Electrolux: President and CEO Keith McLoughlin’s Comments on the Results for the Second Quarter of 2013

  Electrolux: President and CEO Keith McLoughlin’s Comments on the Results for
  the Second Quarter of 2013

Strong performance in North America compensated weak development in Europe

Business Wire

STOCKHOLM -- July 19, 2013

Regulatory News:

Electrolux (STO:ELUXA)(STO:ELUXB) in North America maintained strong sales and
earnings growth during the second quarter, which is expected to continue
throughout the year. All of our operations in Europe continued to suffer from
weak demand resulting in negative price development. Latin America showed
strong top-line growth, while earnings were impacted by negative currency
movements.

Operations in North America reported another quarter of strong earnings. In
the first half of 2013, our EBIT margin was close to 7%, which is a record for
the first six-month period in North America. This strong momentum was driven
by an improved US appliance market, a strong product offering in all price
segments and that we now have access to all major distribution channels.
Rising appliance consumption in North America is largely due to the
strengthening of the housing market and this development is expected to
continue. As a result, we now believe that demand for appliances in the US
will increase by 5-7% in 2013.

In the second quarter, Electrolux Major Appliances in Europe performed in line
with the first quarter and generated a breakeven result. Although this
represents a weak bottom line result, our gross margin is solid and showed a
healthy recovery compared with last year. This is primarily attributable to
our activities to remain cost competitive by improving our manufacturing
footprint, capitalizing on our shared global strength and the launch of
high-end appliances under the Electrolux brand to ensure a positive product
mix. Despite these improvements, we believe that 2013 will continue to be a
challenging year in Europe, although gradually improving during the second
half.

In Latin America, organic growth of Electrolux sales was close to 18% in the
quarter. The EBIT was lower compared with the same period last year due to
negative currency effects in Brazil, although to a lesser degree than in the
first quarter. Given the current level of the Brazilian real, we expect a
negative currency impact in Latin America throughout the rest of the year.

Despite the difficult situation in Europe, it is encouraging to note that the
Group’s organic growth of 6% in the second quarter is above our target of 4%
through a cycle. Looking ahead to next year and beyond, we expect demand in
Europe to rebound and in combination with our measures in the region, earnings
will recover. We also expect the recovery in North America to continue for
some time, considering the strong start of this year demand is still 23% below
the peak year of 2006. As we have discussed in the past, Electrolux has
globally diversified its revenue base and emerging markets now account for
more than 35% of our sales. In a few years time, our ambition is to increase
our exposure to be 50%.

In combination with the above, the Group’s strategy to bring more
consumer-relevant innovation to the market at a faster pace provides a solid
foundation for Electrolux to meet and exceed all key financial objectives.

Stockholm, July 19, 2013

Keith McLoughlin

President and Chief Executive Officer

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Contact:

Electrolux
Peter Nyquist
Senior Vice President
Head of Investor Relations and Financial Information
+46 (0)8 738 60 03
 
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