Electrolux — Earnings Release 2014

Jan 28, 2015

Consolidated Results 2014

Stockholm, January 28, 2015

Highlights of the fourth quarter of 2014	Read more
• Net sales amounted to SEK 31,400m (28,891).	2
• Sales increased by 8.7%, of which 2.0% was organic growth, 0.2% acquisitions and 6.5% currencies. 2
• Strong improvement in operating income for Major Appliances EMEA, Latin America and Asia/Pacific.	4
• New energy requirements and ramp up of a new production facility impacted earnings negatively for Major Appliances North America.	4
• Operating income amounted to SEK 1,472m (1,223), corresponding to a margin of 4.7% (4.2).	2
• Strong cash flow of SEK 1,844m (1,484).	7
• Income for the period, including items affecting comparability, was SEK 970m (–987), and earnings per share was SEK 3.39 (–3.44).	13
• The Board proposes a dividend for 2014 of SEK 6.50 (6.50) per share.	9

Financial overview

SEKm1)	2013	2014	Change, %	Q4 2013	Q4 2014	Change, %
Net sales	109,151	112,143	3	28,891	31,400	9
Organic growth, %	4.5	1.1		3.6	2.0
Operating income	4,055	4,780	18	1,223	1,472	20
Margin, %	3.7	4.3		4.2	4.7
Income after financial items	3,379	4,196	24	1,071	1,369	28
Income for the period	2,809	3,238	15	1,089	1,045	–4
Earnings per share, SEK2)	9.81	11.30		3.80	3.64
Operating cash flow after investments3)	2,412	6,631	175	1,484	1,844	24

1) Figures are excluding items affecting comparability. Items affecting comparability amounted to SEK –77m (–2,393) for the fourth quarter of 2014 and SEK –1,199m (–2,475) for the full year of 2014, see page 13. Items affecting comparability includes costs for restructuring programs to make the Group's production competitive and other restructuring measures to reduce costs. 2) Basic, based on an average of 286.3 (286.2) million shares for the fourth quarter and 286.3 (286.2) million shares for the full year of 2014, excluding shares held by Electrolux. 3) See page 7.

For earnings per share after dilution, see page 13. For definitions, see page 25.

About Electrolux

Electrolux is a global leader in household appliances and appliances for professional use, selling more than 50 million products to customers in more than 150 markets every year. The company makes thoughtfully designed, innovative solutions based on extensive consumer research, meeting the desires of today's consumers and professionals. Electrolux products include refrigerators, dishwashers, washing machines, cookers, air-conditioners and small appliances such as vacuum cleaners, all sold under esteemed brands like Electrolux, AEG, Zanussi and Frigidaire. In 2014, Electrolux had sales of SEK 112 billion and about 60,000 employees. For more information, go to http://electroluxgroup.com/

AB Electrolux (publ) 556009-4178

Market overview

Market overview

Market demand in Europe increased in the fourth quarter year-over-year. Western Europe increased by 3% and Eastern Europe by 1%. In total, the European market improved by 2%. Market demand for core appliances in North America

increased by 8%.

Market demand in Australia is estimated to have increased, while demand in Southeast Asia and China continued to decline.

Demand for appliances in Brazil continued to deteriorate and most other Latin American markets also declined.

Industry shipments of core appliances in Europe* Industry shipments of core appliances in the US*

Sources: Europe: Gfk, North America: AHAM. For other markets there are no comprehensive market statistics.

The fourth quarter in summary*

• Sales increased organically by 2.0%, primarily due to higher sales in Latin America and North America. Acquisitions had a positive sales impact of 0.2% and currencies by 6.5%.
• Mix improvements across most business areas.
• Strong earnings recovery in EMEA.
• Major Appliances Latin America and Asia/Pacific finalized the year strongly.
• Solid development for Professional Products.
• Transition costs for new energy requirements and ramp up of a new production facility impacted earnings for Major Appliances North America.
• Price increases and mix improvements offset the negative impact on results from currency movements.

SEKm	2013	2014	Change, %	Q4 2013	Q4 2014	Change, %
Net sales	109,151	112,143	2.7	28,891	31,400	8.7
Change in net sales, %, whereof
Organic growth	—	—	1.1	—	—	2.0
Acquisitions	—	—	0.0	—	—	0.2
Changes in exchange rates	—	—	1.6	—	—	6.5
Operating income
Major Appliances Europe, Middle East and Africa	347	1,444	316	227	619	173
Major Appliances North America	2,136	1,714	–20	453	134	–70
Major Appliances Latin America	979	1,079	10	224	478	113
Major Appliances Asia/Pacific	467	448	–4	96	200	108
Small Appliances	391	200	–49	227	173	–24
Professional Products	510	671	32	172	189	10
Other, common group costs, etc.	–775	–776	0	–176	–321	–82
Operating income, excluding items affecting comparability	4,055	4,780	18	1,223	1,472	20
Margin, %	3.7	4.3		4.2	4.7
Items affecting comparability	–2,475	–1,199		–2,393	–77
Operating income	1,580	3,581	127	–1,170	1,395	219
Margin, %	1.4	3.2		–4.0	4.4

* All comments are excluding items affecting comparability. For items affecting comparability, see page 13.

Net sales for the Electrolux Group increased by 8.7% in the fourth quarter of 2014, of which 2.0% was organic growth 0.2% acquisitions and 6.5% currencies. The increase was mainly attributable to sales growth for Major Appliances Latin America and North America.

Operating income increased to SEK 1,472m (1,223), corresponding to a margin of 4.7% (4.2).

Operating income for Major Appliances EMEA improved significantly. Lower operational costs, increased efficiency and mix improvements contributed to the strong recovery in results.

Operating income for Major Appliances North America was negatively impacted by cost increases related to the transition of products to comply with new energy requirements and the ramp up of the new cooking plant in Memphis, Tennessee in the US.

Operations for Major Appliances Latin America and Asia/ Pacific continued to perform favorably in soft markets.

Operating income for Small Appliances declined, primarily due to lower sales volumes in the US and Latin America.

Professional Products continued to report improvements in sales and earnings.

Effects of changes in exchange rates

Changes in exchange rates had a negative impact of SEK –128m on operating income year-over-year. The impact of transaction effects was SEK -255m. The negative impact refers mainly to a stronger US dollar against several local currencies in Latin America. This was to a large extent mitigated by price increases and mix improvements. Translation effects in the quarter amounted to SEK 127m. The strenghtening of the US dollar against the Swedish krona had a positive impact on translation in the quarter.

Financial net

Net financial items for the fourth quarter of 2014 amounted to SEK –103m (–152).

Income for the period

Income for the period amounted to SEK 1,045m (1,089), corresponding to SEK 3.64 (3.80) in earnings per share.

Full year of 2014

Net sales for the Electrolux Group in the full year of 2014 amounted to SEK 112,143m (109,151). Net sales increased by 2.7%. Organic growth was 1.1%, while changes in exchange rates had a positive impact of 1.6%.

Operating income improved to SEK 4,780m (4,055), corresponding to a margin of 4.3% (3.7). Mix improvements across most business areas and increased efficiency as a result of measures to reduce overhead costs and improve competitiveness within manufacturing were the main contributors to the improvement in operating income. Major Appliances EMEA showed a strong recovery of the results for 2014.

Share of sales by business area in Q4 2014 Operating income and margin*

Changes in exchange rates had a negative impact of SEK 1,306m on operating income, which to a large extent was mitigated by mix improvements and price increases.

Income for the period excluding items affecting comparability was SEK 3,238m (2,809), corresponding to SEK 11.30 (9.81) in earnings per share. For earnings per share including items affecting comparability, see page 13.

In 2014, Electrolux entered into an agreement to acquire the appliance business of General Electric ("GE Appliances"), one of the premier manufacturers of kitchen and laundry products in the United States, see page 11.

