Electrolux — Earnings Release 2020

Oct 23, 2020

Strong results and cashflow on rebounding markets

The comments and figures in this report refer to continuing operations unless otherwise stated

• Net sales amounted to SEK 32,004m (30,330). Organic sales increased by 15.2%.
• Record high operating income of SEK 3,220m (1,063), corresponding to a margin of 10.1% (3.5), mainly driven by strong volumes and prices. The comparison period included non-recurring items of SEK -290m.
• Significant market recovery driven mainly by pent-up demand and government stimulus programs.
• Income for the period amounted to SEK 2,356m (610) and earnings per share was SEK 8.20 (2.12).
• Operating cash flow after investments was SEK 6,005m (2,499).
• The Board proposes to reinstate a dividend for 2019 of SEK 7.00 (8.50) per share, to be paid in one instalment.

Financial overview

				Nine months	Nine months
SEKM	Q3 2020	Q3 2019	Change, %	2020	2019	Change, %
Continuing operations
Net sales	32,004	30,330	6	82,058	86,970	-6
Sales growth, %¹	15.3	1.2		-2.0	-0.7
Organic growth, %	15.2	1.4		-2.0	-0.3
Acquisitions,%	0.1	0.0		0.0	0.1
Divestments, %	-	-0.2		-	-0.5
Changes in exchange rates, %	-9.7	5.9		-3.7	4.9
Operating income²	3,220	1,063	203	3,280	2,229	47
Operating margin, %	10.1	3.5		4.0	2.6
Income after financial items	3,056	888	244	2,757	1,720	60
Income for the period	2,356	610	286	2,129	1,454	46
Earnings per share, SEK³	8.20	2.12		7.41	5.06
Return on net assets, %	-	-		16.3	11.2
Operating cash flow after investments	6,005	2,499		3,188	-542
Total Group, including discontinued operations
Income for the period⁴	2,356	739	219	4,724	1,950	142
Earnings per share, SEK³	8.20	2.57		16.44	6.78

¹ Change in net sales adjusted for currency translation effects.

² Operating income for continuing operations for the third quarter of 2020 included non-recurring items of SEK 0m (-290). The non-recurring items previous year related to restructuring charges for efficiency measures and outsourcing projects across the Group, recovery of overpaid sales tax in Brazil and a legal settlement in the U.S. Excluding these items, operating income amounted to SEK 3,220m (1,353), corresponding to a margin of 10.1% (4.5). For the first nine months of 2020, nonrecurring items amounted to SEK 0m (-1,344). Excluding these non-recurring items, operating income amounted to SEK 3,280m (3,573), corresponding to a margin of 4.0% (4.1%) see page 18.

⁴ Income for the period for nine months 2020 included a settlement gain from the distribution of Electrolux Professional of SEK 2,379m. For definitions, see pages 26-27.

³ Basic.

President and CEO Jonas Samuelson's comment

In the third quarter Electrolux reported record earnings of SEK 3,220m, or 10.1% of net sales, driven by pent-up demand and government stimulus programs impacting consumer spending. This drove significant volume growth, and positive price and mix improvement, resulting in organic sales growth of 15.2%. The record high operating income translated into a strong operating cash flow after investments of SEK 6,005m.

The strong demand in the quarter was to a significant extent a recovery of the very low market volumes in March-May due to store closures and restrictions on movement. Demand was further enhanced by stimulus programs, more than compensating for the weaker economy caused by the pandemic. Due to pandemic restrictions during the first half of the year, we entered the quarter with unusually low inventory levels, which have remained during the quarter despite high production levels, somewhat impacting our ability to meet the strong demand across all regions.

Sales also benefitted from consumers spending more time at home, using their appliances more intensively and allocating more of their household budgets to home improvement. This in combination with our relentless focus on consumer experience innovation has continued to improve demand for our more highly featured products, driving favorable product mix.

One great experience innovation example is the Frigidaire Gallery AirFry cooker that recently received the 2020 innovation award at the Home Depot. The AirFry cooker also delivers a significantly higher gross margin compared to traditional cookers. Innovation is truly a key pillar for creating value and that is why we will showcase how we are driving profitable growth through innovation at our online Capital Markets Update on November 17.

The Board of Directors proposed to reinstate a dividend for the fiscal year 2019 based on the recovery in earnings and cash flow. The proposed dividend of SEK 7 per share will be up for decision at an Extraordinary General Meeting on November 3. Our strong commitment to sustainability remains unchanged with the target of climate neutrality by 2050, and I

am pleased that the long-term incentive program for senior managers proposed by the Board includes a substantial climate impact reduction element.

Looking into the fourth quarter, visibility remains limited as demand may be impacted by several factors, especially as the pandemic is still very much present. However, we currently anticipate that consumer demand and thus financial performance will normalize gradually going forward. Considering this and the catch-up effect during the third quarter, we are revising our market outlook for the full-year 2020 upwards. We anticipate market demand for appliances in Europe to be slightly positive, in North America to be slightly positive to positive and in Latin America to be positive. It is only the combined demand in our larger markets in the Asia-Pacific, Middle East and Africa region that we still expect to be negative for 2020.

I am very proud of how we as an organization successfully have navigated in these challenging times. My colleagues around the world has done a great job in executing on our strategy. That is why I am confident that Electrolux remains well positioned to create value.

Outlook

Market outlook,		Previous outlook	Market outlook,		Previous outlook
units year-over-year¹	FY 2020	for FY 2020⁵	units year-over-year¹	FY 2020	for FY 2020⁵
Europe	Slightly positive	Negative	Latin America	Positive	Negative
	Slightly positive -		Asia-Pacific, Middle East and
North America	positive	Negative	Africa	Negative	Negative

Business outlook², year-over-year	Q4 2020	FY 2020	Previous outlook for the FY 2020⁵
Volume/price/mix	Favorable	Favorable	Unfavorable
Raw material costs and trade tariffs	Decrease of SEK ~0.1bn	Decrease of SEK ~0.3bn	Decrease of SEK 0.3-0.6bn
Net cost efficiency³	Unfavorable	Unfavorable	Favorable
Currency effect⁴	SEK -500m	SEK -1,700m	SEK -1,400m
Capital expenditure	Decrease	SEK ~5bn	SEK ~5bn

¹ Electrolux estimates for industry shipments of core appliances. ² Business outlook range: Favorable - Neutral – Unfavorable.

³ Efficiencies in variable costs (excl. raw materials and trade tariffs) and structural costs.

⁴ Impact on operating income for the full year 2020, whereof currency transaction effects of approximately SEK -1,500m and currency translation effects of approximately SEK -200m. The calculation is based on currency rates as per October 15, 2020.

⁵ Published on July 17, 2020.

Note: Business outlook in the above table excludes non-recurring items. Market and business outlook assume no additional major restrictions due to the coronavirus pandemic.

Summary of the third quarter

				Nine months	Nine months		Full year
SEKM	Q3 2020	Q3 2019	Change, %	2020	2019	Change, %	2019
Net sales	32,004	30,330	6	82,058	86,970	-6	118,981
Operating income
Europe	1,522	93	1,528	2,324	1,355	71	2,493
North America	990	-20	n.m.	518	2	n.m.	-516
Latin America	440	1,539	-71	242	1,481	-84	1,821
Asia-Pacific, Middle East and Africa	459	-150	n.m.	661	131	403	446
Other, Group common costs, etc.	-191	-400	52	-465	-741	37	-1,055
Total	3,220	1,063	203	3,280	2,229	47	3,189
Operating margin, %	10.1	3.5		4.0	2.6		2.7
Operating margin excl.
non-recurring items, %¹	10.1	4.5		4.0	4.1		3.8

¹ For information on non-recurring items, see page 18.

Note: n.m. (not meaningful) is used when the calculated number is considered not relevant.

Discontinued operations

Electrolux Professional AB was listed on Nasdaq Stockholm as a separate company on March 23, 2020 and is hence no longer part of the Electrolux Group. Results for Electrolux Professional, for the time it was part of the Electrolux Group, are reported as discontinued operations. See Note 5 for details.

The comments in this report refer to the consumer business, 'continuing operations', exclusive of Electrolux Professional, unless otherwise stated.

Net sales

Sales increased by 15.3% in the quarter, excluding currency translation effects. Volumes were significantly higher in all four business areas as markets recovered strongly after lockdowns were lifted, driven by pent-up demand as well as government stimulus programs. The capacity constraints in North America in the second quarter were largely resolved, even though low inventory levels continued to impact the ability to meet demand. Positive price development and mix improvements also contributed to the sales growth.

Operating income

Operating income amounted to SEK 3,220m (1,063), corresponding to a margin of 10.1 % (3.5). Operating income for the third quarter 2019 included non-recurring items of SEK -290m.

The significant organic growth, with increased volumes as well as positive price and mix development, was the main driver for the higher earnings. Aftermarket sales increased across all business areas. Lower costs for raw materials also had a positive impact year-over-year. Price increases fully offset the continued currency headwind.

Effects of changes in exchange rates

Changes in exchange rates had a year-over-year impact of SEK -248m. The impact of transaction effects was SEK -146m, primarily relating to weakening currencies in Latin America. Translation effects amounted to SEK -102m.

Financial net

Net financial items amounted to SEK –164m (–175).

Income for the period

Income for the period amounted to SEK 2,356 (610), corresponding to SEK 8.20 (2.12) in earnings per share.

EBIT margin – 12 months is excluding non-recurring items, see pages 18 and 25.

12% Europe

First nine months of 2020

Sales growth for continuing operations was –2.0% in the first nine months, excluding currency translation effects. Organic sales also declined by 2.0% as acquisitions and divestments did not have any impact.

