Annual Report 2021
Well positioned
to create value
Sustainable consumer experience innovation is a
key driver for long term profitable growth, enabling
users to prepare great-tasting food, care for their
clothes so they stay new for longer and achieve
healthy wellbeing at home.
Profitable growth is also enabled by consistently
increasing operational efficiency through digitalization,
automation and modularization. Sustainability is an
integral part of Electrolux strategy. A solid balance
sheet facilitates profitable growth.
Table of contents
CEO STATEMENT
Record performance in a dynamic
environment
5
A strategy responding to a changing market 7
Raising the bar on our sustainability agenda 8
12
Creating shareholder value
13
Summary 2021
REPORTING
Report by the Board of Directors
Notes
Proposed distribution of earnings
Auditors’ report
Eleven-year review
Operations by business area, yearly
Quarterly information
Sustainability reporting
Climate Risk Disclosures
Corporate governance report
Remuneration report
Annual General Meeting
Events and reports
14
39
75
76
80
82
83
85
97
102
121
124
125
A global leader
in household
appliances
Our corporate reporting
AnnuAl report
The Annual Report for AB Electrolux (publ),
556009-4178, consists of the Report by
the Board of Directors and Notes to the
financial statements, pages 14—75.
The Annual Report is adopted in Swedish.
The English version is a translation of the
Swedish original.
sustAinAbility reporting
The Electrolux sustainability framework and
execution are described in the Sustainability
reporting section on pages 85–96. The full
Electrolux Sustainability Report is published
online in March 2022 at:
www.electroluxgroup.com/
sustainabilityreport2021
electroluxgroup.com
Please find more information about
business development, strategy and
business areas on the Electrolux
Investor Relations webpage:
electroluxgroup.com/ir/create-value
ForwArd looking stAtements
This report contains ‘forward-looking’ statements that
reflect the company’s current expectations. Although the
company believes that the expectations reflected in such
forward-looking statements are reasonable, no assurance
can be given that such expectations prove to have been
correct as they are subject to risks and uncertainties that
could cause actual results to differ materially due to a
variety of factors. These factors include, but are not limited
to, changes in consumer demand, changes in economic,
market and competitive conditions, supply and produc-
tion constraints, currency fluctuations, developments
in product liability litigation, changes in the regulatory
environment and other government actions.
Forward-looking statements speak only as of the date
they were made, and, other than as required by applicable
law, the company undertakes no obligation to update any
of them considering new information or future events.
A global leader
in household
appliances
Electrolux is a global leader in household appliances. We reinvent taste, care
and wellbeing experiences for more enjoyable and sustainable living around
the world. We offer thoughtfully designed, innovative and sustainable solutions,
under well-established brands including Electrolux, AEG and Frigidaire.
126
sAles
billion sek
60
million products
sold AnnuAlly
52
thousAnd
employees
120
mArkets
sAles by brAnd
sAles by region
Other
21%
36%
*
28%
15%
*Includes Frigidaire Gallery and Frigidaire Professional.
32%
39%
5%
3%
16%
5%
4 CEO comment
“Record
performance
in a dynamic
environment”
Jonas Samuelson
Electrolux President and CEO
ELECTROLUX ANNUAL REPORT 2021
CEO comment 5
Market demand was strong in 2021, as consumers continue to
invest in their homes. We delivered record sales and earnings and
met or exceeded all our financial targets through an attractive
product and brand offering, and we successfully offset significant
cost inflation through price increases. However, the global shortage
of electronic components and logistic constraints impacted
our ability to fully meet the high demand for our products.
Sales growth
14.3%
Operating margin1)
6.0%
Already in 2020, consumers increased their focus on the home envi-
ronment as most people spent more time at home, due to the corona-
virus pandemic. This, in turn, generated increased demand for qual-
itative and innovative products as part of an inspiring, healthy and
sustainable lifestyle. Over the past year, this trend has endured, with a
normalization of market demand above pre-pandemic levels during
the second half of the year. This, together with our innovation power,
continued to increase sales of our more highly featured products. A key
contributor to our accomplishments is the deep understanding of con-
sumers’ needs and desires. As shown by the market’s great response
with an average user star rating of 4.7, our products and brand prop-
osition match highly with consumers’ requirements. I am also very
pleased with our strong price execution. Sales growth of 14.3% (3.3)
resulted in a record net sales of SEK 126bn, and operating income,
excluding non-recurring items, was SEK 7.5bn (5.8), corresponding to
a margin of 6.0% (5.0). Combined with a strong capital turnover-rate
of 5.3 (4.5), we met or exceeded all our financial targets, delivering a
return on net assets of 28.5% (22.6).
There are many factors behind our good performance, but in addi-
tion to our focus on consumer experience innovation, I would like to
highlight the ability of our employees to adapt quickly and successfully
to a changing environment. In the early days of the pandemic, this
meant scaling down rapidly and cost-effectively to adapt to lower
demand. The past year presented different challenges and opportu-
nities across industries – increasing production to meet sharply rising
demand, while concurrently managing higher input material prices,
shortages of electronic components and logistic constraints. A close
dialogue with our suppliers and our employees’ hard work partly
mitigated the impact, but we were not able to fully meet the high con-
sumer demand.
1) Excluding non-recurring items.
ELECTROLUX ANNUAL REPORT 2021
Industry trends:
• Consumer power
• Digitalization
• Sustainability
• Growing global
middle class
• Global scale
6 CEO comment
Consumer power and sustainability are key trends
The challenge of acting and investing with a long-term perspective,
while concurrently addressing more immediate challenges, has char-
acterized the year. Electrolux acts in a global market that was already
experiencing rapid change prior to the pandemic – a development
that has intensified and accelerated over the last two years. The dom-
inant trends impacting the household durables industry is the rising
consumer power and expectations enabled by digitalization and the
demand for companies to contribute to sustainable development.
Digitalization is creating possibilities to work and take care of errands
from home, thereby further increasing the importance of a good home
environment. It also enables innovation and improved consumer experi-
ences through Internet of Things enabled solutions. Access to information
and other users’ reviews empower consumers to choose and to demand
the best solutions and products for their specific needs. For Electrolux,
this also means an opportunity to communicate directly with consumers,
using online channels for product information and marketing. Digital
presence also creates opportunities for more tailored offerings and rev-
enue opportunities throughout the lifetime of the product, supporting our
ambition to strengthen consumer ties through aftermarket sales, offering
an expanded range of services, accessories, and consumables.
Another prevailing trend is the growing demand for companies like
Electrolux to minimize their climate impact throughout the value chain
and offer solutions to enable more sustainable living. Reducing the
climate footprint within our own production remains important. How-
ever, considering that the materials, manufacturing and shipping of the
appliances account for approximately 15%1) of the total lifetime energy
consumption and that product usage generates approximately 85% of
the total climate footprint, an important opportunity is to develop effi-
cient appliances that saves energy and water throughout their lifespan.
The design and function of these products should also inspire consumers
to change their habits and live more sustainably. According to an internal
worldwide survey, about 50% of consumers say they are climate con-
scious but not living as sustainably as they would like to.
1) International Energy Agency report, www.iea.org/reports/appliances-and-equipment
ELECTROLUX ANNUAL REPORT 2021
CEO comment 7
Driving sustainable
consumer experience
innovation
Increasing efficiency
through digitalization,
automation and
modularization
Solid balance sheet facilitates
profitable growth
A strategy responding to a changing market
Our overarching purpose – Shape living for the better – is the guiding
light for the ongoing transformation of Electrolux. We sell 60 million
household products each year. For millions of people around the
world, our products are an essential part of daily life. Our strategy for
profitable growth is firmly based in the market trends that drive the
development of a changing household appliance market. Sustain-
ability is integrated in our strategy and therefore in everything we
do. Developing sustainable consumer experience innovation and
increasing efficiency through digitalization, modularized products
and automated and flexible manufacturing are our key drivers for
profitable growth. Our strong balance sheet allows us to invest in those
drivers to create value through innovative products that are efficiently
produced, while delivering strong direct shareholder returns. The
primary financial priority is achieving our financial targets of an oper-
ating margin of at least 6% and a return on net assets of over 20%, over
a business cycle. Once established, our objective is sales growth of at
least 4% annually, over a business cycle.
Our ability to manage the past two years’ dynamic environment
demonstrates the robustness of our strategy, which creates long-term
value for our shareholders and consumers while contributing to a
more climate neutral value chain.
Financial targets for profitable growth (over a business cycle).