Events during the fourth quarter of 2014

October 7. Electrolux acquired BeefEater in Australia

Electrolux acquired the Australian-based international barbecue business BeefEater, as part of the strategy to grow in this market segment, see page 5 and www. electroluxgroup.com

October 20. Restructuring measures in Europe

The global manufacturing footprint program initiated in 2004 for increased competitiveness is now in its final stages. Consultations are initiated with employee representatives regarding the production in Mariestad, Sweden, and Schwanden, Switzerland, see page 8.,

November 20. Electrolux Capital Markets Day

At Electrolux capital markets day in Charlotte, North Carolina in the US, a status update on the Group's strategy as well as an overview of the current business environment and expectations for the next year were presented. For more information, visit www. electroluxgroup.com

* Excluding items affecting comparability.

Business areas

Major Appliances Europe, Middle East and Africa

The overall market demand for appliances in Europe increased by 2% in the fourth quarter of 2014 year-overyear. Western Europe rose by 3% and Eastern Europe by 1%. Demand in Western Europe increased in most regions, with growth being particularly strong in the Iberian and Benelux countries. Germany, the UK and Italy posted improvements while France and the Nordics remained soft. Market demand in Russia was impacted by the depreciation of the rouble, which led to higher demand in the quarter as customers purchased appliances ahead of expected price increases.

Electrolux showed organic sales growth in the fourth quarter. The growth was a result of an improved product mix in Europe, which compensated for lower sales volumes in the Middle East and Africa and continued price pressure. Active product portfolio management and a strong focus on the most profitable product categories improved the product mix. Sales of products under premium brands, built-in kitchen products and laundry products increased in the quarter.

Operating income improved significantly as a result of the ongoing structural actions to reduce costs and enhance efficiency as well as product mix improvements.

2013	2014	Q4 2013	Q4 2014
–1	2	–1	3
0	0	–2	1
–1	2	–1	2
33,436	34,438	9,281	9,725
–0.2	–0.2	1.1	1.3
347	1,444	227	619
1.0	4.2	2.4	6.4

Major Appliances North America

In the fourth quarter, market demand for core appliances in North America increased by 8% year-over-year. Market demand for major appliances, including microwave ovens and home comfort products, such as room air-conditioners, increased by 7%.

Electrolux organic sales growth in North America was 3% during the fourth quarter. An improved product mix compensated for lower sales volumes and some price pressure. Sales volumes of categories within core appliances such as freezers declined. Sales of air-conditioning equipment remained weak.

Earnings continue to be impacted by the comprehensive transition of refrigerators and freezers as a result of the new energy requirements in the US. In addition, the new cooking facility in Memphis, Tennessee, is still being ramped up which also impacted operating income.

Operating income and margin

Industry shipments of appliances in the US, units, year-over-year, %	2013	2014	Q4 2013	Q4 2014
Core appliances	9	6	10	8
Microwave ovens and home comfort products	–6	4	–3	3
Total Major Appliances	5	6	7	7
SEKm
Net sales	31,864	34,141	7,573	8,924
Organic growth, %	7.6	2.2	7.6	3.0
Operating income	2,136	1,714	453	134
Operating margin, %	6.7	5.0	6.0	1.5

Operating income and margin

Major Appliances Latin America

In the fourth quarter of 2014, market demand declined for core appliances in Brazil and several other Latin American markets year-over-year.

Latin America showed an organic sales growth of 8% in the quarter driven by higher sales prices and mix improvements. Sales volumes increased in Brazil, and Electrolux gained market share, while sales volumes in several other Latin American markets declined due to continued weak market conditions.

Operating income improved year-over-year. Price increases have offset continued currency headwinds and a high rate of inflation. Measures have been taken to adjust the cost base to lower demand.

The fourth quarter of 2013 was negatively impacted by a fire at Electrolux warehouse for refrigerators and freezers in Curitiba, Brazil.

Operating income and margin

SEKm	2013	2014	Q4 2013	Q4 2014
Net sales	20,695	20,041	5,639	6,134
Organic growth, %	6.1	2.8	0.4	8.2
Operating income	979	1,079	224	478
Operating margin, %	4.7	5.4	4.0	7.8

Major Appliances Asia/Pacific

In the fourth quarter of 2014, market demand in Australia stabilized and demonstrated some improvement year-overyear, mainly driven by increased demand for air-conditioners. Demand in China and in several markets in Southeast Asia continued to decline.

Electrolux organic sales declined in the fourth quarter, mainly due to a negative customer mix in China and increased price pressure in Australia. However, sales volumes posted a positive trend in all regions, particularly in Southeast Asia. The acquisition in the fourth quarter of the Australian-based international barbecue business BeefEater had a positive impact of 2.0% on sales.

Operating income showed a strong improvement yearover-year. An improved cost structure and lower marketing spend had a favorable impact on results.

Operating income and margin

SEKm	2013	2014	Q4 2013	Q4 2014
Net sales	8,653	8,803	2,157	2,312
Organic growth, %	10.8	0.4	4.3	–4.0
Acquisitions, %	–	0.6	–	2.0
Operating income	467	448	96	200
Operating margin, %	5.4	5.1	4.5	8.7

Small Appliances

In the fourth quarter of 2014, market demand for vacuum cleaners in Europe and North America is estimated to have declined slightly.

Group sales declined in the fourth quarter mainly due to lower sales volumes of vacuum cleaners, primarily in the US, Latin America and Japan. This was to some extent mitigated by product mix improvements as a result of launches of new vacuum cleaners and small domestic appliances in the premium segment in Europe and Asia/Pacific.

Operating income for the fourth quarter declined yearover-year, primarily due to lower volumes. In addition, negative currency trends mainly related to Latin America and price pressure had an adverse impact on results. This was to some extent mitigated by product mix improvements.

SEKm	2013	2014	Q4 2013	Q4 2014
Net sales	8,952	8,678	2,697	2,664
Organic growth, %	4.4	–4.2	4.8	–6.0
Operating income	391	200	227	173
Operating margin, %	4.4	2.3	8.4	6.5

Professional Products

Year-over-year, overall market demand for professional foodservice and professional laundry equipment improved somewhat during the fourth quarter. Market demand increased in the Nordic countries and the UK, where Electrolux holds a strong position, but slowed down in several other regions in Western Europe. Demand in Eastern Europe declined. Demand in the US and emerging markets displayed growth year-over-year.

Electrolux reported organic growth in the fourth quarter and the Group continued to gain market shares. Sales growth in Western Europe, which accounts for more than 60% of sales, and growth in Africa and the Middle East were the main contributors to this development. The sales growth in emerging markets was primarily the result of the Group's strategic initiatives to grow in new markets and segments, as well as the launches of new products.

Operating income and margin improved as a result of higher sales volumes and increased efficiency within operations.

Operating income and margin

SEKm	2013	2014	Q4 2013	Q4 2014
Net sales	5,550	6,041	1,544	1,641
Organic growth, %	1.7	5.6	10.6	1.9
Operating income	510	671	172	189
Operating margin, %	9.2	11.1	11.1	11.5

Cash flow

Operating cash flow after investments for the fourth quarter of 2014 improved compared with the preceding year and amounted to SEK 1,844m (1,484). The improvement refers mainly to higher earnings. The trend for the cash flow and the working capital in the fourth quarter of 2014 reflects a normal seasonal pattern with increased sales and declining inventories.

Payments for the ongoing restructuring and cost-cutting programs amounted to SEK 315m in the quarter.

Cash flow for the full year of 2014 far exceeded the level in the preceding year. Higher earnings, a significant improvement of the cash flow from working capital and lower capital expenditure were the main contributors to the strong cash flow for 2014. The Group's on-going activities to operationally and structurally reduce working capital contributed to the favorable development of operating cash flow.

