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The Electrolux 
Group 
Capital Markets Day 
Charlotte, November 20, 2014 
Electrolux 
Group 
Presentation 
Keith McLoughli...
Overview 
Business 
Update 
Strategic 
Review 
Value 
Creation 
Potential 
Financial 
Review
3 
Business Update
Summary of what we said about 2014 
4 
Comments after Q4 2013 FY 2014 Comments Status 
Market volumes Slightly positive 
•...
YTD performance 
EBIT, 2014 vs. 2013 
0 
400 
800 
1,200 
1,600 
Q1 Q2 Q3 
2013 2014 
Cash flow after investments, 2014 vs...
Key drivers to performance 
6 
• Higher profitability in Europe with contribution from productivity initiatives 
• Mix imp...
YTD 2013 Volume Price/mix Currency Inflation Raw 
materials 
Investments Savings 
efficiency 
YTD 2014 
Improved profitabi...
8 
Operational recovery 
in Europe
Europe YoY market growth % 
European market stabilized, but not recovering 
from the downturn 
The European market is stab...
EMEA has restored profitability in a weak market 
0 
50 
100 
150 
200 
250 
300 
350 
400 
450 
500 
0.0 
0.5 
1.0 
1.5 
...
Focused Commercial Strategy 
11 
Categories 
Strongest 
Brands 
Strongest 
Categories 
Built-in Kitchen 
and Laundry 
Valu...
12 
Where we are heading
Our Desired Position 
Our Vision We will be the best appliance company in the world 
...our customers 
As measured by... 
...
Total Shareholder Return 
Total return 
Electrolux B 
(Annual return) 
SIX Index Retun 
(Annual return) 
1 year 40% 15% 
5...
12.0% 
Total Shareholder Return 
Cash flow productivity 
Top line 
Margin 
Multiple 
1.0% 
0.5% 
0.5% 
TSR 
14% 
CAGR 
*Da...
Value creation model 
16 
EBIT Margin 
>6% 
Capital Turnover 
4x 
RoNA 
>20% 
Growth 
4%
Our strategy 
Profitable 
growth 
Operational 
excellence 
Innovation 
People & Leadership 
17
18 
Profitable Growth
Electrolux has a leading position in 
most markets 
19 
Electrolux Major Appliance 
(Value market share ranking)
Focus on organic growth 
20 
90,000 
95,000 
100,000 
105,000 
110,000 
115,000 
-5% 
-3% 
-1% 
1% 
3% 
5% 
7% 
2011 2012 ...
Acquired growth 
21 
1919 1950 1984 1986 1994 2011 2014-15
Growth in Adjacent Products 
22 
Coffe machines 
Electrolux Expressionist Collection: 
Kettles, toasters, mixers, blenders...
23 
Innovation
A history of innovations and strong brands 
1901 1919 1957 1984 1986 1994 1997 2004 2008 2012 2014 
AB Lux AB Electrolux E...
Global innovation territories 
Benefit-driven innovation territories 
Culinary 
enjoyment 
Health and 
well-being 
Sustain...
”Innovation Triangle” 
26 
Marketing Design 
R&D 
Develop best-in-class 
products 
1 
“70% Preference Rule” 
2 
Reduce Tim...
Eight 
strategic 
brands 
27
28 
Accelerating innovation with 
relevant and differentiated offerings
Electrolux CombiSteam Oven AEG Maxi Sense Stove 
Leading Innovation in Cooking
Hob²Hood 
Connected Range 
• A wireless functionality that automatically controls the hood according to the 
cooking activ...
Electrolux Expressionist Collection Electrolux Masterpiece Collection 
New product ranges launched in 
Small Domestic Appl...
Ergorapido Range 2014 
32
33 
Ultraflex video
360 Consumer Experience 
34 
Post-Purchase 
Setting up the appliance, 
using and maintaining it 
At-Purchase 
Understandi...
Commercial Triangle 
35 
SIMPLE COLLABORATIVE 
FOCUSED 
Commercial 
Triangle 
PRODUCT 
LINE 
SALES 
MARKETING
EMEA Electrolux CombiSteam Oven 
and Sousvide Launch 
36 
STEAM OVEN STARTER KIT COOKING CLUB! 