Operating margin
≥6%
ELECTROLUX ANNUAL REPORT 2021
Return on net assets (RONA)
Sales growth
>20%
≥4%
8 CEO comment
Raising the bar on our sustainability agenda
We have already this year almost reached our 2025 science-based
climate target for our own operations – to reduce CO2 emissions by
80%. Moreover, we have made good progress on reaching the 2025
targets for water efficiency and renewable energy. Circularity is also
a key area where one of our targets is to use 50% of renewable plas-
tics in our products by 2030. We need to maintain a sense of urgency
and awareness that many of the most difficult challenges have yet
to be solved. Given that the major climate footprint is with users, new
environ mentally friendly and energy-efficient products need to be
brought to market on a large scale. The big sustainability gains, even if
they are harder to achieve, come from how our products inspire con-
sumers to change their behaviors. We design products that intuitively
help consumers to use them in ways that reduce the environmental
footprint. For example, selecting smart washing programs with lower
temperatures and lower water consumption, using more sustainable
cooking techniques or reducing food waste through intelligent refrig-
eration solutions. This is a crucial part towards our long-term ambition
for our entire value chain to be net zero emission by 2050.
Every year, we raise the bar in terms of the criteria used to define
our most energy and water efficient products. These products also
make good business sense in terms of profitability for Electrolux as they
accounted for 19% of total units sold and 31% of gross profit in 2021.
The Electrolux climate neutrality roadmap
“The big sustainability
gains, even if they are
harder to achieve, come
from how our products
inspire consumers to
change their behavior.”
19/31%
Our most resource-efficient products
accounted for 19% of units sold and 31%
of gross profit in 2021.
Targets:
80%
25%
reduction in carbon emissions
in operations. Scope 1 and 21)
Climate neutral
operations2)
reduction in carbon emissions in
product use. Scope 31)
Climate neutral across
the value chain
This long-term ambition supports the
United Nations Global Compact Business
Ambition for 1.5° C. Scope 1, 2 and 3.
2015
2025
2030
2050
Outcomes:
Scope 1 and 21,3)
CO2eq emissions produced directly (Scope 1) by Electrolux, for
instance through the combustion of fuels and indirect CO2eq
emissions (Scope 2) generated through the consumption of
purchased energy.
Scope 31)
Scope 3 are all other indirect CO2eq emissions due to the activities
of Electrolux, but that are produced and controlled by a different
emitter, e.g. CO2eq emissions resulting from the use of Electrolux
products.
78%reduction compared to 2015
~20%reduction compared to 2015
1) Science Based Target (SBT)
2) Company target (Scope 1 + 2 = 0)
3) Includes contributions from energy use and greenhouse gas fugitive emissions.
ELECTROLUX ANNUAL REPORT 2021
CEO comment 9
Strengthening the Electrolux
sustainability offering
In 2021, the Electrolux brand proposition continued
to be sharpened through the rollout of the ‘Make it
Last’ campaign, highlighting the company’s sustain-
able laundry innovations.
A large part of the environmental footprint of laundry appliances
comes from the product use phase. Electrolux latest campaign
for laundry focused on increasing resource efficiency and
inspiring consumers to live a more sustainable life; creating a
win-win situation where clothes last longer with less impact on
the environment.
The “Make it last” campaign highlights sustainable Electrolux
laundry innovations such as AutoDose, which delivers the per-
fect amount of detergents, and UltraWash, a low-temperature
program that cleans thoroughly, while using 30% less energy.
Using a program like this to reduce washing temperatures by
just 10°C can drastically reduce CO2 equivalent emissions, with
potential savings of over 27 kg per household1). The new laundry
drum, enabled through an investment in the Porcia factory, Italy,
is both gentler on fabrics and more energy efficient.
To make it easier for consumers to shift to more sustainable
laundry habits, Electrolux has initiated several activities. One is
the launch of an Electrolux laundry app in several key markets
that has developed an ongoing dialogue with consumers,
encouraging more efficient usage of Electrolux products through
emphasizing energy and resource-saving features.
With around two-thirds of global consumers willing to pay
more for sustainable products2), strengthening the perception
of Electrolux as a sustainability leader offers a key competitive
advantage. ‘Make it Last’ resonated strongly with consumers
across the initial regions and has played an important role in
strengthening key brand attributes for Electrolux.
+0.3
4.76
+2.5 pts value market share
in key market Poland and
+0.3 pts in Europe
(Q2 2021-Q2 2019)
Consumer star rating in
Europe increased to 4.76
from 4.59 (Dec 2021 vs
Dec 2020)
>27 kg
Savings of >27 kg of CO2
equivalent per household
1) The Truth About Laundry report (2021).
2) Eco Ethical Report (2019).
Innovations for a better home – and a better world
In our company purpose – Shape living for the better – consumer-
centric innovation efforts have a central role and are based on our
extensive and long experience of consumers’ needs and desires. A
key factor is our three well-established brands – Electrolux, AEG and
Frigidaire – with strong innovation heritages and clear target con-
sumer positions, where they can grow profitably and with potential
to attract a larger audience. The innovation process’ starting point
is deep consumer insight for each brand to ensure that the products
meet the needs and desires of the specific target consumers. 63% of
consumers are willing to pay up to 15% more for a better experience1).
1) Simon-Kucher & Partners (2019). The Trend Radar.
ELECTROLUX ANNUAL REPORT 2021
63%
of global consumers are willing to pay
more for a better experience1).
”To further increase our
relevance as a partner
to consumers we also
strengthen our position
in aftermarket sales.”
10 CEO comment
We focus our innovation on three clear areas: Taste, Care and Well-
being. The Taste innovation area, which includes our various kitchen
appliances that account for over 60% of our sales, focuses on intel-
ligent and digitally enabled solutions for preparing great-tasting
food, creating healthier and more nutritious meals, and reducing
food waste. Care focuses on user-friendly, resource-efficient wash-
ing machines and tumble dryers that enable clothes to be cared for,
so they stay new longer, while the focus of Wellbeing is on visually
appealing vacuum cleaners and air-conditioning equipment that pro-
mote healthy wellbeing in users’ homes with less carbon footprint.
To further increase our relevance as a partner to consumers we also
strengthen our position in aftermarket sales, including services, repairs
and consumables. We were for example the first appliance manufac-
turer to offer fixed price repair services in Europe in 2017 and it has
been very well received as it allows consumers to make an informed
decision on whether to repair or replace an appliance. We recently
launched Repair and Care, where consumers receive additional ben-
efits protecting them against future repair costs along with monthly
payment solutions to ensure we always have a relevant offer for con-
sumers at their time of need. In 2021, aftermarket sales accounted for
approximately 7% of our total net sales.
Taste
As a kitchen appliance leader, we want our products to
enable consumers to prepare food with the right taste
and texture, minimize food waste, and create healthy
and nutritious meals. We continuously add new func-
tionalities in terms of control, interaction and innovative
digital technologies.
62%
of sales
Product categories:
Cookers, hobs, ovens,
hoods, microwave
ovens, refrigerators
and freezers.
Care
Our laundry products aim to offer consumers out-
standing garment care, water and energy efficiency,
and effective low temperature washing. Demand for
Electrolux washing machines and tumble dryers is driven
by innovations that promote user-friendliness and
garment care through tailored and adaptive programs
combined with leading resource efficiency.
29%
of sales
Product categories:
Washing machines,
tumble dryers and
dishwashers.
Wellbeing
We strive to create wellbeing products that are differ-
entiated by their visual appeal, and how they promote
healthy indoor environments and sustainable living.
Electrolux wellbeing products enable more people to
sustainably benefit from comfortable temperatures as
well as fewer particles in the air, in the water and on
surfaces.
9%
of sales
Product categories:
Vacuum cleaners,
air-conditioning equip-
ment, water heaters,
heat pumps and small
domestic appliances.
ELECTROLUX ANNUAL REPORT 2021
CEO comment 11
Sharpened offering
enabled by investment
New and more attractive products, shorter time to
market, increased efficiency and a significant reduc-
tion of the climate footprint are all important results
of Electrolux investment in a new fridge and freezer
facility in Anderson, South Carolina, U.S.
During 2021, Electrolux ramped up production at the highly
automated new facility with modularized product architectures.
The investment in the Anderson production plant is part of
Electrolux SEK 8bn re-engineering investment program aiming
to drive profitable growth through a sharpened product offering,
increased flexibility and production cost competitiveness.
By using modularized product architectures, we significantly
leverage our global scale and accelerate innovation speed.
Quick response to changing consumer demands is key to stay
competitive and drive profitable growth. New products manu-
factured at the Anderson factory have been very well received
by consumers. The highest volume top freezer has a consumer
star rating of 4.4 and is among the most sold in that category
at major U.S. retail chains, valued particularly for its design and
features.
Modularization also allows increased flexibility and lower
costs for material. Simultaneously, robotization of large parts
of the assembly line increases the automation level by over 20
percentage points compared to previous production processes.
Altogether, this development translates into considerably
increased efficiency, while also improving quality and safety.
