HALF-YEARLY REPORT 2002

HALF-YEARLY REPORT 2002 Stockholm, July 18, 2002 Page 1 (17) Amounts in SEKm, First half 2002 First Change Second Second Change unless otherwise half quarter quarter stated 2001 2002 2001 Net sales 70,804 71,129 -0.5% 37,224 37,459 -0.6% Operating income1) 6,513 3,888 68% 2,722 2,036 34% Operating income excl. items 4,628 3,888 19% 2,722 2,036 34% affecting comparability1) 2) Margin, % 6.5 5.5 7.3 5.4 Income after 6,376 3,251 96% 2,694 1,752 54% financial items1) Income after financial items excl. items 4,491 3,251 38% 2,694 1,752 54% affecting comparability1) 2) Margin, % 6.3 4.6 7.2 4.7 Net income per 14.60 6.55 123% 5.60 3.45 62% share, SEK3) Net income per share, excl. items 9.35 6.55 43% 5.60 3.45 62% affecting comparability2) 3) Value creation 2,084 682 1,402 1,475 392 1,083 Return on equity, % 32.0 16.0 Return on equity, excl. items 20.5 16.0 affecting comparability, % 2) 1) New accounting principle for R&D had positive impact of SEK 102m on income for first half 2002 (see page 2). 2) In first half of 2002, income includes items affecting comparability in the amount of SEK 1,885m (see page 2). 3) Based on an average of 329.6 (341.1) million shares after buy- backs. · Higher demand in the US, somewhat weaker market conditions in Europe · Marked upturn in income for North American operation, production of refrigerators normalized · Substantially higher income and improved margin for appliances in Europe, despite difficult market environment · Ongoing restructuring measures proceeding according to plan Net sales and income Net sales for Electrolux in the first half of 2002 amounted to SEK 70,804m, compared with SEK 71,129m for the same period in the preceding year. This corresponds to a decrease of 0.5%, of which +0.4% is attributable to exchange rate fluctuations, -4.6% to changes in Group structure, and +3.7% to volume/price/mix. See page 6 for changes in Group structure. Operating income increased to SEK 6,513m (3,888), corresponding to 9.2% (5.5) of sales, and income after financial items increased to SEK 6,376m (3,251), corresponding to 9.0% (4.6) of sales. Net income rose to SEK 4,812m (2,228), which corresponds to SEK 14.60 (6.55) per share. Items affecting comparability The above income figures for the first half of 2002 include items affecting comparability amounting to SEK 1,885m (0). These items refer to the first quarter and comprise a capital gain of SEK 1,800m on the divestment of the remaining part of the leisure-appliances operation, and a capital gain of SEK 85m on the divestment of the European home- comfort operation. New accounting principle for R&D A new Swedish accounting standard, RR 15 Intangible assets, came into effect as of January 1, 2002. According to this standard, costs for development of products and software should be capitalized. Development costs of SEK 102m referring to projects started during the first half of the year have been capitalized. Income for the previous year has not been adjusted in this respect. The five other Swedish accounting standards issued by The Swedish Financial Standards Council effective as of January 1, 2002 have not had any material effect on the Group's accounts. Income excluding items affecting comparability Excluding items affecting comparability, operating income increased by 19% to SEK 4,628m (3,888), representing 6.5% (5.5) of net sales. Income after financial items increased by 38% to SEK 4,491m (3,251), corresponding to 6.3% (4.6) of net sales. Net income increased by 38% to SEK 3,078m (2,228), which corresponds to SEK 9.35 (6.55) per share. Effects of changes in exchange rates In terms of both transaction and translation effects, changes in exchange rates during the period had a net positive impact on income after financial items of approximately SEK 80m. The impact in the second quarter is estimated to be approximately SEK -95m, mainly as a result of the general appreciation of the Swedish krona against most currencies, and in particular the US dollar. Financial net Net financial items amounted to SEK -137m (-637). The improvement is mainly due to lower interest rates and reduced net borrowings. Second quarter Net sales in the second quarter of 2002 amounted to SEK 37,224m (37,459). Of the total decrease of -0.6%, -3.0% is attributable to changes in exchange rates, -5.6% to changes in Group structure, and +8.0% to volume/price/mix. Operating income rose by 34% to SEK 2,722m (2,036), corresponding to 7.3% (5.4) of sales. Income after financial items increased by 54% to SEK 2,694m (1,752), which corresponds to 7.2% (4.7) of sales. Net income was SEK 1,850m (1,162), corresponding to SEK 5.60 (3.45) per share. Cash flow Cash flow from operations amounted to SEK 2,181m (4,934). The decline is traceable mainly to a higher increase in accounts receivable and inventories in the first half of 2002 compared to the same period last year, and the final payment of USD 94 million (approximately SEK 990m) related to the PBGC pension litigation. Cash flow inclusive of investments improved as a result of proceeds from divestments. Financial position Equity Equity as of June 30, 2002 amounted to SEK 30,437m (28,861), which corresponded to SEK 92.40 (84.60) per share. Return on equity was 32.0% (16.0). Excluding items affecting comparability, the return on equity was 20.5% (16.0). Net assets Average net assets for the period were SEK 39,146m (45,800), excluding items affecting comparability and SEK 37,985m (44,024), including items affecting comparability. The decrease is primarily due to divestments and restructuring as well as exchange rate effects. Return on net assets was 34.3% (17.7). Return on net assets excluding items affecting comparability was 23.6% (17.0) Net assets as of June 30, 2002 in relation to sales improved to 24.5% (28.7). Net debt/equity and liquid funds Net borrowings decreased to SEK 6,896m (17,631). The net debt/equity ratio decreased to 0.22 (0.59). Liquid funds at the end of the period were SEK 14,336m (11,577). Value creation Total value created by the Group during the first half of 2002 amounted to SEK 2,084m compared with SEK 682m in the first half of 2001. The improvement is mainly generated by an increase in operating margin to 6.5% (5.5), primarily due to significantly higher operating income for Consumer Durables in the US and Europe. The capital turnover rate improved to 3.6, compared with 3.1 in the previous year. The table below shows value creation for the period by business area. Value creation by First First Second Second business area, half half Full SEKm quart quart year er er 2002 2001 Change 2002 2001 Change 2001 Consumer Durables Europe 896 378 518 522 245 277 1,172 North America 1,060 405 655 753 139 614 -297 Rest of the world -538 -515 -23 -192 -259 67 - 1,023 Total Consumer 1,418 268 1,150 1,083 125 958 -148 Durables Professional Products Indoor 115 346 -231 84 238 -154 250 Outdoor 628 491 137 340 261 79 914 Total Professional 743 837 -94 424 499 -75 1,164 Products Common Group costs, -77 -423 346 -32 -232 200 -754 etc. Total 2,084 682 1,402 1,475 392 1,083 262 Value created is defined as operating income excluding items affecting comparability, less a weighted average cost of capital (WACC) on average net assets. As of 2002, the Group's WACC has been changed from 14% to 13% before tax. Operations by business area Consumer Durables Total industry shipments of core appliances in Europe increased in volume during the first half of 2002 by approximately 1% compared with the same period in the previous year. Western Europe showed a decline by almost 2%, while the market in Eastern Europe increased by approximately 11%. Shipments in the second quarter increased by almost 2%, reflecting flat shipments in Western Europe and an increase in Eastern Europe of approximately 13%. Group sales of appliances in Europe increased, particularly in Eastern Europe and with respect to key accounts. Operating income showed a substantial improvement with a higher margin, both in the first half and the second quarter. The improvement is mainly a result of higher volumes, lower costs for materials and improved internal efficiency. In the US, industry shipments for core appliances increased in volume by about 10% in the first half and approximately 9% in the second quarter. Including air conditioners and microwave ovens, shipments increased by about 7% for the entire period, and by about 9% in the second quarter. Group sales of appliances in North America were higher than last year. Operating income and margin showed a marked upturn, particularly in the second quarter. Income in the previous year was negatively impacted by non-recurring costs of approximately SEK 600m related to problems in connection with the start-up of a new generation of refrigerators. Sales of air conditioners were considerably lower than last year and operating income in this product area showed a marked downturn. Demand for core appliances in Brazil declined, but showed signs of improvement in the second quarter. Group sales were lower than last year. Operating income showed a substantial downturn and was negative, mainly due to higher costs for materials and a less favorable product mix. Lower exports to Argentina also had a negative impact. Group sales of appliances in China showed good growth. Operating