STEAM OVEN COOKBOOK AND ST...
37 
Operational Excellence
Cost savings programs 
38 
Savings from 
Overhead 
costs 
Savings from 
Global 
Operations 
Savings from programs have ful...
Manufacturing footprint 
LCC transition in its final phase 
39 
28% 
51% 
~70% 
2004 2008 2014est 
Percentage of Capacity ...
Global Operations 
Previously communicated 
40 
50% 
30% 
20% 
Modularization 1.0 
Purchasing 
Manufacturing
41 
People & Leadership
Passionate, Business-minded People 
Leaders at 
Electrolux 
Business 
Leader 
People 
Leader 
42
43 
Acquisition of 
GE Appliances
Our Desired Position 
Our Vision We will be the best appliance company in the world 
...our customers 
As measured by... 
...
Competitors with Aggressive Growth Plans 
Aggressive growth plans from our competitors may impact the market picture in fu...
Global Market Leadership 
Local market strength 
Strong brands 
Product innovation 
Cost position 
Global scale
Overview of GE Appliances 
47 
• 2013 revenue of USD 5.7bn 
• Manufacturing footprint across 5 states 
– 12,000 employees ...
Transaction overview 
48 
Overview 
• Electrolux has agreed to acquire GE Appliances for a cash consideration of USD 3.3 b...
Strategic fit 
Combining high quality brand portfolios 
49 
Price 
Value 
VALUE 
PRICE
Expected synergy breakdown 
Significant synergies 
Synergies 
• Expected annual synergies of USD 300m 
• Synergies from co...
Delivering on our growth strategy and vision 
We w Our Vision ill be the best appliance company in the world 
...our custo...
52 
Creating value for 
our shareholders
Financial Targets 
53 
RoNA 
>20% 
Organic growth 
4% 
EBIT margin 
>6% 
Capital turnover 
4x
3.50 
4.00 
4.50 
6.00 
6.50 
7.00 
7.50 
4.00 4.25 4.00 
6.50 6.50 6.50 6.50 
0 
20 
40 
60 
80 
100 
0.0 
2.0 
4.0 
6.0 ...
0 
500 
1,000 
1,500 
Electrolux has consistently delivered 
strong total return to our shareholders 
1994 2000 2004 2009 ...
The Electrolux 
Group 
Financial Review 
Capital Markets Day 
November 20, 2014 
Tomas Eliasson 
CFO
57 
Financial trends
Sales and EBIT bridge, Q3 
58 
SEKm 
Q3 2013 
Volume 
Price/Mix 
Currency 
translation 
Currency 
transaction 
Other 
Q3 2...
Sales and EBIT bridge, Jan-Sep 2014 
59 
SEKm 
Jan-Sep 2013 
Volume 
Price/Mix 
Currency 
translation 
Currency 
transacti...
Pre-closure transaction costs 
60 
GE Appliances – Costs expected pre-closure 
Transaction (EBIT) 
M&A advisory, lawyers, ...
61 
The transformation 
is paying off 
Understanding 
Electrolux P&L
Understanding Electrolux 
62 
SEKbn 2013 
Revenues 109 
Direct material 45 
Sourced products 17 
Salaries and other expens...
Summary of Major P&L Components 
63 
Price 0% or 100% drop-through(!) 
Mix 20-50% drop-through 
Volume ~20% drop-through 
...
64 
The transformation 
is paying off 
Raw Material 
Update
Raw material exposure 
65 
Carbon Steel 
35% 
Stainless Steel 
8% 
Plastics 35% 
Aluminium & 
Copper 9% 
Other 12%
Steel 
Global steel prices have been under pressure 
66 
600 
640 
680 
720 
760 
800 
840 
880 
920 
960 
1,000 
1,040 
1...
0 
20 
40 
60 
80 
100 
120 
140 
120 
130 
140 
150 
160 
170 
180 
190 
200 
210 
Jan-10 
Mar-10 
May-10 
Jul-10 
Sep-10...
