First Quarter Report, 2003

FIRST QUARTER REPORT, 2003 Stockholm, April 22, 2003 Page 1(18) Amounts in SEKm, First First Change unless otherwise stated quarter quarter 2003 2002 Net sales 32,062 33,580 -4.5% Operating income 1) 1,798 3,791 -52.6% Operating income, excl. items affecting comparability 1,798 1,906 -5.7% Margin, % 5.6 5.7 Income after financial items 1) 1,798 3,682 -51.2% Income after financial items, excl. items affecting comparability 1,798 1,797 +0.1% Margin, % 5.6 5.4 Net income per share, SEK 2) 3.95 9.00 -56.1% Net income per share, excl. items affecting comparability, SEK1) 2) 3.95 3.75 +5.3% Value creation, excluding items affecting comparability 731 609 +122 Return on equity, % 17.8 39.6 Return on equity, excl. items affecting comparability, % 17.8 16.4 1) In 2002, income includes items affecting comparability in the amount of SEK 1,885m (see page 2). 2) Based on an average of 316.2 (329.6) million shares after buy- backs. - Higher operating income for Consumer Durables in Europe - Continued positive trend in sales and income for appliances in North America in local currency - Substantial downturn in income for Consumer Durables outside Europe and North America - Revised outlook for full year Net sales and income Net sales for the Electrolux Group in the first quarter of 2003 amounted to SEK 32,062m, as against SEK 33,580m for the same period in the previous year. This corresponds to a decrease of 4.5%, of which -11.2% refers to changes in exchange rates, +0.1% to changes in Group's structure, and +6.6% to price/mix/volume. Operating income declined to SEK 1,798m (3,791), corresponding to 5.6% (11.3) of sales, and income after financial items decreased to SEK 1,798m (3,682), which corresponds to 5.6% (11.0) of sales. Net income declined to SEK 1,246m (2,962), corresponding to SEK 3.95 (9.00) per share. Items affecting comparability in 2002 The above income figures for 2002 include items affecting comparability in the amount of SEK 1,885m. This amount refers to a capital gain of SEK 1,800m on the divestment of the remaining part of the leisure-appliances product line, and to a capital gain of SEK 85m on the divestment of the European home-comfort operation. Income excluding items affecting comparability Excluding items affecting comparability, operating income decreased by 5.7% to SEK 1,798m (1,906), representing 5.6% (5.7) of net sales. Income after financial items was unchanged and amounted to SEK 1,798m (1,797), corresponding to 5.6% (5.4) of net sales. Net income increased by 1.5% to SEK 1,246m (1,228), corresponding to SEK 3.95 (3.75) per share. Effects of changes in exchange rates Compared with the first quarter in 2002, changes in exchange rates, i.e. in terms of both transaction and translation effects, had a net negative impact on income after financial items of approximately SEK 190m. This refers mainly to the appreciation of the Swedish krona against the US dollar and the British pound. Financial net Net financial items improved to SEK 0m (-109), mainly as a result of lower interest rates and substantially reduced net borrowings. Cash flow Operating cash flow generated by business operations was SEK -3,845m as compared to SEK -3,396m in the previous year after adjustment for proceeds from divested operations in 2002. The decrease is mainly due to a higher increase in working capital than in the first quarter of 2002. Cash flow is normally weak during the first half of the year as a result of a build-up of inventories and accounts receivable referring to a seasonal increase in sales of outdoor products, room air-conditioners, refrigerators and freezers. SEKm First First quarter, quarter, 2003 2002 Cash flow from operations, excluding change 1,910 1,354 in operating assets and liabilities Change in operating assets and liabilities -5,136 -4,146 Capital expenditures -625 -746 Other 6 142 Operating cash flow -3,845 -3,396 Financial position Equity Equity as of March 31, 2003 amounted to SEK 28,453m (30,913), which corresponds to SEK 