presentations electrolux capital markets day 2014 - jack truong

The Electrolux GroupGroup

Jack TruongHead of Major Appliances, North AmericajCapital Markets Day, Charlotte, NC November 20, 2014

Electrolux Major AppliancesWell Established in North America

People

12kManufacturing

8Footprint

11mAnnual Shipments

14m12kIn 3 Countries

8Facilities

11mSquare Feet

14mUnits

.2

Electrolux Major AppliancesNorth American Results for 2013

Net Sales

4 9bEBIT

327mCapital

6 1Return on

41%1 2 3 34.9bUSD

327mUSD

6.7% EBIT Margin

6.1Turnover

41%Net Assets

g

1. Represents 29% Share of Sales for the Group2. Represents 51% Share of EBIT for the Group3. 12 month rolling average

3

Our Path to Sustainable, Profitable Growth

NA Market and

New Products and

Consumersand

Strategic Fit andand

Businessand

Innovationand

Customersand

Summary

4

North American Core Appliance Market2013 Shipments

Laundry7.6b$Refrigeration

Refrigeration 10.5m

p

7.6b$Refrigeration 8.8b$Laundry

16.4m

44 8M

23%

37%25 2b$

35% 30%

Cooking

44.8M

19%

5%

25.2b$

22%2%

Cooking 5.5b$Dishwashers

2.7b$

Freezers0.6b$

8.7m

Dishwashers 7.1m

Freezers 2.2m

16%5% 22%11%

Total Units Total Value USD (Mfg. $)

Source: AHAM US, AHAM Canada, EMA BI AnalysisCooking excludes microwaves; Refrigeration is 6.5 cubic feet and over 5

US Core Appliance MarketManufacturers Dollars

3.6 4.120

25

Billio

ns $

3.9 2.615

B

15.0 17.0 18.7 19.7

5

10

02008 2012 2013 2014 Est.

Retail Builder

Source: EMA BI Analysis, AHAM Manufacturers Dollar Valuation, TraQline

Continued Market Growth

Retail Builder

6

TraQline US Market Share by RetailerValue Share

Sept. 2014 YTD2012 2013

Lowe's 19.0%Sears

27 5%Sears

Lowe's18.7% Sears

27 5%

Lowe's19.2%

Home Depot 13.4%

Other

27.5%30.5%Home Depot11.4%

Best Buy

27.5%Home Depot13.2%

B t BOther

Best Buy 10%Dealers

19.1%

Other 10.9%

Best Buy8.1%

Dealers20.3%

Other11.0%

Best Buy10%Dealers

19.1%

11.0%

Best Buy includes Pacific Sales Data for 2012-2014 7

US Housing Market

600

800Single FamilyMulti-Family

sof s

tarts

400

600

Thou

sand

s

200

02008 2009 2010 2011 2012 2013 2014(e) 2015(e)

Single Family Growth -21% 3% -7% 25% 21% 1% 11%Multi Family Growth -55% 15% 36% 29% 28% 7% 7%

Source: McGraw-Hill 20148

Annual US Total Core Shipments

50

nts (

m)

+2.0% -0.7%

45

nual

Ship

men -5.6%

-9.9%+4% to +5%

+9 6%

35

40Ann 9 9%

-8.6%+4.6%

-4.2% -2.1%

+9.6%

30

35

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 E t2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Est.

Source: AHAM, EMA BI Analysis.

Expectation of 2014 Annual US Core Shipments is +4% to +5%9

North America: Profitable Sales Growth

+7.2%5$ +52%$

EBITNet Sales

4.64.9

3.8

+6.8%

+1.2%4Billio

ns $

327

+436%

+52%

-8.5%

300

Millio

ns $

2

3216

236+436%

200

0

1

0

100

02012 2013 SEPT 2014 YTD

0 2012 2013 SEPT 2014 YTD4.7% 6.7% 6.3%EBIT % vs 6.9% PY

10

North America: Profitable Sales GrowthSeptember YTD – Core White Goods

$

p

5$

Net Sales EBIT

44.3 12.3

300

Millio

ns $

0 50.5 0.3

4Billio

ns $

+8.4% +4.6%+45.6% +4.7%+3 5%

147

213 22321.8

44.32003.0 3.3 3.40.5

2

3+45.6%+3.5%

147

0

100

0

1

02012 YTD 2013 YTD 2014 YTD

02012 YTD 2013 YTD 2014 YTD

4.9%* 6.5% 6.5%EBIT %

11*September 2011 YTD EBIT = -5m$ (-0.2%)