68 
The transformation 
is paying off Currency Impact
Transactional Currency Effects 
69 
• In general, earnings for Electrolux benefit from a: 
– Weak USD, EUR, HUF, THB, MXN ...
-6,000 
-4,000 
-2,000 
0 
2,000 
4,000 
6,000 
8,000 
10,000 
BRL GPB AUD CAD CHF RUB CLP ARS CNY EUR USD 
Gross Currency...
Currency Effects 
71 
Major transaction effects, SEKm Q1 Q2 Q3 Q4 
BRL -200 -80 -15 
ARS, CLP, VEF, COP -130 -50 -50 
CNY ...
72 
The transformation 
is paying off Restructuring Update
Cost savings programs 
Previously communicated 
73 
Savings from 
Overhead 
costs 
Savings from 
Global 
Operations 
Savin...
74 
The transformation 
is paying off Cash Flow
3,871 
5,273 
2,283 
6,337 
0 
1,000 
2,000 
3,000 
4,000 
5,000 
6,000 
7,000 
2011 2012 2013 LTM 
Free Operational Cash ...
Cash flow per quarter, 2011-2014 
76 
SEKm 
-4,000 
-3,000 
-2,000 
-1,000 
0 
1,000 
2,000 
3,000 
4,000 
5,000 
Q1 Q2 Q3...
Working Capital 
SEK 7bn released since 2008… 
77 
• The Group’s NOWC has decreased by 
SEK 7bn since 2008 
• Focus on NOW...
78 
The transformation 
is paying off Summary
Summary - Financial Development 
79 
• Earnings 
– Profit recovery in Europe as cost take-out initiatives continues and po...
Q&A
Prochain SlideShare
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Presentations Electrolux Capital Markets Day 2014 - By Keith McLoughlin and Tomas Eliasson

At Electrolux capital markets day in Charlotte, North Carolina on November 20 2014, CEO Keith McLoughlin and other senior officers of the company presented a status update on the Group’s strategy as well as an overview of the current business environment and expectations for next year.

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Presentations Electrolux Capital Markets Day 2014 - By Keith McLoughlin and Tomas Eliasson

  1. 1. The Electrolux Group Capital Markets Day Charlotte, November 20, 2014 Electrolux Group Presentation Keith McLoughlin President and CEO Tomas Eliasson CFO
  2. 2. Overview Business Update Strategic Review Value Creation Potential Financial Review
  3. 3. 3 Business Update
  4. 4. Summary of what we said about 2014 4 Comments after Q4 2013 FY 2014 Comments Status Market volumes Slightly positive • Growth in NA and emerging markets • Europe developing sideways • Brazil slowing  Price/mix Slightly positive • Latin America and North America: positive • Europe: negative price • Asia/Pacific: negative country mix  Raw material costs Flat • Range SEK -100m/+100m  R&D and Marketing Higher • Higher marketing spend in NA and Asia • Higher global R&D  Cost savings ~ SEK 1 bn • Include global operations, overhead reduction and manufacturing footprint 
  5. 5. YTD performance EBIT, 2014 vs. 2013 0 400 800 1,200 1,600 Q1 Q2 Q3 2013 2014 Cash flow after investments, 2014 vs. 2013 -4,000 -2,000 0 2,000 4,000 Q1 Q2 Q3 2013 2014 5 +4% +13% +30% +95% +27% +55% SEKm SEKm
  6. 6. Key drivers to performance 6 • Higher profitability in Europe with contribution from productivity initiatives • Mix improvements through active product portfolio management • Sales and earnings in North America contribute strongly to the Group • Latin America and Asia/Pacific, solid performance in weak markets • Professional Products continues to show improved results • Earnings has continued to improve with a solid cash flow
  7. 7. YTD 2013 Volume Price/mix Currency Inflation Raw materials Investments Savings efficiency YTD 2014 Improved profitability 7 2.8 3.3 EBIT, SEKbn 3.9% Improved EBIT 17% 4.1%
  8. 8. 8 Operational recovery in Europe
