Electrolux Professional

254900KI62Q46ZWD80842023-01-012023-12-31254900KI62Q46ZWD80842022-01-012022-12-31254900KI62Q46ZWD80842023-12-31254900KI62Q46ZWD80842022-12-31254900KI62Q46ZWD80842021-12-31ifrs-full:IssuedCapitalMember254900KI62Q46ZWD80842021-12-31ifrs-full:AdditionalPaidinCapitalMember254900KI62Q46ZWD80842021-12-31ifrs-full:OtherReservesMember254900KI62Q46ZWD80842021-12-31ifrs-full:RetainedEarningsMember254900KI62Q46ZWD80842021-12-31ifrs-full:EquityAttributableToOwnersOfParentMemberiso4217:SEKiso4217:SEKxbrli:sharesxbrli:shares254900KI62Q46ZWD80842022-01-012022-12-31ifrs-full:IssuedCapitalMember254900KI62Q46ZWD80842022-01-012022-12-31ifrs-full:AdditionalPaidinCapitalMember254900KI62Q46ZWD80842022-01-012022-12-31ifrs-full:OtherReservesMember254900KI62Q46ZWD80842022-01-012022-12-31ifrs-full:RetainedEarningsMember254900KI62Q46ZWD80842022-01-012022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember254900KI62Q46ZWD80842022-12-31ifrs-full:IssuedCapitalMember254900KI62Q46ZWD80842022-12-31ifrs-full:AdditionalPaidinCapitalMember254900KI62Q46ZWD80842022-12-31ifrs-full:OtherReservesMember254900KI62Q46ZWD80842022-12-31ifrs-full:RetainedEarningsMember254900KI62Q46ZWD80842022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember254900KI62Q46ZWD80842023-01-012023-12-31ifrs-full:IssuedCapitalMember254900KI62Q46ZWD80842023-01-012023-12-31ifrs-full:AdditionalPaidinCapitalMember254900KI62Q46ZWD80842023-01-012023-12-31ifrs-full:OtherReservesMember254900KI62Q46ZWD80842023-01-012023-12-31ifrs-full:RetainedEarningsMember254900KI62Q46ZWD80842023-01-012023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember254900KI62Q46ZWD80842023-12-31ifrs-full:IssuedCapitalMember254900KI62Q46ZWD80842023-12-31ifrs-full:AdditionalPaidinCapitalMember254900KI62Q46ZWD80842023-12-31ifrs-full:OtherReservesMember254900KI62Q46ZWD80842023-12-31ifrs-full:RetainedEarningsMember254900KI62Q46ZWD80842023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember254900KI62Q46ZWD80842023-01-01254900KI62Q46ZWD80842022-01-01 Annual and Sustainability Report 2023 Making our customers’ work-life easier, more profitable – and truly sustainable every day Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Contents Introduction INTRODUCTION Contents This is Electrolux Professional Group The year in brief 2023 in figures CEO comments OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Contents The Annual Report for Electrolux Professional AB (publ) 556003-0354, consists of the Administration Report on pages 89–93, the Financial Statements and notes on pages 94–140, the Corporate Governance Report on pages 69–79, Remuneration report on pages 80–81, and the Sustainability Report on pages 7, 48–66 and 149–161. The Annual Report is published in Swedish and English. The Swedish version is the original. The ESEF report (European Single Electronic Format) is available at www.electroluxprofessionalgroup.com/corporate/annual-reports/ Electrolux Professional was part of Electrolux, founded in 1919, until March 23, 2020 when the shares of Electrolux Professional were distributed to the shareholders of Electrolux, and listed on Nasdaq Stockholm. Introduction Our strategic foundation Global trends & our markets Business segments Our people Sustainability Governance & risk management Financial information Other information This is Electrolux Professional Group 1 The year in brief 2 2023 in figures 3 CEO comments 4 How we create value 7 Sustainable targets 8 Strategies 9 Global external trends 19 The global professional equipment industry 20 Customers 21 Sales 23 Customer Care 24 Our markets 25 Marketing and brands 26 Food & Beverage 30 Laundry 35 Our People 45 Guiding principles 46 Engagement and development 47 2023 activities 49 Our sustainability framework 50 Materiality assessment 52 Strategies and targets 53 Sustainable Development Goals 54 Sustainable solutions 55 Sustainable operations 58 Ethics and relationships 63 Chairman’s comments 68 Corporate governance report 69 Board of Directors 76 Group Management Team 78 Remuneration report 2023 80 Risk and risk management 82 Financial information, contents 88 Administration report 89 Financial statements 94 Notes 102 The Board’s assurance 141 Auditor’s report 142 Seven years in summary 145 Definitions 147 Sustainability notes 149 Auditor’s report on the sustainability report 162 Share & shareholders 164 Our history 168 Production Operational excellence 40 Quality 43 Logistics 43 Purchasing 43 P. 1Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 This is Electrolux Professional Group Introduction INTRODUCTION Contents This is Electrolux Professional Group The year in brief 2023 in figures CEO comments OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION This is Electrolux Professional Group Electrolux Professional Group is one of the leading global providers of professional food, beverage, and laundry solutions, serving a wide range of customers globally, from restaurants and hotels to healthcare, educational, and other service facilities. 19 Business brands To meet our market needs, we use a portfolio of distinct brands with Electrolux Professional as our master brand, targeting different customers and stakeholders in different geographies. This is a unique constellation that is experience-focused and “heritage for the future” minded – our way of seeing sustainable business development. 13 manufacturing units in eight countries Sales in approximately 110 countries Headquarters in Stockholm, Sweden Approximately 4,300 employees Listed on NASDAQ Stockholm since 2020 Top-of-Industry rating for Climate Change by CDP Sustainalytics rating ”low risk” Climate targets approved by SBTi P. 2Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 The year in brief Introduction INTRODUCTION Contents This is Electrolux Professional Group The year in brief 2023 in figures CEO comments OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION The year in brief > Molteni, the brand of luxury professional stoves, celebrated a century of master craftsmanship. > All of Electrolux Professional Group’s US Food and Beverage brands were displayed together at NAFEM, a food service exhibition in the US. > UNIC launched the TANGO XP line, a new range of super-automatic, high-performing espresso machines. > The Group received a silver rating certification from EcoVadis, a global provider of business sustainability ratings. > Q1 RESULT - Healthy market and improved profitability. > Annual General Meeting was held in Stockholm. Josef Matosevic was appointed as a non-execu- tive member of the Board of Directors. > Following the EU Single-Use Plastics Directive that aims to reduce global reliance on certain single-use plastics, Electrolux Professional an- nounced that it would partner with several multi- national brands, including Coca-Cola and Max Burgers in Sweden, in a unique ‘circular econo- my’ initiative. > Q2 RESULT – Another positive step towards our financial targets. > Electrolux Professional Group’s near-term targets to reduce greenhouse gas emissions (Scope 1 and 2) and indirect use-phase emis- sions (Scope 3) by 2030 were validated by the Science Based Targets initiative (SBTi). > In Italy in October, we welcomed 350 customers from 30 countries to "The Hive" - a customer event showcasing our vision of a sustainable future of the food service industry. > Q3 RESULT – Somewhat weaker sales and profitability while cash generation increased. > In December 2023 we announced the acquisi- tion of TOSEI Corporation, a leading Japanese manufacturer of professional laundry equipment and vacuum packing machines for food. The ac- quisition closed in January 2024. TOSEI will make us a larger player in the resilient laundry market in Japan which constitutes the second largest laundry market in the world. > Q4 RESULT – Solid results, despite slightly declining sales. Q1 Q2 Q4Q3 Molteni - a century of master craftsmanship 2023 marked a century of master craftsmanship for Molteni, the Electrolux Professional Group brand of luxury professional stoves, used by famous Michelin chefs all over the world. Few brands in the sphere of professional cooking are as highly respected as Molteni. Each Molteni stove is hand-crafted and assembled in our workshop in Saint-Vallier, in the south of France. Molteni stoves are at the heart of many of the world’s most renowned restaurants, and they are a popular choice for luxury hotels globally. P. 3Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 2023 in figures Introduction INTRODUCTION Contents This is Electrolux Professional Group The year in brief 2023 in figures CEO comments OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION 2023 in figures SEK 11,848 m Net sales, total Food & Beverage 64% Laundry 36% Net sales by segment Europe 61% Asia-Pacific, Middle East, Africa 12% Americas 27% Net sales by region Key ratios SEKm 2023 2022 2021 2020 2019 Net sales 11,848 11,037 7,862 7,263 9,281 EBITA 1,317 1,111 663 456 1,058 EBITA margin, % 11.1 10.1 8.4 6.3 11.4 EBITA excl. items affecting comparability¹ 1,317 1,146 663 533 1,090 EBITA margin excl. items affecting comparability, %¹ 11.1 10.4 8.4 7.3 11.7 Operating income 1,154 955 592 387 992 Operating margin, % 9.7 8.7 7.5 5.3 10.7 Income after financial items 1,033 895 587 363 978 Income for the period 775 686 487 278 663 Earnings per share, SEK² 2.70 2.39 1.69 0.97 2.31 Operating cash flow after investments 1,453 636 1,116 570 1,138 Operating working capital, % of net sales 18.1 16.7 14.9 19.9 17.7 ) Alternative performance measures used in this report are explained on pages 147–148. 1) Includes items affecting comparability of SEK –32m in 2019, SEK –77m in 2020, and SEK –35m in 2022. 2) Basic number of outstanding shares. Total net sales SEKm 0 2,000 4,000 6,000 8,000 10,000 12,000 20232022202120202019 % EBITA EBITA margin EBITA and EBITA margin SEKm 0 300 600 900 1,200 1,500 20232022202120202019 0 5 10 15 20 25 Operating cash flow after investments SEKm 0 300 600 900 1,200 1,500 20232022202120202019 Base year Climate target: reduce Scope 1 and 2 CO₂ emissions by 50% by 2025 2023 Outcome –50% 0 1,000 2,000 3,000 4,000 5,000 202320222021202020192018201720162015 CO2e emissions (tons) Includes contributions from acquisitions made 2015-2019. Unified brands, acquired in December 2021 is not included. P. 4Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 CEO comments Introduction INTRODUCTION Contents This is Electrolux Professional Group The year in brief 2023 in figures CEO comments OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION CEO comments Building a stronger company step by step The results of our key activities clearly show that we have taken another step on the journey towards our long-term goals this year. Organic sales grew by 2.6%, EBITA was the highest ever with an EBITA margin that rose from from 10.1% to 11.1%, and cash flow was the strongest we’ve seen, despite challenging macroeconomic circumstances. We expanded the group further with the acquisition of TOSEI in Japan, which was completed in January 2024. After more than two years of strong growth since the pandemic, market growth is now back to more normalized levels. The only vis- ible, enduring change in trends since the pandemic is the increase in remote working and the decline in business travel, both of which influence when and how we consume food away from the home. However, the underlying long-term factors influencing growth in the hospitality industry are robust and stable, creating the conditions for continued global market growth. Focusing on our strategic pillars Electrolux Professional Group has improved its performance in recent years, and we constantly strive to keep developing and improving. Our strategic pillars support these efforts. We continue to grow through innovation and launched several important new products during the year. Within the fast-growing espresso coffee market, we have launched a new range of fully- automatic, high-performing espresso machines, the TANGO® XP line. Another step we’ve taken - which also is part of our sustain- ability ambitions - was the launch of our energy-efficient dryer “HeroDry” which can quickly dry reusable packaging. Together with our ware washing solutions the dryer will facilitate the reduction of certain single-use plastics, and thus enable hospitality outlets to realize their circular ambitions faster. To meet the needs for compact solutions that increase productivity in the kitchen, we have launched GourmeXpress. This high-speed oven includes a combination of microwave, convection, and impingement allowing rapid cooking, grilling, and reheating, making it particularly well-suited for restau- rant chains. Growth in restaurant chains is another strategic priority. In the US this segment has been somewhat soft during the year. At the same time, we have been burdened by changes in some of our represen- tatives’ channel partners, even though this now should be behind us. We have a strong US platform in Food & Beverage from which we can grow profitably. This is important to us since the US is the single largest market for Food & Beverage and it is home to most of the large global food chains. Customer Care is crucial to our customers’ uptime and is also one of the most profitable parts of our business. I am therefore pleased to report that Customer Care grew more than product sales during the year. We want to generate greater customer value faster, enabled by the digitalization of our company and our products. To that end, we continued to make significant investments in digitalization in 2023, including connected products. We are in the midst of launching our product and service offering for connected products (“OnE Connected”), thereby improving our customers’ processes and effectiveness. We continue to improve and roll out our digital customer platform through which customers can more easily order P. 5Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 CEO comments Introduction INTRODUCTION Contents This is Electrolux Professional Group The year in brief 2023 in figures CEO comments OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION products and services directly. Our digitalization efforts also include adopting artificial intelligence where we already see opportunities, both in our operations and in our products. Acquisition of TOSEI widens our footprint Another key element of our strategy is to grow through acquisitions, and we have now carried out two relatively large acquisitions since we became an independent company in 2020, adding approxi- mately 20% to our turnover. We acquired Unified Brands in the US in 2021, and in January 2024 we closed the acquistion of TOSEI Corporation in Japan. Both acquisitions have helped us widen our footprint. TOSEI is a leading company in laundry and vacuum packing machines. Through this acquisition we will become a larger player in Japan, which is the second largest laundry market and third largest food-service market globally. In addition, we will be able to expand the vacuum packing products that are already used globally in the fast-growing segment of sous-vide cooking. 2025 CO 2 target already met – new targets set Electrolux Professional Group is the sustainability leader in our industry. Our sustainability targets center on the climate, health & safety, and diversity. Electrolux Professional Group is a signatory of the UN Global Compact, and our sustainability work is based on the United Nations Sustainable Development Goals. We fully recognize the importance of taking action to mitigate climate change and we support the ambitions of the Paris Agreement. Our overarching, and ambitious, target is to become climate neutral in our own operations by 2030. I am therefore happy to report that as a step along the way, we have already been able to meet our 2025 target to reduce CO 2 emissions (base year 2015) by 50% during 2023 – two years ahead of plan. Not only this, through our steady focus on energy use and waste and emissions manage- ment, we improved all key environmental indicators compared to previous years. Having achieved our target to reduce CO₂ emissions by 50%, we have developed new, near-term sustainability targets over the last year that have now also been validated by the Science Based Targets initiative (SBTi). Our new science-based targets are to re- duce Scope 1 and 2 emissions by 70% by 2030, and to reduce indi- rect use-phase emissions of sold products by 27.5% by 2030, in both cases from a 2019 base year. For many years, Electrolux Professional Group has followed its clear strategy to develop and provide energy-efficient and low-consuming products. Our main climate impact – approximately 95% – occurs during the product-use phase, with the primary con- tributor being product energy consumption. For that reason, setting a target that is related to the use-phase emissions of sold products is another important part of our Group’s climate journey. Reducing energy consumption and emissions from the product-use phase is beneficial for our customers’ running costs and the environment. Step-by-step improvement As we enter 2024, we will continue to improve our performance step-by-step. Electrolux Professional Group has a profitable busi- ness with a stable cash flow in stable markets. Our brands and market positions are strong, and we have talented and committed employees that are proud of our company and our innovative and sustainable products. The customer-centric organizational structure we launched in 2022 is also proving that it delivers customer value and enhances employee engagement. All this makes me confident in saying that Electrolux Professional Group stands strong. We have the foundation we need to further develop and build the company for the benefit of our customers, shareholders, and employees. Alberto Zanata, President and CEO Electrolux Professional Group has a profitable business with a stable cash flow in stable markets. Our brands and market positions are strong, and we have talented and committed employees that are proud of our company and our innovative and sustainable products. Alberto Zanata, President and CEO Alberto Zanata, President and CEO P. 6Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Our strategic foundation Our strategic foundation INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Our strategic foundation Our mission - making our customers’ work-life easier, more profitable - and truly sustainable every day Our business model – how we create value 7 Sustainable targets 8 Strategies 9 – Grow through innovation 10 – Expand in high-margin products, segments, and geographies 13 – Boost Customer Care 15 – Invest in digitalization 16 P. 7Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 How we create value Our strategic foundation INTRODUCTION OUR STRATEGIC FOUNDATION How we create value Sustainable targets Strategy for growth – Grow through innovation – Expand in high-margin products, segments, and geographies – Boost Customer Care – Invest in digitalization GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION How we create value > Product development and innovation of smart products offering sustainable solutions, page 10. > Marketing focused on making our customers’ work-life easier, more profitable and truly sustainable, page 26. > Sales mainly through dealers and distributors, page 23. > Production World-class manufacturing focused on low- er environmental impact and an excellent working environment, page 40. > Customer Care and sales of chemicals, accessories, spare parts and consumables, page 24. > 4,300 committed employees, page 45. > 13 manufacturing sites, page 42. > A wide range of customers in 110 countries, page 21. > Long-term relations with stakeholders in our value chain, page 52. > A strong portfolio of 19 different brands – known for innovative, sus- tainable, and digital solutions target- ing different customers and stake- holders in different geographies, page 26. > Raw materials and components page 43. For our customers > Lower total costs over the lifecycle of the equipment > Reduced energy consumption and carbon footprint > Improved quality of the food, beverage or laundry service > Ergonomic and human-centric design > Enhanced hygiene page 55. . For our employees > A diverse and inclusive culture > A long-term employer > A safe work environment > Skills development page 45. For shareholders > Share development > Dividend page 164. For society > Greater resource efficiency > Address social challenges Our businessOur resources Value created SEK 11,883 m Distributed value Employees SEK 2,434 m Suppliers SEK 7,860 m Society, taxes SEK 814 m Reinvested SEK 775 m Value created P. 8Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainable targets Our strategic foundation INTRODUCTION OUR STRATEGIC FOUNDATION How we create value Sustainable targets Strategy for growth – Grow through innovation – Expand in high-margin products, segments, and geographies – Boost Customer Care – Invest in digitalization GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Capital structure Net debt/EBITDA ratio below 2.5x Higher levels may be temporarily acceptable in the event of acquisitions, provided there is a clear path to de-leveraging. Profitability EBITA margin of 15% Net sales growth Organic annual growth of more than 4% over time, complemented by value-accretive acquisitions. Asset efficiency Operating working capital below 15% of net sales. OUTCOME: 2023: 2.6% (16.9) Comment on 2023 outcome There was good growth in the first half of the year, while sales declined in the second half. The somewhat weaker sales compared to target was mainly driven by the US. Food & Beverage declined by 1% and Laundry grew by 9.7%. OUTCOME: 2023: 11.1% (10.1) Comment on 2023 outcome Profit and profitability took another step forward, mainly driven by price, but also lower material and transportation cost. OUTCOME: 2023: 18.1% (16.7) Comment on 2023 outcome Operating working capital as a percent of annulized net sales is still high, but it improved during the second half of the year, mainly due to a substantial reduc- tion in inventory. OUTCOME: 2023: 0.9 (1.5) Comment on 2023 outcome Cash flow has been very strong during the year which made it possible to sig- nificantly reduce borrowings. Dividend policy Electrolux Professional’s target is for the dividend to correspond to approximately 30% of the income for the year. The timing, declaration, and number of future dividends will depend on the company’s financial situation, earnings, capital require- ments, and debt service obligations. Comment on 2023 outcome The Board proposes a dividend of SEK 0.80 (0.70) per share which is in line with the dividend policy. Sustainable targets Climate target for 2025 Health and safety target for 2025 Gender diversity target for 2030 Reduce CO 2 emissions Scope 1 and 2 emissions from our industrial sites >50% by 2025 (base year 2015) Lost time injury rate (LTIR) As measured by work-related accidents per 200,000 work hours <0.3 by 2025 Gender diversity Distribution men/women or women/men 40/60 Distribution across managerial positions by 2030 OUTCOME 2023: The number of accidents resulting in lost work time decreased, bringing us closer to our target, at 0.54 (0.64). Comment on 2023 outcome We continued to address the root causes of accidents, working proactively with near misses and unsafe actions. OUTCOME 2023: The percentage of women in all managerial positions was 27% (26). Comment on 2023 outcome Gender diversity across managerial positions improved somewhat.. Activities related to diversity and inclusion, such as training and support to hiring man- agers, have increased during the year. OUTCOME 2023: Scope 1 and 2 CO₂ emissions in 2023 amounted to 4.25 (6.2) kton, which is -62% compared to 2015 with a recalcu- lated baseline. Comment on 2023 outcome Strong focus on switching to renewable energy, and full capacity generation of renewable electricity in Rayong, made it possible to reach the 2025 target two years ahead of time. Reduce CO 2 emissions Scope 1 and 2 emissions from our industrial sites >70% by 2030 (base year 2019) Science-based climate targets for 2030 OUTCOME 2023: With a recalculated baseline, the reduction since 2019 is 50%. Comment on 2023 outcome A solar panel subscription in the Mississippi plant, a reduction in natural gas consumption, and improved pro- duction efficiency helped us reduce our emissions. Reduce indirect use-phase emissions of sold products Scope 3 emissions >27.5% by 2030 (base year 2019) OUTCOME: In 2022 (2023 result not yet avail- able) Scope 3 emissions, Category 11, amounted to 5,302 kton, which is a 16% reduction compared to 2019 with a recalculated baseline. Comment on 2023 outcome During 2023, we developed our Scope 3 product-use emission reduction target, and it was validated, and approved by the Science-Based Targets initiative. The reduction of emissons was due to lower volumes and grid emission improvement. Including Unified Brands, acquired in 2021. ** Recalculation is made by distributing the first reported emission footprint backwards to previous years. P. 9Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Strategy for growth Our strategic foundation INTRODUCTION OUR STRATEGIC FOUNDATION How we create value Sustainable targets Strategy for growth – Grow through innovation – Expand in high-margin products, segments, and geographies – Boost Customer Care – Invest in digitalization GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION GROW through innovation. Read more on page 10 EXPAND in high-margin products, segments, and geographies. Read more on page 13. BOOST Customer Care and service-as-a-solution. Read more on page 15. INVEST In digitalization to unlock additional customer value. Read more on page 16. 1 2 3 4 Strategy for growth: generate customer value from a foundation of operational excellence Our strategic targets Our strategy for growth rests on four pillars, built on a foundation of operational excellence in the supply chain. In the following pages we describe the core activities within each pillar. P. 10Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Strategy for growth Our strategic foundation INTRODUCTION OUR STRATEGIC FOUNDATION How we create value Sustainable targets Strategy for growth – Grow through innovation – Expand in high-margin products, segments, and geographies – Boost Customer Care – Invest in digitalization GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION 1 We want to set the pace of industry innovation in sustainability and energy efficiency, underpinned by a connected and digital platform. We develop new and improved products and services to add value to our customers and grow our company profitably. Our ambition is to address our customers’ increasing require- ments for multi-functional products, with low running costs, and reduced energy and water consumption. In addition, we will prioritize appliance digitalization. Investments in R&D 2023 SEK 388 m Annual average R&D expenditure as a share of net sales 2019–2023 3.7% GROW through innovation P. 11Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Strategy for growth Our strategic foundation INTRODUCTION OUR STRATEGIC FOUNDATION How we create value Sustainable targets Strategy for growth – Grow through innovation – Expand in high-margin products, segments, and geographies – Boost Customer Care – Invest in digitalization GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Research and development One of our key competitive advantages is our focus on developing sustain- able and innovative products that cater to customers’ needs and increase customer productivity and efficiency. Significant investments in R&D Electrolux Professional Group invests significant resources into its global R&D activities. From 2019 to 2023 the company’s R&D expenditure was an average of approximately 3.7% of net sales per year. During 2023, our partnership with HCL Tech in India has progressed, creating several R&D deliverables to support our innovation process. Growth through sustainable solutions Offering our customers truly sustainable solutions is one of our key strategies for growth. We aim to be a sustainability role model in our industry and continously find new, more energy-efficient and resource-efficient methods for food, beverage, and laundry profes- sionals. As a result, not only do we help our customers to reduce their operating costs, but we also have a substantial impact on their sustainability efforts. As our main environmental impact occurs during the product-use phase (energy, water, detergents), low- consuming and energy-efficient products become key. Read more on pages 12, 31 and 36. Digitally connected products Through digitally advanced and connected products, customers can monitor and steer any connected products, thereby maximizing uptime, improving service, and reducing the consumption of energy, water and consumables. Read more on page 15. OUTCOME 2023: New products launched during the year include: Tango XP a fully automated espresso coffee machine, Hero Dry, a free-standing blower for food chains, and GourmeXpress a high-speed oven. Most of the products manufactured in 2023 are connectable to be able to provide their users with useful information. In addition, focus has been on develop- ing products using less energy and water. 1 GourmeXpress High-Speed Oven The GourmeXpress is part of the Electrolux Professional High-Speed cooking portfolio of fast, easy, and versatile solutions. It allows cus- tomers to serve high-quality products consistently and speedily, day after day, and can be operated by any member of the team. The GourmeXpress includes a combination of microwave, convection, and impingement allowing rapid cooking, grilling, and reheating. Grand Prix Du Design gold award winner In 2023, the GourmeXpress was awarded a gold certification from Grands Prix Du Design, an interna- tional, well-respected competition. TANGO XP super-automatic espresso line The new TANGO XP is a complete line of high- performing super-automatic coffee machines. The range includes single and double group models dedicated to coffee pro- fessionals who want and expect premi- um coffee extraction. Winning innovative products P. 12Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Strategy for growth Our strategic foundation INTRODUCTION OUR STRATEGIC FOUNDATION How we create value Sustainable targets Strategy for growth – Grow through innovation – Expand in high-margin products, segments, and geographies – Boost Customer Care – Invest in digitalization GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Growth through sustainable solutions Low running costs are more important than ever > Our energy-saving solutions are at the forefront of their field > Vital in times of high electricity prices and greater climate concern > Momentum for our energy-saving heroes > Support our customers in moving towards a circular economy Food: Hero dryer freestanding blower A unique ‘circular economy’ initiative that meets the EU Single-Use Plastics Directive aimed at reducing global reliance on certain single-use plastics. This blower is designed to reduce the amount of waste generated by single-use consumables in hospitality outlets. Electrolux Professional is partnering with several multinational fast-food chains in this area. 1 Laundry: ClarusVibe control Our newest and best-performing interface guaran- tees an intuitive experience and seamless interac- tion, providing smart, effortless management of the wash process. Capable of drying up to 750 cups/hr Laundry: Intelligent dosing: the easy and green automatic dosing The Intelligent Dosing feature automatically adds the precise amount of detergent based on the weight of the load. Thanks to this feature, the right amount of detergent, softner, and chemicals are automatically dosed avoiding any waste and providing the best results. "Integrated savings" to avoid over- or under- loading Avoids waste, saves water, and guarantees better care of garments. P. 13Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Strategy for growth Our strategic foundation INTRODUCTION OUR STRATEGIC FOUNDATION How we create value Sustainable targets Strategy for growth – Grow through innovation – Expand in high margin products, segments, and geographies – Boost Customer Care – Invest in digitalization GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION We will grow sales organically in laundry and in restaurant chains, supported by potential M&A. Our growth priorities include: > increasing sales to commercial restaurant chains – large companies with multiple outlets across several regions – in order to expand our presence in North America and emerging markets, > further growing the highly profitable Laundry business globally, and > accelerating growth through selective add-on acquisitions that clearly align with the Group's strategic road-map. EXPAND in high-margin products, segments, and geographies OUTCOME 2023: Growth in restaurant chains has been somewhat weak this year, mainly due to softening sales in the US. However, several product tests are cur- rently being carried out for restaurant chains, which often leads to new roll-outs. At the same time, sales of the high-margin laundry products have developed very well during the year, contributing to profitability. 2 0 5 10 15 20 25 2023202220212020 Chains, Food & Beverage, sales in % of net sales % P. 14Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Strategy for growth Our strategic foundation INTRODUCTION OUR STRATEGIC FOUNDATION How we create value Sustainable targets Strategy for growth – Grow through innovation – Expand in high margin products, segments, and geographies – Boost Customer Care – Invest in digitalization GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Acquisitions to accelerate growth Previous acquisitions include UNIC – a French producer of profes- sional coffee solutions in 2019, Grindmaster-Cecilware – a North- American coffee solutions producer in 2017, and in 2018 SPM Drink Systems, an Italian manufacturer of frozen beverage equipment. Veetsan, a manufacturer of professional dishwashers in China, was acquired in 2015, and in 2018 we acquired Schneidereit, a supplier of laundry rental solutions in Europe. 2 Electrolux Professional Group aims to accelerate growth through selective add-on acquisitions, primarily acquisition targets that clearly align with our strategic roadmap. 2024 - TOSEI Corporation In early 2024, Electrolux Professional Group acquired TOSEI Corporation (“TOSEI”) – a leading Japanese manufacturer of pro- fessional laundry equipment and vacuum packing machines for food. The acquistion was closed in January 2024. The acquisition is part of Electrolux Professional’s strategy to further accelerate growth and enhance our presence globally. With this acqusition, Electrolux Professional became a larger player in Japan, which is the second largest laundry market and third largest food-service market globally. The move widens the geograph- ical presence of the Group and increases the size of Electrolux Professional’s high-margin, resilient, global Laundry business. In addition, the acquisition presents opportunities to expand the vac- uum packing products that are used globally in the fast-growing segment of sous-vide cooking, to other markets for vacuum packing products outside Japan. Electrolux Professional will be able to benefit from TOSEI’s leading position in Food to expand in Japan, which is a large market characterized by local players. TOSEI has a long history (it was founded in 1950), robust brands, and strong reputation in the marketplace, making it a high-quality platform for Electrolux Professional's strategy deployment. Following the acquisition, ap- proximately 70% of TOSEI will be reported as part of Electrolux Professional’s Laundry segment, and approximately 30% of TOSEI will come under the Food & Beverage segment. TOSEI's main brands TOSEI offers washers, dryers, combined washers and dryers, and table-top and stationary vacuum packing machines under the main brands TOSEI and TOSPACK. About TOSEI Corporation > TOSEI was founded in 1950 and is a leading manufacturer of profes- sional laundry and vacuum-packing equipment in Japan. > TOSEI has 340 employees who de- velop, design, manufacture, and ser- vice products. The company's head office is in Tokyo and the factory is in Izunokuni, Shizuoka. TOSEI has six regional sales offices in Japan. > TOSEI's annual sales were approx- imately SEK 930m in 2023, approx- imatley 70% of which is from pro- fessional laundry and 30% from the vacuum packing business. In late 2021, Electrolux Professional acquired Unified Brands, a leading US-based manufacturer of food-service equipment. The acquisition significantly strengthened Electrolux Professional’s pres- ence in the US and supports our focus on growth in food service chains. TOSEI professional laundry products Washing machines, dryers, steamers, coin-op washers and dryers, and a cash- less laundromat payment system. TOSEI vaccuum-packing and cooking products Small desktop vacuum-type machines for the food business and large stationary vacuum solutions for industrial use. P. 15Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Strategy for growth Our strategic foundation INTRODUCTION OUR STRATEGIC FOUNDATION How we create value Sustainable targets Strategy for growth – Grow through innovation – Expand in high margin products, segments, and geographies – Boost Customer Care – Invest in digitalization GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION We will further develop our global service network and competence as a full-service provider while increasing sales of spare parts, accessories, consumables, and service. Our market is characterized by the heavy use of machines, and a large replacement business. This requires us to have a reliable and geographically well-distributed Customer Care service that can support our customers throughout the life of the product, which also ensures customer retention. We also offer spare parts kits and performance-enhancing consum- ables, and provide our customers remote guidance. Sales of Customer Care 2023 18.3% Electrolux Professional Group provides Customer Care via 2,200 service partners BOOST Customer Care and service-as-a-solution offering OUTCOME 2023: Sales of Customer Care increased by approx- imately 6% in 2023 and now accounts for ap- proximately 18% of Group sales. Sales of service contracts and detergents progressed well. Customer care share of net sales % 0 5 10 15 20 20232022202120202019 Post-service recommendations Spare parts Preventive maintenance Repairs End-of-life replacement Accessories and consumables 3 P. 16Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Strategy for growth Our strategic foundation INTRODUCTION OUR STRATEGIC FOUNDATION How we create value Sustainable targets Strategy for growth – Grow through innovation – Expand in high margin products, segments, and geographies – Boost Customer Care – Invest in digitalization GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION We will accelerate the digitalization of our company and our products. We have enhanced our global product and service offering, providing online sales through the digital Customer platform and connected appliances. These digital advancements enable us to help customers improve their processes and effectiveness. Our digital offering can strengthen our market presence, and our existing customer relationships create an opportunity for repurchases and additional services. We are also automating our internal processes to become more efficient and to provide better service to our customers. Distributors' online orders 65% INVEST in digitalization to unlock additional customer value Connected appliance of the future installations 50% OUTCOME 2023: We are currently launching "OnE Connected" which enables our customers to digitally connect their products. Electrolux Professional thus becomes the systems integrator for the operations of our customers. Our digital platform has been launched in several countries to make it easier for customers to order our products. 80% of orders in these countries now take place through the digital platform. Digital customer interactions 50% 4 Our digital vision for 2024 P. 17Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Strategy for growth Our strategic foundation INTRODUCTION OUR STRATEGIC FOUNDATION How we create value Sustainable targets Strategy for growth – Grow through innovation – Expand in high margin products, segments, and geographies – Boost Customer Care – Invest in digitalization GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Digitalization of our industry Electrolux Professional Group's global product and service offering encompasses single and full solutions and services across Food, Beverage and Laundry. This allows our customers to manage their operations through connectivity and a digital ecosystem. Digital Customer Platform The Digital Customer Platform is a seamless, self-service, one-stop shop designed for our customers. From the portal, partners and distributors can place orders for products, consumables, and spare parts, track shipments in real time, search for documentation or products, and digitally interact with us for all manner of support, and cases are monitored through a ticketing system. The main plat- form benefits are: > Easy ordering of products and parts > Tracking of shipments and support cases > Customer insights into their business data > Access 24/7 > Reduced number of support requests > Improved communication through one single tool tomanage the customer relationship > Increased future sales Connected appliances Through our Connectivity offer, our customers monitor and steer their connected products, thereby maximizing uptime, improving service, and reducing the consumption of energy, water, and con- sumables. This means that customers are offered better insights into their equipment, and we can create an ongoing relationship with customers throughout their equipment lifecycle, thereby supporting them in their needs for repurchases and additional services. Order value, manual versus digital, 2023 80% digital20% manual Number of orders, manual versus digital, 2023 60% digital40% manual * Orders to onboarded partners and distributors in the countries where the platform has been launched. 4 Digital customer platform deployed in 32 countries so far P. 18Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Global trends and our markets Global trends and markets INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Global trends and our markets Global trends impacting our industry 19 The global professional equipment industry 20 Customers 21 Sales 23 Customer Care 24 Our markets 25 Marketing and brands 26 P. 19Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Global trends impacting our industry Global trends and markets INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS Global trends impacting our industry The global professional equipment industry Customers Sales Customer Care Our markets Marketing and brands BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Global trends impacting our industry Climate change and effective use of resources Climate change and a shortage of water, energy, and other re- sources has created a need for sustainability and energy efficiency in all parts of society. Since energy costs are a significant part of the total cost of ownership, energy efficiency in professional solutions is central to any investment decision. This is also driving the switch to products that use electricity rather than gas. The ability to share products is rising in importance as a way to facilitate more efficient use of resources. In addition, a ban on the single use of plastic packaging will be introduced in several markets, and the move to reduce microplastics is becoming more prominent. Increased demand for take-away and home-deliveries With the post-pandemic new normal, including the normal- ization of hybrid work, there has been an increase in drive- throughs, take-away, home-deliveries, and outdoor serving in restaurants. This calls for new digital tools, smaller and more user-friendly equipment, machines that are easier to clean with stricter hygiene requirements, and new ways of working in the industry. Labor availability There is still a shortage of labor in the hospitality industry which drives the cost of labor up. This is accelerating autom- atization and digitalization as there is a need to ensure high productivity with fewer employees. At the same time, ease of use and ergonomics are increasingly important to the users of the products. Digitalization Digitalization and artificial intelligence affect the way we work and interact, and are changing the eco-system of our custom- ers’ businesses. There will be greater demand for connected solutions, contactless payment, process optimization, and effi- ciency driven by new technologies, which in turn requires future investments and knowledge. Potential access to customer data will enable this development. Societal changes An increase in workforce participation, the prolongation of the working age, and higher disposable incomes allow more people to spend more money on leisure activities such as out-of-home eating, and less time on household chores. There is consequently more demand for out-of-home profes- sional services. In addition, the aging of the population will lead to greater investments in the healthcare segment, such as hospitals and elderly homes. The growth of the middle class and urbanization leads to an increased number of potential end-customers, demand for out-of-home food and beverage consumption, and other application areas for professional equipment. P. 20Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 The global professional equipment industry Global trends and markets INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS Global trends impacting our industry The global professional equipment industry Customers Sales Customer Care Our markets Marketing and brands BUSINESS SEGMENTS OPERATIONS & OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION The global professional equipment industry Electrolux Professional Group operates in the global professional equipment industry, offering food service, beverage, and laundry products and solutions to a wide range of customers. These include companies in the global hospitality industry as well as other businesses and institutions. In 2023, the food and beverage segment accounted for approxi- mately USD 31bn of the global market, and the professional laundry segment accounted for USD 2.9bn. The industry is largely characterized by: > Favorable general end-market trends with multiple catalysts for structural growth. > Product performance having a material impact on customer productivity. > The requirement for reliable and technologically advanced products. > Significant benefits from local presence and collaboration with customers. > Ongoing Customer Care and support through the equipment lifecycle. Major factors for success include > Strong innovation capabilities > Reliability and product quality > Product design > A well-developed distribution and service network > Brand recognition > Customer relationships as a key differentiating factor Total cost of ownership Total cost of ownership is an additional factor that drives com- petition. This is because the initial equipment cost represents only a fraction of the total cost of ownership during the lifetime of the equipment. The majority of the costs are running costs for water, electricity, and chemicals, maintenance costs, and health and safety considerations. Reduced running costs are also a driver for custom- ers wishing to make a positive contribution to the environment. Competitive landscape Electrolux Professional Group is one of the leading global players, with a complete offering for both the food and beverage sector and the global laundry equipment market. There are a number of large global players in these markets but in local markets, we also compete with significant local players and companies focused on individual product lines. * Own company estimates The 6 largest professional food and beverage equipment companies Compan 1 Company 4 Company 3 Electrolux Professional Group Company 2 Smaller companies Company 5 USD 31bn The 6 largest laundry companies Company 1 Company 5 Company 4 Electrolux Professional Group Company 3 Company 6 Smaller companies USD 2.9bn End customers > Restaurants and chains > Hotels, bars, and cafés > Roasters and ingredient producers > Education, leisure, and sports > Public institutions > Business, transport, industry, and facility managers > Coin and apartment building laundries > Care facilities and hospitals > Retail and convenience stores Food & Beverage > Ali Group/ Welbilt > Hoshizaki > ITW > Middleby > Rational Laundry > Alliance > Girbau > Jensen > Kannegiesser > Miele Pro Largest global players Products > Food service applications: cooking, refrigeration, dishwashing, and dynamic food preparation > Beverage equipment for coffee, espres- so, hot, cold and frozen beverages, and soft-drink dispensing equipment > Laundry products: washers, tumble dryers, drying cabinets, and ironers > Specialty accessories and consum- ables Market and competition P. 21Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Customers Global trends and markets INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS Global trends impacting our industry The global professional equipment industry Customers Sales Customer Care Our markets Marketing and brands BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Customers Our end-customer base consists of large multinational, regional, chain, and independent restaurants, catering providers, leisure and accommodation facilities, healthcare facilities, customer-operated laundries, schools and universities, as well as small businesses and large industrial customers. HotelsRestaurants Food Distribution Care Restaurant chains Bars & Cafés Self-Service Laundries Commercial Laundries Public Institutions Business, Transport & Industry P. 22Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Customers Global trends and markets INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS Global trends impacting our industry The global professional equipment industry Customers Sales Customer Care Our markets Marketing and brands BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Distribution per customer segment Consumer and customer operated laundries 18% 9% Hospitals and elderly homes Restaurants 13% Business, Industry and Transport 8% Public institutions 8% Restaurant chains 13% 2% Others Hotels 13% Bars and cafes 4% Retail and convenience stores 6% Laundry Commercial laundries 6% Figures are partially estimates since Electrolux Professional do not always have information about the end customer. Food & Beverage and Laundry Food & Beverage Long-standing relationships As a food, beverage, and laundry equipment provider we generally maintain long-standing relationships with our key customers and distributors in order to increase our wallet share and overall growth. Close customer relationships are particularly important for chains in the food and beverage businesses. Read more about Customer Care on page 24. Customers Our customer base is diverse, from small independent owners to large chains. We also have many customers in elderly care homes, government and private healthcare facilities, multi-housing laun- dries, and coin-ops. Large chain contracts Even though we generally do not enter into long-term contracts, large food-service chains usually authorize specific appliance manufacturers as their “preferred vendors” for specific equipment. Furthermore, many quick-service restaurant chains launch or refur- bish a larger number of locations, or frequently change their menus, requiring significant investments in new equipment over a relatively short period of time. Customers regularly require appliance upgrades. These allow them to increase productivity and food safety, reduce labor costs, and respond to hygiene, sustainability, and energy-efficiency trends. These upgrades usually require customized equipment as customers additionally endeavor to differentiate their offerings and services. Individual needs and innovation Individualization and equipment innovation are primary purchase decision factors for the customer, making product innovation essen- tial, and one of the key differentiators and competitive advantages of Electrolux Professional Group's brands. Our substantial investments in research and development drive the production of innovative equipment and ensure the Group is well positioned to serve its global customer base. Read more about R&D on page 11. Electrolux Professional Group has a diverse base of customers ranging from cafés to launderettes, restaurant chains and institutions. Addressing customer needs > Simplification, faster speed, and flexibility of overall operations > Improved quality of the food, beverage, and laundry service > Reduced energy consumption and carbon footprint > Lower total cost throughout the lifecycle of the equipment > Handling post-pandemic labor shortages > Reliability of the equipment > Ergonomic and human-centric design > Enhanced hygiene requirements P. 23Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sales Global trends and markets INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS Global trends impacting our industry The global professional equipment industry Customers Sales Customer Care Our markets Marketing and brands BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sales Our products are mainly sold through a global network of dealers and distributors, but also directly to end customers. The majority of the products sold are replacement products, meaning the end customer only buys one or a few products to replace existing products. The rest of the sales is mainly comprised of Project sales defined as full installations such as a launderette or a fully equipped restaurant kitchen that needs a complete refurbishment, as well as new builds. Sales via dealers/distributors A distributor or dealer buys our ready-made products without any specific customer specifications. We aim to to keep track of the products through the dealers or through our service-partners who perform installations, commissioning, warranty activation, service, and maintenance. The distributors/dealers sell the solutions to end customers (such as restaurant chains or launderettes). Customized products via dealers/distributors The end customer deals directly with us regarding their product requirements. If needed, we customize their products and agree on pricing. This can be for single products or full projects. The end customer places the order with a distributor or dealer who in turn orders the products from us. Direct sales to end users We talk to the end customers and agree on specifications and pricing and we invoice the end customers. This sales process is used in specific countries, for some large customers, or for large projects where the distribution infrastructure is not well developed. Digital sales Our dealers and distributors can also place orders on our digital customer platform, a customer portal combining e-commerce, ser- vice digitization, and connectivity, now launched in 32 countries. It is a seamless, one-stop, self-service way for customers to interact with us. From this self-service portal, partners can place orders for products, consumables and spare parts, track shipments in real time, search for documentation or products, and digitally interact with us on any support case, which can be monitored through a ticketing system. In addition, they can see the status and use of their connected products. Channels to market - Food & Beverage Our products are normally sold in three different ways: Direct sales Electrolux Professional Group Independent reps. (only in the US) Dealers Distributors Independent Institutional Chains SERVICE / CUSTOMER CARE CHANNEL Spare parts, Accessories and Consumables P. 24Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Customer Care Global trends and markets INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS Global trends impacting our industry The global professional equipment industry Customers Sales Customer Care Our markets Marketing and brands BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Customer Care To maintain the highest customer experience throughout the ownership period of professional equipment, Customer Care assists customers with support services and products throughout the entire lifetime of customer ownership. Electrolux Professional Group offers Customer Care in more than 110 countries via 2,200 service partners in a hybrid model of our own service technicians and contracted service partners. Essentia - the heart of Customer Care Our Customer Care services are brought to mar- ket under a differentiated portfolio – Essentia. The Essentia service offering is built on the basis that the Original Equipment Manufacturer is best suited to understand and handle require- ments for supporting the efficiency and long life of its own equipment. By offering sustainable upgrade solutions to the marketplace we also ensure that the initial customer investment in our products endures for a longer time. Two Pairs of Eyes Through Two Pairs of Eyes, we provide our customers remote guid- ance with a seamless connection between their field service engi- neers and our technical experts. Service Network 2,200 authorized service partners provide a unique service network to make our customers’ work-life easier, supported by a full range of original spare parts and digitally augmented tools to ensure faster troubleshooting and issue resolution. Service Agreements Choice of flexible, tailor-made packages, based on the customer’s business needs, offering a variety of maintenance and support services throughout the customer ownership lifetime. Detergents Performance-enhancing consumables, including eco-certi- fied detergents, are developed and sold under the Electrolux Professional brand. A low environmental impact is ensured through reduced water pollution, waste production, and energy consumption compared to standard products on the market. Spare parts and maintenance kits Maintenance and spare parts kits contain all the preventive maintenance parts to service the equipment according to the maintenance schedule under normal usage conditions. In addition, refresher kits are provided to lengthen the service life of our equipment. Original Accessories & Consumables Quick dispatch of original accessories and consumables rigorously tested by our experts to ensure durability and performance of customer equipment. P. 25Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Our markets Global trends and markets INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS Global trends impacting our industry The global professional equipment industry Customers Sales Customer Care Our markets Marketing and brands BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Our markets Well-positioned in attractive markets Electrolux Professional Group's two reportable segments Food & Beverage and Laundry in- cludes five business areas focused on customer categories and geographies: Food Europe, Food Americas, Food APAC & MEA, Beverage & Food Preparation, and Laundry. Europe In Europe, we have 24 sales companies across the continent. The largest countries are Italy, France, Sweden, and Germany. 80% of sales are handled via distributors and agents. 20% of sales are served by our own sales organizations, mainly via key accounts and large projects. Our business priority is to leverage our strong market presence in Europe, to continue to grow both in the markets where we are well positioned, and in the markets where we see additional opportuni- ties for growth, such as in the UK, France and Germany. Americas In the Americas, large chain accounts, including our main distrib- utor within Laundry, are served through a direct-sales team while the broad institutional markets such as schools, healthcare, insti- tutions, and restaurants, are served through independent sales representatives working in partnership with dealers and consultants. Additionally, there is a network of distributors across the Americas selling and stocking products locally for quick shipments. Asia-Pacific, Middle East and Africa We have sales companies in ten countries in the region. The major- ity of sales are handled via an indirect distribution network, supple- mented by some of our own sales activities when needed. After the acquisition of TOSEI in January 2024, Japan is our largest market in this region. AMERICAS Well-positioned in Food, Laundry, and Cold Beverages in the US. Share of Group sales, 2023 27% EUROPE One of the leaders in Food, Beverage and Laundry, with strong brand recognition. Share of Group sales, 2023 61% APAC One of the leaders in Laundry and in Food & Beverage in China/South-east Asia with strong brand recognition in hotels and restaurant seg- ments in the whole APAC region. MIDDLE EAST AND AFRICA One of the leaders in Food with strong brand recognition in hotels and restaurant segments. Share of Group sales, 2023 12% P. 26Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Marketing and brands Global trends and markets INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS Global trends impacting our industry The global professional equipment industry Customers Sales Customer Care Our markets Marketing and brands BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Marketing and brands In order to meet the needs of the market, Electrolux Professional Group holds a portfolio of 19 distinct brands targeting diverse customers in different parts of the world. Electrolux Professional is our largest brand. Tailored marketing strategy backed by global strength Our marketing is tailored to each geography and distribution chan- nel. Promoting and strengthening the Electrolux Professional Group's brands and reputation through a targeted marketing strategy, com- plemented by a structured sales process and organization, is key to our success. Marketing initiatives include marketing automation, performance and brand building via a 360-degree approach and omni-channel execution, collaboration with schools and industry associations, cooperative distributor merchandising, digital marketing, and marketing at industry events. Brands Electrolux Professional Group is our corporate brand which we use when presenting the company to external stakeholders. The main business brand (“master brand”) of the Group is Electrolux Professional, which includes all categories within Laundry, Food, and Beverage. Electrolux Professional is our master brand With our master brand, Electrolux Professional, we provide a global product and service offering consisting of integrated solutions and services across Food, Beverage, and Laundry – under one brand – allowing customers to manage their oper- ations through connectivity and one digital ecosystem. This also includes management of the entire value chain, from project planning and design to production, installation, Customer Care, and service. In addition to our master brand, we have specialty brands to gain access to specific markets and categories. These are locally managed brands that have high brand awareness and legacy amongst customers in the local markets and channels. The Electrolux Professional Group brand The corporate brand Electrolux Professional Group has been intro- duced to clarify the roles of Electrolux Professional as both a company and a business brand. This will also sup- port the development of the other brands in the Group. The majority of sales remain under the Electrolux Professional brand, with its integrated portfolio of products and services across all categories. The other brands can add the tagline “part of Electrolux Professional Group” to benefit from being part of a larger Group. At the same time the corporate brand distinguishes the com- pany (Electrolux Professional Group) from the main business brand (Electrolux Professional). P. 27Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Marketing and brands Global trends and markets INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS Global trends impacting our industry The global professional equipment industry Customers Sales Customer Care Our markets Marketing and brands BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION The Master brand of the Group - the OnE trusted partner For single and full solutions – in Food, Bever- age, and Laundry. Electrolux Professional is the OnE trusted partner making your work-life easier, more profitable – and truly sustainable every day. Categories: All categories, full solution Segment: The master brand is approximately 50% of the company sales Geographical market: North America, Latin America, Europe, APMEA Your one and only Craftsmanship and bespoke detail are the hallmarks of Molteni. Each stove is a timeless masterpiece, handmade and tailor-made by expert artisans in our atelier to meet the customer's precise requirements. Categories: High-end Cooking Segment: Food Geographical market: North America, Latin America, Europe, APMEA Design that celebrates Italian cooking heritage Our products bring you know-how. Zanussi Professional – The reliable best friend for your kitchen solutions. Categories: Cooking, Dishwashing, Refrigeration Segment: Food Geographical market: Latin America, Europe, APMEA Born to last – since 1907 We help our customers build a reputation for great, healthy food by building equipment that stands the test of time. Not only does our equipment handle the rigors of commercial kitchens, but it also offers the industry’s most comprehensive, free onboarding program. Categories: Cooking Segment: Food Geographical market: North America Reach the next level of food quality and consistency with CapKold sous-vide & cook-chill systems. Categories: Cook/Chill Segment: Food Geographical market: North America Your fresh experience Whether customers want to peel, cut, slice, mince, mix, blend, knead, or whip – Dito Sama provides the desired output in less time. Categories: Food Preparation Segment: Food Geographical market: Europe, APMEA The dishwashing PROFESSIONAL Good value for money, reliable, trustworthy, honest, straight-forward, credible, account- able, multi-cultural. Categories: Dishwashing Segment: Food Geographical market: North America, Europe, APMEA A deeper clean - always We are worldwide leaders in continuous mo- tion washing. From produce to wares, we en- sure proper sanitation, while helping reduce food and labor costs to achieve a positive ROI and a more sustainable future. Categories: Ware and vegetable washing Segment: Food Geographical market: North America Your perfect fit Simply the best fitting, high-performing re- frigeration for your specific kitchen. Whether you need ready-made, custom, or anything in-between, you can count on Randell when you need it most. Categories: Refrigeration/Preparation Segment: Food Geographical market: North America Expertise and experience with respect for the environment For over 40 years Alpeninox has preserved the heart of your kitchen, the food, with ex- pertise and experience. Alpeninox is the ideal solution for all refrigeration. Categories: Refrigeration Segment: Food Geographical market: Europe Synonymous with quality and performance Kelvinator Commercial delivers a line of food service refrigerators and freezers for the Professional market, designed to provide years of trouble-free service in demanding commercial applications. Categories: Refrigeration Segment: Food Geographical market: North America Who we are Electrolux Professional Group is one of the leading global providers of professional food, beverage, and laundry solutions. 