The new production facility at Anderson has also entailed
significant environmental gains. The more resource efficient
manufacturing process at the new facility has resulted in reduced
CO₂ emissions by 95%, while using 35% less water and 24% less
electricity, compared with 2015. At the same time, almost 90%
of the site’s energy consumption comes from renewable energy
sources. The predominantly electric production process has
reduced the use of natural gas to a minimum.
However, the environmental gains are not limited to the man-
ufacturing process. The entire life cycle of a fridge or a freezer
have become more sustainable. All fridges and freezers pro-
duced at the Anderson plant are converted to a new refrigerant,
substantially reducing the climate footprint. R&D efforts have
created energy-efficient appliances that helps food stay fresh
longer. Finally, when the appliance has reached the end-of-life
many of the parts are recyclable. Overall, the new production
facility in Anderson allows Electrolux to take yet another step
towards the goal of being climate neutral across the whole value
chain by 2050, while also significantly increase competitiveness.
Investments for efficiency and innovation
Electrolux strong balance sheet provides a strong foundation for
implementing the SEK 8bn investment program that has been ongoing
since 2018. The investments in production facilities in Europe, North
and Latin America are critical for creating profitable long-term growth
by strengthening our competitiveness. Modularization enables an
increased speed to market for new innovative products and more
efficient procurement, including savings in material costs. Increased
automation is central to increase efficiency in manufacturing. The
majority of the investments that are part of the SEK 8bn program will
contribute to achieving our science-based targets. This as they will
result in significant reductions in energy consumption, an increased
share of renewable energy, reduced water consumption and recy-
cling of wastewater. As one of the leading players, we have a major
responsibility for ensuring that our investments contribute to the objec-
tive of the Paris Agreement to limit global warming to 1.5°C.
A total of six factories will be modernized and renewed under the
investment program and we made significant progress during the
year. We started ramp-up in three additional factories, on top of the
two that are already up and running.
ELECTROLUX ANNUAL REPORT 2021
“By using modularized
product architectures,
we leverage our global
scale and accelerate
innovation speed.”
12 CEO comment
Creating shareholder value
During the year, the Board of Directors of Electrolux reviewed the
Group’s capital structure. The first prioritization is to maintain a high
level of capacity for value creating organic investments and selective
acquisitions. However, given Electrolux strong financial position, the
Board decided that a larger percentage of the value created should
accrue to shareholders. Accordingly, the dividend policy was adjusted
to approximately 50% of annual income, an increase compared to
previous policy of at least 30% of annual income.
In addition, at the Extraordinary General Meeting in August, a resolu-
tion was passed on the Board’s initiative to make a separate distribution
of SEK 17 per share through an automatic share redemption procedure.
Combined with the ordinary dividend, this meant that a total cash
distribution of SEK 25 per share was paid out in 2021. The redemption
process was completed in October. Furthermore, based on the authori-
zation granted by the Annual General Meeting, the Board has resolved
to repurchase up to 9,369,172 B shares during the period from October
2021 to March 2022. During the fourth quarter, Electrolux repurchased
more than 4.3 million B shares. As previously communicated it is the
Board’s intention to continue with share buybacks over time and to con-
tinue to reduce Electrolux number of shares through subsequent share
cancellations, which will further improve earnings per share. In line with
this, the Board has announced its intention to proceed with a new share
buyback program after the AGM 2022 for approximately SEK 2.5bn.
Additional details of the intended buyback program will be communi-
cated as and when decided.
The increased distribution to shareholders underlines the efficiency
and flexibility with which Electrolux has managed market volatility during
the two pandemic years. For this reason, I would like to take this opportu-
nity to thank all colleagues warmly for their hard and diligent work.
At the time of writing, the major tasks for 2022 are to continue to
manage global supply constraints and to compensate for higher cost
inflation in a benign market environment, while ramping up new prod-
ucts and manufacturing facilities in the most intense launch year ever
for the company. Over the coming years, a key task for myself and the
rest of Electrolux management is the completion of the ambitious invest-
ment program in efficient and flexible manufacturing facilities to boost
competitiveness and reduce the climate footprint of Electrolux. Enabled
by these investments, the very intensive product launch period ahead
of us provides a great platform to further improve sales of high margin
products. We are also accelerating the transformation to enable direct
digital and IoT interaction with our end consumers in order to provide a
better ownership life cycle and significantly increasing both aftermarket
sales revenues and consumer loyalty. We continue our efforts to deliver
innovations for great consumer experiences, keeping our brands
desirable, to drive profitable growth and to progress toward climate
neutrality.
Stockholm, February 2022
Jonas Samuelson
President and CEO
25 SEK
Total cash distribution of SEK 25 per share
was paid out in 2021.
”We continue our efforts
to deliver innovations
for great consumer
experiences.”
ELECTROLUX ANNUAL REPORT 2021
CEO comment 13
Summary 2021
Sales and operating income
The business environment was highly dynamic during the year,
offering both significant opportunities and challenges. Market
demand was in general strong throughout the year, while supply
and logistic constraints limited product availability. The financial
performance improved, with an operating margin excluding
non-recurring items of 6.0% compared to 5.0% last year. Sales
growth was 14.3% and was the main driver for the improved
operating income.
Also this year, Electrolux commitment to delivering sustainable
consumer experience innovation contributed strongly to the
result. An attractive product offering, delivered under well-estab-
lished brands, continued to generate an improved mix through
selling more innovative premium products. Aftermarket sales,
one of the Group’s focus areas, continued to grow. It remained at
7% of total sales for the year, following the high organic growth of
the Group.
The net price realization was strong with good traction from
list price increases implemented during the year across regions,
coupled with a low level of promotional activity reflecting
constrained product availability. Price fully offset the significant
cost inflation, mainly from raw material but also from electronic
components and logistics, as well as currency headwinds.
The year was increasingly challenging from a supply chain
perspective, facing shortages in mainly electronic components
but also logistic constraints. This impacted volumes as well as
product mix and the high consumer demand could not fully be
met. In addition, the constraints resulted in production inefficien-
cies due to low production planning visibility and increased cost
for logistics and sourcing. This negative impact on cost efficiency
was partly mitigated by continuous cost improvements and
progress in the SEK 8bn re-engineering program driving modu-
larization, automation and digitalization.
Electrolux increased investments in innovation and marketing
to support profitable growth, but the increase was also a result
of a significant reduction in 2020 to respond to the market condi-
tions, highly impacted by the pandemic.
CO2 emissions
The ambition is to achieve climate neutrality by 2050. An import-
ant step is the Science Based Targets set for 2025.
The Group is close to achieving its combined Scope 1 and
2 Science Based Target of 80% reduction in CO₂ emissions for
operations by reaching 78% in 2021, compared to 70% in 2020.
The main reason is the increased use of electricity from renew-
able sources.
The Scope 3 target of 25% reduction in CO₂ emissions, cov-
ering use of sold products, reached almost 20% reduction in
emissions in 2021. The year-over-year increase in production
volumes negatively impacted emissions.
Operating income (EBIT) bridge1)
CO2 emissions
SEKbn
15
12
9
6
3
0
8.6
-1.3
-1.0
5.8
-4.5
0.0
7.5
EBIT
2020
Organic
contribution
Innovation
and marketing
Cost
efficiency
External
factors
Acq/
Divest
EBIT
2021
1) Excluding non-recurring items
Scope 1 and 2
Scope 3
78%
reduction compared
to 2015
~20%
reduction compared
to 2015
Electrolux has set two Science Based Targets for 2025
compared to 2015. The first target is 80% reduction in carbon
emissions in operations i.e. Scope 1 (direct emissions) and
Scope 2 (indirect emissions). The second target is 25%
reduction in carbon emissions in product use i.e. Scope 3
(indirect emissions).
Sales growth
Operating margin
Return on net assets
6.8
6.0
5.4
%
8
6
4
2
0
SEKbn
30
25
20
15
10
5
0
%
60
50
40
30
20
10
0
23.9
28.5
17
18
19
20
21
Average net assets
Return on net assets
Target, >20%
SEKbn
125
100
75
50
25
0
-25
126
126
14.3
14.3
17
18
19
20
21
%1)
20
16
12
8
4
0
-4
SEKbn
8
6
4
2
0
17
18
19
20
21
Net sales
Sales growth
Target, ≥4%
1) Total sales growth excluding
currency translation effects.
Operating income
Operating margin
Operating margin excl. non-recurring items
Target, ≥6%
Note: Financial targets are over a business cycle.
ELECTROLUX ANNUAL REPORT 2021
Report by
the Board
of Directors
ELECTROLUX ANNUAL REPORT 2021
Discontinued operations in 2020 refer to Electrolux Professional AB, which was part of the Electrolux Group until it was listed on Nasdaq Stockholm as a separate company on March 23, 2020. The
comments in this report refer to the consumer business, continued operations, unless otherwise stated. For more information, see Note 26.