  9. 9. Europe YoY market growth % European market stabilized, but not recovering from the downturn The European market is stabilizing from the 2008-2009 downturn Though there is M&A-activity, the market is still relatively fragmented Some consolidation is taking place… …but there are still 5 top players with less than 60% of combined value share -10% -15% 5% 0 -5% 2009 2010 2011 2012 2013 2014 Source: Total Europe sell-in Major goods ex. Turkey, % change vs. same period last year Source: GfK MDA Sales value %, 25 CTR EU, 2014 H1 The European market is stabilizing from the 2008-2009 downturn Though there is M&A-activity, the market is still relatively fragmented
  10. 10. EMEA has restored profitability in a weak market 0 50 100 150 200 250 300 350 400 450 500 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 EBIT Margin EBIT EBIT (SEK m) MARGIN (%) 2012 2013 2014 • Market demand • Market prices • Currency • Strong mix improvement • Product cost efficiency • Cost savings
  11. 11. Focused Commercial Strategy 11 Categories Strongest Brands Strongest Categories Built-in Kitchen and Laundry Value Creating Sales Channels FOCUS Key focus areas • Strong brands • Building on advantage in cooking and built-in • Re-gaining premium position • Stronger sales channels • Right-sized cost structure
  12. 12. 12 Where we are heading
  13. 13. Our Desired Position Our Vision We will be the best appliance company in the world ...our customers As measured by... ...our employees ...our shareholders 13
  14. 14. Total Shareholder Return Total return Electrolux B (Annual return) SIX Index Retun (Annual return) 1 year 40% 15% 5 year 9% 14% 10 year 17% 11% 15 year 11% 7% 20 year 14% 12% 25 year 13% 11% 14 Note: calculated TSR price as of 11/4/2014
  15. 15. 12.0% Total Shareholder Return Cash flow productivity Top line Margin Multiple 1.0% 0.5% 0.5% TSR 14% CAGR *Data based on 1994-2014
  16. 16. Value creation model 16 EBIT Margin >6% Capital Turnover 4x RoNA >20% Growth 4%
  17. 17. Our strategy Profitable growth Operational excellence Innovation People & Leadership 17
  18. 18. 18 Profitable Growth
  19. 19. Electrolux has a leading position in most markets 19 Electrolux Major Appliance (Value market share ranking)
  20. 20. Focus on organic growth 20 90,000 95,000 100,000 105,000 110,000 115,000 -5% -3% -1% 1% 3% 5% 7% 2011 2012 2013 Sales SEKm Growth % Organic growth % Sales in local currencies, SEKm 2014 CAGR 2011-2014 ~5%
  21. 21. Acquired growth 21 1919 1950 1984 1986 1994 2011 2014-15
  22. 22. Growth in Adjacent Products 22 Coffe machines Electrolux Expressionist Collection: Kettles, toasters, mixers, blenders Electrolux Masterpiece Collection: Stick mixer, food processor, blender Air Care Water Care Fabric Care Filtration Consumables & Accessories
  23. 23. 23 Innovation
  24. 24. A history of innovations and strong brands 1901 1919 1957 1984 1986 1994 1997 2004 2008 2012 2014 AB Lux AB Electrolux Elektrolux to Electrolux Zanussi White Consolidated (Frigidaire) US Launch of Electrolux AEG Electrolux Inspiration Range China C5 Launch Refribar (Brazil) Electrolux Grand Cuisine Termaline 5000 Ultraflex 2nd gen Trilobite Launch of Ergorapido
  25. 25. Global innovation territories Benefit-driven innovation territories Culinary enjoyment Health and well-being Sustainable homes Effortless living 25
  26. 26. ”Innovation Triangle” 26 Marketing Design R&D Develop best-in-class products 1 “70% Preference Rule” 2 Reduce Time to Market 30% 3 Continue investing in premium brands 4
  27. 27. Eight strategic brands 27
  28. 28. 28 Accelerating innovation with relevant and differentiated offerings
  29. 29. Electrolux CombiSteam Oven AEG Maxi Sense Stove Leading Innovation in Cooking
  30. 30. Hob²Hood Connected Range • A wireless functionality that automatically controls the hood according to the cooking activities on the hob • 1,400 connected possibilities Let the hob run the hood…you focus on cooking !
