Business overview Jonas Samuelson, President and CEO Q1 Highlights - - PowerPoint PPT Presentation

Q1 Results

presentation

2019

Business overview

Jonas Samuelson, President and CEO

• 0.

• 4.

• 67.

• 1.

• excl. N

• 4.

• excl. N

• 0.

• 85.6

EBIT IT a and m d margin gin

Q1 Highlights

Organic growth in most business areas

• Price increases and positive mix in all

business areas

• Strong price execution in North America

and Latin America

• Lower volumes, primarily private label

in North America Price increases offsetting headwinds

• Contribution from price offsetting

headwinds from raw material costs, trade tariffs and currency

• Investments in marketing and R&D

supporting product launches

• Restructuring charges in North America

and Latin America

Innovation targeting consumer experience

• Strengthened global offering
• f multidoor refrigerators

— An attractive and fast growing category — One common platform — Successful launch in Australia in 2018, driving strong growth — Launch in North and Latin America in Q1 2019

• New kitchen range under a

sharper Electrolux brand

— Focus on growing profitably in the premium segments — Connected features — New range rolled out in Europe during 2019

Europe

Strong performance

• Positive overall demand in Europe
• Improved sales volumes, product mix

and slight price increases

• Continued market share gain in

built-in-kitchen products Improved earnings and margins

• Strong organic contribution from

volume/price/mix offset higher raw material costs and currency

EBIT IT a and m d margin gin

European Core Appliances Market

Total European shipments, quarterly unit comparison y-o-y

• 2
• 20%

0%

• 15

15%

• 1
• 10%

0%

• 5%

5% 0% 0% 5% 5% 10% 0% 2 200 009 2 201 010 2 201 011 2 201 012 2 201 013 2 201 014 2 201 015 2 201 016 2 201 017 2 201 018 201 019

• 2%

EBIT a and d margin rgin

• 5.0%

• 5.9

• 2.0%

• 7.

• 48

• 14

• 5.3%

• 1.

• 3.

• excl. N

• 22.5%

• 1.

North America

Good performance in core business offset by lower private label business

• Market decline vs strong growth last year
• Good price traction and mix improvement
• Lower volumes due to private label
• Share gains in core branded products

Higher prices offset cost headwinds

• Price increases and mix partly offset lower

volumes, higher costs from raw materials and trade tariffs Active measures taken to strengthen competitiveness

• Consolidation of cooking production
• Restructuring charge in Q1

U.S. Core Appliances Market

U.S. shipments, quarterly unit comparison y-o-y

• 2
• 20%

0%

• 15

15%

• 1
• 10%

0%

• 5%

5% 0% 0% 5% 5% 10% 0% 15% 5% 2 200 009 2 201 010 2 201 011 2 201 012 2 201 013 2 201 014 2 201 015 2 201 016 2 201 017 2 201 018 201 019

• 5.4

• 11.

• 223

• 5.2%

• 6.0p

• excl. N

• 94.

• 0.

• 4%
• 2%

• 100
• 50

EBIT a and d margin rgin

Latin America

Recovery in the Latin American market

• Positive demand in Brazil and Chile while

Argentina continued to decline

• Organic growth driven by price

increases and mix improvement

• Higher prices impacted sales volumes

Underlying earnings in line vs last year

• Increased prices fully offset negative

headwinds from currency and raw material costs Consolidation of refrigeration manufacturing

• Restructuring costs for closure of

production line in Chile

EBIT a and d margin rgin

• 5.0%

• 32

• 1.

Asia-Pacific, Middle East and Africa

Continued growth in the region

• Demand growth in Southeast Asia and

MEA while Australia remained softer

• Sales growth in both Southeast Asia and

MEA, driven by higher volumes and mix

• Lower volumes in Australia following

price increases EBIT impacted by continued FX headwind

• Positive contribution from higher prices

and mix could not offset the currency headwind and lower volumes

• Ongoing investments in major product

launches impacted earnings negatively

EBIT a and d margin rgin

Professional Products

Solid performance with high organic growth

• Sales increase in food, laundry and

beverage

• Solid growth in the aftermarket business

Increased earnings and margins

• Contribution from price/mix/volume
• Higher costs for R&D and marketing

for new product launches Acquisition of the espresso machines manufacturer Unic in France

• Strengthening the beverage offering

Financial overview

Therese Friberg, CFO

SEKm Q1 2019 Q1 2018 Change Net sa t sales 29,7 ,710 10 27, 7,906 6. 6.4% 4% Org rgani nic g c gro rowth wth 1.9 1.9% 1.8 1.8% Acq cquisi siti tions/ ns/divestm stments ts

• 0.

0.3% 3% 1.5% 1.5% Curre rrency ncy 4. 4.8%

• 4.

4.4% 4% Gro Gross o ss opera rati ting ng i inco ncome 4, 4,804 4, 4,891

• 1.8

1.8% Gro Gross o ss opera rati ting ng m marg rgin n 16 16.2 .2% 17 17.5% .5%

• 1.4

1.4pts EBIT IT 248 48 764 64

• 67.5%

.5% Ma Marg rgin 0.8% 8% 2.7% 7%

• 1.9

1.9pts No Non-re recu curri rring ng i ite tems

• 1,0

1,054 54

• 59

596 EBIT e IT excl.

• l. NRI

1,3 1,302 1,3 1,360

• 4.