90.20 (93.80) per share. Change in equity, SEKm Opening equity, January 1, 2003 27,629 Repurchase of shares -373 Translation differences -49 Net income 1,246 Closing equity, March 31, 2003 28,453 Liquid funds and net debt/equity ratio Net borrowings decreased to SEK 5,400m (11,835). Liquid funds at the end of the period amounted to SEK 11,324m (10,282). Interest-bearing liabilities declined to SEK 16,724m (22,117). The net debt/equity ratio improved to 0.19 (0.37). The equity/assets ratio remained unchanged at 37.5% (37.1). Net debt, SEKm March 31, 2003 March 31, 2002 Interest-bearing liabilities 16,724 22,117 Liquid funds -11,324 -10,282 Net borrowings 5,400 11,835 Net debt/equity 0.19 0.37 Equity/assets ratio, % 37.5 37.1 Net assets Net assets as of March 31, 2003 declined to SEK 32,646 m (40,000). Average net assets for the period declined to SEK 30,281m (38,581), mainly as a result of restructuring and changes in exchange rates. Average net assets after adjustment for items affecting comparability amounted to SEK 32,842m (39,923), corresponding to 25.6% (29.7) of net sales. Inventories and accounts receivables Inventories declined to SEK 17,035m (18,545), and accounts receivable to SEK 27,455m (27,799), corresponding to 13.3% (14.0) and 21.4% (21.0) of annualized net sales, respectively. Return on equity and net assets The return on equity was 17.8% (39.6), and the return on net assets was 23.8% (39.3). Excluding items affecting comparability, the return on equity in 2002 was 16.4% and the return on net assets was 19.1%. Operations by business area Consumer Durables Industry shipments of core appliances in Europe increased by almost 4% compared with the first quarter of 2002. The market in Western Europe grew by approximately 3% and Eastern Europe by approximately 8%. Group sales of appliances in Europe showed good growth, particularly in Eastern Europe. Operating income improved, mainly as a result of higher volumes and lower cost for materials. In the US, industry shipments of core appliances were largely unchanged, compared with a strong first quarter in 2002. Shipments of major appliances, i.e. including room air-conditioners and microwave ovens, increased by approximately 6%. Group sales of core appliances in North America showed good growth in local currency, particularly in the refrigerator and cooker product areas. Operating income and margin improved. Sales of room air-conditioners increased over the previous year. Operating income for the home comfort product area improved and was slightly positive. Demand for appliances in Brazil declined from the previous year. The Group's Brazilian operation reported somewhat higher sales in local currency. Operating income showed a strong improvement and reached break even, compared with a substantial loss in the first quarter of 2002. In India, Group sales decreased substantially as a result of ongoing restructuring and downsizing. Operating income for the Indian operation showed a substantial downturn, and a major loss was reported for the quarter. In China, Group sales decreased substantially, mainly due to ongoing consolidation and restructuring of operations, downward pressure on prices and a less favorable product mix. Operating income for the Chinese operation showed a considerable decline and was negative. The market for appliances in Australia increased in volume. Group sales for the Australian operation decreased, however. Operating income was largely unchanged as a result of synergies from the integration into the Electrolux Group. Demand for floor-care products increased in Europe, while the US market showed a continued negative trend. Group sales decreased in both markets. Operating income and margin declined, mainly due to an unfavorable product mix and downward pressure on prices, particularly in the US. Demand for outdoor products for the consumer market in Europe was largely unchanged. Group sales of garden equipment in Europe were in line with the previous year. Both operating income and