Electrolux: President and CEO Jonas Samuelson’s Comments on the Results for the Second Quarter 2016

Significant earnings improvement

STOCKHOLM–(BUSINESS WIRE)–Regulatory News:

Electrolux (STO:ELUXA) (STO:ELUXB):

Electrolux operating income for the second quarter increased
significantly compared to the same period previous year and amounted to
SEK 1,564m. Of the Group’s six business areas, four achieved an
operating margin of above 6%. The improvement was particularly strong in
Major Appliances EMEA and Major Appliances North America. Major
Appliances Asia/Pacific and Professional Products showed a stable
development in earnings. Measures to restore profitability within Small
Appliances continued. A continued weak market environment in Latin
America impacted the performance in the region negatively. Cash flow in
the second quarter was at historically high levels and amounted to SEK
4.1bn.

Earnings continued to improve within Major Appliances EMEA, driven by
higher sales volumes, positive contribution from product portfolio
management and cost efficiency measures. Electrolux continued to gain
market share in our focus categories and premium brands. The operating
margin amounted to 6.4% in the quarter. Market demand for appliances in
Europe continued to grow, increasing by 4%. We now expect the European
market demand to grow by 2-4% in 2016. Following the Brexit referendum,
the outlook for UK demand and the British Pound is uncertain.

Positive contribution from the product mix and improved cost efficiency
led to a strong recovery in our North American operations, and our work
to enhance efficiencies in the production system is making progress. The
operating margin was 6.5% in the quarter. Market demand for core
appliances increased by 3% in the second quarter and 5% year-to-date.
Sales of core appliances declined somewhat, driven by products under
private labels, while sales of products under own brands increased. We
expect market demand for appliances in North America to grow by 4-5% in
2016.

Market demand for appliances in Latin America remained weak. Demand
continued to deteriorate in Brazil, and also Chile and Argentina
contracted in the quarter. Lower sales volumes and a deterioration of
the mix impacted results negatively, while price increases and cost
reductions partly compensated for continued currency headwinds. At
current currency rates, the headwind is forecast to be less significant
in the second half of the year compared with the first half. However, we
expect the Latin American market to remain weak also in the second half
of 2016.

Earnings in Asia/Pacific improved 11% year-over-year. Growth continued
at a strong pace in Southeast Asia, partially offsetting the planned
contraction in China. This development contributed positively to the
operating margin. In the quarter, we announced the acquisition of
Vintec, an Australia and Singapore-based company which supplies a wide
range of climate-controlled wine cabinets throughout the region. Vintec
has a good strategic fit with our major appliances business and
complements the product offering.

In Small Appliances, the work to restore profitability continued.
Actions to reposition operations and to exit unprofitable categories and
markets continued at a high pace. These measures will continue in the
second half of the year. Professional Products continued to generate
stable operating results and margin.

The focus to achieve stability in all operations globally and to
increase the operating margin continues. These efforts will, together
with the development of innovative products delivering best-in-class
consumer experiences, support cash generation and shareholder value.

Electrolux is a global leader in home appliances and appliances for
professional use, based on deep consumer insight. We offer thoughtfully
designed, innovative and sustainable solutions, developed in close
collaboration with professional users. The products include
refrigerators, ovens, cookers, hobs, dishwashers, washing machines,
vacuum cleaners, air conditioners and small domestic appliances. Under
esteemed brands including Electrolux, AEG, Zanussi, Frigidaire and
Electrolux Grand Cuisine, the Group sells more than 60 million products
to customers in more than 150 markets every year. In 2015, Electrolux
had sales of SEK 124 billion and 58,000 employees. For more information
go to www.electroluxgroup.com

This information is information that AB Electrolux is obliged to make
public pursuant to the EU Market Abuse Regulation and the Securities
Markets Act. The information was submitted for publication, through the
agency of the contact person set out above, at 0800 CET on July 20, 2016.

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Contacts

Electrolux
Daniel Frykholm
Electrolux Press Hotline
+46
8 657 65 07
or
Catarina Ihre
Vice
President Investor Relations
+46 8 738 60 87