19 trustworthy brands In order to meet the needs of our markets, we use a portfolio of distinct brands, target- ing different customers and stakeholders in different geographies. P. 28Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Marketing and brands Global trends and markets INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS Global trends impacting our industry The global professional equipment industry Customers Sales Customer Care Our markets Marketing and brands BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Unique in coffee, since 1919 Uniquely crafting the evolution of custom- and service-fit coffee machines – since 1919. By transforming the Unic technology into the perfect cup of coffee time after time, we are making every customer location a unique place to go and to grow. Categories: Espresso, Bean-to-Cup Segment: Beverage Geographical market: North America, Europe, APMEA The Cool-To-Go experts in innovative beverage systems Feel our passion and savor the ultimate chilling experience thanks to our cold beverage dispensers. Whether you want a straightforward solution or the most advanced technology, our drink systems deliver the perfect pour every time. Categories: Cold Beverages, Slush Ice, Ice Cream Segment: Beverage Geographical market: North America, Latin America, APMEA Passionately designed beverage dispensers SPM, a front-runner in designing and man- ufacturing premium professional beverage equipment, from slush machines to soft-serve machines and hot beverage dispensers. Categories: Cold Beverages, Slush Ice, Ice Cream Segment: Beverage Geographical market: Latin America, Europe Built to last since 1955 Wascomat has earned its reputation through 60 years of reliability and solid performance in Laundry. Technologically advanced with relevant features, Wascomat is a solid investment when replacing old equipment or building a new business focused on long- term profitability. Categories: Laundry Segment: Laundry Geographical market: North America A partner you can rely on Innovation leader with more than 60 years of knowledge in the field of commercial washing and drying technology, Schneidereit Professional is responsible for the process reliability and optimal hygiene standards of our customers. Categories: Laundry Segment: Laundry Geographical market: Europe Smart Japanese technology creates technologies for life TOSEI's laundromat equipment line-up continues to evolve delivering even greater convenience. Categories: Washers and dryers Segment: Laundry Geographical market: Japan The TOSEI acquisition was completed in 2024. TOSPACK's line-up of vacuum packing machines is great for food preservation and is actively used in industry. Categories: Vacuum packing machines such as table-top, stationary, and fully automatic. Segment: Food Geographical market: Japan The TOSEI acquisition was completed in 2024. Increase efficiency, safety, and performance in your commercial kitchen with Avtec ventilation systems, conveyors, and utility dis- tribution solutions. Avtec delivers outstanding commercial ventilation equipment for the professional food-service industry. Categories: Ventilation systems, conveyors, and utility distribution solutions Segment: Food Geographical market: North America P. 29Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Business segments Business segments INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Business segments Food & Beverage 30 Laundry 35 P. 30Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Food & Beverage Business segments INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS Food & Beverage Laundry PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Food & Beverage Food & Beverage operates in the global professional equipment industry, offering food-service and beverage equipment and solutions to a wide range of customers, such as hotels, restaurants, retail points, schools, and hospitals. 64% Food & Beverage, share of Group net sales P. 31Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Food & Beverage Business segments INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS Food & Beverage Laundry PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainable food and beverage solutions The future of the planet relies on our ability to create smart solutions that use resources efficiently. Our solutions ensure that our customers can concentrate on their business, knowing they are doing everything in the most sustainable way. HeroDry free-standing dishwasher blower This is the ideal solution for the washing area. It supports customers who need to conform comply with international directives targeting a reduction in single-use consum- ables. Internal tests performed in our R&D laboratory comparing the average standard programs com- mon in the market with the eco cy- cle program in HeroDry, show that the HeroDry solution saves up to 60% in energy consumption. ecostoreHP Premium This solution reduces electricity con- sumption significantly. The Electrolux Professional ecostoreHP Premium refrigerated counter has an A-rated energy label, is climate class 5, and consumes just 560 kWh per year. Zanussi magistar oven series – consumption under control The Zanussi Magistar Combi ovens give customers a graphic display of water, gas, and electricity consump- tion, so they can keep an eye on progress in real time and schedule cooking in a more responsible way. The Cooking Optimizer is a new logical function that uses artificial intelligence to provide a set of op- tions for different dishes. This allows the oven to offer the most logical cooking sequence in order to opti- mize energy consumption while also saving time. SP Ultra sherbet and frozen ice cream dispenser The dispenser is built with patented (EP2680708 and related family) I-Tank technology which saves energy, improves cooling power, minimizes the effect of the external temperature on the product, and prevents the accumulation of ice or condensation on the outside of the bowl. R290 gas reduces the dis- penser's environmental impact and has a less aggressive effect on components compared to tradi- tional gas. The solution is sold both under the Electrolux Professional brand, and from SPM. P. 32Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Food & Beverage Business segments INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS Food & Beverage Laundry PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Organization Food & Beverage is divided into four business areas: Food Europe, Food Americas, Food APAC & MEA, and Beverage & Food Preparation. Market size and growth The total market for food and beverage equipment in 2023 is estimated at approximately USD 31bn. According to our estimates, the food service and beverage segment experienced a compound annual growth rate of around 3–4% from 2015 to 2019 before the pandemic, with growth in beverage being slightly stronger than food service. In 2022, as in 2021, the food and beverage market increased substantially after a decline of approximately 25% during 2020 due to the pandemic, which affected the hospitality industry heavily. In terms of sales, the global market returned to pre-pandemic levels during 2022, and 2023 demonstrated relatively good market growth. Besides this strong growth after the pandemic, growth has been affected by the push for energy efficiency, an increase in food safe- ty, environmental and food waste requirements, a focus on healthy products and menus, the drive for automation and workforce optimization, product innovation, and the rising importance of data management and digitalization. Our sales of food and beverage equipment largely depend on the level of our customers’ capital expenditure for new equipment, as well as expenditure related to appliance maintenance, refurbish- ment, and overhaul. Food The food market is seeing an increasing demand for more versatile food preparation equipment that can prepare a larger variety of meals. This is mainly due to a reduction in kitchen space and an increase in menu variety. Also, restaurant owners are looking to reduce the number of pieces of equipment used for daily opera- tions, thus requiring versatile machines. Recent years' economic downturns have forced many restau- rants to downsize or increase the prices on their menus, as well as change the composition of their menus to make things cheaper. In addition, many restaurants have had difficulties to find qualified kitchen staff. Beverage Growth rates are expected to be high in the beverage industry. This mainly stems from the impact of seasonal trends, stronger product diversification, and smaller average equipment size creating more space for multiple machines that are operated simultaneously. Within the beverage equipment sector, the market for espresso equipment has the most attractive medium-term growth outlook, while the market for non-frozen dispensers represents the largest sub-segment of the industry. The hot and cold beverage segments are largely equal in size. Key drivers in the professional food and beverage market Food USD 25bn Beverage USD 6bn FOOD & BEVERAGE USD 31bn * Own company calculations and estimates Food & Beverage equipment market 2023 Changing consumer food habits and delivery models Restaurant owners have gradually increased the variety in their menus in response to changing consumer food habits, which demands more versatile kitchen equipment. Furthermore, the take-away and delivery business models are heavy growth drivers. Total cost of ownership and environmental awareness There is a greater focus on the total cost of ownership as a purchase decision. Cost mainly includes energy, main- tenance, and food-waste related costs, as well as labor costs for operating the equipment. Connectivity Product automation and connectivity will help customers optimize their workforce and reduce labor costs, thus reducing total cost of ownership. New and innovative beverage trends Customers are moving towards healthier beverage options, and new and innovative products are emerg- ing. In mature markets particularly, such as Europe and North America, customers are shifting toward customized flavored beverages, with an increased demand for more versatile equipment. P. 33Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Food & Beverage Business segments INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS Food & Beverage Laundry PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Markets and customers In Europe sales are particularly significant in Southern Europe where we have a strong market position under the Electrolux Professional brand, in addition to other well-known historical brands such as Zanussi. We are also strong in this region in the coffee and bever- age segment with UNIC in France and SPM in Italy. In Asia-Pacific & Middle East and Africa our strength is in the high-end project environment. This means we are involved in larger installations in hotels and restaurants, and projects play a more important role in this region compared to Europe or the Americas. Beverage in the Asia-Pacific & Middle East and Africa region is fo- cused on the QSR and Convenience Store segments – building on a strong history in cold beverages in South-East Asia. In the Americas the focus within Food & Beverage has tradition- ally been on fine dining, projects, schools, and major chains. Net sales and EBITA margin Sales EBITA margin SEKm % 20232022 0 500 1,000 1,500 2,000 2,500 Q4Q3Q2Q1Q4Q3Q2Q1 0 5 10 15 20 25 Net sales total, Food & Beverages SEK 7,616m (7,290) EBITA SEK 766m (679) EBITA margin 10.1% (9.3) Net sales per market Europe 58% Asia-Pacific, Middle East, Africa 10% Americas 32% P. 34Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Food & Beverage Business segments INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS Food & Beverage Laundry PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Products for food service & beverage The key food-service applications of this segment are cooking, refrigeration, dishwashing, and dynamic food preparation. Our key products include ovens, blast chillers, cooking ranges, refrigerated cabinets and counters, freezers, cutters, mixers, dishwashing equipment, and specialty accessories and consumables. The key beverage applications of this segment consist of equipment for coffee, espresso, hot, cold and frozen beverages, and soft drink dispensing equipment. Our key products include, coffee machines for espresso, coffee brewing and grinders, hot beverage dispensers, cold beverage and juice dispensers, frozen drink and soft- serve products. • Coffee grinders • Coffee brewers • Espresso machines • Hot beverage dispensers HOT • Cold beverage dispensers • Cold juice dispensers • Beer dispensing systems COLD • Frozen granita dispensers • Frozen ice cream dispensers FROZEN • Soft serve • Soft ice cream dispensers SOFT • Slicers & food processors • Vegetable washers • Spin dryers • Planetary mixers • Vacuum packers & sealers • Multi-purpose peeling machines DYNAMIC FOOD PREPARATION • Fryers • Boiling & braising pans • Grills & griddles • Steamers • Ventilation equipment • Modular cooking ranges • Fry tops • Combi ovens • Convection ovens • Made-2-Measure cooking suites COOKING • Refrigerated cabinets • Refrigerated counters • Saladettes • Cold rooms • Blast chillers REFRIGERATION Dishwashers: • Under -counter • Hood type • Rack type • Flight type • Blow dryer • Waste and dishware handling systems • Accessories DISHWASHING • Cabinets and cupboards • Work tables and shelves STAINLESS STEEL FABRICATION Products for food Products for beverage P. 35Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Laundry Business segments INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS Food & Beverage Laundry PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Laundry Laundry provides solutions designed for a range of professional users, from self-service coin-ops and the hospitality industry to healthcare providers and commercial laundries. Customers include hospital and hotel laundries, laundries in apartment buildings, and launderettes. 36% Laundry segment, share of Group net sales P. 36Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Laundry Business segments INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS Food & Beverage Laundry PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainable laundry solutions Clean linen demands the consumption of water, energy, and detergents. Our solutions use technology and innovation to build resource-efficient products that have a low environmental impact and keep customers ahead of the game in business sustainability. The upfront investment cost when purchasing a washing machine is only a small part of the overall cost of ownership. Operating costs accumulate year on year and in the end they make up the majority of the customer’s costs. Over the long term, our washing machines and tumble dryers cost less than most of our competitors’ products, which makes the initial investment more profitable. Sustainability Hero Heat Pump Tumble Dryer range Tumble dryers consume the most energy in a laundry. Electrolux Professional’s advanced technol- ogy behind the new heat pump range delivers up to 60% savings in energy consumption compared to a traditional dryer, without impacting the drying time. It thereby lowers the laundry’s carbon footprint without impact- ing productivity. Further savings in energy and drying time are achieved through the Adaptive Fan Control, a unique innovation that adjusts fan speed automat- ically. Estimated total cost of ownership of a washing machine over its lifetime Calculation is based on a typical washer (20 kg) and typical prices in Europe. Note that the figures differ depending on equipment, water, energy, and detergent costs in different markets. The figures refer to 2022. Equipment investment 10% Washing detergent and other chemicals 35% Energy 50% Water 5% Clarus Vibe laundry models Lower chemical & detergent consumption Detergents, chemicals, and utilities make up a large part of a commercial washing machine’s lifecycle cost. Intelligent features available on Clarus Vibe models eliminate over-dosing and improve the total cost of ownership. The Intelligent Dosing feature automatically adjusts the detergent based on load weight, while the Integrated Savings function provides real-time data to avoid over or underloading the machine. P. 37Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Laundry Business segments INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS Food & Beverage Laundry PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Organization Laundry is organized as one global business area since the custom- er segment is global. Market size and growth The total market for professional laundry equipment is estimated to be approximately USD 2.9bn in 2023. Prior to the pandemic, the market for global professional laundry equipment experienced annual growth of 2–3%, and this is expected to continue over the medium term. Market growth is mainly being driven by an increased focus on product sustainability and efficiency, energy labelling and certifica- tion requirements, good ergonomics, and the demand for appliance innovation and connectivity for better control, flexibility, and to be able to reduce the cost of labor. While these trends are evident worldwide, the importance of each varies from region to region. As more technologically-advanced equipment is introduced, major equipment replacement cycles are expected to take place. As a result of lower ownership costs, customers are expected to demonstrate more price flexibility. Customer service and after-market support are key competitive factors. * Own company estimates Two major market segments in Laundry The Laundry segment is divided into two main areas; the first is comprised of customers whose main business is professional laundry, and the second is made up of customers that consider laundry as a cost center. • Health care • Elderly care CARE • Building service companies FACILITY MANAGEMENT • Marinas • Sport & Leisure • Public ser- vices • Factories • Institutions SPECIAL ON-SITE LAUNDRY • Hotels • Restaurants • Catering HORECA (HOTELS, RESTAURANTS, CATERING) • Small hotels/ B&B’s • Hairdressers • Beauty shops • Sport centers SMALL BUSINESSES PROFIT CENTER • Heavy duty • Commercial laundries BUSINESS TO BUSINESS • Dry-clean- ing shops (chains and privately owned) BUSINESS TO CONSUMERS • Coin-ops • Laundrettes • Camping/ Marinas SELF-SERVICE • Apartment housing laundry - route operations • Student houses • Dormitories MULTI- HOUSING COST CENTER Sub-segments Sub-segments Key drivers in the professional laundry equipment market Reduced cost of ownership – especially energy costs Customers are increasingly looking for equipment that reduces operating costs. They are focusing more on the total cost of ownership of equipment rather than the initial investment, for instance costs for labor, electricity, water, and detergent. Greater environmental and climate awareness Many customers want to be able to meet environmental standards and desire lower water consumption, more efficient appliances, gentler detergents, and less impact from chemicals. Increased demand for flexible business models Functional sales or equipment rentals are gaining traction in the market. Demand for equipment rental is rapidly accelerating, particularly in Europe and especially from smaller companies. P. 38Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Laundry Business segments INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS Food & Beverage Laundry PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Markets and customers In Europe we are one of the leading laundry equipment players with the most significant sales being in Sweden, where the majority of customers are property owners with laundry rooms. During and since the pandemic we have seen an increased focus on hygiene, in particular within elderly care homes and hospitals, which has been a contributing factor to our sales growth. In the Asia-Pacific, Middle East and Africa region, sales come from an equal mix of laundrettes, hotels and recreation, and elderly care homes and hospitals. After the acquisition of TOSEI in January 2024, Japan is the country in the region with the largest sales. Our business in North America has traditionally been heavily weighted towards laundromats, with good growth in the other segments too. We are one of the market leaders in the US. EBITA SEK 702 m (608) The most important products in the segment include equipment for laundry, drying, and ironing. Our major products are washers, tumble dryers, drying cabinets, ironers, and related specialty accessories and consumables. • Front-load washers • Efficient dispensing systems • Barrier washers • Semi-professional washers LAUNDRY • Tumble dryers • Drying cabinets • Semi-professional dryers DRYING • Ironers • Finishing machines IRONING Laundry products Net sales and EBITA margin Sales EBITA margin SEKm % 20232022 0 200 400 600 800 1,000 1,200 Q4Q3Q2Q1Q4Q3Q2Q1 0 5 10 15 20 Net sales total, Laundry SEK 4,231 m (3,747) EBITA margin 16.6% (16.2) Net sales per market Europe 66% Asia-Pacific, Middle East, Africa 17% Americas 17% P. 39Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Our production Production INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Our production Operational excellence 40 Quality 43 Logistics 43 Purchasing 43 P. 40Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Our production Production INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION Operational excellence - Quality - Logistics - Purchasing OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Operational excellence The Group’s manufacturing units are organized by product category to ensure proximity and agility to serve customers. Our three largest factories, Vallenoncello in Italy, Ljungby in Sweden, and Rayong in Thailand, produce for the global markets. The other plants mainly serve regional markets, some of them with solutions already adapted for the global markets, and have significant growth potential. OUTCOME 2023: Several projects to improve productivity and decrease costs have been carried out during the year. These include automatization, lean workshops, improved quality, and greater consolidation of the supplier base. This has resulted in an improved gross margin. In addition, several activities have been implemented in the factories to decrease CO 2 emissions. P. 41Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Our production Production INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION Operational excellence - Quality - Logistics - Purchasing OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Highest possible efficiency, flexibility, and performance standards We have been focusing on agility in our supply chain, resulting in a normal, standard manufacturing lead time of three days from pro- duction to ready-to-deliver, for a significant portion of our products. Our ability to adapt the production capacity and structure of our plants to customer demand, and establish network abilities between the sites, is key to maintaining control and generating cost savings. Our network is built on common standards and methods, based on the World-Class Manufacturing Framework. The tools and the logic are retained through this framework, from choosing the right priorities to creating tangible and measurable results with a focus on sustainability, customer satisfaction, and cost reduction. We continuously evaluate our manufacturing footprint to ensure all processes meet the highest possible efficiency, flexibility, and performance standards. Modular production Standardization and modularization are key factors for achieving the highest level of customization at the lowest cost and use of resources. The modularization model is based on product design and brings about a new set-up for the supply chain, which improves efficiency. ISO-certified plants Our target for all of our logistics, manufacturing, and R&D opera- tions is to be third-party certified according to ISO (International Organization for Standardization) standards ISO 9001 and ISO 14001. Some sites are also ISO 50001 and ISO 45001 certified. Reduced energy and water consumption in operations All our manufacturing sites are progressing with their sustainability efforts. This includes a systematic approach to the responsible use of resources, occupational health and safety, and environmental management. We leverage a consolidated set of standard tools and methods, and also encourage the highest possible engage- ment from our employees. One of our important future priorities will be to reduce our impact from waste within our manufacturing. During 2023 we have reduced energy consumption by 10%, and water consumption by 4.5% from the previous year. We are currently operating with a 45% share of renewable energy. All manufacturing sites in Europe operate with renewable electricity. For sites outside Europe, our focus is on increasing the share of renewable electricity. ISO certification – share of production volume covered by third-party certification (Excluding Unified Brands) ISO 9001 100% ISO 14001 98% ISO 50001 75% ISO 45001 75% P. 42Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Our production Production INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION Operational excellence - Quality - Logistics - Purchasing OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Vicksburg Weidman Rayong Shanghai Ljungby Vallenoncello Spilamberto Sursee Troyes Aubusson Saint-Vallier Carros Izinuokuno Shizuoka Location Primary product category Products produced Vallenoncello, Italy Food solutions • Refrigeration: counters, cabinets, blast chillers, roll-ins, saladettes • Oven range • Modular cooking: grills, fry tops, braising pans, fryers, pasta cookers, pans, neutral tops, solid tops, burners, open bases, induction, hobs • Dishwashers: hood types, rack types, under counters, glass washers Ljungby, Sweden Laundry • Washers • Dryers Rayong, Thailand Beverage Laundry • Coffee brewers • Cold beverage and juice dispensers • Washers • Dryers: single, stacked Carros, France Beverage • Espresso coffee machines Troyes, France Laundry • Washers, ironers Aubusson, France Food solutions • Dynamic preparation: planetary mixers, cutters, peelers, vegetable cutters, display cooking Saint Vallier, France Food solutions • Made-to-measure stoves Sursee, Switzerland Food solutions • Modular cooking: grills, fry tops, braising pans, fryers, pasta cookers, pans, neutral tops, solid tops, burners, open bases, induction, hobs • High-capacity cooking: tilting, boiling, and braising pans • Made to measure stoves Spilamberto, Italy Beverage • Hot and frozen beverage dispensers • Soft ice cream dispensers Shanghai, China Food solutions • Dishwashers: hood types, rack types, under counters, flight types Vicksburg, Mississippi, United States Food solutions • Preparation, cooking and washing systems (ware and vegetable washing) • Steamers, kettles, and braising pans Weidman, Michigan, United States Food solutions • Refrigeration and preparation tables; standard and made-to-measure solutions Izinuokuno Shizuoka, Japan Laundry, Food solutions • Washers and dryers, mainly for laundromats (Coin-ops) • Vacuum packing machines such as table-top, stationary and fully automatic Manufacturing sites Food solutions Beverage Laundry Global manufacturing site The acquisition of TOSEI was completed in January 2024 P. 43Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Our production Production INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION Operational excellence - Quality - Logistics - Purchasing OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Purchase categories direct materials, 2023 Mechanical 52% Electronics 34% Chemical 13% Quality In 2023 we continued to focus on quality and we had a low rate of product complaints. Electrolux Professional Group’s zero quality-defect product approach is part of the Electrolux Professional production system. It embodies a philosophy of defect-free, reliable, cost-effective appliances that exceed customers’ quality expectations. In accor- dance with our quality policy, we are committed to marketing prod- ucts that are of such high quality that this alone would be a defining reason for customers to choose our products over the competition, whether it’s a first-time buy, recommendation, or repurchase. Logistics The aim of the logistics organization is to serve customers with the right products and parts, on time, at the lowest possible cost. This is delivered through effective and prompt customer order manage- ment, an efficient global planning organization, and a comprehen- sive global distribution network, including efficient management of finished goods and spare part inventories. Logistics hubs The outbound infrastructure is organized into four logistics hubs that currently serve 110 countries. The two main global logistics hubs dis- tribute more than half of all our products and are based in Europe, one in Italy for Food & Beverage and one in Sweden for Laundry. One regional hub is based in Singapore to cover the APAC region, while a second regional hub, located in Louisville in the US, serves the market in North America. Purchasing We purchase a wide range and large volumes of raw materials and components from external suppliers. We monitor the quality and reliability of these suppliers closely. Electrolux Professional Group contracts around 3,300 suppliers. Purchased materials represent about 68% of our product costs. Steel, both austenitic and carbon steel, and mechanical compo- nents are traditionally the largest commodities, while electronics have increased substantially in recent years. Mitigating risks In order to mitigate potential negative impacts due to price fluctua- tions and to secure availability, we negotiate annual prices through contracts with the main producers for the most important raw ma- terials, such as steel. The vast majority of our purchases are direct materials such as mechanical, chemical, and electrical components. Electrolux Professional is focused on strategic sourcing of raw materials from several suppliers in order to minimize supplier risk and dependency on certain suppliers. At the same time, there are cost-saving opportunities from the planned consolidation of our relatively large supplier base, which has increased due to recent acquisitions. Purchasing approach Our purchasing approach is a balance between effectiveness, quality, agility of deliveries, and the ability to reduce cost. This is a core activity involving suppliers, R&D, and Industrial Operations. We evaluate our preferred suppliers not only on their capability to deliver today, but also on their ability to be partners in the journey of continuous innovation. Purchasing in 2023 In 2023, expenditure on direct materials and products was approx- imately SEK 4.1bn, which accounts for approximately 58% of total purchasing. The direct materials bought in 2023 were primarily mechanical materials such as steel, aluminum, and cast iron, amounting to ap- proximately 36% of total direct material expenditure. The Power-of-zero framework Our quality framework supports the use of standardized design tools and practices and the performance of product and process audits. The framework is based on the “power of zero”, meaning zero quality defects, zero service call rate, and zero safety issues. Making quality an integrated part of the entire organization involves generating a mindset that focuses on preventative and proactive activities – to the point of identifying unknown problems before they even occur, rather than maintaining a reactive approach. P. 44Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Our people Our people INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Our people Our people 45 Guiding principles 46 Engagement and development 47 P. 45Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Our people Our people INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE Our people Guiding principles Engagement & development SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Our mission is to make our customers’ work-life easier, more profitable – and truly sustainable every day. This can only be accomplished through our greatest asset – our people. Employees by region Europe 68% Asia-Pacific, Middle East, Africa 15% Americas 17% Satisfaction rate 73 (70) Number of employees 3,978 Women/men, % 32/68 P. 46Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Our people Our people INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE Our people Guiding principles Engagement & development SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Our Guiding principles Our Guiding Principles aim to support our mission and strategy by giving direction to our behaviors. By clearly stating the behaviors we want to see, we drive the company identity and culture. Our actions and decisions throughout the company should reflect and be aligned with these principles. Be customer obsessed Our customers are at the heart of everything we do. In our definition, our customers are our external end cus- tomers, as well as the colleagues who are impacted by our actions and who benefit from our work – and we value both. Build trust We believe that trust is an essential element for our busi- ness and our people to thrive. We welcome healthy de- bates and honest conversations in which everyone has a voice and is encouraged to use it, regardless of hier- archy. We are honest about our mistakes and learn from our setbacks. We seek commitment and accountability, and value honesty, integrity, and ownership. Be bold Everyone is empowered to take action to deliver better outcomes at Electrolux Professional Group. We take risks with confidence and support courageous decision-making that inspires progress and growth. New perspectives and ideas are welcomed and we approach them with an open mind. We appreciate and respect our cultural differences and embrace all people – irrespec- tive of race, ethnicity, or gender. Act sustainably We consider the development of our people to be as important as preserving our environment, and we take decisions that reflect our desire to build a better future. We aim to reduce our negative environmental and social impact by developing innovative and sustainable solutions to enable future generations to live more sustainably. Employee surveys We conduct an extensive, company-wide Employee Engagement Survey (EES) annually. The survey provides long-term and in-depth insights about the organization by measuring a variety of indices to provide a perspective on the health of the organization, its employees, and its leaders. In October 2023, 91% of our employees expressed their opinions through the EES, compared to 88% in 2022. The satisfaction rate, High Performance Organization index, rose to 73% (70). Based on the results of the EES in 2022, the following areas were prioritized for improvement: people development, collaboration, and renewal climate. The results of the 2023 EES indicate that there was progress in all these areas, and also in the area familiarity with strategy. Diverse and inclusive organization We recognize and seek diversity in all its forms. It is paramount to our business success that we have a wide and diverse perspective on matters. We also believe that an open, fair, and inclusive work environment will drive higher engagement and better growth and development for our employees. In the 2023 EES, 74% of our em- ployees agreed with the statement “In my team, people with diverse backgrounds, styles, and approaches have equal opportunities for development“, which is an improvement since 2022, when it was 69%. We monitor gender diversity, and we have clear and cascaded objectives to increase gender diversity. All employees must be treat- ed according to their abilities and qualifications in any employment decision, including hiring, promotion, compensation, training, and termination. As part of our commitment to having a diverse and inclusive workplace, we have zero tolerance for harassment and bullying. All employees must treat each other with respect, dignity, and common courtesy. Our ethics framework has been designed to provide guidance to our employees in applying the Electrolux Professional Code of Conduct. Employee satisfaction survey rate, satisfied or very satisfied % 76% 76% 73% 71% 70% 73% 0 20 40 60 80 202320222021201920182016 P. 47Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Our people Our people INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE Our people Guiding principles Engagement & development SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION A new and more flexible work-life We have stayed with our bold decision to show trust in our em- ployees with regards to their choice of place to work. Those whose work activities allow may choose where they work for part of their working time per month. We recommend and prefer that employees come to their workplace at least half of the time since it is important for team collaboration and for personal and informal interactions, However, we do allow for less presence. Development Talks Development Talks originated in the long-standing performance management process, in which performance objectives were set once per year and evaluated at the end of each calendar year. During 2022 we evolved and implemented a version of this process which underlines the criticality of employees’ develop- ment to the company’s continued success. It also reflects a new way of working focused on prioritization and deliverables, and encompasses regular check-ins to monitor progress and fine-tune priorities. During 2023 we have further enhanced this process by enabling system support through our HR information system, PeoplePro. Development Talks is a process to ensure accountability and contributions from each employee. It is underpinned by the princi- ple of trust and by the belief that highly engaged employees with a growth mindset will take excellent care of their jobs, the company, and our customers. It is an employee-driven process, where it is up to the employee to take the initiative and act. The process en- compasses regular dialog between employees and their managers about key business priorities, how employees can contribute, and opportunities for employees to do things differently to strengthen their skills, increase their impact, and secure their long-term success. Reporting misconduct All employees can report conduct that they believe, in good faith, to be a violation of laws or our Code of Conduct (CoC), to their manager or in accordance with locally established procedures. Misconduct and violations of the Code of Conduct or Group pol- icies can also be reported through our third-party provider's web tool called EthicsPoint. Anyone reporting a violation will, to the ex- tent legally permissible, be able to remain anonymous if they wish. In 2023, 12 reports were received via the whistleblowing tool, EthicsPoint, and other channels. The reports mainly concerned workplace conduct. All cases were thoroughly investigated accord- ing to the established procedures, under the instruction of the Code of Conduct Steering Committee consisting of the CHRO, the Head of Internal Audit and the General Counsel, and reported to the Audit Committee. The majority of the cases led to actions to mitigate further discontent, although the majority were deemed not to be violations of the Code of Conduct. We also measure incidents of discrimination and harassment through our annual EES. Based on these results, actions are planned to address the culture and behaviors in the locations we deem necessary. During 2023, 82% of the employees completed the CoC training. A safe and healthy workplace Given that our employees are the single most important factor in achieving long-term success, we are committed to continuously developing a work environment that enables sustainable perfor- mance and development so that all employees can deliver their best. Our commitment to health and safety goes beyond ensuring compliance with rules and legislation. The Group Workplace Directive describes the minimum requirements for environmental and working conditions for all employees. According to our annual EES in 2023, 82% of our employees agree with the statement “Health and safety is always considered in the decisions and actions taken in my team”, which is an improvement of one percentage point since the survey result in 2022. Number of employees On December 31, 2023 Electrolux Professional Group had 3,978 employees in 33 countries. We had twelve manufacturing sites including R&D centers. The biggest countries in terms of number of employees are Italy, the US, and Sweden. Age distribution employees <30 >50 8% 42% 30–50 50% Gender distribution Women 32% Men 68% Worker distribution Production workers 41% Non-production workers 59% Leadership diversity Women 27% Men 73% 31 December, 2023 Engagement and development P. 48Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainability Report Sustainability Report INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability Report 2023 activities 49 Our sustainability framework 50 Strategy and targets 53 Sustainable Development Goals 54 Sustainable solutions 55 Sustainable operations 58 Ethics and relationships 63 Sustainability notes 149 Sustainability is a key part of our strategy, culture, and day-to-day operations. We want our solutions and operations, today and tomorrow, to support a more sustainable world, and we use the UN’s Sustainable Development Goals (SDGs) as our compass to guide what we do to contribute to a better society. P. 49Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 2023 activities Sustainability Report INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY 2023 activities Our sustainability framework Materiality assessment Strategy and targets Sustainable Development Goals Sustainable solutions Sustainable operations Ethics and relationships GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION 2023 activities > The Science Based Targets initiative validated our Scope 1, 2, and Scope 3, Category 11 greenhouse gas emission targets. > We retained B score in the Carbon Disclosure Project Ranking (CDP). > We retained a reduced ESG-risk rating by Sustainalytics, Morningstar, Low risk 10.8 (13.8). > Following the devastating earthquake in Turkey and Syria in the beginning of the year, Electrolux Professional Group donated EUR 10,000 to the Red Cross to support the organization's work for earthquake survivors. > We also donated cooking equipment in partnership with Mercy Chefs US, an organization providing relief efforts for those displaced in the Turkey-Syria region. > On September 8, central Morocco was hit by an earthquake causing widespread devastation. We donated products to support humanitarian organizations in preparing food for survivors. > Application submitted for our Shanghai operations to participate in the I-REC system, targeting 100% use of renewable electricity plant. > Signed contract for solar subscription for our Mississippi plant in October to increase the share of renewable energy. > Initiated pilot projects from the winner of the internal sustainability challenge initiative, 2022, to make a positive impact on the environment. > Completed decarbonization project studies in 5 of our 12 plants, with the objective of reaching our emission reduction targets. > We identified salient human rights issues through a human rights due diligence process, in accordance with the EU Corporate Sustainability Due Diligence Directive (CSDDD) and the EU Taxonomy. Read about the outcomes on page 66. > Preparations for implementation of a digital reporting platform for sustainability data were carried out. This to ensure reporting in accordance with ESRS (European Sustainability Reporting Standards), starting from 2024. > Launched the dishwashing Hero Dryer solution, a free-standing blower to help dining-in or take-away restaurants to move away from single-use plastics, in line with the EU regulations. P. 50Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Our sustainability framework Sustainability Report INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY 2023 activities Our sustainability framework Materiality assessment Strategy and targets Sustainable Development Goals Sustainable solutions Sustainable operations Ethics and relationships GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Our Sustainability framework shows how we work with our material sustainability topics. We perform impact analyses and strategic assessments, which together with stakeholder expectations and dialogs, serve as the basis for our sustainability efforts and materiality analysis. Read more about our material topics on pages 56–65. Product performance and efficiency Grow the business by developing sustainable, innovative solutions that have low running costs. Read more on page 55. Sustainable solutions Material efficiency Customer health, safety, and wellbeing Responsible use of resources Operational excellence drives sustainability. Read more on page 58. Sustainable operations Occupational health and safety Environmental management Enabling business through trust and relationships. Read more on page 63. Ethics & relationships Ethical practices Stakeholder relationships 1 2 3 The Sustainable Partner P. 51Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Our sustainability framework Sustainability Report INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY 2023 activities Our sustainability framework Materiality assessment Strategy and targets Sustainable Development Goals Sustainable solutions Sustainable operations Ethics and relationships GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Our guiding principles Be customer obsessed Build trust Be bold Act sustainably Read more on page 46. Our sustainability commitment We act according to our ethical principles. We constantly strive for improvement throughout our value chain. We act fairly and uphold the trust we are given by our stakeholders. Making our customers’ work-life easier, more profitable – and truly sustainable every day Mission Strategic framework We want to do our part to improve society and generate value for our stakeholders. We believe that the Agenda 2030 and the UN’s Sustainable Development Goals (SDG’s) are good indi- cators of the priorities and challenges that the world is facing. Electrolux Professional Group has identified six SDGs where we believe we have a greater impact and opportunity to make a difference. Read more on page 54. We also believe that commitment to, and application of, standardized frameworks such as the UN Global Compact, ILO Convention, GRI, and ISO standards simplifies the understanding and fulfillment of stakeholder expectations. P. 52Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Materiality assessment Sustainability Report INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY 2023 activities Our sustainability framework Materiality assessment Strategy and targets Sustainable Development Goals Sustainable solutions Sustainable operations Ethics and relationships GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Materiality assessment 2023 Stakeholder Form of dialog Important topics Generated value Customers and users • Ongoing dialog to understand requirements. This dialog takes place during customer visits, requests for quotations, fairs etc. We also do more systematic studies and measure the Net Promotor Score (NPS) • Quality • Energy consumption and carbon footprint • Total cost of ownership • Reliability of the overall equipment system • Ergonomics and human-centric design • Enhanced hygiene requirements • Easier work life, profitability, low consumption, and environmental footprint. See more on pages 7, 21–28, 31, 36. Employees • Ongoing dialog with employees and unions through our man- agers • Systematic dialog within our people performance and devel- opment process • Employee engagement surveys • Health and safety • Diversity and inclusion • People development • Competitive compensation, sustainable working environment, learning and development. • Strengthened leadership See more on pages 7, 45–47. Investors and owners • We communicate through direct meetings, questions, ESG surveys, capital market days, and the Annual General Meeting where a dialog can take place. Our largest sharehold- er is also a member of the Board of Directors • Ethical business practices • Diversity and inclusion • Health and safety • Climate action • Supply chain management • Reduced risks and long-term value generation. See more on pages 7, 164–167. Suppliers • Dialog with suppliers is mainly conducted through supplier meetings, negotiations, and discussions • Information gathered about suppliers during the RFQ phase • Signing of our supplier workplace standard • Labor conditions • Health and safety • Environmental management • Jobs, mutual benefits, and reduced risks. See more on pages 7, 43, 64–65. Society and local communities • Contacts with local communities regarding local environmental requirements • Monitor public opinion and changes in legislation • Environmental impact • Social impact • Contribution to local community • Taxes and reduced carbon footprint. See more on pages 7, 60–62, 64–65. Academia and NGO's • Participation in networks, meetings, and partnerships • Sustainable innovation • Strategic partnerships • Mutual benefits • Mutual benefits and development of opportunities. See more on pages 52, 59. We based our materiality assessment on a stakeholder engagement process that encompassed workshops, interviews, and other forms of dialog. By seeking perspectives from diverse stakeholders, we gained a deeper understanding of different sustainability topics and their severity and likelihood. The 2023 sustainability report is based on the material topics identified below: P. 53Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Strategy and targets Sustainability Report INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY 2023 activities Our sustainability framework Materiality assessment Strategy and targets Sustainable Development Goals Sustainable solutions Sustainable operations Ethics and relationships GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainable operations Improve sustainability performance within our operations through proper management and a systematic approach, with an em- phasis on improving our environmental and social performance every day. Sustainability strategy Sustainable solutions Set the pace in the professional food, beverage, and laundry industries, through innovations in sustainability and energy efficiency, underpinned by a connected and digital platform to meet customer needs. Ethics and relationships Maintain strong and sustainable relation- ships with the stake holders impacted by our business, and demonstrate our commitment through actions and procedures. Our climate ambition for 2030 To become climate neutral within our industrial operations by 2030. Sustainability targets Climate target for 2025 Health and safety target for 2025 Gender diversity target for 2030 Reduce CO 2 emissions Scope 1 and 2 emissions from our industrial sites >50% by 2025 (base year 2015) Lost time injury rate (LTIR) As measured by work-related accidents per 200,000 work hours <0.3 by 2025 Gender diversity Distribution men/women or women/men 40/60 Distribution across managerial positions by 2030 OUTCOME 2023: The number of accidents resulting in lost work time decreased bringing us closer to our target, at 0.54 (0.64). Comment on 2023 outcome We continued to address the root causes of accidents, working proactively with near misses and unsafe actions. OUTCOME 2023: The percentage of women in all managerial positions in 2023 was 27% (26). Comment on 2023 outcome Gender diversity across managerial positions improved somewhat.. Activities related to diversity and inclusion, such as training and support for hiring man- agers have increased during the year. OUTCOME 2023: Scope 1 and 2 CO₂ emissions in 2023 amounted to 4.25 (6.2) kton, which is -62% compared to 2015 with a recalcu- lated baseline. Comment on 2023 outcome Strong focus on switching to renewable energy, and full capacity generation of renewable electricity in Rayong, made it possible to reach the 2025 target two years ahead of time. Reduce CO 2 emissions Scope 1 and 2 emissions from our industrial sites >70% by 2030 (base year 2019) Science-based climate target for 2030 OUTCOME 2023: With a recalculated baseline the reduction since 2019 is 50%. Comment on 2023 outcome A solar panel subscription in the Missis- sippi plant, a reduction in natural gas consumption, and improved produc- tion efficiency helped us reduce our emissions. Reduce indirect use-phase emissions of sold products Scope 3 emissions >27.5% by 2030 (base year 2019) OUTCOME 2023: In 2022 (2023 result not yet avail- able) Scope 3 emissions, Category 11 amounted to 5,302 kt, a 16% reduction compared to 2019, with recalculated baseline. Comment on 2023 outcome During 2023, we developed our Scope 3 product-use emission reduction target, and it was validated and approved by the Science Based Targets initiative. The reduction in emissions was due to lower volumes and grid improvement. * Including Unified Brands, which was acquired in 2021. ** Recalculation is made by distributing the first reported emission footprint backwards to previous years. P. 54Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainable Development Goals Sustainability Report INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY 2023 activities Our sustainability framework Materiality assessment Strategy and targets Sustainable Development Goals Sustainable solutions Sustainable operations Ethics and relationships GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Other SDGs relevant to us SDG 3 – Health and wellbeing SDG 11 – Sustainable cities and communities SDG 16 – Peace, Justice and Strong Institutions SDG 17 – Partnerships for the goals SDG 7 Clean and affordable energy SDG 13 Climate action We can make a difference throughout our value chain by de- veloping energy-efficient products and working with energy efficiency in our operations. Our main actions > Energy-efficient and low- consuming products > Implement alternatives to HFC (Hydrofluorocarbon) gases > Gradual shift from natural gas to renewable energy use in our operations. > Energy efficiency improvements in all our operations to reduce the overall energy demand and switch to renewable electricity. SDG 8 Decent work and economic growth Knowing that our employees are the single most important factor in achieving long-term success, we are committed to continuously de- veloping a work environment that enables sustainable performance where all employees can deliver their best. Our main actions > Occupational Health and Safety program > User ergonomics and product safety integrated in product de- velopment, including third-party certifications > Drive employee engagement > Zero tolerance for slavery, hu- man trafficking, and child labor > Respect labor rights (ILO conventions) SDG 12 Responsible consumption and production To reduce the environmental footprint related to our products and operations, we have a major focus on developing sustainable products for our customers. Our main actions > Environmental performance in operations (water, energy, waste etc.) > Efficient use of materials > Sustainable innovations and product efficiency SDG 6 Clean water and sanitation As a number of our products consume water, we can make a difference by developing and offering water-efficient products. Our main actions > Provide more water-efficient/ low-consuming products > Improve water efficiency in our own operations, with a special focus in water-risk countries > Management of water discharge to control quality and destina- tion SDG 5 Gender equality We value diversity and inclusion and have zero tolerance for discrimination and harassment. We aim to increase the share of female leaders at all levels of the company. Our main actions > Anti-discrimination policies > Actively promote diversity and inclusion Sustainable Development Goals (SDG) Electrolux Professional Group uses the SDGs as our compass to guide what we do to contribute to a more sustainable society. We have identified six SDGs where we believe we have a greater impact and opportunity to make a difference. We believe that the SDGs are good indicators of the priorities and challenges that the world is facing. P. 55Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainable solutions Sustainability Report INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY 2023 activities Our sustainability framework 2023 materiality assessment Strategy and targets Sustainable Development Goals Sustainable solutions Sustainable operations Ethics and relationships GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION 1 We serve a wide range of customers around the world, from restaurants, hotels, and launder- ettes to healthcare and service facilities. Our solutions consume energy, water, and detergents and thus impact our customers and the consumers of the services they provide. We want to set the pace within the professional food, laundry, and beverage industry through innovation in sustainability and energy efficiency, and offer connected and digital platforms that meet customer needs. Product design influences or determines environmental and social impact throughout the value chain. The choices made will have an impact on materials used, manufacturing, distribution, product use, and end of life. As our main environmental impact occurs during the product-use phase, embedding sustainability into product development is essen- tial to reduce our overall impact. Focus on developing innovative and sustainable solutions As there are few energy directives and certification schemes exter- nally, Electrolux Professional has created an internal indicator to highlight technical solutions that can offer opportunities for carbon reduction. Our intention is to track products that can technically support carbon reduction. We do not benchmark the indicators against our competition in the market, as this might be precarious due to the lack of objective measurement methods. Further, we do not include technical solutions that support, but do not actually en- sure, efficient user behaviors. Sustainable solutions P. 56Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainable solutions Sustainability Report INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY 2023 activities Our sustainability framework 2023 materiality assessment Strategy and targets Sustainable Development Goals Sustainable solutions Sustainable operations Ethics and relationships GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION 1 Three priority areas within sustainable solutions Efficient and low-consuming products As our products are used, they consume resources such as energy, water, and detergents. These resources impact the product’s envi- ronmental footprint as well as the customer’s operating costs. The Group invests significant resources into its global R&D activities. From 2019 to 2023 the company’s R&D expenditure was an average of approximately 3.7% of sales per year. Efficient use of material Most of our material use is related to steel and other metals. As the materials used and waste generated have a negative impact on the environment, more efficient use is required to reduce our impact. An efficient approach means using materials for as long as possible, working towards closing material loops, and reducing waste. Material efficiency is supported by a circular transition. Our products are used frequently, either by professional busi- nesses or as user-operated equipment in the sharing economy. Material efficiency can be increased by designing durable products. We invest in lifetime testing and quality assurance to verify that our products meet durability and reliability requirements. For more infor- mation about our approach to Zero defects, see page 43. Service and maintenance During the product's lifetime we offer a wide range of spare parts, services, and customer support that can help to prolong the prod- uct's lifespan. Maintenance and service can also help to ensure that efficiency and performance are maintained during the product's life- time. For more information about our service offering, see page 24. End-of-life management and recovery We have a restricted material list (RML) to facilitate the use of non-hazardous and non-toxic substances in our materials and components. All components and materials used are RoHS-directive (Restriction of Hazardous Substances) compliant, meaning they do not contain any toxic substance prohibited under, or, if permissible, do not exceed certain levels set out in, the RoHS Directive (2011/65/ EU). We also meet the requirements of WEEE, the Waste Electrical and Electronic Equipment Directive (2012/19/EU). As most of our products are designed for easy disassembly, include restrictions on hazardous and toxic materials, and mainly con- tain recyclable materials, a large proportion of materials within our products (normally between 85–95%) can be recovered and used in new material loops. Our aim is to further improve material recovery and thereby reduce our impact from waste