NA Market New Products Consumers Strategic Fit a etand

Business

e oductsand

Innovation

Consumersand

Customers

Strategic Fit and

Summary

12

Delivering Consumer-Driven Innovation

State of the Art Design TechnologyConsumer Research

Develop Innovative, New Products Based on Consumers’ Future Needs

Electrolux Innovation Center Consumer Testing

13

Memphis, TNNew Electrolux Brand Wall Ovens

• Oven cavity leverages global modularization efforts

• Perfect-Taste™ Temp Probe and Perfect Turkey® features utilize technology from Electrolux Professional Products group

• Keep your kitchen smelling great with Fresh Clean™ technology

+4% Gross Margin Dollar Improvement14

Anderson, SCNew Frigidaire Gallery SpaceWise® Refrigeratorsg y p g

• First significant innovation in the Top Freezer Refrigerator Category in many years

• Uses modularization and innovation developed in Electrolux operations in Thailand

• Satisfies the #1 pain point for consumers: • Satisfies the #1 pain point for consumers: Not enough storage flexibility

• Preferred by consumers 4 to 1 over l di titleading competitor


Solaro, Italy New Electrolux Brand Dishwashers

• North American wash system, European modular design and manufacturingg

• Achieve a professional level clean with 4x more water coverage

Target Wash Zones

S t llit S ™ A

+15% Gross Margin Dollar Improvement

SatelliteSpray™ Arm

16

Porcia, ItalyNew Electrolux Brand Compact Laundry p y

• Existing European product for new market opportunities in North Americapp

• Deep cleaning results with Perfect Steam™

• Fits more spaces with vent-less design p g

• Global product fulfills US growth category



John WeinstockSVP Marketing, North America

18



Business

e oductsand

Innovation

Consumersand

Customers

Strategic Fit and

Summary

19

Our Brands Attract a Broad Group of ConsumersBroad Group of Consumers

Home• Latest technology• Showcases latest interior design trends

Appliances

Home• Well-run• Organized

Appliances Appliances• Enable great entertaining• Have high-tech appeal

Appliances• Save time• Get it right the first time

20

New Frigidaire Gallery 360° Marketing Campaign

21

New Frigidaire Gallery 360° Marketing CampaignNational Television Advertisingg

Featuring:• French Door RefrigeratorFrench Door Refrigerator• Double Wall Oven• OrbitClean® Dishwasher

#1 Appliance Ad Q3 2014

22

New Frigidaire Gallery 360° Marketing CampaignDigital Presenceg

NEW WEBSITE NEW MOBILE TOOLS

23

New Frigidaire Gallery 360° Marketing CampaignRetailer IntegrationRetailer Integration

PRINT ADVERTISING DIGITAL INTEGRATION

®FRIGIDAIRE GALLERY®

Sell Through +27% YTD

24


Mark ChambersSVP Sales, North America

25



Business

e oductsand

Innovation

Consumersand

Customers

Strategic Fit and

Summary

26

TraQline US Market Share by RetailerValue Share

Sept. 2014 YTD2012 2013

Lowe's 19.0%Sears

27 5%Sears

Lowe's18.7% Sears

27 5%

Lowe's19.2%

Home Depot 13.4%

Other

27.5%30.5%Home Depot11.4%

Best Buy

27.5%Home Depot13.2%

B t BOther

Best Buy 10%Dealers

19.1%

Other 10.9%

Best Buy8.1%

Dealers20.3%

Other11.0%

Best Buy10%Dealers

19.1%

11.0%

Best Buy includes Pacific Sales Data for 2012-2014 27

Long Standing Strategic Partnership

• Started selling Electrolux products 30+ years ago

• Electrolux has 1/3 of showroom plan-o-gram

• Both Electrolux and Frigidaire Brands are represented on the showroom floorrepresented on the showroom floor

• +6% CAGR (2011-2014)

Growing Sales, Gaining Share, Increasing Mix, Expanding Floor PresenceSource: EMA BI AnalysisSeptember Year to Date Results 28