income for the Chinese operation was positive for the period as a whole. The operation in India reported lower sales. Operating income for the Indian operation improved somewhat as a result of implemented structural changes, but was still negative. The market for appliances in Australia showed a slight upturn, and the Group had a positive trend in both sales and income. Overall, operating income for the appliance operation outside Europe and North America declined compared with the previous year. Demand for vacuum cleaners showed some growth in the US, particularly in the lower price segment, while demand in the European market declined somewhat. Sales for the floor-care product line were slightly higher than last year, as a result of a strong sales trend in the US. Operating income was largely unchanged compared to the previous year. Demand for consumer outdoor products in Europe weakened in the second quarter, and was largely unchanged for the period as a whole. Sales for the Group's European operation showed good growth, however, particularly in the UK. Operating income showed a marked improvement as a result of higher volumes and implemented restructuring. Demand for consumer outdoor products in the US increased somewhat over the previous year. The Group achieved higher sales volume, and operating income and margin improved. Overall, sales for the Consumer Durables business area were higher than in the previous year. Operating income and margin improved. Professional Indoor Products Demand for food-service equipment in Western Europe declined somewhat, and Group sales were lower in most markets. Operating income improved, however, as a result of the divestment of a loss-making operation in the second half of 2001. Demand for laundry equipment declined in Europe and was largely unchanged in the US. Sales for this product line showed strong growth in the American market as a result of the introduction of new products, but decreased somewhat overall. Operating income and margin improved. Demand for compressors in Europe increased somewhat over the previous year. Sales for the Components product line declined as a result of divestments, but increased for comparable units. Operating income showed a considerable improvement as a result of implemented restructuring and the launch of a new compressor. Total sales for Professional Indoor Products were lower than in the first half of 2002, mainly as a result of divestments and implemented restructuring. Operating income and margin increased for comparable units. Professional Outdoor Products Demand for professional chainsaws was largely unchanged in Europe and the US. Group sales of chainsaws increased over last year, however, but with a lower proportion of higher specified products. Sales of lawn and garden equipment were also higher than in 2001. Sales of power cutters were largely unchanged, while sales of diamond tools declined particularly in the US. Overall, sales for Professional Outdoor Products showed good growth over the previous year. The change in accounting principle for R&D had a significant positive impact on operating income for this business area. Both income and margin improved on a comparable basis, however. Major changes in the Group Divestments As of January 1, the Group divested the remaining parts of the leisure- appliance product line within the Professional Indoor Products business area. These operations had sales in 2001 of approximately SEK 1,300m and about 1,400 employees. The divestment generated a capital gain of approximately SEK 1,800m. As of January 1, the Group also divested its European home comfort operation, which was part of the Consumer Durables business area. This operation had sales in 2001 of approximately SEK 850m, and about 280 employees. The divestment generated a capital gain of approximately SEK 85m. As of April 1, the Group's Mexican compressor plant was divested, which was part of the Components product line within the Professional Indoor Product business area. In 2001, this operation had sales of approximately SEK 180m and about 240 employees. The divestment was made at approximately book value. As of April 30, the Group also divested its European motor operation, which was part of the Components product line within the Professional Indoor Product business area. In 2001, this operation had sales of approximately SEK 2,250m, of which approximately SEK 975m was external sales. The operation had about 1,950 employees. The divestment was made at approximately book value. In June, an agreement was signed regarding divestment of Zanussi Metallurgica, the Group's metallurgical plant in Italy, which is part