  31. 31. Electrolux Expressionist Collection Electrolux Masterpiece Collection New product ranges launched in Small Domestic Appliances
  32. 32. Ergorapido Range 2014 32
  33. 33. 33 Ultraflex video
  34. 34. 360 Consumer Experience 34 Post-Purchase Setting up the appliance, using and maintaining it At-Purchase Understanding the range of potential options and making a final choice Pre-Purchase Gathering inspiration and exploring possibilities
  35. 35. Commercial Triangle 35 SIMPLE COLLABORATIVE FOCUSED Commercial Triangle PRODUCT LINE SALES MARKETING
  36. 36. EMEA Electrolux CombiSteam Oven and Sousvide Launch 36 STEAM OVEN STARTER KIT COOKING CLUB! STEAM OVEN COOKBOOK AND STEAM APP TASTE FESTIVAL – ACROSS EUROPE BRAND WEBSITE ONLINE VIDEO CONTENT VIP SECRET INGREDIENT AND STEAM PR EVENT PRINT ADVERTISING ONLINE BANNER LA FAYETTE FOOD HALL COOKING SESSIONS POINT TASTE THEATRE IN STORE INTERACTIVE CATALOGUE SPECIAL RETAIL PLACEMENT OF SALE TASTE BANNERS
  37. 37. 37 Operational Excellence
  38. 38. Cost savings programs 38 Savings from Overhead costs Savings from Global Operations Savings from programs have full effect in 2016 Savings from Manufacturing footprint
  39. 39. Manufacturing footprint LCC transition in its final phase 39 28% 51% ~70% 2004 2008 2014est Percentage of Capacity in Low Cost Countries
  40. 40. Global Operations Previously communicated 40 50% 30% 20% Modularization 1.0 Purchasing Manufacturing
  41. 41. 41 People & Leadership
  42. 42. Passionate, Business-minded People Leaders at Electrolux Business Leader People Leader 42
  43. 43. 43 Acquisition of GE Appliances
  44. 44. Our Desired Position Our Vision We will be the best appliance company in the world ...our customers As measured by... ...our employees ...our shareholders 44
  45. 45. Competitors with Aggressive Growth Plans Aggressive growth plans from our competitors may impact the market picture in future REGIONAL CHINESE #1 Household Appliances worldwide KOREANS
  46. 46. Global Market Leadership Local market strength Strong brands Product innovation Cost position Global scale
  47. 47. Overview of GE Appliances 47 • 2013 revenue of USD 5.7bn • Manufacturing footprint across 5 states – 12,000 employees • State of the art distribution and logistics network • USD 1bn of investments in R&D, products and manufacturing • Innovative product portfolio • Joint venture with 48.4% stake in Mabe Bloomington, Indiana - Refrigeration Louisville, Kentucky - Laundry - Dishwashers - Refrigerators - Water heaters Selmer, Tennessee - Built-in Refrigeration Decatur, Alabama - TM Refrigeration LaFayette, Georgia - Cooking
  48. 48. Transaction overview 48 Overview • Electrolux has agreed to acquire GE Appliances for a cash consideration of USD 3.3 billion • The deal is primarily an asset transaction • Transaction includes GE’s 48.4% ownership in Mabe Rationale • Improving global scale in home appliances • Significant synergies particularly in sourcing and operations • The transaction is expected to be EPS accretive in year 1 Financing • Financed with a fully committed bridge facility • Rights issue ~25% and ~75% bond take out Conditions • Subject to approval from regulatory authorities Timetable • Expected closing: 2015 • Rights issue: As soon as possible following acquisition completion
  49. 49. Strategic fit Combining high quality brand portfolios 49 Price Value VALUE PRICE
  50. 50. Expected synergy breakdown Significant synergies Synergies • Expected annual synergies of USD 300m • Synergies from combined operations and manufacturing • Utilize cost efficient sourcing base • Strong logistics and distribution capabilities • One-off implementation cost of USD 300m • Implementation capex of USD 60m expected for the first two years 50 Sourcing ~50% Operations ~40% Other ~10%