Operating income amounted to SEK 3,280m (2,229), corresponding to a margin of 4.0% (2.6). In the first nine months, non-recurring items amounted to SEK 0m (-1,344), see page 18. Excluding non-recurring items, operating income for the first nine months 2019 amounted to SEK 3,573m corresponding to a margin of 4.1%.

Income for the period for continuing operations amounted to SEK 2,129m (1,454), corresponding to SEK 7.41 (5.06) in earnings per share.

Income for the period for the total Group, including discontinued operations, amounted to SEK 4,724m (1,950), corresponding to SEK 16.44 (6.78) in earnings per share. 2020 included a settlement gain from the distribution of Electrolux Professional of SEK 2,379m.

Market overview

In the third quarter, the market in Europe increased significantly year-over-year driven by pent-up demand from previous quarter and government incentives. In the U.S., the market demand for core appliances increased as previous industry supply constraints were reduced and government stimulus packages, effective until July 31, supported the market growth. For more information about the markets, please see the Business areas section.

INDUSTRY SHIPMENTS OF CORE APPLIANCES IN EUROPE* INDUSTRY SHIPMENTS OF CORE APPLIANCES IN THE U.S.*

*Units year-over-year, %

Sources: Europe: Electrolux estimate, US: AHAM. For definitions see below. For other markets, there are no comprehensive market statistics.

Industry shipment of appliances

			Nine months	Nine months
Europe, units, year-over-year,%*	Q3 2020	Q3 2019	2020		2019 Full year 2019
Western Europe	14	1	-2	1	1
Eastern Europe (excluding Turkey)	11	2	5	4	3
Total Europe	13	1	0	2	2

*Source: Electrolux estimates for core appliances. Core appliances include: Refrigerators, Freezers, Washing machines, Tumble dryers, Free-standing Cookers, Built-in Ovens, Built-in Hobs, Hoods and Dishwashers.

			Nine months	Nine months
U.S., units, year-over-year, %*	Q3 2020	Q3 2019	2020		2019 Full year 2019
Core appliances	9	3	2	-1	-2
Microwave ovens and home-comfort products	31	-7	-3	-9	-10
Total major appliances	14	0	0	-4	-5

*Source: AHAM. Core appliances includes AHAM 6 (Washers, Dryers, Dishwashers, Refrigerators, Freezers, Ranges and Ovens) and Cooktops.

Business areas

Europe

In the third quarter, overall market demand in Europe increased by 13% year-over-year. All markets showed growth, many recovering strongly after the decline in the second quarter due to the lockdowns related to the coronavirus. Both pent-up demand and governmental stimulus packages impacted the recovery pace. In Western Europe, demand increased by 14% and in Eastern Europe by 11%.

Organic sales for Electrolux operations in Europe increased by 15.7%, mainly driven by higher volumes across all categories. Mix also continued to develop favorably, primarily from built-in kitchen and laundry products. The premium brands Electrolux and AEG gained value market share and aftermarket sales increased.

Operating income increased significantly year-over-year, excluding the non-recurring items last year. This was mainly a result of the organic contribution from both volume and mix. Lower cost for raw material and a slight currency tailwind also impacted earnings positively.

OPERATING INCOME AND MARGIN

EBIT margin – 12 months is excluding non-recurring items, see pages 18 and 25.

			Nine months	Nine months
SEKM	Q3 2020	Q3 2019	2020		2019 Full year 2019
Net sales	12,317	11,036	32,113	32,068	45,420
Organic growth, %	15.7	-1.8	0.8	1.0	1.7
Acquisitions,%	-	-	-	0.2	0.1
Operating income	1,522	93	2,324	1,355	2,493
Operating margin,%	12.4	0.8	7.2	4.2	5.5
Operating margin excl. non-recurring items, %¹	12.4	7.7	7.2	6.6	7.1

¹ Last year's operating income in the third quarter included non-recurring items of SEK -752m, see page 18.

North America

During the quarter, market demand for core appliances in the U.S. increased by 9% year-over-year. Previous industry supply constraints were reduced, resulting in a catch-up effect, and government stimulus packages, effective until July 31, impacted positively. Market demand for all major appliances, including microwave ovens and home-comfort products, increased by 14%.

The organic sales increased in the quarter by 8.6%. Volumes increased and price developed positively as promotion activity was low. Demand could, however, not be fully met due to previous quarters' production constraints resulting in low inventory levels. Aftermarket sales grew significantly.

Operating income increased significantly year-over-year, excluding the non-recurring items last year. Positive price development, higher volumes and mix improvements contributed to earnings. The pandemic continued as expected to impact the ongoing manufacturing consolidation.

OPERATING INCOME AND MARGIN

EBIT margin – 12 months is excluding non-recurring items, see pages 18 and 25.

			Nine months	Nine months
SEKM	Q3 2020	Q3 2019	2020		2019 Full year 2019
Net sales	10,993	10,880	27,939	30,234	38,954
Organic growth, %	8.6	-0.2	-7.2	-5.5	-8.7
Divestments, %	-	-0.4	-	-1.3	-1.0
Operating income	990	-20	518	2	-516
Operating margin,%	9.0	-0.2	1.9	0.0	-1.3
Operating margin excl. non-recurring items, %¹	9.0	2.0	1.9	3.6	1.4

¹ Last year's operating income in the third quarter included non-recurring items of SEK -242m, see page 18.

Latin America

In the third quarter, consumer demand for core appliances are estimated to have increased in Brazil year-over-year driven by government incentives and pent-up demand. Demand in Argentina declined, affected by quarantine measures and product shortages, while demand in Chile increased, supported by government stimulus packages.

The organic sales in Electrolux operations in Latin America grew by 37.8%. Overall volumes increased, driven by Brazil. Online sales continued to grow in all main markets. Both price and mix also contributed positively as an effect of price increases and increased sales of high-end products.

Operating income increased significantly year-over-year, excluding the non-recurring items last year. This was mainly driven by the organic contribution. Currency headwind continued to impact earnings negatively but was fully offset by price increases.

OPERATING INCOME AND MARGIN

EBIT margin – 12 months is excluding non-recurring items, see pages 18 and 25. * Q3 2019: EBIT of SEK 1,539m corresponding to a margin of 33.4%. This includes non-recurring items of SEK 1,326m.

			Nine months	Nine months
SEKM	Q3 2020	Q3 2019	2020		2019 Full year 2019
Net sales	4,779	4,613	11,427	13,740	19,653
Organic growth, %	37.8	14.2	3.4	9.7	10.9
Operating income	440	1,539	242	1,481	1,821
Operating margin, %	9.2	33.4	2.1	10.8	9.3
Operating margin excl. non-recurring items, %¹	9.2	4.6	2.1	2.8	3.7

¹ Last year's operating income in the third quarter included non-recurring items of SEK 1,326m, see page 18.

Asia-Pacific, Middle East and Africa

During the third quarter, consumer demand is estimated to have decreased overall as Southeast Asia and Middle East continued to be affected by recessions and continued lockdowns due to the coronavirus. However, Australia, one of Electrolux major markets, continued to grow strongly supported by government incentives. South Africa and Egypt recovered after the decline in the second quarter.

Electrolux reported an organic sales growth of 9.7%, mainly a result of higher volumes. Sales increased significantly in Australia, driven by volumes, price increases, new products in the kitchen category and repositioning of the Westinghouse brand. Online and aftermarket sales grew significantly. In Southeast Asia, however, sales continued to decline.

Operating income increased significantly year-over-year, excluding the non-recurring items last year. This was mainly a result of the strong sales growth in Australia. Lower costs for raw material also contributed positively.

OPERATING INCOME AND MARGIN

EBIT margin – 12 months is excluding non-recurring items, see pages 18 and 25.

SEKM	Q3 2020	Q3 2019	Nine months 2020	Nine months	2019 Full year 2019
Net sales	3,916	3,801	10,579	10,928	14,954
Organic growth, %	9.7	1.5	-1.3	-0.2	-1.3
Acquisitions,%	0.4	0.2	0.2	0.1	0.1
Operating income	459	-150	661	131	446
Operating margin, %	11.7	-4.0	6.2	1.2	3.0
Operating margin excl. non-recurring items, %¹	11.7	6.5	6.2	4.8	5.6

¹ Last year's operating income in the third quarter included non-recurring items of SEK -398m, see page 18.

Cash flow

Operating cash flow after investments amounted to SEK 6,005m (2,499) in the quarter. The increased cash flow compared to the previous year was mainly a result of a higher operating income. A favorable development of operating assets and liabilities as well as a lower level of investments also contributed positively.

Operating cash flow after investments in the first nine months of 2020 amounted to SEK 3,188m (-542).

OPERATING CASH FLOW AFTER INVESTMENTS

			Nine months	Nine months
SEKM	Q3 2020	Q3 2019	2020		2019 Full year 2019
Operating income adjusted for non-cash items¹	4,416	2,933	7,146	7,625	9,746
Change in operating assets and liabilities	2,584	1,430	-824	-3,649	-498
Operating cash flow	7,000	4,363	6,321	3,976	9,248
Investments in tangible and intangible assets	-1,077	-1,639	-3,311	-4,024	-6,674
Changes in other investments	81	-224	179	-494	-294
Operating cash flow after investments	6,005	2,499	3,188	-542	2,280
Acquisitions and divestments of operations	-7	-0	-8	-27	-27
Operating cash flow after structural changes	5,997	2,499	3,180	-569	2,254
Financial items paid, net²	-129	-142	-425	-430	-656
Taxes paid	-263	-170	-571	-818	-1,277
Cash flow from operations and investments	5,605	2,186	2,185	-1,817	321
Payment of lease liabilities	-217	-228	-685	-651	-870
Dividend	-	-	-	-1,221	-2,443
Share-based payments	-	-	-	5	9
Total cash flow, excluding changes in loans and short–term
investments	5,388	1,958	1,500	-3,684	-2,982

¹ Operating income adjusted for depreciation, amortization and other non-cash items.