of the Components product line in the Professional Indoor Products business area. The operation had sales in 2001 of approximately SEK 1,300m, of which approximately SEK 600m was external sales. The operation has about 640 employees. The sale is expected to be completed as of July 31, 2002, and will not have any significant effect on the Group's income and financial position. Acquisition As of July 1, the Group acquired Diamant Boart International, a world- leading manufacturer and distributor of diamond tools and related equipment for the construction and stone industry. The purchase price was approximately SEK 1,700m. In 2001, the operation had sales of approximately SEK 2,500m and about 2,000 employees. The acquisition is expected to increase the Group's operating income by SEK 200m on an annual basis. The operation will be part of the Professional Outdoor Products business area, which in 2001 had sales of approximately SEK 1,300m in power cutters and diamond tools. Ongoing restructuring and cost adjustments The restructuring measures announced in 2001 are proceeding according to plan. The changes refer mainly to operations in components and major appliances, and include plant shutdowns as well as rationalization of sales organizations and administration. See also Comments from the CEO, page 8. Of the total provision of SEK 3,261m in 2001, approximately SEK 2,185m had been utilized as of June 30, 2002. Savings in the first half of 2002 amounted to approximately SEK 346m. Changes implemented to date have involved personnel cutbacks of approximately 2,940, of which approximately 1,870 were implemented in the first half of 2002. Provisions in 2001, Utilized Savings Estimated SEKm savings Provision up to Q2 up to 2002 2003 Q2 Major appliances, 997 317 77 206 552 Europe Floor care, Europe 19 16 - 9 17 Garden products, 157 76 23 51 96 Europe Major appliances, 114 58 52 157 210 North America Major appliances, 40 20 22 38 47 Rest of the world Total Consumer 1,327 487 174 461 922 Durables Food-service 168 156 37 89 89 equipment Components 1,710 1,507 121 273 343 Other 56 35 14 33 36 Total 3,261 2,185 346 856 1,390 Parent company Net sales for the parent company, AB Electrolux, for the first half of 2002 amounted to SEK 3,331m (3,641). Income after financial items was SEK 2,602m (518), which includes dividends from subsidiaries of SEK 3,975m (924). Capital expenditure for the period was SEK 67m (71). Liquid funds at the end of the period amounted to SEK 7,668m (4,507), compared to SEK 4,281m at the end of 2001. Repurchase of shares and reduction of share capital The Electrolux Board has authorized additional repurchase of own shares in accordance with the authorization by the Annual General Meeting in April 2002. The Annual General Meeting authorized the Board of Directors to acquire and transfer own shares during the period up to the next Annual General Meeting. Shares of series A and/or B may be acquired on condition that after each transaction the company owns a maximum of 10% of the total number of shares. Following the reduction of the share capital of AB Electrolux in May 2002, the company's share capital consists of 10,000,000 A-shares and 328,712,580 B-shares, totaling 338,712,580 shares. Electrolux currently owns 9,148,000 previously repurchased B-shares, corresponding to 2.7% of the total number of shares. No shares were repurchased during the second quarter. Comments from the CEO The Group achieved a substantial improvement in operating income and margin during the first half of 2002. The second quarter was particularly strong and the operating margin increased to 7.3% compared with 5.4% in 2001. The US market showed a somewhat stronger upturn than expected, while demand in Europe was slightly weaker and in line with our expectations. The majority of the Group's operations achieved higher income. The major part of the improvement in operating income was traceable to appliances in the US. This operation reported weak earnings in the first half of 2001 due to delivery problems and substantial costs related to the phase- in of a new generation of refrigerators. Ongoing restructuring is proceeding according to plan and achieved the expected savings. Consumer Durables outside Europe and North America reported positive income in the second quarter after a loss in the first quarter. Income for this business area, however, showed a marked downturn for the period as a whole. Professional Indoor Products achieved an improvement in income, after adjustment for the divestment of the profitable Leisure operation. Professional Outdoor Products showed a continued positive trend in operating income and