Board of Directors’ report and financial statements 15
Report by the
Board of Directors
• Net sales amounted to SEK 125,631m (115,960). The sales growth excluding currency
translation effects was 14.3%.
• Operating income amounted to SEK 6,801m (5,778), corresponding to a margin of 5.4% (5.0).
Excluding a non-recurring item of SEK –727m, operating income amounted to SEK 7,528m
(5,778), corresponding to a margin of 6.0% (5.0).
• Income for the period amounted to SEK 4,678m (3,988), corresponding to SEK 16.31 (13.88)
per share. Excluding the non-recurring item, income for the period amounted to SEK 5,220m
(3,988), corresponding to SEK 18.20 (13.88) in earnings per share.
• Operating cash flow after investments amounted to SEK 3,200m (8,552).
• An automatic share redemption of SEK 17 per share was resolved.
• 4,320,057 own series B shares were repurchased for an amount of SEK 894m. The Board
proposes the AGM 2022 to resolve on cancellation of repurchased shares and to renew
the mandate to acquire own shares. The Board intends to thereafter initiate a new share
buyback program for an amount of approximately SEK 2.5bn.
• The Board decided on an adjusted dividend policy of approximately 50% of annual income
and proposes a dividend for 2021 of SEK 9.20 (8.00) per share, to be paid in two equal
installments.
Key data
SEKm
Continuing operations
Net sales
Sales growth, %1)
Organic growth, %
Acquisitions, %
Changes in exchange rates, %
Operating income2)
Operating margin, %
Income after financial items
Income for the period
Earnings per share, SEK3)
Operating cash flow after investments
Return on net assets, %
Capital turnover-rate, times/year
Average number of employees
Net debt/EBITDA
Total Group, including discontinued operations
Income for the period4)
Earnings per share, SEK
Equity per share, SEK
Dividend per share, SEK
Return on equity, %
2021
2020
Change, %
125,631
115,960
8
14.3
14.2
0.2
–6.0
6,801
5.4
6,255
4,678
16.31
3,200
28.5
5.3
51,590
0.71
4,678
16.31
65.74
9.205)
24.4
3.3
3.2
0.1
–5.8
5,778
5.0
5,096
3,988
13.88
8,552
22.6
4.5
47,543
0.15
6,584
22.91
65.10
8.00
34.1
18
23
17
17
–29
–29
1) Change in net sales adjusted for currency translation effects.
2) Operating income for 2021 included a non-recurring item of SEK –727m, relating to arbitration in U.S. tariff case. Excluding this item, operating income for 2021
amounted to SEK 7,528m, corresponding to a margin of 6.0%, see Note 7.
3) Basic, based on an average of 286.9 (287.4) million shares for the full year, excluding shares held by Electrolux.
4) Income for the period 2020 included a settlement gain from the distribution of Electrolux Professional of SEK 2,379m.
5) Proposed by the Board of Directors.
AB Electrolux (publ), 556009–4178. S:t Göransgatan 143, SE-105 45 Stockholm, Sweden.
Annual Report 2021, page 14–75
Sustainability Reporting 2021, page 85–96
Climate Risk Disclosures 2021, page 97–101
Corporate Governance Report 2021, page 102–120
Remuneration Report 2021, page 121–123
ELECTROLUX ANNUAL REPORT 2021
16 Board of Directors’ report and financial statements
Net sales and income
• Net sales increased by 8.3%. This was a result of an organic sales increase of 14.2% and a positive
impact from acquisitions of 0.2%, while currency translation effects had a negative impact of 6.0%.
• Operating income amounted to SEK 6,801m (5,778), corresponding to a margin of 5.4% (5.0).
• Excluding a non-recurring item of SEK –727m, operating income amounted to SEK 7,528m (5,778),
corresponding to a margin of 6.0% (5.0).
• Positive price development fully offset significant cost inflation, including currency headwinds.
• Mix developed favorably and volumes increased, although strong consumer demand could not fully
be met due to supply chain constraints.
• Income for the period amounted to SEK 4,678m (3,988), corresponding to SEK 16.31 (13.88) per share.
Net sales
Net sales in 2021 amounted to SEK 125,631m (115,960), which
is an increase of 8.3%. Organic sales increased by 14.2% and
acquisitions had a positive impact of 0.2%, while currency
translation had a negative impact of 6.0%.
All business areas reported organic sales growth. Positive
price development, improved mix and increased volumes all
contributed to the growth. Both volumes and mix were, however,
impacted by supply chain constraints, limiting the ability to fully
meet strong consumer demand. Aftermarket sales increased
across business areas.
Operating income
Operating income for 2021 amounted to SEK 6,801m (5,778),
corresponding to a margin of 5.4% (5.0). Operating income
included a non-recurring item of SEK –727m relating to arbi-
tration in a U.S. tariff case, impacting the business area North
America. Excluding this non-recurring item, operating income
amounted to SEK 7,528m (5,778), corresponding to a margin
of 6.0% (5.0).
The increase in operating income was mainly driven by the
organic contribution. Mix developed strongly through an attrac-
tive product offering delivered under well-established brands
and a strong net price realization offset significant cost inflation,
mainly in raw material but also in electronic components and
logistics, as well as currency headwinds. Investments in innova-
tion and marketing increased.
Operating income and margin, excluding non-recurring
items, increased in all business areas. For more information on
the performance of each business area, see page 18–21.
Financial net
Net financial items amounted to SEK –546m (–681).
The decrease was mainly a result of lower interest costs.
Income after financial items
Income after financial items amounted to SEK 6,255m (5,096),
corresponding to 5.0% (4.4) of net sales.
Taxes
Total taxes for 2021 amounted to SEK –1,577m (–1,108),
corresponding to a tax rate of 25.2% (21.7).
Income for the period and earnings per share
Income for the period amounted to SEK 4,678m (3,988),
corresponding to SEK 16.31 (13.88) in earnings per share
before dilution. Excluding non-recurring items, income for the
period amounted to SEK 5,220m (3,988), corresponding to
SEK 18.20 (13.88) in earnings per share.
Income for the period for the Group last year, including dis-
continued operations, amounted to SEK 6,584m, corresponding
to SEK 22.91 in earnings per share before dilution. The income
for the period for the Group in 2020 included a settlement gain
from the distribution of Electrolux Professional of SEK 2,379m.
SALES GROWTH
OPERATING MARGIN
SEKM
125,000
100,000
75,000
50,000
25,000
0
-25,000
%
15
12
9
6
3
0
-3
Net sales
Sales growth
Target: at least 4%
Total sales growth excluding
currency translation effects.
SEKM
8,000
6,000
4,000
2,000
0
17
18
19
20
21
17
18
19
20
21
Financial targets are over a business cycle.
For comparable reasons the figures in the graphs above are exclusive of the discontinued business area Professional Products.
%
8
6
4
2
0
Operating income
Operating margin
Operating margin
excl. non-recurring items
Target: at least 6%
For non-recurring items included in
operating income, see Note 7 and page 82.
ELECTROLUX ANNUAL REPORT 2021
Board of Directors’ report and financial statements 17
Consolidated statement of comprehensive income
NotE
3, 4
5, 7
5, 7
5, 7
6, 7, 29
3, 8
9
9
10
26
22
11, 18
11
11
20
20
2021
125,631
–101,647
23,984
–11,835
–4,972
–376
6,801
44
–589
–546
6,255
–1,577
4,678
–
4,678
2,746
–584
2,161
–35
1,284
9
1,258
3,419
8,097
4,677
0
4,678
8,096
0
8,097
16.31
–
16.31
16.21
–
16.21
286.9
288.5
2020
115,960
–93,689
22,272
–11,071
–5,116
–307
5,778
74
–755
–681
5,096
–1,108
3,988
2,595
6,584
189
–46
143
32
–3,326
48
–3,246
–3,103
3,481
6,584
0
6,584
3,481
–0
3,481
13.88
9.03
22.91
13.86
9.02
22.88
287.4
287.7
SEKm
Net sales
Cost of goods sold
Gross operating income
Selling expenses
Administrative expenses
Other operating income and expenses
Operating income
Financial income
Financial expenses
Financial items, net
Income after financial items
Taxes
Income for the period, continuing operations
Income for the period, discontinued operations
Income for the period
Items that will not be reclassified to income for the period:
Remeasurement of provisions for post–employment benefits
Income tax relating to items that will not be reclassified
Items that may be reclassified subsequently to income for the period:
Cash flow hedges
Exchange–rate differences on translation of foreign operations
Income tax relating to items that may be reclassified
Other comprehensive income, net of tax
Total comprehensive income for the period
Income for the period attributable to:
Equity holders of the Parent Company
Non–controlling interests
Total
Total comprehensive income for the period attributable to:
Equity holders of the Parent Company
Non–controlling interests
Total
Earnings per share
For income attributable to the equity holders of the Parent Company:
Basic, continuing operations, SEK
Basic, discontinued operations, SEK
Basic, total Group, SEK
Diluted, continuing operations, SEK
Diluted, discontinued operations, SEK
Diluted, total Group, SEK
Average number of shares1)
Basic, million
Diluted, million
1) Average numbers of shares excluding shares held by Electrolux.