generation. Product performance and efficiency % Product water consumption efficency improvements 0 20 40 60 80 100 20232022202120202019 Product water consumption efficency compared to 2019 Efficency improvment 1.5% 2.3% 4.3% 4.5% The sales volume for 2022 was incorrect so the efficiency was recalculated based on the correct volume. Around 94% of the company’s climate impact occurs as the products consume energy. The Scope 3 emissions (category 11) from the use phase of our products amounted to 5,302 kt in 2022 (2023 figures not yet available). The reduction of these emissions drives our continous pursuit to innovate and to identify strategies to devel- op and provide energy-efficient and low-consuming products. We have set a target to increase the energy efficiency of our product range (base year 2019). This is positive both for the environment and for our customers’ operating costs. A number of our products use innovations and technologies that help save energy and/or reduce carbon emissions. As some of our products consume water, we have set a target to increase water efficiency within our dishwashing and laundry product ranges (base year 2019). In 2023 we have improved water consumption efficiency by 4.5%. Read more about our sustainable product offering on pages 12, 31, 36, 60. P. 57Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainable solutions Sustainability Report INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY 2023 activities Our sustainability framework 2023 materiality assessment Strategy and targets Sustainable Development Goals Sustainable solutions Sustainable operations Ethics and relationships GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION 1 Safety Safety is critically important to Electrolux Professional and its cus- tomers as the use of our products frequently involves a mixture of water, hot surfaces, moving parts, and electricity. We aim to ensure customer safety and reduce risks by focusing on product safety starting from the product development phase, passing through a controlled production process, and providing a professional main- tenance service. To improve the safety level of our appliances, we also use third-party laboratories to review products from a safety standpoint. Appliances are designed with consideration for ergonomic principles on human functionality and according to the user’s natural workflow, to achieve maximum efficiency with minimum effort. We also per- form third-party ergonomic certifications on certain products (ERGOCERT). The safety performance of our products, as well as their ability to live up to our quality demands and targets, is continuously moni- tored. Product safety concerns raised are addressed through a strict process that follows international laws and standards, including notification to the authorities if need be. This process is governed by the Group's top management and those involved are trained and their competence registered. Hygiene and food safety Our businesses include professional laundry or food service opera- tions in hospitality businesses and within community businesses such as elderly care homes or hospitals. As people in these environments can be more vulnerable, hygiene and food safety are critically important. We offer solutions for control and monitoring with third-party certified disinfection performance. Microplastics Research has demonstrated that microplastics can be found in all areas of the environment and are increasingly contaminating our oceans. Electrolux Professional Group has participated in several research projects to investigate how our products can help prevent microplastics released from textiles being emitted into the oceans. We are working intensively to identify a microplastic filtration technology that is suitable for a professional laundry setting. We have therefore been developing methods to evaluate the perfor- mance and the suitability of separation technologies. For several years, we have been actively partaking in microplastic standard- ization committees worldwide to contribute to the development of meaningful and strong standards – and based on these standards meaningful and strong legislation. This standardization work is pro- gressing fast spurred on by the environmental risks of microplastics. We take part in global efforts both as a knowledge contributor and by doing real-life tests of standard test methods. Customer health and safety P. 58Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainable operations Sustainability Report INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY 2023 activities Our sustainability framework 2023 materiality assessment Strategy and targets Sustainable Development Goals Sustainable solutions Sustainable operations Ethics and relationships GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION 2 Electrolux Professional Group has a global presence and applies the same high standards and principles of conduct globally. These are respect, diversity, integrity, ethics, safety, and environmental protection. We aim to improve sustainability performance in our operations through proper management and a systematic approach, focusing on decreasing our negative impact on the environment and society every day. Sustainable operations P. 59Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainable operations Sustainability Report INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY 2023 activities Our sustainability framework 2023 materiality assessment Strategy and targets Sustainable Development Goals Sustainable solutions Sustainable operations Ethics and relationships GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION 2023 Disclosure on climate-related topics Climate change is already impacting every region on earth and further warming continues to increase the risk of extreme weather events. Risk mitigation and the transition to a low-carbon economy might have an impact on all stakeholders in society and have political, legal, and technological impacts on organizations. We constantly strive to reduce our climate change impact through the climate-neutral ambitions for our industrial operations and by working relentlessly to achieve our SBTi Scope 1, 2, and Scope 3, Category 11 emission reduction targets. Our efforts have been recognized by various rating institutes. Electrolux Professional Group is seeing an increased interest in climate-related disclosures under the Taskforce on Climate-related Financial Disclosure (TCFD). We have also identified climate-relat- ed transition risks, physical risks, opportunities, and their financial impact. Read more in the Group Risk report on page 82. Sustainability Ratings Score Date EcoVadis Silver March 2023 CDP Climate Change B February 2024 Sustainalytics ESG risk-rating 10.8 (low risk) February 2024 We place great emphasis on reducing the environmental impact of our business activities. Our biggest direct environmental impact relates to water and energy consumption, wastewater, waste, and transportation. From a product life cycle perspective, the main envi- ronmental impact occurs in the product-use phase at the customer’s location. The material sustainability topics within our operations are integrated into our Enterprise Production System. The system pro- vides a method for minimizing all types of waste and losses in our Environmental management processes. Using fewer resources is good for the environment and for the long-term profitability of the company. The Group complies with environmental legislation and the fac- tories operate according to national legislation, apply for necessary permits, and report to local authorities in accordance with applica- ble legislation. Our Group environmental commitment is outlined in our Code of Conduct, Group Work Policy, and Environmental Policy. The Workplace Directive stipulates minimum requirements regarding topics such as legal compliance, waste, and chemicals. Our suppli- ers are assessed against sustainability parameters, as outlined in our supplier workplace standard/directive. Our target is for all of our logistics, manufacturing, and R&D operations to become third-party certified according to ISO 9001 and ISO 14001. See all our ISO-certified sites on page 41. The Group’s environmental policy and environmental work are described in more detail on pages 56 and 60–62. P. 60Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainable operations Sustainability Report INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY 2023 activities Our sustainability framework 2023 materiality assessment Strategy and targets Sustainable Development Goals Sustainable solutions Sustainable operations Ethics and relationships GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION 2 CO 2 emissions In 2020 we communicated our ambition to become carbon neutral in our industrial operations by 2030, as measured by Scope 1 and 2 emissions. During 2020 we also set a Scope 1 and 2 emission target to reduce emissions by 50% by 2025 (including contributions from acquisitions made in 2015–2019). During 2023, we continued to reduce our Scope 1 and 2 emis- sions and have already achieved our 2025 targets. We have set science-based targets for Scope 1 and 2 which were validated and approved by the Science Based Targets initia- tive in 2023. Our SBTi target is to reduce Scope 1 and 2 emissions by 70% by 2030 from a 2019 base year. The climate and environment Our emissions are mainly driven by gas consumption used for heating, use of HFCs, and electricity consumption. We have invest- ed in renewable electricity during the year, which has reduced our carbon emissions. Furthermore, to meet our Scope 1 and Scope 2 emission reduction targets, we have developed the following plan: Roadmap Scope 1 and 2: > Elimination of natural gas and electrification of heating > Installation of on/near-site solar PV > Purchasing of Renewable Energy Certificates (RECs), Guarantees of Origin (GO), and renewable electricity subscriptions > Improvement in both thermal and electrical efficiency Scope 3 emissions Product use Analysis of our greenhouse gas emissions within Scope 1, 2, and 3 shows that our Scope 1 and 2 emissions constitute only a small portion, approximately 0.1%, of our total carbon emissions. Scope 3 emissions actually constitute around 99.9% of our total emissions. Our main climate impact occurs during the product-use phase within Scope 3 (~94% in 2022). The main source of emissions within the usage phase relates to the product’s energy consumption. In 2022 (2023 result not yet avalable) Scope 3 emissions, Category 11, amounted to 5,302 kt, a 16% reduction compared to 2019 with a recalculated baseline. Recalculation is made by distributing the first reported emission footprint backwards to previous years. During 2022, we developed our Scope 3 product-use emission reduction target of 27.5% by 2030 from a 2019 base year. This was validated and approved by the Science-Based Targets initiative (SBTi) in 2023. We have developed a clear plan to reduce our Scope 3 product use emissions: Roadmap Scope 3: > Improve our product mix offering to our customers with an increae in low-electricity-consumption products > Continue developing highly energy-efficient products in line with the Scope 3 product-use emission targets (SBTi) > Continue developing cutting-edge technologies to further improve product performance efficiencies 0 1,000 2,000 3,000 4,000 5,000 2023 2022 2021 2020 2019 2018 2017 2016 2015 CO2 emissions target 2015-2025 CO2e emissions (tons) Distribution of our carbon footprint (Scope 3), % Capital Goods Use of sold products 0.09% 94.3% Purchased goods & services 4.32% EOL treatmentof sold products 0. 87% Upstream Transport & Distribution 0.18% * Based on 2022 data, including Unified Brands P. 61Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainable operations Sustainability Report INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY 2023 activities Our sustainability framework 2023 materiality assessment Strategy and targets Sustainable Development Goals Sustainable solutions Sustainable operations Ethics and relationships GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION 2 Energy management Electrolux Professional Group places a strong emphasis on reducing energy consumption in our operations. We constantly monitor our performance and have developed reduction targets. Total energy consumption has decreased in 2023, mainly due to reduced electricity consumption and purchasing of solar sub- scriptions and renewable energy certificates. Electrolux Professional Group will continue to prioritize energy reduction measures. We are currently operating with a 45% (37) share of renewable energy. All manufacturing sites in Europe operate with renewable Share of renewable energy Renewable Non renewable 45%55% Energy consumption as reported Recalculated baseline including acquisitions MWh Energy consumption 0 10,000 20,000 30,000 40,000 50,000 20232022202120202019 MWh Energy intensity 0 1,000 2,000 3,000 4,000 5,000 20232022202120202019 Consumption (MWh) per reported SEKm net sales Water management During the year, both water withdrawal and water discharge has decreased. Our water consumption has remained the same compared to last year. We use the Worldwide Fund for nature's water risk filter to assess our water risks. According to the water risk assessment, we do not have high water risks related to our operations. We are implementing protective measures to reduce our water footprint from our operations. In areas where water availability and water supplies are becoming more unpredictable or scarce, requests for water-efficient products can be expected to increase. As some of Electrolux Professional Group’s products consume water when operating, we have a clear strategy and targets to develop low-consuming and water-efficient products. Reported consumption Recalculated baseline including acquisitions m³ Water consumption 0 5,000 10,000 15,000 20,000 20232022202120202019 m³ Water intensity 0.0 0.5 1.0 1.5 2.0 2.5 20232022202120202019 Consumption m³ per reported SEKm net sales The climate and environment Water intensity has been recalculated based on water consumption, not water withdrawal. Earlier years water withdrawal was reported as water consumption. For this year's report, we recalculated water consumption by deducting water discharge from water withdrawal, using GRI 303-5. Recalculation is made by distributing the first reported water consumption back- wards to previous years. electricity and we are focused on increasing the share of renewable electricity in sites outside of Europe. Solar panels have been installed at our sites in Vallenoncello, Modena, and Rayong. In Mississippi we have subscribed to a community solar program. Our plan is based on continuous improvement activities, projects, and investments in energy-effi- cient equipment. We are also active supporters of the switch to renewable energy. A pilot project has been initiated to investigate solutions for reducing natural gas consumption through electrification at our Italian sites. P. 62Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainable operations Sustainability Report INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY 2023 activities Our sustainability framework 2023 materiality assessment Strategy and targets Sustainable Development Goals Sustainable solutions Sustainable operations Ethics and relationships GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION 2 Materials Metal and metal parts are the materials we consume the most. We have adopted a restricted materials list to restrict toxic and hazard- ous substances in our products and processes. Our factories also work to reduce material losses by improving the scrap rate and by using materials efficiently. Read more on page 56. Waste and hazardous waste 86% of the non-hazardous waste we generate is recovered while 4% is sent to energy recovery. 8.5% goes to landfill or incineration with- out energy recovery. 5% of the waste generated is categorized as hazardous waste. Non-hazardous waste, 2023 Waste-to-energy Recycling 4% 86% Landfill 8.5% Incineration (without energy recovery) 1% Other recovery 0.5% Share of hazardous waste, 2023 Hazardous waste Non-hazardous waste 5% 95% Occupational health and safety We prioritize the wellbeing of all employees by providing a safe and healthy work environment. We work with a ’zero accident’ mindset, putting safety at the top of the agenda. Our Group health and safety guidelines are outlined in our Code of Conduct and Group Workplace policy, and detailed requirements are described in our Group Workplace Directive. Our industrial op- erations pose higher risks, and we have established a dedicated Health & Safety pillar focused on maintaining a safe work environ- ment to protect our employees. Within the Health & Safety pillar we drive improvements, develop health and safety methods, and share best practices and risks. Each manufacturing site tracks and reports accidents and inci- dents. Accidents result in a root-cause analysis and corresponding action plan. Each accident is followed up by the pillar team and insight is shared between the different sites. The manufacturing sites also work to identify and eliminate causes of unsafe acts and con- ditions. Three of our largest plants are third-party certified according to ISO 45001, read more on page 41. We also collaborate with SOS International to protect our people during business travel. The climate and environment Lost Time Injury Rate 0.0 0.3 0.6 0.9 1.2 1.5 20232022202120202019 Material consumption, 2023 Supplier packaging material Metal & metal parts 0% 81% Semi-manufacturing goods or parts 12% Packaging material for finished products 3% Plastics & plastic parts 4% Process materials (indirect material) 0% P. 63Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Ethics and relationships Sustainability Report INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY 2023 activities Our sustainability framework 2023 materiality assessment Strategy and targets Sustainable Development Goals Sustainable solutions Sustainable operations Ethics and relationships GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION 3 A good, sustainable relationship with the stakeholders that are impacted by our business is key to delivering on our strategic targets. We demonstrate our commitment, and seek stakeholder trust, through several actions and procedures. Electrolux Professional Group has signed the UN Global Compact and commits to its 10 principles regarding human rights, labor, anti-corruption, and the environment. Ethics and relationships P. 64Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Ethics and relationships Sustainability Report INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY 2023 activities Our sustainability framework 2023 materiality assessment Strategy and targets Sustainable Development Goals Sustainable solutions Sustainable operations Ethics and relationships GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Business ethics Value generation for stakeholders > Build product and employee branding > Value generation for customers > Reduced or mitigated risks > Reduced costs through efficient use of resources > Availability of sustainable and green investments > Economic value, generated and distributed > Improved environmental and social footprint within our value chain 3 Anti-corruption, bribery, and unethical business We do not tolerate corruption, bribery, or unethical business practices in any form. All operational units and suppliers, and their employees, must refrain from offering, giving, demanding, or receiving bribes or any other improper benefits. During 2023 on- line anti-corruption training was rolled out to a targeted group of employees, with a completion rate of approximately 93%. In addi- tion, face-to-face courses or webinars are regularly conducted on legal compliance topics for employees likely to face such risks. 82% (2023) of employees participated in Code of Conduct training 93% ( approx. completion rate) training on anti-corruption for targeted employee groups Whistleblowing - reporting of misconduct Misconduct and violation of the Code of Conduct or Group Policies can be reported anonymously online, via the whistleblowing web platform, or directly to a suitable person or function within the Group. Our online platform, EthicsPoint, where employees can report serious concerns, misconduct, or potential breaches of the company’s Code of Conduct, is also open to external report- ers. In 2023, 12 reports were received via the whistleblowing tool, EthicsPoint, and other channels. The reports received mainly con- cerned workplace conduct. All cases were thoroughly investigated according to the established procedures, under the instruction of the Code of Conduct Steering Committeee consisting of the CHRO, the Head of Internal Audit and the General Counsel, and reported to the Audit Committee. The majority of the cases led to actions to mitigate the issue, although the majority were deemed not to be violations of the Code of Conduct. P. 65Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Ethics and relationships Sustainability Report INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY 2023 activities Our sustainability framework 2023 materiality assessment Strategy and targets Sustainable Development Goals Sustainable solutions Sustainable operations Ethics and relationships GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Tax policy Our Tax Policy outlines how we deal with tax-related matters. We aim to always pay the correct amount of tax in the correct country, and to be fair and resolve differences in opinions with local tax authorities and other governmental organizations in a constructive and positive manner. Supply chain Sustainability risks within our supply chain are mitigated by stipu- lating demands related to quality, product safety, chemical com- pliance, social responsibility, and the environment. We expect our suppliers to adhere to our Code of Conduct and Supplier Workplace Standard. These policies are consistent with requirements in frame- works such as the International Labor Organization’s (ILO) core conventions and the OECD guidelines for multinational enterprises. Social and environmental requirements of our suppliers are integrated into our Supplier Workplace Standard. Defined due diligence activities are put in place based on specified risk levels. The Group audits its existing supplier base. These audits include environmental and health & safety aspects, in addition to the quality aspects of our audits. In 2023 we commenced the Conflict Mineral due diligence process for selected suppliers (a pilot) to ensure that purchased components that contain the four minerals tin, tantalum, tungsten, and gold are sourced from responsible and conflict-free sourc- es only. Our pilot showed that we meet the responsible sourcing standards set by the Organization for Economic Co-operation and Development (OECD). Policies Selected policies are available on our Corporate website. 74 general supplier audits in 2023, 34 in Asia Pacific, 2 in Africa and 38 in Europe 74/74 audits included environment and health & safety 74/74 audits included quality 3 Business ethics P. 66Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Ethics and relationships Sustainability Report INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY 2023 activities Our sustainability framework 2023 materiality assessment Strategy and targets Sustainable Development Goals Sustainable solutions Sustainable operations Ethics and relationships GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION 3 We are a signatory of the UN Global Compact. We support the OECD Guidelines for Multinational Enterprises, and we apply the UN Guiding Principles on Business & Human Rights in our work, to identify and remediate any negative impact on people that is a di- rect or indirect result of our operations. We do not tolerate child labor, forced labor, discrimination, ha- rassment, or abuse. We are committed to decent working hours and compensation, freedom of association, and collective bargaining. The health and safety of our employees is a top priority, and we work continuously to identify, manage, and mitigate any risks of ac- cidents and illness. We aim to have an open and transparent dialog to engage with employees directly and, when applicable, with their representatives. Source: OECD p21 https://mneguidelines.oecd.org/OECD-Due-Diligence-Guidance-for-Responsible-Business-Conduct.pdf Due diligence process and supporting measures Communicate How impacts are addressed Identify & assess adverse impacts In operations, supply chains & business relationships Track Implementation and results Cease, prevent or mitigate Adverse impacts 1 6 Provide for or cooperate In remediation when appropriate 2 3 5 4 Embed responsible business conduct Into policies and management systems Salient Human Rights Impacts Group affected Salient human rights impacts Own workforce • Health and Safety Workers along the value chain • Health and Safety/Health impacts • Freedom of association • Fair wages • Forced labor • Child labor • Discrimination • Harm to livelihoods • Working hours • Access to clean water Communities affected • Forced labor • Child labor • Discrimination • Harm to livelihoods • Land-related impacts • Health impacts • Access to clean water Impact on end users • Health and Safety Human rights statement Human Rights Due Diligence In 2023, we conducted a Human Rights Due Diligence (HRDD) assessment. The assessment involved collaborative workshops with a diverse internal team representing various departments and ge- ographies in manufacturing, Sustainability, Human Resources, and Purchasing in APAC, US and Europe. Through these workshops, we pinpointed potential human rights impacts across our value chain, and prioritized key risks in a heat mapping exercise. This strategic approach helps us focus on ad- dressing the most crucial risks for both our stakeholders and our operations. P. 67Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Corporate governance Corporate governance INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Corporate governance The Corporate Governance Report describes the organizational bodies, rules, and other governance structures by which the Electrolux Professional Group is controlled and operated. The Group’s external auditors have reviewed this report and their opinion has been included in the Auditor’s Report. Chairman’s comments 68 Corporate governance report 69 Board of Directors 76 Group Management Team 78 Remuneration report 2023 80 Risk and risk management 82 P. 68Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Chairman’s comments Corporate governance INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT Chairman’s comments Corporate governance report Board of Directors Group Management Team Remuneration report 2023 Risk and risk management FINANCIAL INFORMATION OTHER INFORMATION Chairman's comments Robust strategic and financial progress Despite high inflation, macroeconomic uncertainty, and continued geo-political tension, our markets held up well, particularly during the first half of the year. Sales and profitability im- proved, and cash generation was strong. Electrolux Professional Group took several important strategic steps this year. Two examples I’d like to highlight are progress in sustainability and the acquisition of TOSEI in Japan in January 2024, which will further strengthen the Group. In parallel to general governance duties and monitoring of external dynamics, the Board of Directors has given particular attention to reviewing the business area plans over the last year. This has special significance given the reorganization of the Group in 2022. It is re- assuring to see that the plans are making good progress in most of the relevant, attractive segments. In addition, Group Customer Care grew more than product sales, and investments continued in dig- italization and connected products focused on delivering greater customer value. The somewhat weaker development of the US Food and Beverage business, after a strong 2022, has also featured on the Board’s agenda. Many steps have been taken to create a more streamlined and efficient organization, including managing channel partner dynamics in Food Service. Electrolux Professional Group’s ambition is to be the sustainabil- ity leader in our industry and the results achieved during the year continue to support this aspiration. One tangible example is the CO₂ emissions reduction, where we met our 50%-reduction target for 2025 already in 2023. In addition, the Group’s near-term targets to reduce indirect greenhouse gas emissions from the use of our prod- ucts by 2030 have been validated by the Science Based Targets initiative (SBTi). The company and the Board have also made efforts to establish governance and reporting readiness for the compre- hensive Corporate Sustainability Reporting Directive (CSRD), due for the 2024 reporting. Towards the end of the year, the Group announced the strategic acquisition of TOSEI Corporation, a move that is consistent with the Board’s intention to use the strong cash generation to also expand inorganically. With the acquisition of TOSEI, Electrolux Professional will become a larger player in Japan, and further strengthen the Group's position in Asia. In general, acquisition opportunities remain on the Board agenda. Besides regular Board meetings, the Board has carried out two visits during the year. One meeting was in Milan, Italy where we visited the trade fair HOST, and one Board meeting was held in Ljungby, Sweden, the center of the Laundry operations. At a business level, demand held up well in the first half of the year but declined somewhat during the second half as markets softened. Despite this, the Group has managed to increase sales and profit, including improving the margin. Overall we have con- tinued to build a stronger company, which is also reflected in the Board’s proposal to increase the dividend to SEK 0.80 (0.70) per share, in line with the dividend policy. The Board would like to express its gratitude to Electrolux Professional Group’s management and employees for their great contributions during the year. Kai Wärn, Chairman of the Board Towards the end of the year, the Group announced the strategic acquisition of TOSEI Corporation, a move that is consistent with the Board’s intention to use the strong cash generation to also expand inorganically. With the acquisition of TOSEI, Electrolux Professional will become a larger player in Japan, and further strengthen the Group's position in Asia. Kai Wärn, Chairman of the Board P. 69Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Corporate governance report Corporate governance INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT Chairman’s comments Corporate governance report Board of Directors Group Management Team Remuneration report 2023 Risk and risk management FINANCIAL INFORMATION OTHER INFORMATION Corporate governance report Good corporate governance is about ensuring that Electrolux Professional Group is managed as responsibly and efficiently as possible to meet our obligations as a public company, and also to create value for shareholders in an efficient, responsible, and sustainable manner. Corporate governance determines how rights and responsibilities are distributed between a company’s various bodies in accordance with internal processes and the laws and regulations in effect. External and internal rules The governance of the Group is defined by external and internal rules. The external rules comprise the Swedish Companies Act, Nasdaq Stockholm’s Rule Book for Issuers, and the Swedish Code of Corporate Governance (the “Code”), as well as other relevant Swedish and foreign laws and regulations. The Code is available at www.corporategovernanceboard.se and describes good practices in the stock market. The internal rules consist of the Articles of Association, the Rules of Procedure of the Board of Directors, the Electrolux Professional Code of Conduct, policies for information, finance, credit, internal control, risk management, anti-corruption, and other group policies. Application of the Code Electrolux Professional applies the Code without deviations and did not report any deviations from the Code in 2023. There were no infringements of applicable stock exchange rules by Electrolux Professional, and no breach of good practice on the securities market were reported by the Disciplinary Committee of Nasdaq Stockholm nor the Swedish Securities Council in 2023. This corpo- rate governance report has been drawn up as part of Electrolux Professional’s application of the Code. Shares According to Electrolux Professional’s Articles of Association, the share capital shall not be less than SEK 20,000,000 and not be more than SEK 80,000,000, divided into not less than 200,000,000 shares and not more than 800,000,000 shares. Electrolux Professional registered share capital is SEK 28,739,745, represented by 287,397,450 shares of which 8,031,461 are Class A shares and 279,365,989 are Class B shares (as of December 31, 2023), each with a quota value of SEK 0.1. Nomination Committee Shareholders at the Annual General Meeting Group Management Internal Audit External Audit Remuneration Committee Audit Committee Board of Directors 1 2 3 4 5 7 6 Corporate governance structure P. 70Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Corporate governance report Corporate governance INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT Chairman’s comments Corporate governance report Board of Directors Group Management Team Remuneration report 2023 Risk and risk management FINANCIAL INFORMATION OTHER INFORMATION Each Electrolux Professional Class A share entitles the holder to one vote and each Electrolux Professional Class B share entitles the holder to one tenth of a vote at the General Meeting. The Class B shares of Electrolux Professional are listed on Nasdaq Stockholm and traded on the Large Cap list. Since September 2020, Class A shares have been delisted from trading on Nasdaq Stockholm. Holders of Electrolux Professional Class A shares have the right to require that Class A shares are con- verted to Class B shares. During 2023, 13,853 Class A shares were converted to Class B shares. 1 Shareholders The number of registered shareholders at December 31, 2023 was 44,069. On December 31, 2023, Investor AB was the largest share- holder, with a holding corresponding to 32.4% of the votes and 20.5% of the share capital in Electrolux Professional AB. For more information about the shares and shareholders, see page 164-166. Dividend Policy Electrolux Professional’s target is for the dividend to correspond to approximately 30% of the income for the period. For the financial year of 2023 the Board of Directors proposes a dividend to the shareholders of SEK 0.80 (0.70) per share, corresponding to around 30% of the profit for the year. General Meeting of shareholders Pursuant to the Swedish Companies Act, the General Meeting is the supreme decision-making body in a Swedish limited liability compa- ny, and shareholders exercise their voting rights at such meetings. The Annual General Meeting (AGM) was held on April 26, 2023 in Stockholm and in combination with advance postal voting. The AGM of Electrolux Professional is held annually before the end of June. In addition to the AGM, Extraordinary General Meetings (EGM) can be convened when required. The General Meetings of Electrolux Professional are held in the municipality of Stockholm, where the company’s registered office is located. The date and place of the AGM is communicated on the company’s external website no later than the publication of the quarterly report for the third quarter. At the AGM, shareholders of Electrolux Professional resolve on several matters, including confirmation of income statements and balance sheets, the disposition of the company’s profit or loss, dis- charge of liability for the members of the Board and the CEO, com- position of the Nomination Committee, election of members of the Board (including the Chairman of the Board) and auditor, remunera- tion for the members of the Board and auditor, as well as guidelines for remuneration for the CEO and other senior executives. The shareholders of Electrolux Professional also resolve on other matters that are important to the company, for example any chang- es to the Articles of Association, at the General Meeting. Shareholders who wish to have a matter dealt with must submit a written request to the Board to that effect. The request must have been received by Electrolux Professional no later than seven weeks prior to the General Meeting. Right to attend the General Meeting All shareholders who are directly recorded in the share register maintained by Euroclear Sweden five working days prior to the General Meeting, and who have notified the company of their inten- tion to participate, are entitled to attend the General Meeting and vote in proportion to the number of shares they hold. Shareholders whose shares are nominee registered through a bank or other nominee must request that their shares be temporarily registered in their own names in the register of shareholders main- tained by Euroclear Sweden, in order to be entitled to participate in the General Meeting. The next AGM will be held on April 25, 2024, in Stockholm. 2 Nomination Committee At the Extraordinary General Meeting held on December 5, 2019, the current instruction for the Nomination Committee was adopted to apply until further notice. No changes were proposed or adopted during 2023. The Nomination Committee shall comprise five members. The members should be one representative of each of the four larg- est shareholders, in terms of voting rights, that wish to participate in the Committee, together with the Chairman of the Electrolux Professional Board. The composition of the Nomination Committee shall be based on shareholder statistics from Euroclear Sweden as of the last banking day in August in the year prior to the AGM and on other reliable shareholder information which is provided at such time. The names of the representatives and the names of the share- holders they represent shall be announced as soon as they have been appointed. If the shareholder structure changes during the term of office of the Nomination Committee, the composition of the Nomination Committee may be adjusted accordingly. Changes in the composition of the Nomination Committee shall be published as soon as any such changes have been made. The Nomination Committee’s task includes preparing a proposal to the next AGM regarding: > The Chair of the AGM > The number of Board members > The nominees for election to the Board > The Chair of the Board > Remuneration for Board members including work on Board committees > Auditors and auditor’s fees > Amendments to instructions for the Nomination Committee The Audit Committee assists the Nomination Committee in prepar- ing proposals for auditors, and the Nomination Committee’s pro- posal includes the Audit Committee’s recommendation on the elec- tion of auditors. The Nomination Committee’s proposals are publicly announced no later than on the date of notification of the AGM. Shareholders may submit proposals for nominees to the Nomination Committee. The Chairman of the Board conducts a yearly evaluation of the Board by way of a survey to the Board members and subsequent discussions, to assess the Board’s composition, qualifications, efficiency, and work procedures. The conclusions are presented to the Nomination Committee. On this basis and if deemed appropri- ate after subsequent discussions and interviews, the Nomination Committee determines whether the existing Board should be strengthened with additional expertise or if there are any other rea- sons to make changes to the composition of the Board. In making such determinations and (if applicable) evaluating potential new candidates for the Board, the Nomination Committee takes into consideration the objective to achieve a gender balance in the Board. The Nomination Committee applies rule 4.1 of the Swedish Code as its diversity policy. In addition, the Nomination Committee takes into consideration the need to ensure that the independence requirements of the Swedish Code are met. These requirements stipulate that at least the majority of Board members must be independent from Electrolux Professional’s management, and that at least two (from such P. 71Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Corporate governance report Corporate governance INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT Chairman’s comments Corporate governance report Board of Directors Group Management Team Remuneration report 2023 Risk and risk management FINANCIAL INFORMATION OTHER INFORMATION majority) are also independent of Electrolux Professional’s largest shareholders. The Nomination Committee also takes into account any proposals it receives about the composition of the Board that may have been suggested by other shareholders. Nomination Committee for the 2023 AGM The Nomination Committee for the AGM 2023 was comprised of five members, led by Petra Hedengran of Investor AB. For the pro- posal for the AGM 2023, the Nomination Committee assessed the composition and size of the Board and the expected demands on the Board based on the Group’s future strategy. The Nomination Committee applied rule 4.1 of the Code as the diversity policy in its nomination work. The Nomination Committee proposed re-election of all Board members including re-election of Kai Wärn as Chairman of the Board and election of Josef Matosevic as a new member of the Board. The Nomination Committee also proposed, in accordance with the recommendation by the Audit Committee, re-election of Deloitte AB as the company’s auditors for the period until the end of the AGM 2024. Nomination Committee ahead of the 2024 AGM The Nomination Committee for the 2024 AGM is based on the ownership structure as of August 31, 2023, and was announced in a press release on September 21, 2023. The Nomination Committee members are: > Petra Hedengran, Chairman, appointed by Investor AB > Joachim Spetz, appointed by Swedbank Robur Funds > Jesper Wilgodt, appointed by Alecta > Suzanne Sandler, appointed by Handelsbanken Funds > Kai Wärn, Chairman of the Board of Electrolux Professional AB 3 Board of Directors The Board of Directors has the overall responsibility for Electrolux Professional’s organization and administration. The duties of the Board of Directors are set forth in the Swedish Companies Act, the company’s Articles of Association and the Code. In addition, the work of the Board of Directors is governed by the Rules of Procedure of the Board of Directors, adopted annually by the Board. The instructions for the Board of Directors govern, among other things, the division of work and responsibility between the Board of Directors, its Chairman, and the CEO, and specify finan- cial reporting procedures for the CEO. The Board of Directors also adopts instructions for the Board committees. Composition and Independence of the Board of Directors According to Electrolux Professional’s Articles of Association, the Board of Directors shall be comprised of no less than three and no more than nine members, with no more than three deputy members, elected by the shareholders at the AGM. In addition and by law, employee organizations are entitled to appoint employee represen- tatives. The Board of Directors currently comprises eight members elected by the 2023 AGM for a term of office extending until the close of the 2024 AGM, with no deputies, as well as two ordinary members and two deputy appointed by Swedish employee organizations. The AGM elects the Chairman of the Board. Directly after the AGM, the Board holds a meeting for formal constitution at which the members of the committees of the Board are elected. The Chair- man of the Board of Electrolux Professional is Kai Wärn. All current members of the Board are non-executive members. According to the Code, the majority of the Board members appointed by the General Meeting must be independent in rela- tion to the company and its Group Management Team. No more than one Board member elected by the General Meeting may be a member of the Group Management Team of the company or a subsidiary. At least two of the Board members that are indepen- dent in relation to the company and the Group Management Team Board of Directors 2023 – AGM 2024 Name Position Board member of Electrolux Professional since Independent in rela- tion to the company and the Executive Management Team Independent in relation to the company’s major shareholders Audit Committee Remuneration Committee Share- holding 1 Kai Wärn 2 Chairman 2019 Yes Yes – Member 104,000 Katharine Clark Member 2020 Yes Yes – – 9,000 Lorna Donatone Member 2019 Yes Yes Member – 9,000 Hans Ola Meyer Member 2019 Yes Yes Chairman – 9,000 Josef Matosevic Member 2023 Yes Yes – – – Daniel Nodhäll Member 2019 Yes No Member Member 20,000 Martine Snels Member 2019 Yes Yes – Chairman 7,000 Carsten Voigtländer Member 2019 Yes Yes – – 10,000 Joachim Nord Member 2019 – – – – 130 Jens Pierard Member 2022 – – – – – Per Magnusson Deputy 2019 – – – – – * Employee representative. 1) Own holdings and holdings of related persons and affiliated companies. Each Board member's shareholding in Electrolux Professional as per March 1, 2024 2) Kai Wärn also has 778,816 call options issued by Investor AB entitling him to the right to purchase Electrolux Professional B shares Gender distribution Women, 37. 5 %Men, 62.5% P. 72Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Corporate governance report Corporate governance INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT Chairman’s comments Corporate governance report Board of Directors Group Management Team Remuneration report 2023 Risk and risk management FINANCIAL INFORMATION OTHER INFORMATION must also be independent in relation to the major shareholders of the company. According to the Code, a major shareholder is a shareholder that directly or indirectly controls 10% or more of the shares or votes in the company. Independence is assessed by the Nomination Committee. The Board is considered to be in compliance with relevant requirements for independence. All Directors apart from Daniel Nodhäll are considered to be independent. Daniel Nodhäll is considered to be independent in relation to the company and the Group Management Team, but not in relation to major shareholders of Electrolux Professional. Management of the company’s affairs The Board of Directors is responsible for the organization of Electrolux Professional and the management of the company’s affairs. The Board’s tasks include adopting strategies, targets, busi- ness plans, budgets, interim reports, year-end financial statements, and policies. The Board of Directors is also required to monitor the company’s financial performance and ensure that the company has good internal control, including formalized routines to ensure that approved principles for financial reporting and internal control are applied, and that financial reports are produced in accordance with legislation, applicable accounting standards, and other re- quirements for listed companies. Furthermore, the Board of Directors decides on major investments and changes in the organization and operations of the Group. The Board of Directors is responsible for regularly evaluating the work of the CEO. Moreover, the Board of Directors is to ensure that there is a satis- factory process for monitoring the company’s compliance with laws and other regulations relevant to operations, as well as the applica- tion of internal guidelines, and to evaluate operations on the basis of the objectives and policies set by the Board of Directors. The Board of Directors is also tasked with identifying how sustainability issues impact risks to, and business opportunities for, the company, and defining appropriate guidelines to govern the company’s conduct in society with the aim of ensuring its long-term value creation capability. The Board shall ensure that the company has formalized procedures to ensure that the established principles for sustainability reporting are complied with and that Electrolux Professional's sustainability reporting is prepared in accordance with laws and applicable accounting standards. Read more about sustainability governance on page 150. The Chairman of the Board of Directors leads and organizes the work of the Board, ensures that the Board fulfils its tasks, and ensures that the Board’s decisions are implemented. The Chairman of the Board of Directors shall, together with the CEO, monitor the company’s performance and prepare and chair Board meetings. The Chairman is also responsible for ensuring that the Board members evaluate their work each year and continuously receive the information necessary to effectively perform their tasks. The Chairman represents the company in relation to its shareholders. The Group’s external auditors report to the Board as necessary, but at least once a year. A minimum of one such meeting is held without the presence of the CEO, or any other member of the Group Management Team. The external auditors also attend the meetings of the Audit Committee. The Audit Committee reports to the Board after each of its meetings. Minutes are taken at all meetings and are made available to all Board members and to the auditors. Board meetings in 2023 In 2023, the Board held twelve meetings, ten of which were held either as physical meetings or web meetings. Two meetings were held per capsulam. All scheduled Board meetings during the year followed an agenda, which, together with the documentation for each item on the agenda, was sent to Board members in advance of the meet- ings. Ordinary Board meetings usually last for half a day or one entire day in order to allow time for presentations and discussions. Electrolux Professional’s General Counsel serves as the secretary at the Board meetings. Each scheduled ordinary Board meeting includes a review of the Group’s results and financial position, as well as the outlook for the forthcoming quarters, as presented by the CEO. The meetings also deal with investments, credit limits, and other matters that are to be submitted to the Board under the Rules of Procedure or the company’s policies. The Board decides on all capital investments exceeding SEK 25m and receives reports on all investments exceeding SEK 10m. Finally, in most scheduled Board meetings a business function or strategic item is presented and reviewed. Key focus areas for the Board during 2023 As the effects of the pandemic declined, and despite the macro- economic impact of Russia’s war on Ukraine in terms of inflation, increased energy prices, and interest rates, overall market demand held up well during the first half of the year. During the second half of the year organic sales declined and market demand softened. As a result of the implementation of the new and simplified > Review of BA Food Americas > Q1 quarterly financial statements > AGM, statutory board meeting > Review of BA Beverage and Food Preparation > Q4 quarterly and Year-end financial statements > Review of strategy BA Laundry > Approval of 2022 Annual Report > Q2 quarterly financial statements > Budget 2024 > Group Strategic Plan > Board Trip Ljungby, Sweden > Board work evaluation > Acquisition of TOSEI > Board Trip Milan, Italy > Review BA Food Europe > Review BA Food APAC-MEA > Q3 quarterly financial statements J a n u a r y F e b r u a r y D e c e m b e r N o v e m b e r O c t o b e r M a r c h A p r i l M a y J u n e J u l y A u g u s t S e p t e m b e r The work of the Board in 2023 P. 73Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Corporate governance report Corporate governance INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT Chairman’s comments Corporate governance report Board of Directors Group Management Team Remuneration report 2023 Risk and risk management FINANCIAL INFORMATION OTHER INFORMATION organization to be able to execute faster on the company's strate- gic priorities and strategic plans, five Business Areas, Food Europe, Food Americas, Food APAC & MEA, Beverage & Food Preparation, and Laundry, were presented and reviewed by the Board The sustainability strategy continued to develop and in August Electrolux Professional Group’s near-term targets to reduce green- house gas emissions (Scope 1 and 2) and reduce indirect use-phase emissions (Scope 3) by 2030 were validated by the Science Based Targets initiative (SBTi). Another significant task consisted of estab- lishing the governance and monitoring the preparations and readi- ness for Corporate Sustainability reporting. In October one Board meeting was held in Milan and the Board visited the trade fair HOST. In December 2023 a board meeting was held in Ljungby, Sweden and the Board visited the laundry plant. Evaluation of the Board of Directors The Board evaluates its work annually with regard to working pro- cedures, the working climate, and the focus of the Board's work. This evaluation also focuses on access to, and requirements for, special competence on the Board. The evaluation is a tool for the develop- ment of the Board work and also serves as input for the Nomination Committee’s work. Each year, the evaluation of the Board is initiated and led by the Chairman of the Board. Evaluation tools include questionnaires and discussions. In 2023, Board members responded to written ques- tionnaires. The evaluations were subsequently discussed individually and at a Board meeting. The result of the evaluations was presented to the Nomination Committee. Fees for Board Members The AGM determines the compensation for the Board of Directors for a period of one year until the next AGM. The compensation is distributed between the Chairman, other members of the Board, and remuneration for committee work. The Annual General Meeting 2023 resolved on fees to the Board of Directors in accordance with the Nomination Committee’s pro- posal. Yearly fee to the Chairman of the Board of Directors of SEK 1,680,000 and SEK 560,000 to each of the other Directors appoint- ed by the Annual General Meeting not employed by Electrolux Professional. In addition to these fees, the Annual General Meeting resolved on an additional fee of USD 4,000 per meeting to be paid to each Director that resides outside Europe for attendance at ordinary physical Board meetings in Sweden or Italy. Fees for committee work to the members who are appointed by the Board of Directors were approved as follows: SEK 175,000 to the Chairman of the Audit Committee and SEK 115,000 to each of the other mem- bers of the Audit Committee and SEK 115,000 to the Chairman of the Remuneration Committee and SEK 85,000 to each of the other members of the Remuneration Committee. The compensation paid in 2023, shown in the table below, refers to compensation until the AGM in 2023 and three quarters of the compensation authorized by the AGM in 2023, see also note 26. 4 Board committees According to the Swedish Companies Act and the Code, the Board of Directors shall institute an audit committee and a remuneration committee. The majority of each committee’s members are indepen- dent in relation to the company and its Group Management. For the Audit Committee, at least one of the members who is independent in relation to the company and its Group Management team is also to be independent in relation to the company’s major shareholders. The major tasks of these committees are preparatory and ad- visory, but the Board may delegate decision-making powers on specific issues to the committees. The issues considered at com- mittee meetings shall be recorded in minutes of the meetings and continuously reported to the Board of Directors. The members and Chairmen of the committees are appointed at the statutory Board meeting following the election of Board members. The Board has also determined that issues may be referred to ad hoc committees dealing with specific matters. Audit Committee The main tasks of the Audit Committee are to oversee the process of Electrolux Professional’s financial reporting, internal control, and internal auditing in order to secure the quality of the Group’s external reporting. During 2023 the tasks of the Audit Committee have also included oversight of the preparations and readiness for Corporate Sustainability reporting. The Audit Committee is also tasked with supporting the Nomination Committee with proposals when electing external auditors. The Audit Committee consists of the following three Board members: Hans Ola Meyer (Chairman), Lorna Donatone, and Daniel Nodhäll. The external auditors report to the Committee at each or- dinary meeting. The CEO, CFO, Head of Group internal audit, and General Counsel participated in all the Audit Committee meetings in 2023. During 2023 the Audit Committee held five meetings. All Audit Committee members attended all the meetings. Remuneration Committee One of the Remuneration Committee’s primary tasks is to propose guidelines for the remuneration of the members of the Group Management Team. The Committee also proposes changes in remuneration of the CEO, for resolution by the Board, and reviews Board of Directors – remuneration and meeting attendance Total remuneration 2023, ’000 SEK Board meeting attendance Remuneration Committee attendance Audit Committee attendance Independence 1 Kai Wärn 1,751 12/12 4/4 Yes Katharine Clark 556 11/12 Yes Lorna Donatone 757 12/12 5/5 Yes Josef Matosevic 507 7/8 2) Yes Hans Ola Meyer 730 12/12 5/5 Yes Daniel Nodhäll 753 12/12 4/4 5/5 No Martine Snels 670 11/12 4/4 Yes Carsten Voigtländer 556 12/12 Yes 1) For further information about the independence assessment, see page 71. 2) Mr Matosevic was elected in April 2023. P. 74Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Corporate governance report Corporate governance INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT Chairman’s comments Corporate governance report Board of Directors Group Management Team Remuneration report 2023 Risk and risk management FINANCIAL INFORMATION OTHER INFORMATION CEO Our organization Business Area Food Europe Finance Communications, Investor Relations, Brand & Digital Marketing IT & Digital Transformation Human Resources Business Area Food Americas Business Area Laundry Business Area Beverage & Food Preparation Business Area Food APAC & MEA Legal Operations & Innovation Competence Center and resolves on changes in remuneration of other members of the Group Management Team as proposed by the CEO. The Remuneration committee consists of the following three Board members: Martine Snels (Chairman), Kai Wärn, and Daniel Nodhäll. The Chief Human Resources Officer participated in the meetings and was responsible for the meeting preparations. During 2023 the Remuneration Committee held four meetings, one of which was per capsulum. Attendance is presented in the table on the previous page. 5 Group Management Team The Group Management Team currently includes the CEO and eleven members. The CEO is appointed by, and receives instruc- tions from, the Board of Directors. The CEO, in turn, appoints other members of the Group Management Team and is responsible for the ongoing management of the Group in accordance with the Board’s guidelines and instructions. The Group Management Team holds monthly meetings online, and quarterly in-person meetings lasting two or three days, to re- view the previous month’s results, update forecasts and plans, and discuss strategic issues. Key focus areas for the Group Management Team during 2023 > Continued implementation of the new organization consisting of the two reportable segments Food & Beverage and Laundry, with five Business Areas focused on customer categories and geographies: Food Europe, Food Americas, Food APAC & MEA, Beverage & Food Preparation, and Laundry. > Digital transformation. > Continued development of sustainability strategy including readiness for the Corporate Sustainability Reporting Directive. > To address global macro-economic effects, Electrolux Professional has established procedures and internal bodies (“boards”) for the preparation and execution of key activities and processes, such as the Insider and Disclosure Committee, the Finance Governance Board, the Code of Conduct Steering Group, the Audit Board, the Enterprise Risk Management Board, and the Sourcing Board. In addition boards and forums have been created to ensure collab- oration and coordination between the Business Areas, such as the Chains and Food Product Board. > The Acquisition of TOSEI Corporation. Management changes Alberto Zanata, President and CEO acted as the head of the Business Area Food Europe from July 1 2022 to March 6, 2023 when Camilla Monefeldt Kirstein took up the position as President of the Business Area Food Europe. 6 Auditors The 2023 AGM re-elected Deloitte AB for the period up to and in- cluding the 2024 AGM. Jonas Ståhlberg, authorized public accoun- tant and a member of FAR (the professional institute for authorized public accountants in Sweden), is the auditor-in-charge. During 2023 a tender process was conducted for the election of auditor at the coming 2024 AGM. For specification of remuneration to auditors refer to note 12. Deloitte provides an audit opinion regarding Electrolux Professional AB, the financial statements of the majority of its subsidiaries, the consolidated financial statements for the Electrolux Professional Group, and the administration of Electrolux Professional AB. The auditors also conduct a review of the interim report for the second quarter. The audit is conducted in accordance with the Swedish Companies Act, International Standards on Auditing (ISA), and generally accepted auditing standards in Sweden. Audits of local statutory financial statements for legal entities outside of Sweden are performed as required by laws or applicable regula- tions in each country, including issuance of audit opinions for the various legal entities. 