margin showed a substantial improvement, as a result of implemented restructuring and higher internal efficiency. Demand for garden equipment in the US showed good growth due to favorable weather. Group sales increased in volume and operating income improved both in local currency and SEK. Overall, sales for the Consumer Durables business area declined after translation into SEK. Operating income declined with a slightly lower margin. Professional Indoor Products Demand for food-service equipment was considerably weaker than in the previous year in most of the Group's markets. Sales for this product line declined and operating income showed a substantial downturn. Group sales of laundry equipment were also lower than in 2002, particularly in North America and Japan. Operating income decreased, but with an unchanged margin. Demand for compressors was in line with the previous year. Group sales in this product category were largely unchanged for comparable units. Operating income showed a substantial improvement, although from a low level, as a result of implemented restructuring and write-downs of assets, as well as higher volumes of new products. Overall, sales and operating income for Professional Indoor Products were lower than in the previous year. Operating margin improved slightly, however. Professional Outdoor Products Demand for chainsaws showed an upturn in both Europe and the US, particularly in the light-duty segments. Group sales of chainsaws increased in volume, partly on the basis of new distribution channels in North America. Pre-seasonal sales of lawn and garden products showed strong growth, also to a large extent a result of new distribution channels. Sales of diamond tools and power cutters declined for comparable units as a result of weak demand from the construction market. Total sales in this product category increased, however, due to the acquisition of Diamant Boart as of July 1, 2002. Overall, sales and operating income for Professional Outdoor Products were higher than in the previous year. Operating margin was largely unchanged. Restructuring programs Restructuring program in 2002 The restructuring measures announced in December 2002 refer mainly to appliances in North America, India and China, as well as to compressors. Measures are aimed at improving productivity and adjusting the cost structure. See table below for total cost and estimated savings. Of the total charge of SEK 1,338m in the fourth quarter of 2002, approximately SEK 648m had been utilized as of March 31, 2003. Savings in the first quarter of 2003 amounted to approximately SEK 29m. Changes implemented to date have involved personnel cutbacks of approximately 1,120. Restructuring program in 2002, Total Utilized Savings Estimate SEKm cost as of in 1st d Mar. 31, quarter savings 2003 2003 2003 Major appliances, Rest of the 613 406 18 106 world Major appliances, North America 396 146 0 94 Major appliances, Europe 177 53 5 40 Total major appliances 1,186 605 23 240 Compressors 152 43 6 43 Total 1,338* 648 29 283 * Approximately SEK 567m of the total cost referred to write-downs of assets. Restructuring program in 2001 The restructuring measures announced in 2001 are proceeding according to plan. Of the total charge of SEK 3,261m in 2001, approximately SEK 2,834m had been utilized as of March 31, 2003. Savings in the first quarter of 2003 amounted to approximately SEK 142m compared to the first quarter of 2002. Changes implemented to date have involved personnel cutbacks of approximately 4,200. Savings in 2003 are estimated at SEK 398m compared to 2002. Measures during the first quarter of 2003 include the closure of a plant for hobs in Germany. Restructuring Accumulate Estimated Estimated program in Utilize d savings Savings savings in accumulated 2001, SEKm Total d as of Jan. 1, in 2003 savings cost March 2002 - Q1, 2003 compared Jan. 1, 31, March 31, to 2002 2002 - 2003 2003 compared Dec. 31 to 2003 Q1,2002 Major 997 667 383 104 316 573 appliances, Europe Floor care, 19 