  51. 51. Delivering on our growth strategy and vision We w Our Vision ill be the best appliance company in the world ...our customers As measured by... ...our employees ...our shareholders 51  Brands  Innovative Products  Distribution  Enhanced production and R&D capabilities  Engaged 12,000 employees  Global opportunities  EPS accretive in year 1  Significant synergy potential  Enhanced cash generation
  52. 52. 52 Creating value for our shareholders
  53. 53. Financial Targets 53 RoNA >20% Organic growth 4% EBIT margin >6% Capital turnover 4x
  54. 54. 3.50 4.00 4.50 6.00 6.50 7.00 7.50 4.00 4.25 4.00 6.50 6.50 6.50 6.50 0 20 40 60 80 100 0.0 2.0 4.0 6.0 8.0 10.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 A history of sustainable dividends 54 Dividend as % of net income Electrolux shareholder distrubution policy ...dividends to correspond to at least 30% of income for the period Historically, the dividend rate has been considerably higher. In 2013, proposed pay-out corresponded to 66%. *Earnings per share excludes items affecting comparability Dividend per share, SEK
  55. 55. 0 500 1,000 1,500 Electrolux has consistently delivered strong total return to our shareholders 1994 2000 2004 2009 2014 Electrolux B Average total return ~14% Six Return Index Average total return ~12% Index = 100
  56. 56. The Electrolux Group Financial Review Capital Markets Day November 20, 2014 Tomas Eliasson CFO
  57. 57. 57 Financial trends
  58. 58. Sales and EBIT bridge, Q3 58 SEKm Q3 2013 Volume Price/Mix Currency translation Currency transaction Other Q3 2014 Net sales 27,258 -660 1,105 1,081 - - 28,784 Growth % - -2.3% +3.9% +4.0% - - 5.6% EBIT 1,075 -13 450 +40 -160 - 1,392 EBIT % 3.9% 2.0% 40.7% - - 4.8% Accretion % 0.0% -0.6% Organic 1.5%
  59. 59. Sales and EBIT bridge, Jan-Sep 2014 59 SEKm Jan-Sep 2013 Volume Price/Mix Currency translation Currency transaction Other Jan-Sep 2014 Net sales 80,260 -3,420 3,950 -46 - - 80,743 Growth % - -4.3% +4.9% -0.1% - - 0.7% EBIT 2,832 -450 2,095 -25 -1,145 - 3,308 EBIT % 3.9% 13.2% 53.0% - - 4.1% Accretion % 0.0% -1.4% Organic 1.9%
  60. 60. Pre-closure transaction costs 60 GE Appliances – Costs expected pre-closure Transaction (EBIT) M&A advisory, lawyers, auditors ~200 SEKm Integration (EBIT) Integration team and external consultants ~100 SEKm Funding (Finance net) Bridge facility ~200 SEKm Total estimated cost ~500 SEKm Note: USD/SEK exchange rate used as of 17/10/2014
  61. 61. 61 The transformation is paying off Understanding Electrolux P&L
  62. 62. Understanding Electrolux 62 SEKbn 2013 Revenues 109 Direct material 45 Sourced products 17 Salaries and other expenses 43 EBIT 4 Variable cost to sales 80% Fixed cost to sales 16% EBIT to sales 4%
  63. 63. Summary of Major P&L Components 63 Price 0% or 100% drop-through(!) Mix 20-50% drop-through Volume ~20% drop-through Total Sales SEK 109bn Salaries & expenses SEK 43bn, 3-4% inflation (1.2-1.5bn) Raw material SEK 45bn total material, raw material 50% Sourced products SEK 17bn Savings projects Cost programs/efficiency Fixed cost changes Planned changes Net organic Net before currency and acquisition Currency ~SEK 36bn in gross currency flows Acquisitions Earnings contributions Total
  64. 64. 64 The transformation is paying off Raw Material Update
  65. 65. Raw material exposure 65 Carbon Steel 35% Stainless Steel 8% Plastics 35% Aluminium & Copper 9% Other 12%
  66. 66. Steel Global steel prices have been under pressure 66 600 640 680 720 760 800 840 880 920 960 1,000 1,040 1,080 Jan 10 Mar 10 May 10 July 10 Sept 10 Nov 10 Jan 11 Mar 11 May 11 July 11 Sept 11 Nov 11 Jan 12 Mar 12 May 12 July 12 Sept 12 Nov 12 Jan 13 Mar 13 May 13 July 13 Sept 13 Nov 13 Jan 14 Mar 14 May 14 July 14 Sept 14 Nov 14 In USD$/Mton CRU Germany USD/t CRU US Midwest USD/t CRU China USD/t MONTHLY