7 Internal Audit The Group Internal Audit function provides independent, objec- tive assurance designed to add value and improve Electrolux Professional’s operations. Group Internal Audit assists Electrolux Professional in accomplishing its objectives by bringing a system- atic, disciplined approach to evaluating and improving the effec- tiveness of the organization’s governance, internal control, and risk management processes. Group Internal Audit assignments are conducted according to a risk-based plan developed annually and approved by the Audit Committee. The audit plan is derived from an independent risk assessment conducted by Group Internal Audit to identify and evaluate risks associated with the execution of the Company’s strategy, operations, and processes. The audits are executed using a methodology for evaluating the design and implementation of internal controls to ensure that risks are adequately addressed, and processes operate efficiently. Opportunities for improving the effec- tiveness of the governance, internal control, and risk management processes identified in the internal audits are reported to manage- ment for action. A summary of audit results is provided to the Audit Committee, as is the status of management’s implementation of agreed actions to address findings identified in the audits. The Head of Group Internal Audit reports to the Audit Committee and is managed administratively by the CFO. P. 75Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Corporate governance report Corporate governance INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT Chairman’s comments Corporate governance report Board of Directors Group Management Team Remuneration report 2023 Risk and risk management FINANCIAL INFORMATION OTHER INFORMATION Internal control over financial reporting Electrolux Professional uses the COSO framework (Committee of Sponsoring Organizations of the Treadway Commission) as a basis for internal control over financial reporting. The processes for inter- nal control, risk assessment, control activities, information and com- munication, and monitoring regarding the financial reporting are designed to ensure reliable overall financial reporting and external financial statements in accordance with IFRS, applicable laws and regulations, and other requirements. This process involves the Board of Directors, the Audit Committee, the Group Management Team and all employees. Control environment The Board has overall responsibility for establishing an effective system of internal control. The Audit Committee regularly reviews and evaluates the adequacy of the internal control framework. It monitors control deficiencies identified within the Group’s internal control environment and oversees implementation of action plans if applicable. The CEO and the Group Management Team have the ultimate responsibility for internal controls within their areas of re- sponsibility. All entities within the Group must maintain adequate internal controls. As a minimum requirement, control activities should ad- dress key risks identified within the Group. Limits of responsibilities and authorities are provided in the Delegation of Authority Policy, manuals, policies, and procedures and codes, including the Code of Conduct, the Group Workplace Policy, and the Group Anti- Corruption Policy, as well as in policies for information and finance, and in the finance manual. Together with laws and external regu- lations, these internal guidelines form the control environment and all Electrolux Professional employees are held accountable for compliance. Risk assessment Risk assessment is the assessment of risks in the various processes and data points that feed into the Company’s financial reports. This includes identifying risks of not fulfilling the fundamental criteria, i.e., completeness, valuation, existence and occurrence, rights and obligations, and presentation and disclosure of significant accounts in the financial reporting for the Group, as well as the risk of loss or misappropriation of assets and potential fraud. Control activities Control activities aim to mitigate the risks identified and ensure accurate and reliable financial reporting as well as process efficiency. Control activities include ongoing evaluations, self- assessments, and internal audit to ascertain whether the compo- nents of internal control are present and functioning. Information and communication Information and communication within the Group regarding risks and controls helps to ensure that the right business decisions are made. Guidelines for financial reporting are communicated to employees, for instance by ensuring that manuals and policies are published and accessible through the Group-wide intranet. Monitoring Monitoring and testing of control activities is performed periodically to ensure that risks are properly mitigated. The effectiveness of con- trol activities is monitored continuously at three levels: Group, legal unit, and process. Monitoring involves both formal and informal procedures applied by management, process owners, and control operators, including reviews of results in comparison with budgets and plans, analytical procedures and key performance indicators, and self-assessment results. Internal audit independently evaluates the design and im- plementation of controls based on the audit scope, and proactively proposes improvement to the control environment. Controls that have failed must be remediated. Management establishes and im- plements action plans to correct weaknesses. The Audit Committee reviews, evaluates, and monitors the internal control process for financial reporting. Responsible for internal control Board of Directors Review, evaluate, and monitor the adequacy and coherence of the Internal control framework Audit Committee Provide leadership and direction to local management and review the effectiveness of internal control Group Management Internal Control Function Local and Functional Management Internal audit Coordinate and provide support for internal control self assessment process and reporting to Group Management and Audit Committee Independently evaluate the efficiency and effectiveness of internal control Perform and manage internal controls Internal control self assessment Support Audit P. 76Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Board of directors Corporate governance INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT Chairman’s comments Corporate governance report Board of Directors Group Management Team Remuneration report 2023 Risk and risk management FINANCIAL INFORMATION OTHER INFORMATION Board of Directors KAI WÄRN KATHARINE CLARK LORNA DONATONE JOSEF MATOSEVIC HANS OLA MEYER Position & year elected Chairman of the Board of Directors and Board member since 2019. Member of the Remuneration Committee. Board member since 2020. Board member since 2019. Member of the Audit Com- mittee. Board member since 2023. Board member since 2019. Chairman of the Audit Committee. Year of birth 1959 1979 1957 1971 1955 Nationality Swedish British American American Swedish Education M.Sc. in Mechanical Engi- neering, KTH Royal Institute of Technology, Stockholm, Sweden. B.Sc. (Hons) Business Infor- mation Systems Management, Bournemouth University, UK. Professional Diploma, Char- tered Institute of Marketing, UK. MBA, Texas Christian Universi- ty, USA. B.Sc. Tulane University, USA. B.Sc. in Mechanical Engineering from Bayerische Julius-Maximilian’s Universität in Würzburg, Germany. B.Sc. in Economics and Business Administration from Stockholm School of Economics, Sweden. Other board assignments Board member of Sandvik AB, Mälarhamnar AB, Sunstreet Energy AB, Exandio Holding AB, and Comparsio AB. – Board member of Dawn Food Products Inc., Sbarro, LLC and National Restaurant Associa- tion Educational Foundation, USA. Board member at Helios Tech- nologies. - Current and previous positions Previously CEO and President Husqvarna AB, Partner at IK Investment Partners Norden AB, President and CEO of Seco Tools AB, various positions within ABB. VP BD, Innovation and Sustainability at Gunnebo. Previously VP Commercial De- velopment/CCO, ASSA ABLOY Opening Solutions EMEAI. Previously various senior posi- tions within the Sodexo Group President and CEO, Helios Technologies. Previously Executive Vice President and Chief Operating Officer and interim President and CEO of Welbilt, Inc., Executive Vice President of Global Operations at The Manitowoc Company, Inc., Executive Vice President of Global Operations Oshkosh Corporation, as well as various executive positions with Wynnchurch Capital. Previously CFO, Senior Vice President Controlling and Finance at Atlas Copco AB. Independence Independent in relation to the company and the Group Man- agement Team as well as the company’s major shareholders. Independent in relation to the company and the Group Management Team as well as the company’s major share- holders. Independent in relation to the company and the Group Man- agement Team as well as the company’s major shareholders. Independent in relation to the company and the Group Man- agement Team as well as the company’s major shareholders. Independent in relation to the company and the Group Management Team as well as the company’s major share- holders. Shareholding at March 4, 2024 104,000 Class B shares and 778,816 call options issued by Investor AB entitling him to the right to purchase Electrolux Professional B shares. 9,000 Class B shares. 9,000 Class B shares – 9,000 Class B shares. P. 77Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Board of directors Corporate governance INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT Chairman’s comments Corporate governance report Board of Directors Group Management Team Remuneration report 2023 Risk and risk management FINANCIAL INFORMATION OTHER INFORMATION DANIEL NODHÄLL MARTINE SNELS CARSTEN VOIGTLÄNDER Position & year elected Board member since 2019. Mem- ber of the Remuneration Commit- tee and the Audit Committee. Board member since 2019. Chairman of the Remuneration Committee. Board member since 2019. Year of birth 1978 1969 1963 Nationality Swedish Belgian German Education M.Sc. in Economics and Business Administration, Stockholm School of Economics, Sweden. M.Sc. Industrial engineering, K.U. Leuven, Campus Geel, Belgium. Studies in mathematics, Universiteit Antwerpen, Belgium. Advanced Finance, London Busi- ness School, England. Finance for non-financials, Singapore Insti- tute of Management, Singapore. B2B Marketing, Vlerick Business School, Belgium. Degree in Mechanical Engineering, Technical University of Braunschweig, Germany. Doctoral Degree/Dr.-Ing., Process Engineering, Technical University of Braunschweig, Germany. Advanced Manage- ment Programme, INSEAD Other board assignments Board member of Husqvarna AB. Board member of SIG Group AG, member of the Audit Committee and member of the Nomination and Governance Committee, Board member of Urus Group LLC, Board member of Prodrive Technologies Group B.V. Board member of Arbonia AG and BBC Group AG. Non-Exec- utive Director of INNIO Group, OIKOS International and STULZ GmbH. Member of the Founda- tion Board of Friedhelm Loh Sti- fung. Member of the Supervisory Board of Testo Management SE. Current and previous positions Head of Listed Companies at Investor AB. CEO and owner of L’Advance B.V. Previous Non-Executive Director of Resilux NV and Member of the Supervisory Board of Vion Food Group NV. Previous member of the Executive Board of GEA Group AG and various positions within FrieslandCampina NV, including Chief Operating Officer on the Board and Executive Director Ingredients. CEO and owner of Voiglaender Board Advisory. Previously CEO of Vaillant Group. Independence Independent in relation to the company and the Group Management Team, but not in relation to the company’s major shareholders. Independent in relation to the company and the Group Management Team as well as the company’s major shareholders. Independent in relation to the company and the Group Management Team as well as the company’s major share- holders. Shareholding at March 4, 2024 20,000 Class B shares. 7,000 Class B shares 10,000 Class B shares JOACHIM NORD Position & year elected Board member since 2019. Employee representative of the Council for Negotiation and Cooperation (PTK). Year of birth 1966 Nationality Swedish Shareholding 130 Class B shares. PER MAGNUSSON Position & year elected Deputy board mem- ber since 2019. Employee representative of the Swedish Confederation of Trade Unions (LO). Year of birth 1964 Nationality Swedish Shareholding – JENS PIERARD Position & year elected Board member since January 1, 2023. Employee representative of the Swedish Confederation of Trade Unions (LO). Year of birth 1968 Nationality Swedish Shareholding – HELEN ÅKERMAN Position & year elected Deputy board member since 2024. Employee representative of Unionen Year of birth 1982 Nationality Swedish Shareholding – P. 78Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Group Management Team Corporate governance INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT Chairman’s comments Corporate governance report Board of Directors Group Management Team Remuneration report 2023 Risk and risk management FINANCIAL INFORMATION OTHER INFORMATION Group Management Team ALBERTO ZANATA PAOLO SCHIRA CAMILLA MONEFELDT KIRSTEIN DAVE HERRING PHILIPPE ZAVATTIERO RICHARD FLYNN Position President and Chief Executive Officer since 2009. President Business Area Laundry, since 2022. President Business Area Food Europe since March 2023. President Business Area Food Americas, since 2022. President Business Area Beverage and Food Prepara- tion, since 2021. President Business Area Food APAC and MEA since 2022. Year of birth 1960 1975 1972 1964 1961 1980 Nationality Italian Italian Norwegian American French British Education Master’s degree in Electronic Engineering with Business Administration, Padua University, Italy. Master’s Degree, Engineering, University of Trieste, Italy. Master's degree in Industri- al Economics, Norwegian University of Science and Technology. Master's degree in Operational Research, London School of Economics and Political Science. MBA, University of Southern New Hampshire, USA. B.Sc in Mechanical Engineering, University of Iowa, USA. Master’s Degree of Engineering, National Institute Polytechnique of Grenoble, France. Master’s degree ESSEC Business School Paris, France. Business management, University of Gloucestershire, England. Other assignments – – Board member of Knowit AB. – Board member of Institut Paul Bocuse, France. – Previous positions Head of Professional Products, Executive Vice President within the Electrolux Group Most recently SVP & GM Commercial Organization Europe. Various senior posi- tions within the Professional Products business area of the Electrolux Group, including SVP Business Development and Vice President Business Unit Laundry. Recently President Personal Protection Equipment Division at Hultafors Group. Previous- ly Executive Vice President Snickers Workwear and Fris- tads AB. Various management positions at Oriflame Cosmet- ics, SAS Group, K-World, and Management consultant at McKinsey & Company. Most recently President Unified Brands, part of the Group Management Team of Electrolux Professional since December 2021. VP/GM positions at Avery Dennison Inc. SVP & GM Europe Electrolux Professional, SVP of the Commercial Organization Europe within the Professional Products business area of the Electrolux Group. Board member of Institut Paul Bocuse, France. Most recently, since 2021 SVP & GM Commercial Organiza- tion APAC & MEA. Previously Sales Director Chains, APAC & MEA. Various roles within Electrolux Professional in Europe and Asia. Shareholding at March 4, 2024 173,203 Class B shares. 26,411 Class B shares. – – 31,836 Class B shares. 7,843 Class B shares. P. 79Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Group Management Team Corporate governance INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT Chairman’s comments Corporate governance report Board of Directors Group Management Team Remuneration report 2023 Risk and risk management FINANCIAL INFORMATION OTHER INFORMATION FABIO ZARPELLON CARLO MARIO CARONI PIA HOVLAND CAROLINA TENDORF JACOB BROBERG GUILHEM SENEGAS Position CFO since 2009. COO (Operations & R&D) since 2014 (Operations) and 2019 (R&D) respectively. Chief Human Resources Officer since 2020. General Counsel since 2022. Chief Communication and Investor Relations Officer since 2019. Chief Information Officer and Head of Digital Transforma- tion, since 2020. Year of birth 1967 1968 1965 1968 1964 1975 Nationality Italian Italian Swedish Swedish Swedish French Education Degree, Business Administra- tion, Ca´Foscari University of Venice, Italy. Master’s degree in Mechani- cal Engineering in Economics and Management, Politecnico di Torino, Italy. Bachelor’s degree in Computer Science, Stockholm University, Sweden. Master’s Degree of Law, University of Stockholm, Sweden B.A., Political Science and Economics, Lund University, Sweden. Master’s degree in Engineer- ing from CentraleSupelec, Paris and MBA from Le Collège des Ingénieurs, Paris. Other assignments President La Vela srl. – – – Board member Sveriges Kommunikatörer AB, Board member Stiftelsen Svenska Dagbladet, Board member Swedish Investor Relations Association. – Previous positions CFO of Professional Products within the Electrolux Group. SVP Global Operations within the Professional Products business area of the Electrolux Group. Various senior HR positions in Britannia Airways, Effnet Group and Electrolux includ- ing SVP HR, Communications & Continuous Improvement at Electrolux Business Area Europe. Head of Legal Electrolux Professional Group, Se- nior Group Legal Counsel, Electrolux Group, Partner and member of the Swedish Bar Association (Advokat) Ashurst law firm, General Counsel Mandator, Lawyer/Advokat Advokat- firman Södermark. Most recently, since 2019 SVP Investor Relations and Corporate Communications in Electrolux Professional. Previously SVP Corporate Communications and Investor Relations, Cloetta AB. Various Senior IT roles for bioMérieux & Mérieux Nutrisciences, IT consultant for Capgemini. Shareholding at March 4, 2024 32,378 Class B shares. 27,352 Class B shares. 19,844 Class B shares. 7,088 Class B shares. 20,685 Class B shares. 10,716 Class B shares. P. 80Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Electrolux Professional Group remuneration report 2023 Corporate governance INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT Chairman’s comments Corporate governance report Board of Directors Group Management Team Remuneration report 2023 Risk and risk management FINANCIAL INFORMATION OTHER INFORMATION Electrolux Professional Group remuneration report 2023 Introduction This report describes how the guidelines for executive remunera- tion of Electrolux Professional AB, adopted by the Annual General Meeting 2020, have been implemented in 2023. The report also provides information on remuneration for the President and CEO. The report has been prepared in accordance with the Swedish Companies Act and the Rules on Remuneration of the Board and Executive Management and on Incentive Programs, issued by the Swedish Corporate Governance Board. Further information on executive remuneration is available in note 26 (Employees and personnel costs) on pages 134–136 of the 2023 Annual Report. Information on the work of the Remuneration Committee in 2023 is set out in the corporate governance report available on pages 73 of the 2023 Annual Report. Remuneration of the Board of Directors is not covered by this report. Such remuneration is resolved annually by the Annual General Meeting and disclosed in note 26 on page 134 of the 2023 Annual Report. Key business developments in 2023 The President and CEO summarizes the company’s overall perfor- mance in his statement on pages 4–5 of the 2023 Annual Report. Group remuneration guidelines: scope, purpose and deviations A prerequisite for the successful implementation of the Group’s busi- ness strategy and safeguarding of its long-term interests, including its sustainability, is that the Group can recruit and retain qualified personnel. To this end, the Group must offer competitive remuner- ation in relation to the country or region of employment of each Group Management member. The Group’s remuneration guide- lines enable the company to offer executives a competitive total remuneration. Under the remuneration guidelines, executive remuneration shall be on market terms and may consist of the following components: fixed cash compensation, variable compensation, pension benefits, and other benefits. Variable compensation consists of both short-term cash compen- sation and long-term, share-related or cash-based compensation. The guidelines are found in the administration report on pages 92–93 of the 2023 Annual Report. During 2023, the Group has com- plied with the applicable remuneration guidelines adopted by the Annual General Meeting. No deviations from the guidelines have been decided and no derogations from the procedure for imple- mentation of the guidelines have been made. The auditor’s report regarding the Group’s compliance with the guidelines is available on www.electroluxprofessional.com/corpo- rate. No remuneration has been reclaimed. Table 1 – Total remuneration of the President and CEO in 2023 (kSEK)¹ Fixed compensation Variable compensation kSEK Fixed cash compensation³ Other benefits⁴ One-year variable Multi-year variable⁵ Extraordinary items Pension expense⁶ Total remuneration Proportion of fixed and variable remuneration Alberto Zanata President and CEO)² 7,269 394 2,717 5,635 – 583 16,599 50%/50% 1) The table reports compensation earned in 2023 (irrespective of whether payments have been made the same year), except for multi-year variable compensa- tion which reports what was vested in 2023 (settlement in Q1 the following year). 2) The remuneration of the President and CEO is defined in EUR. The presented remuneration in SEK is therefore impacted by the currency exchange rate. 3) The annual fixed salary includes annual base salary, vacation salary, paid vacation days, and fixed non-compete components. 4) Company car and medical insurance. 5) Vested 2021 long-term incentive award. 6) Pension expense, consisting of defined contributions according to collective bargaining agreement entitlements, has been counted entirely as fixed remuneration. Table 2 – Share-based remuneration (for the President and CEO) Information regarding the reported financial year Opening Balance (Jan 1, 2023) During the year Closing balance (Dec 31, 2023) The main conditions of share award plans Shares awarded⁴ Shares vested⁶ Specification of plan¹ Performance period Award date² End of vesting period Share awards held at the beginning of the year³ No. of shares Value (kSEK)⁵ No. of shares Value (kSEK)⁷ Awards subject to vesting⁸ Awards forfeited⁹ LTI 2021 10 Jan 1 – Dec 31, 2021 May 5, 2021 Dec 31, 2023 102,457 0 0 102,457 5,635 0 0 LTI 2022 11 Jan 1 – Dec 31, 2022 May 5, 2022 Dec 31, 2024 49,181 0 0 0 0 49,181 55,995 LTI 2023 12 Jan 1 – Dec 31, 2023 May 5, 2023 Dec 31, 2025 0 119,223 6,742 0 0 74,598 44,625 1) All plans have a three-year vesting period, including a one-year performance period. 2) Refers to the date when the share awards were awarded to the participant. 3) Refers to the number of share awards under vesting period at the beginning of the year. See column ‘End of vesting period’ for vesting date. 4) Assuming a maximum performance outcome. 5) Value at award date calculated as the market price per share multiplied by the number of awarded shares. 6) Actual number of shares based on performance outcome, and their value at vesting date. 7) The share value based on closing price on vesting date. 8) Refers to number of shares awarded based on actual performance outcome, but for which the vesting date is after the end of the reported financial year. 9) Refers to number of shares forfeited based on actual performance outcome. 10) The maximum number of shares that could be awarded under LTI 2021 for the CEO was 102,457 shares. Outcome was 100% and resulted in the maximum numbers of shares for the CEO. 11) The maximum number of shares that could be awarded under LTI 2022 for the CEO was 105,176 shares. The outcome was 47% and resulted in 49,181 shares for the CEO. 12) The maximum number of shares that could be awarded under LTI 2023 for the CEO was 119,223 shares. The outcome was 63% and resulted in 74,598 shares for the CEO. P. 81Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Electrolux Professional Group remuneration report 2023 Corporate governance INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT Chairman’s comments Corporate governance report Board of Directors Group Management Team Remuneration report 2023 Risk and risk management FINANCIAL INFORMATION OTHER INFORMATION Share-based remuneration The aim of Electrolux Professional’s long-term incentive plans (LTI) is to attract and retain competent senior employees, and to increase the commitment and the motivation of the program participants. The plans have been designed to align management incentives with shareholder interests. During 2023, the company had three ongoing performance share programs (LTI 2021, LTI 2022, and LTI 2023) for senior man- agers and key employees, including the President and CEO. All programs run over a three-year vesting period including a one-year performance period. The allocation of shares in the 2021 and 2022 programs is determined by the position level and the outcome of two objectives: (i) earnings per share and (ii) operating cash flow after investments. The allocation of shares in the 2023 program is determined by the position level and the outcome of three objec- tives: (i) earnings per share, (ii) operating cash flow after invest- ments and (iii) CO₂ emission reduction. Performance outcome of the objectives in the three plans is de- termined by the Board after the expiry of the respective one-year performance period for each program. Allocation of shares is based on performance, and performance objectives are linear from minimum to maximum. If the maximum is reached or exceeded, 100% of the maximum granted shares to each participant will be allocated. If the performance is below the maximum level but exceeds the minimum level, a proportionate allocation of shares will be made. No allocation will be made if performance does not reach the minimum level. The shares will be allocated after the vesting period free of charge except for tax liabilities. If a participant’s employment is terminated during the respective three-year vesting period of each program, the participant will be excluded from the program and will not receive any shares or other benefits under the program. However, in certain instances, including a participant’s death, disability, retirement, or the divestiture of the participant’s employing company, a participant could be entitled to reduced benefits under the program. All programs comprise Class B shares. Additional information about the outstanding LTI programs can be found in Note 26 in the Annual Report 2023. Application of performance criteria The performance measures for the President and CEO’s variable compensation have been defined to deliver the Group’s strategy and to encourage behavior that is in the long-term interest of the Group. The strategic objectives and short-term and long-term busi- ness priorities for 2023 have been taken into account in the defini- tion of performance measures. Descriptions of how the performance measures for payment of variable short-term and long-term compensation have been ap- plied during the financial year are set out in Tables 3(a) and 3(b) on this page. Table 3(a) – Performance of the President and CEO in the reported financial year: variable short-term cash compensation kSEK Description of the performance criteria related to the remuneration component Relative weighting of the performance criteria a) Measured performance b) Actual award/remuneration outcome Alberto Zanata (President and CEO) Group EBITA Growth (%) 1 55% a) 12% b) 1,804 kSEK Group Net Sales Growth (%) 2 15% a) 2% b) 256 kSEK Group Operating Working Capital (%) 3 15% a) 18% b) 0 Group Customer Care Net Sales Growth (%) 4 15% a) 8% b) 657 kSEK 1) Year-on-year EBITA value growth %, adjusted to budget rate 2023 in SEKm. EBITA = EBIT (absolute) plus amortization. Effects of acquisitions and divestments excluded. 2) Year-on-year External Net Sales growth (%), adjusted to budget rate 2023 in SEKm. Effects of acquisitions and divestments excluded. 3) Operating Working Capital (OWC) % = OWC (excluding factoring contribution) divided by External Net Sales. OWC: 12-month average OWC (Acc. Receivables excluding factoring contribution + Inventory + Acc. Payable) adjusted to average rate 2023. External Net Sales: 12-month External Net sales adjusted to average rate 2023. Effects of acquisitions and divestments excluded. 4) Year-over-year External Net Sales growth (%), adjusted to budget rate 2023 in SEKm. Effects of acquisitions and divestments excluded. Table 3(b) – Performance of the President and CEO in the reported financial year: variable long-term share-based compensation kSEK Name of plan Description of the performance criteria related to the remuneration component Relative weighting of the performance criteria a) Measured performance b) Actual award/remuneration outcome 4 Alberto Zanata (President and CEO) LTI 2023 Earnings per share¹ 50% a) 2.70 SEK b) 26,694 Operating cash flow after investments 2 30% a) 1,453 mSEK b) 24,059 CO₂ emission reduction 3 20% a) 680 tonnes b) 23,845 1) Income for the period (attributable to equity holders of Electrolux Professional) divided by the weighted average number of basic shares outstanding during the period. 2) Cash flow from operations and investments shall be adjusted for financial items paid, taxes paid, and acquisitions/divestments of operations. 3) CO 2 emission reduction refers to Year-on-Year greenhouse gas reductions measured in absolute values within the following areas: (i) Scope 1 and (ii) Scope 2, in accordance with the Greenhouse Gas (GHG) Protocol. 4) The vesting period ends on December 31, 2025 and shares will be paid in the following year (subject to continued employment). Table 4 – Comparative information on the change of remuneration and company performance¹ Actual Value and Annual Change² 2023 2022 2021 2020 President and CEO Remuneration in kSEK (change in %)³ 16,599 (+46%) 4 11,331 (-9%) 12,453 (+102%) 2 6,163 Group EBITA in SEKm (change in %) 1,330 (+16%) 5 1,146 (+72%) 665 (+25%) 533 Average remuneration on a full-time equivalent basis of employees of the parent company, Electrolux Professional AB in kSEK (change in %) 6 552 (+2%) 539 (+10%) 489 (-4%) 509 1) The table presents the actual value for the reported financial year and, in parentheses, the annual change vs the previous year. 2) The increase in 2021 compared to 2020 is due to close to maximum outcome for 2021 incentive programs and zero outcome for 2020 programs. 3) The remuneration of the President and CEO is defined in EUR. The presented remuneration in SEK is therefore impacted by the currency exchange rate. 4) The increase in 2023 compared to 2022 is due to the vesting of the first LTI program (LTI 2021) in Electrolux Professional AB. 5) EBITA adjusted to budget foreign exchange rates for 2023, excluding costs for acquisitions. 6) Total remuneration, excluding Board members and members of the Group Management Team, of Electrolux Professional AB. P. 82Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Risk and risk management Risk and risk management INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Risk and risk management Electrolux Professional Group is an international company which means that we are exposed to strategic, operational, and financial risks at a micro and macro level. Risks are managed through a systematic risk management frame- work to enhance resilience and empower the Group to achieve its goals. P. 83Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Risk and risk management Corporate governance INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT Chairman’s comments Corporate governance report Board of Directors Group Management Team Remuneration report 2023 Risk and risk management FINANCIAL INFORMATION OTHER INFORMATION Risk Governance Electrolux Professional’s Board of Directors has the ultimate responsibility for risk oversight. The ERM governance structure is based on the three lines of defense model, which determines the roles, responsibilities, and relationships between risk management functions. The CEO, Group Management, Business and Group functions form the first line of defense with ownership of risks, ensuring moni- toring of risks, and the responsibility for addressing risk. The role of the second line of defense, fulfilled by the ERM Board is to provide risk management oversight, support, facilitation, and consultation. The ERM Board oversees and facilitates Electrolux Professional Group’s ERM activities, ensuring that they are conduct- ed in a holistic and proactive manner, to strengthen the develop- ment of integrated risk assessment processes, thus supporting the achievement of the Group’s strategic goals. The ERM Board con- sists of the President and Group CEO, the Group CFO, the General Counsel, and the Group Risk Manager. Internal audit is the third line of defense. It provides independent assurance by evaluating the efficiency and effectiveness of the Group’s risk governance model and risk management processes, including the implementation of internal control and other risk mitigation actions. Electrolux Professional Group transfers certain risks to estab- lished and internationally recognized commercial insurance mar- kets. Further actions are also taken to reduce insurable risks as part of the Group’s loss prevention strategy, to reduce the potential for significant losses, and to ensure the Group’s ability to produce and deliver to customers without interruptions. Risk Governance 3 rd line of defense Independent assurance 2 nd line of defense Risk Management oversight, support, facilitation, and consultation 1 st line of defense Ownership of risk taking and addressing risk Compliance/LegalRisk Management CEO and Group Management Audit Committee Board of Directors ERM Board Business and Group functions Internal Audit Enterprise Risk Management The purpose of the Enterprise Risk Management (ERM) process is to proactively manage risks that have the greatest potential to impact Electrolux Professional Group’s ability to fulfill the compa- ny's mission, strategy, and business goals. The foundation for the ERM process is bi-annual workshops with Group Management and Business Area Management Teams as well as continuous support for risk mitigation actions. ERM objectives and process > Promote integration of risk management processes with business strategy, project management processes, and decision making. > Ensure continuity and transparency in methodology, assessment, and management processes. > Establish appropriate, consistent, and transparent risk coordina- tion and accountability for risk mitigation. Identified risks are assessed by management teams through a combination of potential impact on the company and current level of risk management. This assessment determines the degree of materiality for each risk, which in turn sets the prioritization for risk mitigation and guides identification of appropriate actions to improve the specific risk management. The process setup ensures strong risk ownership and highlights the ability to act to improve risk management as the core component in the ERM process. Risk materiality scale Low Moderate Substantial Critical P. 84Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Risk and risk management Corporate governance INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT Chairman’s comments Corporate governance report Board of Directors Group Management Team Remuneration report 2023 Risk and risk management FINANCIAL INFORMATION OTHER INFORMATION Materiality Risk Management Economic climate Demand for Electrolux Professional Group´s products depends on the general economic climate within the professional equipment industry, which in turn is affected by macroeconomic factors in the countries and regions where the Group conducts operations, including the rate of growth in the global and local economy. Strategic risks are managed through the normal course of business, i.e. strategic plans and business decisions taken by the Board of Directors, the Group Management Team, and management teams throughout the Group. Political instability Market accessibility is impacted by geopolitical decisions, aggressions, sanc- tions, export controls, etc. as well as the general prevailing political discourse, e.g. globalization or protectionism, which ultimately affects the legal possibili- ties to do business in certain areas of the world as well as general supply and demand. Close monitoring of the geopolitical developments in countries with political risk exposure. Readiness to act to ensure continuity of business. Climate change Climate change is expected to drive global geographic shifts affecting tourism/ business travel, and is a chronic physical risk. In a 4-degree climate change scenario, a large part of our customer base could become exposed to significant risks due to climate change in 2050. Geographic shifts in global tourism/business travel could have a financial impact in terms of reduced demand for products and a shift to new geographies to- wards the higher latitudes, unless we keep up with this shift in demand. A shift in peak season tourism to shoulder seasons could open up future business oppor- tunities and increase sales in these currently off-peak seasons. Read more about actions taken in the Sustainability report on pages 48–66. Strategic risks Strategic risks relate to macro-economic factors and geopolitical conditions resulting in changes in the business environment that potentially have a significant effect on operations and business objectives. Read about climate scenario analysis in Note 31 on page 139. Risks The Group’s most significant strategic, operational, financial, and sustainability risks are described on the following pages. Low Moderate Substantial Critical P. 85Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Risk and risk management Corporate governance INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT Chairman’s comments Corporate governance report Board of Directors Group Management Team Remuneration report 2023 Risk and risk management FINANCIAL INFORMATION OTHER INFORMATION Materiality Risk Management Manufacturing The Group has 13 manufacturing plants in eight countries and manufacturing is a chain of processes. Unfavorable geopolitical developments, fire, natural disasters, extreme weather conditions, epidemics, pandemics, systems failure, mechanical failure, or equipment failure could affect the Group’s manufacturing capacity. Any extensive outages or disruptions due to such events could have an adverse effect on the Group’s business and financial position. Disruption to the Group’s manufacturing capacity in operations and supply chain due to extreme weather events has been identified as a changed physical risk. Electrolux Professional’s manufacturing and supplier sites may become increas- ingly affected by extreme weather events in the coming years. Manufacturing units continuously monitor the production process, test the safety and quality of products, conduct risk assessments, and train employees. The Group works in a structured manner to ensure the health and wellbeing of its employees and by regularly assessing and managing safety and health risks in operations. Manufacturing sites are surveyed annually through a group-wide loss prevention standard which includes risk management, emergency procedures, business con- tinuity, and security. The program ensures continuous improvement and sharing lessons learned between sites. The Group has transferred part of its property damage and business interruption risks to the direct insurance market. The long-term view of the location of sites is managed through strategic plans and business decisions taken by the Board of Directors, the Group Management Team, and management teams throughout the Group. Read more about produc- tion and logistics on pages 40–43. Supply chain Manufacturing depends on the availability and timely supply of components and raw materials, sourced and purchased primarily from external suppliers. A shortage of electronics and raw materials poses risks related to product costs and timely delivery to customers. Some key parts and customized components are available only from a single supplier or a limited group of suppliers and there is a risk that the Group will be unable to obtain these products for a certain period, which could have an adverse effect on the Group’s ability to manufacture single types or catego- ries of products within a reasonable time or at an acceptable cost. Potentially increased costs for materials, energy, and transportation as a knock-on effect of carbon pricing has been identified as a climate change transition risk. Proactive efforts are being made to establish a robust and flexible supply chain with multiple sourcing that complies with laws and the Group’s business princi- ples, which is having a positive effect. We perform regular supplier audits and continuous monitoring of supplier performance and financial stability, and long- term agreements are in place with single-source suppliers. In addition, we are establishing more dual-sourcing for key components and raw materials. Products Most of Electrolux Professional Group’s products and product lines are subject to regulations that set out basic health and safety requirements applicable to products released onto the market. Should any of the Group’s products have defects that lead to serious accidents or ill-health when used, there is a risk that competent authorities could decide to prohibit sales, require recall of the product from the market, or provide warning information. Such market interventions and any product liability claim from contracting parties or third parties could have an adverse effect on the Group’s business, reputation, results of operations, and financial position. The Group aims to ensure customer safety and reduce risks by focusing on product safety during the product development phase and the manufacturing of its products. Tests are performed on products during the manufacturing process as well as through field tests at customer sites. The Group also uses third-party laboratories to review products from a safety standpoint. In recent years we have started to perform ergonomic certifications on certain products (ERGO- CERT). The Group has transferred part of its product liability risk to the direct insurance market. Operational risks Operational risks stem from business operations and have a potential impact on the Group's financial position and performance. Risks are mainly associated with the development, design, and manufacturing of the Group’s products, the supply chain, and sales of products and services worldwide. Read about climate scenario analy- sis in Note 31 on page 139. Low Moderate Substantial Critical P. 86Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Risk and risk management Corporate governance INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT Chairman’s comments Corporate governance report Board of Directors Group Management Team Remuneration report 2023 Risk and risk management FINANCIAL INFORMATION OTHER INFORMATION Materiality Risk Management Legal and compliance Electrolux Professional Group conducts its business in many jurisdictions with different legislation, rules, and regulations. Non-compliance with trade compli- ance rules, product certification requirements, privacy rules, and so on could result in fines and penalties, trade restrictions, and reputational impact. In addition to the Code of Conduct, the Group has issued policies and proce- dures on legal compliance that are applicable to all employees worldwide. The procedures are regularly reviewed and followed up, and whistleblowing procedures have been implemented. Regular training is held for relevant employees (face-to-face, via video or e-learning). IT systems and cyber security The Group is dependent on information technology and systems. Cyber security risks are increasing globally, and the risk of a cyber intrusion is continuously on the rise. A cyber security breach could disrupt manufacturing processes and IT systems, which could impact the Group’s financial position and result. The Group has an IT security strategy including information security policies and procedures, and IT General Controls (ITGC). There are different levels of access controls for internal employees and contractors, and regular vulnerability testing is carried out. Internet security training for employees is conducted regularly. The system landscape is based on well-proven products and market-leading service providers. There is a designated Chief Information Security Officer function at Group level. Human resources A prerequisite for the successful implementation of the Group’s business strategy and safeguarding of its long-term interests, including its sustainability, is that the Group can recruit and retain qualified personnel. Difficulties in recruiting and retaining qualified personnel could result in a diminished competitive edge and increased costs. To offer attractive positions and personal and professional development, a good working environment and competitive compensation and benefits are prioritized within the Group. Salaries and other conditions are adapted to the market and linked to business priorities. The Group strives to maintain good relationships with unions. Financial risks The Group is exposed to several risks from liquid funds, trade re- ceivables, borrowings, commodity prices, tax, foreign exchange etc. These risks are categorized as financial risks, some of which are presented below. More information about financial risks and man- agement of the risks can be found in Note 1 Accounting Principles on page 102, Note 2 Financial risks on page 104 and Note 17 Trade receivables on page 120. Foreign exchange risk Electrolux Professional’s solutions and products are manufactured in thirteen facilities located in eight countries around the world and sold in approximately 110 countries. Accordingly, the Group is exposed to currency risks. Foreign exchange risk is defined as the risk that fluctuations in currency exchange rates have a negative impact on the Group’s financial position, profitability, or cash flow and includes transaction exposure and translation exposure. Credit risk Credit risk on financial transactions is the risk that the counterpart is not able to fulfill its contractual obligations related to the Group’s investments of liquid funds and derivatives. Credit risks also arise in connection with trade receivables. Electrolux Professional’s client base is characterized by a mix of repeat customers such as dis- tributors and one-time customers, as well as multi-operator stores or spare-part customers. If Electrolux Professional is unable to fully collect its trade receivables from major customers, the Group’s result would be adversely affected. Interest-rate risk Interest-rate risk refers to the adverse effects of changes in interest rates on the Group’s income. The main factor determining this risk is the interest-fixing period. In 2023, the Group’s average interest- fixing period was 1.1 years. Tax risk The Group is comprised of subsidiaries that are subject to taxa- tion in approximately 30 jurisdictions. There is a risk that Electrolux Professional’s understanding and interpretation of tax laws, tax treaties, and other provisions are not correct in all aspects. There is also a risk that tax authorities in the relevant jurisdictions make as- sessments and decisions that differ from Electrolux Professional’s un- derstanding and interpretation, which could negatively impact the Group’s tax expense and effective tax rate. In addition, valuation of deferred taxes is based on projections of future taxable income and there is a risk that changes in assumptions or erroneous estimates result in significant differences in the valuation of deferred taxes. Sustainability risks Electrolux Professional Group’s global operations expose the Group to risks related to sustainability factors such as environmen- tal impact, human rights, employment conditions, and corruption. These risks could arise in several phases of the value chain, such as in purchasing and sales, and also in connection with third-party service partners providing preventive and corrective maintenance services to end customers. Countries are increasingly adopting new rules and regulations aimed at imposing mandatory rules on sustainability-related areas, particularly in human rights and modern slavery. Failure to comply with standards and regulations on the work environment, anti- corruption, human rights, and business ethics could have an adverse effect on the Group’s reputation, results of operations, and financial position. Operational risks, continued Low Moderate Substantial Critical P. 87Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Financial information Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Financial information P. 88Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Financial information, contents Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION Financial information, contents Note 1 Accounting principles 102 Note 2 Financial risk management 104 Note 3 Segment information 107 Note 4 Revenue recognition 108 Note 5 Operating expenses 110 Note 6 Other operating income and expenses 110 Note 7 Material profit and loss items 110 Note 8 Leases 111 Note 9 Financial income and financial expenses 112 Note 10 Taxes 112 Note 11 Other comprehensive income 113 Note 12 Property, plant and equipment 114 Note 13 Goodwill and other intangible assets 116 Note 14 Other non-current assets 119 Note 15 Inventories 119 Note 16 Other current assets 119 Note 17 Trade receivables 120 Note 18 Financial instruments 120 Note 19 Assets pledged for liabilities to credit institutions 128 Note 20 Share capital, number of shares, and earnings per share 128 Note 21 Post-employment benefits 129 Note 22 Other provisions 131 Note 23 Other liabilities 132 Note 24 Contingent liabilities 132 Note 25 Acquired and divested operations 132 Note 26 Employees and remuneration 133 Note 27 Fees to auditors 136 Note 28 Transactions with related parties 136 Note 29 Untaxed reserves, Parent Company 136 Note 30 Shares and participations 137 Note 31 Climate 139 Note 32 Events after the balance sheet date 140 Note 33 Proposed distribution of earnings 140 Administration report 89 Consolidated statement of total comprehensive income 94 Consolidated balance sheet 95 Change in consolidated equity 96 Consolidated cash flow statement 97 Parent Company income statement 98 Parent Company balance sheet 99 Parent Company change in equity 100 Parent Company cash flow statement 101 Notes 102 The Board's assurance 141 Auditor’s report 142 Seven years in summary 145 Definitions and reconciliation of alternative performance measures 147 Financial information Notes to the financial statements P. 89Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Administration report Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION Administration report The Board of Directors and President and CEO of Electrolux Professional AB (publ), corporate identity number 556003-0354 and registered office in Stockholm, Sweden, hereby submit the annual report and consolidated accounts for the financial year January 1, 2023 to December 31, 2023. Information on operations Electrolux Professional Group is one of the leading global providers of food service, beverage, and laundry equipment for professional users. Our innovative products and worldwide service network make our customers’ work-life easier, more profitable and truly sustainable every day. The Group serves a wide range of customers globally, from restaurants and hotels to healthcare, educational, and other service facilities. Electrolux Professional has two reportable segments; Food & Beverage and Laundry. The segments are regularly reviewed by the President and CEO, who is the Group’s chief operating decision maker. > Food & Beverage offers equipment to a variety of professional users in the hospitality industry. Products within Food & Beverage are mainly comprised of modular cooking, ovens, dishwashing and refrigeration, dispensers for hot beverages (e.g. coffee grind- ers, brewers, and espresso machines), cold beverages (beverage and juice dispensers), and frozen beverages (frozen drinks and ice cream dispensers), as well as equipment for soft serve. > Laundry offers equipment designed to meet a diverse array of professional users, from self-service and the hospitality industry to healthcare providers and commercial laundries. Customers include hospital and hotel laundries, apartment-building laundries, and laundrettes. Products offered within the laundry segment include washing machines, tumble dryers, ironers, and finishing equipment. In addition to product offerings, each segment provides Customer Care services to customers throughout the equipment lifecycle. Markets Electrolux Professional’s solutions and products are sold in more than 110 countries. Our commercial activities focus on three main geographical regions – Americas, Europe, and Asia Pacific & Middle East and Africa (APAC & MEA). Our products are sold through a global network of dealers and distributors. Production On December 31, 2023, Electrolux Professional’s production units operated through twelve manufacturing sites, organized mainly by product category to ensure proximity and agility to serve customer needs. All manufacturing sites commit to a systematic approach for the responsible use of resources, occupational health and safety, and environmental management. Our factories are specialized by product categories, with food and laundry plants producing the majority of the appliances to order, while for the beverage plants there is a mix between make-to-order and make-to-stock. Significant events during the financial year All US Food & Beverage brands on show at NAFEM For the very first time since the acquisition of Unified Brands in 2021, all of Electrolux Professional Group’s Food and Beverage brands in the US were displayed together at the NAFEM Show, the largest food-service exhibition in the US. All these brands combined creates a stronger than ever platform in the US – which supports the Group strategy for growth in the US and through restaurant chains. The Group’s sustainability targets validated by Science-based targets initiative (SBTi) Electrolux Professional Group’s near-term targets to reduce green- house gas emissions (Scope 1 and 2) and reduce indirect use-phase emissions (Scope 3) by 2030 were validated by the Science Based Targets initiative (SBTi). The new Science Based Target is to reduce Scope 1 and 2 emissions by 70% by 2030 from a 2019 base year. In addition, a further Science Based target to reduce indirect use- phase emissions of sold products by 27.5% by 2030 from a 2019 base year was also approved. CO 2 emission target reached The target to reduce CO 2 (Scope 1 and 2) emissions from our in- dustrial sites with >50% by 2025 (base year 2015, excluding Unified Brands) was achieved already during 2023 – two years ahead of plan. Acqusition of TOSEI Corporation In December 2023 Electrolux Professional Group entered into an agreement to acquire TOSEI Corporation (“TOSEI”), a leading Japanese manufacturer of professional laundry equipment and vacuum packing machines. The acqusition was completed on January 10, 2024. Through this acquistion Electrolux Professional became a larger player in Japan, which is the second largest laundry market and third largest food-service market globally. The Group will also be able to expand the vacuum packing products that are already used globally in the fast-growing segment of sous-vide cooking. Commercial paper program launched The Commercial paper program has a framework amount of SEK 2,000m, and is mainly used for short-term financing of working capital needs and to replace other short-term financing. Conversion of shares According to Electrolux Professional's Articles of Association, owners of A shares have the right to convert such shares to B shares. Conversion reduces the total number of votes in the company. 13,853 shares were converted during 2023. On December 31, 2023, the company’s registered share capital amounted to SEK 28,739,745, represented by 287,397,450 shares of which 8,031,461 were Class A shares and 279,365,989 were Class B shares. The total number of votes amounted to 35,968,059.9. P. 90Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Administration report Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION SEKm Operating cash flow after investments 0 300 600 900 1,200 1,500 20232022202120202019 SEKm EBITA and EBITA margin 0 300 600 900 1,200 1,500 20232022202120202019 % EBITA EBITA margin 0 5 10 15 20 25 SEKm Total net sales 0 2,000 4,000 6,000 8,000 10,000 12,000 20232022202120202019 Includes items affecting comparability of SEK -32m in 2019, SEK –77m in 2020, and SEK –35m in 2022. Financial targets Electrolux Professional’s financial targets are as follows: Organic sales growth Organic annual growth of more than 4% over time, complemented by value-accretive acquisitions. EBITA margin EBITA margin of 15%. Operating working capital Operating working capital below 15% of net sales. Net debt/EBITDA Leverage ratio below 2.5x Net debt/EBITDA. Higher levels may be temporarily acceptable in the event of acquisitions, provided there is a clear path to deleveraging. Dividend policy Approximately 30% of net income. Operational and financial review Net sales Net sales for 2023 amounted to SEK 11,848m (11,037), an increase of 7.3% compared to the same period last year. Organically, sales in- creased by 2.6%, changes in exchange rates contributed 4.9% while the divestment of the Russian operations had an effect of –0.2%. Sales of Food & Beverage decreased organically by 1.0%. Sales of Laundry increased organically by 9.7%. Sales in Europe increased organically by approximately 7% and in Asia-Pacific, Middle East and Africa by 4%. Sales declined by 6% in the Americas. Changes in net sales % 2023 2022 Organic growth 2.6 16.9 Acquisitions – 17.2 Divestments –0.2 –0.8 Changes in exchange rates 4.9 7.1 Total 7.3 40.4 Operating income and EBITA Operating income excluding amortization of intangible assets (EBITA) amounted to SEK 1,317m (1,111), corresponding to a margin of 11.1% (10.1). Operating income amounted to SEK 1,154m (955), corresponding to a margin of 9.7% (8.7). The improved operating income is mainly due to price, but also lower material and transpor- tation costs. Performance per segment The Group’s operations are reported to the President and CEO under two segments, Food&Beverage and Laundry, which have been identified based on the monitoring and reporting structures. Food & Beverage Sales for Food & Beverage were SEK 7,616m (7,290), an increase of 4.5% compared to last year. Organically sales decreased by –1.0% (17.4) and changes in exchange rates had an effect of 5.6% (10.3). The divestment of the operations in Russia had an effect of –0.1%. Operating income excluding amortization of intangible assets (EBITA) amounted to SEK 766m (679), corresponding to a margin of 10.1% (9.3). Operating income amounted to SEK 620m (542), corre- sponding to a margin of 8.1% (7.4). Laundry Sales for Laundry were SEK 4,231m (3,747), an increase of 12.9% compared to last year. Organically, sales increased by 9.7% (16.2) and changes in exchange rates had an effect of 3.5% (3.2). Key ratios Food & Beverage performance SEKm 2023 2022 Change Net sales 7,616 7,290 4.5 Organic growth, % –1.0 17.4 – Acquisitions, % – 28.3 – Divestments –0.1 –0.9 – Changes in exchange rates, % 5.6 10.3 – EBITA 766 679 12.7 EBITA margin, % 10.1 9.3 – Operating income 620 542 14.4 Operating margin, % 8.1 7.4 – Key ratios Laundry performance SEKm 2023 2022 Change Net sales 4,231 3,747 12.9 Organic growth, % 9.7 16.2 – Divestments –0.3 –0.7 – Changes in exchange rates, % 3.5 3.2 – EBITA 702 608 15.6 EBITA margin, % 16.6 16.2 – Operating income 686 590 16.2 Operating margin, % 16.2 15.7 – ) Alternative performance measures are explained on pages 147-148. P. 91Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Administration report Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION Operating income excluding amortization of intangible assets (EBITA) amounted to SEK 702m (608), corresponding to a margin of 16.6% (16.2). Operating income amounted to SEK 686m (590), corresponding to a margin of 16.2% (15.7). Seasonal variation No seasonal variations exist. Financial net Net financial items amounted to SEK –121m (–61). The increase in financial net is due to higher interest rates and indebtedness as a result of the acquisition of Unified Brands. Income for the period Income for the period amounted to SEK 775m (686), corresponding to SEK 2.70 (2.39) in earnings per share. Income tax for the period amounted to SEK –259m (–209). The effective tax rate was 25.0% (23.3). Group common cost Group common cost was SEK –152m (–177). Cash flow Operating cash flow after investments amounted to SEK 1,453m (636). Cash conversion continues to be good with a positive contribution from reduced inventory. Operating working capital Operating working capital as a percent of annualized net sales was 18.1% compared to 16.7% at the end of 2022. Inventory is starting to come down, but is still at a high level. Inventory has decreased by SEK 289m compared to the end of 2022. Financial position Net debt As of December 31, 2023, Electrolux Professional Group had a financial net debt position (excluding lease liabilities and post- employment provisions) of SEK 973m compared to SEK 1,643m as of December 31, 2022. Lease liabilities amounted to SEK 319m and net provisions for post-employment benefits amounted to SEK 98m. In total, net debt amounted to SEK 1,390m as of December 31, 2023, compared to SEK 2,050m as of December 31, 2022. Long- term borrowings amounted to SEK 1,192m. Short term borrowings amounted to SEK 771m. Total borrowings amounted to SEK 1,963m compared to SEK 2,894m as of December 31, 2022. Liquid funds as of December 31, 2023, amounted to SEK 989m compared to SEK 1,251m as of December 31, 2022. During 2023 Electrolux Professional Group executed voluntary pre-payment of EUR 140m to its syndicated term loan facility. This means that the loan facility has now been fully repaid and cancelled. Credit facilities and loans Electrolux Professional Group has a term loan of SEK 600m with a tenure of seven years from 2020, a sustainability-linked loan of EUR 60m with a tenure of seven years from 2021, a commercial paper program with a framework amount of SEK 2,000m, and a revolving credit facility of EUR 200m with a tenure until 2027. None of the loan facilities contain any financial covenants. As of December 31, 2023, the revolving credit facility was unutilized and Electrolux Professional Group had SEK 650m issued under its commercial paper program. Related-party transactions See Note 28 on page 136. Employees The number of employees at year-end was 3,983 (4,022). Corporate governance report Electrolux Professional has prepared the Corporate Governance report presented on pages 69-79. Sustainability Report Electrolux Professional Group has prepared a Sustainability Report in accordance with the updated Global Reporting Initiative (GRI) Standards from 2021. The sustainability report has been prepared in accordance with disclosure requirements set out in the Swedish Annual Accounts Act, chapter 6 paragraph 11. The Sustainability re- port is presented on pages 48–66 and 149–162 of this report. Environmental impact and approach A systematic environmental approach is the basis for reducing Electrolux Professional Group’s environmental impact. The greatest direct environmental impact relates to water and energy con- sumption, wastewater, waste, and transportation. From a product lifecycle perspective, the main environmental impact occurs in the product-use phase at the customer’s location. The company com- plies with environmental legislation and is not involved in any envi- ronmental disputes. As of December 31, 2023, Electrolux Professional had manufacturing operations at twelve sites in seven countries. The Swedish factory in Ljungby conducts notifiable activities according to Swedish legislation. There are no injunctions under the Swedish Environmental Legislation. The factories operate according to national legislation, apply for necessary permits, and report to local authorities in accordance with applicable legislation. All factories conduct systematic environmental work that in- cludes action plans and monitoring of a number of environmental aspects. Our environmental work is an integral part of our opera- tions and environmental matters are taken into account during deci- sion making. Evaluation and follow-up of measures taken increases awareness of the impacts the business has on the environment. The Group’s environmental policy and environmental work are described in more detail on pages 54–55, 59–62, and 150. Other disclosures Risk and uncertainty factors The Group is exposed to several risks from liquid funds, trade receivables, borrowings, commodities, tax, foreign exchange, credit, and other financial risks. Electrolux Professional’s Board of Directors has the ultimate responsibility for risk oversight. The ERM Governance Structure is based on the three-lines-of-defense model. Risk and risk management is described on pages 82-86 and in note 2 on pages 104-106. Research and development A key factor for Electrolux Professional’s success is its ability to develop new products that serve customer needs and increase their productivity. This is mainly driven by management decisions to make investments in product development and the right technolo- gies, leading to a stronger and more competitive range of products, which makes it possible for Electrolux Professional to retain its com- petitiveness and pricing. Product development starts and ends with the customer in mind. The Group’s sales organization has continuous interaction with cus- tomers in order to understand their needs. Continued investments in research and development are paramount to the company’s future profitability. Electrolux trademark license agreement Since the separation from the AB Electrolux group, the “Electrolux” component of the Electrolux brand and trademark (to be used exclusively in combination with “Professional”, i.e. “Electrolux Professional”) and the “Zanussi” brand and trademark are licensed from AB Electrolux to Electrolux Professional pursuant to a license granted to Electrolux Professional under a trademark license agree- ment. The