President and CEO Hans Stråberg's comments on the first-quarter results of 2010

President and CEO Hans Stråberg's comments on the first-quarter results of 2010

Another record result for Electrolux 

The positive development from last year continues as Electrolux shows its best
first-quarter result in appliances ever.

Electrolux strategy with focus on innovative products, strong brands and a
cost-efficient production progresses as planned and has for the last 12-month
period resulted in an operating margin of over 6%.

The result for 2009 was one of the best ever for Electrolux, and the first
quarter of 2010 continues in the same way, with a new record and all operations
showing strong improvements. 

In North America, we've improved our operating income through a better product
mix. This is a result of our successful increase in sales and market shares
under our own strong brands Frigidaire and Electrolux. At the same time, we've
consciously continued to phase out products with lower profitability, primarily
under retailers' own brands. 

In Europe, we are continuing to take market share within the very important
built-in segment. This is mainly due to the successes in the German market and
our cooperation with IKEA. Another positive factor responsible for improving our
result is our successful quality work, which has decreased our warranty costs. 

Demand in our most important markets has recovered somewhat more quickly than we
anticipated. This is primarily true of the US market, which showed strong growth
in March. For the whole of Western Europe, we note a certain increased demand
for the first time after ten quarters of decreases. The Brazilian market
continues to grow, even though previously implemented tax subsidies were
discontinued in the quarter. A steady improvement in demand is good news for
Electrolux, because we can quickly adapt production, at the same time as we are
launching new, innovative products. 

Prices of certain raw materials continue to rise. When the global economy picks
up the pace, we expect even higher raw-material prices. We have contracts for
fixed prices on a significant portion of the year's purchases and we do not
expect our costs for raw materials in 2010 to increase by more than SEK 1
billion compared to last year. Data show no historical correlation between
increasing raw-material costs and poorer earnings for Electrolux, which is a
result of the fact that we have been able to compensate for increased
raw-material costs with higher prices and cost savings. In addition, we know
that increasing raw-material prices often coincide with an economic recovery,
and thus also an increased demand for appliances. 

Electrolux has for the last 12-month period achieved an operating margin of more
than 6%. The margin improvement in combination with increased balance sheet
efficiencies has also resulted in a return on capital employed above our target
of 25%. Although there is still great uncertainty and many things can happen in
the remaining part of the year, 2010 could be the year we approach our goal of
an operating margin of 6%.


Stockholm, April 27, 2010

Hans Stråberg
President and Chief Executive Officer