Strategic Growth Partnership

• Growth: +56% sales and +2% share

• Higher Mix: Frigidaire Gallery +5% and Electrolux +1%

• Showroom Expansion: 350 Jumbo and Showroom Expansion: 350 Jumbo and 1,000 Bigfoot Floors

• + 55% sales growth HomeDepot.com

Growing Sales, Gaining Share, Increasing Mix, Expanding Floor PresenceSource: EMA BI AnalysisSeptember Year to Date Results 29

Strategic Growth PartnershipYear Over Year Sales Growth

Upright Freezers+193%

Counter Depth SxS+39%

French Door BM+196%

Front Load Laundry+55%

Wall Ovens+58%

Sales Growth in Platforms That Drive Better MixSource: EMA BI AnalysisSeptember Year to Date Results 30

New Home Construction MarketsWell Positioned for Growth

• Product available to the market in 48 to 72 hours

• Systems and infrastructure to provide “one stop shop” for builder inquiry

• People dedicated within the market to sell, train, and People dedicated within the market to sell, train, and maintain builder accounts

• Job site delivery and installation capabilities to targeted marketstargeted markets

31

New Home Construction MarketsComplementary Packages for All Housing Segmentsp y g g g

Valu

eV

St t H M U S i C t C t

Kitchen Packages Across New Construction Segments

Starter Homes Move Up Semi-Custom Custom

32


Jack TruongHead of Major Appliances, North Americaj

33


NA Business New Products Consumers Strategic Fit us essand

Market

e oductsand

Innovation

Consumersand

Customers

Strategic Fit and

Summary

34

Electrolux + GE Appliances: Strategic FitCreating a Stronger North American BusinessCreating a Stronger North American Business

Brand Portfolio• Trusted, iconic brands that resonate with consumers

and customers

Operational Opportunities• Optimizes economies of scale in manufacturing footprint

and sourcingand customers

Product Offering• Enhances R&D capabilities for continuous innovation• Expands product portfolio in all major appliance

and sourcing

Consumer and Customer Focus• Provides best-in-class distribution, delivery and

service network

2013 North American Sales (Est)

Expands product portfolio in all major appliance categories, from opening price points to premium • Increases digital capabilities and retail merchandising

468

1012

Billio

ns $

024

Combined… Whirlpool GE Electrolux Others35

Electrolux + GE Appliances: Strategic FitExpanding Our Consumer Reachp g

PrE rice

VALU

E

Value

PRICE36

Electrolux + GE Appliances: Strategic FitIntegration Planning Status

Day One Planning• Integration Management Office created • 30 dedicated integration leaders; 200+ team members engaged in planning process

14 k t l i f th i t ti t ti “D O ”

g g

• 14 work streams planning for smooth integration starting “Day One”

• USD 300m expected annual synergies Synergy Focus

p y g• Largest part of synergies expected in sourcing, operations and logistics• One time implementation costs of USD 300m

Stronger Together• “Best of both” acquisition approach• Cultural integration is foundational• Increasing consumer benefits through economies of scale

37

g g

Integration Planning On Track; Expected to Close During 201537

Summary: Electrolux North America Sustainable, Profitable Sales Growth,

• 2014 US market demand is growing 4-5%, expected to continue growing

• Adoption of new energy requirements for refrigeration and freezers will continue to have negative EBIT impact into the first half of 2015

• Well-positioned to participate in growing market segments– Proven consumer-driven innovation pipeline utilizing local and global capabilities to improve mix– Full-line supplier with strong brand portfolio– Full-line supplier with strong brand portfolio– Distributed in all key retailers in North America and able to serve new home construction markets– Electrolux + GE Appliances = Stronger Together

BUILD STRENGTH ON STRENGTH38

Factors Affecting Forward-looking Statements

This presentation contains “forward-looking” statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 Such statements include among others the financial goals and targets of 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 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 and acquisition candidates and the integration of these opportunities with existing businesses, progress in achieving structural and supply-chain reorganization goals. For further information concerning these and other risks, and how they are managed, see the AB Electrolux 2013 Annual Report generally, and specifically beginning at page 76 thereof.

39

presentations electrolux capital markets day 2014 - jack truong

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