19 8 4 13 17 Europe Garden 157 124 91 10 17 86 products, Europe Major 114 107 145 5 0 116 appliances, North America Major 40 36 53 6 -1 42 appliances, Rest of the world Total Consumer 1,327 953 680 129 345 834 Durables Food-service 168 167 134 30 5 89 equipment Components 1,710 1,673 343 -18* 43 334 Other 56 41 41 1 5 38 Total 3,261 2,834 1,198 142 398 1,295 * The negative amount is due to changes in exchange rates. Most of the measures implemented were in North America. Value created The total value created during the first quarter of 2003 amounted to SEK 731m, as compared with SEK 609m in the first quarter of the previous year. The overall decline in sales and operating margin during the quarter was compensated for by higher capital utilization. The capital turnover rate increased to 3.90, as compared with 3.36 in the previous year. The table below shows value created by business area. Value created by business area, First quarter First quarter Change SEKm 2003 2002 Consumer Durables Europe 435 374 61 North America 326 307 19 Rest of the world -333 -346 13 Total Consumer Durables 428 335 93 Professional Products Indoor 81 31 50 Outdoor 297 288 9 Total Professional Products 378 319 59 Common group costs, etc. -75 -45 -30 Total 731 609 122 Value created is defined as operating income excluding items affecting comparability, less a weighted average cost of capital (WACC) on average net assets. The Group's WACC is estimated at 13% before tax. 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. Almost all of the cases involve multiple plaintiffs who have made identical allegations against many other defendants who are not part of the Electrolux Group. As of March 31, 2003 the Group had a total of 301 lawsuits pending, representing approximately 18,000 plaintiffs. A total of 96 new cases were filed during the first quarter of 2003 and 13 were resolved. Approximately 17,900 of the plaintiffs refer to cases pending in the state of Mississippi. Parent company Net sales for the parent company, AB Electrolux, for the first quarter of 2003 amounted to SEK 1,587m (1,730). Income after financial items was SEK 2,136m (1,676), including dividends from subsidiaries in the amount of SEK 1,673m (1,658). Capital expenditure was SEK 9m (30). Liquid funds at the end of the period amounted to SEK 6,541m (2,941) as against SEK 8,090m at the start of the year. Proposed dividend The Board of Directors proposes an increase of the dividend for 2002 to SEK 6.00 (4.50) per share, for a total dividend payment of SEK 1,894m (1,483). The proposed dividend corresponds to 34% (41) of net income per share for 2002, excluding items affecting comparability. The Group's goal is to ensure that the dividend corresponds to 30-50% of net income for the year. Proposals by the Board to the Annual General Meeting on April 22, 2003 New employee stock-option program in 2003 The Board has presented a proposal to the Annual General Meeting to introduce a new employee stock option program in 2003. It is proposed that a maximum of 3,000,000 options will be allotted to less than 200 senior managers and that the 2003 program will be based on the same parameters as the 2001 and 2002 programs, including the number of options per lot. The Board also proposes to the Annual General Meeting that the company's obligations under the proposed program, including estimated employer contributions, will be secured by repurchased shares. With reference to the 2003 and previous employee stock-option programs, the Board proposes that the Annual General Meeting resolves that the Company may, until the next Annual General Meeting, transfer a maximum of 1,447,572 B-shares to cover costs, mainly employer contributions, which may arise due to the 1998-2003 option programs. Transfer shall be made at the Stockholm Stock Exchange at a price at each time within the registered price interval for the share. Assuming that all stock options allotted under the 2003 program are exercised, the sale of previously repurchased shares under this