Q1 Results presentation 2020
Business overview Jonas Samuelson, President and CEO
Coronavirus implications in Q1 Nor North A Ame merica Most retail open and strong demand in March but increasing impact from social distancing Euro urope measures Severe market impact from mid Limited Q1 impact on production March due to lock-downs. Italian production closed from 2nd half of March Latin A in Americ ica Asi sia-Paci cific, Mi , Middle e East and A Africa ca Declines in most markets, but large Strong social distancing measures variances between countries. Majority of retail in major markets Lockdown or movement restrictions in closed in second half of March most markets Production constraints end March Limited impact in production ELECTROLUX Q1 2020 PRESENTATION 3
Responding to the coronavirus situation with comprehensive actions Phase 1 Phase 2 Phase 3 Cash focus Cost efficiency focus “New normal” • Duration of major • Duration of significant • Post coronavirus Time horizon demand- and supply macroeconomic effects situation disturbances • Direct management of • Marketing and structural • Go to market strategy Key actions cash in- and outflows cost reduction acceleration • Funding actions • Adapting manufacturing • Adapting to longer term demand development • Production and supply • Reprioritizing CAPEX • Flexible supply chain actions • Furloughing • Core strategy well adapted to new reality Health and safety main priority The strong corporate culture is a key driver for our competitiveness and our ability to manage cost 4 ELECTROLUX Q1 2020 PRESENTATION
Q1 Highlights SE SEKm Km Q1 2 1 202 020 Q1 2 1 2019 019 Cha hange Net s et sales es 26, 6,578 27,40 408 -3. 3.0% 0% Sales decline driven by lower volumes Or Orga ganic gr growth -5.1% 1% 1.2% 1. -6.3p 3pts • Lower North America volumes, mainly Acquis isit itio ions 0. 0.0% 0% 0. 0.1% 1% -0. 0.1p 1pts manufacturing transition Dives estm tmen ents ts 0. 0.0% 0% -0. 0.7% 0. 0.7pts • Market demand down by end Q1 Curre rrency 2.1% 1% 4.9 .9% -2.8p 8pts ts • Mix improvements and price increases EBIT BIT 12 122 -53 53 n.m n.m Marg rgin 0. 0.5% -0. 0.2% 0. 0.7pts Earnings impacted negatively EBIT BIT ex excl. N NRI 12 122 1, 1,001 001 -87 87.8% 8% • Coronavirus impact SEK~-400m EBIT BIT m margin ex excl. N NRI 0. 0.5% 3. 3.7% -3. 3.2pts EBIT IT a and m d margin gin* • Significant currency headwinds 2,400 8.0% • Cost-cutting measures implemented 2,000 6.0% • Raw material and trade tariffs contributed 1,600 positively 1,200 4.0% 800 2.0% 400 0 0.0% Electrolux Professional distributed and Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 listed 2018 2019 2020 EBIT EBIT % EBIT % R12 *Excluding non-recurring items (NRI) and currency adjusted. ELECTROLUX Q1 2020 PRESENTATION 5
Driving sustainable consumer experience innovation Boosting margin through resource-efficient products — Consumers are willing to pay a premium for resource-efficient products — Sales of Electrolux UltraCare washing machines grew by 27% and accounted for 20% of Electrolux branded laundry volumes in Europe 2019 — These resource-efficient washing machines have twice the margin compared to other washing machines. Leveraging our Swedish heritage in Australia — The Electrolux brand has a competitive advantage as Australian consumers associate Sweden with premium and quality — New premium products under a sharper Electrolux brand contributed to a 45% sales increase during 2019 ELECTROLUX Q1 2020 PRESENTATION 6
Europe SE SEKm Km Q1 2 1 202 020 Q1 2 1 2019 019 Cha hange Net s et sales es 10, 10,908 08 10,553 ,553 3.4% 3. Mix improvements from built-in Or Orga ganic gr growth 0. 0.3% 3% 4. 4.4% 4% -4.1p 1pts • Mix improvements compensated for Acquis isit itio ions 0. 0.0% 0% 0. 0.3% 3% -0. 0.3p 3pts volume decline Curre rrency 3.1% 3. 1% 3.5% 3. -0. 0.4pts • Slight price decreases EBIT BIT 558 558 686 68 -18 18.6% • Overall market demand declined Marg rgin 5.1% 1% 6.5 .5% -1. 1.4pts EBIT BIT ex excl. N NRI 558 558 686 68 -18 18.6% EBIT BIT m margin ex excl. N NRI 5.1% 1% 6.5 .5% -1. 1.4pts Operating income declined EBIT IT a and m d margin gin* • Currency headwinds impacted negatively 1,200 10.0% 1,000 8.0% • Volume decline partly offset by costs- 800 6.0% cutting measures 600 4.0% • Mix and raw material impacted positively 400 2.0% 200 0 0.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2018 2019 2020 EBIT EBIT % EBIT % R12 *Excluding non-recurring items (NRI) and currency adjusted. ELECTROLUX Q1 2020 PRESENTATION 7