Operating cash flow after investments

SEKm	2013	2014	Q4 2013	Q4 2014
EBITDA1)	7,616	8,544	2,043	2,358
Change in operating assets and liabilities	–675	1,777	837	858
Operating cash flow	6,941	10,321	2,880	3,216
Investments in fixed assets2)	–4,529	–3,690	–1,396	–1,372
Operating cash flow after investments	2,412	6,631	1,484	1,844
Restructuring payments	–603	–1,026	–242	–315
Acquisitions and divestments of operations	–205	–69	–3	–1
Operating cash flow after structural changes	1,604	5,536	1,239	1,528
Financial items paid, net	–540	–488	–122	–68
Taxes paid	–1,343	–985	–405	–384
Free cash flow3)	–279	4,063	712	1,076
Dividend	–1,860	–1,861	—	—
Total cash flow, excluding change in loans and short–term investments	–2,139	2,202	712	1,076

1) Operating income excluding items affecting comparability plus depreciation and amortization plus other non-cash items.

2) Investments excluding acquisitions and divestments of operations.

3) Cash flow from operations and investments.

Financial position

The financial net debt decreased by SEK 1,157m during the fourth quarter of 2014 as a result of the strong operating cash flow after investments. Net provision for post-employment benefits increased by SEK 1,193m. In total, net debt increased by SEK 36m during the fourth quarter.

Long-term borrowings as of December 31, 2014, including long-term borrowings with maturities within 12 months, amounted to SEK 12,123m with average maturity of 2.8 years, compared to SEK 12,207m and 3.3 years at the end of 2013. During 2015, long-term borrowings in the amount of SEK 2,594m will mature.

Liquid funds as of December 31, 2014, amounted to SEK 9,835m (7,232), excluding short-term back-up facilities.

Net assets and working capital

Average net assets for the period amounted to SEK 25,166m (27,148). Net assets as of December 31, 2014, amounted to SEK 26,099m (24,961). Adjusted for items affecting comparability, i.e., restructuring provisions, average net assets amounted to SEK 27,941m (28,915), corresponding to 24.9% (26.5) of net sales.

Working capital as of December 31, 2014, amounted to SEK –8,377m (–5,800), corresponding to –6.6% (–5.1) of annualized net sales. The return on net assets was 14.2% (5.8), and 17.1% (14.0), excluding items affecting comparability.

Net debt

SEKm	Dec. 31, 2013	Dec. 31, 2014
Borrowings	14,905	14,703
Liquid funds1)	7,232	9,835
Financial net debt	7,673	4,868
Net provisions for post-employment benefits	2,980	4,763
Net debt	10,653	9,631
Net debt/equity ratio	0.74	0.58
Equity	14,308	16,468
Equity per share, SEK	49.99	57.52
Return on equity, %	4.4	15.7
Equity/assets ratio, %	20.8	21.7

1) Electrolux has two unused committed back-up facilities. One credit facility of SEK 3,400m maturing in 2017 and one EUR 500m multi-currency revolving credit facility, approximately SEK 4,730m, maturing in 2018.

Structural changes

In 2013, Electrolux communicated actions to reduce annual costs by SEK 1.8bn for a charge of SEK 3.4bn. Cost savings will be achieved through manufacturing footprint restructuring as well as through overhead-cost reductions. These actions relate mainly to Major Appliances Europe, Middle East and Africa, but also to other business areas and Group staff.

In the fourth quarter of 2014, consultations were initiated with employee representatives regarding the production in Mariestad, Sweden, and Schwanden, Switzerland. These processes also include reviews of potential alternative solutions for the plants. In the quarter, a decision was taken to cease Electrolux production at the plant in Schwanden. Restructuring costs are expected to approximately SEK 336m for both projects.

However, in the quarter there were also reversals of previous restructuring provisions not utilized, as well as some granted external funding for the above mentioned projects. The reversals of unused restructuring provisions relate primarily to the production facility in Revin, France, in the amount of SEK 160m and other projects including IT restructuring. In total, the charge within operating income was therefore reduced to SEK 77m, see page 13.

In total, restructuring costs amounting to SEK 2.8bn of the SEK 3.4bn plan have been charged to operating income within items affecting comparability. This restructuring program has now come to an end. As previously communicated, Electrolux will eliminate the accounting practice of "items affecting comparability". As of 2015, any potential future restructuring charges will be taken directly to earnings.

Annual General Meeting

The Annual General Meeting of AB Electrolux will be held on March 26, 2015, at The Brewery Conference Centre (Münchenbryggeriet), situated at Torkel Knutssonsgatan 2 in Stockholm, Sweden.

Proposed dividend

The Board of Directors proposes a dividend for 2014 of SEK 6.50 (6.50) per share, for a total dividend payment of approximately SEK 1,861m (1,861). The proposed dividend corresponds to approximately 57% (66) of income for the period, excluding items affecting comparability. Monday, March 30, 2015, is proposed as record date for the dividend. The estimated date for payment of dividends is Thursday, April 2, 2015.

The Group's goal is for the dividend to correspond to at least 30% of income for the period, excluding items affecting comparability.

Historically, Electrolux dividend rate has been considerably higher than 30%. Electrolux has a long tradition of high total distribution to shareholders that includes repurchases and redemptions of shares as well as dividends.

Proposal for resolution on acquisition of own shares

Electrolux has previously, on the basis of authorizations by the Annual General Meetings, acquired own shares. The purpose of the repurchase programs has been to adapt the Group's capital structure, thus contributing to increased shareholder value and to use these shares to finance potential company acquisitions and as a hedge for the company's share-related incentive programs.

The Board of Directors makes the assessment that it continues to be advantageous for the company to be able to adapt the company's capital structure, thereby contributing to increased shareholder value, and to continue to be able to use repurchased shares on account of potential company acquisitions and the company's share-related incentive programs.

The Board of Directors proposes the Annual General Meeting 2015 to authorize the Board of Directors, for the period until the next Annual General Meeting, to resolve on acquisitions of shares in the company and that the company may acquire as a maximum so many B shares that, following each acquisition, the company holds at a maximum 10% of all shares issued by the company.

As of December 31, 2014, Electrolux holds 22,599,884 B shares in Electrolux, corresponding to approximately 7.3% of the total number of shares in the company.

Nomination Committee for the AGM 2015

In accordance with decision by the Annual General Meeting, Electrolux Nomination Committee shall consist of six members. The members should be one representative of each of the four largest shareholders in terms of voting rights that wish to participate in the committee, together with the Chairman of the Electrolux Board and one additional Board member.

The members of the Nomination Committee have been appointed based on the ownership structure as of August 29, 2014. Börje Ekholm, Investor AB, is the Chairman of the committee. The other owner representatives are Kaj Thorén, Alecta, Mathias Leijon, Nordea Investment Management, and Marianne Nilsson, Swedbank Robur funds. The committee also includes Ronnie Leten and Torben Ballegaard Sørensen, Chairman and Director, respectively, of Electrolux.

The Nomination Committee will prepare proposals for the Annual General Meeting in 2015 regarding Chairman of the Annual General Meeting, Board members, Chairman of the Board, remuneration for Board members and, to the extent deemed necessary, proposal regarding amendments of the current instruction for the Nomination Committee.

Shareholders who wish to submit proposals to the Nomination Committee should send an email to nominationcommittee@electrolux.com

Other items

Asbestos litigation in the US

Litigation and claims related to asbestos are pending against the Group in the US. Almost all of the cases refer to externally supplied components used in industrial products manufactured by discontinued operations prior to the early 1970s. The cases involve plaintiffs who have made substantially identical allegations against other defendants who are not part of the Electrolux Group.

As of December 31, 2014, the Group had a total of 3,070 (2,980) cases pending, representing approximately 3,129 (approximately 3,040) plaintiffs. During the fourth quarter of 2014, 315 new cases with 315 plaintiffs were filed and 419 pending cases with approximately 428 plaintiffs were resolved.