program would result in a dilution of 1.1%. This figure includes the sale of shares for hedging of employer contributions in connection with the exercise of the options. The financing cost for these shares for hedging purposes is estimated at SEK 20m for 2003. More information on the proposed option program for 2003 can be found in the Group's annual report, and has also been displayed in the AGM section of the Group's web site at www.electrolux.com/ir since April 8, 2003. New share repurchase program and cancellation of shares In order to allow for further repurchase of shares, the Board proposes to the Annual General Meeting that the number of B-shares that are not required for the hedging of the stock option programs, be eliminated through a process of cancellation. The proposal means that the Annual General Meeting would resolve to reduce the share capital by SEK 73,062,900 through cancellation of 14,612,580 own B-shares. Shares required to meet obligations under the Company's personnel stock-option programs (8,508,172) are excluded from cancellation. Today Electrolux share capital amounts to SEK 1,693,562,900 and will, following the execution of the reduction, amount to SEK 1,620,500,000. The Board also proposes that the Annual General Meeting approve a new program for the repurchase up to a maximum of 10% of the total number of shares. This authorization would cover the period up to the Annual General Meeting in 2004. The purpose of the share repurchase program is to ensure the possibility to adapt the capital structure of the Group and, thereby, contribute to increased shareholder value, or to use the repurchased shares in conjunction with the financing of potential acquisitions and the Group's option programs. More information on the proposed cancellation of shares and new repurchase program has been displayed in the AGM section of the Group's web site at www.electrolux.com/ir since April 8, 2003. Repurchase of shares during the first quarter of 2003 During the first quarter of 2003, Electrolux repurchased 2,726,700 own B- shares for a total of SEK 373m, corresponding to an average price of SEK 137 per share. As of March 31, 2003, the Company owned a total of 23,120,752 B-shares, equivalent to 6.8% of the total number of outstanding shares. Repurchase of shares Total number of No. of No. of shares outstanding A- shares held held by other and B-shares by shareholders Electrolux As of January 1, 2003 338,712,580 20,394,052 318,318,528 Repurchase of shares in first quarter of 2003 -- 2,726,700 -- Number of shares as of March 338,712,580 23,120,752 315,591,828 31, 2003 De-listing of shares in Paris and Zurich In December 2002, the Board of Directors decided to de-list the Electrolux share from the stock exchanges in Paris and Zurich. The last day for trading Electrolux shares on the Zurich Exchange is April 30, 2003. De-listing in Paris is expected to be implemented during the first half of 2003. Outlook for 2003* Although there is still uncertainty regarding market conditions during the rest of the year, the Group expects demand for appliances to be generally flat in both Europe and North America. As a result of the negative trend in income for the appliance operations in India and China, continued downward pressure on prices for floor-care products in North America and weaker demand for Professional Indoor Products, the Group's operating income for the full year is expected to be somewhat lower than in 2002. Stockholm, April 22, 2003 Hans Stråberg President and CEO *This represents a change from the previous outlook published in February 2003, which stated: "There is uncertainty regarding market conditions in 2003. At present, the Group expects demand to be generally flat during the year in both Europe and the US. In light of the above expectations for flat demand, and on the basis of internal restructuring and cost adjustments, the Group should achieve some improvement in operating income and value created for the full year 2003." Slide presentation