ELECTROLUX ANNUAL REPORT 2021
18 Board of Directors’ report and financial statements
Operations by business area
• Strong organic contribution from volume, price and mix in Europe.
• Supply chain constraints impacted ability to fully meet strong demand in North America.
• Positive price development more than offset significant headwind from external factors in Latin America.
• Strong performance in Asia-Pacific, Middle East and Africa, mainly driven by successful product
launches and price execution.
Market demand overview
The market demand was in general strong, as shown in more
mature markets as the U.S. and Europe. Already in 2020, con-
sumers allocated more of their household budget to household
improvements, a result of more time spent at home due to the
coronavirus pandemic. This trend continued in 2021, though
starting to normalize in most markets during the second part
of the year. The strong market demand was, however, limited
by global supply and logistic constraints, impacting product
availability.
Market demand for core appliances in Europe increased
by 7% in 2021, where growth in Eastern Europe was 9% and
7% in Western Europe. In the U.S., market demand for core
appliances increased by 10%. Overall consumer demand for
core appliances in Latin America is estimated to have been
in line with last year. Demand in Brazil is estimated to have
decreased as a consequence of pandemic restrictions and
inflationary pressure, while demand in Argentina and Chile is
estimated to have increased, supported by pent-up demand
and government stimulus packages, respectively. In Asia-Pacific,
Middle East and Africa, overall market demand for appliances
is estimated to have increased in 2021, despite pandemic
restrictions partly being re-introduced during the year. However,
demand in Australia, one of Electrolux main markets, declined
compared to a strong development last year.
INDUSTRY SHIPMENTS FOR CORE APPLIANCES IN THE U.S.
INDUSTRY SHIPMENTS FOR CORE APPLIANCES IN EUROPE
MILLION UNITS
MILLION UNITS
60
55
50
45
40
35
120
110
100
90
80
A total of approximately
56 million core
appliances were sold
in the U.S. in 2021.
A total of approximately
112 million core
appliances were sold
in Europe in 2021.
03
05
07
09
11
13
15
17
19
21
03
05
07
09
11
13
15
17
19
21
Source: AHAM. Core appliances includes AHAM 6 (Washers,
Dryers, Dishwashers, Refrigerators, Freezers, Ranges and
Ovens) and Cooktops.
For other markets there are no comprehensive market statistics.
Source: Electrolux estimates, as from 2018, market volumes
in Eastern Europe have been revised, considering additional
sources.
Business areas
Electrolux operations are organized into four regional business
areas: Europe, North America, Latin America and Asia-Pacific,
Middle East and Africa. The Group’s operations include products
for consumers comprising of major appliances, e.g. refrigera-
tors, freezers, cookers, dryers, washing machines, dishwashers,
room air-conditioners and microwave ovens. Floor-care prod-
ucts, water heaters, heat pumps, small domestic appliances as
well as consumables, accessories and service are other impor-
tant areas for Electrolux.
SHARE OF SALES BY BUSINESS AREA
Europe, 39%
North America, 32%
Latin America, 16%
Asia-Pacific, Middle East and Africa, 13%
ELECTROLUX ANNUAL REPORT 2021
Board of Directors’ report and financial statements 19
Financial overview by business area, continuing operations
SEKm
Net sales
Operating income:
Europe
North America
Latin America
Asia-Pacific, Middle East and Africa
Other, Group common costs, etc.
Total
Operating margin, %
Operating margin excl. non-recurring items, %1)
1) For more information on non-recurring items, see Note 7.
2021
125,631
2020
115,960
4,002
688
1,336
1,511
–737
6,801
5.4
6.0
3,643
1,215
666
1,038
–783
5,778
5.0
5.0
Change, %
8
10
–43
101
46
6
18
Europe
Market demand in Europe increased by 7% in 2021. Growth in
Eastern Europe was 9% and 7% in Western Europe.
Electrolux operations reported an organic sales growth
of 10.6% in 2021. Price developed favorably driven by price
increases implemented during the year. Both volumes and mix
also contributed positively, despite negative impact from supply
chain constraints that limited product availability in the second
half of the year. The strategically important aftermarket sales
continued to increase.
Operating income and margin improved year-over-year.
The strong organic contribution more than offset headwind
from external factors, driven by raw material, and higher costs
for logistics and electronic components. Investments in innova-
tion and marketing increased, compared to last year’s signifi-
cant reduction following market conditions.
KEY FIGURES
SEKm
Net sales
Organic growth, %
Acquisitions, %
Operating income
Operating margin, %
Net assets
Return on net assets, %
Capital expenditure
NET SALES AND OPERATING MARGIN
2021
2020
49,384
46,038
10.6
0.1
3.3
—
4,002
3,643
8.1
1,749
224.4
2,787
7.9
1,406
153.8
2,155
SEKM
50,000
40,000
30,000
20,000
10,000
0
Net sales
Operating margin
Operating margin
excl. non-recurring items1)
%
10
8
6
4
2
0
17
18
19
20
21
Average number of employees
17,914
17,661
1) For information on non-recurring items, see page 82.
ELECTROLUX ANNUAL REPORT 2021
20 Board of Directors’ report and financial statements
North America
Market demand for core appliances in the U.S. increased by
10% in 2021. Market demand for all major appliances, including
microwave ovens and home-comfort products, increased by
11%.
Electrolux operations in North America reported an organic
sales growth of 12.7%. Price developed favorably driven by
price increases implemented during the year as well as lower
promotional spending, while volumes decreased year-over-
year. Both mix and volumes were negatively impacted by the
tight supply and logistics situation that limited the ability to meet
market demand. Aftermarket sales increased.
Operating income and margin decreased year-over-year.
A non-recurring item of SEK –727m was charged to operating
income, relating to arbitration in a U.S. tariff case on washing
machines imported into the U.S. from Mexico in 2016/2017.
Excluding this non-recurring item, operating income and
margin increased year-over-year. The positive price develop-
ment more than offset headwind from external factors, mainly
from raw material, and higher costs related to the supply chain
constraints.
KEY FIGURES
SEKm
Net sales
Organic growth, %
Operating income
Operating margin, %
Operating margin excl. non-recurring items, %1)
Net assets
Return on net assets, %
Capital expenditure
NET SALES AND OPERATING MARGIN
2021
2020
40,468
38,219
12.7
688
1.7
3.5
9,376
8.7
1,311
0.9
1,215
3.2
3.2
6,086
16.3
1,772
SEKM
50,000
40,000
30,000
20,000
10,000
0
Net sales
Operating margin
Operating margin
excl. non-recurring items
%
8
6
4
2
0
-2
17
18
19
20
21
Average number of employees
13,558
11,551
1) For information on non-recurring items, see Note 7 and page 82.
Latin America
Overall consumer demand for core appliances in Latin America
in 2021 is estimated to have been in line with last year. In Chile
and Argentina demand is estimated to have increased, while
demand is estimated to have declined in Brazil.
Electrolux operations in Latin America reported an organic
sales growth of 33.7% in 2021. Across regions, both higher
volumes and a positive price development contributed to the
growth. The favorable price impact was driven by list price
increases during the year coupled with a lower level of pro-
motional activity. Mix remained stable compared to last year,
partly impacted by supply chain constraints that limited
product availability. Aftermarket sales increased.
Operating income and margin increased year-over-year.
Higher price more than offset significant headwind from
external factors, mainly raw material and currency, as well as
higher costs driven by supply chain constraints. Productivity
measures contributed positively. Investments in innovation
and brand strengthening initiatives increased to support
product launches.
KEY FIGURES
SEKm
Net sales
Organic growth, %
Operating income
Operating margin, %
Net assets
Return on net assets, %
Capital expenditure
Average number of employees
1) For information on non-recurring items, see page 82.
NET SALES AND OPERATING MARGIN
2021
2020
19,958
16,915
33.7
1,336
6.7
10.0
666
3.9
5,893
4,526
25.9
933
11.9
665
10,749
9,391
SEKM
25,000
20,000
15,000
10,000
5,000
0
Net sales
Operating margin
Operating margin
excl. non-recurring items1)
%
10
8
6
4
2
0
17
18
19
20
21
ELECTROLUX ANNUAL REPORT 2021
Board of Directors’ report and financial statements 21
Asia-Pacific, Middle East and Africa
Overall market demand for appliances is estimated to have
increased in the region in 2021, despite pandemic restrictions
partly being re-introduced during the year. However, demand in
Australia, one of Electrolux main markets, declined compared to
a strong development last year.