license agreement has an initial term of 50 years, which is automatically renewed with two consecutive ten-year periods, unless terminated with two years’ notice by either party. For the first 15 years of the term, the licenses will be royalty-free. Thereafter, Electrolux Professional will pay a royalty for the licenses amounting to 0.1% of the net sales of licensed products and services, subject to more detailed calculation principles set forth in the agreement. The trademark license agreement is subject to a change-of- control clause, which gives AB Electrolux a right to terminate the agreement or any licenses therein, with immediate effect, in the event that Electrolux Professional is subject to a change of control. Such change of control is deemed to occur if, for example, any sale or transfer of the ownership of a controlling interest or majority stake in Electrolux Professional (or a parent company) takes place to an- other entity which has a substantial consumer appliances business (meaning a consumer appliance business with an annual sales revenue of more than SEK 10bn) in the first twelve-month period of the term of the agreement, and thereafter increasing annually in line with the Swedish Consumer Price Index (Sw. konsumentprisindex), decided at the sole reasonable discretion of AB Electrolux. P. 92Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Administration report Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION The company’s expected future progress For the next few years the company will remain focused on its strategic pillars to grow sales and profit. In the short term, the company may be affected by the general economic uncertainty, inflation, and negative consumer sentiment, which gives us reason for caution and to be prepared for various scenarios. Remuneration Remuneration Guidelines for Group Management The 2024 Remuneration Guidelines for Group Management will be proposed to the 2024 Annual General meeting. The proposal contains only minor editorial changes. The guidelines set forth below were resolved by the 2020 Annual General Meeting and apply to the remuneration and other terms of employment of the President and CEO and other members of the Group Management of Electrolux Professional Group (“Group Management”). The Group Management currently (December, 31, 2023) comprises twelve executives, including the CEO. The principles are applied to employment agreements entered into after the Annual General Meeting in 2021 and to changes made to existing employment agreements thereafter. The guidelines will be in force until new guidelines are adopted by the General Meeting. These guidelines do not apply to any remuneration decided or approved by the General Meeting. Remuneration for the President and CEO is resolved upon by Electrolux Professional AB’s Board of Directors, based on the rec- ommendation of the Remuneration Committee. Remuneration for other members of Group Management is resolved upon by the Remuneration Committee and reported to the Board of Directors. The Remuneration Committee also monitors and evaluates programs for variable remuneration for the Group Management, the application of the guidelines for executive remuneration, as well as the current remuneration structures and compensation levels in the company. Based on the recommendation from the Remuneration Committee, the Board of Directors prepares a proposal for new guidelines at least every four years and submits it to the Annual General Meeting. The President and CEO and other members of the Group Management do not participate in the Board of Directors’ process- ing of, and resolutions regarding, remuneration-related matters insofar as they are affected by such matters. Electrolux Professional has a clear strategy to deliver profitable growth and create shareholder value. A prerequisite for the success- ful implementation of the company’s business strategy and safe- guarding of its long-term interests, including its sustainability, is that the company is able to recruit and retain qualified personnel. To that end, it is necessary that the company offers competitive remuneration in relation to the country or region of employment of each Group Management member. These guidelines enable the company to offer the Group management a competitive total remuneration. More information on the company’s strategy can be found on the company’s website and in the Annual Report. The remuneration terms must emphasize ‘pay for performance’, and vary with the performance of the individual and the Group. The total remuneration for the Group Management must be in line with market practice and may comprise the following components: fixed compensation, variable compensation, pension benefits, and other benefits. Employment contracts governed by rules other than those in Sweden may be duly adjusted for compliance with mandatory rules or established local practice, taking into account, to the extent possible, the overall purpose of these guidelines. Fixed compensation The Annual Base Salary (“ABS”) must be competitive relative to the relevant market and reflect the scope of the job responsibilities. Salary levels are to be reviewed periodically (usually annually) to ensure continued competitiveness and to recognize individual performance. Variable compensation Variable compensation consists of both short-term and long-term incentives. Long-term incentives (“LTI programs”) can be cash based or share-related. Share-related LTI programs are resolved upon by the General Meeting and are therefore excluded from these guidelines. Each year, the Board of Directors will evaluate whether or not an LTI program shall be adopted or, in the case of a share-related LTI program, proposed to the General Meeting. LTI programs are to be distinctly linked to the business strategy and must always be designed with the aim of further enhancing the common interest of participating employees and Electrolux Professional shareholders of good long-term development for Electrolux Professional Group. Consistent with the ‘pay for performance’ principle, variable compensation must represent a significant portion of the total compensation potential for Group Management. Variable compensation must always be measured against pre-defined targets and have a maximum above which no payout can be made. The extent to which the criteria for awarding variable cash remuneration has been satisfied is determined by the Remuneration Committee when the measurement period has ended. For financial objectives, the evaluation will be based on the annual financial result in accordance with the most recent interim report for the fourth quarter made public by the company. Short-Term Incentive (STI) Members of the Group Management participate in an STI plan under which they may receive variable compensation. The objec- tives set in the STI plan must be financial and the measurement period must be one year. The objectives may include EBITA Growth and Net Sales Growth. The maximum STI entitlements are dependent on position and may amount to no more than 100% of the ABS. Cash-based LTI programs Variable remuneration may also be paid as part of cash-based LTI programs. The objectives for cash-based LTI programs must be fi- nancial and aim to measure the company’s growth and profitability. The objectives may include Earnings per Share and Operating Cash Flow. The measurement period for the satisfaction of the objectives must be one year, however, any payout under the pro- gram must not be awarded until two years after the expiry of the measurement period, provided that the conditions for payout are fulfilled. Any payout is to be used by the participant to purchase shares in Electrolux Professional, and the participant is required to hold such shares for a holding period of two years after the payout. The purpose of a cash based LTI program is thus for the participants to build up a shareholding in the company in order to create a com- mon ownership interest between the participants and the share- holders. Cash-based LTI programs must always be designed with the aim of further enhancing the common interest of participating employees and Electrolux Professional shareholders of good long- term growth for Electrolux Professional. The maximum LTI entitlements are dependent on position and may amount to no more than 100% of the ABS. Extraordinary arrangements Additional variable compensation may be approved in extra- ordinary circumstances under the condition that such extraordinary arrangements are made for recruitment or retention purposes, are agreed on an individual basis, do not exceed three (3) times the ABS, and are earned and/or paid out in instalments over a minimum period of two (2) years. Such additional variable remuneration may also be paid on an individual level for extraordinary performance beyond the individual’s ordinary tasks, and in these situations must not exceed 30% of the ABS and be paid in one instalment. Right to reclaim variable remuneration Terms and conditions for variable remuneration should be devised to enable the Board, under exceptional financial circumstances, to limit or cancel payments of variable remuneration provided that such action is deemed reasonable (malus). The Board also has the possibility, under applicable law or contractual provisions and subject to the restrictions that may apply under law or contract, to in whole or in part reclaim variable remuneration paid on incorrect grounds (claw-back). P. 93Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Administration report Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION Pension and Benefits Old age and survivor’s pension, disability benefits, and health- care benefits are designed to reflect home-country practices and requirements. When possible, pension plans are to be based on defined contribution. In individual cases, depending on provisions in collec- tive agreements, tax and/or social security legislation to which the individual is subject, other schemes and mechanisms for pension benefits may be approved. For the Group Management, the defined pension contributions must not exceed 40% of the ABS unless the entitlement is higher under applicable collective agreements. Other benefits, such as company cars and housing, may be provided on an individual level or to the entire Group Management. Costs relating to such benefits must not amount to more than 20% of the ABS. Members of the Group Management who are expatriates or relocated permanently to another country, may receive additional remuneration and other benefits to the extent reasonable in light of the special circumstances associated with the relocation arrange- ment. Such benefits must be determined in line with the Group’s Directive on International Assignments or applicable local reloca- tion policy, and may for example include relocation costs, housing, tuition fees, home travel, tax support, and tax equalization. Notice of Termination and Severance Pay The notice period for the President and CEO is twelve months if Electrolux Professional takes the initiative to terminate the employ- ment and six months if the President and CEO takes the initiative to terminate the employment. For other members of the Group Management the notice period is between six to twelve months if Electrolux Professional takes the initiative to terminate the employment and three to six months if the Group Management member takes the initiative to terminate the employment. In individual cases, contractual severance pay may be approved in addition to the notice periods. Contractual severance pay may only be payable upon Electrolux Professional’s termination of the employment arrange- ment or where a Group Management member gives notice as the result of an important change in the working situation, because of which he or she can no longer perform to standard. This may be the case for instance in the event of a substantial change in ownership of Electrolux Professional in combination with a change in reporting line and/or job scope. Contractual severance pay for the individual may include the continuation of the ABS for a period of up to twelve months follow- ing termination of the employment agreement; no other benefits shall be included. These payments must be reduced by the equiv- alent value of any income that the individual earns during a period of up to twelve months from other sources of income, either from employment or from other business activities. In addition to the above, compensation may be awarded for any non-compete undertaking. Such compensation must be based on the ABS at the time of notice of termination of the employment, unless otherwise stipulated by mandatory collective agreement provisions, and be awarded over the period for which the non- compete clause applies, which should not exceed twelve months after termination of the employment. Salary and employment conditions for employees In the preparation of the Board of Directors’ proposal for these remuneration guidelines, salary and employment conditions for employees of the company have been taken into account by including information on the employees’ total income, the compo- nents of the remuneration, and increase and growth rate over time. These are included in the Remuneration Committee’s and the Board of Directors’ basis for decision when evaluating whether the guide- lines and the limitations set out herein are reasonable. Deviations from the guidelines The Board of Directors may temporarily resolve to deviate from the guidelines, in whole or in part, if in a specific case there is special cause for the deviation and a deviation is necessary to serve the company’s long-term interests, including its sustainability, or to ensure the company’s financial viability. The Remuneration Committee’s tasks include preparing the Board of Directors’ resolutions in remuneration-related matters. This includes any resolutions to deviate from the guidelines. Note 26 of the Annual Report includes a detailed description of existing remuneration arrangements for the Group Management Team. Variable long-term share programs The LTI 2021, LTI 2022 and LTI 2023 programs are described in note 26. Proposed appropriation of profit Electrolux Professional’s target is for the dividend to correspond to approximately 30% of the Group income for the period. The Board of Directors proposes to pay a dividend of SEK 0.80 (0.70) per share, corresponding to around 30% of the income for the period, which is in line with the policy, in total SEK 230m and SEK 6,510m to be carried forward. Parent Company The Parent Company’s activities include head office as well as production and sales in and from Sweden. Net sales for the Parent Company, Electrolux Professional AB, for the period amounted to SEK 3,218m (2,963) of which SEK 1,228m (1,158) referred to sales to Group Companies and SEK 1,990m (1,805) to external customers. Income after financial items was SEK 509m (431). Income for the period amounted to SEK 454m (392). Capital expenditure in tangible and intangible assets was SEK 47m (21). Cash and cash equivalents at the end of the period, including short term investments, amounted to SEK 778m, compared to SEK 877m in the beginning of the year. Undistributed earnings in the Parent Company at the end of the period amounted to SEK 6,740m, compared to SEK 6,495m at the beginning of the year. The income statement and balance sheet for the Parent Company are presented on pages 98–99. P. 94Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Financial statements Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION Consolidated statement of total comprehensive income SEKm Note 2023 2022 Net sales 3, 4 11,848 11,037 Cost of goods sold 5, 7 –7,850 –7,421 Gross operating income 3,997 3,616 Selling expenses 5, 7 –1,969 –1,829 Administrative expenses 5, 7 –873 –819 Other operating income/expenses 5, 6 –1 –13 Operating income 1,154 955 Financial items, net 9 –121 –61 Income after financial items 1,033 895 Taxes 10 –259 –209 Income for the period 775 686 SEKm Note 2023 2022 Items that will not be reclassified to income for the period: Remeasurement of provisions for post-employment benefits 21 4 –152 Income tax relating to items that will not be reclassified –1 14 Total 3 –138 Items that may be subsequently reclassified to income for the period: Cash flow hedges –15 0 Exchange-rate differences on translation of foreign operations –138 360 Income tax relating to items that may be reclassified 13 0 Total –140 360 Other comprehensive income, net of tax 11 –137 223 Total comprehensive income for the period 638 909 Income for the period attributable to: Equity holders of the Parent Company 775 686 Total 775 686 Total comprehensive income for the period attributable to: Equity holders of the Parent Company 638 909 Total 638 909 Earnings per share, SEK 20 For income attributable to the equity holders of the Parent Company: Basic, SEK 2.70 2.39 Diluted, SEK 2.70 2.39 Average number of shares 20 Basic, million 287.4 287.4 Diluted, million 287.4 287.4 P. 95Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Financial statements Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION Consolidated balance sheet December 31 December 31 SEKm Note 2023 2022 Assets Non-current assets Property, plant and equipment, owned 12 1,559 1,577 Property, plant and equipment, right-of-use 8 309 294 Goodwill 13 3,290 3,381 Other intangible assets 13 837 997 Deferred tax assets 10 427 428 Pension plan assets 21 2 0 Other non-current assets 14 17 19 Total non-current assets 6,441 6,696 Current assets Inventories 15 1,692 1,981 Trade receivables 17, 18 1,904 2,028 Tax assets 86 11 Other current assets 16 266 416 Short-term financial assets 18 0 200 Cash and cash equivalents 18 959 898 Total current assets 4,906 5,533 Total assets 11,347 12,229 December 31 December 31 SEKm Note 2023 2022 EQUITY AND LIABILITIES Equity attributable to equity holders of the Parent Company Share capital 20 29 29 Other paid-in capital 20 5 5 Other reserves 20 378 517 Retained earnings 20 4,293 3,719 Equity attributable to equity holders of the Parent Company 4,705 4,270 Total equity 4,705 4,270 Non-current liabilities Long-term borrowings 18 1,192 2,824 Long-term lease liabilities 18 221 225 Deferred tax liabilities 10 96 116 Provisions for post-employment benefits 21 100 103 Other provisions 22 317 288 Total non-current liabilities 1,926 3,557 Current liabilities Trade payables 18 1,761 2,040 Tax liabilities 360 357 Other liabilities 23 1,659 1,773 Short-term borrowings 18 716 7 Short-term lease liabilities 18 98 79 Other provisions 22 122 146 Total current liabilities 4,716 4,402 Total equity and liabilities 11,347 12,229 P. 96Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Financial statements Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION Change in consolidated equity Attributable to equity holders of the Parent Company Share Other Other Retained Total SEKm Note capital paid-in capital reserves earnings equity Opening balance, January 1, 2022 29 5 157 3,334 3,525 Income for the period - - - 686 686 Cash flow hedges - - 0 - 0 Remeasurement of provisions for post-employment benefits - - - –152 –152 Exchange differences on translation of foreign operations - - 360 - 360 Income tax relating to other comprehensive income - - - 14 14 Other comprehensive income, net of tax - - 360 –138 223 Total comprehensive income for the period - - 360 548 909 Dividend - - - –144 –144 Share-based incentive program - - - 13 13 Equity swap for share-based incentive program - - - –33 –33 Total transactions with equity holders - - - –164 –164 Closing balance, December 31, 2022 29 5 517 3,719 4,270 Opening balance, January 1, 2023 29 5 517 3,719 4,270 Income for the period - - - 775 775 Cash flow hedges - - –15 - –15 Remeasurement of provisions for post-employment benefits - - - 4 4 Exchange differences on translation of foreign operations - - –138 - –138 Income tax relating to other comprehensive income - - 13 –1 12 Other comprehensive income, net of tax - - –140 3 –137 Total comprehensive income for the period - - –140 777 638 Dividend - - - –201 –201 Share-based incentive program - - - 25 25 Equity swap for share-based incentive program - - - –27 –27 Total transactions with equity holders - - - –203 –203 Closing balance, December 31, 2023 29 5 378 4,293 4,705 P. 97Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Financial statements Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION Consolidated cash flow statement SEKm Note 2023 2022 Operations Operating income 1,154 955 Depreciation and amortization 427 413 Other non-cash items 36 47 Interest and similar items received 36 10 Interest and similar items paid –148 –65 Taxes paid –355 –226 Cash flow from operations, excluding change in operating assets and liabilities 1,150 1,135 Change in operating assets and liabilities Change in inventories 260 –433 Change in trade receivables 96 –277 Change in trade payables –269 88 Change in other operating assets, liabilities and provi- sions –62 –37 Cash flow from change in operating assets and liabili- ties 24 –660 Cash flow from operations 1,175 475 Investments Acquisition of operations 25 0 4 Divestment of operations 25 0 –35 Capital expenditure in property, plant and equipment 12 –163 –130 Capital expenditure in product development 13 –9 0 Capital expenditure in other intangibles 13 –19 –9 Other 3 18 Cash flow from investments –188 –152 Cash flow from operations and investments 987 323 SEKm Note 2023 2022 Financing Change in short-term investments, net 18 200 –200 Change in short-term borrowings, net 18 766 –1,362 New long-term borrowings 18 0 1,534 Amortization of long-term borrowings 18 –1,543 –0 Payment of lease liabilities 18 –86 –80 Dividend –201 –144 Equity swap for share-based incentive program –27 –33 Cash flow from financing –892 –285 Total cash flow 94 38 Cash and cash equivalents at beginning of period 898 836 Exchange-rate differences pertaining to cash and cash equivalents –34 24 Cash and cash equivalents at end of period 959 898 P. 98Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Financial statements Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION Parent Company income statement SEKm Note 2023 2022 Net sales 4 3,218 2,963 Cost of goods sold –2,264 –2,078 Gross operating income 954 885 Selling expenses –434 –405 Administrative expenses –219 –222 Other operating income/expenses 6 –17 –20 Operating income 284 238 Financial income/expenses 9 304 660 Impairment of shares in subsidiaries 14 –79 –467 Income after financial items 509 431 Appropriations 29 10 12 Income before taxes 519 443 Taxes 10 –65 –51 Income for the period 454 392 Parent Company statement of total comprehensive income SEKm Note 2023 2022 Income for the period 454 392 Items that may be subsequently reclassified to income for the period: Cash flow hedges –15 – Exchange-rate differences on translation of foreign operations –1 3 Income tax relating to items that may be reclassified 3 – Other comprehensive income, net of tax –13 3 Total comprehensive income for the period 441 395 P. 99Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Financial statements Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION Parent Company balance sheet SEKm Note December 31 2023 December 31 2022 Assets Non-current assets Property, plant and equipment, owned 12 233 216 Intangible assets 13 15 38 Deferred tax assets 10 16 14 Shares in subsidiaries 14, 30 5,866 5,946 Long-term receivables from subsidiaries 14 1,644 2,890 Total non-current assets 7,774 9,104 Current assets Inventories 15 289 303 Receivables from subsidiaries 1,446 746 Trade receivables 17 300 332 Tax assets 12 - Other current assets 84 208 Short-term financial assets – 200 Cash and cash equivalents 18 778 677 Total current assets 2,909 2,466 Total assets 10,683 11,570 SEKm Note December 31 2023 December 31 2022 Equity and liabilities Restricted equity Share capital 20 29 29 Statutory reserve 5 5 Development reserve 2 6 36 40 Non-restricted equity Retained earnings 6,286 6,103 Income for the period 454 392 6,740 6,495 Total equity 6,776 6,535 Untaxed reserves 88 97 Non-current liabilities Other provisions 121 104 Other non-current loans 1,192 2,824 Total non-current liabilities 1,313 2,928 Current liabilities Payables to subsidiaries 1,152 1,301 Trade payables 351 388 Tax liabilities - 5 Other liabilities 287 315 Short-term borrowings 716 – Other provisions – 1 Total current liabilities 2,506 2,010 Total equity, untaxed reserves, and liabilities 10,683 11,570 P. 100Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Financial statements Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION Parent Company change in equity Restricted equity Non-restricted equity SEKm Note Share capital Statutory reserve Development reserve Fair value reserve Retained earnings Total equity Opening balance, January 1, 2022 29 5 10 0 6,263 6,307 Income for the period - - - - 392 392 Cash flow hedges - - - - – – Exchange differences on translation of foreign operations - - - - 3 3 Income tax relating to other comprehensive income - - - - – – Total comprehensive income for the period - - - - 395 395 Dividend - - - - –144 –144 Share-based incentive program - - - - 10 10 Equity swap for share-based incentive program - - - - –33 –33 Development reserve - - –4 - 4 – Total transactions with equity holders - - –4 - –163 –167 Closing balance, December 31, 2022 29 5 6 0 6,495 6,535 Income for the period - - - - 454 454 Cash flow hedges - - - - –15 –15 Exchange differences on translation of foreign operations - - - - –1 –1 Income tax relating to other comprehensive income - - - - 3 3 Total comprehensive income for the period - - - - 441 441 Dividend - - - - –201 –201 Share-based incentive program - - - - 28 28 Equity swap for share-based incentive program - - - - –27 –27 Development reserve - - –4 - 4 0 Total transactions with equity holders - - –4 - –196 –200 Closing balance, December 31, 2023 29 5 2 0 6,740 6,776 P. 101Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Financial statements Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION Parent Company cash flow statement SEKm Note 2023 2022 Operations Operating income 284 238 Depreciation and amortization 12, 13 67 64 Other non-cash items – 10 Financial items paid, net –1 26 Taxes paid –81 –41 Cash flow from operations, excluding change in operating assets and liabilities 269 297 Change in operating assets and liabilities Change in inventories 14 –94 Change in trade receivables 31 –66 Change in trade payables –38 51 Change in other operating assets, liabilities and provisions 97 –63 Cash flow from change in operating assets and liabilities 104 –172 Cash flow from operations 373 125 Investments Capital expenditure in property, plant and equipment 12 –47 –21 Cash flow from investments -47 –21 Cash flow from operations and investments 325 104 SEKm Note 2023 2022 Financing Change in short-term investments 200 –200 Change in internal lending and borrowing 324 –564 Change in external short-term borrowing 18 810 –1,129 New long-term borrowing 18 –1,633 1,610 Equity swap for share-based incentive program –27 –33 Dividend to shareholders –201 –144 Dividend from subsidiaries 304 642 Cash flow from financing –224 182 Total cash flow 102 286 Cash and cash equivalents at beginning of period 677 391 Cash and cash equivalents at end of period 778 677 P. 102Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION Notes NOTE 1 ACCOUNTING PRINCIPLES This section describes the comprehensive basis of preparation which has been applied in preparing the consolidated financial statements. Accounting principles for specific accounting areas and individual line items are described in the related notes. Electrolux Professional AB’s registered office is at Franzéngatan 6, 112 51 Stockholm, Sweden. The consolidated financial statements were authorized for issue by the Board of Directors on March 27, 2024. The balance sheets and income statements are subject to approval by the Annual General Meeting of shareholders on April 25, 2024. The terms “Electrolux Professional”, “Electrolux Professional Group”, the “Group” or the “Company” refer to Electrolux Professional AB (publ) (corporate ID No. 556003-0354) or the Group in which Electrolux Professional AB (publ) is the Parent com- pany and its subsidiaries, depending on the context. Enumerated amounts presented in tables and statements may not always agree with the calculated sum of the related line items due to rounding differences. The aim is for each line item to agree with its source and there may therefore be rounding differences affecting the total when the presented line items are added up. Basis of preparation The consolidated financial statements have been prepared in ac- cordance with International Financial Reporting Standards (IFRS) as endorsed by the European Union (EU). The consolidated financial statements have been prepared under the historical cost conven- tion, except for financial instruments at fair value (including financial derivative instruments). Some additional information is disclosed based on the requirements in standard ‘RFR 1’ issued by the Swedish Financial Reporting Board and the Swedish Annual Accounts Act. As required by IAS 1, Electrolux Professional companies apply uniform accounting rules, irrespective of national legislation, as defined in Electrolux Professional’s Accounting Manual which is fully compliant with IFRS. The policies set out below have been consistently applied to all years presented, except for new accounting standards where the application follows the rules in each particular standard. For information on new standards, see the section on new or amended accounting standards. The Parent Company applies the same ac- counting principles as the Group, except in the cases specified in the section entitled ‘Parent Company accounting principles’. Principles applied for consolidation The consolidated financial statements have been prepared using the acquisition method of accounting, whereby the assets and liabilities and contingent liabilities assumed in a subsidiary on the date of acquisition are recognized and measured to determine the acquisition value to the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued, and liabilities incurred or assumed at the date of exchange. The consideration transferred includes the fair value of any asset or liability resulting from a con- tingent consideration arrangement. Costs directly attributable to the acquisition effort are expensed as incurred. The excess of the consideration transferred over the fair value of the identifiable net assets acquired is recorded as goodwill. If the fair value of the acquired net assets exceeds the cost of the busi- ness combination, the identification and measurement of the ac- quired assets must be reassessed. Any excess remaining after that reassessment represents a ‘bargain purchase’ and is recognized immediately in the statement of comprehensive income . The consolidated financial statements for the Group include the financial statements of the Parent Company, Electrolux Professional AB, and its directly and indirectly owned sub sidiaries after: • elimination of intra-group transactions, balances, and unrealized intragroup profits, and • carrying values, depreciation and • amortization of acquired surplus values. Definition of Group companies The consolidated financial statements include Electrolux Professional AB and all companies over which the Parent Company (Electrolux Professional AB) has control, i.e., the power to direct the activities, exposure to variable return, and the ability to use its pow- er. When the Group ceases to have control or significant influence, any retained interest in the entity is remeasured at its fair value, with the change in carrying amount recognized in profit or loss. At year- end 2023, the Group consisted of 41 companies. The following apply to acquisitions and divestments: • Companies acquired are included in the consolidated state- ment of comprehensive income as of the date when Electrolux Professional gains control. • Companies divested are included in the consolidated statement of comprehensive income up to and including the date when Electrolux Professional loses control. Foreign currency translation Foreign currency transactions are translated into the functional currency using the exchange rate prevailing at the date of each transaction. Monetary assets and liabilities denominated in foreign cur- rencies are valued at end-of-period exchange rates and any ex- change-rate differences are included in income for the period. The consolidated financial statements are presented in Swedish krona (SEK), which is Electrolux Professional AB’s functional currency and the Group’s presentation currency according to IAS 21. The balance sheets of foreign subsidiaries are translated into SEK at end-of-period closing rates. The consolidated statement of comprehensive income is translated at the average rates for the year. Translation differences thus arising are included in other com- prehensive income. 2023 2022 Currency Average End of period Average End of period CNY 1.50 1.41 1.50 1.51 CZK 0.4778 0.4488 0.4326 0.4612 DKK 1.54 1.49 1.43 1.50 EUR 11.46 11.10 10.63 11.12 GBP 13.17 12.77 12.45 12.54 JPY 0.0754 0.0710 0.0773 0.0791 NOK 1.01 0.99 1.05 1.06 CHF 11.7844 11.9827 10.5914 11.2946 THB 0.3044 0.2922 0.2881 0.3019 TRY 0.4594 0.3398 0.6206 0.5571 USD 10.59 10.04 10.09 10.43 P. 103Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 1 ACCOUNTING PRINCIPLES, CONT. New or amended accounting standards to be applied in 2023 The following new, amended or improved accounting standards were applicable from January 1, 2023: Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (issued on May 7, 2021); Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies (issued on February 12, 2021); Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates (issued on February 12, 2021) and Amendments to IAS 12 Income taxes: International Tax Reform – Pillar Two Model Rules (issued May 23, 2023). The new, amended or improved standards men- tioned above have not had any material impact on Electrolux Professional’s consolidated financial statements. New or amended accounting standards to be applied after 2023 The following new, amended or improved accounting standards have been published but are not mandatory for 2023 and have not been adopted early by Electrolux Professional: Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (is- sued on September 22, 2022); Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current Date (issued on January 23, 2020); Classification of Liabilities as Current or Non-current - Deferral of Effective Date (issued on July 15, 2020); and Non-current Liabilities with Covenants (issued on October 31, 2022); Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements (issued on May 25 2023) and Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (issued on August 15, 2023). The new, amended or improved standards mentioned above are not expected to have any material impact on Electrolux Professional’s consolidated finan- cial statements. Critical accounting policies and key sources of estimation uncertainty Use of estimates The Group's management has made a number of estimates and assumptions relating to the reporting of assets and liabilities in preparing the consolidated financial statements in conformity with IFRS. Actual results may differ from these estimates under differ- ent assumptions or conditions. In the following section, Electrolux Professional summarizes the accounting policies that require more subjective judgment by management when making assumptions or estimates regarding the effects of matters that are inherently uncer- tain. Asset impairment and useful lives Non-current assets, including goodwill, are evaluated for impair- ment yearly or whenever events or changes in circumstances indi- cate that the carrying amount of an asset may not be recoverable. An impaired asset is written down to its recoverable amount, being the higher of fair value less costs of disposal and value in use. Impairment charges are recorded when the information shows that the carrying amount of an asset is not recoverable. The value in use is estimated by using the discounted cash flow method based on expected future cash flows. Differences in the estimation of ex- pected future cash flows and the discount rates used may result in different asset valuations. The yearly impairment testing of goodwill and other intangible assets with indefinite useful lives has not indicated any impairment. See Note 13 for more information. Property, plant and equipment are depreciated on a straight- line basis over their estimated useful lives. Useful lives for property, plant and equipment are estimated at between 10 and 40 years for buildings and 15 years for land improvements, and between 3 and 15 years for machinery, technical installations, and other equipment. The Group's management regularly reassesses the useful lives of all significant assets. See Note 12 for more information. See note 31 for assessments related to climate change. Deferred taxes In the preparation of the consolidated financial statements, Electrolux Professional estimates the income taxes in each of the tax jurisdictions in which the Group operates, as well as any de- ferred taxes based on temporary differences. Deferred tax assets relating to tax loss carry-forwards and temporary differences are recognized in those cases when future taxable income is expected to permit the recovery of those tax assets. Changes in assumptions in the projection of future taxable income as well as changes in tax rates could result in significant differences in the valuation of de- ferred taxes. See Note 10 for more information. Electrolux Professional has applied the exception not to recog- nizing and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes. The Group is continuing to asses the impact of the Pillar Two income taxes legislation on its future financial performance. The initaial analysis show no material consequences for the Group. Current taxes Electrolux Professional’s provisions for uncertain outcomes of tax audits and tax litigations are based on the management’s best es- timates and are recorded in the balance sheet. The best estimate of the expected tax to be paid is based on a qualitative assessment of all relevant information. In assessing any appropriate provision requirements for uncertain tax items, the Group considers progress made in discussions with tax authorities, expert advice on the likely outcome, and any recent developments in case law. Estimates might differ from the actual outcome, and the timing of the potential effect on Electrolux Professional’s tax cost and cash flow is normally not possible to predict. Any such variations will af- fect the financial results in the year in which such a determination is made. In recent years, tax authorities have been focusing on transfer pricing. Transfer-pricing matters are normally very complex, include large amounts, and might take several years to conclude. Trade receivables and calculation of loss allowance Receivables are reported net of provision for expected credit losses. The net value reflects the amounts that are expected to be collected, based on circumstances known at the balance sheet date. When measuring expected credit loss the Group uses a mod- el based on historical and forward-looking information. The most important components of the model are historical credit losses and assumptions about various future market effects such as GDP de- velopment and ability to pay for individual customers. Changes in circumstances such as higher than expected defaults or changes in the financial situation of a significant customer could lead to signifi- cantly different valuations. See Note 17 for more information. Post-employment benefits Electrolux Professional sponsors a number of defined contribution and defined benefit pension plans for its employees. The pension calculations referring to defined benefit plans are based on actu- arial assumptions regarding, e.g., the discount rate, mortality rates, and future salary and pension increases. Changes in assumptions directly affect the defined benefit obligation, service cost, interest income, and expense. See Note 21 for more information. Warranties As is customary in the industry in which Electrolux Professional oper- ates, some of the products sold are covered by an original warran- ty, which is included in the price and extends for a predetermined period of time. Provisions for this original warranty are estimated based on historical data regarding service rates, cost of repairs, etc. An epidemic failure can have a significant effect on the amount reported as warranty provision. See Note 22 for more information. Disputes Electrolux Professional is involved in disputes in the ordinary course of business. The disputes may concern matters such as product liability, alleged defects in delivery of goods and services, patent rights and other rights, and other issues on rights and obligations in connection with Electrolux Professional's operations. Such disputes may prove costly and time consuming and may disrupt normal op- erations. In addition, the outcome of complicated disputes is difficult to foresee. It cannot be ruled out that a disadvantageous outcome of a dispute may prove to have a material adverse effect on the Group’s earnings and financial position. P. 104Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 1 ACCOUNTING PRINCIPLES, CONT. Hyperinflation Turkey is regarded as a hyperinflation economy and accordingly, Electrolux Professional has analyzed whether hyperinflation ac- counting should be applied, in accordance with IAS 29. Given that Turkey corresponds to less than 1% of the Group’s total assets, the effect has been considered as immaterial. Climate For information about climate related matters see note 31. Parent Company accounting principles Electrolux Professional AB is the parent company of the group, and has offices in Stockholm, Ljungby, Malmö, and Partille. Stockholm is the base for the corporate functions whereas the operational part of the business is located in Ljungby including a factory and sales. The Parent Company prepares the annual report in compliance with the Swedish Annual Accounts Act (1995:1554) and recommen- dation RFR2, Accounting for legal entities of the Swedish Financial Reporting Board. RFR2 prescribes the amendments and exceptions from IFRS applicable to the Parent Company. This means that all IFRS standards and statements are applied when possible within the frame of the Annual Accounts Act with consideration given to Swedish legislation in accounting and taxation. The financial reports of the parent company are presented in Swedish krona (SEK), rounded to millions. The accounting principles are applicable for all periods unless other wise stated. More detailed information on accounting principles can be found in the above text regarding the Group’s application of these. Shares in subsidiaries Holdings in subsidiaries are recognized according to the cost meth- od of accounting. If there is an indication that the recognized value of shares has declined, they are tested for impairment according to IAS36. In accordance wit RFR2, transaction costs are recognized as part of the acquisition value in the Parent Company, unlike the Group where they are considered as costs. Anticipated dividends Dividends decided at each of the subsidiaries' annual general meetings are recognized in the income statement. Anticipated div- idends are recognized if the Parent Company has exclusive rights to decide on dividends from subsidiaries and has decided on an amount before the Parent Company’s annual report or quarterly re- port has been published. Taxes Untaxed reserves including deferred tax liability are recognized in the Parent Company. In the group’s income statement untaxed reserves are divided between deferred tax liability and equity. Tax on Group contribution is included in the Parent Company’s income statement. Appropriations and untaxed reserves Under Swedish tax legislation, the Parent Company has the possibil- ity to make depreciations in excess of those planned. They are rec- ognized as appropriations in the income statement and as untaxed reserves in the balance sheet. Group and shareholders' contribution In Sweden, group contributions are deductible and when given by subsidiaries or the Parent Company they are recognized as appro- priations in the income statement. Shareholders' contribution is not deductible and if paid by the Parent Company it is recognized as shares in subsidiaries and is subject to impairment if needed. This is described in more detail above in “shares in subsidiaries”. Post-employment benefits Electrolux Professional AB applies the simplified rule according to RFR2, for recognition of defined benefit plans. For further informa- tion see Note 21. Intangible assets In accordance with RFR2, the Parent Company amortizes goodwill and trademarks over 5 years. Reserve for development Own developed intangible assets are recognized as a reserve for development in the Parent Company. It is amortized, and the clos- ing balance of the reserve is transferred from unrestricted to restrict- ed equity in compliance with the Swedish Annual Accounts Act.. Leases Lease agreements for the Parent Company are reported as opera- tional, where the cost is linear over the lease period. Financial guarantees Financial guarantees for the Parent company to the benefit of sub- sidiaries are reported as contingent liabilities. A provision is booked if there is any indication that any of these may lead to a payment. Financial instruments The Parent Company does not apply the simplification rules for IFRS 9 Financial Instruments, allowed under RFR2. Expected credit loss The Parent Company calculates an expected credit loss provision for its trade receivable position and lending to each of its subsidiar- ies. The default probability of each subsidiary is based on a credit rating model per country. NOTE 2 FINANCIAL RISK MANAGEMENT Financial risk management The Group is exposed to a number of risks from liquid funds, trade receivables, trade payables, borrowings, commodities, and foreign exchange. The risks include: • Financing risk in relation to the Group’s capital requirements; • Foreign-exchange risk on commercial flows and net investments in foreign subsidiaries; • Commodity-price risk affecting the expenditure on raw materials and components; • Credit risk related to financial and commercial activities; and • Interest-rate risk on liquid funds and borrowings. The Board of Directors of Electrolux Professional AB has estab- lished several policies (hereinafter all policies are referred to as the Financial Policy) to monitor and manage the financial risks related to the operations of the Group. The primary responsibility for ensur- ing that these risks are managed in an efficient and professional manner lies within Group Treasury with the support of the manage- ment of each operational unit. Moreover, the commercial credit risk is managed at an operating level by the controlling department, and is guided by the Group Credit Policy. The policies are adopted through a delegation of authority matrix, which defines roles and responsibilities within the Group management structure. Application of the policies is monitored through internal controls and breaches are managed according to pre-agreed procedures. The Board of Directors meets on a regular basis (at least quarterly) to discuss business, policy compliance, and governance matters. Group Treasury in Stockholm provides services to the business, co-ordinates access to financial markets, and monitors and man- ages the financial risks through internal risk reports, which analyze exposures by degree and magnitude of the risk. The Group’s Financial Policy governs the use of financial deriv- atives. The internal auditors review compliance with policies and exposure limits on a continuous basis. Capital structure The Group defines its capital as equity stated in the balance sheet. The Group’s objective is to have a capital structure resulting in an efficient weighted cost of capital and sufficient credit worthiness, with consideration given to operating needs, and the needs for po- tential acquisitions. Financing risk Financing risk refers to the risk that financing of the Group’s capital requirements and refinancing of existing borrowings could become more difficult or more costly. This risk can be decreased by ensuring that maturity dates are evenly distributed over time, and that total short-term borrowings do not exceed liquidity levels. According to the Financial Policy, Group Treasury must ensure that the remaining P. 105Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 2 FINANCIAL RISK MANAGEMENT, CONT. average credit duration of the total debt portfolio exceeds two years and at any given point in time, liquidity reserves are moni- tored and kept in line with the Policy. Liquidity risk Liquid funds as defined by the Group consist of cash, cash equiva- lents, and short-term investments. Electrolux Professional’s target is that the level of liquid reserves, including cash and bank balances, short-term investments, and unutilized committed credit facilities do not fall below SEK 500m. If that level is not maintained, the Board of Directors is to be immediately informed, and appropriate actions taken to restore that preferred level. Foreign exchange risk Foreign exchange risk is defined as the risk that fluctuations in cur- rency exchange rates have a negative impact on the company’s financial position, profitability or cash flow. In order to manage such effects, the Group covers these risks within the framework of the Financial Policy, and the Group’s overall currency exposure is man- aged centrally by Group Treasury. As general rule, financing is to be made in each company’s local currency, and net foreign exchange exposures on financial assets and liabilities are to be hedged by Group Treasury. After hedging, the foreign exchange exposure on financial items is immaterial. Transaction exposure from commercial flows Transaction exposure is defined as the confirmed future net of operational and financial inflows and outflows of currencies. The Financial Policy stipulates the extent to which commercial flows are to be hedged. The Group’s geographically widespread production reduces the effects of changes in exchange rates. The remaining transaction exposure is either related to internal sales from producing entities to sales companies or external exposures from purchasing of compo- nents and input material for the production paid in foreign currency. If the currency exposure is significant based on long-term con- tracts in foreign currencies, Group Treasury be is contacted for decisions on potential hedges. Group Treasury is the sole party authorized to execute financial hedge transactions and derivative contracts with external parties. Translation exposure from consolidation of entities outside Sweden Translation exposure is defined as the risk that fluctuations in cur- rency exchange rates have a negative impact on the balance sheet or consolidated equity. This occurs when a portion of consolidated equity, net assets, or a financial asset or liability are denominated in a foreign currency. Electrolux Professional does not hedge such ex- posure. The translation exposures arising from income statements of foreign subsidiaries are included in the sensitivity analysis below. Foreign-exchange sensitivity from transaction and translation exposure The major net export currencies that Electrolux Professional is ex- posed to are the EUR, THB, and SEK. The major import currencies that Electrolux Professional is exposed to are the USD, GBP, JPY, DKK, NOK, and CNY. These currencies represent the majority of the exposures of the Group. The currency exposure from foreign investments should, when possible, be mitigated by loans in local currency. The remaining foreign net investment should not generally be hedged by financial derivatives. In exceptional cases the Group CFO may decide to use financial derivatives to hedge net investments in foreign subsidiaries. The table below shows the effect from a change in exchange rates for the Group's major currencies. The analysis takes into con- sideration the net transaction flow as disclosed in Note 18 and op- erating income (EBIT – i.e. before tax) by functional currency as per the end of each year. The table does not cover the equity effect of changes in FX rates. The model assumes the distribution of earnings and costs effective at year-end and does not include any dynamic effects, such as changes in competitiveness or consumer behavior arising from such changes in exchange rates. Exposures Profit or Loss Impact Currency Change 12m net flows (in and out) Hedge 12m net flows includ- ing Hedges EBIT 12m net flows and EBIT Transaction exposure EBIT Translation exposure Profit or loss impact 2023 Profit or loss impact 2022 USD/SEK –10% 649 – 649 290 939 –65 –29 –94 –92 GBP/SEK –10% 183 – 183 10 193 –18 –1 –19 –23 EUR/SEK –10% –333 – –333 501 168 33 –50 –17 8 JPY/SEK –10% 72 – 72 26 99 –7 –3 –10 –5 DKK/SEK –10% 90 – 90 7 97 –9 –1 –10 –11 TRY/SEK –10% 37 – 37 55 91 –4 –5 –9 –6 NOK/SEK –10% 72 – 72 7 79 –7 –1 –8 –8 CZK/SEK –10% 37 – 37 1 38 –4 0 –4 –4 AUD/SEK –10% 25 – 25 4 29 –3 0 –3 –3 THB/SEK –10% –317 – –317 73 –244 32 –7 24 21 P. 106Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 2 FINANCIAL RISK MANAGEMENT, CONT. Commodity-price risks Commodity risk exposure is defined as the risk that fluctuations in the price of commodities result in an unexpected impact on the consolidated statement of comprehensive income or the consoli- dated balance sheet of the Group. The Purchasing department is re- sponsible for the overall commodity risk management and follow-up on commodity exposures. The Purchasing department strives to reach a commercial hedge via matching of terms in sales contracts with terms in contracts with existing raw material suppliers. If a significant exposure occurs without the possibility to fix prices with suppliers or pass on potential profit and loss effects to the customer, a financial hedge should be considered. In this case Group Treasury is to be contacted for discussion on the hedge strategy and hedge counterparty. The Purchasing department is not permitted to enter into any financial hedges or financial contracts. There are no out- standing financial hedges related to commodities at the balance date. Credit risk Credit risk in financial activities Credit risk in financial transactions is the risk that the counterparty is not able to fulfill its contractual obligations related to the Group’s investments of liquid funds and derivatives. In order to limit exposure to credit risk, the Group has adopted a policy stating that excess liquidity must be deposited at bank accounts in the Group’s core banks, invested in securities issued by the core banks, or invested in government securities. The Financial Policy states that: • Short-term investments in the form of deposits should be done with the Revolving Credit Facility Banks (RCF Banks) or with Banks with a minimum rating of BBB- (investment grade) according to Standard & Poor. • Short-term investments in the form of securities should have a minimum rating of A. The Group aims to have master netting agreements (ISDA) with all counterparties for derivative transactions. Assets and liabilities will only be netted from a credit risk perspective for counterparties with valid ISDA agreements. Further, derivatives should be spread be- tween counterparties to reduce the credit risk. No financial assets or liabilities are offset in the balance sheet. Outstanding net position for derivative instruments SEKm Gross Net in BS Master netting agreement Net position Assets Derivatives 29 29 –8 21 Liabilities Derivatives 40 40 –8 32 Credit risk in trade receivables Electrolux Professional’s client base contains a mix of repeat cus- tomers such as distributors, and one-time customers, as well as multi-operator stores or spare-parts customers. The Financial Policy defines how credit management is to be performed in the Group to achieve competitive and professionally performed credit assessment, limited bad debts, improved cash flow, and optimized profit. Electrolux Professional has adopted a Rating Model (EPRM), which is managed by the Group Credit Manager. The purpose of the EPRM is to have a common, objective approach to credit risk assessment that enables more standardized and systematic credit evaluations to minimize inconsistencies in decisions. The EPRM is based on a risk/reward approach and is the basis for the customer assessment. The risk of a customer is determined by the EPRM Risk Score in which customers are classified. EPRM calculates a Risk score that is translated to a Risk class: Low Risk (1), Moderate Risk (2), Medium Risk (3), Marked Risk (4), High Risk (5) and Default (6). The amount of information required for the assessment varies with the size of the credit limit and the risk. EPRM is the mandatory tool for credit assessment within the Group. External sources of infor- mation are used for basic and credit information on customers, such as unique identifiers (DUNS number) and legal hierarchy. The required type and source of information is determined by Group Credit Management. EPRM must be used for customers with a credit limit of a minimum of SEK 750k unless a higher minimum amount is approved by the Group Credit Manager or the Group CFO. EPRM is also used for customers with full credit protection since the credit decision is taken on the gross credit limit. As far as possible customer receivables are insured and are cov- ered by a global insurance program. Under the existing arrange- ments the trade credit insurance covers not only the risk of customer insolvency but also the risk of protracted default. Interest-rate risk on liquid funds and borrowings Interest-rate risk refers to the adverse effects of changes in interest rates on the Group’s income. The main factor determining this risk is the interest-fixing period. Interest-rate risk in liquid funds All liquidity is invested in interest bearing instruments, normally with maturities of between 0 and 3 months. For more information, see Note 18, liquidity profile. The Financial Policy states that: • Surplus cash holdings are to be avoided. Excess liquidity must be offset against external debts. • Short-term investments must have a time to maturity that matches large disbursements, planned investments or dividend, and must not exceed 12 months. Borrowings According to the Financial Policy, the debt financing of the Group is to be managed by Group Treasury in order to ensure efficiency and risk control. Debt is primarily raised at the Parent Company level and transferred to subsidiaries through internal loans or capital injections. In this process, swap instruments might be used to con- vert the funds to the required currency. Short-term financing might also be undertaken locally in subsidiaries where there are capital restrictions. At year-end 2023, the Electrolux Professional Group pri- marily held two bilateral term loans with the Swedish Export Credit Corporation (AB Svensk Exportkredit) and the Nordic Investment Bank, and issued commercial papers in the Swedish capital markets. For more information, see Note 18. Interest-rate risk in borrowings The Financial Policy states that the average interest duration in the debt portfolio (including overdrafts, RCF, term loans, and interest rate derivatives) is to be between 0 and 3 years. Group Treasury is responsible for managing the long-term debt portfolio and seeks a balance between floating and fixed interest rates in order to limit the negative impact that a rise in market rates may have. Any bind- ing of interest rates for a longer time period than 5 years is not per- mitted without the approval of the Board of Directors. Derivatives such as interest-rate swap agreements might be used to manage the interest-rate risk by changing the interest from fixed to floating or vice versa. For those derivatives Electrolux Professional practices hedge accounting, which has affected other comprehensive income by SEK –15m (–) during 2023. On the basis of 2023 borrowings with an average interest fixing period of 1.1 years, and considering that the amount of loans out- standing as at December 31, 2023 were approximately SEK 1.9bn, a 1%-point shift in interest rates would impact the Group’s interest expenses by approximately SEK 13m. This calculation is based on a parallel shift of all relevant yield curves (EUR and SEK) simul- taneously by one percentage point. In this assessment Electrolux Professional acknowledges that the calculation does not take into consideration the fact that the interest rates on different maturities and different currencies might change differently. P. 107Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 3 SEGMENT INFORMATION Electrolux Professional Group has five business areas which are ag- gregated into two reportable segments: • Food & Beverage, and • Laundry. The business areas are aggregated into reportable segments based on the following aggregation criteria: similar economic characteris- tics and long-term financial performance, similar nature of products and production processes, purchasing and logistic activities, and customers. The Food & Beverage segment consists of three geographical business areas, Food Europe, Food Americas, Food APAC & MEA and a global business area, Beverage and Food Preparation. Food & Beverage offers equipment for professional users within the hos- pitality industry. Products within Food & Beverage comprise mainly modular cooking, ovens, dishwashing and refrigeration, dispensers for hot beverages (e.g., coffee grinders, brewers and coffee urns), cold beverages (beverage and juice dispensers), and frozen bev- erages (frozen drinks and ice cream dispensers) and equipment for soft serve as well as Customer Care. The Laundry segment consists of one global business area. Laundry offers equipment designed to meet a diverse array of pro- fessional requirements, from self-service and the hospitality industry to healthcare providers and commercial laundries. Customers in- clude hospital and hotel laundries, apartment-building laundries in Scandinavia, and laundrettes. Products offered within the laundry segment include washing machines, tumble dryers, ironers, and fin- ishing equipment. The five business areas are regularly reviewed by the President and CEO, the Group’s chief operating decision maker. The business areas are responsible for operating income be- fore interest, tax, and amortizations (EBITA), which is the primary measurment, and operating income, whereas net assets, financial items and taxes, as well as net debt and equity, are not reported per business area. The operating income of the business areas is consolidated using the same principles as for the Group. The business areas consist of separate legal units as well as divisions in multi-business area, where some allocations of costs are made. Operating costs not included in the business areas are shown under Group shared costs, which mainly are costs related to the group management activities typically required to run a group. Sales between business areas are made at market conditions with arm’s-length principles, if applicable. Net sales and operating income per segment 2023 2022 SEKm Food & Beverage Laundry Group shared costs Total Food & Beverage Laundry Group shared costs Total Net sales 7,616 4,231 - 11,848 7,290 3,747 – 11,037 EBITA 766 702 -151 1,317 679 608 –176 1,111 Amortization intangible assets -145 -17 -1 -163 –137 –18 –1 –155 Operating income 620 686 -152 1,154 542 590 –177 955 Financial items, net -121 –61 Income after financial items 1,033 895 Taxes -259 –209 Income for the period 775 686 Depreciation of tangible assets including right-of-use assets 2023 2022 SEKm Food & Beverage Laundry Group shared costs Total Food & Beverage Laundry Group shared costs Total Depreciation -178 -84 -2 -264 –174 –79 –5 –258 Geographical information, net sales¹ SEKm 2023 2022 United States 2,913 3,048 Italy 1,589 1,377 France 961 861 Sweden 901 851 Germany 689 675 Great Britain 447 407 Finland 408 302 Spain 314 241 Switzerland 306 278 Denmark 294 273 Turkey 220 152 Japan 204 201 China 193 195 Norway 155 161 Netherlands 146 127 Australia 131 121 Austria 114 109 Malaysia 110 48 Belgium 107 114 Greece 94 74 Other 1,552 1,422 Total 11,848 11,037 1) Net sales attributable to countries on the basis of customer location. Property, plant