A slide presentation of the Group's 2003 first quarter results is available on the Electrolux website at the following address: www.electrolux.com/webcast1 Factors affecting forward-looking statements This report contains "forward-looking" statements within the meaning of the US Private Securities Litigation Reform Act of 1995. Such statements include, among others, the financial goals and targets of Electrolux for future periods and future business and financial plans. These statements are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially due to a variety of factors. These factors include, but may not be limited to the following; consumer demand and market conditions in the geographical areas and industries in which Electrolux operates, effects of currency fluctuations, competitive pressures to reduce prices, significant loss of business from major retailers, the success in developing new products and marketing initiatives, developments in product liability litigation, progress in achieving operational and capital efficiency goals, the success in identifying growth opportunities and acquisition candidates and the integration of these opportunities with existing businesses, progress in achieving structural and supply-chain reorganization goals. Consolidated income statement, SEKm First First Full quarter quarter year 2003 2002 2002 Net sales 32,062 33,580 133,150 Cost of goods sold -24,512 -25,948 -101,705 Selling expense -4,217 -4,204 -17,738 Administrative expense -1,478 -1,451 -5,405 Other operating income/expense -57 -71 -137 Items affecting comparability - 1,885 -434 Operating income* 1,798 3,791 7,731 Margin, % 5.6 11.3 5.8 Financial items, net 0 -109 -186 Income after financial items 1,798 3,682 7,545 Margin, % 5.6 11.0 5.7 Taxes -556 -726 -2,459 Minority interests in net income 4 6 9 Net income 1,246 2,962 5,095 * Including depreciation and -854 -1,006 -3,854 amortization in the amount of: Net income per share basic and 3.95 9.00 15.60 diluted, SEK Number of shares after buy backs, million 315.6 329.6 318.3 Average number of shares after buy backs, 316.2 329.6 327.1 million Consolidated balance sheet, SEKm March 31 March 31 Full year 2003 2002 2002 Assets Fixed assets 27,418 30,925 27,698 Inventories, etc 16,731 18,258 15,614 Accounts receivable 27,455 27,799 22,484 Other receivables 5,891 8,115 5,328 Liquid funds 11,324 10,282 14,300 Total assets 88,819 95,379 85,424 Equity and liabilities Shareholders' equity 28,453 30,913 27,629 Minority interests 572 671 592 Interest-bearing liabilities and 16,724 22,117 15,698 provisions Non-interest-bearing liabilities and 43,070 41,678 41,505 provisions Total equity and liabilities 88,819 95,379 85,424 Contingent liabilities 1,117 1,462 949 Change in equity, SEKm First First Full quarter quarter year 2003 2002 2002 Opening balance 27,629 28,864 28,864 Dividend payment - - -1,483 Repurchase of shares -373 - -1,703 Minimum liability US pensions - - -1,335 Translation differences etc. -49 -913 -1,809 Net income 1,246 2,962 5,095 Closing balance 28,453 30,913 27,629 Consolidated cash-flow statement, SEKm First First Full quarter quarter year 2003 2002 2002 Operations Income after financial items 1,798 3,682 7,545 Depreciation and amortization 854 1,006 3,854 Provisions and capital gains/losses -528 -3,114 -1,272 Taxes paid -214 -220 -1,027 Changes in operating assets and liabilities Change in inventories -1,202 -1,901 -706 Change in accounts receivable -5,073 -4,562 28 Change in other current assets -621 -99 832 Change in current liabilities 1,760 2,416 1,651 and provisions Cash flow from operations -3,226 -2,792 10,905 Investments Acquisition and divestment of - 2,397 2,229 operations Capital expenditure in tangible -625 -746 -3,335 fixed assets Capitalization of product -50 -80 -195 development and software Other 56 222 290 Cash flow from investments -619 1,793 -1,011 Dividend - - -1,483 Repurchase of shares -373 - -1,703 Cash flow after dividends -4,218 -999 6,708 Change in interest-bearing 1,301 -849 -4,157 liabilities Total cash flow -2,917 -1,848 2,551 Liquid funds at beginning of year 14,300 12,374 12,374 Exchange-rate differences referring to liquid funds -59 -244 -625 Liquid funds at end of period 11,324 10,282 14,300 Change in net borrowings Total cash flow excl. change in -4,218 -999 6,708 loans Net borrowings at beginning of year -1,398 -10,809 -10,809 Exchange-rate differences referring to 216 -27 2,703 net borrowings Net borrowings at end of period -5,400 -11,835 -1,398 Net sales by business First First Full area, SEKm quarter quarter year 2003 2002 2002 Consumer Durables Europe 11,987 11,241 48,250 North America 12,028 13,284 48,450 Rest of the world 2,908 3,437 14,820 Total Consumer Durables 26,923 27,962 111,520 Professional Products Indoor 2,165 3,029 10,887 Outdoor 2,950 2,547 10,597 Total Professional 5,115 5,576 21,484 Products Other 24 42 146 Total 32,062 33,580 133,150 Operating income by business First First Full area, SEKm quarter quarter year 2003 2002 2002 Consumer Durables Europe 710 676 3,265 Margin, % 5.9 6.0 6.8 North America 798 876 3,271 Margin, % 6.6 6.6 6.8 Rest of the world -120 -22 51 Margin, % -4.1 -0.6 0.3 Total Consumer Durables 1,388 1,530 6,587 Margin, % 5.2 5.5 5.9 Professional Products Indoor 138 183 753 Margin, % 6.4 6.0 6.9 Outdoor 442 386 1,508 Margin, % 15.0 15.2 14.2 Total Professional 580 569 2,261 Products Margin, % 11.3 10.2 10.5 Common Group costs, etc. -170 -193 -683 Items affecting - 1.885 -434 comparability Total 1,798 3,791 7,731 Value creation, SEKm First First Full quarter quarter year 2003 2002 2002 Consumer Durables Europe 435 374 2,099 North America 326 307 1,170 Rest of the world -333 -346 -1,011 Total Consumer 428 335 2,258 Durables Professional Products Indoor 81 31 291 Outdoor 297 288 1,090 Total Professional 378 319 1,381 Products Common Group costs, -75 -45 -178 etc. Total 731 609 3,461 Key ratios First First First quarter Full quarter quarter 2002, year 2003 2002 excl. items 2002 affecting comparability Net income per share, 3.95 9.00 3.75 15.60 SEK1) Return on equity, % 2) 17.8 39.6 16.4 17.2 Return on net assets, 23.8 39.3 19.1 22.1 % 3) Net debt/equity ratio 4) 0.19 0.37 0.37 0.05 Capital expenditure, 625 746 746 3,335 SEKm Average number of 80,329 84,474 84,474 81,971 employees 1) Average number of shares for the first quarter after buy-backs is 316.2 (329.6) million. 2) Annualized net income, expressed as a percentage of average equity. 3) Annualized operating income, expressed as a percentage of average net assets. 4) Net borrowings, i.e. interest-bearing liabilities less liquid funds, in relation to adjusted equity. The latter is defined as equity including minority interests. Exchange rates in SEK First First Full quarter quarter year 2002 2003 2002 USD, average 8.57 10.51 9.72 USD, end of period 8.51 10.35 8.78 EUR, average 9.19 9.16 9.15 EUR, end of period 9.28 9.03 9.16 GBP, average 13.76 14.98 14.58 GBP, end of period 13.45 14.74 14.09 Quarterly figures Net sales and income, per quarter 1st 2nd 3rd 4th qtr Full qtr qtr qtr year Net sales, SEKm 2003 32,062 2002 33,580 37,224 31,760 30,586 133,150 Operating income, SEKm 2003 1,798 Margin,% 5.6 2002 3,791 2,722 1,781 -563 7,731 Margin,% 11.3 7.3 5.6 -1.8 5.8 2002 1) 1,906 2,722 1,756 1,781 8,165 Margin, % 5.7 7.3 5.5 5.8 6.1 Income after financial 2003 1,798 items, SEKm Margin,% 5.6 2002 3,682 2,694 1,728 -559 7,545 Margin,% 11.0 7.2 5.4 -1.8 5.7 2002 1) 1,797 2,694 1,703 1,785 7,979 Margin, % 5.4 7.2 5.4 5.8 6.0 Net income, SEKm 2003 1,246 2002 2,962 1,850 1,239 -956 5,095 2002 1) 1,228 1,850 1,222 1,221 5,521 Net income per share, 2003 3.95 SEK 2002 9.00 5.60 3.80 -2.80 15.60 2002 1) 3.75 5.60 3.75 3.80 16.90 Value creation, SEKm 2003 731 2002 609 1,475 636 741 3,461 1) Excluding items affecting comparability, which in 2002 amounted to SEK -434m. Net sales by business area, per quarter, SEKm Consumer Durables 1st qtr 2nd 3rd qtr 4th qtr Full qtr year Europe 2003 11,987 2002 11,241 11,896 12,605 12,508 48,250 North America 2003 12,028 