margin improved from a high level. Strong improvement in income in North America Operating income for Consumer Durables in North America in the second quarter increased by SEK 653m, which was almost twice the figure reported in 2001. Operating margin improved from 4.9% to 8.9%. The Group benefited from the upturn in demand for appliances, as well as floor-care products and outdoor products. We also achieved an improved mix as regards appliances due to a larger proportion of new products. As mentioned above, the appliance operation reported weak earnings in the previous year when the problems within the refrigerator division had a negative impact on operating income by approximately SEK 600m, of which the major part referred to the second quarter. Production in our two refrigerator factories in the US normalized at the end of 2001. Today, we produce more refrigerators than we did prior to the transition to the new range, and with fewer employees. These new products have been well received by the market. We have now regained the market share we lost in 2001, as a result of these setbacks. Furthermore, we have succeeded in increasing our share in the higher end, side-by-side, refrigerator segment, an area in which we lacked suitable products in the past. Higher income for appliances in Europe White goods in Europe also achieved a substantially improved operating income and higher margin, in spite of a difficult market environment and a continued decline of the German market. The Group had a continued positive trend in market share. In Europe we are increasing our efforts to reduce complexity and increase the rate of product renewal. We have decided to reduce the number of product platforms by more than fifty percent. The first project which will reduce the number of platforms within dishwashers from 4 to 1 by the year 2004, will be initiated in September 2002. We will also continue to integrate processes and create a true pan-European structure. During the first half of the year we introduced a larger number of new products than during the same period of the previous year, for example, a new front-loaded washer with improved performance and the highest AAA rating according to the EU standards for energy and water consumption. We also introduced a new dishwasher, Izzi, which combines simplicity in handling with an elegant design, and which is a good example of a product developed with the help of consumer panels and testing groups. Both products have sold very well in the markets in which they have been introduced. Ongoing restructuring in accordance with plan The ongoing restructuring measures are proceeding according to plan. These measures refer mainly to operations in components and major appliances, and include plant closures, as well as rationalization of sales organizations and administration. To date we have utilized approximately 65% of the total provision of SEK 3.3 billion. Savings in the first half amounted to approximately SEK 340m. The major portion of the savings estimated for 2002 is expected to be achieved during the latter part of the year. In the first half of the year, a compressor plant in North America was closed, as well as a plant for cookers in Norway and a small plant for washers in India. We are in the final negotiations with the labor representatives regarding closure of one plant for hobs and one plant for refrigerators in Germany. In accordance with previously determined structural changes, a vacuum cleaner plant in Germany is currently being closed, a process which will be finalized by September. Greater efforts in product renewal and marketing In recent years, we have improved the Group's internal efficiency and cost structure. Group operations have been streamlined to fewer areas through divestment of 19 operations with annual sales of more than SEK 27 billion. We have strengthened our market shares in core areas and improved our positions with the major retailers in both Europe and the US. Apart from 2001, when we suffered setbacks within the refrigerator division in the US, cash flow as well as income and profitability have improved steadily. The balance sheet has been strengthened and the Group has covered its cost of capital, WACC, since 1998. Until now, the Group has focused primarily on sales volumes and costs. However, in order to create growth and increase our gross margin, we must invest greater efforts in product development and marketing. We spend less in these areas than several of our competitors. Each time we launch a new product that meets a consumer need, we see that consumers are willing to pay a premium for that product. Therefore, we need to better