and equipment and intangible assets located in the Group’s country of domicile, Sweden, amounted to SEK 278m (270). Property, plant and equipment and intangible assets located in all other countries amounted to SEK 5,717m (5,978). Individually, mate- rial countries in this regard are the US with SEK 3,143m (3,380), Italy with SEK 879m (895) and France with SEK 524m (537). No single customer of the Group represents 10% or more of the external revenue. P. 108Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 4 REVENUE RECOGNITION Revenue recognition Electrolux Professional manufactures and sells a wide range of products for the hospitality industry, healthcare providers, and commercial laundries. Sales are recorded net of value-added tax, specific sales taxes, returns, and trade discounts. Sales of finished products including spare parts and accessories Revenue from sales of products are recognized at a point in time when control of the products has been transferred to the customer. Depending on the contractual terms, transfer of control, and thus revenue recognition, occurs when Electrolux Professional has a present right to payment for the products, the customer has legal title of the products, the products have been delivered to the cus- tomer, and/or the customer has the significant risks and rewards of the ownership of the goods. Transaction price — Volume discounts The products are sometimes sold with volume discounts based on aggregate sales over a specific time period, normally 3–12 months. Revenue from these sales is recognized based on the price specified in the contract, net of the estimated volume discounts. Accumulated experience is used to estimate and provide for the discounts using either the expected value method or an assessment of the most likely amount. Revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur. A contract liability is recognized for expected volume discounts payable to customers in relation to sales made until the end of the reporting period. The estimated volume discount is revised at each reporting date. Receivables, contract assets, and contract liabilities A receivable is recognized when the control of the products has transferred as this is the point in time that the consideration is un- conditional because only the passage of time is required before the payment is due. If the consideration is conditional to additional performance, a contract asset is recorded. If Electrolux Professional receives prepayment from customers a contract liability is recorded. Sale of goods and services combined When contracts include both goods and services the sales value is split into separate performance obligations based on relative stand-alone selling prices, and revenue is recognized when each of the separate performance obligations are satisfied. In general, types of performance obligations that may occur are products, spare parts, installation, service and support. Sale of services in a separate contract Electrolux Professional recognizes revenue from services related to installation of products, repairs or maintenance service when con- trol is transferred over the time the service is provided. For service contracts revenue is recognized on a linear basis over the contract period. Payments from customers Payment terms are based on local market conditions and are al- ways shorter than one year. The Group has no significant financing component included in the payment terms. Payments to customers Agreements can, in a limited number of cases, be made with cus- tomers to compensate for various services or actions the customer takes. As an example, this may relate to agreements under which Electrolux Professional agrees to compensate the customer for e.g. marketing activities undertaken by the customer. The main rule is that if the payment is related to a distinct service or product it shall be accounted for as a purchase of that service or product. If not, it shall be deducted from the related revenue stream. In practice, if the contract doesn’t include any requirement for follow-up from Electrolux Professional and/or reporting back from the customer that the service is being performed, the payment shall be account- ed for as a reduction of revenue. Warranties The most common warranty for Electrolux Professional is to replace a faulty component under legal and common practice warran- ty terms. In those cases warranty is recognized as a provision. Electrolux Professional also sells extended warranty where the revenue is recognized during the warranty period, which usually starts after the legal warranty period. Sometimes warranty offered is including a service part and if it is not possible to separate the war- ranty from the service, the two are bundled together and revenue is recognized over the warranty period. Freight charges Freight charges can be included in the price of the product sold based on the contractual terms and conditions, and revenue is rec- ognized at the same time as for the product. Revenue types and flows The vast majority of the Group’s revenues of SEK 11,848m (11,037) during the year consisted of finished products, spare parts, services, and accessories. The Group’s net sales in Sweden amounted to SEK 901m (851). Exports from Sweden during the year amounted to SEK 2,326m (2,125), of which SEK 1,227m (1,158) were to Group subsidiar- ies. The Group does not disclose information about the aggregate amount of the transaction price allocated to the performance obli- gations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period since the majority of the Group’s performance obligations are related to contracts with an original expected dura- tion of less than one year. Disaggregation of revenue Electrolux Professional manufactures and sells a wide range of products for the hospitality industry. Sales of services are not mate- rial in relation to Electrolux Professional's total net sales. Geography is an important attribute when disaggregating Electrolux Professional’s revenue. The table below therefore presents net sales per geographic region based on the location of the customer. See Note 3 for net sales per country based on customer location. P. 109Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 4 REVENUE RECOGNITION, CONT. 2023 2022 2023 2022 SEKm Food & Beverage Laundry Total Food & Beverage Laundry Total Parent Company Geographical region Europe 4,414 2,804 7,218 3,993 2,435 6,429 2,218 1,956 Asia Pacific, Middle East and Africa 783 696 1,479 764 613 1,377 355 383 Americas 2,419 732 3,151 2,532 699 3,232 645 624 Total 7,616 4,231 11,848 7,290 3,747 11,037 3,218 2,963 The table below presents the opening and closing balances of contract liabilities as well as movements during the year. There are no contract assets to report. Parent Company Contract liabilities SEKm Advances from customers Customer bonuses/ incentives Prepaid income – service/ warranty Contract liabilities, total Opening balance, January 1, 2022 30 22 50 102 Gross increase during the period 16 49 14 79 Paid to/settled with customer – –49 – –49 Revenue recognized during the year –23 – –14 –37 Other – – –1 –1 Closing balance, December 31, 2022 23 22 49 94 Opening balance, January 1, 2023 23 22 49 94 Gross increase during the period 7 54 18 79 Paid to/settled with customer – –54 – –54 Revenue recognized during the year –18 – –26 –44 Other – – – – Closing balance, December 31, 2023 12 22 41 75 Group Contract liabilities SEKm Advances from customers Customer bonuses/ incentives Prepaid income – service/ warranty Contract liabilities, total Opening balance, January 1, 2022 242 93 260 595 Gross increase during the period 106 220 501 827 Paid to/settled with customer – –191 – –191 Revenue recognized during the year –168 – –491 –658 Acquisition of operations –13 – – –13 Other – – –1 –1 Exchange-rate differences 18 11 20 49 Closing balance, December 31, 2022 186 132 289 607 Opening balance, January 1, 2023 186 132 289 607 Gross increase during the period 206 214 509 929 Paid to/settled with customer – –242 – –242 Revenue recognized during the year –207 – –475 –682 Acquisition of operations – – – – Other – – – – Exchange-rate differences –8 –3 –3 –14 Closing balance, December 31, 2023 177 101 319 597 P. 110Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 5 OPERATING EXPENSES Cost of goods sold and additional information on costs by nature Cost of goods sold includes expenses for the following items: • Finished goods i.e. cost for production and sourced products • Warranties • Environmental fees • Warehousing and transportation • Exchange-rate changes on payables and receivables and the effects from currency hedging SEKm 2023 2022 Operating expenses Direct material and components –3,069 –3,278 Sourced products –1,739 –1,694 Depreciation and amortization –427 –413 Salaries, other remuneration, and employer contribution –2,912 –2,788 Transportation –407 –415 Other –2,140 –1,493 Total –10,694 –10,081 Cost of goods sold includes direct material and components amounting to SEK 3,069m (3,278) and sourced products amounting to SEK 1,739m (1,694). The depreciation and amortization charge for the year amounted to SEK 427m (413). Costs for research and development amounted to SEK 388m (381). The Group’s operating income includes net exchange rate differences in the amount of SEK -41m (16). Selling and administration expenses Selling expenses include expenses for brand communication, communication to drive sales, and costs for sales and marketing staff. Selling expenses also include the cost for impairment of trade receivables. Administration expenses include expenses for general manage- ment, finance, human resources, and IT expenses related to those functions. Administration costs related to manufacturing are includ- ed in cost of goods sold. NOTE 6 OTHER OPERATING INCOME AND EXPENSES Group Parent Company SEKm 2023 2022 2023 2022 Other operating income Gain on sale of property, plant and equipment 1 10 – 1 Government grant/ subsidy 2 2 – – Other 9 16 – 1 Total 12 28 – 2 Other operating expenses Loss on sale of property, plant and equipment 0 –1 – – Transaction costs, acquired operations –4 –4 – – Loss on sales of opera- tions and shares – –35 – –10 Other –9 –1 –17 –12 Total –13 –41 –17 –22 Other operating income and expenses –1 –13 –17 –20 NOTE 7 MATERIAL PROFIT AND LOSS ITEMS This note summarizes events and transactions that have a signifi- cant effect and are therefore relevant for understanding financial performance when comparing income for the current period with previous periods, including items such as: • Capital gains and losses from divestments of product groups or major units • Close-down or significant down-sizing of major units or activities • Larger cost-saving programs • Significant impairment • Other major cost or income items There were no material profit and loss items in 2023. Material profit and loss items in 2022 consists of the costs related to the divestment of the operation in Russia. Material profit and loss items SEKm 2023 2022 Loss from divesting the operation in Russia – –35 Total – –35 Material profit and loss items per function SEKm 2023 2022 Other operating income and expenses – –35 Total – –35 P. 111Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 8 LEASES The majority of the Group’s lease arrangements are those under which the Group is a lessee. This applies to a number of assets such as warehouses, office premises, vehicles, and certain office equip- ment. The normal rental period ranges between 3–10 years for office and warehouse premises and 3–5 years for vehicles. A few lease contracts include an option for extension. The Group’s activities as a lessor are limited. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Such an assessment is performed at the inception of a contract. An identified lease agreement is further categorized by the Group as either a short-term lease, a lease of a low-value asset, or a standard lease. Short-term leases are defined as leases with a lease term of 12 months or less. The Group’s defini- tion of low-value assets comprises all personal computers and lap- tops, phones, office equipment and furniture, and all other assets of a value less than SEK 100k when new, and are applied on a lease- by-lease basis. Lease payments related to short-term leases and leases of low-value assets are recognized as operating expenses on a straight-line basis over the term of the lease. The Group applies the term ‘standard lease’ to all identified leases which are catego- rized as neither short-term leases nor leases of a low-value asset. Thus, a standard lease is a lease agreement for which a right-of-use asset and a corresponding lease liability are recognized at com- mencement of the lease, i.e. when the asset is available for use. The Group’s right-of-use assets and its long-term and short-term lease liabilities are presented as separate line items in the consolidated balance sheet. Assets and liabilities arising from a lease are initially measured on a present value basis. The lease liability is determined as the present value of all future lease payments at the commencement date, discounted using the Group’s calculated incremental bor- rowing rate determined by country and contract duration (>12–36 months, >37–72 months, and >72 months). A remeasurement of the lease liability, and a corresponding ap- plicable adjustment to the related right-of-use asset, is performed when: • The lease term has changed or there is a change in the assess- ment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate. • The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual val- ue, in which cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate (unless the lease payments change is due to a change in a floating inter- est rate, in which case a revised discount rate is used). • A lease contract is modified and the lease modification is not ac- counted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate. A right-of-use asset is normally depreciated on a straight-line basis over the shorter of the asset’s useful life and the lease term. However, if it is reasonably certain that ownership of the asset will be transferred at the end of the lease, the right-of-use asset is de- preciated over its useful life. Depreciation of a right-of-use asset starts at the commencement date of the lease. Lease payments related to standard leases are accounted for partly as amortization of the lease liability and partly as interest ex- pense in the statement of comprehensive income. When a lease contract for buildings includes non-lease compo- nents they are separated, if possible, from lease components and are not part of the lease liability. For lease contracts regarding other asset classes (machinery, vehicles etc.) the lease components and any associated non-lease components are accounted for as a sin- gle arrangement. Extension options are only included if it is determined that the lease term is reasonably certain to be extended. Periods after termi- nation options are only included in the lease term if it is reasonably certain that the lease will not be terminated. Property, plant and equipment, right-of-use SEKm Buildings Machinery Vehicles Other equipment Total Carrying amount Opening balance, January 1, 2022 267 1 48 2 318 Divestment of operations –1 – – – –1 Additions 5 – 32 –0 37 Cancellations –9 – – – –9 Depreciation –54 –1 –26 –1 –82 Reclassification – – – – – Exchange rate differences 28 0 3 0 31 Closing balance, December 31, 2022 236 0 57 1 294 Opening balance, January 1, 2023 236 0 57 1 294 Divestment of operations – – – – – Additions 44 1 61 3 109 Cancellations –0 – –1 – –2 Depreciation –51 –0 –34 –1 –86 Reclassification – – – – – Exchange rate differences –6 0 –0 –0 –6 Closing balance, December 31, 2023 222 1 83 3 309 P. 112Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 8 LEASES, CONT. Lease expenses SEKm 2023 2022 Lease expenses Short-term leases –10 –0 Leases of low-value assets –1 –1 Depreciation –86 –82 Variable lease payments –4 –4 Total –100 –87 Lease liability, interest expense –11 –10 Total cash outflow from lease contracts for 2023 amounts to SEK 112m (97). There were no committed lease contracts for which the commencement date has not yet occurred neither at year-end 2023 nor 2022. For information on maturity profile, see note 18. NOTE 9 FINANCIAL INCOME AND FINANCIAL EXPENSES Group Parent Company SEKm 2023 2022 2023 2022 Financial income Interest income from subsidiaries – – 196 90 from others 128 81 13 2 Exchange rate differences, gains 1,078 702 1,078 694 Dividends from subsidiaries – – 304 642 Pension interest income 22 2 – – Other financial income 0 2 – – Total financial income 1,228 787 1,591 1,428 Group Parent Company SEKm 2023 2022 2023 2022 Financial expenses Interest expenses to subsidiaries – – –26 –3 to others –247 –131 –134 –56 Exchange rate differences, losses –1,054 –696 –1,121 –696 Pension interest expenses –26 –3 – - Lease liability interest expense –11 –10 – - Other financial expenses –11 –9 –6 –14 Total financial expenses –1,349 –848 –1,287 –768 Financial items, net –121 –61 304 660 NOTE 10 TAXES Group Parent Company SEKm 2023 2022 2023 2022 Current taxes –292 –246 –66 –52 Deferred taxes 33 37 1 1 Taxes included in in- come for the period –259 –209 –65 –51 Taxes related to OCI 12 14 3 – Taxes included in total comprehensive income –247 –195 –62 –51 Current taxes in 2023 includes adjustments related to prior years of SEK 17m (–7). The consolidated accounts contain SEK 18m (20) in deferred tax liabilities attributable to untaxed reserves in the Parent Company. Deferred tax is only recognized in subsidiaries when the group expects sufficient taxable income to utilize the tax benefit . Theoretical and actual tax rates Group Parent Company SEKm 2023 2022 2023 2022 Theoretical tax rate 24.4 23.3 20.6 20.6 Non-taxable/non- deductible income state- ment items, net -0.3 0.5 –9.5 –7.8 Non-recognized tax losses carried forward – – – – Utilized non- recognized tax losses carried forward – –1.2 – – Other changes in estimates relating to deferred tax -2.7 –4.7 – – Withholding tax 0.3 0.1 0.5 0.1 Other 3.3 5.3 1.2 –1.3 Actual tax rate 25.0 23.3 12.8 11.6 The theoretical tax rate for the Group is calculated on the basis of the weighted income after financial items multiplied by the statutory P. 113Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 10 TAXES, CONT. tax rates. Non-recognized deductible temporary differences As of December 31, 2023, the Group had tax loss carry-forwards and other deductible temporary differences of SEK 8m (7), which have not been included in the computation of deferred tax assets. The decision not to recognize certain deferred tax assets on tempo- rary differences is based on an assessment in which the likelihood of future utilization is evaluated for each of the temporary items. The Group typically does not recognize deferred tax assets on tem- porary differences in situations where the ability to utilize these is considered to be limited. The non-recognized temporary differences will expire as follows: Non-recognized deductible temporary differences SEKm December 31, 2023 2024 – 2025 – 2026 – 2027 – 2028 – And thereafter 8 Without time limit – Totalt 8 Deferred tax assets in the Parent Company relates to other pro- visions of SEK 14m (11) and expected credit losses of SEK 4m (5). Deferred tax liabilities relates to property, plant and equipment of SEK 2m (2). The following table shows deferred tax assets and liabilities for the Group, at the end of each reporting period and the change in net deferred tax assets and liabilities. Deferred tax assets and liabil- ities are netted in the balance sheet in case the Group has a right to them. Deferred tax assets and deferred tax liabilities SEKm 2023 2022 Deferred tax assets Property, plant and equipment 40 11 Provision for pension obligations 9 9 Provision for restructuring 0 1 Other provisions 36 38 Inventories 48 42 Accrued expenses and prepaid income 69 72 Unused tax losses carried forward 69 115 Lease liability 67 74 Other deferred tax assets 224 149 Deferred tax assets before netting of deferred tax assets and liabilities 562 510 Netting of deferred tax assets and liabilities –135 –82 Deferred tax assets, net 427 428 Deferred tax liabilities Property, plant and equipment, owned 8 14 Property, plant and equipment, right-of-use 64 71 Other provisions 34 16 Inventories 2 4 Intangible assets 37 58 Other taxable temporary differences 87 34 Deferred tax liabilities before netting of deferred tax assets and liabilities 232 197 Netting of deferred tax assets and liabilities –136 –81 Deferred tax liabilities net 96 116 SEKm 2023 2022 Items that will not be reclassified to income for the period: Remeasurement of provisions for post-em- ployment benefits Opening balance, January 1 23 161 Gain/loss to other comprehensive income 4 –152 Income tax relating to items that will not be reclassified –1 14 Closing balance, December 31 26 23 Items that may subsequently be reclassified to income for the period: Cash flow hedges Opening balance, January 1 – – Gain/loss to other comprehensive income –15 – Closing balance, December 31 –15 – Exchange differences on translation of foreign operations Opening balance, January 1 517 157 Translation differences –88 360 Extended net investment –50 – Closing balance, December 31 379 517 Income tax relating to items that may sub- sequently be reclassified to income for the period Opening balance, January 1 – – Cash flow hedges 3 – Extended net investment 10 – Closing balance, December 31 13 – Other comprehensive income, net of tax –137 223 NOTE 11 OTHER COMPREHENSIVE INCOME P. 114Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 12 PROPERTY, PLANT AND EQUIPMENT Group SEKm Land and land improvements Buildings Machinery and technical installations Other equipment Plants under construction and advances Total Acquisition costs Opening balance, January 1, 2022 156 1,163 1,973 331 60 3,683 Acquired during the year – 6 55 17 53 130 Divestment of operations – – – –6 – –6 Transfer of work in progress and advances 3 17 24 14 –58 0 Sales, scrapping, etc. – –6 –27 –5 –0 –38 Exchange rate differences 18 118 140 24 3 304 Closing balance, December 31, 2022 176 1,298 2,166 375 58 4,073 Acquired during the year 0 8 50 13 91 163 Divestment of operations – – – – – – Transfer of work in progress and advances 0 5 61 9 –75 1 Sales, scrapping, etc. –2 –1 –44 –7 –0 –54 Exchange rate differences 3 2 –9 –3 –1 –7 Closing balance, December 31, 2023 178 1,312 2,225 388 73 4,175 Accumulated depreciation Opening balance, January 1, 2022 19 377 1,533 268 2 2,197 Divestment of operations – – – –4 – –4 Depreciation for the year 1 43 109 22 – 175 Transfer of work in progress and advances – 1 – 0 –1 0 Sales, scrapping, etc. – –6 –25 –4 – –35 Impairment – –0 – – – –0 Exchange rate differences 1 35 108 18 0 162 Closing balance, December 31, 2022 21 450 1,725 299 1 2,497 Divestment of operations – – – – – – Depreciation for the year 1 46 109 23 – 178 Transfer of work in progress and advances – –0 0 0 – 1 Sales, scrapping, etc. –2 –1 –45 –6 – –54 Impairment – – – – – – Exchange rate differences –0 1 –4 –2 –0 –5 Closing balance, December 31, 2023 20 496 1,785 315 1 2,616 Net carrying amount, December 31, 2022 155 848 441 76 57 1,577 Net carrying amount, December 31, 2023 158 816 440 73 72 1,559 P. 115Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 12 PROPERTY, PLANT AND EQUIPMENT, CONT. Property, plant, and equipment are stated at historical cost less straight-line accumulated depreciation, adjusted for any impairment charges. Elements of property, plant and equipment that have a cost that is significant in relation to the total cost of the item are depreciated separately. Land is not depreciated as it is considered to have an unlimited useful life. All other depreciation is calculated using the straight-line method and is based on the following esti- mated useful lives: Land improvements 15 years Buildings 10–40 years Machinery and technical installations 3–15 years Other equipment 3–10 years No borrowing costs were capitalized during 2023 or 2022. Parent company SEKm Land and land improvements Buildings Machinery and technical installations Other equipment Plants under construction and advances Total Acquisition costs Opening balance, January 1, 2022 8 86 494 88 36 712 Acquired during the year – – – – 21 21 Transfer of work in progress and advances 2 9 10 11 –32 – Closing balance, December 31, 2022 10 95 504 99 25 733 Acquired during the year - - - - 47 47 Transfer of work in progress and advances – – 19 6 -25 - Sales, scrapping, etc. - - -30 - - -30 Closing balance, December 31, 2023 10 95 493 105 47 750 Accumulated depreciation Opening balance, January 1, 2022 4 24 377 82 0 487 Depreciation for the year – 3 21 6 – 30 Closing balance, December 31, 2022 4 27 398 88 0 517 Depreciation for the year 1 2 22 5 - 30 Sales, scrapping, etc - - -30 - - -30 Closing balance, December 31, 2023 5 29 390 93 0 517 Net carrying amount, December 31, 2022 6 68 106 11 25 216 Net carrying amount, December 31, 2023 5 66 103 12 47 233 P. 116Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 13 GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Goodwill is recognized as an indefinite life intangible asset at cost less accumulated impairment losses. Product development Electrolux Professional capitalizes expenses for certain of its own development of new products provided that the level of their future economic benefit is high. The intangible asset is only recognized if the product is sellable on existing markets and if resources exist to complete the development. Only expenditures which are directly attributable to the new product’s development are recognized. Capitalized development costs are amortized over their useful lives, between 3 and 5 years, using the straight-line method. Software Acquired software licenses and development expenses are capital- ized on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortized over their useful lives, between 3 and 5 years, using the straight-line method. Trademarks Trademarks are reported at historical cost less amortization and impairment. Trademarks are amortized over their useful lives, esti- mated at 5 to 10 years, using the straight-line method. Customer relationships Customer relationships are recognized at fair value in connection with acquisitions. The values of these relationships are amortized over the estimated useful lives, between 5 and 15 years, using the straight-line method. Intangible assets with indefinite useful lives Goodwill as of December 31, 2023, had a total carrying value of SEK 3,290m (3,381). The allocation, for impairment-testing purposes, on cash-generating units is shown in the table. All intangible assets with indefinite useful lives are tested for impairment at least once a year to ensure that the value does not deviate negatively from the carrying value and whenever there is any indication of impairment. Single assets are tested more often in cases where there are indications of impairment. The recoverable amounts of the cash-generating units have been determined based on value-in-use calculations. The cash-generating units are the op- erating segments (business areas). Costs related to Group services are carried by the business areas units and therefore included in the impairment testing of each business brea. Common group costs that cannot be allocated on a reasonable and consistent basis to any of the individual business areas are included in impairment testing of the total carrying amount of all business areas combined. Value-in-use is calculated using the discounted cash flow model based on forecasts approved by Group management for the up- coming four years. The forecasts are built up from the estimates of the units within each business area. The preparation of the forecast requires a num- ber of key assumptions such as volumes, prices, product mix, prices for raw material, and components, which creates a basis for future growth and gross margin. These figures are set in relation to historic figures and external reports on market growth. Furthermore the pos- sibility to raise prices, cost reduction via simplified production, new more attractive products combined with phasing out products with low profitability and capital efficiency through reducing working capital levels, have been taken into consideration. Moreover, the trends driving the growth of the Group's business are still valid, and despite the potential down-turn in the economy, people continue to travel and spend money on eating out and on take-away. The pre-tax discount rate used in 2023 was between 10.5% and 13.5% (13.1) depending on business area and is calculated based on market information as at October 2023. For 2022, since there was no reliable information available to calculate the discount rate per business area, the pre-tax Group WACC (Weighted Average Cost of Capital) was used for all business areas. The cash flow for the last year of the four-year period is used as the base for the perpetuity calculation. Gordon’s growth model is used to calculate the in-perpetuity value. In accordance with this model, the terminal value of a growing cash flow is calculated as the starting cash flow divided by cost of capital, less the growth rate. Cost of capital less growth of 2.7% (4.4) is between 9.3% and 10.8% depending on business area (8.7). The impairment testing for 2023 did not lead to any impairment. Sensitivity analysis has been performed in the form of increasing the discount rate by two percentage points, and has not not led to a need for impairment. A reduction of the cash flow forecast to a zero 'headroom' (calculated recoverable amounts being equal to their carrying amounts) has been performed and the conclusion is that such a deviation from the forecast is not probable for any of the business areas. Goodwill and discount rates 2023 SEKm Goodwill Discount rate, % Food Europe 56 13.5 Food Americas 1,346 10.5 Food APAC & MEA 118 13.5 Beverage and Food Preparation 1,448 12.0 Laundry 322 11.0 Total 3,290 2022 SEKm Goodwill Discount rate, % Food Europe 56 13.1 Food Americas 1,397 13.1 Food APAC & MEA 127 13.1 Beverage and Food Preparation 1,478 13.1 Laundry 323 13.1 Total 3,381 P. 117Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 13 GOODWILL AND OTHER INTANGIBLE ASSETS, CONT. Group Other intangible assets Parent Company SEKm Goodwill Product development Customer relations Trademarks Other Total other intangible assets Total intangible assets Acquisition costs Opening balance, January 1, 2022 3,068 108 682 206 326 1,321 115 Acquired during the year – – – 0 22 22 – Acquisition of operations¹ –73 – – – –0 –0 – Internally developed – – – – – – – Reclassification – – – –0 0 – – Sales, scrapping etc. – – – – –3 –3 – Exchange rate differences 386 9 92 28 48 178 – Closing balance, December 31, 2022 3,381 117 774 234 394 1,519 115 Acquired during the year – – – 0 19 19 – Acquisition of operations¹ – – – – – – – Internally developed – 9 – – – 9 – Reclassification – – – –0 –1 –1 – Sales, scrapping etc. – – – –0 –2 –2 – Exchange rate differences –92 2 –22 –7 –14 –41 – Closing balance, December 31, 2023 3,290 127 753 227 397 1,503 115 P. 118Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 13 GOODWILL AND OTHER INTANGIBLE ASSETS, CONT. Group Other intangible assets Parent Company SEKm Goodwill Product development Customer relations Trademarks Other Total other intangible assets Total intangible assets Accumulated amortization Opening balance, January 1, 2022 – 85 122 38 76 322 54 Amortization for the year – 10 59 23 63 155 23 Reclassification – – – – – – – Sales, scrapping etc. – – – – – – – Impairment – – – 3 – 3 – Exchange rate differences – 8 17 6 12 43 – Closing balance, December 31, 2022 – 104 198 70 151 522 77 Amortization for the year – 9 62 21 70 163 23 Reclassification – – – – –1 –1 – Sales, scrapping etc. – – – – –2 –2 – Impairment – – – – – – – Exchange rate differences – 2 –7 –3 –8 –16 – Closing balance, December 31, 2023 – 115 253 88 211 667 100 Carrying amount, December 31, 2022 3,381 13 576 164 243 997 38 Carrying amount, December 31, 2023 3,290 12 500 139 186 837 15 1) For more information about the reduction in acquired goodwill in 2022, see note 25. Amortization of intangible assets has been included in Cost of goods sold in the amount of SEK 71m (69). Administrative expenses of SEK 8m (5) and Selling expenses of SEK 83m (82) are included in the consol- idated statement of comprehensive income. No borrowing costs were capitalized during 2023 or 2022. P. 119Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 14 OTHER NON-CURRENT ASSETS Group Parent Company SEKm 2023 2022 2023 2022 Shares in subsidiaries – – 5,866 5,946 Long-term financial receivables from subsidiaries – – 1,644 2,890 Long-term operational receivables 17 19 – – Total 17 19 7,510 8,836 Long-term operational receivables include deposits and other op- erating customer receivables. For the Parent company, long-term financial receivables from subsidiaries include loans and expected credit loss of SEK 5m (5). Shares in subsidiaries Parent Company SEKm 2023 2022 Accumulated cost Opening balance, January 1 8,451 8,461 Investments – – Divestments – –10 Shareholders’ contribution – – Closing balance, December 31 8,451 8,451 Accumulated impairment Opening balance, January 1 2,505 2,039 Impairment 79 467 Closing balance, December 31 2,584 2,505 Total 5,866 5,946 In the fourth quarter of 2023, Electrolux Professional AB impaired SEK 79m (467) related to some of its investments in subsidiaries. The main reason for the impairment is lower future statutory expected profit generation. NOTE 15 INVENTORIES Group Parent Company SEKm 2023 2022 2023 2022 Raw materials 657 752 78 70 Work in progress 64 71 16 26 Finished products 966 1,151 195 207 Advances to suppliers 4 7 – – Total 1,692 1,981 289 303 Inventories and work in progress are valued at the lower of cost at normal capacity utilization, and net realizable value. Net realizable value is defined as the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimat- ed costs necessary to make the sale at market value. The cost of finished goods and work in progress comprises development costs, direct materials, direct labor, tooling costs, other direct costs, and related production overheads. The cost of inventories is assigned by using the weighted average cost formula. Provisions for obsoles- cence are included in the value for inventory. The cost of inventories recognized as expense and included in Cost of goods sold, amounted to SEK 6,479m (5,981) for the Group. Write-downs due to obsolescence amounted to SEK 102m (98) and reversals, due to scrapping or sale of previous write-downs amounted to SEK 190m (65) for the Group. The amounts have been included in the item Cost of goods sold in the Statement of compre- hensive income. NOTE 16 OTHER CURRENT ASSETS SEKm 2023 2022 VAT receivable 142 167 Prepaid expenses and accrued income 74 71 Prepaid interest expenses and accrued interest income 1 1 Derivatives 29 152 Miscellaneous short-term receivables 19 27 Total 266 416 Miscellaneous short-term receivables include advances to employees and receivables from tax agencies. P. 120Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 17 TRADE RECEIVABLES Group Parent Company SEKm 2023 2022 2023 2022 Trade receivables 1,980 2,116 313 343 Provisions for expected credit loss –76 –88 –13 –11 Trade receivables, net 1,904 2,028 300 332 Provisions in relation to trade receivables, % 3.8 4.2 4.2 3.2 Trade receivables are recognized initially at fair value and sub- sequently measured at amortized cost using the effective interest method, less provision for expected losses. The change in amount of the provision is recognized in the consolidated statement of com- prehensive income within selling expenses. The fair value of trade receivables equals their carrying amount, as the impact of discount- ing is not significant. The Group applies the simplified approach for trade receivables and measures the provision at an amount equal to lifetime expect- ed credit loss. The internal policy uses an aging matrix as a base for the provision and the calculation is based on historical loss rate adjusted for specific factors such as customer credit rating, signs of bankruptcy, publicly known insolvency etc., and forward-looking country level GDP information. The Group uses credit insurance as a means of protection against credit risks. There is no significant effect from changes in forward-looking factors. Provisions for expected credit loss Group Parent Company SEKm 2023 2022 2023 2022 Provisions, January 1 –88 –93 –11 –11 Acquisition of operations – – – – Divestment of operations – 1 – – Charged/released to PL, net 7 –4 –2 – Actual credit losses 5 15 – – Exchange rate differences and other changes 1 –7 – – Provisions, December 31 –76 –88 –13 –11 Aging analysis of trade receivables past due Group Parent Company SEKm 2023 2022 2023 2022 Trade receivables not overdue 1,647 1,772 313 343 Past due date 1–15 days 122 115 – – Past due date 16–60 days 88 93 – – 2–6 months overdue 65 72 – – 6–12 months overdue 25 22 – – More than 1 year 33 43 – – Provison for expected credit loss –76 –88 –13 –11 Total trade receivables 1,904 2,028 300 332 For accounts receivable that are not yet due and those past their due date by up to 60 days, 0% of the amount is reserved. For ac- counts receivable that are past their due date by between 2 and 6 months, 28% is reserved. Accounts receivable that are past their due date by between 6 and 12 months, and accounts receivable that are more than 12 months past their due date are reserved at 100%. The percentages refer to the 2023 year end. Based on historical ex- perience, default is not considered until after 6 months past due. NOTE 18 FINANCIAL INSTRUMENTS Additional and complementary information is presented in the following notes: Note 2, Financial risk management, describes the Group’s risk policies in general and the principal financial instru- ments of Electrolux Professional in more detail. Note 17, Trade re- ceivables, describes the trade receivables and related credit risks. The information in this note highlights and describes the prin- cipal financial instruments of the Group regarding specific major terms and conditions when applicable, and the exposure to risk and the fair values at year end. Financial instruments Initial recognition and measurement Financial assets and financial liabilities are recognized when the entity becomes party to the contractual provisions of the instrument. The regular way that purchases and sales of financial assets are recognized is on trade-date, the date on which the Group commits to purchase or sell the asset. At initial recognition, the Group measures a financial asset or financial liability at its fair value plus or minus, in the case of a finan- cial asset or financial liability not carried at fair value through profit or loss, transaction costs that are incremental and directly attrib- utable to the acquisition or issue of the financial asset or financial liability, such as fees and commissions. Transaction costs of financial assets and financial liabilities carried at fair value through profit or loss are expensed in profit or loss. Financial assets Classification and subsequent measurement The Group classifies its financial assets as follows: • Fair value through profit or loss (FVPL); • Fair value through other comprehensive income (FVOCI); or • Amortized cost. The classification requirements for debt and equity instruments are described below. Debt instruments are those instruments that meet the definition of a financial liability from the issuer’s perspective, such as trade re- ceivables, loan receivables, and government bonds. The Group classifies its debt instruments into one of the following two measurement categories depending on the business model for managing the instruments and the cash flow characteristics of the instruments: Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest (SPPI), and are not designated as FVPL, are measured at amortized cost. The carrying amount of these assets is adjusted by any expected credit loss allowance recognized (see “Impairment and expected losses” below). Interest income from P. 121Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 18 FINANCIAL INSTRUMENTS, CONT. these financial assets is included in the financial net using the effec- tive interest rate method. Fair value through profit or loss (FVTPL): Assets that do not meet the criteria for amortized cost are measured at fair value through profit and loss. A gain or loss on a financial debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship, is recognized in the financial net in the period in which it arises. Interest income from these financial assets is included in the financial net using the effective interest rate method. Trade receivables sold on non-recourse terms are cate- gorized as ‘Hold to Sell’ with the gain or loss reported in operating income. The Group reclassifies debt investments when, and only, when its business model for managing those assets changes. Equity instruments are instruments that meet the definition of equity from the issuer’s perspective; that is, instruments that do not contain a contractual obligation to pay and that evidence a resid- ual interest in the issuer’s net assets. Gains and losses on equity in- vestments at FVPL are included in the financial net. The Group does not have any investments in equity instruments. Impairment and expected loss The Group assesses expected credit losses (ECL) associated with its financial assets not carried at fair value on a forward-looking basis. Based on this, the Group recognizes a provision for such potential losses at each reporting date. The measurement of ECL reflects an unbiased and probability-weighted amount based on reasonable and supportable information available such as past events, current conditions, and forecasts of future economic conditions. For finan- cial obligations, Electrolux Professional Group follows the Standard & Poor's Global Ratings approach, which generally record a de- fault on the first occurrence of a payment default on any financial obligation, other than a financial obligation subject to a bona fide commercial dispute. Payment default is defined by the earliest of above and a relevant obligation being overdue for more than 90 days. For receivables other than trade receivables a rating model is used to assign a probability of default to calculate the provision. For cash, a rating-based approach is used to estimate a probabil- ity of default for each counterparty. Due to the high ratings of the counterparties and the short maturity, the impairment amounts are insignificant. For trade receivables, the Group applies the ‘simplified approach’. Derecognition Financial assets, or a portion thereof, are derecognized when the contractual rights to receive the cash flows from the assets have expired, or when they have been transferred and either (i) the Group transfers substantially all the risks and rewards of ownership, or (ii) the Group neither transfers nor retains substantially all the risks and rewards of ownership and the Group has not retained control. Financial liabilities Classification and subsequent measurement All of the Group’s financial liabilities, excluding derivatives, are clas- sified as subsequently measured at amortized cost. Derecognition A financial liability is derecognized when it is extinguished, i.e. when the obligation specified in the contract is discharged, canceled or expires. Derivatives Derivatives are initially recognized at fair value on the date a deriv- ative contract is entered into and are subsequently measured at fair value. All derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative. The method of recog- nizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item hedged. Changes in fair value for derivatives that do not fulfill the criteria for hedge accounting are recognized as operating or financial transactions based on the purpose of the use of the deriv- ative. Interest payments for interest rate swaps are recognized as interest income or expense, whereas changes in fair value of future payments are presented as gains or losses from financial instru- ments. IFRS 9 Hedge accounting is applied. To qualify for hedge ac- counting the hedging relationship must be: • formally identified and designated, • expected to fulfil the effectiveness requirements, and • documented. Cash flow hedge The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in equity via other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in the statement of comprehensive income. Amounts accumulated in equity are recycled to the statement of profit or loss in the periods when the hedged item affects profit or loss. They are recorded in the income or expense lines in which the revenue or expense associated with the related hedged item is reported. The impact of cash flow hedg- es on equity was SEK -15m (- ) at the year end. Net debt At year-end 2023, the Group’s net debt amounted to SEK 1,390m (2,050). The following table presents how the Group calculates net debt and what it consists of. Net debt SEKm December 31, 2023 December 31, 2022 Short-term loans 642 7 Short-term part of long-term loans 74 - Short-term borrowings 716 7 Financial derivative liabilities 40 54 Accrued interest expenses and prepaid interest income 14 8 Short-term borrowings and other 771 69 Long-term loans 1,192 2,824 Long-term borrowings 1,192 2,824 Total borrowings 1,963 2,894 Cash and cash equivalents 959 898 Short-term investments 0 200 Liquid funds 959 1,098 Financial derivative assets 29 152 Prepaid interest expenses and accrued interest income 1 1 Liquid funds and other 989 1,251 Financial net debt (total borrowings less liquid funds and other) 973 1,643 Lease liabilities 319 304 Net provisions for post-employment benefits 98 103 Net debt 1,390 2,050 1) Of which interest-bearing borrowings amounts to SEK 1,908m (2,832). Liquid funds Liquid funds consist of cash and cash equivalents and short-term investments. Cash and cash equivalents consist of cash on hand, bank deposits, and other short-term highly liquid investments with a maturity of 3 months or less. The table below presents the key data for liquid funds. The carry- ing amount of liquid funds is approximately equal to fair value. P. 122Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 18 FINANCIAL INSTRUMENTS, CONT. Liquidity profile SEKm December 31, 2023 December 31, 2022 Cash and cash equivalents 959 898 Short-term investments - 200 Liquid funds 959 1,098 Less total short-term borrowings 716 7 Net liquidity 242 1,091 Interest-bearing liabilities Borrowings are initially recognized at fair value of the funds re- ceived net of transaction costs incurred. After initial recognition, borrowings are valued at amortized cost using the effective interest rate method. At year-end 2023, the Group’s total interest-bearing borrowings amounted to SEK 1,908m, of which SEK 1,266m was for long-term borrowings including short-term portions of long-term loans. Short- term borrowings consisted of SEK 642m. The majority of total bor- rowings is raised at the Parent Company level. In 2020, Electrolux Professional AB entered into a EUR 250m multi-currency revolving credit facility agreement and a bilateral term loan of SEK 600m with AB Svensk Exportkredit. In October 2021 a bilateral sustainability-related loan of EUR 60m was agreed with the Nordic Investment Bank. In September 2022 Electrolux Professional AB entered into a EUR 140m syndicated Term Loan Facility. The revolving credit facility had an original tenure of five years (with extension options), the first one-year extension option was executed in 2021, the second one-year extension option was executed in 2022, and the loan was repaid during 2023. Electrolux Professional AB elected to reduce the RCF capacity from EUR 250m to EUR 200m in 2021. The full EUR 200m capacity of the RCF was available on December 31, 2022 and the facility expires in 2027. The term loan with AB Svensk Exportkredit has a tenure of seven years and the sustainability-related loan with the Nordic Investment Bank has a tenure of 7 years, with a grace period of 3 years, and a semi-annual repayment schedule starting in 2024. At year-end 2023, the average interest-fixing period for long and short-term borrowings was 1.1 years. The calculation of the average interest-fixing period includes the effect of interest-rate swaps used to manage the interest-rate risk of the debt portfolio. The fair value of the interest-bearing borrowings was SEK 1,934m. The fair value including swap transactions used to manage the interest fixing was approximately SEK 1,963m. The Group’s exposure to the reform of interbank rates (IBOR) is limited. At year-end 2023, the Group had no derivative transactions denominated in USD. The Group uses interest rate swaps for cash flow hedges, hedg- ing borrowings with variable interest . Changes in liabilities arising from financing Group Cash flow Non-cash flow 2023 SEKm Opening balance Amortization New debt Acquisitions Additions/ cancellations Reclassification Exchange rate differences Closing balance Long-term borrowings (including short-term part of long-term) 2,824 –1,543 – – – – –15 1,266 Short-term borrowings (including factoring with recourse) 7 –717 1,359 – – –7 – 642 Lease liabilities 304 –86 109 – –2 – –6 319 Total 3,135 –2,346 1,468 – –2 –7 –21 2,227 Group Cash flow Non-cash flow 2022 SEKm Opening balance Amortization New debt Acquisitions Additions/ cancellations Reclassification Exchange rate differences Closing balance Long-term borrowings (including short-term part of long-term) 1,215 –0 1,534 – – – 75 2,824 Short-term borrowings (including factoring with recourse) 1,045 –6,617 5,255 – – – 324 7 Lease liabilities 326 –79 38 –1 –9 – 29 304 Total 2,586 –6,696 6,827 –1 –9 – 428 3,135 P. 123Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 18 FINANCIAL INSTRUMENTS, CONT. Parent Company Cash flow Non-cash flow 2023 SEKm Opening balance Amortization New debt Change in financial liabilities, subsidiaries Acquisitions Additions/ cancellations Exchange rate differences Closing balance Long-term borrowings (including short-term part of long-term) 2,824 –1,543 – – – – –15 1,266 Short-term borrowings (including factoring with recourse) 7 – 642 7 – – – 656 Total 2,831 –1,543 642 7 – – –15 1,922 1) Of the SEK 656m, SEK 642m is presented as short-term borrowings in the balance sheet and SEK 14m is disclosed as part of payables to subsidiaries. Parent Company Cash flow Non-cash flow 2022 SEKm Opening balance Amortization New debt Change in financial liabilities, subsidiaries Acquisitions Additions/ cancellations Exchange rate differences Closing balance Long-term borrowings (including short-term part of long-term) 1,215 – 1,534 – – – 75 2,824 Short-term borrowings (including factoring with recourse) 1,288 –1,039 – –249 – – 7 7¹ Totalt 2,503 –1,039 1,534 –249 – – 82 2,831 1) Of the SEK 7m, SEK 0m is presented as short-term borrowings in the balance sheet and SEK 7m is disclosed as part of payables to subsidiaries. Group Carrying amount SEKm, borrowings Description of loan Duration Interest rate Currency Nominal amount 2023 2022 AB Svensk Exportkredit 2020–2027 Floating, 3 months SEK 600 600 600 Nordic Investment Bank 2021–2028 Floating, 6 months EUR 60 592 667 Syndicated loan facility 2022–2024 Floating, 3 months EUR 140 – 1,557 Long-term borrowings 1,192 2,824 Commercial paper 3 months 4.54% – 4.72% SEK 650 642 – Loan in Italy Floating EUR 0.6 – 7 Short-term part of long- term loans 74 - Short-term borrowings 716 7 Total borrowings 1,908 2,832 Lease liabilities Long-term lease liabilities 221 225 Short-term lease liabilities 98 79 Total lease liabilities 319 304 Parent Company Carrying amount SEKm, borrowings Description of loan Duration Interest rate Currency Nominal amount 2023 2022 AB Svensk Exportkredit 2020–2027 Floating, 3 months SEK 600 600 600 Nordic Investment Bank 2021–2028 Floating, 6 months EUR 60 592 667 Syndicated loan facility 2022–2024 Floating, 3 months EUR 140 – 1,557 Long-term borrowings 1,192 2,824 Commercial paper 3 months 4.54% – 4.72% SEK 650 642 – Loan from subsidiaries 2024 Fixed rate EUR 1.3 14 – Loan from subsidiaries 2023 Fixed rate EUR 0.6 – 7 Short-term part of long- term loans 74 - Short-term borrowings 730 7 Total borrowings 1,922 2,831 P. 124Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 18 FINANCIAL INSTRUMENTS, CONT. Repayment schedule for long-term borrowings, December 31, 2023 SEKm 2024 2025 2026 2027 2028 2029– Totalt Bank and other loans 724 148 148 748 148 – 1,916 Total 724 148 148 748 148 – 1,916 Commercial flows The Electrolux Professional Financial Policy states that: • Currency exposure in operational units may be hedged on a case by case basis. Forecasted flows should normally not be hedged, as these exposures should be mitigated with natural hedges and price adjustments. • The Head of Group Treasury is authorized to approve hedging of known flows, such as internal dividends or M&A related payments, that due to timing reasons cause a temporary exposure to the Group. The table below shows the forecasted transaction flows, imports and exports, for the 12-month period of 2024, at year-end 2023. As of December 31, 2023, no financial instruments were in place to hedge transaction flows. Forecasted transaction flows and hedges SEKm SEK EUR THB CZK CNY NOK JPY DKK GBP USD Other Total Inflow of currency, long position 1,399 1,333 107 48 44 72 72 95 184 842 221 4,417 Outflow of currency, short position –1,980 –1,666 –423 –12 –1 – – –5 0 –192 –138 –4,417 Net transaction flow –581 –333 –317 37 43 72 72 90 183 649 84 0 P. 125Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 18 FINANCIAL INSTRUMENTS, CONT. Maturity profile of financial liabilities and derivatives – undiscounted cash flows Group SEKm <= 0.5 year > 0.5 year < 1 year > 1 years < 2 years > 2 years < 5 years > 5 years Total Loans –682 –101 –187 –1,092 – –2,062 Lease liabilities –52 –52 –87 –111 –62 –364 Gross settled derivatives 16 –1 –9 –18 0 –12 of which outflow –1,702 –121 –171 –480 –2,474 of which inflow 1,718 120 162 462 2,462 Trade payables –1,761 – – – – –1,761 Total –2,479 –154 –283 –1,221 –62 –4,199 Trade receivables amounted to SEK 1,904m and liquid funds to SEK 959m as per December 31, 2023. Furthermore, the group has an unuti- lized revolving credit facility in EUR equivalent to SEK 2,219m. That combination supports the Group’s commitment of a minimum liquidity reserve of SEK 500m. Maturity profile of financial liabilities and derivatives – undiscounted cash flows Parent Company SEKm <= 0.5 year > 0.5 year < 1 year > 1 years < 2 years > 2 years < 5 years > 5 years Total Loans –682 –101 –187 –1,092 – –2,062 Loans from subsidiaries –14 – – – – –14 Gross settled derivatives 16 –1 –9 –18 – –12 of which outflow –1,702 –121 –171 –480 – –2,474 of which inflow 1,718 120 162 462 – 2,462 Trade payables –549 – – – – –549 Other financial liabilities, subsidiaries –930 – – – – -930 Total –2,159 –102 –196 –1,110 – -3,567 Maturity profile of financial liabilities and derivatives The table below presents the undiscounted cash flows of the Group’s contractual liabilities related to financial instruments based on the remaining period to the contractual maturity date at the bal- ance sheet date. Floating interest cash flows with future fixing dates are estimated using the forward-forward interest rates at year-end. Any cash flow in foreign currency is converted to Swedish krona using the FX spot rates at year-end. The short-term liabilities from accounts payable are matched by positive cash flow from trade receivables. The loan maturities can be offset by the available li- quidity and/or a combination of existing credit facilities, new issued bonds, commercial papers, or bank and bilateral loans. On top of the other sources, Electrolux Professional entered into a committed revolving credit facility and two bilateral loans as stated above (interest-bearing liabilities). P. 126Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 18 FINANCIAL INSTRUMENTS, CONT. Net gain/loss, fair value, and carrying amount of financial instruments The tables below present net gain/loss of financial instruments, the effect in profit or loss and other comprehensive income, and the fair value and carrying amount of financial assets and liabilities. Net gain/loss can include both exchange rate differences and gain/loss due to changes in interest rate levels. Net gain/loss, income and expense of financial instruments 2023 2022 Group SEKm Gain/loss in profit or loss Gain/loss in OCI Interest income Interest expense Gain/loss in profit or loss Gain/loss in OCI Interest income Interest expense Recognized in operating income Financial assets and liabilities at amortized cost –41 – – – 16 – – – Total net gain/loss, income and expense –41 – – – 16 – – – Recognized in financial items Financial assets and liabilities at fair value through profit or loss 87 –15 32 –63 –17 – 28 –42 Financial assets at amortized cost –20 – 17 – 398 – 5 – Other financial liabilities at amortized cost –43 –50 – –104 –375 – – –41 Total net gain/loss, income and expense 24 –65 49 –167 6 – 33 –83 Net gain/loss, income and expense of financial instruments 2023 2022 Parent Company SEKm Gain/loss in profit or loss Gain/loss in OCI Interest income Interest expense Gain/loss in profit or loss Gain/loss in OCI Interest income Interest expense Recognized in operating income Financial assets and liabilities at amortized cost –17 – – – –12 – – – Total net gain/loss, income and expense –17 – – – –12 – – – Recognized in financial items Financial assets and liabilities at fair value through profit or loss 81 –15 32 –63 –17 – 28 –42 Financial assets at amortized cost –33 – 210 – 388 – 92 – Other financial liabilities at amortized cost –42 – – –129 –374 – – –45 Total net gain/loss, income and expense 6 –15 242 –192 –3 – 120 –87 P. 127Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 18 FINANCIAL INSTRUMENTS, CONT. Fair value and carrying amount of financial assets and liabilities 2023 1 2022 1 Group SEKm Hierarchy level Carrying amount Hierarchy level Carrying amount Financial assets 0 200 Financial assets at fair value through profit or loss 3 0 3 0 Financial assets at fair value through profit and loss 1 0 1 200 Trade receivables 1,904 2,028 Financial assets at amortized cost 1,904 2,028 Derivatives 29 152 Financial assets at fair value through profit or loss 2 29 2 152 Cash and cash equivalents 959 898 Financial assets at amortized cost 959 898 Total financial assets 2,892 3,278 Long-term borrowings 1,192 2,824 Financial liabilities at amortized cost 1,192 2,824 Trade payables 1,761 2,040 Financial liabilities at amortized cost 1,761 2,040 Short-term borrowings 716 7 Financial liabilities at amortized cost 716 7 Derivatives 40 54 Financial liabilities at fair value through profit or loss 2 40 2 54 Total financial liabilities 3,710 4,926 1) Carrying amount equals fair value except for long-term and short-term borrowings with a combined fair value of SEK 1,934m (2,846). The calculation of fair value of the Group’s borrowings is level 2 in the fair value hierarchy. 2023 1 2022 1 Parent Company SEKm Hierarchy level Carrying amount Hierarchy level Carrying amount Trade receivables 410 534 Financial assets at amortized cost 300 333 Financial assets at amortized cost, subsidiaries 110 201 Derivatives 29 152 Financial assets at fair value through profit or loss 29 2 152 Long-term financial assets 1,644 2,890 Financial assets at amortized cost, subsidiaries 1,644 2,890 Short-term financial assets 1,280 517 Financial assets at amortized cost, subsidiaries 1,280 517 Cash and cash equivalents 778 677 Financial assets at amortized cost 778 677 Total financial assets 4,141 4,770 Financial liabilities Long-term borrowings 1,192 2,824 Financial liabilities at amortized cost 1,192 2,824 Trade payables 550 578 Financial liabilities at amortized cost 351 388 Financial liabilities at amortized cost, subsidiaries 199 190 Short-term borrowings² 1,660 1,106 Financial liabilities at amortized cost 716 – Financial liabilities at amortized cost, subsidiaries 944 1,106 Derivatives 40 54 Financial liabilities at fair value through profit or loss 40 2 54 Total financial liabilities 3,442 4,562 1) Carrying amount equals fair value except for long-term and short-term borrowings with a combined fair value of SEK 1,934m (2,846). The calculation of fair value of the Group’s borrowings is level 2 in the fair value hierarchy. 