4.2% Ma Marg rgin e n excl cl NRI 4. 4.4% 4% 4. 4.9%

• 0.5p

.5pts EP EPS, S, SEK SEK 0.28 28 1.9 1.92

• 85.6

5.6%

• Op. ca

cash sh flow a w afte ter r inv nvestm stments nts

• 2,770

770

• 2,67

671 3.7% 7% Retu turn o rn on ne n net t asse ssets ts 3.6% 6% 13 13.3 .3%

• 9.7pt

pts

Financial overview

SE SEKm Q1 20 2018 8 excl

• cl. N

NRI* I* Vol

• lum

ume/ e/ Price rice/Mix ix Raw m w mate teria rial l & T Tarif riffs Curre rrency cy** Net C t Cost st Efficie iciency cy Acq/ cq/*** Div ivest. st. Q1 20 2019 9 excl

• cl. N

NRI* I* Net et Sa Sales es 27,90 906 559 559 1,332 332

• 87

87 29,710 710 Gro rowth wth % % 1. 1.9% 4. 4.9%

• 0.

0.3% 3% 6. 6.4% 4% EBI EBIT 1, 1,360 60 82 828

• 436

36

• 32

323

• 144

144 17 17 1,302 302 EBI EBIT % % 4.9% 9% 4. 4.4% 4% Accre ccretio tion/ Dilu ilutio tion 2.8 .8%

• 1.

1.5%

• 1.

1.3%

• 0.5

.5% 0.1% 1%

Sales and EBIT Bridge

Business Area Price/Mix Comments for Q1 Eu Europ

• pe

Posit itiv ive Posit itiv ive mix ix d driv iven by p premiu ium pro roducts cts and s slig lightly ly posit itiv ive pri rice ce North rth A Ameri rica ca Posit itiv ive Impro roved tra tracti ction n in ne n net p t pri rice ce co contri ntributi tion n fro rom co cost st-base sed p pri rice ce incre ncrease ses a s and nd impro roved mix Lati tin A n Ameri rica ca Posit itiv ive Higher r pri rice ces s and nd posi siti tive m mix As Asia-Paci cific, c, Mi Middle E East a st and nd A Afri rica ca Posit itiv ive Posi siti tive p pri rice ce and nd mix Pro rofessi ssiona nal P Pro roducts cts Posit itiv ive Posi siti tive p pri rice ce and nd mix Gr Group EB EBIT % IT % accretion +3 +3.5 .5%

Earnings contribution from price/mix

SEKm Q1 2019 Q1 2018 EBIT IT 248 48 764 64 D/A and nd oth ther no r non-ca cash sh i ite tems 2, 2,324 24 1,6 1,658 58 Chang nge in o n opera rati ting ng asse ssets ts and nd l liabiliti ties

• 4,

4,072

• 4,37

370 Inv nvestm stments nts in i n inta ntang ngible a and nd ta tang ngible a asse ssets ts

• 1,10

1,102

• 800

00 Chang nges i s in o n oth ther r inv nvestm stments nts

• 168

68 77 77 Cash sh f flow a w afte ter i r investm stments* ts*

• 2,770

770

• 2,671

71

Cash Flow

Pioneering green bond financing focused on industrial and R&D investments

1st green bond issued SEK 1 bn

• Earmarked for investments contributing to

reduced environmental impacts from the company’s products and operations

• Strengthening our financial position given

future capex plans Act sustainably

• Supports our purpose and integrates sustainability

in to our financing strategy

• Enable investors to allocate funds specifically to

industrial projects with an environmental profile Medium Green rating – second highest grade

• Second opinion from Cicero on Electrolux green

bond framework

Outlook and summary

Jonas Samuelson, President and CEO Therese Friberg, CFO

Market outlook FY 2019 per region

Slightly negative

North America Demand impacted by higher industry prices and tariff uncertainty

Slightly positive

Europe Demand driven mainly from Eastern Europe

Slightly positive

Latin America Brazilian market showing recovery

Positive Slightly negative

Southeast Asia In general favorable markets

Australia Slower property market impacting

Electrolux business outlook

Busi usiness o ss outl utlook*, *, y y-o-y Q2 20 2 2019 FY 20 Y 2019 Comments f ts for th r the f ful ull y year 2 r 2019 Net co t cost e st effici ciency ncy** Unfavorab able Unfavorab able Conti ntinu nued co cost p st pro roducti ctivity ty f focu cus, s,

• ffse

set b t by i inv nvestm stments a nts and nd i inf nflati tion n Curre rrency ncy e effect* ct*** SEK SEK 0 0m SEK - K -300m 300m Vol Volume me/price/mi mix Favorabl able Favorabl able Posi siti tive co contri ntributi tion f n fro rom p pri rice ce a and nd mix co combine ned wi with th ta targ rgete ted v volume gro rowth wth Raw m w mate teri rial co costs & sts & tra trade ta tari riffs Incre ncrease se o

• f

SEK ~0 ~0.4b 4bn Incre ncrease se o

• f

SEK 1.4 1.4-1.6 1.6bn Higher co r costs f sts for ste r steel, ch chemica cals, s, and nd ta tari riffs s Cape pex Incre ncrease se SEK SEK ~ ~7bn

Path to profitable growth continuing

Strategic drivers executed in Q1:

• Price execution fully offsetting headwinds
• Product mix improvement
• Strengthening the Professional business through acquisition
• Re-engineering programs progressing according to plan

Profitable Growth

1

Stability & Focus

2

Sustainable Profitability

3

Targeted Growth

2016 2017 2018/ 2019

This presentation contains “forward-looking” statements that reflect the company’s current expectations. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations prove to have been correct as they are subject to risks and uncertainties that could cause actual results to differ materially due to a variety of factors. These factors include, but are not limited to, changes in consumer demand, changes in economic, market and competitive conditions, currency fluctuations, developments in product liability litigation, changes in the regulatory environment and other government actions. Forward-looking statements speak only as of the date they were made, and, other than as required by applicable law, the company undertakes no obligation to update any of them in light of new information or future events.

Factors affecting forward-looking statements

Q&A