It is expected that additional lawsuits will be filed against Electrolux. It is not possible to predict the number of future lawsuits.

In addition, the outcome of asbestos lawsuits is difficult to predict and Electrolux cannot provide any assurances that the resolution of these types of lawsuits will not have a material adverse effect on its business or on results of operations in the future.

Risks and uncertainty factors

As an international group with a wide geographic spread, Electrolux is exposed to a number of business and financial risks. The business risks can be divided into strategic, operational and legal risks. The financial risks are related to such factors as exchange rates, interest rates, liquidity, the giving of credit and financial instruments.

Risk management in Electrolux aims to identify, control and reduce risks. This work begins with the description of risks and risk management, see the 2013 Annual Report on page 76. No significant risks other than the risks described there are judged to have occurred.

Risks, risk management and risk exposure are described in more detail in the Annual Report 2013, www.electrolux.com/ annualreport2013

Press releases 2014

January 22	Electrolux named Industry Leader in RobecoSAM annual rating
January 31	Consolidated results 2013 and CEO Keith McLoughlin's comments
February 21	Notice convening the Annual General Meeting of AB Electrolux
February 21	Changes to the Board of AB Electrolux
February 21	Electrolux Annual Report 2013 is published
March 6	Electrolux Capital Markets Day in Charlotte, USA, November 20, 2014
March 26	Electrolux unveils new climate impact target in 2013 Sustainability Report
March 27	Bulletin from AB Electrolux Annual General Meeting 2014
April 25	Interim Report January-March 2014 and CEO Keith McLoughlin's comments
May 7	Electrolux Design Lab Top 100+ are online

May 28	Electrolux issues Bond Loan
July 18	Interim Report January-June 2014 and CEO Keith McLoughlin's comments
August 27	Electrolux joins AllSeen Alliance to enable seamlessly connected appliances
September 8	Electrolux to acquire GE Appliances
September 11	Electrolux leads Household Durables in Dow Jones Sustainability Indices
September 12	Electrolux Ergorapido turns 10 and 10 million sold
September 25	Nomination Committee appointed for Electrolux Annual General Meeting 2015
October 7	Electrolux acquires Australian BBQ business
November 20	Electrolux Capital Markets Day

Acquisition of GE Appliances

On September 8, 2014, Electrolux announced it has entered into an agreement to acquire the appliance business of General Electric ("GE Appliances"), one of the premier manufacturers of kitchen and laundry products in the United States, for a cash consideration of USD 3.3 billion. The acquisition enhances Electrolux position as a global player in home appliances, offering an unparalleled opportunity to invest in innovation and growth, which will benefit consumers, retailers, employees and shareholders.

Highlights

• Attractive strategic fit in North America.
• Significant synergies, primarily in sourcing and operations.
• Cash consideration of USD 3.3 billion.

• Transaction expected to be EPS accretive from year one.

• Financing is provided by a committed bridge facility and the transaction is not subject to any financing conditions. A rights issue corresponding to approximately 25% of the consideration is planned following completion of the acquisition.

• Completion of the acquisition is mainly subject to regulatory approvals.

Transaction rationale and synergies

The acquisition of GE Appliances is an important step for Electrolux towards realizing the Group's vision: to be the best appliance company in the world as measured by customers, employees and shareholders.

The scale and efficiencies from combining the businesses create a solid financial foundation from which to drive growth in the increasingly global and competitive appliance industry. The Electrolux Group will further strengthen its capacity to invest in innovation and growth. Electrolux has secured the right to the GE Appliances' brands through a long term license agreement with GE.

The transaction is expected to generate annual cost synergies of approximately USD 300 million. One-off implementation costs and capital expenditures are estimated to USD 300 million and USD 50-70 million, respectively. The largest parts of the synergies are expected in sourcing, operations, logistics and brands.

Description of GE Appliances

GE Appliances is headquartered in Louisville, Kentucky, and generates more than 90% of its revenue in North America. GE Appliances' product portfolio includes refrigerators, freezers, cooking products, dishwashers, washers, dryers, air-conditioners, waterfiltration systems and water heaters. Its revenue split by major product category is approximately 35% cooking, 25% refrigeration, 20% laundry, 10% dishwashers and 10% home comfort (A/C). The company operates its own distribution and logistics network and has nine well-invested manufacturing facilities with 12,000 employees.

The acquisition includes a 48.4% shareholding in the Mexican appliance company Mabe. For nearly 30 years, GE Appliances has had a joint venture with Mabe in Mexico where Mabe develops and manufactures portions of GE Appliances' product offering.

In 2013, GE Appliances had sales of USD 5.7 billion (SEK 37 billion) and an EBITDA of USD 390 million (SEK 2.5 billion) including share of income from Mabe.

Transaction terms and timing

Electrolux will acquire GE Appliances for a cash consideration of USD 3.3 billion. The deal is structured primarily as an asset transaction.

Completion of the transaction is mainly subject to regulatory approvals. The acquisition is expected to close during 2015.

As is customary in the United States in certain types of transactions, Electrolux has agreed to pay a termination fee of USD 175 million in certain circumstances involving the failure to obtain regulatory approvals.

Proforma financials 2013, before synergies

		GE Appliances incl. 48.4% of
USD billion1)	Electrolux	Mabe2)	Combined
Sales	16.8	5.7	22.5
EBITDA	1.1	0.4	1.5
EBITDA margin, %	6.8	6.8	6.8

1) Figures in SEK have been converted to USD at an exchange rate of SEK/USD 6.515, the average exchange rate in 2013.

The above figures are for illustrative purposes and do not include any impact from synergies, implementation costs and amortization of surplus values resulting from the purchaseprice allocation.

The effect of the transaction on Electrolux earnings per share is expected to be accretive from year one. The EBITDA multiple for the full year 2014 is expected to be in the range of 7.0-7.3x.

The transaction is expected to contribute positively to cash flow. The financial position of Electrolux, after completion of the planned rights issue, is expected to be consistent with a financial policy to retain an investment grade credit rating.

Extract from the press release, Electrolux to acquire GE Appliances, of September 8, 2014.

For more information on the rationale behind the acquisition, as well as financing, please read the full press release and listen to the investor and press telephone conference held on September 8 at http://www.electrolux.com /ir

Parent Company AB Electrolux

The Parent Company comprises the functions of the Group's head office, as well as five companies operating on a commission basis for AB Electrolux.

Net sales for the Parent Company AB Electrolux for the full year of 2014 amounted to SEK 29,508m (28,856) of which SEK 23,757m (23,484) referred to sales to Group companies and SEK 5,751m (5,372) to external customers. Income after financial items was SEK 1,398m (-1,861), including dividends from subsidiaries in the amount of SEK 2,616m (2,004). Income for the period amounted to SEK 1,830m (-909).

Capital expenditure in tangible and intangible assets was SEK 255m (524). Liquid funds at the end of the period amounted to SEK 4,601m, as against SEK 2,795m at the start of the year.

Undistributed earnings in the Parent Company at the end of the period amounted to SEK 12,617m, as against SEK 12,531m at the start of the year. Dividend payment to shareholders for 2013 amounted to SEK 1,861m.

The income statement and balance sheet for the Parent Company are presented on page 22.

Stockholm, January 28, 2015

Keith McLoughlin President and CEO

Accounting and valuation principles

Electrolux applies International Financial Reporting Standards (IFRS) as adopted by the European Union. This report has been prepared in accordance with IAS 34, Interim Financial Reporting, and ÅRL, the Swedish Annual Accounts Act and recommendation RFR 2, Accounting for legal entities, issued by the Swedish Financial Reporting Board. There are no changes in the Group's accounting and valuation principles compared with the accounting and valuation principles described in Note 1 of the Annual Report 2013.

This report has not been audited.

