Electrolux - Keith McLoughlins speech at the AGM 2011

1. Annual General
Meeting 2011
Keith McLoughlin
President and CEO
March 31, 2011

2. EBIT Target %

3. Capital Turnover
Target
3

4. RONA Target %
4

5. Summary of 2010
Record year
– Earnings & Returns
– Productivity
– Product Mix Impact
– Safety & Quality
All business areas outperformed previous
year’s results
Solid cash flow generated by operating income
growth and balance sheet productivity
5

6. A Look Back
– Despite headwinds, we have improved
our profitability
Approx. Approx. SEK 11bn in raw-material
EBIT % 16% improvements cost headwind since 2002
20
15
+ –
10
–
5 6.1
4.2
0
2001 Improve- Raw Other 2010
ments materials cost increases
*) Excluding items affecting comparability.
6

7. Phases in Electrolux
development
Up until 1990’s Up until early 2000’s 2000’s Onwards
Globalization
Acquisitions &
Growth
Consolidation Today Growth
Transformation
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8. Global Appliance Industry
Competitive landscape A very large market: >$100bn
changing – Large installed base
Significant over capacity That is growing
Manufacturers “in-the-middle” – Population growth
Heavily promoted/discounted – GDP per capita
Rising raw-material prices Not overly capital intensive
– Asset turnover >3
1. The winners can generate significant free cash flows to be
re-invested and/or returned to the shareholders
2. Not much left for the non-winners
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9. Our Point-of-View
Best Appliance Company in the world:
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10. How to do it?
Innovation Productivity Profitable
– Product growth
– Brand
– Design
10

11. Growth Target %

12. First margin expansion
then profitable growth
Operating margin %
8
Maximize
7 shareholder
6 value
5
4
3
2
1
0 1 2 3 4
Growth %
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13. How we accelerate growth
Value share growth in mature markets
Growth in emerging markets
Develop adjacent product opportunities
Selective acquisitions in strategically
important categories and markets
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14. Value share growth
“Best-in-Class” Products Consumer Insight
g
t in
D
es
ke
ig
ar
n
M
R&D
Product Creation Process
Primary Product
Strategic Consumer development development Launch Range
market plan opportunities execution management Phase-out
Concept Commercial
development launch preparation
Intent Commercial Launch Process
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19. 19

21. 21

22. Growth in emerging markets
22

23. Develop adjacent product
opportunities
23

24. Sustainable products
get a boost
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26. How to do it?
Innovation Productivity Profitable
– Product growth
– Brand
– Design
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27. The final phase of our
restructuring program
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28. Utilizing global strength
and customer focus
Shared global strength Sharp customer focus Premium
Benefits of scale in:
Manufacturing Differentiation
R&D
Purchasing
Common components/
modules
Common processes Low cost
and shared services
Mass
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29. We need the right people to
continue to develop Electrolux
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30. Our values
Foundation Respect & Diversity Ethics & Integrity Safety & Sustainability
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32. Our Point-of-View
Best Appliance Company in the world:
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33. Shareholder value
Total return to shareholders
450
400 Electrolux B
20%
350
300 SIX RX index
16%
250
200
150
100
50
0
2003 2004 2005 2006 2007 2008 2009 2010
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34. 34

35. 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.
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