² For the period January 1 to September 30: interest and similar items received SEK 52m (80), interest and similar items paid SEK -309m (-362) and other financial items received/paid SEK -87m (-55). Interest paid related to lease liabilities SEK -82m (-93).

Financial position

Net debt items as per September 30, 2020 and December 31, 2019 exclude assets and liabilities of Electrolux Professional. Net debt items as per September 30, 2019 include assets and liabilities of Electrolux Professional. Equity as per September 30, 2020 excludes Electrolux Professional. Equity as per September 30, 2019 and December 31, 2019 includes Electrolux Professional.

Net debt

As of September 30, 2020, Electrolux had a financial net cash position (excluding lease liabilities and post-employment provisions) of SEK 2,746m, compared to the financial net debt position of SEK 667m as of December 31, 2019. Net provisions for post-employment benefits was SEK 4,032m and lease liabilities amounted to SEK 2,793m as of September 30, 2020. In total, net debt amounted to SEK 4,079m, a decrease by SEK 3,604m compared to SEK 7,683m per December 31, 2019.

Long-term borrowings and long-term borrowings with maturities within 12 months amounted to a total of SEK 14,819m as of September 30, 2020 with average maturity of 3.0 years, compared to SEK 9,682m and 3.0 years at the end of 2019.

In the third quarter, long-term borrowings in the amount of SEK 1,562m were amortized, including an early repayment of loan of SEK 1,481m. During the remaining part of 2020, longterm borrowings amounting to approximately SEK 0.1bn will mature. In July, a new credit facility was signed of SEK 10bn, expiring 2025. For more information see www.electroluxgroup.com.

Liquid funds as of September 30, 2020, amounted to SEK 19,740m, an increase of SEK 8,551m compared to SEK 11,189m as of December 31, 2019.

Return on equity was 32.3% (12.0), impacted by a settlement gain from the distribution of Electrolux Professional. Adjusted for the settlement gain, return on equity was 16.0% (12.0).

Working capital and net assets (continuing operations) Working capital as of September 30, 2020, amounted to SEK -17,357m (–14,804), corresponding to –16.5% (–12.5) of annualized net sales. Operating working capital amounted to SEK 4,429m (4,632), corresponding to 4.2% (3.9) of annualized net sales, see page 20.

Average net assets for the first nine months of 2020 amounted to SEK 26,888m (26,623), corresponding to 24.6% (23.0) of annualized net sales. Net assets as of September 30, 2020, amounted to SEK 23,946m (28,846).

Return on net assets was 16.3% (11.2).

Net debt
SEKM	Sep. 30, 2020	Sep. 30, 2019¹	Dec. 31, 2019²
Short-term loans	1,913	1,198	1,307
Short-term part of long-term loans	365	2,465	1,446
Trade receivables with recourse	79	140	602
Short-term borrowings	2,358	3,802	3,354
Financial derivative liabilities	108	123	233
Accrued interest expenses and prepaid interest income	74	61	33
Total short-term borrowings	2,539	3,987	3,620
Long-term borrowings	14,454	7,501	8,236
Total borrowings³	16,993	11,488	11,856
Cash and cash equivalents	19,460	9,621	10,807
Short-term investments	176	193	190
Financial derivative assets	87	145	176
Prepaid interest expenses and accrued interest income	17	238	16
Liquid funds⁴	19,740	10,196	11,189
Financial net debt	-2,746	1,292	667
Lease liabilities	2,793	3,372	3,150
Net provisions for post-employment benefits	4,032	5,565	3,866
Net debt	4,079	10,229	7,683
Net debt/equity ratio	0.21	0.48	0.34
Total equity	19,867	21,384	22,574
Equity per share, SEK	69.13	74.41	78.55
Return on equity, %	32.3	12.0	11.4
Equity/assets ratio, %	24.7	22.3	23.6

¹ Including assets and liabilities related to discontinued operations.

² Electrolux Professional was primarily financed through intra-group loans of approximately SEK 1.2bn from Electrolux, included in net debt as per December 31, 2019. These loans were repaid in connection with the listing of Electrolux Professional on March 23, 2020. 3 Whereof interest-bearing liabilities amounting to SEK 16,733m as of September 30, 2020, SEK 11,163m as of September 30, 2019 and SEK 10,989m as of December 31,

2019.

⁴ Electrolux also has an unused committed multicurrency revolving credit facility of EUR 1,000m, approximately SEK 10,571m, maturing 2023, a revolving credit facility of SEK 3,000m, maturing 2021 and a revolving credit facility of SEK 10,000m, maturing 2025.

Other items

Asbestos litigation in the U.S.

Litigation and claims related to asbestos are pending against the Group in the U.S. 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 September 30, 2020, the Group had a total of 3,434 (3,884) cases pending, representing approximately 3,470 (approximately 3,920) plaintiffs. During the third quarter of

2020, 285 new cases with 285 plaintiffs were filed and 594 pending cases with approximately 594 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

Active risk management is essential for Electrolux to drive successful operations. The Group is impacted by various types of risks including strategic and external risks but also business risks such as operational and financial risks.

The current spread of the global coronavirus pandemic adds uncertainty and impacts Electrolux operations as well as supply and demand.

Risk management in Electrolux aims to identify, control and reduce risks. Risks, risk management and risk exposure are described in more detail in the 2019 Annual Report: www.electroluxgroup.com/annualreport2019

Driving sustainable consumer experience innovation

Innovation to improve the consumer experience in the Taste, Care & Wellbeing areas is a key driver for long term profitable growth. Electrolux streamlined and innovative product portfolio, with a strong sustainability focus, enables consumers to live better lives while often also saving energy, water and resources. The product portfolio as well as Electrolux well-established brands with a strong innovation heritage are competitive assets, enabling the company to also strengthen its position in emerging markets and within aftermarket.

Deep consumer insight is a competitive advantage in an age of greater consumer awareness and increases success rate and return on investment. Consumers increasingly prioritize sustainability and research shows that 2/3 of global consumers are willing to pay more for sustainable goods.* Electrolux most resource-efficient products have consistently had a higher margin for many years and in 2019 these products accounted for 23% of total units sold and 32% of gross profit.

Solutions to reduce food waste

Consumers know that wasting food is bad for the planet. 53% of the respondents in the Electrolux Better Living Report say they try to minimize the amount of food they throw in the bin.

To enable and empower consumers to act for a more sustainable home-life, the Electrolux Better Living Report was conducted in nine cities - Stockholm, Warsaw, Sao Paulo, Santiago, Buenos Aires, San Francisco, Shanghai, Hanoi and Melbourne in 2019. Electrolux asked over 9,000 people about their attitudes, behaviors and intentions on the topic of sustainability.

Fresh food that goes bad before it is consumed is a barrier and 37% throw away food that has passed its 'best before' date while it could still be perfectly good to eat.

Electrolux multidoor refrigerators offer a solution to keep food fresh longer. In 2018 the new multidoor range was launched in Australia and New Zealand. In North America it was launched in 2019. The new range is part of a wider multidoor growth strategy, with ambitious targets to increase value market share.

Growing aftermarket with fixed-price repair

Electrolux is launching services, such as fixed-price repair in Europe, that aim to access the largely untapped aftermarket business. The overall objective is to double aftermarket's share of Group sales, to 10% by 2025.

Currently, only 15-20% of all consumers contact branded manufacturers for out-of-warranty repairs. One reason is that few consumers are aware that Electrolux offers affordable professional repairs. They may also fear an expensive cost.

A service such as fixed-price repair allows consumers to make an informed decision on whether to repair or replace an appliance based on their quote from Electrolux. Such services increase the lifetime value for consumers, which also drives loyalty and repurchasing rates.

The new service has been well received and since the launch in 2017, its Net Promoter Score has more than doubled compared to the company's previous service offerings. Electrolux was the first appliance manufacturer to offer fixedprice repair services in Europe.

Find more inspiring business cases in the Annual Review 2019.

Over a dozen cases from across the four regions are collected into one place to showcase how Electrolux creates value through sustainable consumer experience innovation.

https://www.electroluxgroup.com/annualreports/2019/create-value/case-stories/

* Eco Ethical Report June 2019

July 7. Electrolux announced smaller Q2 loss than previously anticipated and sales growth in June

Electrolux announced it would report a smaller loss for the second quarter of 2020 than previously anticipated, with operating income estimated to be approximately SEK -100 million (1,219). The improvement was driven by sales growth in June and successful cost mitigation actions. In the Q1 interim report published on May 7, 2020, Electrolux communicated that it expected a "significant" loss in the second quarter.

August 18. Electrolux announced management change

Electrolux announced that Jan Brockmann, Chief Operations Officer and Executive Vice President of AB Electrolux, has decided to resign from his position to pursue an external opportunity. Carsten Franke, previously Chief Operations Officer Business Area Europe, was on September 16 announced to succeed Jan Brockmann, effective as from October 1, 2020.

September 22. Nomination Committee appointed for Electrolux Annual General Meeting 2021

The members of the Nomination Committee were appointed based on the ownership structure as of August 31, 2020. Johan Forssell, Investor AB, is the Chairman of the committee. The other members are Carina Silberg, Alecta, Tomas Risbecker, AMF – Försäkring och Fonder, and Marianne Nilsson, Swedbank Robur Funds. The committee will also include Staffan Bohman and Fredrik Persson, Chairman and Director, respectively, of Electrolux.

September 25. Electrolux to propose reinstated dividend based on recovery in earnings and cash flow

After assessing the company's financial position and the impact of the coronavirus pandemic, the Board of Directors of AB Electrolux has decided to propose a dividend of SEK 7 per share for the fiscal year 2019. It has called for an Extraordinary General Meeting on November 3, 2020.