Consolidated income statement

SEKm	2013	2014	Q4 2013	Q4 2014
Net sales	109,151	112,143	28,891	31,400
Cost of goods sold	–87,892	–90,488	–23,187	–25,358
Gross operating income1)	21,259	21,655	5,704	6,042
Selling expenses	–11,564	–11,600	–3,149	–3,140
Administrative expenses	–5,646	–5,378	–1,350	–1,487
Other operating income/expenses	6	103	18	57
Items affecting comparability	–2,475	–1,199	–2,393	–77
Operating income	1,580	3,581	–1,170	1,395
Margin, %	1.4	3.2	–4.0	4.4
Financial items, net	–676	–584	–152	–103
Income after financial items	904	2,997	–1,322	1,292
Margin, %	0.8	2.7	–4.6	4.1
Taxes	–232	–755	335	–322
Income for the period	672	2,242	–987	970
Items that will not be reclassified to income for the period:
Remeasurement of provisions for post-employment benefits	1,851	–1,534	182	–990
Income tax relating to items that will not be reclassi
fied	–636	808	–160	343
	1,215	–726	22	–647
Items that may be reclassified subsequently to income for the period:
Available for sale instruments	–69	19	–1	—
Cash flow hedges	41	–30	92	–34
Exchange-rate differences on translation of foreign operations	–1,518	2,428	–109	867
Income tax relating to items that may be reclassified	29	–10	–4	–10
	–1,517	2,407	–22	823
Other comprehensive income, net of tax	–302	1,681	—	176
Total comprehensive income for the period	370	3,923	–987	1,146
Income for the period attributable to:
Equity holders of the Parent Company	671	2,241	–987	969
Non-controlling interests	1	1	—	1
Total	672	2,242	–987	970
Total comprehensive income for the period attributable to:
Equity holders of the Parent Company	374	3,922	–986	1,144
Non-controlling interests	–4	1	–1	2
Total	370	3,923	–987	1,146
Earnings per share, SEK	2.35	7.83	–3.44	3.39
Diluted, SEK	2.34	7.78	–3.43	3.36
Number of shares after buy-backs, million	286.2	286.3	286.2	286.3
Average number of shares after buy-backs, million	286.2	286.3	286.2	286.3
Diluted, million	287.3	288.2	287.7	288.7

1) As of 2014, selling and administrative costs in the factories are included in cost of goods sold. This reporting change reduces the reported gross operating income annually by approximately SEK 450m with the corresponding reductions in the line items selling and administrative expenses. The change in calculation has no impact on operating income and previous periods have not been restated.

Items affecting comparability

SEKm	2013	2014	Q4 2013	Q4 2014
Restructuring provisions and write-downs
Manufacturing footprint restructuring	–594	–1,173	–512	–250
Program for reduction of overhead costs	–975	–199	–975	—
Impairment of ERP system	–906	—	–906	—
Reversal of unused restructuring provisions	0	173	—	173
Total	–2,475	–1,199	–2,393	–77

Consolidated balance sheet

SEKm	Dec. 31, 2013	Dec. 31, 2014
Assets
Property, plant and equipment	17,264	18,934
Goodwill	4,875	5,350
Other intangible assets	4,011	3,878
Investments in associates	221	228
Deferred tax assets	4,385	5,351
Financial assets	279	312
Pension plan assets	445	399
Other non-current assets	752	1,110
Total non-current assets	32,232	35,562
Inventories	12,154	14,324
Trade receivables	19,441	20,663
Tax assets	746	784
Derivatives	268	375
Other current assets	4,405	4,774
Short-term investments	148	99
Cash and cash equivalents	6,607	9,107
Total current assets	43,769	50,126
Total assets	76,001	85,688
Equity and liabilities
Equity attributable to equity holders of the Parent Company
Share capital	1,545	1,545
Other paid-in capital	2,905	2,905
Other reserves	–2,658	–251
Retained earnings	12,482	12,235
	14,274	16,434
Non-controlling interests	34	34
Total equity	14,308	16,468
Long-term borrowings	11,935	9,529
Deferred tax liabilities	1,026	687
Provisions for post-employment benefits	3,425	5,162
Other provisions	4,522	5,665
Total non-current liabilities	20,908	21,043
Accounts payable	20,607	25,705
Tax liabilities	1,331	1,042
Short-term liabilities	12,886	13,531
Short-term borrowings	2,733	4,960
Derivatives	194	156
Other provisions	3,034	2,783
Total current liabilities	40,785	48,177
Total equity and liabilities	76,001	85,688
Contingent liabilities	1,458	3,739

Change in consolidated equity

SEKm	Dec. 31, 2013	Dec. 31, 2014
Opening balance	15,726	14,308
Total comprehensive income for the period	370	3,923
Share-based payment	77	99
Dividend	–1,860	–1,862
Acquisition of operations	–5	—
Total transactions with equity holders	–1,788	–1,763
Closing balance	14,308	16,468

Consolidated cash flow statement

SEKm	2013	2014	Q4 2013	Q4 2014
Operations
Operating income	1,580	3,581	–1,170	1,395
Depreciation and amortization	3,356	3,671	876	943
Restructuring provisions	1,855	173	2,141	–238
Other non-cash items	222	93	–46	–57
Financial items paid, net	–540	–488	–122	–68
Taxes paid	–1,343	–985	–405	–384
Cash flow from operations, excluding change in operating assets and liabilities	5,130	6,045	1,274	1,591
Change in operating assets and liabilities
Change in inventories	165	–929	1,306	1,520
Change in trade receivables	–1,932	195	–974	–1,721
Change in accounts payable	609	3,160	–217	857
Change in other operating assets, liabilities and provi sions	483	–649	722	202
Cash flow from change in operating assets and lia bilities	–675	1,777	837	858
Cash flow from operations	4,455	7,822	2,111	2,449
Investments
Acquisition of operations1)	–205	–69	–3	–1
Capital expenditure in property, plant and equipment	–3,535	–3,006	–1,189	–1,152
Capital expenditure in product development	–442	–355	–95	–88
Capital expenditure in software	–514	–290	–61	–91
Other2)	–38	–39	–51	–41
Cash flow from investments	–4,734	–3,759	–1,399	–1,373
Cash flow from operations and investments	–279	4,063	712	1,076
Financing
Change in short-term investments	–25	49	9	—
Change in short-term borrowings	1,151	367	1,065	449
New long-term borrowings	3,039	1,952	—	930
Amortization of long-term borrowings	–1,851	–2,254	–5	–1,005
Dividend	–1,860	–1,861	—	—
Cash flow from financing	454	–1,747	1,069	374
Total cash flow	175	2,316	1,781	1,450
Cash and cash equivalents at beginning of period	6,835	6,607	4,971	7,616
Exchange-rate differences referring to cash and cash equivalents	–403	184	–145	41
Cash and cash equivalents at end of period	6,607	9,107	6,607	9,107

1) Includes the purchase and subsequent divestment of the Electrolux head-office building in 2013. Electrolux remaining investment in the real estate company is SEK 200m.

2) Includes grants related to investments of SEK 222m for the full year of 2013.

Key ratios

SEKm unless otherwise stated	2013	2014	Q4 2013	Q4 2014
Net sales	109,151	112,143	28,891	31,400
Organic growth, %	4.5	1.1	3.6	2.0
Items affecting comparability	–2,475	–1,199	–2,393	–77
Operating income	1,580	3,581	–1,170	1,395
Margin, %	1.4	3.2	–4.0	4.4
Income after financial items	904	2,997	–1,322	1,292
Income for the period	672	2,242	–987	970
Capital expenditure, property, plant and equipment	–3,535	–3,006	–1,189	–1,152
Operating cash flow after investments	2,412	6,631	1,484	1,844
Earnings per share, SEK1)	2.35	7.83	–3.44	3.39
Equity per share, SEK	49.99	57.52	49.99	57.52
Capital–turnover rate, times/year	4.0	4.5	—	—
Return on net assets, %	5.8	14.2	—	—
Return on equity, %	4.4	15.7	—	—
Net debt	10,653	9,631	10,653	9,631
Net debt/equity ratio	0.74	0.58	–	–
Average number of shares excluding shares owned by Electrolux, million	286.2	286.3	286.2	286.3
Average number of employees	60,754	60,038	61,228	60,695
Excluding items affecting comparability
Operating income	4,055	4,780	1,223	1,472
Margin, %	3.7	4.3	4.2	4.7
Earnings per share, SEK¹)	9.81	11.30	3.80	3.64
Capital–turnover rate, times/year	3.8	4.0	—	—
Return on net assets, %	14.0	17.1	—	—

1) Basic, based on average number of shares, excluding shares owned by Electrolux.

