
150
200
250
0,0
2,0
4,0
6,0
8,0
10,0
12,0 Australia: Improved EBIT despite market decline
Improved product mixPositive currency impactImproved efficiency
Southeast Asia and ChinaMarket-share gainPositive impact of cost-cutting measures
(SEKm) Q2 2010 Q2 2009
Sales 2,298 2,004
EBIT 231 61
Margin 10.1% 3.0%
2009
EBIT (SEKm) Margin (%)
2010
11
Professional Products
8,9
12,0
0
50
100
150
200
250
300
0,0
3,0
6,0
9,0
12,0
15,0Stabilization of market demandImproved operating incomeFood service
Improved product mixHigher production efficiency Lower costs for raw materials
Laundry productsImproved cost efficiencyImproved mix
(SEKm) Q2 2010 Q2 2009
Sales 1,730 1,850
EBIT 207 165
Margin 12.0% 8.9%
2009
EBIT (SEKm) Margin (%)
2010
12
Third quarter
Top line developmentProduct mix; continues to have a positive impactMarket volumes; flat year-over-yearPrice development; defend current levels
Cost developmentCost savings; positive impact from restructuring programRaw material prices; peak in Q3, y-o-y negative effect of SEK 500mIncrease marketing and brand spend
Take into accountWith more replacement business there is less seasonal variationsbetween quartersThe appliance industry is experience a shortage of components which is expected to continuo into the second half of 2010
13
“…….. I still think 2010 could be the year we approach our goal of an
operating margin of 6% with continued improved capital efficiency.”
Full year 2010
14
15
Factors affecting forward-looking statements
Factors affecting forward-looking statementsThis 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.