2002 13,284 15,090 10,876 9,200 48,450 Rest of the world 2003 2,908 2002 3,437 4,257 3,332 3,794 14,820 Total Consumer Durables 2003 26,923 2002 27,962 31,243 26,813 25,502 111,520 Professional Products, 2003 2,165 Indoor 2002 3,029 3,032 2,192 2,634 10,887 Professional Products, 2003 2,950 Outdoor 2002 2,547 2,907 2,720 2,423 10,597 Total Professional 2003 5,115 Products 2002 5,576 5,939 4,912 5,057 21,484 Operating income by business area, per quarter, SEKm Consumer Durables 1st qtr 2nd 3rd qtr 4th Full qtr qtr year Europe 2003 710 Margin,% 5.9 2002 676 819 828 942 3,265 Margin,% 6.0 6.9 6.6 7.5 6.8 North America 2003 798 Margin,% 6.6 2002 876 1,338 577 480 3,271 Margin,% 6.6 8.9 5.3 5.2 6.8 Rest of the world 2003 -120 Margin,% -4.1 2002 -22 98 -41 16 51 Margin,% -0.6 2.3 -1.2 0.4 0.3 Professional Products, 2003 138 Indoor Margin,% 6.4 2002 183 214 197 159 753 Margin,% 6.0 7.1 9.0 6.0 6.9 Professional Products, 2003 442 Outdoor Margin,% 15.0 2002 386 435 356 331 1,508 Margin,% 15.2 15.0 13.1 13.7 14.2 Common Group costs, 2003 -170 etc. 2002 -193 -182 -161 -147 -683 Items affecting 2003 - comparability 2002 1,885 - 25 -2,344 -434 Five-year review Amounts in SEKm, unless 2002 2001 2000 1999 1998 otherwise stated Net sales 133,150 135,803 124,493 119,550 117,524 Operating income 7,731 6,281 7,602 7,204 7,028 Margin, % 5.8 4.6 6.1 6.0 6.0 Margin, excluding items 6.1 4.7 6.5 6.2 5.2 affecting comparability, % Income after financial items 7,545 5,215 6,530 6,142 5,850 Margin, % 5.7 3.8 5.2 5.1 5.0 Margin, excluding items 6.0 3.9 5.6 5.3 4.2 affecting comparability, % Net income 5,095 3,870 4,457 4,175 3,975 Net income per share, SEK 15.60 11.35 12.40 11.40 10.85 Average number of shares 327.1 340.1 359.1 366.2 366.2 after buy-backs, million Dividend, adjusted for share 6.00 1) 4.50 4.00 3.50 3.00 issues Value creation 3,461 262 2,423 1,782 437 Return on equity, % 17.2 13.2 17.0 17.1 18.2 Return on net assets, % 22.1 15.0 19.6 18.3 17.5 Net debt/equity ratio 0.05 0.37 0.63 0.50 0.71 Capital expenditure 3,335 4,195 4,423 4,439 3,756 Average number of employees 81,971 87,139 87,128 92,916 99,322 1) Proposed by the Board. 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-end exchange rates and adjusted for acquired and divested operations. Net assets Total assets, excluding liquid funds, interest- bearing financial receivables, as well as non- interesting-bearing liabilities and provisions. Adjusted equity Equity, including minority interests. Working capital Net assets less fixed assets and deferred tax assets/liabilities. Net borrowings Total interest-bearing liabilities less liquid funds. Net debt/equity Net borrowings in relation to adjusted equity. ratio Equity/assets Adjusted equity as a percentage of total assets less ratio liquid funds. Other key ratios Net income per Net income divided by the average number of shares share after buy-backs. Operating cash Total cash flow from operations and investments, flow excluding acquisition and divestment of operations. Operating margin Operating income expressed as a percentage of net sales. Value creation Operating income excluding items affecting comparability less the weighted average cost of capital (WACC) on average net assets excluding items affecting comparability. [(Net sales - operating costs = operating income) - (WACC x Average net assets)]. The WACC for 2003 and 2002 was 13% before tax. The WACC for previous periods was 14% before tax. Return on equity Net income expressed as a percentage of average equity. Return on net Operating income expressed as a percentage of average assets net assets. This report has not been audited. Financial reports in 2003 Quarterly report, 2nd quarter July 17 Quarterly report, 3rd quarter October 21 Financial information from Electrolux is also available on www.electrolux.com/ir ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2003/04/22/20030422BIT00600/wkr0001.doc The Full Report http://www.waymaker.net/bitonline/2003/04/22/20030422BIT00600/wkr0002.pdf The Full Report