Electrolux reported an organic sales growth of 8.4%. Mix
improved, mainly driven by successful product launches, and
list price increases implemented during the year generated
a positive price development. Volumes increased as well as
aftermarket sales.
Operating income and margin increased year-over-year,
driven by the positive organic development from price, mix and
volume as well as from continuous cost improvements. Price
increases offset headwind from external factors, driven by raw
material, and higher costs for logistics and electronic compo-
nents. Investments in brand building activities and marketing
increased to support product launches.
NET SALES AND OPERATING MARGIN
2021
2020
15,820
14,788
8.4
0.9
1.7
0.6
1,511
1,038
9.6
7.0
4,900
3,996
31.7
727
20.3
562
7,876
7,526
SEKM
20,000
15,000
10,000
5,000
0
Net sales
Operating margin
Operating margin
excl. non-recurring items1)
%
12
9
6
3
0
17
18
19
20
21
KEY FIGURES
SEKm
Net sales
Organic growth, %
Acquisitions, %
Operating income
Operating margin, %
Net assets
Return on net assets, %
Capital expenditure
Average number of employees
1) For information on non-recurring items, see page 82.
Other facts
Changes in Group Management during 2021
Effective as from October 1, 2021, the Group General Counsel
reports to the Chief Financial Officer instead of to the Chief
Executive Officer. The Group General Counsel remains secretary
of the Board of Directors but is not member of Group Manage-
ment.
Sustainability reporting
For sustainability related information, please see the section
Sustainability Reporting on page 85–96. The Sustainability
Reporting has been prepared in accordance with disclosure
requirements set out in the Swedish Annual Accounts Act,
chapter 6, paragraph 11.
Asbestos litigation in the U.S.
Litigation and claims related to asbestos are pending against
the Group in the U.S. Almost all of the cases refer to externally
supplied components used in industrial products manufac-
tured by discontinued operations prior to the early 1970s. The
cases involve plaintiffs who have made substantially identical
allegations against other defendants who are not part of the
Electrolux Group.
As of December 31, 2021, the Group had a total of 3,315 (3,403)
cases pending, representing approximately 3,324 (approxi-
mately 3,440) plaintiffs. During 2021, 1,264 new cases with
approximately 1,267 plaintiffs were filed and 1,352 pending
cases with approximately 1,383 plaintiffs were resolved.
The Group continues to operate under a 2007 agreement
with certain insurance carriers who have agreed to reimburse
the Group for a portion of its costs relating to certain asbestos
lawsuits. The agreement is subject to termination upon 60 days
notice and if terminated, the parties would be restored to their
rights and obligations under the affected insurance policies.
It is expected that additional lawsuits will be filed against
Electrolux. It is not possible to predict the number of future
lawsuits.
In addition, the outcome of asbestos lawsuits is difficult to
predict and Electrolux cannot provide any assurances that
the resolution of these types of lawsuits will not have a material
adverse effect on its business or on results of operations
in the future.
For information on certain additional legal proceedings, see Note 25 Contingent liabilities.
ELECTROLUX ANNUAL REPORT 2021
22 Board of Directors’ report and financial statements
Average net assets and annualized net sales exclude Electrolux Professional for 2020.
Financial position
• Financial net debt position amounted to SEK 4,645m, compared to a financial net cash
position of SEK 4,741m end of 2020.
• Net debt/EBITDA ratio was 0.71 (0.15).
• Equity/assets ratio was 19.3% (23.6).
• Return on net assets was 28.5% (22.6).
Working capital and net assets
Working capital as of December 31, 2021, amounted to
SEK –17,726m (–19,191), corresponding to –13.7% (–17.9)
of annualized net sales. Operating working capital amounted
to SEK 5,407m (1,851), corresponding to 4.2% (1.7) of
annualized net sales.
Average net assets were SEK 23,860m (25,563),
corresponding to 19.0% (22.0) of annualized net sales.
Return on net assets was 28.5% (22.6).
Working capital and net assets
SEKm
Inventories
Trade receivables
Accounts payable
Operating working capital
Provisions
Prepaid and accrued income and expenses
Taxes and other assets and liabilities
Working capital
Property, plant and equipment, owned
Property, plant and equipment, right-of-use
Goodwill
Other non-current assets
Deferred tax assets and deferred tax liabilities
Net assets
Annualized net sales2)
Average net assets
Annualized net sales3)
Return on net assets, %
1) Annualized, see page 84 for definition.
2) Calculated at end of period exchange rates.
3) Calculated at average exchange rates.
Dec. 31, 2021
% of net sales1)
Dec. 31, 2020
% of net sales1)
20,478
23,110
–38,182
5,407
–7,368
–14,371
–1,394
–17,726
25,422
2,771
6,690
4,775
5,269
27,201
129,124
23,860
125,631
28.5
15.9
17.9
–29.6
4.2
–13.7
21.1
19.0
13,213
19,944
–31,306
1,851
–8,083
–12,777
–181
–19,191
20,452
2,351
6,369
4,696
5,588
20,265
107,142
25,563
115,960
22.6
12.3
18.6
–29.2
1.7
–17.9
18.9
22.0
Liquid funds
Liquid funds as of December 31, 2021, amounted to
SEK 11,236m (20,467), excluding back-up credit facilities.
As per December 31, 2021, Electrolux had an unused
committed back-up multi- currency sustainability linked
revolving credit facility of EUR 1,000m, approximately
SEK 10,244m, maturing 2026, and a revolving credit facility
of SEK 10,000m, maturing 2025.
Liquidity profile
SEKm
Liquid funds
% of annualized net sales1)
Net liquidity
Fixed interest term, days
Effective annual yield, %
Dec. 31, 2021 Dec. 31, 2020
11,236
24.4
5,560
9
0.3
20,467
40.6
18,864
17
0.5
1) Liquid funds in relation to net sales, see page 84 for definition.
For additional information on the liquidity profile, see Note 18.
CAPITAL TURNOVER-RATE
RETURN ON NET ASSETS
TIMES/YEAR
8
6
4
2
0
Capital turnover-rate
Target: at least 4 times/year
SEKM
30,000
22,500
15,000
7,500
0
Average net assets
Return on net assets
Target: >20%
%
40
30
20
10
0
17
18
19
20
21
17
18
19
20
21
Financial targets are over a business cycle.
For comparable reasons the figures in the graphs above are exclusive of the discontinued business area Professional Products.
ELECTROLUX ANNUAL REPORT 2021
Board of Directors’ report and financial statements 23
NotE
December 31, 2021
December 31, 2020
12
8
13
13
29
10
18
22
14
15
17, 18
18
16
18
18
20
20
20
20
18
8
10
22
23
18
24
18
8
18
23
25,422
2,771
6,690
4,000
76
5,746
65
1,732
634
47,136
20,478
23,110
959
204
4,632
165
10,923
60,471
107,607
1,545
2,905
–3,335
17,489
18,604
6
18,610
10,205
2,173
476
2,623
4,664
20,142
38,182
1,704
19,745
5,563
882
75
2,704
68,854
88,996
107,607
20,452
2,351
6,369
3,480
274
6,064
65
1,272
878
41,205
13,213
19,944
894
135
3,846
172
20,196
58,399
99,604
1,545
2,905
–4,593
18,846
18,702
7
18,709
14,123
1,834
476
4,951
5,567
26,952
31,306
562
17,114
1,329
784
332
2,516
53,943
80,894
99,604
Consolidated balance sheet
SEKm
ASSETS
Non-current assets
Property, plant and equipment, owned
Property, plant and equipment, right-of-use
Goodwill
Other intangible assets
Investments in associates
Deferred tax assets
Financial assets
Pension plan assets
Other non-current assets
Total non-current assets
Current assets
Inventories
Trade receivables
Tax assets
Derivatives
Other current assets
Short-term investments
Cash and cash equivalents
Total current assets
Total assets
EQUITY AND LIABILITIES
Equity attributable to equity holders of the Parent Company
Share capital
Other paid-in capital
Other reserves
Retained earnings
Non-controlling interests
Total equity
Non-current liabilities
Long-term borrowings
Long-term lease liabilities
Deferred tax liabilities
Provisions for post-employment benefits
Other provisions
Total non-current liabilities
Current liabilities
Accounts payable
Tax liabilities
Other liabilities
Short-term borrowings
Short-term lease liabilities
Derivatives
Other provisions
Total current liabilities
Total liabilities
Total equity and liabilities
ELECTROLUX ANNUAL REPORT 2021
24 Board of Directors’ report and financial statements
Cont. Financial position
Net debt
As of December 31, 2021, Electrolux had a financial net debt
position (excluding lease liabilities and post-employment
provisions) of SEK 4,645m, compared to the financial net cash
position of SEK 4,741m as of December 31, 2020. In 2021, a total
of SEK 7,185m was distributed to shareholders as dividend and
through an automatic share redemption procedure. In addi-
tion, shares of series B were repurchased for a total amount of
SEK 894m. Net provisions for post-employment benefits was
SEK 891m (3,679) and lease liabilities amounted to SEK 3,055m
(2,618) as of December 31, 2021. In total, net debt amounted
to SEK 8,591m, an increase by SEK 7,035m compared to
SEK 1,556m per December 31, 2020.