For definitions, see page 25.

Shares

Number of shares	Outstanding A–shares	Outstanding B–shares	Outstanding shares, total	Shares held by Electrolux	Shares held by other shareholders
Number of shares as of January 1, 2014	8,192,539	300,727,769	308,920,308	22,708,321	286,211,987
Conversion of A–shares into B–shares	—	—	—	—	—
Sale of shares	—	—	—	—	—
Shares allotted to senior managers under the Performance Share Program	—	—	—	–108,437	108,437
Number of shares as of December 31, 2014	8,192,539	300,727,769	308,920,308	22,599,884	286,320,424
As % of total number of shares				7.3%

Exchange rates

SEK	Dec. 31, 2013	Dec. 31, 2014
AUD, average	6.29	6.17
AUD, end of period	5.75	6.37
BRL, average	3.03	2.92
BRL, end of period	2.76	2.93
CAD, average	6.32	6.23
CAD, end of period	6.04	6.70
EUR, average	8.67	9.11
EUR, end of period	8.91	9.47
GBP, average	10.23	11.31
GBP, end of period	10.67	12.11
HUF, average	0.0292	0.0295
HUF, end of period	0.0300	0.0301
USD, average	6.52	6.89
USD, end of period	6.47	7.79

Net sales by business area

SEKm	2013	2014	Q4 2013	Q4 2014
Major Appliances Europe, Middle East and Africa	33,436	34,438	9,281	9,725
Major Appliances North America	31,864	34,141	7,573	8,924
Major Appliances Latin America	20,695	20,041	5,639	6,134
Major Appliances Asia/Pacific	8,653	8,803	2,157	2,312
Small Appliances	8,952	8,678	2,697	2,664
Professional Products	5,550	6,041	1,544	1,641
Other	1	1	—	—
Total	109,151	112,143	28,891	31,400

Operating income by business area

SEKm	2013	2014	Q4 2013	Q4 2014
Major Appliances Europe, Middle East and Africa	347	1,444	227	619
Margin, %	1.0	4.2	2.4	6.4
Major Appliances North America	2,136	1,714	453	134
Margin, %	6.7	5.0	6.0	1.5
Major Appliances Latin America	979	1,079	224	478
Margin, %	4.7	5.4	4.0	7.8
Major Appliances Asia/Pacific	467	448	96	200
Margin, %	5.4	5.1	4.5	8.7
Small Appliances	391	200	227	173
Margin, %	4.4	2.3	8.4	6.5
Professional Products	510	671	172	189
Margin, %	9.2	11.1	11.1	11.5
Common group costs, etc.	–775	–776	–176	–321
Total Group, excluding items affecting comparability	4,055	4,780	1,223	1,472
Margin, %	3.7	4.3	4.2	4.7
Items affecting comparability	–2,475	–1,199	–2,393	–77
Operating income	1,580	3,581	–1,170	1,395
Margin, %	1.4	3.2	–4.0	4.4

Change in net sales by business area

Year–over–year, %	2014	2014 in local currencies	Q4 2014	Q4 2014 in local currencies
Major Appliances Europe, Middle East and Africa	3.0	–0.2	4.8	1.3
Major Appliances North America	7.1	2.2	17.8	3.0
Major Appliances Latin America	–3.2	2.8	8.8	8.2
Major Appliances Asia/Pacific	1.7	1.0	7.2	–2.0
Small Appliances	–3.1	–4.2	–1.2	–6.0
Professional Products	8.8	5.6	6.3	1.9
Total change	2.7	1.1	8.7	2.2

Change in operating income by business area

Year–over–year, %	2014	2014 in local currencies	Q4 2014	Q4 2014 in local currencies
Major Appliances Europe, Middle East and Africa	316.1	287.4	172.7	145.6
Major Appliances North America	–19.8	–23.3	–70.4	–80.6
Major Appliances Latin America	10.2	21.0	113.4	123.7
Major Appliances Asia/Pacific	–4.1	–4.4	108.3	76.3
Small Appliances	–48.8	–48.7	–23.8	–28.4
Professional Products	31.6	29.0	9.9	5.5
Total change, excluding items affecting comparability	17.9	15.1	20.4	8.9

Working capital and net assets

SEKm	Dec. 31, 2013	% of annualized net sales	Dec. 31, 2014	% of annualized net sales
Inventories	12,154	10.6	14,324	11.2
Trade receivables	19,441	17.0	20,663	16.2
Accounts payable	–20,607	–18.0	–25,705	–20.1
Provisions	–7,556		–8,448
Prepaid and accrued income and expenses	–7,933		–8,495
Taxes and other assets and liabilities	–1,299		–716
Working capital	–5,800	–5.1	–8,377	–6.6
Property, plant and equipment	17,264		18,934
Goodwill	4,875		5,350
Other non-current assets	5,263		5,528
Deferred tax assets and liabilities	3,359		4,664
Net assets	24,961	21.8	26,099	20.4
Average net assets	27,148	24.9	25,166	22.4
Average net assets, excluding items affecting comparability	28,915	26.5	27,941	24.9

Net assets by business area

	Assets			Equity and liabilities	Net assets
SEKm	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014
Major Appliances Europe, Middle East and Africa	22,936	22,484	14,408	15,650	8,528	6,834
Major Appliances North America	12,886	16,555	7,606	9,968	5,280	6,587
Major Appliances Latin America	12,875	14,574	6,321	7,661	6,554	6,913
Major Appliances Asia/Pacific	4,866	5,713	2,852	3,250	2,014	2,463
Small Appliances	4,756	5,144	3,202	3,676	1,554	1,468
Professional Products	2,720	2,931	1,760	2,012	960	919
Other1)	7,285	8,053	7,214	7,138	71	915
Total operating assets and liabilities	68,324	75,454	43,363	49,355	24,961	26,099
Liquid funds	7,232	9,835	—	—	—	—
Interest-bearing receivables	—	—	—	—	—	—
Interest-bearing liabilities	—	—	14,905	14,703	—	—
Pension assets and liabilities	445	399	3,425	5,162	—	—
Equity	—	—	14,308	16,468	—	—
Total	76,001	85,688	76,001	85,688	—	—

1) Includes common functions, tax items and restructuring provisions.

Net sales and income per quarter

SEKm	Q1 2013	Q2 2013	Q3 2013	Q4 2013	Full year 2013	Q1 2014	Q2 2014	Q3 2014	Q4 2014	Full year 2014
Net sales	25,328	27,674	27,258	28,891	109,151	25,629	26,330	28,784	31,400	112,143
Operating income	638	1,037	1,075	–1,170	1,580	731	63	1,392	1,395	3,581
Margin, %	2.5	3.7	3.9	–4.0	1.4	2.9	0.2	4.8	4.4	3.2
Operating income, excluding items affecting comparability	720	1,037	1,075	1,223	4,055	749	1,167	1,392	1,472	4,780
Margin, %	2.8	3.7	3.9	4.2	3.7	2.9	4.4	4.8	4.7	4.3
Income after financial items	483	859	884	–1,322	904	575	–120	1,250	1,292	2,997
Income after financial items, excluding items affecting compara bility	565	859	884	1,071	3,379	593	984	1,250	1,369	4,196
Income for the period	361	642	656	–987	672	431	–92	933	970	2,242
Earnings per share, SEK1)	1.26	2.24	2.29	–3.44	2.35	1.50	–0.32	3.26	3.39	7.83
Earnings per share, SEK, excluding items affecting comparability1)	1.48	2.24	2.29	3.80	9.81	1.55	2.85	3.26	3.64	11.30
Items affecting comparability2)	–82	—	—	–2,393	–2,475	–18	–1,104	—	–77	–1,199
Number of shares after buy-backs, million	286.2	286.2	286.2	286.2	286.2	286.2	286.3	286.3	286.3	286.3
Average number of shares after buy-backs, million	286.2	286.2	286.2	286.2	286.2	286.2	286.3	286.3	286.3	286.3

1) Basic, based on average number of shares, excluding shares owned by Electrolux.