understand consumer needs. From now on, each investment in a new product will be based on a clear consumer need. More rapid product development based on consumer needs is also a prerequisite for our success in brand consolidation, and in building fewer and stronger brands. Continued focus on structure and cost efficiency Investing greater efforts in products and marketing does not imply that we can lose our focus on cost reduction. High cost efficiency is also a prerequisite for competing successfully in our highly competitive industry, and is also a necessity for further improving profitability in several areas. Although we have achieved a great deal in recent years, there are still operations within the Group that are not creating value. These represent about one fourth of Group sales. One example is the components operation, but there are also countries as well as product areas that fall into this category. Our objective is of course to ensure that these businesses create sufficient value. Some problem areas have been addressed by the restructuring measures initiated at the end of 2001. Within Components, which showed a significant loss in 2001, we have written down assets, closed manufacturing plants, as well as divested operations. We expect this operation to show a small positive result for the full year of 2002. A number of operations, representing approximately 40% of sales, are creating value, but should be able to increase their value contribution. These operations generally have good market positions. For both categories mentioned above, we need to continue to reduce costs and complexity, as well as improve the product offering. In the remaining parts of the Group, we have strong market positions and good profitability. The challenge here is to find possibilities for continued profitable growth. We are now in the process of establishing detailed 3-year plans at product line level for all our operations. Short term priorities I'm convinced that we can further improve our profitability and value creation in the Group. As I have mentioned on a number of occasions, our first ambition is to stabilize the Group's operating margin at the 6% level. To achieve this, our main priorities are to: · Fulfill ongoing structural changes and measures aimed at driving down costs and reduce complexity in the entire Group · Take measures as regards those operations that are not creating value · Ensure that we have sufficient resources and effective processes for stepping up efforts in product development and marketing Today, large volumes and scale in production are not enough to be successful in our industry. We must also be among the top three suppliers to the main retailers, and even more so, we must be seen as the leader in the minds of the consumers. Electrolux must adapt and become a truly market-oriented company. Expectations for the second half of 2002*) Market demand during the second half of 2002 is expected to be generally flat in both Europe and North America compared with the same period in the previous year. However, there is still uncertainty regarding consumer confidence and spending in the US. During both the third and fourth quarters comparison of industry shipments of appliances will be against strong quarters in 2001. Notwithstanding expectations for flat market demand, and on the basis of the ongoing restructuring measures, as well as the costs related to the new refrigerator line in the US in 2001, the Group should achieve an improvement in operating income and value created for the second half of 2002, compared with the same period in 2001. Operating income and value creation for the full year of 2002 is thus expected to show a significant improvement, excluding items affecting comparability. Stockholm, July 18, 2002 Hans Stråberg President and CEO *) This statement is an adjustment to the expectations that were included in the Group's first quarter report issued on April 18, 2002, which stated: "Market demand in 2002 is expected to be generally flat compared with the previous year in both Europe and North America. However, there is still uncertainty regarding consumer confidence and spending, particularly in North America. Notwithstanding the above expectations for flat market demand, on the basis of the previously announced internal restructuring the Group should achieve an improvement in operating income and value creation for the full year 2002, excluding items affecting comparability." 