Highlights of the fourth quarter of 2009. Net sales amounted to SEK 28,215m (28,663) and income for the period was SEK 664m (-474), or SEK 2.34 (-1.68) per share. Net sales declined by 1% in comparable currencies, due to continued weak markets.
4. Price development
Drivers of price stability
Price index
100 Competitors’ balance sheets
Being aggressive on price very costly
Record-low inventory levels
95 Industry shift towards LCC capacity
almost finished – price cuts based
on unique cost position will become
less of an issue
90
2004 2005 2006 2007 2008 2009 Strong internal focus on price
YTD
4
5. Reducing cost – profitability
with capacity utilization of 60%
90%
80%
70%
60%
50%
40% 85%
30% 60%
20%
10%
0%
Normal Current
Only 20% of total cost is fixed
5
6. The raw-material markets
are uncertain
Plastic prices development Electrolux
100
Other 19%
Cu&Al 11%
0
Plastics 23% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009
Steel prices development Electrolux
100
Steel 47%
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2009
6
7. Focus on cash flow; structural
improvements – lower inventories
Cash flow from operations and investments
4000
Improved earnings
3500
Significant improvement in
3000
working capital strongly
2500
contributed to high cash flow
2000
Structural reduction of inventory
1500 level
1000 Reduction of past due
500 receivables
0 Improved accounts payable
-500 Lower capital expenditure
-1000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4*
Proposal to pay dividend of SEK
2007 2008 2009 1.1 billion
*) Pension contributions are excluded in Q4, 2009 figures Consistent with dividend policy
7
8. Further comments on the
financial and balance sheet
Contributions to pension
funds Pension
2009 2008
funds
Close to SEK 4 billion
injections into pension funds
Assets 19,008 13,989
Reduced pension net debt
volatility
Liabilities 22,399 23,185
Positive EBIT impact
Pension
25% tax rate in 2009 -3,391 -9,196
net debt
Reversal of tax provisions
8
9. Q4 Highlights
EBIT (mSEK) Margin (%)
Net sales declined by 1% in comparable
2500 10
currencies
7,3 7,2
2000 8 Continued weak market demand
Maintained prices
1500 6
EBIT amounted to SEK 2,023m,
1000 4 excluding items affecting comparability
500 2
Improved results for all business areas
despite continued weak markets
0 0 Cost savings
-500 -2 Positive price and mix development
-1,2
Lower raw-material costs
2007 2008 2009
-1000 -4
Continued strong cash flow
(SEKm) Q4 2009 Q4 2008 Continued structural improvement of
Sales 28,215 28,663 working capital
EBIT 2,023 -389
Margin 7.2% -1.4%
9
10. Consumer Durables
Europe
EBIT (mSEK) Margin (%)
1200 12 Weak market demand
6,1 7,3 Stabilization in some
800 8
markets
400 4 Cost reductions
0 0
Positive price and mix
development
-400 -4
Lower raw materials costs
-5,3
-800
2007 2008 2009
-8
Improved results for floor-
(SEKm) Q4 2009 Q4 2008 care products
Sales 11,285 11,972
EBIT 829 -638 Improved product mix
Margin 7.3% -5,3%
10
11. The European market continued
to decline in 2009…
Quarterly comparison, year over year
10%
5%
0%
-5%
-10%
-15%
2006 2007 2008 2009
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
West. Europe 4% 1% 1% 5% 1% 1% -1% -5% -4% -4% -5% -8% -9% -9% -4% -2%
East. Europe 1% 9% 6% 7% 14% 5% 5% 10% 6% 5% 4% -15% -31% -30% -26% -17%
11
12. Consumer Durables
North America
EBIT (mSEK) Margin (%)
10
Cost reductions
8,6
Improved internal efficiency
600
5,7
Higher productivity despite
5
350 lower capacity utilization
100
Positive price and mix
0 development
-0,5
-150
Lower raw material costs
2007 2008 2009
-400 -5 Improved operating income
(SEKm) Q4 2009 Q4 2008 for floor-care products
Sales 7,865 8,928
EBIT 450 -43
Margin 5.7% -0.5%
12
13. In North America, we saw the first
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
2006 2007 2008 2009
13
14. Consumer Durables
Latin America
EBIT (mSEK) Margin (%)
400 8,4 10,0
Continued strong demand in
Brazil
7,3 7,4
300 7,5 Tax incentives
Interest rates
200 5,0
Consumer access to credit
100 2,5 Record high earnings
Positive price/mix
0 0,0
Lower raw material costs
2007 2008 2009
-100 -2,5
(SEKm) Q4 2009 Q4 2008
Sales 4,401 3,305
EBIT 368 244
Margin 8.4% 7.4%
14
15. Consumer Durables
Asia Pacific
EBIT (mSEK) Margin (%)
300 9,3 10,0
Improved operating income
250 7,5
9,0 in Australia
8,0
7,0 Increased sales of air-
200
6,0 conditioners
150 5,0
4,0
Positive price development
100
3,0 Raw materials
2,0
50 0,7
1,0 Southeast Asia
0 0,0
Market share gain
2007 2008 2009 Profitable growth
(SEKm) Q4 2009 Q4 2008 China
Sales 2,741 2,409 Cost measures
EBIT 254 16
Repositioning of Electrolux
Margin 9.3% 0.7%
brand
15
18. 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.
18