  67. 67. 0 20 40 60 80 100 120 140 120 130 140 150 160 170 180 190 200 210 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Average Feed Stock Index 2012 177 2013 185 2014 188 Plastics Stable price outlook so far into the year 67 Weighted index of key feedstocks where 100 = average 2009 Annually Monthly Crude Oil Brent, $US
  68. 68. 68 The transformation is paying off Currency Impact
  69. 69. Transactional Currency Effects 69 • In general, earnings for Electrolux benefit from a: – Weak USD, EUR, HUF, THB, MXN and CNY (export countries) – Strong BRL, RUB, ARS, CAD, CHF, AUD and GBP (import countries) • In countries with large manufacturing and logistic centers, effects over time will to a large extent balance out due to natural hedging. • Currencies are accounted for GROSS. Over time no effect.
  70. 70. -6,000 -4,000 -2,000 0 2,000 4,000 6,000 8,000 10,000 BRL GPB AUD CAD CHF RUB CLP ARS CNY EUR USD Gross Currency Flows 70  Largest currency flows over 12 months  In total, 80 significant currency pairs  Total flows around SEK 36bn SEKm Currency exposure 2014 GBP
  71. 71. Currency Effects 71 Major transaction effects, SEKm Q1 Q2 Q3 Q4 BRL -200 -80 -15 ARS, CLP, VEF, COP -130 -50 -50 CNY -1 -70 -45 AUD -75 -35 -20 RUB -15 -25 -5 Total -565 -420 -160 Translation effects, SEKm -55 -10 +40 Total currency effects, SEKm -620 -430 -120 Price and mix effects, SEKm 900 740 450
  72. 72. 72 The transformation is paying off Restructuring Update
  73. 73. Cost savings programs Previously communicated 73 Savings from Overhead costs Savings from Global Operations Savings from programs have full effect in 2016 Savings from Manufacturing footprint Saving 1.1bn Cost 3.2bn Saving 3.0bn Cost 1.2bn Saving 1.1bn Cost 1.2bn
  74. 74. 74 The transformation is paying off Cash Flow
  75. 75. 3,871 5,273 2,283 6,337 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 2011 2012 2013 LTM Free Operational Cash Flow Cash flow, 2011-2014 75 SEKm • Driven by increased EBITDA, working capital improvement and optimization of capital expenditure • SEK 4.8bn of cash generated year-to-date and over SEK 6bn generated over the last 12 months 0% 100% 2008 Current Structural change of capex • Capital expenditure will structurally change • Capital expenditure will be more related to launching new products Products Factory Other
  76. 76. Cash flow per quarter, 2011-2014 76 SEKm -4,000 -3,000 -2,000 -1,000 0 1,000 2,000 3,000 4,000 5,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 2013 2014 Free Operational Cash Flow
  77. 77. Working Capital SEK 7bn released since 2008… 77 • The Group’s NOWC has decreased by SEK 7bn since 2008 • Focus on NOWC as key driver for value creation • Structured approach to “process improvement” with dedicated global resources • Inventory – Complexity reduction – Modularization 17,499 12,007 17.4% 10.9% 9.6% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 2008 2009 2010 2011 2012 2013 2014 YTD Avg. NOWC NOWC % of Net sales
  78. 78. 78 The transformation is paying off Summary
  79. 79. Summary - Financial Development 79 • Earnings – Profit recovery in Europe as cost take-out initiatives continues and positive product/mix focus – North America a large contributor to overall Group results, despite DOE transition challenges – Defending earnings in Latin America and Asia through pro-active cost actions – Currency impacts are mitigated • Cash Flow performance is strong • Focus on RONA first, then growth
  80. 80. Q&A

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