On March 23, 2020, the Board of Directors withdrew its SEK 8.50 per share dividend proposal for the AGM 2020, in light of the at the time considerable uncertainty relating to the mediumterm effects of the pandemic. However, Electrolux has seen a substantial recovery in earnings and cash flow during the third quarter, with pent-up demand and government stimulus programs impacting consumer spending patterns and thus driving a positive development in all business areas. Electrolux estimated that the negative impact initially seen related to the pandemic would largely be recovered in the operating profit for the nine-month period ending September 30, including a strong improvement in cash flow. Looking into the fourth quarter, visibility remains limited as demand may be impacted by several factors – both positive and negative – but at present, Electrolux anticipates financial performance to gradually normalize. The Board of Directors therefore has concluded that a dividend can be proposed without jeopardizing Electrolux financial position. It will also propose that a performance based long-term share program for 2020 is implemented in line with its original proposal for the AGM 2020.

September 28. Notice convening the extraordinary general meeting of AB Electrolux

An Extraordinary General Meeting will take place on November 3, 2020. Due to the coronavirus, the Board of Directors has decided that the Extraordinary General Meeting should be conducted without the physical presence of shareholders, representatives or third parties and that the shareholders before the meeting should be able to exercise their voting rights only by post. Information on the resolutions passed at the meeting will be disclosed on November 3, 2020, as soon as the outcome of the postal voting has been finally confirmed.

The Board of Directors proposes a dividend for the financial year 2019 of SEK 7.00 per share. The dividend is proposed to be paid in one instalment with the record date Thursday, November 5, 2020. Subject to resolution by the Extraordinary General Meeting in accordance with this proposal, the dividend is expected to be distributed by Euroclear Sweden AB on Tuesday, November 10, 2020. The Board of Directors also proposes implementation of a long-term incentive program for 2020 and certain amends to the articles of association.

For more information, visit www.electroluxgroup.com

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 first nine months of 2020 amounted to SEK 28,567m (29,183) of which SEK 23,281m (23,735) referred to sales to Group companies and SEK 5,286m (5,448) to external customers. Income after financial items was SEK 5,924m (2,970), including dividends from subsidiaries in the amount of SEK 6,208m (3,142). Income for the period amounted to SEK 5,966m (2,300).

Capital expenditure in tangible and intangible assets was SEK 391m (472). Liquid funds at the end of the period amounted to SEK 14,063m, compared to SEK 6,084m at the start of the year.

Undistributed earnings in the Parent Company at the end of the period amounted to SEK 21,027m, compared to SEK 22,894m at the start of the year. Dividend payment to shareholders for 2019 amounted to SEK 0m at the end of the period. Dividend distribution to shareholders of the shares in Electrolux Professional AB amounted to SEK 7,749m corresponding to the book value of the shares at the time of the distribution.

The income statement and balance sheet for the Parent Company are presented on page 21.

Stockholm, October 23, 2020

AB Electrolux (publ) 556009-4178

Jonas Samuelson President and CEO

The report has not been audited or reviewed by external auditors.

Consolidated statement of comprehensive income

			Nine months	Nine months
SEKM	Q3 2020	Q3 2019	2020		2019 Full year 2019
Net sales	32,004	30,330	82,058	86,970	118,981
Cost of goods sold	-24,781	-25,723	-67,506	-72,927	-99,182
Gross operating income	7,224	4,607	14,552	14,043	19,799
Selling expenses	-2,607	-3,028	-7,670	-8,753	-12,186
Administrative expenses	-1,299	-1,675	-3,483	-4,106	-5,481
Other operating income/expenses	-97	1,159	-119	1,045	1,057
Operating income	3,220	1,063	3,280	2,229	3,189
Financial items, net	-164	-175	-522	-509	-733
Income after financial items	3,056	888	2,757	1,720	2,456
Taxes	-700	-277	-628	-266	-636
Income for the period, continuing operations	2,356	610	2,129	1,454	1,820
Income for the period, discontinued operations	-	128	2,595	496	688
Income for the period, total Group	2,356	739	4,724	1,950	2,509
Items that will not be reclassified to income for the period:
Remeasurement of provisions for post-employment benefits
	1,244	-1,405	-156	-1,817	-103
Income tax relating to items that will not be reclassified	-284	323	30	412	3
	961	-1,082	-126	-1,406	-100
Items that may be reclassified subsequently to income for the
period:
Cash flow hedges	1	-27	-3	-26	-10
Exchange-rate differences on translation of foreign
operations	-572	594	-1,988	1,735	1,030
Income tax relating to items that may be reclassified	2	20	50	14	24
	-569	587	-1,941	1,723	1,044
Other comprehensive income, net of tax	392	-495	-2,068	317	944
Total comprehensive income for the period	2,748	243	2,656	2,267	3,452
Income for the period attributable to:
Equity holders of the Parent Company	2,356	738	4,724	1,950	2,509
Non-controlling interests	0	0	-0	0	-1
Total	2,356	739	4,724	1,950	2,509
Total comprehensive income for the period attributable to:
Equity holders of the Parent Company	2,748	242	2,657	2,266	3,453
Non-controlling interest	-0	1	-0	1	-1
Total	2,748	243	2,656	2,267	3,452
Earnings per share, SEK
Basic, continuing operations	8.20	2.12	7.41	5.06	6.33
Basic, discontinued operations	-	0.45	9.03	1.73	2.40
Basic, Group total	8.20	2.57	16.44	6.78	8.73
Diluted, continuing operations	8.20	2.11	7.40	5.03	6.30
Diluted, discontinued operations	-	0.44	9.02	1.72	2.38
Diluted, Group total	8.20	2.56	16.43	6.75	8.69
Average number of shares¹
Basic, million	287.4	287.4	287.4	287.4	287.4
Diluted, million	287.4	288.9	287.6	288.9	288.8

¹ Average numbers of shares excluding shares held by Electrolux.

Consolidated balance sheet

SEKM	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Assets
Property, plant and equipment, owned	20,804	22,185	21,803
Property, plant and equipment, right-of-use	2,495	3,057	2,811
Goodwill	6,621	9,162	7,071
Other intangible assets	3,580	4,280	3,817
Investments in associates	323	438	424
Deferred tax assets	6,509	7,323	6,618
Financial assets	83	285	93
Pension plan assets	976	443	1,043
Other non-current assets	1,360	1,546	1,486
Total non-current assets	42,751	48,720	45,166
Inventories	14,006	20,035	16,194
Trade receivables	19,154	21,174	20,847
Tax assets	677	887	913
Derivatives	159	181	192
Other current assets	3,675	5,441	4,465
Short-term investments	176	193	190
Cash and cash equivalents	19,460	9,621	10,807
Discontinued operations, assets held for distribution (see Note 5)	-	-	8,034
Total current assets	57,307	57,531	61,642
Total assets	100,058	106,251	106,808
Equity and liabilities
Equity attributable to equity holders of the Parent Company
Share capital	1,545	1,545	1,545
Other paid-in capital	2,905	2,905	2,905
Other reserves	-3,292	-673	-1,351
Retained earnings	18,703	17,598	19,468
Equity attributable to equity holders of the Parent Company	19,860	21,375	22,566
Non-controlling interests	7	10	8
Total equity	19,867	21,384	22,574
Long-term borrowings	14,454	7,501	8,236
Long-term lease liabilities	1,979	2,497	2,333
Deferred tax liabilities	473	750	561
Provisions for post-employment benefits	5,008	6,009	4,909
Other provisions	5,697	6,608	5,577
Total non-current liabilities	27,611	23,365	21,616
Accounts payable	28,731	34,792	33,892
Tax liabilities	583	673	883
Dividend payable	-	1,221	-
Other liabilities	17,456	17,160	16,821
Short-term borrowings	2,358	3,802	3,354
Short-term lease liabilities	814	875	817
Derivatives	154	128	293
Other provisions	2,484	2,850	2,606
Discontinued operations, liabilities held for distribution (see Note 5)	-	-	3,951
Total current liabilities	52,580	61,501	62,617
Total equity and liabilities	100,058	106,251	106,808

Change in consolidated equity

	Nine months	Nine months
SEKM	2020	2019	Full year 2019
Opening balance	22,574	21,749	21,749
Change in accounting principles	-	-233	-234
Total comprehensive income for the period	2,656	2,267	3,452
Share-based payments	40	45	52
Dividend to equity holders of the Parent Company¹	-5,403	-2,443	-2,443
Dividend to non-controlling interests	-0	-0	-1
Acquisition of non-controlling interests	-0	-0	-1
Total transactions with equity holders	-5,363	-2,399	-2,393
Closing balance	19,867	21,384	22,574

1 2020; Distribution of Electrolux Professional AB. Equivalent to the fair market value of Electrolux Professional at listing at Nasdaq Stockholm on March 23, 2020.