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 or targets of Electrolux for future periods and future business and financial plans. Actual results may differ materially from these goals and targets due to a variety of factors. These factors include, but may not be limited to the following; the success in developing new products and marketing initiatives, 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, competitive pressures to reduce prices, significant loss of business from major retailers, consumer demand, effects of current fluctuations and the effect of local economies on product demand. Consolidated income statement, First First Second Second Full SEKm half half quarter quarter year 2002 2001 2002 2001 2001 Net sales 70,804 71,129 37,224 37,459 135,803 Cost of goods sold - - -28,462 -29,294 -105,654 54,410 55,189 Selling expense -8,769 -8,684 -4,565 -4,351 -17,806 Administrative expense -2,922 -3,256 -1,471 -1,720 -5,790 Other operating income/expense -75 -112 -4 -58 -131 Items affecting comparability 1,885 -3,888 - - -141 Operating income* 6,513 2,722 2,036 6,281 Margin, % 9.2 5.5 7.3 5.4 4.6 Financial items, net -137 -637 -28 -284 -1,066 Income after financial items 6,376 3,251 2,694 1,752 5,215 Margin, % 9.0 4.6 7.2 4.7 3.8 Taxes -1,589 - -863 -569 -1,477 1,056 Minority interests in net income 25 33 19 -21 132 Net income 4,812 2,228 1,850 1,162 3,870 * Including depreciation in the -1,971 - -965 -1,028 -4,277 amount of: 2,013 Net income per share, SEK 14.60 6.55 5.60 3.45 11.35 Number of shares after buy backs, 329.6 341.1 329.6 341.1 329.6 million 329.6 341.1 329.6 341.1 340.1 Average number of shares after buy backs, million Consolidated balance sheet, SEKm June 30 June 30 Full year 2002 2001 2001 Assets Fixed assets 28,307 33,344 32,351 Inventories, etc. 16,599 19,660 17,001 Accounts receivable 26,754 29,065 24,189 Other receivables 6,827 7,837 8,532 Liquid funds 14,336 11,577 12,374 Total assets 92,823 101,483 94,447 Equity and liabilities Shareholders' equity 30,437 28,861 28,864 Minority interests 593 791 699 Interest-bearing liabilities and 21,232 29,208 23,183 provisions Non-interest-bearing liabilities and 40,561 42,623 41,701 provisions Total equity and liabilities 92,823 101,483 94,447 Contingent liabilities 1,587 1,336 1,220 Change in equity, SEKm First First Full Half half year 2002 2001 2001 Opening balance 28,864 26,324 26,324 Dividend payment -1,483 -1,365 -1,365 Repurchase of shares - - - 1,752 Translation differences - 1,674 1,787 1,756 Net income 4,812 2,228 3,870 Closing balance 30,43 28,86 28,86 7 1 4 Consolidated cash flow statement, SEKm First First Full Half Half Year 2002 2001 2001 Operations Income after financial items 6,376 3,251 5,215 Depreciation according to plan charged 1,971 2,013 4,277 against above income Provisions and capital gains/losses -3,274 -448 -2,148 Taxes paid -310 -578 -1,496 Changes in operating assets and liabilities Change in inventories -1,247 -336 1,164 Change in accounts receivable -4,641 -3,355 -50 Change in other current assets 580 1,133 146 Change in current liabilities and 2,726 3,254 2,374 provisions Cash flow from operations 2,181 4,934 9,482 Investments Investments in/divestments of 3,142 163 4,861 operations Capital expenditure -1,468 -2,035 -4,195 Other 167 -159 547 Cash flow from investments 1,841 -2,031 1,213 Dividend -1,483 -1,365 -1,365 Repurchase of shares - - -1,752 Cash flow after dividends 2,539 1,538 7,578 Change in interest-bearing liabilities -145 1,244 -4,059 Total cash flow 2,394 2,782 3,519 Liquid funds at beginning of year 12,374 8,422 8,422 Exchange-rate differences referring to -432 373 433 liquid funds Liquid funds at end of period 14,336 11,577 12,374 Change in net borrowings Total cash flow excl. change in loans 2,539 1,538 7,578 Net borrowings at beginning of year - - - 10,809 16,976 16,976 Exchange-rate differences referring to 1,374 -2,193 -1,411 net borrowings Net borrowings at end of period -6,896 -17,631 -10,809 Net sales by business area, First half 2002 First Second Second Full SEKm half quarter quarter year 2001 2002 2001 2001 Consumer Durables Europe 23,137 22,147 11,896 11,246 47,200 North America 28,374 26,412 15,090 14,104 46,814 Rest of the world 7,694 7,462 4,257 4,229 14,976 Total Consumer Durables 59,205 56,021 31,243 29,579 108,990 Professional Products Indoor 6,061 9,621 3,032 5,037 17,073 Outdoor 5,454 5,217 2,907 2,692 9,452 Total Professional Products 11,515 14,838 5,939 7,729 26,525 Other 84 270 42 151 288 Total 70,804 71,129 37,224 37,459 135,803 Operating income by business First half First Second Second Full area, SEKm 2002 Half quarter quarte Year 2001 2002 r 2001 2001 Consumer Durables Europe 1,495 1,025 819 578 2,528 Margin, % 6.5 4.6 6.9 5.1 5.4 North America 2,214 1,492 1,338 685 1,814 Margin, % 7.8 5.6 8.9 4.9 3.9 Rest of the world 76 175 98 130 