2) Of the SEK 1,660m (1,106), SEK 716m (0) is presented in the balance sheet as short-term borrowings and SEK 1,142m (1,296) is disclosed as part of payables to subsidiaries. P. 128Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 18 FINANCIAL INSTRUMENTS, CONT. Fair value estimation Valuation of financial instruments at fair value is done at quoted market prices. Level 1 instruments quoted on the market, e.g., the major bond and interest-rate future markets, are all marked-to-mar- ket with the current price. The foreign-exchange spot rate is used to convert the value into SEK. For level 2 instruments where no ob- servable price is available on the market, cash flows are discounted using the deposit/swap curve of the cash flow currency. If no proper cash flow schedule is available, e.g., as is the case with forward-rate agreements, the underlying schedule is used for valuation purposes. To the extent option instruments are used, the valuation is based on the Black & Scholes formula. The carrying values, less impairment, of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities is estimated by discounting the future contractual cash flows at the current market-interest rate that is available to the Group for similar financial instruments. The Group’s financial assets and liabilities are measured at fair value according to the following hierarchy: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices included in level 1 that are observable for assets or liabilities either directly or indirectly. Level 3: Inputs for the assets or liabilities that are not entirely based on observable market data. NOTE 19 ASSETS PLEDGED FOR LIABILITIES TO CREDIT INSTITUTIONS There are no pledged assets to be disclosed for 2023 nor for 2022. NOTE 20 SHARE CAPITAL, NUMBER OF SHARES, AND EARNINGS PER SHARE The equity attributable to equity holders of the Parent Company consists of the following items. Share capital As per December 31, 2023, the share capital of Electrolux Professional AB consisted of 8,031,461 Class A shares with a quota value of SEK 0.1 per share and 279,365,989 Class B shares with a quota value of SEK 0.1. All shares are fully paid. All shares entitle the holder to the same proportion of assets and earnings, and carry equal rights in terms of dividends. Share capital SEKm Share capital Share capital, December 31, 2022 8,045,314 A shares, with a quota value of SEK 0.1 1 279,352,136 B shares, with a quota value of SEK 0.1 28 Total 29 Share capital, December 31, 2023 8,031,461 A shares, with a quota value of SEK 0.1 1 279,365,989 B shares, with a quota value of SEK 0.1 28 Total 29 Number of shares SEKm Owned by other shareh olders Shares, December 31, 2022 Class A shares 8,045,314 Class B shares 279,352,136 Total 287,397,450 Conversion of Class A shares into Class B shares Class A shares –13,853 Class B shares 13,853 Shares, December 31, 2023 Class A shares 8,031,461 Class B shares 279,365,989 Total 287,397,450 Other paid-in capital Other paid-in capital relates to statutory reserves in the Parent Company. Other reserves Other reserves includes exchange-rate differences on translation of foreign operations, which refer to changes in exchange rates when net investments in foreign subsidiaries are translated to SEK. Retained earnings Retained earnings, including income for the period, include the income of the Parent Company and its share of income in subsidiar- ies. Retained earnings also include transactions with shareholders, remeasurement of provision for post-employment benefits, and the amount recognized for the common dividend. It also includes the payment for equity swaps used for hedging the shares included in the share-based incentive programs and reversal of the cost for share-based incentive programs recognized in the income state- ment. Earnings per share SEKm 2023 2022 Income for the period 775 686 Earnings per share Basic, SEK 2.70 2.39 Diluted, SEK 2.70 2.39 Average number of shares, million Basic 287.4 287.4 Diluted 287.4 287.4 Basic and diluted earnings per share is calculated by dividing the income for the period attributable to the equity holders of the Parent Company with the average number of shares. The average number of shares is the weighted average number of shares outstanding during the year. When applicable, diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding with the estimated number of shares from the share programs. The average number of shares during 2023 was 287,397,450 (287,397,450) and the average number of diluted shares was 287,397,450 (287,397,450). P. 129Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 21 POST-EMPLOYMENT BENEFITS Post-employment benefits The Group sponsors pension plans in many of the countries in which it has activities. Pension plans can be defined contribution or defined benefit plans or a combination of both. Under defined contribution plans, the company’s commitment is to make periodic payments to independent authorities or investment plans, and the level of benefits depends on the actual return on those investments. Under defined benefit pension plans, the company enters into a commitment to provide post-employment benefits based upon one or several parameters for which the outcome is not known at pres- ent. For example, benefits can be based on final salary, on career average salary, or on a fixed amount of money per year of employ- ment. The cost for pension is disaggregated into three components; service cost, financing cost, or income and remeasurement effects. Service cost is reported within Operating income and classified as Cost of goods sold, Selling expenses, or Administrative expenses depending on the function of the employee. Financing cost or in- come is recognized in the Financial items and the remeasurement effects in Other comprehensive income. Net provisions for post-employment benefits in the balance sheet represent the present value of the Group’s obligations less market value of plan assets. Remeasurement due to actuarial as- sumptions is recorded in Other comprehensive income. Past-service costs are recognized immediately in income for the period. The majority of the funded pension obligation is attributable to the Swiss pension plan, where benefits are career average in nature. Contributions are paid to a pension foundation and a recovery plan has to be set up if the plan is underfunded on a local funding basis. Swiss laws do not state any specific way of calculating an employ- er‘s additional contribution and because of that there is normally no minimum funding requirement. Benefits are paid from the plan assets. In France and Italy, provisions are made for compulsory sever- ance payments, these provisions cover the Group’s commitment to pay employees a lump sum upon reaching retirement age, or upon the employees’ dismissal or resignation, these plans are unfunded. Unfunded pension plans also exist in other countries within the Group, such as Austria, Thailand, and Japan. Commitments for retirement pension for salaried employees in Sweden related to ITP2 are guaranteed through insurance with Alecta. In accordance with a statement from the Swedish Financial Reporting Board, UFR10, this is a defined benefit multi-employer plan. For the 2023 financial year, the company did not have access to information that would enable it to report its proportional share of the plan’s obligation, plan assets and costs, which means that the plan could not be reported as a defined benefit plan, therefore reported as a defined contribution plan. On December 31, 2023, Alecta’s surplus, which can be distributed between the policy holder and/or the persons insured in the form of the collective consolida- tion rate, preliminary amounted to 157% (172). The collective con- solidation rate comprises the market value of Alecta’s assets as a percentage of the insurance commitments produced in accordance with Alecta’s actuarial calculation assumptions, which are not in agreement with IAS 19. The collective consolidation level is normally allowed to vary between 125 to 175%. If the collective consolidation level falls below 125%, one measure could be raising the contractual premiums for taking up new insurance and expanding existing ben- efits. If collective consolidation exceeds 150%, one action could be to implement premium reductions. Expected fees for the next report- ing period for ITP2 insurance with Alecta amount to SEK 13m (9). The discount rate used for the calculation of expenses during 2023 was 2.42% on average, which was the same rate used to estimate liabilities at the end of 2022. An explanation of the amounts in the financial statements relat- ing to defined benefit obligations is presented in the following table. SEKm December 31, 2023 December 31, 2022 Amounts included in the balance sheet Funded plans Present value of funded obligations 880 739 Fair value of plan assets –1,057 –970 Effect of asset ceiling 175 231 Net amount (surplus)/deficit, funded plans –2 0 Average duration of the obligation, years 11.9 11.6 Unfunded plans Present value of unfunded obligations 100 103 Average duration of the obligation, years 8.4 8.1 Total net amount (surplus)/deficit 98 103 Of which reported as Pension plan assets 2 0 Provisions for post-employment benefit plans 100 103 P. 130Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 21 POST-EMPLOYMENT BENEFITS, CONT. SEKm 2023 2022 Pension cost Service cost –13 –8 Interest income/expense, net –3 0 Pension cost, defined benefit plans –16 –8 Pension cost, defined contribution plans –70 –65 Pension cost included in income for the period –86 –73 Remeasurement gain/loss attributable to defined benefit plans 1 –152 Total pension cost included in other comprehensive income –85 –225 Amounts included in the cash flow statement Contributions by the employer –12 –10 Benefits paid by the employer –7 –5 Major assumptions for the valuation of the liability Funded plans Longevity, years, 1 Male 21.8 21.8 Female 23.6 23.6 Inflation, % 2 1.3 1.3 Discount rate, % 1.3 2.2 Unfunded plans Inflation, % 2 2.1 2.4 Discount rate, % 3.7 3.8 1) Expressed as the average life expectancy of a 65-year-old person in num- ber of years. 2) General inflation impacting salary and pensions increases. Reconciliation of change in present value of funded and unfunded obligations SEKm 2023 2022 Opening balance, January 1 842 935 Current service cost 13 13 Special events –1 –6 Interest expense 20 3 Remeasurement arising from changes in financial assumptions 78 –206 Remeasurement from changes in demographic assumptions 0 2 Remeasurement from experience 14 24 Contributions by plan participants 12 10 Benefits paid –43 –50 Exchange differences 45 110 Settlements and other 0 7 Closing balance, December 31 980 842 Reconciliation of change in the fair value of plan assets SEKm 2023 2022 Opening balance, January 1 970 974 Interest income 1 22 2 Return on plan assets, excluding amounts included in interest 1 20 –111 Net contribution by employer 12 10 Contribution by plan participants 12 10 Benefits paid –37 –45 Exchange differences 58 129 Settlements and other – 1 Closing balance, December 31 1,057 970 1) The actual return on plan assets amounts to SEK 42m (-113). Risks There are three main categories of risks related to defined benefit obligations and pension plans. Increased longevity and inflation of salary and pensions may increase the future pension payments and, hence, increase the pension obligation. Pension plan assets are invested in a variety of financial instruments and are exposed to market fluctuations. The discount rate used for measuring the present value of the obligation may fluctuate, which impacts the valuation of the Defined Benefit Obligation (DBO). The discount rate also impacts the size of the interest income and expense that is re- ported in the Financial items and the service cost. Expected salary increase and mortality assumptions are based on local conditions in each country and changes in those assumptions affect the mea- sured obligation. Below is the sensitivity analysis for the main financial assump- tions and the potential impact on the present value of the defined pension obligation. Note that the sensitivities are not meant to ex- press any view by Electrolux Professional Group on the probability of a change. Sensitivity analysis on defined benefit obligation SEKm 2023 2022 Longevity +1 year 26 21 Inflation +0.5%¹ 12 11 Discount rate +1% –99 –79 Discount rate –1% 120 94 1) The inflation change feeds through to other inflation-dependent assumptions, i.e., pension increases and salary growth. In 2024, the Group expects to pay a total of SEK 15m (16) in contri- butions to the pension funds and as payments of benefits directly to the employees. Market value of plan assets by category SEKm 2023 2022 Fixed income 274 234 Equity 323 284 Other alternative assets 129 138 Real estate 327 306 Cash 4 8 Total value of plan assets 1,057 970 P. 131Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 21 POST-EMPLOYMENT BENEFITS, CONT. Investment strategy and risk management The assets held in funds are managed professionally by asset man- agers who propose portfolio allocations based on a framework de- cided by the fund boards. Risks related to pension obligations, e.g., mortality and inflation, are monitored on an ongoing basis by the Group Finance Governance Board. Governance Defined-benefit pensions and pension plan assets are governed by the Group Finance Governance Board, which meets 3 to 4 times per year and has the following responsibilities: • Approve the financial and actuarial assumptions to be used in the calculations of the Pension Funds’ assets and liabilities. • Initiate processes for new plans, changes to plans, or termination of plans if such actions are found necessary. • Approve the election of company representatives in the local Board of Trustees (or equivalent). Parent Company Commitments for retirement pensions for salaried employees in Sweden related to ITP2 are guaranteed through insurance with Alecta, hence reported as a defined-contribution plan, equal to ITP1. Total pension expense for the Parent Company amounted SEK 34m (33). Expected fees for the next reporting period for ITP2 insur- ance with Alecta amount to SEK 13m. NOTE 22 OTHER PROVISIONS Group Parent Company SEKm Provisions for restruc- turing Warranty commitments Other Total Provisions for restruc- turing Warranty commitments Other Total Opening balance, January 1, 2022 18 237 145 399 1 98 1 100 Reclassification 6 – –6 – – – – – Acquisitions of operations – 2 – 2 – – – – Provisions made 5 73 31 109 – 10 2 12 Provisions used –16 –44 –22 –82 –1 –2 – –3 Unused amounts reversed –0 –10 –18 –28 – –4 – –4 Exchange rate differences 1 16 16 33 – – – – Closing balance, December 31, 2022 14 273 146 433 0 102 3 105 Of which current provisions 14 121 11 146 – 1 – 1 Of which non-current provisions – 152 135 288 – 101 3 104 Opening balance, January 1, 2023 14 273 146 433 0 101 3 104 Reclassification – – – – – – – – Acquisitions of operations – – – – – – – – Provisions made 6 69 53 127 – 15 4 19 Provisions used –9 –44 –36 –88 – – – – Unused amounts reversed –3 –13 –12 –27 – –2 – –2 Exchange rate differences 0 –4 –2 –7 – – – – Closing balance, December 31, 2023 8 282 149 439 0 114 7 121 Of which current provisions 8 96 17 122 – – – – Of which non-current provisions – 185 132 317 – 114 7 121 Provisions are recognized when the Group has a present obliga- tion as a result of a past event, and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the expenditure required to settle the present obligation at the balance sheet date. Where the effect of time value of money is material, the amount recognized is the present value of the estimated expenditures. Provisions for warranty are recognized at the date of sale of the products covered by the warranty and are calculated based on historical data for similar products. Provisions for warranty commit- ments are recognized as a consequence of the Group’s policy to cover the cost of repair of defective products. The warranty period is based on local market conditions. Restructuring provisions are recognized when the Group has both adopted a detailed formal plan for the restructuring and either started the plan implementation or communicated its main features to those affected by the restructuring. Provisions for restructuring represent the expected costs to be incurred as a consequence of the Group’s decision to reduce personnel, both for newly acquired and already owned companies. The amounts are based on man- agement’s best estimates and are adjusted when changes to these estimates are known . Other provisions mainly include provisions for environmental liabilities, litigations other than warranty related claims, and employ- ee related provisions. The timing of any resulting outflows for other provisions are uncertain. P. 132Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 23 OTHER LIABILITIES Group Parent Company SEKm 2023 2022 2023 2022 Accrued holiday pay 157 149 43 40 Other accrued payroll costs 287 361 58 59 Accrued interest expenses 14 8 11 6 Other prepaid income 4 16 – – Government grants 17 19 – – Other accrued expenses 206 216 20 20 Contract liabilities¹ 597 607 75 94 VAT liabilities 191 197 – 3 Personnel-related liabilities 88 90 31 29 Other operating liabilities 58 56 9 10 Derivatives 40 54 40 54 Total 1,659 1,773 287 315 1) Movement in contract liabilities in 2023 and 2022 is presented in Note 4. NOTE 24 CONTINGENT LIABILITIES Group Parent Company SEKm 2023 2022 2023 2022 Contingent liabilities 10 10 22 22 Total 10 10 22 22 Parent Company The Parent Company has issued guarantees on behalf of some of its subsidiaries. The nominal amount is SEK 22m (22) of which the majority is related to credit cards for employees. The likelihood that these guarantees will be utilized is considered low. NOTE 25 ACQUIRED AND DIVESTED OPERATIONS Acquisitions in 2023 No acquisitions were made in 2023. See note 32 for acqusition in 2024. Acquisitions in 2022 No acquisitions were made in 2022. During the year an adjustment of the purchase price for Unified Brands was agreed with the seller. The amount was SEK 4m and has decreased the recognized goodwill. An additional adjustment to the opening balance has been made reducing goodwill by SEK 69m and other operating liabilities by the same amount. Divested operations in 2023 No divestments were made in 2023. Divested operations in 2022 The Group concluded that under the current circumstances business continuity in Russia is no longer feasible. As a consequence of this, the legal entity Electrolux Professional Russia was divested to former local management as of July 14, 2022. See Note 7 for more informa- tion. P. 133Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 26 EMPLOYEES AND REMUNERATION Employees and employee benefits As of December 31, 2023, the number of employees was 3,978 (4,022). Average number of employees, per country 2023 2022 Women Men Total Women Men Total Parent company Sweden 146 416 563 137 412 550 Subsidiaries Australia 3 13 16 2 14 16 Austria 8 21 29 5 24 29 Belgium 0 4 4 0 4 4 China 40 127 167 40 133 172 Croatia 1 4 5 1 4 6 Czech Republic 2 5 8 2 6 8 Denmark 11 33 44 11 32 43 Finland 14 24 38 13 24 37 France 130 255 385 87 287 374 Germany 64 151 214 64 147 211 Greece 1 4 5 1 4 5 Hungary 4 7 12 2 3 5 India 2 13 15 2 11 13 Italy 451 658 1,109 447 647 1,094 Japan 12 31 43 13 38 50 Malaysia 9 10 19 9 7 16 Netherlands 4 12 15 5 13 18 New Zealand 2 2 4 2 2 4 Norway 5 13 18 5 13 18 Poland 1 2 3 1 2 3 Russia¹ – – – 8 6 14 Singapore 13 16 29 12 15 27 Slovak Republic 8 7 15 8 7 15 South Korea 2 0 2 3 3 Spain 12 20 32 9 21 31 Switzerland 35 112 147 32 122 154 2023 2022 Women Men Total Women Men Total Thailand 80 196 277 79 197 276 Turkey 10 11 21 9 12 20 United Arab Emirates 1 10 11 1 10 11 United Kingdom 23 36 59 21 39 60 USA 190 491 681 214 524 737 Total 1,284 2,704 3,988 1,243 2,781 4,024 1) The Russian company was sold during 2022 and at year-end there were no employees in Russia. Salaries, other remuneration, and employer contributions 2023 2022 SEKm Salaries and remuneration 1 Social costs 2 Total Salaries and remuneration 1 Social costs 2 Total Parent Company 394 124 518 365 119 485 of which pension costs 35 35 35 35 Subsidiaries 1,959 435 2,394 1,834 470 2,304 of which pension costs 46 46 37 37 Total Group 2,353 559 2,912 2,199 589 2,788 of which pension costs 81 81 72 72 1) For the Parent Company, salaries and remuneration of SEK 67m (59) were paid by another legal entity in the Group. 2) For the Parent Company, social costs of SEK 12m (14) (of which pension costs amounted to SEK 2m (2)) were paid by another legal entity in the Group. Salaries and remuneration for Board members, senior managers, and other employees 2023 2022 SEKm Board members and senior managers Other employees Total Board members and senior managers Other employees Total Parent Company 90 304 394 74 291 365 Others 32 1,927 1,959 28 1,806 1,834 Total Group 122 2,231 2,353 102 2,097 2,199 P. 134Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 26 EMPLOYEES AND REMUNERATION, CONT. Of the Board members in Group companies, 21 were men and 3 women, of which 5 men and 3 women were in the Parent Company, excluding 3 union members. In accordance with the definition of Senior managers in the Swedish Annual Accounts Act, the number of Senior managers in the Group consisted of 9 men and 3 women, of which 9 men and 3 women were in the Parent Company. The total pension costs for Board members and Senior managers in the Group amounted to SEK 5m. Compensation to Board members 2023 2022 SEK thousand Ordinary compensation Compensation for committee work Total compensation Ordinary compensation Compensation for committee work Total compensation Kai Wärn, Chairman 1,668 84 1,752 1,613 80 1,693 Lorna Donatone 643 114 757 539 109 648 Hans Ola Meyer 556 174 730 539 166 705 Daniel Nodhäll 556 198 754 539 189 728 Martine Snels 556 114 670 539 109 648 Carsten Voigtländer 556 – 556 539 – 539 Katharine Clark 556 – 556 539 – 539 Josef Matosevic 505 – 505 – – – Jens Pierard – – – – – – Joachim Nord – – – – – – Per Magnusson – – – – – – Total compensation 5,596 684 6,280 4,845 653 5,498 Compensation for the Board of Directors The Annual General Meeting (AGM) determines the compensation for the Board of Directors for a period of one year until the next AGM, including the compensation for committee work. The com- pensation is distributed between the Chairman and other Board Members and is paid out quarterly. The compensation paid in 2023 encompasses one quarter of the compensation authorized by the AGM in 2022 and three quarters of the compensation authorized by the AGM in 2023. Total compensation paid in cash in 2023 amount- ed to SEK 6.3m, of which SEK 5.6m included ordinary compensation and SEK 0.7m was for committee work. Remuneration guidelines for the Group Management Team The current guidelines were approved by the AGM in 2020. The guidelines apply until the AGM 2024. The remuneration terms emphasize ‘pay for performance’ and vary with the performance of the individual and the Group. The total remuneration for the Group Management Team is to be strongly tied to the position held, consistent with market practice, and may com- prise the following components: annual fixed compensation, variable compensation, and other benefits such as pension and insurance. The following describes the guidelines for determining the amount of remuneration (the detailed guidelines can be found on page 92). • Fixed compensation must be competitive relative to the relevant country market and reflect the scope of the job responsibilities. Fixed compensation consists of annual base salary and may, if locally stipulated by mandatory collective agreement provisions, also include a fixed non-compete component. Base salary levels are to be reviewed periodically (usually annually) to ensure contin- ued competitiveness and to recognize individual performance. • Variable compensation may consist of short-term and long-term incentives. Following the ‘pay for performance’ principle, variable compensation must represent a significant portion of the total po- tential compensation for the Group Management Team. Variable compensation must always be measured against pre-defined tar- gets and have a maximum above which no payout is to be made. Both short-term incentives' and long-term incentives' entitlement must be dependent on job level and the variable compensation must not amount to more than 100% of the annual base salary. • Pension and Benefits such as old-age and survivor’s pension, disability benefits, and healthcare benefits must be designed to reflect home-country practices and requirements. When possible, pension plans are to be based on defined contribution. In indi- vidual cases, depending on provisions in collective bargaining agreements, tax and/or social security legislation to which the individual is subject, other schemes, and mechanisms for pension benefits may be approved. Other benefits may consist of a com- pany car, housing, and private health insurance. • The notice period for the President and CEO must be 12 months if Electrolux Professional initiates termination of the employment and 6 months if the President and CEO initiates termination of the em- ployment. For other members of the Group Management Team the notice period is between 6 to 12 months if Electrolux Professional initiates termination of the employment and 3 to 6 months if the Group Management Team member initiates termination of the em- ployment. In individual cases, contractual severance pay may be approved in addition to the notice periods. The Board of Directors may temporarily resolve to deviate from the guidelines, in whole or in part, if in a specific case there is spe- cial cause for the deviation and a deviation is necessary to serve the Company’s long-term interests, including its sustainability, or to ensure the Company’s financial viability. President and CEO The remuneration package for the President and CEO comprises fixed cash compensation, variable compensation, and other bene- fits such as pension and insurance. For the President and CEO, the annualized base salary for 2023 was set at EUR 600,000 (approxi- mately SEK 6,800k). The variable compensation for the President and CEO consists of both short-term cash-based incentive (STI) and long-term share- based incentive (LTI). STI is based on fixed financial targets at Group level and LTI is based on fixed financial and ESG targets at Group level. STI can give a maximum of 100% of annual base salary and LTI can give a maximum of 100% of annual base salary. The notice period for the Company is 12 months and for the President and CEO it is 6 months. The President and CEO is entitled to 12 months' severance pay. The President and CEO accrues pension entitlements in accor- dance with Italian social security legislation for pensions. A vol- untary defined contribution pension scheme is offered (Previndai) through which the Company matches contributions of up to EUR 7,200 per year. In addition, the company also contributes to the Italian statutory TFR. Healthcare benefits are provided in accordance with the collec- tively agreed plan rules of FASI and Assidai designed for Executives (Dirigenti). Other Members of the Group Management Team Like the President and CEO, other members of the Group Management Team receive a remuneration package that comprises fixed cash compensation, variable compensation, and other bene- P. 135Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 26 EMPLOYEES AND REMUNERATION, CONT. fits such as pension and insurance. Base salary is reviewed annually per January 1. The variable compensation for other members of the Group Management consists of both short-term cash-based incentive (STI) and long-term share-based incentive (LTI). STI is based on fixed financial targets at Group level and Regional and Group level for the Business Area Heads. LTI is based on fixed financial and ESG targets at Group level. STI and LTI can each give a maximum of 60- 80% of annual base salary depending on job level. The notice period for other members of the Group Management Team is between 6 to 12 months if Electrolux Professional initiates termination of the employment and 3 to 6 months if the Group Management Team member initiates termination of the employment. The Group Management Team members employed in Italy, similar to the President and CEO, also accrue pension entitlements in accordance with Italian social security legislation for pensions, and are eligible to participate in the voluntary defined contribution pension scheme offered (Previndai) through which the Company matches contributions of up to EUR 7,200 per year. In addition, the company also contributes to the Italian statutory TFR. Healthcare benefits are provided in accordance with the collec- tively agreed plan rules of FASI and Assidai designed for managers (Dirigenti). The Group Management Team members employed in Sweden are covered by the collectively agreed ITP1, and a top-up plan providing 30% of fixed salary and ST I, which is a defined contribu- tion plan or by the ITP2 and the Alternative ITP rule. The Alternative ITP plan is a defined contribution plan in which the contribution increases with age. The contribution is between 20 and 40% of pensionable salary, between 7.5 and 30 income base amounts and 20% of pensionable salary above 30 income base amounts. The pensionable salary under the alternative ITP plan is calculated as the current fixed salary including vacation pay, plus the average short-term variable salary for the last three years. For Group Management Team members employed outside of Italy and Sweden, varying terms of employment, pensions and oth- er benefits, such as a company car, may apply depending on the country of employment. Share-based compensation Variable long-term share programs 2021, 2022, and 2023 The Annual General Meeting on April 26, 2023, approved a long- term incentive program for 2023. The General Meeting of Electrolux Professional has also approved a long-term incentive program for 2021 and 2022. All programs run over a three-year period, with a one-year performance period followed by a two-year vesting period. The allocation of shares in the 2021 and 2022 program is determined by the participant's position level and the outcome of two objectives: (i) earnings per share and (ii) operating cash flow after investments. The performance targets adopted by the Board stipulate a min- imum level and a maximum level, with the relative weight of the performance targets (i) and (ii) being 60% and 40% respectively. Performance outcome of the two financial objectives was deter- mined by the Board after the expiry of the one-year performance period. The allocation of shares in the 2023 program is determined by the participant's position level and the outcome of three objectives: (i) earnings per share, (ii) operating cash flow after investments and (iii) CO₂ emission reduction. The performance targets adopted by the Board stipulate a minimum level and a maximum level, with the relative weight of the performance targets (i), (ii) and (iii) being 50%, 30%, and 20% respectively. Performance outcome of the three objectives was determined by the Board after the expiry of the one- year performance period. For the 2021, 2022, and 2023 programs allocation of shares is based on performance, and performance objectives are linear from minimum to maximum. If the maximum is reached or exceeded, 100% of maximum granted shares will be allocated to each partic- ipant. If performance is below the maximum level but exceeds the minimum level, a proportionate allocation of shares will be made. No allocation will be made if performance does not reach the min- imum level. The shares will be allocated after the three-year vesting period, free of charge except for tax liabilities. All programs cover up to 30–35 senior managers and key em- ployees. Participants are divided into four groups; President and CEO (Group 1); other members of Group Management and Senior Managers (Groups 2 & 3); and certain other key employees (Group 4). The total sum of the maximum values of the Performance Shares defined for all participants in LTI 2023 will not exceed SEK 49m, ex- cluding social costs. The performance outcome for LTI 2023 was 63%, which means that 63% of the maximum number of shares granted under the LTI 2023 will be paid out after the end of the vesting period 2026. Remuneration to Group Management 2023 SEK thousand Annual fixed salary¹ Short-term variable salary² Long-term variable salary³ Pension contribution Other benefits⁴ Social security contribution Total⁶ President & CEO 7,269 2,717 5,676 583 394 2,872 19,511 Other members of Group Management⁵ 33,205 9,755 17,182 4,142 5,216 11,381 80,881 Total 40,474 12,472 22,858 4,725 5,610 14,253 100,392 1) The annual fixed salary includes annual base salary, vacation salary, paid vacation days, and fixed non-compete components. 2) Variable salary earned in 2023, to be paid in 2024. 3) Cost incurred in 2022 for the long-term share-based incentive programs. At the closing of the books the actual outcome wasn't known and the cost for 2023 is based on an outcome of 66%. The adjustment to 63% will be made during 2024. 4) Includes allowances and other benefits such as housing, company car, medical insurance, and retention bonus. 5) Other members comprised of 11 people at the end of 2023. 6) The remuneration of the President and CEO is defined in EUR, hence the presented remuneration in SEK is impacted by the currency exchange rate. 2022 SEK thousand Annual fixed salary¹ Short-term variable salary² Long-term variable salary³ Pension contribution Other benefits⁴ Social security contribution Total President & CEO 6,227 4,188 2,563 510 406 3,626 17,520 Other members of Group Management⁵ 29,697 14,556 7,862 3,056 3,102 12,613 70,886 Total 35,924 18,744 10,425 3,566 3,508 16,239 88,406 1) The annual fixed salary includes annual base salary, vacation salary, paid vacation days, and fixed non-compete components. 2) Variable salary earned in 2022, paid in 2023. 3) Cost incurred in 2022 for the long-term share-based incentive programs. At the closing of the books the actual outcome wasn't known and the cost for 2022 is based on an outcome of 39%. The adjustment to 47% will be made during 2023. 4) Includes allowances and other benefits such as housing, company car, medical insurance, and retention bonus. 5) Other members comprised 10 people at the end of 2022. Remuneration for other members of Group Management included the SVP & GM Commercial orga- nization America, John Evans and SVP Product & Marketing, Torsten Urban until June 2022, SVP Business Development, Douglas Walker until March 2022, and General Counsel, Carolina Tendorf, as of July 2022. P. 136Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 26 EMPLOYEES AND REMUNERATION, CONT. The share-based compensation program is classified as equity settled transactions, and the cost of the granted instrument’s fair value at grant date is recognized over the vesting period which is 2.6 years. At each balance sheet date, the Group revises the estimates to the number of shares that are expected to vest. The impact of the revision to original estimates, if any, is recognized in the income statement, with a corresponding adjustment to equity. In addition, the Group provides for social costs expected to be paid in connection with the share-based compensation programs. The costs are charged to the income statement over the vesting period. The provision is periodically revalued based on the fair value of the instruments at each closing date. Outstanding share awards 2023 2022 Share awards LTI 2023 LTI 2022 LTI 2021 LTI 2022 LTI 2021 At January 1 1 – 325,489 539,902 – 601,807 Granted² 826,495 – – 711,519 – Forfeited³ –318,601 –13,496 –386,030 –61,905 Excercised⁴ – – –539,902 – – At December 31⁵ 507,894 311,993 0 325,489 539,902 1) Outstanding share awards at the beginning of the year. 2) Shares awarded during the year. 3) Forfeited awards during the year based on performance outcome and/or employees leaving the company. 4) Vested awards during the year. LTI 2021 vested end of 2023, LTI 2022 will vest in 2024, and LTI 2023 will vest in 2025. 5) Number of share awards at the end of the year. NOTE 27 FEES TO AUDITORS At the 2023 Annual General Meeting Deloitte was appointed as auditor for the period until the end of the 2024 Annual General Meeting. Group Parent Company SEKm 2023 2022 2023 2022 Deloitte Audit fees 1 18 17 6 6 Audit-related fees 2 0 0 - – Tax fees 3 0 0 - – All other fees 0 0 - – Total fees to Deloitte 18 18 6 6 Audit fees to other audit firms 0 2 - – Total fees to auditors 18 20 6 6 1) Audit fees consist of fees for the annual audit-services engagement and other audit services, which are those services that only the external auditors reasonably can provide, and includes the Group audit, statutory audits, comfort letters and consents, and attest services. 2) Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit of the accounts and annual reports of the Group and group companies traditionally performed by the external auditors, and include consultations concerning financial accounting and reporting standards, internal control reviews, and reviews of interim reports. 3) Tax fees include tax compliance and tax consultation services. NOTE 28 TRANSACTIONS WITH RELATED PARTIES Transactions between Electrolux Professional AB and its subsid- iaries have been eliminated in the Group and are not disclosed in this note. Remuneration to members of the Board of Directors and Group Management are disclosed in Note 26. Transactions related to post-employment plans are disclosed in Note 21. Equity transac- tions with shareholders are disclosed in Note 20. The Parent Company’s largest shareholder, Investor AB, controls approximately 32.5% of the voting rights in Electrolux Professional AB. The Group has not had any transactions with Investor AB during the year, and there are no outstanding balances with Investor AB. Investor AB has controlling or significant influence over companies with which Electrolux Professional may have transactions within the normal course of business. Commercial terms and market prices ap- ply to any such transactions. NOTE 29 UNTAXED RESERVES AND APPROPRIATIONS, PARENT COMPANY SEKm December 31, 2023 Appropria- tions December 31, 2022 Accumulated depreciation in excess of plan Brands 8 – 8 Licenses – – – Machinery and equipment 76 –9 85 Buildings – – – Other 4 – 4 Total 88 –9 97 Group contributions -1 Total appropriations -10 P. 137Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 30 SHARES AND PARTICIPATIONS Group companies The following table lists the companies included in the Electrolux Professional Group, split into direct and indirect shareholdings by the Parent Company. Carrying amount Parent Company Subsidiaries, direct shareholdings Corp. ID no. Country City of registered office Holding, % Legal form 2023 2022 Electrolux Professional Australia Pty Ltd 634 149 250 Australia Scoresby 100% Limited Liability Company 22 22 Electrolux Professional Austria GmbH FN516160 i Austria Brunn Am Gebirge 100% Limited Liability Company 0 0 Electrolux Professional Belgium B.V. 0729.704.769 Belgium Brussels 100% Limited Liability Company 5 5 Electrolux Profissional do Brasil 3563041087-8 Brazil São Paulo 100% Limited Liability Company 0 0 Electrolux (Shanghai) Professional Appliances Co., Ltd. 91310120332328256Q China Shanghai 100% Limited Liability Company 114 114 Electrolux Professional d.o.o 081259831 Croatia Zagreb 100% Limited Liability Company 0 0 Electrolux Professional Czech Republic s.r.o. 08340226 Czech Republic Prague 100% Limited Liability Company 1 1 Electrolux Professionals A/S 24622428 Denmark Hvidovre 100% Limited Liability Company 7 7 Electrolux Professional Oy 0816444-8 Finland Helsinki 100% Limited Liability Company 0 0 Electrolux Professionnel SAS 996750030 France Saint-Denis 100% Limited Liability Company 294 294 UNIC SAS² 958 806 408 France Carros 100% Limited Liability Company 0 0 Electrolux Professional GmbH HRB20581 Germany Nürnberg 100% Limited Liability Company 252 252 Electrolux Professional Hellas SA AME 322157 Greece Athens 100% Limited Liability Company 0 0 Electrolux Professional Hungary Kft Cg.16-09-018699 Hungary Jászberény 100% Limited Liability Company 0 0 Electrolux Professional India Private Limited U31909HR2019-FTC082077 India Gurgaon 100% Limited Liability Company 2 2 Electrolux Professional S.p.A. 00072220932 Italy Pordenone 99% 1 Limited Liability Company 3,105 3,105 S.P.M Drink Systems S.p.A. 03195610369 Italy Spilamberto 100% Limited Liability Company 179 258 Electrolux Professional Japan Limited 01040103326 Japan Tokyo 100% Limited Liability Company 32 32 Electrolux Professional Korea Co., Ltd. 110111-7179248 Korea Seoul 100% Limited Liability Company 0 0 Electrolux Professional Sdn Bhd 147661P Malaysia Petaling Jaya 100% Limited Liability Company 3 3 Electrolux Professional B.V. 33269220 The Netherlands Rotterdam 100% Limited Liability Company 53 53 Electrolux Professional New Zealand Limited 7497977 New Zealand Wellington 100% Limited Liability Company 3 3 Electrolux Professional AS 923830197 Norway Oslo 100% Limited Liability Company 66 66 Electrolux Professional Poland Sp. z o.o. 0000786645 Poland Warsaw 100% Limited Liability Company 0 0 Limited Liability Company Electrolux Professional Rus³ 1197746476806 Russia Moscow 99% 1 Limited Liability Company 0 0 Electrolux Professional Singapore Pte. Ltd. 201919595D Singapore Singapore 100% Limited Liability Company 0 0 Electrolux Professional s.r.o. 31 358 446 Slovakia Bratislava 99% 1 Limited Liability Company 6 6 Electrolux Professional S.A. ESA28238947 Spain Madrid 100% Limited Liability Company 80 80 P. 138Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 30 SHARES AND PARTICIPATIONS, CONT. Carrying amount Parent Company Subsidiaries, direct shareholdings Corp. ID no. Country City of registered office Holding, % Legal form 2023 2022 Electrolux Professional Sweden AB 556025-2081 Sweden Stockholm 100% Limited Liability Company 61 61 Electrolux Professional Holding AB 559006-2278 Sweden Stockholm 100% Limited Liability Company 0 0 Electrolux Professional AG CHE-105.957.638 Switzerland Sursee 100% Limited Liability Company 197 197 Crathco Ltd 105541040522 Thailand Rayong 100% Limited Liability Company 275 275 Electrolux Professional (Thailand) Co., Ltd. 0105562090821 Thailand Bangkok 100% Limited Liability Company 65 65 Electrolux Professional Durable Consumer Goods Industry and Trade Joint Stock Company 223730/5 Turkey Istanbul 100% Limited Liability Company 10 10 Electrolux Professional Middle East DMCC DMCC176056 United Arab Emirates Dubai 100% Limited Liability Company 0 0 Electrolux Professional Ltd. 00637383 United Kingdom Luton 100% Limited Liability Company 495 495 Electrolux Professional US Holdings, Inc. EIN 84-3103055 USA Wilmington, Delaware 100% Limited Liability Company 539 539 Carrying amount, December 31 5,866 5,945 1) Electrolux Professional Sweden AB holds 1% 2) Merged into Electrolux Professionnel SAS during 2022 3) Divested during 2022 Subsidiaries, indirect shareholdings Country City of residence Holding, % Electrolux Professional Laundry Systems France SNC France Rosères-Près-Troyes 100% Exefem France Saint-Denis 100% Schneidereit GmbH Germany Solingen 100% UNIC Japan KK Japan Tokyo 100% GCS Mexico SA de CV Mexico Ciudad Juárez 100% Schneidereit UK Ltd. United Kingdom Luton 0% 1 Electrolux Professional LLC USA Louisville 0%² Grindmaster Corporation USA Louisville 0%³ Electrolux Professional Inc USA Delaware 100% 1) Liquidated in 2023 2) Merged into Grindmaster in 2023 3) Merged into Unified Brands in 2023 which was renamed to Electrolux Professional Inc in 2023. P. 139Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 31 CLIMATE In preparing the financial statements the management has consid- ered the potential impact of climate change. Our target is to reduce CO 2 emissions of Scope 1 & 2 by at least 50% by 2025 compared to 2015. During 2023, we continued to reduce our Scope 1 and 2 emis- sions and have already achieved our 2025 targets. Our climate ambition for 2030 is to become climate neutral within all our industrial operations by 2030. During 2023 our scope 1, 2, and 3 targets were validated by the Science Based Targets initiative (SBTi). The new targets reduce Scope 1 and 2 emissions by 70% by 2030 from a 2019 base year and reduce indirect use-phase emissions of sold products by 27.5% by 2030 from a 2019 base year. Read more in the Sustainability Report on pages 48–66. Climate-related risks Climate-related risks may impact the below areas and the financial statements, but are not considered to be key areas of judgments or sources of estimation uncertainty in the current financial year. The purpose of a scenario analysis is to analyze future events by considering possible alternative outcomes. It is meant as a tool for companies to make strategic risk management decisions, providing insights and clarifying predictable and uncertain elements in differ- ent futures. It is meant to help frame and evaluate climate change's strategic and financial consequences. We have carried out a cli- mate scenario risk and opportunity analysis in accordance with the TCFD recommendations for 2022. The two scenarios help to identify transition risks and physical risks: A. Transition risks are related to the financial risks of not being prepared for the socio-economic changes of a world striving to meet the Paris Agreement ambition of limiting global warming to well below 2°C. B. Physical risks are related to the financial risks of not being prepared for the physical changes of a world where ambitious climate policies fail or fall short, and the global warming of the world pushes towards 4°C. Transition risks identified: • Increased prices due to carbon prices. • Increased transport prices due to low carbon emission transport. • Energy price volatility due to energy decarbonization. • Increased steel prices due to leftover carbon. • Energy labeling and circular economy legislation impacting the increase in prices. Physical risks identified: • Asian sites are more prone to climate risks. • Suppliers located in Asia are more prone to climate risks. Read more in the Sustainability Report on pages 48–66 and Risk Management on pages 82–86. Products Our main environmental impact occurs during the product-use phase (energy, water, detergents), we therefore have a clear strategy to develop and offer energy-efficient and low-resource- consuming products. Over the years, Electrolux Professional Group has invested in new product ranges which are energy efficient and lower in running costs, and also have less of an impact on the environment in the form of lower water, energy, and detergent con- sumption. We have a clear strategy for developing low-carbon and water/energy-efficient solutions given the EU’s potential regulations on Eco-design and/or energy labeling, and we continue to be the market leader in sustainability. By offering integrated products and services, including logistics and transportation, compared to our competitors we can reduce complexity for our customers, thereby reducing greenhouse gas emissions. This has been taken into con- sideration when assesing the need for impairment of existing prod- ucts and product development. For the development of new products we invest above historical levels to reach our sustainability targets and this is considered in our forecasts underpinning the 2023 financial statements. Production The Group's factories are modern and efficient and in the short- term, energy efficiency is the main focus area. This includes using less energy and converting to renewable energy sources, reviewing the replacement of heating systems, ventilation, lighting, insulation, compressed air, windows, doors etc. and streamlining production processes. The climate targets for 2025 were already achived during 2023 within normal running costs and investments. To reach our cli- mate ambition for 2030, we initiated a plant decarbonization study project in five of our plants worldwide. The project resulted in sever- al initiatives and required investments to achieve the Scope 1 and 2 reduction targets. The necessary investments are covered as part of normal investment levels. The initiatives also resulted in operational cost-saving opportunities. P. 140Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Notes Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION NOTE 32 EVENTS AFTER THE BALANCE SHEET DATE Acquisitions in 2024 TOSEI Corporation On January 10, 2024, Electrolux Professional acquired 100% of the shares in TOSEI Corporation in a cash deal. The enterprise value amounted to JPY 23,006m corresponding to SEK 1,620m. TOSEI, founded in 1950, had sales of approximately SEK 940m during 2023. After synergies, the EBITA margin is expected to be well in line with Electrolux Professional’s EBITA target of 15%. The compa- ny has approximately 340 employees and is based in Tokyo. TOSEI operates one manufacturing facility in Izunokuni, Shizuoka and has six regional sales offices in Japan. The company supplies washers, dryers, combined washers and dryers, tabletop vacuum packing machines, and stationary vacuum packing machines under the main brands TOSEI and TOSPACK. The acquisition of TOSEI will make Electrolux Professional a larg- er player in Japan, which is the second largest laundry market and third largest food-service market globally. In addition, Electrolux Professional will be able to expand the vacuum packing prod- ucts that are already used globally in the fast-growing segment of sous-vide cooking. Goodwill mainly represents the value of increasing Electrolux Professional's presence in Japan. Goodwill will not be deductible for income tax. TOSEI's net sales and operating income from January 1, 2024 to the completion of the deal is immaterial and will be included fully in the consolidated financial statements of Electrolux Professional in quarter one, 2024. Approximately 70% of the business will be included in the Laundry segment and 30% in Food & Beverage. Transaction costs Transaction costs related to the acquisition amounted to SEK 7m and have been expensed as incurred during the acquisition process in 2023. The costs have been reported in operating income within Group Common Costs. Acquired operations SEKm 2024 TOSEI Corporation Enterprise value 1,620 Less financial debt –628 Cash paid for the acquisition 992 Recognized amount for assets acquired and liabilities assumed Assets less liabilties –291 Goodwill 1,283 Total 992 The purchase price allocation is preliminary and will be subject to changes. Part of the value of goodwill will be reclassified to assets with definite useful lives, e.g. customer relationships and trademarks. NOTE 33 PROPOSED DISTRIBUTION OF EARNINGS The Board of Directors proposes that income for the year and retained earnings be distributed as follows. ‘000 SEK Dividend to the shareholders 229,918 To be carried forward 6,510,006 Total 6,739,924 P. 141Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 The Board’s assurance Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION The Board of Directors give their assurance that the consolidated financial statements and annual report have been prepared in accordance with Regulation (EC) No. 1606/2002 of the European Parliament and of the Council of 19 July 2002, on the Application of International Accounting Standards and Generally Accepted Accounting Standards, and give a true and fair view of the financial position and results of opera- tions of the Group. The financial statements of the Parent Company have been prepared in accordance with generally accepted accounting princi- ples in Sweden and give a true and fair view of the Parent Company’s financial position and results of operations. The administration report for the Group and the Parent Company gives a true and fair view of the business activities, financial position and results of operations of the Group and the Parent Company, and describes the significant risks and uncertainties to which the Parent Company and the Group companies are exposed. Stockholm March 27, 2024 Electrolux Professional AB (publ) 556003-0354 Kai Wärn Chairman of the Board Katharine Clark Board member Lorna Donatone Board member Josef Matosevic Board member Hans Ola Meyer Board member Daniel Nodhäll Board member Martine Snels Board member Carsten Voigtländer Board member Joachim Nord Employee representative Jens Pierard Employee representative Alberto Zanata President and CEO The Auditor's report was issued on March 27, 2024 Deloitte AB Jonas Ståhlberg Authorized Public Accountant P. 142Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Auditor’s report Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION Auditor’s report To the General Meeting of the Shareholders of Electrolux Professional AB (publ), corporate identity number 556003-0354. Report on the annual accounts and consolidated accounts Opinions We have audited the annual accounts and consolidated accounts of Electrolux Professional AB (publ) for the financial year 2023-01- 01 - 2023-12-31. The annual accounts and consolidated accounts of the company are included on pages 89-141 in this document. In our opinion, the annual accounts have been prepared in ac- cordance with the Annual Accounts Act and present fairly, in all ma- terial respects, the financial position of the parent company as of 31 December 2023 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31 December 2023 and their financial performance and cash flow for the year then ended in ac- cordance with International Financial Reporting Standards (IFRS), as adopted by the EU, and the Annual Accounts Act. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts. We therefore recommend that the general meeting of sharehold- ers adopts the income statement and balance sheet for the parent company and the group. Our opinions in this report on the annual accounts and consol- idated accounts are consistent with the content of the additional report that has been submitted to the parent company's audit com- mittee in accordance with the Audit Regulation (537/2014) Article 11. Basis for Opinions We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing stan- dards in Sweden. Our responsibilities under those standards are further described in the Auditor’s Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have other- wise fulfilled our ethical responsibilities in accordance with these re- quirements. This includes that, based on the best of our knowledge and belief, no prohibited services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided to the audited company or, where applicable, its parent company or its controlled compa- nies within the EU. We believe that the audit evidence we have obtained is suffi- cient and appropriate to provide a basis for our opinions. Key Audit Matters Key audit matters of the audit are those matters that, in our pro- fessional judgment, were of most significance in our audit of the annual accounts and consolidated accounts of the current period. These matters were addressed in the context of our audit of, and in forming our opinion thereon, the annual accounts and consolidated accounts as a whole, but we do not provide a separate opinion on these matters. Revenue Recognition Revenues in the Group amounts to SEK 11,848 million and consists of a large number of transactions that mainly comprises sales of ap- pliances and spare parts. Revenue recognition cut off constitutes a key audit matter in our audit. The Group’s accounting principles and disclosures related to rev- enue recognition can be found in note 4. Our audit procedures Our audit procedures included, but were not limited to: • evaluation of the Group’s accounting principles for revenue recog- nition and its compliance with IFRS, • test of identified key controls, within the revenue process, including relevant IT controls • analytical procedures, and • detailed testing of sales transactions on a sample basis to confirm proper revenue cut off. Valuation of inventory Inventory in the Group amounts to SEK 1,692 million and is held by several production and sales units in different countries. Valuation of inventory requires clear policies among other things related to provisions for obsolescence which is subject to management’s esti- mates especially given large price variances related to raw material and components. Processes for valuation of inventory constitutes a key audit matter in our audit. The Group’s accounting principles and disclosures related to in- ventory can be found in note 15. Our audit procedures Our audit procedures included, but were not limited to: • evaluation of the Group’s accounting principles for inventory to verify compliance with IFRS, • evaluation of the internal control environment regarding valuation of inventory and test of design and implementation of identified key controls including relevant IT controls, • attending physical inventory counts, • on sample basis testing for example purchase prices, and • evaluating management’s estimates related to provisions for ob- solescence. Other information than the annual accounts and consolidated accounts This document also contains other information than the annual accounts and consolidated accounts and is found on pages 1-7, 9-47, 80-86, 145-148, 164-168. The Board of Directors and the Managing Director are responsible for this other information. Our opinion on the annual accounts and consolidated accounts does not cover this other information and we do not express any form of assurance conclusion regarding this other information. In connection with our audit of the annual accounts and consol- idated accounts, our responsibility is to read the information iden- tified above and consider whether the information is materially in- consistent with the annual accounts and consolidated accounts. In this procedure we also take into account our knowledge otherwise obtained in the audit and assess whether the information otherwise appears to be materially misstated. If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other informa- tion, we are required to report that fact. We have nothing to report in this regard. P. 143Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Auditor’s report Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION Responsibilities of the Board of Directors and the Managing Director The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and consolidated ac- counts and that they give a fair presentation in accordance with the Annual Accounts Act and, concerning the consolidated accounts, in accordance with IFRS as adopted by the EU. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the prepa- ration of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error. In preparing the annual accounts and consolidated accounts, The Board of Directors and the Managing Director are responsi- ble for the assessment of the company’s and the group’s ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors and the Managing Director intends to liquidate the company, to cease operations, or has no realistic alternative but to do so. The Audit Committee shall, without prejudice to the Board of Director’s responsibilities and tasks in general, among other things oversee the company’s financial reporting process. Auditor’s responsibility Our objectives are to obtain reasonable assurance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and generally accept- ed auditing standards in Sweden will always detect a material mis- statement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts and consoli- dated accounts. An additional description of our responsibility for the audit of the annual accounts and the consolidated accounts is located at the Swedish Inspectorate of Auditors’ web page: www.revisorsinspek- tionen.se/revisornsansvar. This description is a part of the auditor’s report. Report on other legal and regulatory requirements Opinions In addition to our audit of the annual accounts and consolidated accounts, we have also audited the administration of the Board of Directors and the Managing Director of Electrolux Professional AB (publ) for the financial year 2023-01-01 – 2023-12-31 and the pro- posed appropriations of the company’s profit or loss. We recommend to the general meeting of shareholders that the profit to be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year. Basis for Opinions We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsibilities under those stan- dards are further described in the Auditor’s Responsibilities section. We are independent of the parent company and the group in ac- cordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is suffi- cient and appropriate to provide a basis for our opinions. Responsibilities of the Board of Directors and the Managing Director The Board of Directors is responsible for the proposal for appropri- ations of the company’s profit or loss. At the proposal of a dividend, this includes an assessment of whether the dividend is justifiable considering the requirements which the company's and the group’s type of operations, size and risks place on the size of the parent company's and the group’s equity, consolidation requirements, li- quidity and position in general. The Board of Directors is responsible for the company’s organi- zation and the administration of the company’s affairs. This includes among other things continuous assessment of the company’s and the group’s financial situation and ensuring that the company's or- ganization is designed so that the accounting, management of as- sets and the company’s financial affairs otherwise are controlled in a reassuring manner. The Managing Director shall manage the on- going administration according to the Board of Directors’ guidelines and instructions and among other matters take measures that are necessary to fulfill the company’s accounting in accordance with law and handle the management of assets in a reassuring manner. Auditor’s responsibility Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors or the Managing Director in any material respect: • has undertaken any action or been guilty of any omission which can give rise to liability to the company, or • in any other way has acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. Our objective concerning the audit of the proposed appropriations of the company’s profit or loss, and thereby our opinion about this, is to assess with reasonable degree of assurance whether the pro- posal is in accordance with the Companies Act. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appropriations of the company’s profit or loss are not in accordance with the Companies Act. An additional description of our responsibilities for the au- dit of management’s administration is located at the Swedish Inspectorate of Auditors website: www.revisorsinspektionen.se/revi- sornsansvar. This description forms part of the auditor’s report. The auditor’s examination of the Esef report Opinion In addition to our audit of the annual accounts and consolidated accounts, we have also examined that the Board of Directors and the Managing Director have prepared the annual accounts and consolidated accounts in a format that enables uniform electronic reporting (the Esef report) pursuant to Chapter 16, Section 4 a of the Swedish Securities Market Act (2007:528) for Electrolux Professional AB (publ) for the financial year 2023-01-01 - 2023-12-31. Our examination and our opinion relate only to the statutory requirements. In our opinion, the Esef report has been prepared in a format that, in all material respects, enables uniform electronic reporting. Basis for opinion We have performed the examination in accordance with FAR’s rec- ommendation RevR 18 Examination of the Esef report. Our respon- sibility under this recommendation is described in more detail in the Auditors’ responsibility section. We are independent of Electrolux Professional AB (publ) in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical re- sponsibilities in accordance with these requirements. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of The Board of Directors and the Managing Director The Board of Directors and the Managing Director are respon- sible for the preparation of the Esef report in accordance with the Chapter 16, Section 4 a of the Swedish Securities Market Act (2007:528), and for such internal control that the Board of Directors and the Managing Director determine is necessary to prepare the Esef report without material misstatements, whether due to fraud or error. Auditor’s responsibility Our responsibility is to obtain reasonable assurance whether the Esef report is in all material respects prepared in a format that meets the requirements of Chapter 16, Section 4 a of the Swedish Securities Market Act (2007:528), based on the procedures per- formed. RevR 18 requires us to plan and execute procedures to achieve reasonable assurance that the Esef report is prepared in a format that meets these requirements. P. 144Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Auditor’s report Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION Reasonable assurance is a high level of assurance, but it is not a guarantee that an engagement carried out according to RevR 18 and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Esef re- port. The firm applies International Standard on Quality Management 1, which requires the firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. The examination involves obtaining evidence, through various procedures, that the Esef report has been prepared in a format that enables uniform electronic reporting of the annual accounts and consolidated accounts. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement in the report, whether due to fraud or error. In carrying out this risk assessment, and in order to design audit procedures that are appropriate in the circumstances, the auditor considers those elements of internal control that are relevant to the prepara- tion of the Esef report by the Board of Directors and the Managing Director, but not for the purpose of expressing an opinion on the effectiveness of those internal controls. The examination also in- cludes an evaluation of the appropriateness and reasonableness of assumptions made by the Board of Directors and the Managing Director. The procedures mainly include a validation that the Esef report has been prepared in a valid XHMTL format and a reconciliation of the Esef report with the audited annual accounts and consolidated accounts. Furthermore, the procedures also include an assessment of whether the consolidated statement of financial performance, fi- nancial position, changes in equity, cash flow and disclosures in the Esef report have been marked with iXBRL in accordance with what follows from the Esef regulation. The auditor’s examination of the corporate governance statement The Board of Directors is responsible for that the corporate gover- nance report on pages 69-79 has been prepared in accordance with the Annual Accounts Act. Our examination of the corporate governance report is conduct- ed in accordance with FAR’s standard RevR 16 The auditor’s exam- ination of the corporate governance statement. This means that our examination of the corporate governance report is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinions. A corporate governance report has been prepared. Disclosures in accordance with chapter 6 section 6 the second paragraph points 2-6 of the Annual Accounts Act and chapter 7 section 31 the second paragraph the same law are consistent with the other parts of the annual accounts and consolidated accounts and are in ac- cordance with the Annual Accounts Act. Deloitte AB, was appointed auditor of Electrolux Professional AB by the general meeting of the shareholders on the 2023-04-26 and has been the company’s auditor since 2018-06-01. 