Consolidated cash flow statement

			Nine months	Nine months
SEKM	Q3 2020	Q3 2019	2020		2019 Full year 2019
Operations
Operating income	3,220	1,063	3,280	2,229	3,189
Depreciation and amortization¹	1,095	1,270	3,470	3,607	4,821
Other non-cash items	102	600	396	1,789	1,736
Financial items paid, net²	-129	-142	-425	-430	-656
Taxes paid	-263	-170	-571	-818	-1,277
Cash flow from operations, excluding change in operating
assets and liabilities	4,024	2,620	6,150	6,377	7,813
Change in operating assets and liabilities
Change in inventories	-14	-522	1,294	-2,330	-437
Change in trade receivables	-4,112	1,238	-428	1,416	-604
Change in accounts payable	4,263	82	-2,908	-1,378	67
Change in other operating assets, liabilities and provisions	2,447	632	1,218	-1,357	476
Cash flow from change in operating assets and liabilities	2,584	1,430	-824	-3,649	-498
Cash flow from operations	6,608	4,049	5,325	2,728	7,314
Investments
Acquisition of operations	-7	-0	-8	-27	-27
Capital expenditure in property, plant and equipment	-822	-1,329	-2,594	-2,994	-5,320
Capital expenditure in product development	-153	-231	-438	-685	-788
Capital expenditure in software and other intangibles	-103	-79	-279	-346	-566
Other	81	-224	179	-494	-294
Cash flow from investments	-1,003	-1,864	-3,141	-4,545	-6,994
Cash flow from operations and investments	5,605	2,186	2,185	-1,817	321
Financing
Change in short-term investments	1	-12	13	-15	-13
Change in short-term borrowings	-1,038	-77	1,023	171	854
New long-term borrowings	0	20	9,793	2,304	3,810
Amortization of long-term borrowings⁴	-1,562	-78	-4,392	-1,234	-2,376
Payment of lease liabilities	-217	-228	-685	-651	-870
Dividend	-	-	-	-1,221	-2,443
Share-based payments	-	-	-	5	9
Cash flow from financing	-2,816	-376	5,752	-642	-1,028
Total cash flow, continuing operations	2,789	1,810	7,936	-2,459	-707
Total cash flow, discontinued operations (see Note 5)	-	-38	1,177	36	297
Total cash flow, total Group	2,789	1,772	9,113	-2,423	-411
Cash and cash equivalents at beginning of period	16,747	7,702	11,458	11,697	11,697
Exchange-rate differences referring to cash and cash
equivalents	-75	146	-500	347	172
Cash and cash equivalents in distributed operations	-	-	-611	-	-
Cash and cash equivalents at end of period³	19,460	9,621	19,460	9,621	11,458

^¹ For the period January 1 to September 30: depreciation related to right-of-use assets amounted to SEK -657m (-623). 2 For the period January 1 to September 30: interest and similar items received SEK 52m (80), interest and similar items paid SEK -309m (-362) and other financial items received/paid SEK-87 (-55). Interest paid related to lease liabilities SEK -82m (-93).

3 The difference between Cash and cash equivalents for full year 2019 in the Consolidated cash flow statement and Consolidated balance sheet correspond to the cash and cash equivalents of Electrolux Professional amounting to approximately SEK 0.6bn.

4 For the period January 1 to September 30, 2020, the amount include loan repurchases and early repayment of loan of SEK 3,085m. For Q3 2020, the amount include early repayment of loan of SEK 1,481m.

Key ratios

			Nine months	Nine months
SEKM unless otherwise stated	Q3 2020	Q3 2019	2020		2019 Full year 2019
Continuing operations
Net sales	32,004	30,330	82,058	86,970	118,981
Organic growth, %	15.2	1.4	-2.0	-0.3	-1.0
EBITA	3,416	1,263	3,902	2,841	4,003
EBITA margin, %	10.7	4.2	4.8	3.3	3.4
Operating income	3,220	1,063	3,280	2,229	3,189
Operating margin, %	10.1	3.5	4.0	2.6	2.7
Operating margin excl. non-recurring items, %¹	10.1	4.5	4.0	4.1	3.8
Income after financial items	3,056	888	2,757	1,720	2,456
Income for the period	2,356	610	2,129	1,454	1,820
Capital expenditure property, plant and equipment	-822	-1,329	-2,594	-2,994	-5,320
Operating cash flow after investments	6,005	2,499	3,188	-542	2,280
Earnings per share, SEK²	8.20	2.12	7.41	5.06	6.33
Capital turnover rate, times/year³	-	-	4.1	4.4	4.5
Return on net assets, %³	-	-	16.3	11.2	12.0
Net debt⁴	4,079	-	4,079	-	7,683
Net debt/equity ratio⁴	0.21	-	0.21	-	0.34
Average number of employees	48,248	48,588	46,566	48,736	48,652
Total Group, including discontinued operations
Income for the period	2,356	739	4,724	1,950	2,509
Earnings per share, SEK²	8.20	2.57	16.44	6.78	8.73
Equity per share, SEK	69.13	74.41	69.13	74.41	78.55
Return on equity, %⁵	-	-	32.3	12.0	11.4
Net debt⁴	-	10,229	-	10,229	-
Net debt/equity ratio⁴	-	0.48	-	0.48	-
Average number of shares excluding shares owned by
Electrolux, million	287.4	287.4	287.4	287.4	287.4

¹ For information on non-recurring items, see page 18.

² Basic.

³ To facilitate comparison, net assets excludes assets and liabilities of Electrolux Professional for all periods.

⁴ Net debt items as per September 30, 2020 and December 31, 2019 exclude assets and liabilities of Electrolux Professional. Net debt items as per September 30, 2019 include assets and liabilities of Electrolux Professional. Equity as per September 30, 2020 excludes Electrolux Professional. Equity as per September 30, 2019 and December 31, 2019 includes Electrolux Professional.

⁵ Return on equity for the nine months period 2020 include a settlement gain from the distribution of Electrolux Professional. Adjusted for the settlement gain, return on equity was 16.0%.

For definitions, see pages 26-27.

Exchange rates

SEK	Sep. 30, 2020		Sep. 30, 2019		Dec. 31, 2019
Exchange rate	Average	End of period	Average	End of period	Average	End of period
ARS	0.1401	0.1185	0.2136	0.1707	0.2010	0.1558
AUD	6.36	6.43	6.57	6.63	6.57	6.53
BRL	1.88	1.60	2.42	2.36	2.40	2.31
CAD	6.93	6.74	7.07	7.41	7.10	7.14
CHF	9.87	9.78	9.46	9.86	9.50	9.60
CLP	0.0117	0.0115	0.0136	0.0135	0.0133	0.0125
CNY	1.34	1.33	1.37	1.38	1.37	1.34
EUR	10.56	10.57	10.56	10.70	10.56	10.44
GBP	11.98	11.59	11.94	12.08	12.03	12.25
HUF	0.0303	0.0289	0.0326	0.0319	0.0324	0.0315
MXN	0.4359	0.4037	0.4853	0.4986	0.4878	0.4951
RUB	0.1324	0.1152	0.1441	0.1512	0.1455	0.1507
THB	0.2981	0.2851	0.3003	0.3211	0.3039	0.3119
USD	9.37	9.03	9.40	9.82	9.43	9.33

Net sales and operating income by business area

					Full year					Full year
SEKM	Q1 2020	Q2 2020	Q3 2020	Q4 2020	2020	Q1 2019	Q2 2019	Q3 2019	Q4 2019	2019
Europe
Net sales	10,908	8,888	12,317			10,553	10,479	11,036	13,352	45,420
Sales growth, %	0.3	-14.2	15.7			4.6	1.0	-1.8	3.3	1.8
EBITA	600	290	1,565			730	631	149	1,189	2,698
EBITA margin, %	5.5	3.3	12.7			6.9	6.0	1.3	8.9	5.9
Operating income	558	244	1,522			686	576	93	1,138	2,493
Operating margin, %	5.1	2.8	12.4			6.5	5.5	0.8	8.5	5.5
North America
Net sales	8,409	8,537	10,993			9,099	10,255	10,880	8,719	38,954
Sales growth, %	-13.1	-17.9	8.6			-6.8	-12.1	-0.7	-18.3	-9.5
EBITA	-247	-126	1,033			-450	555	-3	-486	-383
EBITA margin, %	-2.9	-1.5	9.4			-4.9	5.4	-0.0	-5.6	-1.0
Operating income	-299	-173	990			-482	504	-20	-519	-516
Operating margin, %	-3.6	-2.0	9.0			-5.3	4.9	-0.2	-5.9	-1.3
Latin America
Net sales	3,826	2,822	4,779			4,312	4,816	4,613	5,913	19,653
Sales growth, %	-1.9	-24.2	37.8			6.9	8.3	14.2	13.9	10.9
EBITA	32	-141	481			-165	217	1,591	390	2,033
EBITA margin, %	0.8	-5.0	10.1			-3.8	4.5	34.5	6.6	10.3
Operating income	-15	-183	440			-223	164	1,539	340	1,821
Operating margin, %	-0.4	-6.5	9.2			-5.2	3.4	33.4	5.8	9.3
Asia-Pacific, Middle East and Africa
Net sales	3,434	3,230	3,916			3,445	3,682	3,801	4,027	14,954
Sales growth, %	-3.2	-10.9	10.1			2.3	-3.8	1.6	-4.1	-1.2
EBITA	78	188	484			141	204	-115	350	580
EBITA margin, %	2.3	5.8	12.4			4.1	5.5	-3.0	8.7	3.9
Operating income	44	159	459			110	171	-150	315	446
Operating margin, %	1.3	4.9	11.7			3.2	4.7	-4.0	7.8	3.0
Group common costs, etc.	-165	-109	-191			-143	-197	-400	-315	-1,055
Total, continuing operations
Net sales	26,578	23,476	32,004			27,408	29,232	30,330	32,011	118,981
Sales growth, %	-5.1	-16.6	15.3			0.6	-3.6	1.2	-2.8	-1.3
EBITA	340	146	3,416			145	1,433	1,263	1,162	4,003
EBITA margin, %	1.3	0.6	10.7			0.5	4.9	4.2	3.6	3.4
Operating income	122	-62	3,220			-53	1,219	1,063	960	3,189
Operating margin, %	0.5	-0.3	10.1			-0.2	4.2	3.5	3.0	2.7
Total Group, including discontinued operations
Income for the period, Group total	2,509	-141	2,356			79	1,132	739	559	2,509
Earnings per share, Group total, SEK¹	8.73	-0.49	8.20			0.28	3.94	2.57	1.94	8.73

¹ Basic.

