IAS 10 para 21(b), 22(e), major restructuring announced post year end

AB Electrolux (publ) – Annual report – 31 December 2018

Industry: manufacturing

Events after year-end 2018 (extract)

January 31. Electrolux reinitiates U.S. manufacturing and product investment, announces manufacturing consolidation projects The Electrolux Group is reinitiating an investment, estimated at USD 250m, in Springfield, Tennessee, and consolidating all U.S. cooking manufacturing into that facility. Electrolux will also transfer refrigeration manufacturing from its Santiago, Chile, facility to other locations. The measures will lead to restructuring charges in the first quarter 2019 of approximately SEK 1bn, whereof approximately SEK 300m will have a cash flow impact.

As Electrolux reinitiates the project and consolidates into Springfield, the company will also cease production at its Memphis, Tennessee facility. Production at the facility is expected to continue through 2020. The Springfield, Tennessee expansion will be complete and production will begin during the fourth quarter 2020.

The increased global use of modular product platforms has also contributed to a decision to cease manufacturing of refrigerators at Electrolux factory in Santiago, Chile, to improve efficiency and sharpen the local product offering.

The charges will be reported as non-recurring items in the results for the first quarter of 2019, affecting the business areas Major Appliances North America (approximately SEK 800m) and Major Appliances Latin America (approximately SEK 225m).

Electrolux anticipates annual savings of approximately SEK 1bn with full effect from 2022 as a result of the measures announced.