Net debt
SEKm
Short-term loans
Short-term part of long-term loans
Trade receivables with recourse
Short-term borrowings
Financial derivative liabilities
Accrued interest expenses and pre-
paid interest income
Total short-term borrowings
Long-term borrowings
Total borrowings1)
Cash and cash equivalents
Short-term investments
Financial derivative assets
Prepaid interest expenses and
accrued interest income
Liquid funds
Financial net debt
Lease liabilities
Net provisions for post-employment
benefits
Net debt
Net debt/EBITDA
Net debt/equity ratio
Total equity
Equity per share, SEK
Return on equity, %
Equity/assets ratio, %
Dec. 31, 2021
Dec. 31, 2020
1,288
4,187
87
5,563
48
65
5,675
10,205
15,881
1,012
277
40
1,329
210
64
1,603
14,123
15,727
10,923
20,196
165
144
4
172
81
18
11,236
20,467
4,645
3,055
891
8,591
0.71
0.46
18,610
65.74
24.4
19.3
–4,741
2,618
3,679
1,556
0.15
0.08
18,709
65.10
34.1
23.6
1) Whereof interest-bearing liabilities amounting to SEK 15,681m as of December 31, 2021,
and SEK 15,412m as of December 31, 2020.
Long-term borrowings and long-term borrowings with
maturities within 12 months amounted to a total of SEK 14,392m
as of December 31, 2021 with average maturity of 1.9 years,
compared to SEK 14,400m and 2.8 years at the end of 2020.
During 2022, long-term borrowings amounting to approxi-
mately SEK 4.2bn will mature.
The Group’s target for long-term borrowings includes an
average time to maturity of at least two years, an even spread
of maturities and an average interest-fixing period between
0 and 3 years. A maximum of SEK 5,000m of the long-term
borrowings is allowed to mature in a 12-month period. In 2022,
the temporary exception from the long-term borrowing limits,
approved by the Board of Directors in March 2020 to mitigate
potential impact from the coronavirus pandemic, will cease to
be valid, as debt matures. The maximum amount of long-term
borrowings maturing in any given 12-months period was
SEK 5,754m at the end of 2021. At year-end, the average interest-
fixing period for long-term borrowings was 1.2 years (1.6).
At year-end, the average interest rate for the Group’s total
interest-bearing borrowings was 1.4% (1.4).
Rating
Electrolux has an investment-grade rating from S&P Global
Ratings, A– with a stable outlook.
Rating
S&P Global
Ratings
Long-term
debt
Outlook
Short-term
debt
Short-term
debt, Nordic
A–
Stable
A–2
K–1
Net debt and equity ratios
The net debt/EBITDA ratio was 0.71 (0.15) and the net debt/
equity ratio was 0.46 (0.08). The equity/assets ratio was 19.3%
(23.6).
Equity and return on equity
Total equity as of December 31, 2021, amounted to SEK 18,610m
(18,709), which corresponds to SEK 65.74 (65.10) per share.
Return on equity was 24.4% (34.1). In 2020, return on equity was
impacted by a settlement gain from the distribution of Electrolux
Professional. Adjusted for the settlement gain, return on equity
last year was 21.7%.
LONG-TERM BORROWINGS, BY MATURITY
NET DEBT/EBITDA RATIO
EQUITY/ASSETS RATIO
SEKM
5,000
4,000
3,000
2,000
1,000
0
In 2022, long-term borrowings
in the amount of approximately
SEK 4.2bn will mature. For information
on borrowings, see Note 2 and 18.
22
23
24
25
26
27-
1.5
1.2
0.9
0.6
0.3
0.0
%
50
40
30
20
10
0
12
13
14
15
16
17
18
19
20
21
12
13
14
15
16
17
18
19
20
21
ELECTROLUX ANNUAL REPORT 2021
Board of Directors’ report and financial statements 25
Changes in consolidated equity
Attributable to equity holders of the Parent Company
SEKm
Share
capital
Other
paid-in
capital
Other
reserves
Retained
earnings
Opening balance, January 1, 2020
1,545
2,905
–1,351
Income for the period
Cash flow hedges
Exchange differences on translation of foreign operations
Remeasurement of provisions for post-employment benefits
Income tax relating to other comprehensive income
Other comprehensive income, net of tax
Total comprehensive income for the period
Share-based payments
Dividend1)
Acquisition of non-controlling interest
Total transactions with equity holders
Closing balance, December 31, 2020
Income for the period
Cash flow hedges
Exchange differences on translation of foreign operations
Remeasurement of provisions for post-employment benefits
Income tax relating to other comprehensive income
Other comprehensive income, net of tax
Total comprehensive income for the period
Share-based payments
Dividend
Bonus issue
Redemption of shares
Repurchase of shares
Acquisition of non-controlling interest
Total transactions with equity holders
Closing balance, December 31, 2021
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
32
–3,322
—
48
–3,242
–3,242
—
—
—
—
1,545
2,905
–4,593
—
—
—
—
—
—
—
—
—
772
–772
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
–35
1,284
—
9
1,258
1,258
—
—
—
—
—
—
—
1,545
2,905
–3,335
19,468
6,584
—
–4
189
–46
140
6,723
70
–7,415
—
–7,345
18,846
4,677
—
—
2,746
–584
2,161
6,839
–116
Total
22,566
6,584
32
–3,326
189
2
–3,102
3,481
70
–7,415
—
–7,345
18,702
4,677
–35
1,284
2,746
–576
3,419
8,096
–116
–2,299
–2,299
–772
–4,113
–894
–1
–8,195
17,489
—
–4,886
–894
–1
–8,195
18,604
Non-
controlling
interests
8
0
—
–0
—
—
–0
–0
—
–0
–0
–0
7
0
—
–0
—
—
–0
0
—
–0
—
—
—
–1
–1
6
Total
equity
22,574
6,584
32
–3,326
189
2
–3,103
3,481
70
–7,415
–0
–7,346
18,709
4,678
–35
1,284
2,746
–576
3,419
8,097
–116
–2,299
—
–4,886
–894
–1
–8,196
18,610
1) 2020: Dividend payment to shareholders SEK 2,012m. Distribution of Electrolux Professional AB of SEK 5,403m, equivalent to the fair market value of Electrolux Professional at listing at
Nasdaq Stockholm on March 23, 2020.
For more information on share capital, number of shares and earnings per share, see Note 20.
ELECTROLUX ANNUAL REPORT 2021
26 Board of Directors’ report and financial statements
Cash flow
• Operating cash flow after investments amounted to SEK 3,200m (8,552).
• Capital expenditure amounted to SEK 6,043m (5,338).
• R&D expenditure amounted to 3.1% (3.3) of net sales.
Operating cash flow after investments
Operating cash flow after investments in 2021 amounted to
SEK 3,200m (8,552). The year-over-year comparison reflects
an increase in inventory compared to last year's unusually low
levels. Supply-demand mismatches, cost inflation and increased
time in-transit due to logistic constraints contributed to the
inventory increase. A higher level of investments also impacted
cash flow negatively, while an increased operating income
contributed positively.
Capital expenditure
Capital expenditure in property, plant and equipment in 2021
amounted to SEK 4,847m (4,325). The investments were mainly
related to new products and architectures, manufacturing
efficiency and re-engineering, including automation and
modularisation. Including investments in product development
and software, capital expenditure amounted to SEK 6,043m
(5,338), corresponding to 4.8% (4.6) of net sales.
2021
2,787
5.6
1,311
3.2
933
4.7
727
4.6
285
2020
2,155
4.7
1,772
4.6
665
3.9
562
3.8
183
6,043
5,338
4.8
4.6
Cash flow
SEKm
Capital expenditure by business area
2021
2020
SEKm
Operating income adjusted for non-cash items1)
12,185 10,807
Europe
Change in operating assets and liabilities
–3,175
2,852
% of net sales
Operating cash flow
9,010 13,659
North America
Investments in tangible and intangible assets
–6,043 –5,338
% of net sales
Changes in other investments
233
230
Latin America
Operating cash flow after investments
3,200
8,552
% of net sales
Acquisitions and divestments of operations
Operating cash flow after structural changes
Financial items paid, net2)
Taxes paid
Cash flow from operations and investments
Payment of lease liabilities
Dividend
Redemption of shares
Repurchase of shares
Share-based payments
Total cash flow, excluding changes in loans and
short-term investments
–1,006
2,194
–470
–1,480
244
–880
–8
Asia-Pacific, Middle East and Africa
8,544
–596
–1,132
6,816
–911
% of net sales
Other
Total
% of net sales
–2,299
–2,012
–4,886
–894
-259
—
—
0
–8,975
3,894
R&D expenditure
The expenditure for research and development in 2021,
including capitalization of SEK 578m (563), amounted to
SEK 3,864m (3,799) corresponding to 3.1% (3.3) of net sales.