Non-recurring items by business area

					Full year					Full year
SEKM	Q1 2020	Q2 2020	Q3 2020	Q4 2020	2020	Q1 2019¹	Q2 2019	Q3 2019²	Q4 2019	2019
Europe	-	-	-			-	-	-752	-	-752
North America	-	-	-			-829	-	-242	-	-1,071
Latin America	-	-	-			-225	-	1,326	-	1,101
Asia-Pacific, Middle East and
Africa	-	-	-			-	-	-398	-	-398
Group common costs, etc.	-	-	-			-	-	-224	-	-224
Total, continuing operations	-	-	-			-1,054	-	-290	-	-1,344

¹ The non-recurring item of SEK -829m relates to the consolidation of U.S. cooking production and SEK -225m to the closure of a refrigeration production line in Latin America. The costs are included in Cost of goods sold and consists of write down of fixed assets, provision for severance cost and other cost related to the projects. 2 The non-recurring item of SEK -290m includes recovery of overpaid sales tax in Brazil of SEK 1,403m, a legal settlement in the U.S. of SEK -197m and restructuring charges for efficiency measures and outsourcing projects across business areas and Group common costs of SEK -1,496m. The income from overpaid sales tax in Brazil and the cost for legal settlement in the U.S are included in other operating income/expenses, the costs for restructuring and outsourcing projects are included in the applicable functional lines of the income statement.

Operating income excluding non-recurring items (NRI)

					Full year					Full year
SEKM	Q1 2020	Q2 2020	Q3 2020	Q4 2020	2020	Q1 2019	Q2 2019	Q3 2019	Q4 2019	2019
Europe
Operating income excl. NRI	558	244	1,522			686	576	845	1,138	3,245
Operating margin excl. NRI, %	5.1	2.8	12.4			6.5	5.5	7.7	8.5	7.1
North America
Operating income excl. NRI	-299	-173	990			347	504	222	-519	555
Operating margin excl. NRI, %	-3.6	-2.0	9.0			3.8	4.9	2.0	-5.9	1.4
Latin America
Operating income excl. NRI	-15	-183	440			2	164	213	340	720
Operating margin excl. NRI, %	-0.4	-6.5	9.2			0.1	3.4	4.6	5.8	3.7
Asia-Pacific, Middle East and
Africa
Operating income excl. NRI	44	159	459			110	171	248	315	844
Operating margin excl. NRI, %	1.3	4.9	11.7			3.2	4.7	6.5	7.8	5.6
Group common cost etc
Operating income excl. NRI	-165	-109	-191			-143	-197	-176	-315	-831
Total, continuing operations
Operating income excl. NRI	122	-62	3,220			1,001	1,219	1,353	960	4,533
Operating margin excl. NRI, %	0.5	-0.3	10.1			3.7	4.2	4.5	3.0	3.8

Net sales by business area

			Nine months	Nine months
SEKM	Q3 2020	Q3 2019	2020		2019 Full year 2019
Europe	12,317	11,036	32,113	32,068	45,420
North America	10,993	10,880	27,939	30,234	38,954
Latin America	4,779	4,613	11,427	13,740	19,653
Asia-Pacific, Middle East and Africa	3,916	3,801	10,579	10,928	14,954
Total, continuing operations	32,004	30,330	82,058	86,970	118,981

Change in net sales by business area

		Q3 2020 in local	Nine months	Nine months 2020 in
Year–over–year, %	Q3 2020	currencies	2020	local currencies
Europe	12	16	0	1
North America	1	9	-8	-7
Latin America	4	38	-17	3
Asia-Pacific, Middle East and Africa	3	10	-3	-1
Total change, continuing operations	6	15	-6	-2

Operating income by business area

			Nine months	Nine months
SEKM	Q3 2020	Q3 2019	2020		2019 Full year 2019
Europe	1,522	93	2,324	1,355	2,493
Margin, %	12.4	0.8	7.2	4.2	5.5
North America	990	-20	518	2	-516
Margin, %	9.0	-0.2	1.9	0.0	-1.3
Latin America	440	1,539	242	1,481	1,821
Margin, %	9.2	33.4	2.1	10.8	9.3
Asia-Pacific, Middle East and Africa	459	-150	661	131	446
Margin, %	11.7	-4.0	6.2	1.2	3.0
Group common costs, etc.	-191	-400	-465	-741	-1,055
Operating income, continuing operations	3,220	1,063	3,280	2,229	3,189
Margin, %	10.1	3.5	4.0	2.6	2.7

Change in operating income by business area

		Q3 2020 in local	Nine months	Nine months 2020 in
Year–over–year, %	Q3 2020	currencies	2020	local currencies
Europe	1,528	1,453	71	73
North America	n.m.	n.m.	n.m.	n.m.
Latin America	-71	-62	-84	-77
Asia-Pacific, Middle East and Africa	n.m.	n.m.	403	461
Total change, continuing operations	203	361	47	80

Note: n.m. (not meaningful) is used when the calculated number is considered not relevant.

Working capital and net assets

	Sep. 30,		Sep. 30, 2019,		Sep. 30,		Dec. 31,
SEKM	2020	%¹	restated²	%¹	2019³	%¹	2019²	%¹
Inventories	14,006	13.3	18,648	15.7	20,035	15.7	16,194	13.8
Trade receivables	19,154	18.2	19,380	16.4	21,174	16.6	20,847	17.7
Accounts payable	-28,731	-27.3	-33,396	-28.2	-34,792	-27.2	-33,892	-28.8
Operating working capital	4,429	4.2	4,632	3.9	6,417	5.0	3,149	2.7
Provisions	-8,182		-8,710		-9,458		-8,183
Prepaid and accrued income and
expenses	-12,593		-11,692		-12,273		-11,748
Taxes and other assets and liabilities	-1,010		966		623		-608
Working capital	-17,357	-16.5	-14,804	-12.5	-14,692	-11.5	-17,390	-14.8
Property, plant and equipment,
owned	20,804		21,037		22,185		21,803
Property, plant and equipment, right
of-use	2,495		2,875		3,057		2,811
Goodwill	6,621		7,278		9,162		7,071
Other non-current assets	5,347		6,101		6,550		5,820
Deferred tax assets and liabilities	6,036		6,359		6,573		6,057
Net assets	23,946	22.7	28,846	24.3	32,834	25.7	26,172	22.3
Annualized net sales, calculated at
end of period exchange rates	105,413		118,485		127,747		117,519
Average net assets	26,888	24.6	26,623	23.0	30,240	24.1	26,532	22.3
Annualized net sales, calculated at
average exchange rates	109,411		115,960		125,222		118,981

¹ % of annualized net sales.

² Excluding discontinued operations.

³ Including discontinued operations.

Net assets by business area

		Assets			Equity and liabilities			Net assets
	Sep. 30,	Sep. 30,	Dec. 31,	Sep. 30,	Sep. 30,	Dec. 31,	Sep. 30,	Sep. 30,	Dec. 31,
SEKM	2020	2019	2019	2020	2019	2019	2020	2019	2019
Europe	26,203	27,816	28,032	23,502	25,173	26,604	2,701	2,643	1,429
North America	22,310	24,239	22,917	15,406	17,241	16,421	6,904	6,998	6,496
Latin America	10,519	13,972	14,064	5,577	6,729	7,020	4,942	7,243	7,044
Asia-Pacific, Middle East and Africa	11,255	12,581	12,351	6,494	6,555	6,289	4,761	6,026	6,062
Professional Products	-	7,468	-	-	3,479	-	-	3,988	-
Other¹	9,056	9,535	9,175	4,418	3,599	4,033	4,638	5,936	5,142
Total operating assets and liabilities	79,342	95,611	86,540	55,396	62,777	60,368	23,946	32,834	26,172
Discontinued operations, operating assets
and liabilities	-	-	8,034	-	-	3,951	-	-	-
Liquid funds	19,740	10,196	11,189	-	-	-	-	-	-
Total borrowings	-	-	-	16,993	11,488	11,856	-	-	-
Lease liabilities	-	-	-	2,793	3,372	3,150	-	-	-
Pension assets and liabilities	976	443	1,043	5,008	6,009	4,909	-	-	-
Dividend payable	-	-	-	-	1,221	-	-	-	-
Total equity	-	-	-	19,867	21,384	22,574	-	-	-
Total	100,058	106,251	106,808	100,058	106,251	106,808	-	-	-

¹ Includes common functions and tax items.

Parent Company income statement

			Nine months	Nine months
SEKM	Q3 2020	Q3 2019	2020		2019 Full year 2019
Net sales	11,052	10,138	28,567	29,183	40,594
Cost of goods sold	-9,074	-8,897	-24,523	-25,256	-35,020
Gross operating income	1,978	1,241	4,044	3,927	5,574
Selling expenses	-851	-825	-2,448	-2,375	-3,314
Administrative expenses	-498	-818	-1,385	-1,868	-2,276
Other operating expenses	-	-49	-7	-49	-487
Operating income	629	-451	204	-365	-503
Financial income	224	1,952	6,595	3,923	5,424
Financial expenses	-132	-279	-875	-588	-888
Financial items, net	92	1,673	5,720	3,335	4,536
Income after financial items	721	1,222	5,924	2,970	4,033
Appropriations	2	80	37	-809	-682
Income before taxes	723	1,302	5,961	2,161	3,351
Taxes	-137	63	5	139	6
Income for the period	586	1,365	5,966	2,300	3,357

Parent Company balance sheet

SEKM	Sep. 30, 2020		Sep. 30, 2019 Dec. 31, 2019
Assets
Non–current assets	34,156	38,321	41,760
Current assets	38,297	40,769	33,100
Total assets	72,453	79,090	74,860
Equity and liabilities
Restricted equity	5,741	5,638	5,597
Non–restricted equity	21,027	21,840	22,894
Total equity	26,768	27,478	28,491
Untaxed reserves	438	405	430
Provisions	1,498	1,480	1,461
Non–current liabilities	14,421	6,979	8,200
Current liabilities	29,328	42,748	36,278
Total equity and liabilities	72,453	79,090	74,860

Shares

				Shares held by	Shares held by
Number of shares	A-shares	B-shares	Shares total	Electrolux	other shareholders
Number of shares as of January 1, 2020	8,192,539	300,727,769	308,920,308	21,522,858	287,397,450
Number of shares as of September 30, 2020	8,192,539	300,727,769	308,920,308	21,522,858	287,397,450
As % of total number of shares				7.0%

Notes

Note 1 Accounting 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, the Swedish Annual Accounts Act and RFR 2 'Accounting for legal entities' issued by the Swedish Financial Reporting Board.