27 March, 2024 Deloitte AB Jonas Ståhlberg Authorized public accountant This is a translation of the Swedish language original. In the event of any differences between this translation and the Swedish language original, the latter shall prevail. P. 145Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Seven years in summary Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION Seven years in summary SEKm 2023 2022 2021 2020 2019 2018 2017 Food & Beverage Net sales 7,616 7,290 4,704 4,198 5,895 5,399 4,922 EBITA 766 679 299 87 568 629 607 EBITA, % 10.1 9.3 6.4 2.1 9.6 11.7 12.3 Operating income 620 542 244 35 522 599 572 Operating margin, % 8.1 7.4 5.2 0.8 8.9 11.1 11.6 Laundry Net sales 4,231 3,747 3,159 3,065 3,386 3,267 2,801 EBITA 702 608 492 467 507 573 502 EBITA, % 16.6 16.2 15.6 15.2 15.0 17.6 17.9 Operating income 686 590 475 452 488 558 499 Operating margin, % 16.2 15.7 15.0 14.7 14.4 17.1 17.8 Group shared cost Operating income –152 –177 –128 –100 –18 –14 –11 Total Group Net sales 11,848 11,037 7,862 7,263 9,281 8,666 7,723 EBITA 1,317 1,111 663 456 1,058 1,188 1,098 EBITA, % 11.1 10.1 8.4 6.3 11.4 13.7 14.2 Operating income 1,154 955 592 387 992 1,143 1,060 Operating margin, % 9.7 8.7 7.5 5.3 10.7 13.2 13.7 ) Alternative performance measure. P. 146Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Seven years in summary Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION SEKm, if not otherwise stated 2023 2022 2021 2020 2019 2018 2017 Net sales 11,848 11,037 7,862 7,263 9,281 8,666 7,723 Organic growth, % 2.6 16.9 10.6 –21.0 –0.3 4.1 5.6 EBITA 1,317 1,111 663 456 1,058 1,188 1,098 EBITA, % 11.1 10.1 8.4 6.3 11.4 13.7 14.2 Operating income 1,154 955 592 387 992 1,143 1,060 Operating margin, % 9.7 8.7 7.5 5.3 10.7 13.2 13.7 Income after financial items 1,033 895 587 363 978 1,134 1,052 Income for the period 775 686 487 278 663 952 786 Items affecting comparability – –35 – –77 –32 – – Capital expenditure –191 –139 –159 –273 –257 –169 –167 Operating cash flow after investments 1,453 636 1,116 570 1,138 1,131 1,167 Operating working capital, % of net sales 18.1 16.7 14.9 19.9 17.7 16.3 13.8 Earnings per share, SEK¹ 2.70 2.39 1.69 0.97 2.31 3.31 2.74 Dividend per share, SEK 1, ² 0.80 0.70 0.50 – – – – Equity per share, SEK, ¹ , ³ 16.37 14.86 12.27 9.74 9.43 31.91 8.43 Net debt 1,390 2,050 1,705 549 1,025 –226 –481 EBITDA , 4 1,581 1,369 886 684 1,280 1,363 1,253 Net debt/EBITDA ratio 0.9 1.5 1.9 0.8 0.8 –0.2 –0.4 Average number of shares, million¹ 287.4 287 287 287,4 287,4 287,4 287,4 Number of employees, end of period 3,978 4,022 3,973 3,515 3,624 3,555 3,183 ) Alternative performance measure. 1) Basic number of outstanding shares. 2) 2023, proposed by the Board. 3) Year 2020 has been restated. 4) Rolling four quarters. P. 147Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Definitions Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION Definitions and reconciliation of alternative performance measures Electrolux Professional Group presents certain measures that are not defined under IFRS (alternative performance measures – “APMs”). These are used by management to assess the financial and operational performance of the Group. Management believes that these APMs provide useful information regarding the Group’s APM Definition Reason for use Organic growth % Change in sales growth excluding net FX impact and acquisitions. The Group’s presentation currency is SEK while net sales are mainly in other currencies. Organic growth is dependent on fluctuations in SEK versus other currencies, and acquired or divested businesses can have a further impact on reported net sales. Organic growth adjusted for acquisitions, divest- ments and currency shows the underlying sales development without these parameters. Acquisitions % Change in net sales during the current period attributable to ac- quired operations in relation to prior year sales, following a period of 12 months commencing on the acquisition date. See "Organic growth" above. Divestments % Change in net sales during the current period attributable to divested operations in relation to the prior period’s sales, following a period of 12 months commencing on the divestment date. See "Organic growth" above. Operating income (EBIT) Earnings before interest and tax. Used as an indicator that shows the Group's ability to make a profit, regardless of the method of financing (determines the optimal use of debt versus equity). Operating margin (EBIT margin) Operating income expressed as a percentage of net sales. Operating margin shows the operating income as a percentage of net sales. Operating margin is a key internal measure as the Group believes it provides users of the financial statements with a better understanding of the Group’s financial performance both short and long term. Items affecting comparability Material profit or loss items such as capital gains and losses from divestments of product groups or major units, close-downs or significant down-sizing of major units or activities, significant im- pairment, and other major costs or income items. Summarizes events and transactions with significant effects, which are rele- vant for understanding the financial performance when comparing income for the current period with previous periods. Operating margin excluding items affecting comparability Operating income less items affecting comparability as a percent- age of net sales. Operating margin excluding items affecting comparability shows the oper- ating income as a percentage of net sales adjusted for the items affecting comparability defined above. This is a key internal measure as the Group believes that it provides users of the financial statements with a better un- derstanding of the Group’s financial performance both short and long term. Capital expenditure Investments in property, plant and equipment, product develop- ment, and other intangible assets. Used to ensure that cash spending is in line with the Group's overall strategy for the use of cash. financial and operating performance. Such measures may not be comparable to similar measures presented by other companies. Consequently, APMs have limitations as analytical tools and should not be considered in isolation or as a substitute for related financial measures prepared in accordance with IFRS. The APMs have been derived from the Group’s internal reporting and are not audited. The APM reconciliations can be found on the Group's website www.electroluxprofessional.com/corporate/interim-reports/ P. 148Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Definitions Financial information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION Financial information, contents Administration report Financial statements Notes The Board’s assurance Auditor’s report Seven years in summary Definitions OTHER INFORMATION APM Definition Reason for use EBITA Operating income less amortization and write-down related to intangible assets (excluding right-of-use assets). EBITA gives an indication of the operating income less amortization and write-down related to intangible assets (excluding right-of-use assets), mainly used to follow up operating income without the impact of amortiza- tion of surplus values related to acquisitions. EBITA margin EBITA expressed as a percentage of net sales. Used to evaluate business performance in relation to net sales in order to measure the efficiency of the Group. EBITA excluding items affecting comparability Operating income less amortization and write-down related to intangible assets (excluding right-of-use assets) and less items affecting comparability. Items affecting comparability vary between years and periods and are excluded from EBITA in order to analyze trends. EBITA margin excluding items affecting comparability EBITA excluding items affecting comparability, expressed as a percentage of net sales. Items affecting comparability vary between years and periods and are excluded from EBITA margin in order to analyze trends. EBITDA EBITA less depreciation. This is an indicator of the cash-generating capacity of the business in relation to sales. Operating cash flow after investments Cash flow from operations and investments adjusted for financial items paid net, taxes paid, and acquisitions/divestments of opera- tions. To monetarize the cash from core operations. Net debt Shows short-term borrowings (short-term loans and trade re- ceivables with recourse), accrued interest expenses and prepaid interest income and long-term borrowings, lease liabilities, net provisions for post-employment benefits less liquid funds (cash and cash equivalents, prepaid interest expenses, and accrued interest income). Net debt describes the Group's total debt financing and is monitored by management. Net debt/EBITDA Net debt in relation to EBITDA (Net debt is based on the end-of- period balance. EBITDA is calculated based on last four rolling quarters). A measurement of financial risk, showing net debt in relation to cash generation. Operating working capital, % of net sales Sum of currency-adjusted last twelve months’ average of inven- tories, trade receivables, and trade payables (Operating working capital) as a percentage of the currency-adjusted last twelve months’ average net sales. All months of the period are currency adjusted by applying the end-of-period average currency rate. Used to evaluate how efficient the Group is in generating cash in relation to net sales. P. 149Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainability notes Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes About this report 150 The EU Taxonomy regulation 151 Environmental data 155 People data 157 GRI index 160 Auditor’s Report on Sustainability Report 162 P. 150Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainability notes Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes - About this report - EU Taxonomy regulation - Data - GRI index Auditor’s report on the sustainability report Share and shareholders Our history Reporting framework This report has been prepared in accordance with the Swedish Annual Accounts Act related to statutory sustainability reporting. The main audiences for the report are shareholders and other stake- holders. Electrolux Professional’s main stakeholders are identified by assessing the magnitude of the impacts from, or on, our business and operations. The Sustainability Report has been prepared in ac- cordance with the Global Reporting Initiative (GRI) 2021. See page 160–161 for the GRI Index. Electrolux Professional has performed a materiality analysis to determine the most relevant sustainability topics within our value chain. We have also established sustainability targets to emphasize our ambitions in a number of significant areas. As a signatory of the UN Global Compact, Electrolux Professional uses this report to highlight progress regarding the 10 principles. External assurance Our auditors, Deloitte, have performed a limited assurance of this Sustainability Report. See page 162 for the limited assurance report. Scope of the report The Sustainability Report is published annually. This report covers data that has been collected for the 2023 calendar year. Unified Brands, acquired by Electrolux Professional Group in December 2021, has been included in the sustainability reporting since 2022, excluding ISO-certification, as described on page 41 and page 59 in the Annual report. The environmental data in this report covers 12 (11) manufactur- ing sites and all R&D, logistic centers, and offices where we have manufacturing sites. It also includes the former manufacturing site in Louisville now turned into a logistics center. The people data disclosed relating to GRI topics 2-7, 2-8, 2-24, and 2-30, covers the full scope of the company. As people data is collected from different systems, minor variations in the total number of employees might exist at any specific point in time. Performance indicators normally cover the last five years. Variations might occur, depending on relevance and/or data avail- ability. Historical baselines for performance indicators are not fully comparable as acquired operations are integrated within the report. Re-statements An error was discovered in our water consumption data reporting. In the past, we mistakenly reported water withdrawal as water con- sumption. However, water withdrawal only represents the amount of water taken out of its source, and it does not indicate how much water is actually available for use by the ecosystem or local com- munity. This year, we have corrected this mistake and calculated our water consumption using the GRI 303-5 standard. Assumptions and calculations Emission factors are based on the “Emission factors 2022 edition” provided by the International Energy Agency (IEA). Values used in the report are offset by a three-year period (i.e. 2023 uses figures for 2020). The company uses zero as the emission factor for use of renewable energy. To calculate emissions in Scope 3, category 11, "Use of Sold Products," we utilize the average useful life of products sold from the EUP LOT studies to ensure fair comparisons. We group the products based on their loading capacity and type of energy source using the EUP LOT studies. The volume is based on the products in mar- kets served. The emission factor for electricity is calculated using the weighted average of the IEA emission factor in the market served. For natural gas, we use the DEFRA CO2e value. Since steam is not truly the energy input, we use the electricity emission factor for steam. The emissions that occur during the use of a product are reported in the year the product was sold, and not over its estimated useful life. However, the reported Scope 3 sold product-use emissions may not be entirely accurate due to the uncertainties involved in obtaining precise primary data. The level of uncertainty could vary by up to 10%, although we are dedicated to minimizing these uncertainties as much as possible. Electrolux Professional applies the Precautionary principle for its sustainability reporting and management, this means we are cautious wherever estimates are applied. Wherever estimations are made, this is indicated as foot notes. Omissions from GRI Standards GRI 2-21 Annual total compensation ratio: Information on the ratio per 2-21-a and 2-21-b is not disclosed, since collecting information from the various systems for calculation is an extensive process. GRI 201-1 Direct economic value generated and distributed: Direct economic value distributed is based on operating costs instead of actual value distributed (payments). GRI 205-2 Communication and training on anti-corruption policies: Information on training by region is not disclosed. GRI 303-3 Water withdrawal: Sea water and Produced water are not reported. GRI 303-4 Water discharge: Storm water that is not collected or used is not considered as water discharge if it goes into our storm drains. Ground water and sea water are not reported. GRI 306 Waste: Only reporting on topic disclosure. GRI 306-3 Waste generated: Topic management disclosures excluded. GRI 403-9 Work-related injuries: Includes lost time due to injuries. Employees and temporary hires are included. Employees working at manufacturing sites are included based on local selection. On some Sustainability management and governance The Board of Directors decides on the strategy, direction, and overall targets of the Group’s sustainability work. The Group Management Team further defines and implements proce- dures. Each local management and business function has a delegated responsibility for the implementation of Group pol- icies and risk mitigation and performance. The Group Sustainability function supports the business by identifying the prioritized and strategic sustainability issues and helps integrate them into the business. The function also monitors the overall performance through dialog, perfor- mance data, and audit results. Performance is reported to the Group Management Team. Sustainability Board A Sustainability Board was established in 2022 to share sustainability information, collect feedback, oversee the implementation of the Group’s sustainability strategy across the whole organization, and strengthen the governance of the sustainability work. The Sustainability Board is chaired by the Group Sustainability Vice President who reports the performance of the Sustainability Board to the Group Management and the Board of Directors. In 2023, the focus of the Sustainability Board has been on; > Implementation of the Sustainability network > Allocating resources for conflict mineral compliance > Final selection of Sustainability reporting platform > CSRD gap analysis and preparations Code of Conduct governance Information about the business ethics and conduct expected of managers and employees is published on the Group’s intranet. A Code of Conduct Steering Group has been estab- lished and meets regularly to follow up on the effectiveness of the program, in particular our whistleblowing procedures. About this report sites a small number of the white-collar employees is not included, depending on local reporting practices. GRI 405-1 Diversity of governance bodies and employees: The average number of employees is used for gender distribution. Year- end data collected from local/regional HR systems is used for age distribution data. P. 151Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainability notes Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes - About this report - EU Taxonomy regulation - Data - GRI index Auditor’s report on the sustainability report Share and shareholders Our history The Taxonomy supports a transition to an economy that is consis- tent with the environmental objectives of the European Union (EU). The EU Taxonomy includes definitions of economic activities that are considered eligible, as well as technical screening criteria for the six environmental objectives. These activities must also avoid causing significant harm to any of the other objectives and adhere to minimum social safeguards e.g., related to protection of human rights, and social and labor standards. In the year 2023, Electrolux Professional assessed its econom- ic activities to determine significant contributions to at least one of the EU's environmental goals, as outlined in the Environmental Delegated Act (Commission Delegated Regulation (EU) 2023/2486) and NACE code information. Electrolux Professional manufactures professional equipment and offers services in food service, bev- erage, and laundry, with a strong emphasis on energy efficiency, durability, and repairability, ensuring that our products contribute to the transition to a circular economy. Assessment of compliance with the regulation Assessment of eligibility Electrolux Professional has identified taxonomy-eligible activities by screening the economic activities in the Commission Delegated Regulation (EU) 2023/2486). Regulation (EU) 2020/852, Article 9, Annex II sets out criteria for which an economic activity qualifies as contributing substantially to the transition to a circular economy and for determining whether that economic activity causes no significant harm to any of the other environmental objectives. Four activities have been qualified as contributing substantially to the transition to a circular economy for Electrolux Professional: Manufacture of electrical and electronic equipment Electrolux Professional's core business relates to the manufacturing of electrical and electronic equipment for professional food service, beverages, and laundry. Product as a service and other circular use and result-oriented service models Electrolux Professional offers rental services for some of the prod- ucts. For the product we develop, we are responsible for production, leasing, maintenance, and environmentally responsible disposal. Repair, refurbishment, and remanufacturing Electrolux Professional offers refurbished products to our customers in exchange for their old products. We take their old products, re- place key components, and update the latest improvements. We provide customer care including repair and replacement of wear and tear parts through our Essentia program. Sale of spare parts: Electrolux Professional sells spare parts for the appliances it has sold in the market. Assessment of alignment (significant contribution / Do No Significant Harm (DNHS)) DNHS assessment is yet to be conducted. For circular economy ac- tivities, an in-depth assessment (on climate change adaptation and mitigation, pollution, biodiversity, and water) will be conducted at each site for the next year. For climate change mitigation activities, we still lack the information required to conclude this year. Assessment of Minimum Safeguard Minimum safeguards are yet to be assessed in detail. In 2024, we will perform a gap analysis to determine compliance with four core topics: Human rights, Bribery/corruption, Taxation, and Fair compe- tition. Accounting policies According to Article 8 of the EU Taxonomy Regulation (the taxon- omy), turnover, capital expenditure, and operational expenditure are defined as described below. For capital expenditure opera- tional expenditure, these definitions are different compared with Electrolux Professional Group’s financial reporting. The Company’s financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB,) and as endorsed by the EU. The basis of the preparation of the financial statements is explained in note 1 to the consolidated financial statements. Turnover Turnover is defined as net sales as disclosed in the Consolidated statement of total comprehensive income. See page 94. Capital expenditure Capital expenditures are additions to tangible, intangible, and right-of-use assets during the year including additions from business combinations. Acquired goodwill is not included. See Notes 8, 12, and 13. Capital expenditure for eligible activities in 2023, includes certain capitalized assets as found on the balance sheet related to the activities assessed as eligible. Operational expenditure Operational expenditure includes direct non-capitalized costs relat- ed to R&D costs, costs for renovating buildings and offices, short- term lease costs, and costs for maintaining or repairing buildings/ offices/production equipment/forklifts/warehouse equipment. Eligible turnover, capital expenditure, and operational expenditure Turnover, capital expenditure, and operational expenditure in ac- cordance with the above definition and which is associated with eligible activities constitutes the basis for calculating the share of eligible turnover, capital expenditure, and operational expenditure. amounts recorded on product codes and/or legal entities related to eligible activities have been used as the basis to calculate amounts of eligible turnover, capital expenditure, and operational expendi- ture. A reconciliation of amounts has been performed to avoid any double counting. Reporting in accordance with the EU Taxonomy regulation Nuclear and fossil gas related activities Nuclear energy related activities The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle. No The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies. No The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. No Fossil gas related activities The undertaking carries out, funds or has exposures to construction or opera- tion of electricity generation facilities that produce energy using fossil gaseous fuels. No The undertaking carries out, funds or has exposures to construction, refurbish- ment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels. No The undertaking carries out, funds or has exposures to construction, refurbish- ment, and operation of heat generation facilities that produce heat/cool fusing fossil gaseous fuels. No P. 152Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainability notes Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes - About this report - EU Taxonomy regulation - Data - GRI index Auditor’s report on the sustainability report Share and shareholders Our history Proportion of turnover from products or services associated with taxonomy-aligned economic activities - disclosure covering 2023 Financial year 2023 Year Substantial contribution criteria DNSH criteria (Do No Significant Harm) Economic activities Code(s) Turnover Propor- tion of Turnover, year N Climate change mitigation Climate change adaption Water Pollution Circular economy Biodiversity Climate change mitigation Climate change adaption Water Pollution Circular economy Biodiversity Minimum safe- guards Proportion of Taxonomy aligned (A.1.) or eligible (A.2.) turn- over, 2022 Category (enabling activity) Category (transitional activity) MSEK % Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y/N Y/N YN/ Y/N Y/N Y/N Y/N % E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1 Environmentally sustainable activities (taxonomy-aligned) Turnover of environmentally sustainable activities (Taxonomy-aligned (A.1) 0 0% 0% 0% 0% 0% 0% 0% – – – – – – – 0% Of which enabling 0 0% 0% 0% 0% 0% 0% 0% – – – – – – – 0% E Of which transitional 0 0% 0% – – – – – – – 0% T A.2 Taxonomy-eligible but not environmentally sustainable activities (not taxonomy-aligned activities) EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL Manufacture of electrical and electronic equipment CE 1.2 8,390 72% N/EL N/EL N/EL N/EL EL N/EL – Product-as-a-service and other circular use and result-oriented service models CE 5.5 266 2% N/EL N/EL N/EL N/EL EL N/EL – Sale of spare parts CE 5.2 1,839 16% N/EL N/EL N/EL N/EL EL N/EL – Turnover of taxonomy-eligible but not environmentally sustainable activities (not taxonomy-aligned activities) (A.2) 10,495 90% 0% 0% 0% 0% 90% 0% 0% Total (A.1 + A.2) 10,495 90% 0% 0% 0% 0% 90% 0% 0% B. TAXONOMY-NON-ELIGIBLE ACTIVITIES Turnover of taxonomy-non-eligible activities (B) 1,353 11% Total (A + B) 11,848 100% Proportion of turnover/Total turnover Taxonomy-aligned per objective Taxonomy-eligible per objective CCM 0% 0% CCA 0% 0% WTR 0% 0% CE 0% 90% PPC 0% 0% BIO 0% 0% P. 153Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainability notes Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes - About this report - EU Taxonomy regulation - Data - GRI index Auditor’s report on the sustainability report Share and shareholders Our history Proportion of CapEx from products or services associated with taxonomy-aligned economic activities - disclosure covering 2023 Financial year 2023 Year Substantial contribution criteria DNSH criteria (Do No Significant Harm) Economic activities Code(s) CapEx Proportion of CapEx, year N Climate change mitigation Climate change adaption Water Pollution Circular economy Biodiversity Climate change mitigation Climate change adaption Water Pollution Circular economy Biodiversity Minimum safe- guards Proportion of Taxonomy aligned (A.1.) or eligible (A.2.) CapEx, 2022 Category (enabling activity) Category (transitional activity) MSEK 0% Y; N; N/EL Y; N; N/EL Y; N; N/E Y; N; N/EL Y; N; N/EL Y; N; N/EL Y/N Y/N YN/ Y/N Y/N Y/N Y/N 0% E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1 Environmentally sustainable activities (taxonomy-aligned) CapEx of environmental sustainable activities (Taxonomy-aligned) (A.1) 0 0% 0% 0% 0% 0% 0% 0% – – – – – – – 0% Of which enabling 0 0% 0% 0% 0% 0% 0% 0% – – – – – – – 0% E Of which transitional 0 0% 0% – – – – – – – 0% T A.2 Taxonomy-eligible but not environmentally sustainable activities (not taxonomy-aligned activities) EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL Manufacture of electrical and electronic equipment CE 1.2 121 51% N/EL N/EL N/EL N/EL EL N/EL – Product-as-a-service and other circular use and result-oriented service models CE 5.5 5 2% N/EL N/EL N/EL N/EL EL N/EL – Sale of spare parts CE 5.2 0 0% N/EL N/EL N/EL N/EL EL N/EL – Installation, maintenance and repair of energy efficiency equipment CCM 7.3 0 0% N/EL N/EL N/EL N/EL EL N/EL 12 Installation, maintenance and repair of instruments and devices for mea- suring, regulation and controlling energy performance of buildings CCM 7.5 0 0% N/EL N/EL N/EL N/EL EL N/EL 1 Acquisition and ownership of buildings CCM 7.7 44 18% EL N/EL N/EL N/EL N/EL N/EL 6 CapEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 170 71% 18% 0% 0% 0% 53% 0% 10% A. CapEx of Taxonomy eligible activities (A.1+A.2) 170 71% 18% 0% 0% 0% 53% 0% 10% B. TAXONOMY-NON-ELIGIBLE ACTIVITIES CapEx of Taxonomy-non-eligible activities 69 29% Total 239 100% Proportion of CapEx/Total CapEx Taxonomy-aligned per objective Taxonomy-eligible per objective CCM 0% 18% CCA 0% 0% WTR 0% 0% CE 0% 53% PPC 0% 0% BIO 0% 0% P. 154Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainability notes Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes - About this report - EU Taxonomy regulation - Data - GRI index Auditor’s report on the sustainability report Share and shareholders Our history Proportion of OpEx from products or services associated with taxonomy-aligned economic activities - disclosure covering 2023 Financial year 2023 Year Substantial contribution criteria DNSH criteria (Do No Significant Harm) Economic activities Code(s) OpEx Proportion of OpEx, year N Climate change mitigation Climate change adaption Water Pollution Circular economy Biodiversity Climate change mitigation Climate change adaption Water Pollution Circular economy Biodiversity Minimum safe- guards Proportion of Taxonomy aligned (A.1.) or eligible (A.2.) OpEx, 2022 Category (enabling activity) Category (transitional activity) MSEK % Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1 Environmentally sustainable activities (taxonomy-aligned) OpEx of environmental sustainable activities (Taxonomy-aligned (A.1) 0 0% 0% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 0% Of which enabling 0 0% 0% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 0% E Of which transitional 0 0% 0% Y Y Y Y Y Y Y 0% T A.2 Taxonomy-eligible but not environmentally sustainable activities (not taxonomy-aligned activities) EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL Manufacture of electrical and electronic equipment CE 1.2 543 98% N/EL N/EL N/EL N/EL EL N/EL 0% Product-as-a-service and other circular use and result-oriented service models CE 5.5 1 0% N/EL N/EL N/EL N/EL EL N/EL 0% Sale of spare parts CE 5.2 0 0% N/EL N/EL N/EL N/EL EL N/EL 0% OpEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 544 98% 0% 0% 0% 0% 98% 0% 0% A. OpEx of Taxonomy eligible activities (A.1+A.2) 544 98% 0% 0% 0% 0% 98% 0% 0% B. TAXONOMY-NON-ELIGIBLE ACTIVITIES OpEx of Taxonomy-non-eligible activities 10 2% Total 554 100% Proportion of OpEx/Total OpEx Taxonomy-aligned per objective Taxonomy-eligible per objective CCM 0% 0% CCA 0% 0% WTR 0% 0% CE 0% 98% PPC 0% 0% BIO 0% 0% P. 155Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainability notes Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes - About this report - EU Taxonomy regulation - Data - GRI index Auditor’s report on the sustainability report Share and shareholders Our history Environmental data Energy consumption within the organization 1) GRI 302-1 Energy use by type (MWh) Renewable energy use (MWh) Year Natural gas LPG District heating Electricity Total Renewable energy Non-renew- able energy Total 2019 10,147 0 3,938 19,133 33,218 15,197 18,021 33,218 2020 8,777 0 3,550 16,484 28,811 13,777 15,033 28,811 2021 9,519 905 4,426 17,675 32,525 14,560 17,964 32,525 2022 Electrolux Professional excl. Unified Brands 9,430 987 3,936 17,156 31,509 15,592 15,917 31,509 Unified Brands 2,772 254 0 7,230 10,256 0 10,256 10,256 Total 12,202 1,241 3,936 24,386 41,765 15,592 26,173 41,765 2023 9,657 1,059 4,123 22,829 37,668 16,967 20,702 37,668 1) Electrolux Professional has not previously reported on-site generated electricity when the company was part of the Electrolux Group. On-site generated Elec- tricity is included in the above figures. Note: The baseline is not fully comparable as five acquired plants were added during 2018 and 2019. Note: The baseline is not fully comparable as two acquired plants were added in 2022 (Unified Brands, US). Note: Data for 2021 has been corrected due to an error in previously reported data. Own disclosure - Product water consumption 2020 2021 2022 2023 Product water consumption efficiency compared to 2019 1.5% 2.3% 4.3% 4.5% Only includes dishwashing and laundry. Target to improve efficiency by 8% by year-end 2025 (base year 2019). Calculation is based on annual sales figures, consumption data, and the expected number of cycles during the prod- uct life time. *Data for 2022 has been corrected due to an error in sales volume. Water GRI 303-3 Total water withdrawal from all areas in megaliters 1, 2, 3 Year Municipal water supply – Purchased Ground water Surface water Total 2019 94 94 2020 83 1 84 2021 67 1 1 69 2022 Electrolux Professional excl. Unified Brands 60 1 1 62 Unified Brands 1 0 0 1 Total 61 1 1 63 2023 61 1 0 62 1) 1 megaliter equals 1,000 m³. 2) Internal risk area defined using WWF’s water risk filter. 3) EPR operations have no water withdrawal from areas with water risks. Note: The baseline is not fully comparable as five acquired plants were added during 2018 and 2019. Note: The baseline is not fully comparable as two acquired plants were added in 2022 (Unified Brands, US). P. 156Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainability notes Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes - About this report - EU Taxonomy regulation - Data - GRI index Auditor’s report on the sustainability report Share and shareholders Our history Water GRI 303-4 Total water discharge to all areas in megaliters 1, 2 Third-party destinations Fresh surface water Year Untreated Pre-treated Untreated Pre-treated Total 2019 50 25 0 0 74 2020 42 33 0 0 75 2021 36 26 0 0 62 2022 Electrolux Professional excl. Unified Brands 5 51 0 0 56 Unified Brands 1 0 0 0 1 Total 6 51 0 0 57 2023 26 30 56 1) Figures are based on engineering estimates and data provided from the sites. 2) Electrolux Professional operations have no water discharge in water stressed areas. Note: Storm water that is not collected or used is not considered as water discharge if it goes into our storm drains. Note: The baseline is not fully comparable as five acquired plants were added during 2018 and 2019. Note: The baseline is not fully comparable as two acquired plants were added in 2022 (Unified Brands, US). Waste 1, 2 GRI 306-3 and 306-4 2023 Metric kiloton % of non- hazardous waste Recovery (%) Disposal (%) Landfill 0.5 8.5% 8.5% Incineration (without energy recovery) 0.03 0.5% 0.5% Waste-to-energy 0.2 4% 4% Recycling 4.9 86% 86% Other recovery 0.1 1% 1% Total non-hazardous waste 5.7 100% 87% 13% Waste 1, 2 GRI 306-3 and 306-4 2023 Metric kiloton % of non- hazardous waste Recovery (%) Hazardous waste Disposal without energy recovery 0.1 23% Recycling 0.2 68% 68% Other/Unspecified 0.0 9% Total hazardous waste 0.3 100% 14% 2023 (metric kiloton) Non-hazard- ous waste Hazardous waste Total % of total Total Disposal without energy recovery 0.5 0.1 0.6 10% Waste-to-energy 0.2 0.2 0.4 7% Recovery 5.0 5.0 83% Other/unspecified 0.0 0.0 0% Total 5.7 0.3 6.0 100% Percentage of total 95% 5% 100% 1) All waste is directed to and diverted from disposal off-site. 2) Only disclosing data for 2023. Emissions GRI 305-1 and 305-2 GRI 305-1 GRI 305-2 Own disclosure Year Direct CO2e emissions 1), 2) (metric kton) Indirect CO2e emissions (metric kton) Total CO2e (metric kton) Use of HFC/HFO gases (ton) 2019 2.0 1.9 3.8 18.6 2020 1.7 1.4 3.1 16.1 2021 2.0 1.7 3.7 17.5 2022 Electrolux Professional excl. Unified Brands 2.0 0.9 2.9 15.3 Unified Brands 0.6 2.7 3.3 2.45 Total 2.6 3.6 6.2 17.8 2023 2.0 2.2 4.2 17.7 1) Includes contributions from energy use and Green House Gas emissions. 2) Natural gas emission factors defined as combustion of gas with zero CO₂ content. 3) Emissions from use of renewable energy calculated as zero. Note: The baseline is not fully comparable as five acquired plants were added during 2018 and 2019. Note: The baseline is not fully comparable as two acquired plants were added in 2022 (Unified Brands, US). P. 157Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainability notes Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes - About this report - EU Taxonomy regulation - Data - GRI index Auditor’s report on the sustainability report Share and shareholders Our history People data General Gender balance, employees Gender balance, employees in managerial positions Production/non-production Covered by collective bargaining agreements 1 Total number of employees Male Female Male Female Production Non-production Coverage 68% 32% 73% 27% 41% 59% 44% 2,714 1,264 403 152 1,616 2,362 1,750 1) For employees who are not covered by collective bargaining, contractual conditions are defined in agreement with local legislation requirements. GRI 2-7 and GRI 2-8 Breakdown by gender Female Male Other (Gender as specified by the employees themselves) Not disclosed Total Number of employees¹ 1,264 2,714 0 0 3,978 Number of permanent employees 1,234 2,669 0 0 3,903 Number of temporary employees 30 45 0 0 75 Number of non-guaranteed-hours, employees Unavailable Unavailable Unavailable Unavailable Unavailable Number of full-time employees 1,225 2,705 0 0 3,930 Number of part-time employees 39 9 0 0 48 Breakdown by region Europe US APAC MEA Total Number of employees¹ 2,722 656 567 33 3,978 Number of permanent employees 2,653 655 562 33 3,903 Number of temporary employees 69 1 5 0 75 Number of non-guaranteed-hours, employees Unavailable Unavailable Unavailable Unavailable Unavailable Number of full-time employees 2,674 656 567 33 3,930 Number of part-time employees 48 0 0 0 48 Workers who are not employees 2 Total number of workers who are not employees and whose work is controlled by the organization 784 1) Total number of employees according to GRI 2-7. 2) This number includes contractors, agency workers, and interns. Note: All people-data figures are reported in headcount. These data refer to the end of the reporting period (December 31, 2023). We do not hold information regarding non-guaranteed-hours employees. P. 158Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainability notes Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes - About this report - EU Taxonomy regulation - Data - GRI index Auditor’s report on the sustainability report Share and shareholders Our history New employee hires and employee turnover GRI 401-1 By gender By age group By region Female Male Other (Gender as specified by the employees themselves) Not disclosed Under 30 years 30-50 years Over 50 years Europe US APAC EMEA Total Total number of new employee hires during the reporting period 159 284 0 0 132 221 90 255 112 69 7 443 Rate of new employee hires during the reporting period 13% 10% 0% 0% 36% 11% 6% 9% 16% 12% 22% 11% Total number of employee turnover during the reporting period 135 334 0 0 130 196 143 212 172 79 6 469 Rate of employee turnover during the reporting period 11% 12% 0% 0% 35% 10% 9% 8% 25% 14% 18% 12% Training and development GRI 2-24, 404-1, 404-3, 412-2 By gender By employee category Female Male Other (Gender as specified by the employees themselves) Not disclosed Total Non-production Production Total Average hours of training 14 19.5 0 0 17.7 22.7 10 17.7 Number of training hours 1) 17,335 52,882 0 0 70,217 53,558 16,659 70,217 Number of training hours, Code of Conduct only 3) 866 1,564.5 0 0 2,430 1,700 731 2,430 Number of employees who received a performance review in 2023 2) 897 2,169 0 0 3,066 2,308 758 3,066 Percentage of employees who received a performance review in 2023 71% 80% 77% 98% 47% 77% Number of employees participating in Code of Conduct training in 2023 3) 1,154 2,086 0 0 3,240 2,266 974 3,240 Percentage of employees participating in Code of Conduct training in 2023 3) 91% 77% 82% 96% 60% 82% 1) Number of hours is to some extent based on engineering estimates. 2) Including production and non-production employees. Ratio of performance and career development reviews is significantly higher for non-production employees. 3) Training includes anti-corruption and human rights topics. P. 159Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Sustainability notes Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes - About this report - EU Taxonomy regulation - Data - GRI index Auditor’s report on the sustainability report Share and shareholders Our history Occupational health and safety GRI 403-9 Work-related injuries 2023 2022 2021 2020 2019 Number of work-related fatalities 0 0 0 0 0 Number of high-consequence injures, >6 months 0 1 0 0 1 Total number of work-related lost time injuries 15 18 14 19 25 Working hours (in thousands of hours) 5,576 5,588 4,062 3,453 3,569 Rate of fatalities as a result of work-related injury 0 0 0 0 0 Rate of high-consequence work-related injuries (excluding fatalities) 0 1 0 0 0.1 Lost Time Injury rate 1) 0.54 0.64 0.69 1.10 1.40 1) Own definition (Lost time injuries per 200,000 worked hours) Note: The number of accidents resulting in lost work time decreased in 2023 and the lost time injury rate improved to 0.5 (0.6). No high-con- sequence injury occurred in 2023. The most common injures are lacerations and contusions (7 of 15). The most commonly injured body parts were the hand and fingers (7/15). More severe risks are related to forklift vehicles and machines. Most lost time injuries in 2023 occurred in our assembly stations and warehouses. Reactive, preventive, and proactive measures are managed within our health and safety pillar (page 47). Diversity and equal opportunities 405-1 Diversity of governance bodies and employees 1) Gender distribution Age distribution 2023 Female Male <30 30–50 >50 Board of Directors 1) 38% 63% 25% 75% Group Management 25% 75% 25% 75% Employees 2) 32% 68% 8% 50% 42% Managerial positions 27% 73% 1% 55% 44% 1) Does not include employee representatives. 2) Age distribution data is based on year-end data collected from central or local/regional HR systems. P. 160Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 GRI index Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes - About this report - EU Taxonomy regulation - Data - GRI index Auditor’s report on the sustainability report Share and shareholders Our history GRI index The Global Reporting Initiative (GRI) index provides guidance on where information within this report is disclosed. General information (2021) Page/Information 2-1 Organizational details 89 2-2 Entities included in the organization’s sustainability reporting 137-138 2-3 Reporting period, frequency, and contact point 150 2-4 Restatements of information 150 Contact point: Swapnil S Choudhari, VP Group Sustainability & Quality (swapnil.s.choudhari@ electroluxprofessional.com) 2-5 External assurance 162 2-6 Activities, value chain, and other business relationships 7 2-7 Employees 44–47, 157–159 2-8 Workers who are not employees 45 ,157 2-9 Governance structure and composition 67–74, 76-79, 159 2-10 Nomination and selection of the highest governance body 69–70 2-11 Chair of the highest governance body 76 2-12 Role of the highest governance body in overseeing the management of impacts 68–74 2-13 Delegation of responsibility for managing impacts 68–74 2-14 Role of the highest governance body in sustainability reporting 150 2-15 Conflicts of interest 74 Page/Information 2-16 Communication of critical concerns 46 2-17 Collective knowledge of the highest governance body 150 2-18 Evaluation of the performance of the highest governance body 150 2-19 Remuneration policies 92-93 2-20 Process to determine remuneration 80–81, 93 2-22 Statement on sustainable development strategy 4–5 2-23 Policy commitments 64–66, 150 2-24 Embedding policy commitments 64–65 2-25 Processes to remediate negative impacts 46, 52, 59, 64, 82–86, 150 2-26 Mechanisms for seeking advice and raising concerns 47 2-27 Compliance with laws and regulations 59, 64, 75 2-28 Membership associations Not followed at group level 2-29 Approach to stakeholder engagement 52, 64–66 2-30 Collective bargaining agreements 157 3-1 Process to determine material topics 50, 52, 55-65 3-2 List of material topics 50–52, 161 3-3 Management of material topics 50–52, 161 P. 161Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 GRI - topic specific indicators Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes - About this report - EU Taxonomy regulation - Data - GRI index Auditor’s report on the sustainability report Share and shareholders Our history GRI - topic specific indicators Page/Information GRI 201 Economic performance (2016) GRI 201-1 Direct economic value, generated and distributed 7 GRI 205 Anti-corruption (2016) GRI 205-2 Communication and training on anti-corruption policies 66, 150, 158 GRI 302 Energy (2016) GRI 302-1 Energy consumption within the organization Included from 2022: Unified Brands in Michigan and Mississippi. Includ- ed from 2019: Spilamberto, Carros and Louisville. Included from 2018: Rayong (beverage) and Shanghai. Other sites included 2016 or earlier. 61, 150-151, 155 GRI 303 Water and effluents (2018) GRI 303-3 Water withdrawal Included from 2022: Unified Brands in Michigan and Mississippi. Includ- ed from 2019: Spilamberto, Carros and Louisville. Included from 2018: Rayong (beverage) and Shanghai. Other sites included 2016 or earlier. 61-62, 155 GRI 303-4 Water discharge 156 GRI 303-5 Water Consumption 61-62, 150 GRI 305 Emissions (2016) GRI 305-1 Direct (Scope 1) GHG emissions Included from 2022: Unified Brands in Michigan and Mississippi. Includ- ed from 2019: Spilamberto, Carros and Louisville. Included fron 2018: Rayong (beverage) and Shanghai. Other sites included 2016 or earlier. 60-61, 156 GRI 305-2 Energy indirect (Scope 2) GHG emissions 61, 150, 156 GRI 305-3 Other indirect (Scope 3) GHG emissions Category 11 61, 150 Page/Information GRI 306 Waste (2020) GRI 306-3 Waste generated Included from 2022: Unified Brands in Michigan and Mississippi. Only disclosing data from 2022. 156 GRI 306-4 Waste diverted from disposal 156 GRI 401 Employment (2016) 157 GRI 401-1 New employee hires and em- ployee turnover 158 GRI 403 Occupational health and safety (2018) GRI 403-9 Work-related injuries Sites above refer to the full scope of operations located on the site (manufacturing, R&D, office func- tions, etc.) 63, 159 GRI 404 Training and education (2016) GRI 404-1 Average hours of training per year per employee 158 GRI 404-3 Percentage of employees receiving regular performance and career development re- views 158 GRI 405 Diversity and equal opportunity (2016) GRI 405-1 Diversity of governance bodies and employees 46, 159 Gender distribution 159 P. 162Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Auditor’s Limited Assurance Report on Sustainability Report Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes - About this report - EU Taxonomy regulation - Data - GRI index Auditor’s report on the sustainability report Share and shareholders Our history Auditor’s Limited Assurance Report on Sustainability Report and statement regarding the Statutory Sustainability Report To Electrolux Professional AB (publ), corporate identity number 556003-0354 Introduction We have been engaged by the Board of Directors and Executive Management of Electrolux Professional AB (publ) to undertake a limited assurance engagement of the Electrolux Professional Sustainability Report for the year 2023. The Company has defined the scope of the Sustainability Report in connection to the table of content in the Annual Report and the Statutory Sustainability Report on page 91. Responsibilities of the Board of Directors and the Executive Management The Board of Directors and the Executive Management are respon- sible for the preparation of the Sustainability Report including the Statutory Sustainability Report in accordance with the applicable criteria and the Annual Accounts Act respectively. The criteria are defined on page 150 in the Sustainability Report, and are part of the Sustainability Reporting Standards published by GRI (Global Reporting Initiative), which are applicable to the Sustainability Report, as well as the accounting and calculation principles that the Company has developed. This responsibility also includes the internal control relevant to the preparation of a Sustainability Report that is free from material misstatements, whether due to fraud or error. Responsibilities of the auditor Our responsibility is to express a conclusion on the Sustainability Report based on the limited assurance procedures we have performed and to express an opinion regarding the Statutory Sustainability Report. Our engagement is limited to historical in- formation presented and does therefore not cover future-oriented information. We conducted our limited assurance engagement in accor- dance with ISAE 3000 (revised) Assurance Engagements Other than Audits or Reviews of Historical Financial Information. A limited assurance engagement consists of making inquiries, primarily of persons responsible for the preparation of the Sustainability Report, and applying analytical and other limited assurance procedures. Our examination regarding the Statutory Sustainability Report has been conducted in accordance with FAR’s accounting standard RevR 12 The auditor’s opinion regarding the Statutory Sustainability Report. A limited assurance engagement and an examination ac- cording to RevR 12 is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. The firm applies International Standard on Quality Management 1, which requires the firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. We are independent of Electrolux Professional in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical re- sponsibilities in accordance with these requirements. e limited assurance procedures performed and the examination according to RevR 12 do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. The conclusion based on a limited assurance engagement and an examination according to RevR 12 does not provide the same level of assurance as a conclusion based on an audit. Our procedures are based on the criteria defined by the Board of Directors and the Executive Management as described above. We consider these criteria suitable for the preparation of the Sustainability Report. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion below. Conclusion Based on the limited assurance procedures we have performed, nothing has come to our attention that causes us to believe that the Sustainability Report, is not prepared, in all material respects, in accordance with the criteria defined by the Board of Directors and Executive Management. A Statutory Sustainability Report has been prepared. Stockholm 27 March 2024 Deloitte AB Jonas Ståhlberg Authorized Public Accountant Adrian Fintling Expert Member of FAR P. 163Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Share and shareholders Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes - About this report - EU Taxonomy regulation - Data - GRI index Auditor’s report on the sustainability report Share and shareholders Our history Other information Share and shareholders 164 Our history 168 P. 164Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Share and shareholders Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes - About this report - EU Taxonomy regulation - Data - GRI index Auditor’s report on the sustainability report Share and shareholders Our history Owner distribution, % of capital Swedish Institutional Owners 65.3% Foreign Institutional Owners 23.7% Swedish Private Individuals 6.7% Other 1.3% Anonymous ownership 3.0% Share price performance, 2023 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 DecNovOctSepAugJulJunMayAprMarFebJan Closing price, SEK 40 50 60 70 80 Electrolux Professional No. of shares traded, thousands per weekOMX Stockholm_PI Share and shareholders Share price and trading Between January 1, 2023 and December 31, 2023 a total of 66 million Electrolux Professional shares were traded, amounting to a value of SEK 3,473m. This corresponds to a daily volume of 261,232 shares. Trading on Nasdaq Stockholm accounted for 52% and Cboe Europe accounted for 40%. The highest bid price (last price paid) during 2023 was SEK 61.40 on May 08, 2023. The lowest last price paid was registered on October 27, 2023 at SEK 40.56. During the period, the Electrolux Professional B share price in- creased by 25.5% while Nasdaq OMX Stockholm PI increased by 15.5%. Share ownership structure At December 31, 2023 Electrolux Professional AB had 44,069 registered shareholders. At December 31, 2023, Investor AB was the largest share- holder with a holding representing 32.5% of the votes and 20.5% of the capital in the company. The second largest shareholder was Swedbank Robur with 8.4% of the votes and 10.5% of the capital. Alecta Pension was the third largest shareholder with 6.8% of the votes and 7.1% of the share capital. Share information According to Electrolux Professional’s Articles of Association, the share capital shall not be less than SEK 20,000,000 and not be more than SEK 80,000,000, divided into not less than 200,000,000 Class A shares and not more than 800,000,000 Class B shares. There are two classes of shares issued in the company, Class A and Class B shares. As of December 31, 2023, the company’s registered share capital amounted to SEK 28,739,745, represented by 287,397,450 shares, of which 8,031,461 were Class A shares and 279,365,989 were Class B shares, each with a quota value of SEK 0.1. The total number of votes amounted to 35,980,527.6. The shares in Electrolux Professional were issued in accordance with Swedish law, are fully paid and denominated in SEK. The shares are not subject to any restrictions on transferability. The rights of the shareholders may only be changed pursuant to the procedures set out in the Swedish Companies Act or the Articles of Association. Dividend policy and history Electrolux Professional’s target is for the dividend to correspond to approximately 30% of the income for the year. Any dividend is normally resolved upon by the Annual General Meeting. The Annual General Meeting of Electrolux Professional will be held on April 25, 2024. The Board of Directors proposes distribution of a dividend to the shareholders of SEK 0.80 (0.70) per share for the 2023 financial year corresponding to approximately 30% of the profit for the year. This is in line with the policy to pay approximately 30% of net income in dividends. The proposed record date is April 29, 2024 and payment is expected to be made on May 3, 2024. Delisting of Class A shares In September 2020, the Company’s series A shares were delisted from Nasdaq Stockholm. P. 165Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Share and shareholders Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes - About this report - EU Taxonomy regulation - Data - GRI index Auditor’s report on the sustainability report Share and shareholders Our history Marketplaces, % 2023 Cboe Global Markets 40.0% ITG 2.0% LSE Group 1.7% Nasdaq 52 .3% Aquis Stock Exchange 0.9 % Sigma-X 0.7% Liquidnet EU Limited Equity MTF 0.9% Instinet Blockmatch Europe 0.8% Conversion of Class A shares Shareholders who hold Class A shares are entitled to convert their shares to Class B shares. In 2023, 13,853 Class A shares were converted to Class B shares. Central securities depository The Company’s shares are book-entry registered in a securities reg- ister in accordance with the Swedish Central Securities Depository and Financial Instruments Accounts Act (Sw. lagen (1998:1479) om värdepapperscentraler och kontoföring av finansiella instrument). The register is operated by Euroclear Sweden (Euroclear Sweden AB, P.O. Box 191, SE-101 23 Stockholm, Sweden). The shares are registered by person. No share certificates have been issued for the shares or will be issued for the new shares. Trading 2023 EPRO B Large Cap Stockholm Average daily turnover, SEK 13,836,987 112,279,227 Average daily turnover rel. mcap 0.09% 0.18% Average daily shares traded 261,232 1,243,093 Number of shares traded 65,569,255 47,933,665,937 Average trades per day 503 2,119 Number of trades 126,373 81,725,441 Average value per trade, SEK 27,483 37,539 High, SEK 61.40 – Low, SEK 40.56 – Volume-Weighted Average Price (VWAP) 52.97 – Ownership structure On December 31, 2023, Electrolux Professional Group had 44,069 registered shareholders. The table below shows Electrolux Professional Group’s ownership structure on December 31, 2023. Owners EPRO A EPRO B Capital, % Votes, % Δ Capital, % Investor 6,420,771 52,520,883 20.51% 32.45% Swedbank Robur Funds 30,172,403 10.50% 8.39% Alecta Tjänstepension 453,900 20,025,098 7.13% 6.83% Handelsbanken Funds 19,484,922 6.78% 5.42% –0.05% Second Swedish National Pension Fund 12,149,652 4.23% 3.38% First Swedish National Pension Fund 12,000,000 4.18% 3.34% 0.07% Nordea Funds 9,929,280 3.45% 2.76% 0.47% AMF Pension & Fonder 1,000,000 7,609,567 3.00% 4.90% 1.45% Vanguard 8,154,699 2.84% 2.27% 0.02% ODIN Fonder 7,000,000 2.44% 1.95% –0.59% Investering & Tryghed A/S 6,327,685 2.20% 1.76% Didner & Gerge Funds 5,827,301 2.03% 1.62% 0.04% C WorldWide Asset Management 5,400,000 1.88% 1.50% Norges Bank 5,040,846 1.75% 1.40% –0.05% BlackRock 3,930,365 1.37% 1.09% Total top 15 7,874,671 205,572,701 74.27% 79.05% 1.36% Others 156,790 73,793,288 25.73% 20.95% –1.36% Total 8,031,461 279,365,989 100.00% 100.00% Data compiled by Modular Finance. Sources: Euroclear, Morningstar, Finansinspektionen, Millistream Owner distribution by country December 31, 2023 Country Number of shares Capital, % Votes, % Number of known owners Share of known owners, % Sweden 209,366,329 72.85% 78.27% 42,335 96.07% United States 24,849,892 8.65% 6.91% 153 0.35% Denmark 14,122,380 4.91% 3.93% 393 0.89% Norway 12,280,783 4.27% 3.41% 285 0.65% Finland 10,814,891 3.76% 3.01% 161 0.37% Other countries 7,325,742 2.55% 2.04% 740 1.68% Unknown country 8,637,433 3.01% 2.42% 2 0.00% Total 287,397,450 100.00% 100.00% 44,069 100.00% Data compiled by Modular Finance. Sources: Euroclear, Morningstar, Finansinspektionen, Millistream. P. 166Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Share and shareholders Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes - About this report - EU Taxonomy regulation - Data - GRI index Auditor’s report on the sustainability report Share and shareholders Our history Owner distribution by holdings December 31, 2023 Size class Number of shares Capital, % Votes, % Number of known owners Share of known owners, % 1–1,000 8,442,966 2.94 2.51 40,157 91.12 1,001–10,000 9,278,736 3.23 2.63 3,675 8.34 10,001–20,000 1,158,104 0.40 0.32 80 0.18 20,001– 259,880,699 90.43 92.12 157 0.36 Unknown holding size 8,636,945 3.01 2.42 0 0.00 Total 287,397,450 100.00 100.00 44,069 100.00 Data compiled by Modular Finance. Sources: Euroclear, Morningstar, Finansinspektionen, Millistream. Share capital development The table below shows the devlopment of the company’s share capital since January 1, 2017. Year Event Class A shares Class B shares Change in share capital, SEK Class A shares Class B shares Total number of shares Total share capital, SEK Quota value, SEK Input value – – – 25,000 – 25,000 25,000,000 1,000 2020 Bonus issue 1 8,167,539 279,204,911 3,739,745 8,192,539 279,204,911 287,397,450 28,739,745 0.1 Sep 30–Dec 31 2020 Conversion –70,012 +70,012 8,120,527 279,276,923 287,397,450 Jan 1–Dec 31 2021 Conversion –72,545 +72,545 8,047,982 279,349,468 287,397,450 Jan 1–Dec 31 2022 Conversion –2,668 +2,668 8,045,314 279,352,136 287,397,450 Jan 1–Dec 31 2023 Conversion –13,853 13,853 8,031,461 279,365,989 287,397,450 1) On February 18, 2020, the Annual General Meeting resolved on a bonus issue. The purpose of the bonus issue was to increase the share capital as well as the number of shares to reflect the share capital structure of Electrolux ahead of the separation of Electrolux Professional from Electrolux. Data compiled by Modular Finance. Sources: Euroclear, Morningstar, Finansinspektionen, Millistream. Other information Ticker Class B share: EPRO B ISIN code Class A share: SE0013720018 ISIN code Class B share: SE0013747870 LEI code: 254900KI62Q46ZWD8084 Analyst coverage At the end of 2023 the following analysts had active coverage of Electrolux Professional Group: DnB NOR Markets, Hanna Lindbo Handelsbanken Capital Markets, Karri Rinta Nordea, Stefan Stjernholm Carnegie, Henrik Christiansson SEB, Gustav Hagéus Kepler Cheuvreux, Johan Eliason Contact IR contact Jacob Broberg Chief Communication and Investor Relations Officer Telephone: +46 70 190 00 33 [email protected] P. 167Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Share and shareholders Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes - About this report - EU Taxonomy regulation - Data - GRI index Auditor’s report on the sustainability report Share and shareholders Our history These key strengths and competitive advantages drive our development and performance, and they all provide a strong foundation for us to execute our strategy. Strong positions in structurally growing underlying end-markets. Geographically balanced busi- ness with a large part being recurring sales. Relatively resil- ient to economic downturns. Track record of delivering solid EBITA, cash flow and cash conversion. Solid balance sheet Focused plan to expand in high-margin products, segments, and geographies, supported by potential M&A. Innovation-focused with attractive pipeline of product launches. Committed to be the sustain- ability leader in our industry. Why invest in Electrolux Professional? Annual General Meeting 2024 The Annual General Meeting of Electrolux Professional will be held on April 25, 2024, at 3pm, at hotel Courtyard by Marriott, Rålambshovsleden 50, Stockholm. To order a printed annual report To order a printed version, please send an email to: [email protected] and provide your full name and address details, together with the preferred language version, Swedish or English. Financial calendar 2024 Date Interim report Q1, January – March 2024 April 24, 2024 Annual General Meeting 2024 April 25, 2024 Proposed dividend record date April 29, 2024 Proposed dividend payment May 3, 2024 Interim report Q2, April – June 2024 July 19, 2024 Interim report Q3, July - September 2024 October 25, 2024 P. 168Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Our history Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes - About this report - EU Taxonomy regulation - Data - GRI index Auditor’s report on the sustainability report Share and shareholders Our history Electrolux Professional’s history Electrolux Professional’s heritage dates back more than 100 years to the period when companies such as Wascator, Zanussi, and Cecilware were formed (subsequently acquired by Electrolux). Until March 23 2020, Electrolux Professional was part of the Electrolux Group. 1960s Entered Professional food equipment. 2010s A stronger position in China and the Asia-Pacific region. Entered Professional beverage solutions with a strengthened position in the US. 2020s Strengthened position in the US primarily in restaurant chains. Continued expansion in Asia. Swedish professional Food company. Founded in 1909 Acquired in 1962 Wascator Heating system and washing machines. Founded in 1902 Acquired in 1972 Zanussi Homes and profes- sional solutions. Founded in 1916 Acquired in 1984 Dito Sama French producer of food prepara- tion equipment. Founded in 1945 Acquired in 1987 Alpeninox Italian producer of refrigeration equip- ment. Founded in 1974 Acquired in 1988 Shanghai Veetsan Professional dishwashers in China. Founded in 2003 Acquired in 2015 Grindmaster Cecilware American hot, cold, and frozen bever- age dispensing equipment. Founded in 1933 Acquired in 2017 Schneidereit Laundry rental solutions for pro- fessional custom- ers in Germany and Austria. Founded in 1957 Acquired in 2018 SPM Italian manufacturer of frozen beverage solutions. Founded in 1996 Acquired in 2018 UNIC French manufac- turer of automat- ic and traditional espresso coffee machines. Founded in 1929 Acquired in 2019 Unified Brands A leading US-based manufacturer of food-service equipment. Founded in 1907 Acquired in 2021 2020 Electrolux Professional listed on Nasdaq Stockholm as an independent company. Company history 1990s Business streamlined and refined. Opera- tional headquarters established in Italy in 1990. Focus on food-service and laundary systems. 2000s International expansion. Operatiional offices in North America, India, Brazil, Dubai and others. Industrial facility for laundry equip- ment opened in Thailand in 2005. TOSEI A leading manufacturer of laundry and vacuum packing machines in Japan. Acquisiton was announced in 2023, and completed in 2024. Founded in 1950 1980s Business grew significantly through organic growth and major acquisitions. Acquisitions 1970s Entered Professional laundry equipment. Food Beverage Laundry Corporate P. 169Electrolux Professional Group – ANNUAL AND SUSTAINABILITY REPORT 2023 Other information INTRODUCTION OUR STRATEGIC FOUNDATION GLOBAL TRENDS & MARKETS BUSINESS SEGMENTS PRODUCTION OUR PEOPLE SUSTAINABILITY GOVERNANCE & RISK MANAGEMENT FINANCIAL INFORMATION OTHER INFORMATION Sustainability notes - About this report - EU Taxonomy regulation - Data - GRI index Auditor’s report on the sustainability report Share and shareholders Our history Electrolux Professional AB (publ), 556003-0354 Postal and visiting address: Franzéngatan 6, SE-112 51 Stockholm, Sweden Telephone: +46 8 41056450 Website: www.electroluxprofessionalgroup.com

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