287 Margin, % 1.0 2.3 2.3 3.1 1.9 Total Consumer Durables 3,785 2,692 2,255 1,393 4,629 Margin, % 6.4 4.8 7.2 4.7 4.2 Professional Products Indoor 397 787 214 459 1,070 Margin, % 6.6 8.2 7.1 9.1 6.3 Outdoor 821 702 435 371 1,313 Margin, % 15.1 13.5 15.0 13.8 13.9 Total Professional Products 1,218 1,489 649 830 2,383 Margin, % 10.6 10.0 10.9 10.7 9.0 Common Group costs, etc. -375 -293 -182 -187 -590 Items affecting comparability 1,885 - - - -141 Total 6,513 3,888 2,722 2,036 6,281 Value creation, SEKm First half First Second Second Full 2002 half quarter quarter Year 2001 2002 2001 2001 Consumer Durables Europe 896 378 522 245 1,17 2 North America 1,060 405 753 139 -297 Rest of the world -538 -515 -192 -259 - 1,02 3 Total Consumer Durables 1,418 268 1,083 125 -148 Professional Products Indoor 115 346 84 238 250 Outdoor 628 491 340 261 914 Total Professional Products 743 837 424 499 1,16 4 Common Group costs, etc. -77 -423 -32 -232 -754 Total 2,084 682 1,475 392 262 Key ratios First half First Second Second Full 2002 half quarter quarter year 2001 2002 2001 2001 Net income per share, SEK1) 14.60 6.55 5.60 3.45 11.3 5 Return on equity, %2) 32.0 16.0 13.2 Return on net assets, %3) 34.3 17.7 15.0 Net debt/equity ratio4) 0.22 0.59 0.37 Capital expenditure, SEKm 1,468 2,035 722 982 4,19 5 Average number of employees 83,600 88,500 84,100 88,200 87,1 39 1) Based on an average of 329.6 million (341.1) shares after stock buy- backs. See the income statement on page 12. 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. Adjusted equity is defined as equity including minority interests. Exchange rates in SEK First half First half Full 2002 2001 Year 2001 USD, average 10.17 10.15 10.35 USD, end of period 9.14 10.85 10.59 EUR, average 9.16 9.04 9.25 EUR, end of period 9.11 9.19 9.35 GBP, average 14.74 14.60 14.93 GBP, end of period 14.03 15.24 15.34 Quarterly data Net sales and income 1st qtr 2nd qtr 3rd qtr 4th qtr Full year Net sales, SEKm 2002 33,580 37,224 2001 33,670 37,459 32,793 31,881 135,803 Operating income, SEKm 2002 3,791 2,722 Margin,% 11.3 7.3 20021) 1,906 2,722 Margin,% 5.7 7.3 2001 1,852 2,036 2,442 -49 6,281 Margin,% 5.5 5.4 7.4 -0.2 4.6 20012) 1,852 2,036 1,085 1,449 6,422 Margin, 5.5 5.4 3.3 4.5 4.7 % Income after financial 2002 3,682 2,694 items, SEKm Margin,% 11.0 7.2 20021) 1,797 2,694 Margin,% 5.4 7.2 2001 1,499 1,752 2,202 -238 5,215 Margin,% 4.5 4.7 6.7 -0.7 3.8 20012) 1,499 1,752 845 1,260 5,356 Margin, 4.5 4.7 2.6 4.0 3.9 % Net income, SEKm 2002 2,962 1,850 20021) 1,228 1,850 2001 1,066 1,162 1,928 -286 3,870 20012) 1,066 1,162 596 950 3,774 Net income per share, 2002 9.00 5.60 SEK 20021) 3.75 5.60 2001 3.10 3.45 5.65 -0.85 11.35 20012) 3.10 3.45 1.75 2.80 11.10 Value creation, SEKm 2002 609 1,475 2001 290 392 -453 33 262 1) Exclusive of items affecting comparability of SEK 1,885m in 2002. 2) Exclusive of items affecting comparability of SEK -141m in 2001. Net sales by business area, SEKm Consumer Durables 1st qtr 2nd qtr 3rd qtr 4th qtr Full year Europe 2002 11,241 11,896 2001 10,901 11,246 12,237 12,816 47,200 North America 2002 13,284 15,090 2001 12,308 14,104 11,154 9,248 46,814 Rest of the world 2002 3,437 4,257 2001 3,233 4,229 3,509 4,005 14,976 Total Consumer Durables 2002 27,962 31,243 2001 26,442 29,579 26,900 26,069 108,990 Professional Products, 2002 3,029 3,032 Indoor 2001 4,584 5,037 3,829 3,623 17,073 Professional Products, 2002 2,547 2,907 Outdoor 2001 2,525 2,692 2,108 2,127 9,452 Total Professional 2002 5,576 5,939 Products 2001 7,109 7,729 5,937 5,750 26,525 Operating income by business area, SEKm Consumer Durables 1st qtr 2nd qtr 3rd qtr 4th qtr Full year Europe 2002 676 819 Margin,% 6.0 6.9 2001 447 578 585 918 2,528 Margin,% 4.1 5.1 4.8 7.2 5.4 North America 2002 876 1,338 Margin,% 6.6 8.9 2001 807 685 188 134 1,814 Margin,% 6.6 4.9 1.7 1.4 3.9 Rest of the world 2002 -22 98 Margin,% -0.6 2.3 2001 45 130 21 91 287 Margin,% 1.4 3.1 0.6 2.3 1.9 Professional Products, 2002 183 214 Indoor Margin,% 6.0 7.1 2001 328 459 176 107 1,070 Margin,% 7.2 9.1 4.6 3.0 6.3 Professional Products, 2002 386 435 Outdoor Margin,% 15.2 15.0 2001 331 371 280 331 1,313 Margin,% 13.1 13.8 13.3 15.6 13.9 Common Group costs, etc. 2002 -193 -182 2001 -106 -187 -165 -132 -590 Items affecting 2002 1,885 - comparability 2001 - - 1,357 -1,498 -141 This report has not been audited. Financial reports in 2002 Nine-months report October 22 Financial information from Electrolux is also available at 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/2002/07/18/20020718BIT00040/wkr0003.doc The full report http://www.waymaker.net/bitonline/2002/07/18/20020718BIT00040/wkr0004.pdf The full report