Electrolux interim reports contain a condensed set of financial statements. For the Group this chiefly means that the disclosures are limited compared to the consolidated financial statements presented in the annual report. For the Parent Company this means that the financial statements in general are presented in condensed versions and with limited disclosures compared to the annual report.

The accounting policies applied are consistent with those applied in the preparation of the Group's Annual Report 2019, except for the adoption of standard amendments effective as of January 1, 2020. The amendments have not had any material impact on the financial statements. See section 'New or amended accounting standards to be applied after 2019' in the Annual Report 2019 for more information.

Discontinued operations

In January 2019, Electrolux announced that the company was preparing for the separation and distribution of its Professional Products business area ('Electrolux Professional'). On December 5, 2019 the Electrolux Board of Directors decided to propose to the Electrolux shareholders to distribute the shares in the wholly-owned subsidiary Electrolux Professional AB to the shareholders of Electrolux. The decision was taken by an Extraordinary General Meeting on February 21, 2020 and Electrolux Professional AB was listed on Nasdaq Stockholm on March 23, 2020. Electrolux Professional has been classified as held for distribution to owners as per December 2019 and is accounted for under the applicable principles for assets held for sale and discontinued operations. All related effects are referred to as 'Discontinued operations'.

As per December 2019, Electrolux Professional was reported as discontinued operations in the consolidated statement of comprehensive income. The consolidated statement of comprehensive income for comparative periods has been restated accordingly. The Electrolux Professional results are excluded from the individual lines of the consolidated income statement with the total net reported as 'Income for the period, discontinued operations', which in full is attributable to equity holders of the Parent Company.

The consolidated cash flow statement includes a full cash flow statement for continuing operations and total cash flow for discontinued operations.

In the balance sheet as per December 31, 2019, assets and liabilities of Electrolux Professional were classified as 'Discontinued operations, assets held for distribution' and 'Discontinued operations, liabilities held for distribution' respectively. The balance sheet for the comparative period previous year presents the historical financial statements as no restatement of the balance sheet is allowed under IFRS. However, to facilitate comparison, restated net assets figures are presented on page 20.

Financial statement details for discontinued operations are included in Note 5.

Note 2 Disaggregation of revenue

Electrolux manufactures and sells appliances mainly in the wholesale market to customers being retailers. Electrolux products include refrigerators, dishwashers, washing machines, cookers, vacuum cleaners, air conditioners and small domestic appliances. Electrolux has four regional Consumer Products business areas with focus on the consumer market.

Sales of products are revenue recognized at a point in time, when control of the products has transferred. Revenue from services related to installation of products, repairs or maintenance service is recognized when control is transferred being over the time the service is provided. Sales of services are not material in relation to Electrolux total net sales.

Geography and product category are considered important attributes when disaggregating Electrolux revenue. The business areas, also being the Group's segments, are based on geography: Europe, North America, Latin America and Asia-Pacific, Middle East and Africa. For business area information, see pages 5-6. In addition, the table below presents net sales by product area Taste (cooking appliances), Care (dish and laundry appliances) and Wellbeing (e.g. cleaning appliances and small domestic appliances).

SEKM	Nine months 2020	Nine months 2019	Full year 2019
Product areas
Taste	50,022	53,363	72,424
Care	23,905	24,760	34,593
Wellbeing	8,131	8,848	11,964
Total	82,058	86,970	118,981

Note 3 Fair values and carrying amounts of financial assets and liabilities

		Sep. 30, 2020		Sep. 30, 2019		Dec. 31, 2019
		Carrying		Carrying		Carrying
SEKM	Fair value	amount	Fair value	amount	Fair value	amount
Per category
Financial assets at fair value through profit and loss	246	246	464	464	269	269
Financial assets measured at amortized cost	38,627	38,627	30,808	30,808	31,668	31,668
Derivatives, financial assets at fair value through profit
and loss	151	151	177	177	114	114
Derivatives in hedge accounting	8	8	4	4	78	78
Total financial assets	39,032	39,032	31,453	31,453	32,129	32,129
Financial liabilities measured at amortized cost	45,927	45,543	46,180	46,095	45,515	45,482
Derivatives, financial liabilities at fair value through profit
and loss	150	150	109	109	291	291
Derivatives in hedge accounting	4	4	19	19	2	2
Total financial liabilities	46,081	45,697	46,308	46,223	45,808	45,775

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 counterparties, i.e., if a counterparty will default, assets and liabilities will be netted. Derivatives are presented gross in the balance sheet.

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 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. At September 30, 2020, the fair value for Level 1 financial assets was SEK 163m (179) and for financial liabilities SEK 0m (0).

Level 2: Inputs other than quoted prices included in Level 1 that are observable for assets or liabilities either directly or indirectly. At September 30, 2020, the fair value of Level 2 financial assets was SEK 159m (181) and financial liabilities SEK 154m (128).

Level 3: Inputs for the assets or liabilities that are not entirely based on observable market data. At September 30, 2020, the fair value of Level 3 financial assets was SEK 83m (285) and financial liabilities SEK 0m (0).

Note 4 Pledged assets and contingent assets and liabilities

SEKM	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Group
Pledged assets	-	7	6
Guarantees and other
commitments	998	1,173	939
Parent Company
Pledged assets	-	-	-
Guarantees and other
commitments	963	1,822	1,015

For more information on contingent liabilities, see Note 25 in the Annual Report 2019.

Note 5 Acquisitions of operations and discontinued operations

Acquisitions

Electrolux has acquired 60% of the shares in the Chinese company Guangdong De Yi Jie Appliances Co., LTD, a company that sells AEG household appliances in China. Before the acquisition, Electrolux held 40% of the shares in the company. The acquired company is accounted for as a fully owned subsidiary as from August 31, 2020. A preliminary purchase price allocation has resulted in a goodwill of SEK 14m. The net cash flow effect from the acquisition is SEK -7m. The operations are included in business area Asia-Pacific, Middle East and Africa.

For information on acquisitions in 2019, see Note 5 in the Q4 interim report 2019 or Note 26 in the Annual Report 2019.

Discontinued operations

Business area Electrolux Professional was classified as held for distribution to owners as per December 2019 and accounted for under the applicable principles for assets held for sale and discontinued operations, IFRS 5 'Non-current assets held for sale and discontinued operations' and IFRIC 17 'Distribution of non-cash assets to owners'. The separation was completed during the first quarter 2020 as Electrolux Professional was distributed to the shareholders and listed at Nasdaq Stockholm on March 23, 2020. The settlement gain has been calculated as the difference between the carrying amount of the assets distributed and the carrying amount of the dividend payable, measured at the fair market value of Electrolux Professional at listing.

All related effects are referred to as 'Discontinued operations'. See section 'Discontinued operations' in Note 1 for more information. The financial information presented below consists of Electrolux Professional's contribution to Electrolux Group consolidated financial information up until the separation on March 23, 2020.

			Nine months	Nine months
SEKM	Q3 2020	Q3 2019	2020	2019	Full year 2019
Net sales	-	2,190	1,884	6,946	9,281
Cost of goods sold	-	-1,457	-1,191	-4,476	-6,040
Gross operating income	-	733	693	2,470	3,241
Selling expenses	-	-445	-349	-1,307	-1,699
Administrative expenses	-	-170	-161	-340	-584
Other operating income and expenses	-	8	2	4	32
Operating income	-	125	185	827	991
Financial items, net	-	-3	-1	-6	12
Income after financial items	-	122	184	821	1,003
Taxes	-	6	-40	-325	-314
Income for the period, Electrolux Professional	-	128	144	496	688
Translation difference recycled from OCI	-	-	72	-	-
Settlement gain from distribution of Electrolux Professional	-	-	2,379	-	-
Income for the period, discontinued operations	-	-	2,595	-	-

SEKM			Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Property, plant and equipment, owned			-	1,147	1,214
Property, plant and equipment, right-of-use			-	182	238
Goodwill			-	1,884	1,821
Other intangible assets			-	416	388
Other non-current assets			-	415	397
Total non-current assets			-	4,044	4,057
Inventories			-	1,387	1,265
Trade receivables			-	1,794	1,687
Other current assets			-	683	1,025
Total current assets			-	3,864	3,977
Total assets			-	7,908	8,034
Long-term borrowings			-	34	3
Long-term lease liabilities	-	133	172
Other provisions			-	918	846
Total non-current liabilities			-	1,085	1,021
Accounts payable			-	1,395	1,485
Short-term borrowings			-	7	4
Short-term lease liabilities			-	51	72
Other current liabilities			-	1,457	1,370
Total current liabilities			-	2,911	2,930
Total liabilities			-	3,995	3,951
			Nine months	Nine months
SEKM	Q3 2020	Q3 2019	2020	2019	Full year 2019
Cash flow from operations	-	56	68	664	1,120
Cash flow from investments	-	-68	-87	-556	-689
Cash flow from financing	-	-26	1,195	-71	-134
Total cash flow	-	-38	1,177	36	297

Operations by business area yearly

SEKM	2015	2016	2017¹	2018	2019
Europe
Net sales	38,224	39,097	39,231	43,321	45,420
Operating income	2,290	2,794	2,772	2,128	2,493
Margin, %	6.0	7.1	7.1	4.9	5.5
North America
Net sales	45,276	44,914	42,083	39,804	38,954
Operating income	1,454	2,657	2,796	1,104	-516
Margin, %	3.2	5.9	6.6	2.8	-1.3
Latin America
Net sales	19,679	16,384	18,277	17,963	19,653
Operating income	459	-111	483	492	1,821
Margin, %	2.3	-0.7	2.6	2.7	9.3
Asia-Pacific, Middle East and Africa
Net sales	13,787	13,833	13,457	14,375	14,954
Operating income	308	673	1,077	979	446
Margin, %	2.2	4.9	8.0	6.8	3.0
Other
Group common cost, etc.	-2,631	-693	-775	-527	-1,055
Total, continuing operations
Net sales	116,965	114,228	113,048	115,463	118,981
Operating income	1,879	5,320	6,353	4,176	3,189
Margin, %	1.6	4.7	5.6	3.6	2.7

Non-recurring items in operating income²	2015³	2016	2017	2018⁴	2019⁵
Europe	-40	-	-	-747	-752
North America	-207	-	-	-596	-1,071
Latin America	-11	-	-	-	1,101
Asia-Pacific, Middle East and Africa	-90	-	-	-	-398
Group common cost	-1,901	-	-	-	-224
Total, continuing operations	-2,249	-	-	-1,343	-1,344

¹ 2017 has been restated due to IFRS 15.