2) Restructuring provisions and write-downs.

Net sales and operating income by business area per quarter

SEKm	Q1 2013	Q2 2013	Q3 2013	Q4 2013	Full year 2013	Q1 2014	Q2 2014	Q3 2014	Q4 2014	Full year 2014
Major Appliances Europe, Middle East and Africa
Net sales	7,595	8,040	8,520	9,281	33,436	7,865	8,107	8,741	9,725	34,438
Operating income	11	–2	111	227	347	142	199	484	619	1,444
Margin, %	0.1	0.0	1.3	2.4	1.0	1.8	2.5	5.5	6.4	4.2
Major Appliances North America
Net sales	7,678	8,448	8,165	7,573	31,864	7,664	8,464	9,089	8,924	34,141
Operating income	457	663	563	453	2,136	382	680	518	134	1,714
Margin, %	6.0	7.8	6.9	6.0	6.7	5.0	8.0	5.7	1.5	5.0
Major Appliances Latin America
Net sales	4,885	5,472	4,699	5,639	20,695	4,790	4,064	5,053	6,134	20,041
Operating income	251	261	243	224	979	217	142	242	478	1,079
Margin, %	5.1	4.8	5.2	4.0	4.7	4.5	3.5	4.8	7.8	5.4
Major Appliances Asia/Pacific
Net sales	1,948	2,227	2,321	2,157	8,653	1,928	2,221	2,342	2,312	8,803
Operating income	106	148	117	96	467	21	102	125	200	448
Margin, %	5.4	6.6	5.0	4.5	5.4	1.1	4.6	5.3	8.7	5.1
Small Appliances
Net sales	2,020	2,104	2,131	2,697	8,952	2,001	1,938	2,075	2,664	8,678
Operating income	17	50	97	227	391	33	–41	35	173	200
Margin, %	0.8	2.4	4.6	8.4	4.4	1.6	–2.1	1.7	6.5	2.3
Professional Products
Net sales	1,201	1,383	1,422	1,544	5,550	1,380	1,536	1,484	1,641	6,041
Operating income	59	112	167	172	510	126	172	184	189	671
Margin, %	4.9	8.1	11.7	11.1	9.2	9.1	11.2	12.4	11.5	11.1
Other
Net sales	1	—	—	—	1	1	—	—	—	1
Operating income, common group costs, etc.	–181	–195	–223	–176	–775	–172	–87	–196	–321	–776
Total Group, excluding items affect ing comparability
Net sales	25,328	27,674	27,258	28,891	109,151	25,629	26,330	28,784	31,400	112,143
Operating income	720	1,037	1,075	1,223	4,055	749	1,167	1,392	1,472	4,780
Margin, %	2.8	3.7	3.9	4.2	3.7	2.9	4.4	4.8	4.7	4.3
Items affecting comparability	–82	—	—	–2,393	–2,475	–18	–1,104	—	–77	–1,199
Total Group
Net sales	25,328	27,674	27,258	28,891	109,151	25,629	26,330	28,784	31,400	112,143
Operating income	638	1,037	1,075	–1,170	1,580	731	63	1,392	1,395	3,581
Margin, %	2.5	3.7	3.9	–4.0	1.4	2.9	0.2	4.8	4.4	3.2

Fair value and carrying amount on financial assets and liabilities

	Full year 2013		Q4 2013		Q4 2014
SEKm	Fair value	Carrying amount	Fair value	Carrying amount	Fair value	Carrying amount
Per category
Financial assets at fair value through profit and loss	2,021	2,021	2,021	2,021	2,971	2,971
Available for sale	160	160	160	160	177	177
Loans and receivables	20,664	20,664	20,664	20,664	22,124	22,124
Cash	3,871	3,871	3,871	3,871	5,289	5,289
Total financial assets	26,716	26,716	26,716	26,716	30,561	30,561
Financial liabilities at fair value through profit and loss	171	171	171	171	157	157
Financial liabilities measured at amortized cost	35,405	35,275	35,405	35,275	39,415	39,247
Total financial liabilities	35,576	35,446	35,576	35,446	39,572	39,404

Fair value estimation

Valuation of financial instruments at fair value is done at the most accurate market prices available. Instruments which are quoted on the market, e.g., the major bond and interest-rate future markets, are all marked-to-market with the current price. The foreign-exchange spot rate is used to convert the value into SEK. For instruments where no reliable 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 in 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 value less impairment provision 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 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.

Fair value measurement hierarchy

		Full year 2013			Q4 2013			Q4 2014
Financial assets, SEKm	Level 1	Level 2	Total	Level 1	Level 2	Total	Level 1	Level 2	Total
Financial assets	279	—	279	279	—	279	312	—	312
Financial assets at fair value through profit and loss	119	—	119	119	—	119	135	—	135
Available for sale	160	—	160	160	—	160	177	—	177
Derivatives	—	241	241	—	241	241	—	375	375
Derivatives for which hedge accounting is not applied, i.e., held for trading	—	93	93	—	93	93	—	194	194
Derivatives for which hedge accounting is applied	—	148	148	—	148	148	—	181	181
Short-term investments and cash equivalents	1,661	—	1,661	1,661	—	1,661	2,456	—	2,456
Financial assets at fair value through profit and loss	1,661	—	1,661	1,661	—	1,661	2,456		2,456
Total financial assets	1,940	241	2,181	1,940	241	2,181	2,768	375	3,143
Financial liabilities
Derivatives	—	171	171	—	171	171	—	157	157
Derivatives for which hedge accounting is not applied, i.e., held for trading	—	78	78	—	78	78	—	89	89
Derivatives for which hedge accounting is applied	—	93	93	—	93	93	—	68	68
Total financial liabilities	—	171	171	—	171	171	—	157	157

The Group strives for arranging master-netting agreements (ISDA) with the counterparts for derivative transactions and has established such agreements with the majority of the counterparts, i.e., if a counterparty will default, assets and liabilities will be netted. Derivatives are presented gross in the balance sheet.

The disclosure of this information in the interim report is a consequence of updated disclosure requirements in IAS 34 Interim Financial Reporting. The information was earlier provided yearly in the notes to the financial statements in the Annual Report.