European Core Appliances Market Total European shipments, quarterly unit comparison y-o-y 6% 6% 4% 4% 2% 2% 0% 0% -2% 2% -4% 4% -6% -6 -8% 8% 2 201 011 2 201 012 2 201 013 2 201 014 2 201 015 2 201 016 2 201 017 2 201 018 2 201 019 20 2020 20 Source: Electrolux estimates ELECTROLUX Q1 2020 PRESENTATION 8
North America SE SEKm Km Q1 2 1 202 020 Q1 2 1 2019 019 Cha hange Net s et sales es 8,409 09 9, 9,099 99 -7. 7.6% Organic sales decline Or Orga ganic gr growth -13. 13.1% 1% -5.0% 0% -8. 8.1pts ts • Lower volumes related to manufacturing Dives estm tmen ents ts 0. 0.0% 0% -2.0% 0% 2.0p 0pts transition in Anderson Curre rrency 5.6 .6% 10.5% 10. -4.9 .9pts • Lower sales of private label products EBIT BIT -299 -48 482 -37 37.9% and air-conditioners Marg rgin -3. 3.6% -5.3% 3% 1. 1.7pts EBIT BIT ex excl. N NRI -299 34 347 n.m n.m Negative operating income EBIT BIT m margin ex excl. N NRI -3. 3.6% 3. 3.8% -7. 7.4pts • Mainly a result of lower volumes • Manufacturing transition costs EBIT IT a and m d margin gin* • Increased aftermarket sales 800 8.0% 600 6.0% 400 4.0% 200 2.0% 0 0.0% -200 -2.0% -400 -4.0% -600 -6.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2018 2019 2020 EBIT EBIT % EBIT % R12 *Excluding non-recurring items (NRI) and currency adjusted. ELECTROLUX Q1 2020 PRESENTATION 9
U.S. Core Appliances Market U.S. shipments, quarterly unit comparison y-o-y 15% 5% 10% 0% 5% 5% 0% 0% -5% 5% -10% -1 0% -15 15% 2 201 011 2 201 012 2 201 013 2 201 014 2 201 015 2 201 016 2 201 017 2 201 018 2 201 019 20 2020 20 Source: US Core white includes: AHAM 6 (Washers, Dryers, Dishwashers, Refrigerators, Freezers, Ranges/Cookers and Ovens) and Cooktops. ELECTROLUX Q1 2020 PRESENTATION 10
Latin America SE SEKm Km Q1 2 1 202 020 Q1 2 1 2019 019 Cha hange Lower volumes and higher price/mix Net s et sales es 3,826 3, 4,312 312 -11. 11.3% 3% • Consumer demand growth in Brazil, while demand declined in Argentina and Chile Or Orga ganic gr growth -1. 1.9% 6.9 .9% -8. 8.8p 8pts ts Curre rrency -9.3% 3% -5.4 .4% -3. 3.9pts • Significant demand drop second half March EBIT BIT -15 15 -223 -93. 3.2% • Lower volumes partly offset by price/mix Marg rgin -0. 0.4% -5.2% .2% 4.8p 8pts ts EBIT BIT ex excl. N NRI -15 15 2 n.m n.m EBIT BIT m margin ex excl. N NRI -0. 0.4% 0. 0.0% 0% -0. 0.4pts Operating income decline • Significant currency headwinds EBIT IT a and m d margin gin* • Strong price/mix contribution 400 8.0% 300 6.0% 200 4.0% 100 2.0% 0 0.0% -100 -2.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2018 2019 2020 Note: Excluding non-recurring items (NRI). NRI in Q1 2019 includes restructuring charge of SEK 225m. EBIT EBIT % EBIT % R12 *Excluding non-recurring items (NRI) and currency adjusted. ELECTROLUX Q1 2020 PRESENTATION 11
Asia-Pacific, Middle East and Africa SE SEKm Km Q1 2 1 202 020 Q1 2 1 2019 019 Cha hange Net s et sales es 3, 3,434 34 3,445 445 -0. 0.3% 3% Early impact on sales Or Orga ganic gr growth -3. 3.2% 2.2% -5.4 .4pts • Consumer demand decline, primarily in Acquis isit itio ions 0. 0.0% 0% 0. 0.1% 1% -0. 0.1p 1pts East Asia Curre rrency 2.9% 2.9 5. 5.5% 5% -2.6p 6pts • Australia and Egypt market growth EBIT BIT 44 44 110 110 -60 60.2% • Lower sales volumes in Southeast Asia Marg rgin 1.3% 1. 3% 3. 3.2% -1. 1.9pts and China EBIT BIT ex excl. N NRI 44 44 110 110 -60 60.2% EBIT BIT m margin ex excl. N NRI 1. 1.3% 3% 3. 3.2% -1. 1.9pts Significant currency impact • Strong currency headwind, mainly AUD EBIT IT a and m d margin gin* • Cost-saving activities partly offset lower 12.0% 400 350 volumes 10.0% 300 8.0% • Positive mix in Australia 250 200 6.0% 150 4.0% 100 2.0% 50 0 0.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2018 2019 2020 EBIT EBIT % EBIT % R12 Note: Excluding non-recurring items (NRI) and currency adjusted. ELECTROLUX Q1 2020 PRESENTATION 12
For Internal Use Only Financial overview Therese Friberg, CFO
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