² For more information, see Note 7 in the annual reports.

³ Refers to costs related to the not completed acquisition of GE Appliances of SEK -2,059m and restructuring costs within HC&SDA of SEK -190m. 4 Non-recurring items 2018: SEK -596m refers to the consolidation of freezer production in North America, SEK -747m refers to business area Europe and includes a fine of SEK -493m, relating to an investigation by the French Competition Authority, and a cost of SEK -254m relating to an unfavorable court ruling in France. ⁵ Non-recurring items 2019 includes SEK -829m related to the consolidation of U.S. cooking production and SEK -225m to the closure of a refrigeration production line in Latin America, recovery of overpaid sales tax in Brazil of SEK 1,403m, a legal settlement in the U.S. of SEK -197m and restructuring charges for efficiency measures and outsourcing projects across business areas and Group common costs of SEK -1,496m.

Five-year review

Total Group 2015-2018 and Continuing operations 2018 (restated)-2019

				Restated
2015	2016	2017¹	2018	2018²	2019
123,511	121,093	120,771	124,129	115,463	118,981
2.2	-1.1	-0.4	1.3	1.2	-1.0
2,741	6,274	7,407	5,310	4,176	3,189
2.2	5.2	6.1	4.3	3.6	2.7
2,101	5,581	6,966	4,887	3,754	2,456
1,568	4,493	5,745	3,805	2,854	1,820
-2,249	-	-	-1,343	-1,343	-1,344
-3,027	-2,830	-3,892	-4,650	-4,506	-5,320
6,745	9,140	6,877	3,649	2,646	2,280
5.45	15.64	19.99	13.24	9.93	6.33
52.21	61.72	71.26	75.67	-	78.55
6.50	7.50	8.30	8.50	8.50	7.00
5.0	5.8	5.9	5.3	5.6	4.5
11.0	29.9	36.0	22.7	20.2	12.0
9.9	29.4	31.9	18.2	-	11.4
6,407	360	197	1,825	-	7,683
0.43	0.02	0.01	0.08	-	0.34
287.1	287.4	287.4	287.4	287.4	287.4
58,265	55,400	55,692	54,419	51,253	48,652

¹ 2017 has been restated due to IFRS 15.

² Excluding discontinued operations.

³ For more information, see table on pages 18 and 25 and Note 7 in the annual reports.

⁴ Basic.

⁵ 2019, 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 to assist in generating a healthy total yield for Electrolux shareholders. The objective is growth with consistent profitability.

Financial goals

• Operating margin of at least 6%

• Capital turnover-rate of at least 4 times
• Return on net assets >20%
• Average annual sales growth of at least 4%

Definitions

This report includes financial measures as required by the financial reporting framework applicable to Electrolux, which is based on IFRS. In addition, there are other measures and indicators that are used to follow-up, analyze and manage the business and to provide Electrolux stakeholders with useful financial information on the Group's financial position, performance and development in a consistent way. On the following page is a list of definitions of all measures and indicators used, referred to and presented in this report.

Computation of average amounts and annualized income statement measures

In computation of key ratios where averages of capital balances are related to income statement measures, the average capital balances are based on the opening balance and all quarter-end closing balances included in the reporting period, and the income statement measures are annualized, translated at average rates for the period. In computation of key ratios where end-of-period capital balances are related to income statement measures, the latter are annualized, translated at end of-period exchange rates. Adjustments are made for acquired and divested operations.

Definitions (continued)

Growth measures

Change in net sales

Current year net sales for the period less previous year net sales for the period as a percentage of previous year net sales for the period.

Sales growth

Change in net sales adjusted for currency translation effects.

Organic growth

Change in net sales, adjusted for changes in exchange rates, acquisitions and divestments.

Acquisitions

Change in net sales, adjusted for organic growth, changes in exchange rates and divestments. The impact from acquisitions relates to net sales reported by acquired operations within 12 months after the acquisition date.

Divestments

Change in net sales, adjusted for organic growth, changes in exchange rates and acquisitions. The impact from divestments relates to net sales reported by the divested operations within 12 months before the divestment date.

Profitability measures

EBITA

Operating income excluding amortization of intangible assets.

EBITA margin EBITA expressed as a percentage of net sales.

Operating margin (EBIT margin) Operating income (EBIT) expressed as a percentage of net sales.

Operating margin (EBIT margin) excluding non-recurring items

Operating income (EBIT) excluding non-recurring items, expressed as a percentage of net sales.

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

Return on equity Income for the period (annualized) expressed as a percentage of average total equity.

Capital measures

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

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

Capital turnover-rate Net sales (annualized) divided by average net assets.

Share-based measures

Earnings per share, Basic Income for the period attributable to equity holders of the Parent Company divided by the average number of shares excluding shares held by Electrolux.

Earnings per share, Diluted

Income for the period attributable to equity holders of the Parent Company divided by the average number of shares after dilution, excluding shares held by Electrolux.

Equity per share

Total equity divided by total number of shares excluding shares held by Electrolux.

Capital indicators

Liquid funds

Cash and cash equivalents, short-term investments, financial derivative assets1 and prepaid interest expenses and accrued interest income1 .

Operating working capital

Inventories and trade receivables less accounts payable.

Working capital

Total current assets exclusive of liquid funds, less non-current other provisions and total current liabilities exclusive of total short-term borrowings.

Net assets

Total assets exclusive of liquid funds and pension plan assets, less deferred tax liabilities, non-current other provisions and total current liabilities exclusive of total short-term borrowings.

Total borrowings

Long-term borrowings and short-term borrowings, financial derivative liabilities1 , accrued interest expenses and prepaid interest income1 .

Total short-term borrowings Short-term borrowings, financial derivative liabilities1 , accrued interest expenses and prepaid interest income1 .

Interest-bearing liabilities

Long-term borrowings and short-term borrowings exclusive of liabilities related to trade receivables with recourse1 .

Financial net debt Total borrowings less liquid funds.

Net provision for post-employment benefits Provisions for post-employment benefits less pension plan assets.

Net debt Financial net debt, lease liabilities and net provision for postemployment benefits.

Other measures

Operating cash flow after investments Cash flow from operations and investments adjusted for financial items paid, taxes paid and acquisitions/divestments of operations.

Non-recurring items

Material profit or loss items in operating income which are relevant for understanding the financial performance when comparing income for the current period with previous periods.

¹ See table Net debt on page 8.

Shareholders' information

President and CEO Jonas Samuelson's comments on the third quarter results 2020 Today's press release is available on the Electrolux website www.electroluxgroup.com/ir

Telephone conference 09.00 CET

A telephone conference is held at 09.00 CET today, October 23. Jonas Samuelson, President and CEO and Therese Friberg, CFO will comment on the report.

Details for participation by telephone are as follows: Participants in Sweden: +46 8 566 426 51 Participants in UK/Europe: +44 3333 000 804 Participants in US: +1 631 9131 422 Pin code: 36830556#

Slide presentation for download: www.electroluxgroup.com/ir

Link to webcast: https://edge.media-server.com/mmc/p/yv4vxegt

For further information, please contact: Sophie Arnius, Head of Investor Relations +46 70 590 80 72

Calendar 2020 - 2021

EGM	November 3
Capital markets update	November 17
Consolidated results 2020	February 2
AGM	March 25
Interim report January - March	April 28
Interim report January - June	July 20
Interim report January - September	October 27

This report contains 'forward-looking' statements that reflect the company's current expectations. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations prove to have been correct as they are subject to risks and uncertainties that could cause actual results to differ materially due to a variety of factors. These factors include, but are not limited to, changes in consumer demand, changes in economic, market and competitive conditions, currency fluctuations, developments in product liability litigation, changes in the regulatory environment and other government actions.

Forward-looking statements speak only as of the date they were made, and, other than as required by applicable law, the company undertakes no obligation to update any of them considering new information or future events.

AB Electrolux (publ), 556009-4178 Postal address: SE-105 45 Stockholm, Sweden Visiting address: S:t Göransgatan 143, Stockholm Telephone: +46 (0)8 738 60 00

Website: www.electroluxgroup.com

Shape living for the better

Electrolux is a leading global appliance company that has shaped living for the better for more than 100 years. We reinvent taste, care and wellbeing experiences for millions of people around the world, always striving to be at the forefront of sustainability in society through our solutions and operations. Under our brands, including Electrolux, AEG and Frigidaire, we sell approximately 60 million household products in approximately 120 markets every year. In 2019 Electrolux had sales of SEK 119 billion and employed 49,000 people around the world. For more information go to www.electroluxgroup.com