Parent Company income statement

SEKm	2013	2014	Q4 2013	Q4 2014
Net sales	28,856	29,508	7,899	8,455
Cost of goods sold	–25,382	–25,477	–7,197	–7,254
Gross operating income	3,474	4,031	702	1,201
Selling expenses	–3,783	–3,430	–1,170	–1,003
Administrative expenses	–1,196	–1,208	–71	–247
Other operating income	9	—	—	—
Other operating expenses	–1,874	–645	–1,865	–473
Operating income	–3,370	–1,252	–2,404	–522
Financial income	2,335	3,105	399	2,011
Financial expenses	–826	–455	–265	–233
Financial items, net	1,509	2,650	134	1,778
Income after financial items	–1,861	1,398	–2,270	1,256
Appropriations	187	355	105	196
Income before taxes	–1,674	1,753	–2,165	1,452
Taxes	765	77	813	2
Income for the period	–909	1,830	–1,352	1,454

Parent Company balance sheet

SEKm	Dec. 31, 2013	Dec. 31, 2014
Assets
Non–current assets	33,001	35,074
Current assets	22,027	21,021
Total assets	55,028	56,095
Equity and liabilities
Restricted equity	4,562	4,562
Non–restricted equity	12,531	12,617
Total equity	17,093	17,179
Untaxed reserves	558	396
Provisions	1,843	1,624
Non–current liabilities	11,472	9,071
Current liabilities	24,062	27,825
Total equity and liabilities	55,028	56,095
Pledged assets	—	—
Contingent liabilities	1,815	3,743

Operations by business area yearly

SEKm	2010	2011	2012	2013	2014
Major Appliances Europe, Middle East and Africa
Net sales	36,596	34,029	34,278	33,436	34,438
Operating income	2,297	709	1,105	347	1,444
Margin, %	6.3	2.1	3.2	1.0	4.2
Major Appliances North America
Net sales	30,969	27,665	30,684	31,864	34,141
Operating income	1,442	250	1,452	2,136	1,714
Margin, %	4.7	0.9	4.7	6.7	5.0
Major Appliances Latin America
Net sales	16,260	17,810	22,044	20,695	20,041
Operating income	951	820	1,590	979	1,079
Margin, %	5.8	4.6	7.2	4.7	5.4
Major Appliances Asia/Pacific
Net sales	7,679	7,852	8,405	8,653	8,803
Operating income	793	736	746	467	448
Margin, %	10.3	9.4	8.9	5.4	5.1
Small Appliances
Net sales	8,422	8,359	9,011	8,952	8,678
Operating income	802	543	461	391	200
Margin, %	9.5	6.5	5.1	4.4	2.3
Professional Products
Net sales	6,389	5,882	5,571	5,550	6,041
Operating income	743	841	588	510	671
Margin, %	11.6	14.3	10.6	9.2	11.1
Other
Net sales	11	1	1	1	1
Operating income, common Group costs, etc.	–534	–744	–910	–775	–776
Total Group, excluding items affecting comparability
Net sales	106,326	101,598	109,994	109,151	112,143
Operating income	6,494	3,155	5,032	4,055	4,780
Margin, %	6.1	3.1	4.6	3.7	4.3
Items affecting comparability	–1,064	–138	–1,032	–2,475	–1,199
Total Group, including items affecting comparability
Net sales	106,326	101,598	109,994	109,151	112,143
Operating income	5,430	3,017	4,000	1,580	3,581
Margin, %	5.1	3.0	3.6	1.4	3.2

Electrolux applies the amended standard for pension accounting, IAS 19 Employee Benefits, as of January 1, 2013. Reported figures for 2012 have been restated to enable comparison. Reported figures for previous years have not been restated.

Five-year review

SEKm unless otherwise stated	2010	2011	2012	2013	2014
Net sales	106,326	101,598	109,994	109,151	112,143
Organic growth, %	1.5	0.2	5.5	4.5	1.1
Items affecting comparability	–1,064	–138	–1,032	–2,475	–1,199
Operating income	5,430	3,017	4,000	1.580	3,581
Margin, %	5.1	3.0	3.6	1.4	3.2
Income after financial items	5,306	2,780	3,154	904	2,997
Income for the period	3,997	2,064	2,365	672	2,242
Capital expenditure, property, plant and equipment	3,221	3,163	4,090	–3,535	–3,006
Operating cash flow after investments	5,357	3,407	5,273	2,412	6,631
Earnings per share, SEK	14.04	7.25	8.26	2.35	7.83
Equity per share, SEK	72.40	72.51	54.96	49.99	57.52
Dividend per share, SEK	6.50	6.50	6.50	6.50	6.501)
Capital-turnover rate, times/year	5.4	4.6	4.1	4.0	4.5
Return on net assets, %	27.8	13.7	14.8	5.8	14.2
Return on equity, %	20.6	10.4	14.4	4.4	15.7
Net debt	–709	6,367	10,164	10,653	9,631
Net debt/equity ratio	–0.03	0.31	0.65	0.74	0.58
Average number of shares excluding shares owned by Electrolux, million	284.6	284.7	285.9	286.2	286.3
Average number of employees	51,544	52,916	59,478	60,754	60,038
Excluding items affecting comparability
Operating income	6,494	3,155	5,032	4,055	4,780
Margin, %	6.1	3.1	4.6	3.7	4.3
Earnings per share, SEK	16.65	7.55	11.36	9.81	11.30
Capital-turnover rate, times/year	5,1	4.3	3.9	3.8	4.0
Return on net assets, %	31.0	13.5	17.9	14.0	17.1

1) Proposed by the Board.

Financial goals over a business cycle

The financial goals set by Electrolux aim to strengthen the Group's leading, global position in the industry and assist in generating a healthy total yield for Electrolux shareholders. The objective is growth with consistent profitability. The key ratios exclude items affecting comparability.

Financial goals

• Operating margin of >6%
• Capital-turnover rate >4 times
• Return on net assets >20%
• Average annual growth >4%

Definitions

Capital indicators

Annualized sales

In computation of key ratios where capital is related to net sales, the latter are annualized and converted at year-endexchange rates and adjusted for acquired and divested operations.

Net assets

Total assets exclusive of liquid funds, pension plan assets and interest-bearing financial receivables less operating liabilities, non-interest-bearing provisions and deferred tax liabilities.

Working capital

Current assets exclusive of liquid funds and interest-bearing financial receivables less operating liabilities and non-interestbearing provisions.

Total borrowings

Total borrowings consist of interest-bearing liabilities, fairvalue derivatives, accrued interest expenses and prepaid interest income, and trade receivables with recourse.

Net debt Total borrowings less liquid funds.

Net debt/equity ratio Net borrowings in relation to equity.

Equity/assets ratio Equity as a percentage of total assets less liquid funds.

Other key ratios

Organic growth Sales growth, adjusted for acquisitions, divestments and changes in exchange rates.

Operating cash flow after investments Cash flow from operations and investments excluding financial items paid, taxes paid, restructuring payments and acquisitions and divestment of operations.

Earnings per share Income for the period divided by the average number of shares after buy-backs.

Operating margin Operating income expressed as a percentage of net sales.

Return on equity Income for the period expressed as a percentage of average equity.

Return on net assets Operating income expressed as a percentage of average net assets.

Capital-turnover rate Net sales in relation to average net assets.

Shareholders' information

President and CEO Keith McLoughlin's comments

on the fourth-quarter results 2014 Today's press release is available on the Electrolux website http://www.electrolux.com/ir

Telephone conference 09.00 CET

A telephone conference is held at 09.00 CET today, January 28. The conference will be chaired by Keith McLoughlin, President and CEO of Electrolux. Mr. McLoughlin will be accompanied by Tomas Eliasson, CFO.

Details for participation by telephone are as follows: Participants in Sweden should call +46 8 505 564 74 Participants in UK/Europe should call +44 203 364 5374 Participants in US should call +1 855 753 2230

Slide presentation for download: http://www.electrolux.com/ir

Link to webcast: http://www.electrolux.com/interim-report-webcast

For further information, please contact:

Catarina Ihre, Vice President Investor Relations at +46 (0)8 738 60 87 Merton Kaplan, Analyst Investor Relations at +46 (0)8 738 70 06

Calendar 2015

Annual General Meeting	March 26
Interim report January - March	April 24
Interim report January - June	July 17
Interim report January - September	October 23

Annual Report 2014

Available at the Group's website Week 10

Annual General Meeting 2015

Electrolux Annual General Meeting 2015 will be held on March 26 at The Brewery Conference Centre (Münchenbryggeriet), situated at Torkel Knutssonsgatan 2 in Stockholm, Sweden.