1) Operating income adjusted for depreciation and amortization and other non-cash items.
2) Interests and similar items received SEK 58m (72), interests and similar items paid SEK –430m
(–504) and other financial items paid SEK –98m (–163).
OPERATING CASH FLOW AFTER INVESTMENTS1)
CAPITAL EXPENDITURE1)
SEKM
10,000
8,000
6,000
4,000
2,000
0
SEKM
8,000
6,000
4,000
2,000
0
Operating cash flow after investments in
2021 amounted to SEK 3,200m (8,552).
17
18
19
20
21
17
18
19
20
21
1)The figures for 2018, 2019 and 2020 are for continuing operations, exclusive of Electrolux Professional.
Capital expenditure
Depreciation and amortization
Capital expenditure in 2021 including
product development and software
amounted to SEK 6,043m (5,338).
ELECTROLUX ANNUAL REPORT 2021
Board of Directors’ report and financial statements 27
Consolidated cash flow statement
SEKm
Operations
Operating income from continuing operations
Depreciation and amortization
Other non-cash items
Financial items paid, net
Taxes paid
Cash flow from operations, excluding change in operating assets and liabilities
Change in operating assets and liabilities
Change in inventories
Change in trade receivables
Change in accounts payable
Change in other operating assets, liabilities and provisions
Cash flow from change in operating assets and liabilities
Cash flow from operations
Investments
Acquisition of operations
Capital expenditure in property, plant and equipment
Capital expenditure in product development
Capital expenditure in software and other intangibles
Other
Cash flow from investments
Cash flow from operations and investments
Financing
Change in short-term investments
Change in short-term borrowings
New long-term borrowings
Amortization of long-term borrowings1)
Payment of lease liabilities
Dividend
Redemption of shares
Repurchase of shares
Share-based payments
Cash flow from financing
Total cash flow, continuing operations
NotE
2021
2020
8, 12, 13
9
26
12
13
13
18
18
6,801
4,489
895
–470
–1,480
10,235
–6,401
–2,253
5,372
106
–3,175
7,059
–1,006
–4,847
–578
–618
233
–6,815
244
8
–291
1
–284
–880
–2,299
–4,886
–894
–259
–9,785
–9,541
5,778
4,587
442
–596
–1,132
9,079
1,236
–2,401
1,737
2,279
2,852
11,932
–8
–4,325
–563
–450
230
–5,115
6,816
16
–308
9,793
–4,555
–911
–2,012
—
—
0
2,023
8,839
1,177
Total cash flow, discontinued operations
26
—
Total cash flow, total Group
Cash and cash equivalents at beginning of period
Exchange-rate differences referring to cash and cash equivalents
Cash and cash equivalents in distributed operations
Cash and cash equivalents at end of period
1) For 2020, the amount includes loan repurchases and early repayment of loan of SEK 3,085m.
–9,541
10,016
20,196
267
—
10,923
11,458
–667
–611
20,196
ELECTROLUX ANNUAL REPORT 2021
28 Board of Directors’ report and financial statements
Risk management
Electrolux continuously monitors its identified key risks as well
as new and evolving risks, aiming to respond flexibly to internal
or external changes. The structured process to monitor and
coordinate the risk management related activities are super-
vised and directed by the Enterprise Risk Management (ERM)
Board. Group Management also regularly reviews both the risk
appetite as well as the approach to monitor, assess and follow-
up to ensure that they are up to date and adapted to Electrolux
strategy.
Risks are categorized based on two dimensions: their poten-
tial consequences on Electrolux operations and the operations’
vulnerability to them. Key risks are those deemed to have an
extreme or high impact on the Group’s financial result if material-
ized, but also emerging risks or risks not sufficiently understood
with potential high impact are included. More information
regarding the ERM process can be found in the Corporate
governance report.
Electrolux identified strategic, external and internal key risks
are presented below. Financial risks are presented in more
detail in Note 2, Financial risk management. Risks related to
sustainability are further detailed in the Sustainability reporting.
Climate-related risks are discussed in the section on Climate
Risk Disclosures.
Coronavirus pandemic risks
The coronavirus pandemic has continued to cause disruptions
globally during 2021. Electrolux carefully monitors the effects
of the pandemic which might have further impact on its value
chain, in the short and long term. Business continuity plans are
regularly reassessed to minimize any negative effect on the
Group. The safety of the employees is key and closely reviewed
with the support of external medical experts.
Strategic risks
Major shifts in the industry
As the society is becoming more digital, consumer behavior
changes, leading to structural shifts in many industries, includ-
ing consumer goods. These shifts have accelerated as a con-
sequence of the coronavirus pandemic. Electrolux sees many
opportunities deriving from the developments but also prepares
Sensitivity analysis year-end 2021
Risk
Raw materials1)
Carbon Steel
Stainless Steel
Plastics
Currency2) and interest rates
USD to EUR
EUR to GBP
USD to CAD
USD to BRL
EUR to CHF
CNY to USD
EUR to RUB
USD to AUD
EUR to CZK
USD to CLP
Translation exposure to SEK3)
Change +/–
Pre-tax earnings
impact –/+, SEKm
10%
10%
10%
10%
10%
10%
10%
10%
10%
10%
10%
10%
10%
10%
700
200
500
540
300
300
280
230
170
130
120
120
110
840
50
Interest rate
1 percentage point
1) Changes in raw materials refer to Electrolux prices and contracts, which may differ
from market prices.
2) Transactional exposure. Translation effects not included.
3) Assuming the Swedish krona appreciates/depreciates against all other currencies.
for risks. One potential emerging risk is that the company fails
to reach strategic goals due to a lack of business agility and an
inability to anticipate external developments. The Group is care-
fully monitoring the evolving competitive landscape including
new operators and business models, changes in alliances
and increased competition.
Innovation capability
Electrolux ability to invest in growth and innovation, including
new markets and segments, is crucial for its strategy. Not exe-
cuting on the Group’s strategic priorities in a timely manner may
affect the Group’s delivery of sustainable consumer experience
innovation and profitable growth. Therefore, portfolio manage-
ment is essential for Electrolux, ensuring the right allocation of
resources for relevant innovation in the product and service
categories.
Digital transformation
Digital transformation through automation, modularization
and digital manufacturing is part of Electrolux ambition to drive
operational excellence. It is crucial for the Group to execute on
its re-engineering programs within operations to adapt to the
rapidly changing industry and consumer needs and to continue
to be cost efficient. An inability to follow through on the initiatives
may lead to lower performance, delays or higher costs. Digitali-
zation and automation in manufacturing and supply chain pro-
cesses also result in an emerging risk related to the inability to
attract and train personnel for the new skills required. Electrolux
therefore closely monitors its re-engineering programs, con-
tinuously evaluates their impact on the business and refines its
recruitment processes and training programs.
External risks
Geopolitical risks
Electrolux closely monitors events which may have negative
impact on the macroeconomic or geopolitical factors affecting
its markets. Political instability remains high, like Brexit in Europe,
Hong Kong in Asia, the trade war between the U.S. and China,
the tensions in the South China Sea or the conflict between
Russia and Ukraine. The developments may lead to economic
downturn, affect access to markets and changed consumer
behaviors impacting the Group’s sales negatively.
Instabilities and emerging new geopolitical areas of concern
can also disrupt manufacturing and supply chain systems, affect
Electrolux costs for production, raw material and transportation
as well as currency exchange rate development, which in turn
affect the financial result of the Group. Electrolux continuously
works on business continuity plans based on possible conse-
quences of such events.
RAW MATERIALS EXPOSURE 2021
Carbon steel, 40%
Plastics, 29%
Stainless steel, 12%
Copper and aluminum, 10%
Other, 9%
In 2021, Electrolux purchased raw materials
for approximately SEK 17bn. Purchases of steel
accounted for the largest part.
ELECTROLUX ANNUAL REPORT 2021
Board of Directors’ report and financial statements 29
Regulatory risks
Electrolux is subject to a vast range of regulations, laws and
industry standards. As the regulatory landscape evolves, it is
important to monitor and mitigate risks related to legal and
product regulatory compliance, antitrust, trade rules, contrac-
tual risks, protection of IP/patents, confidential information,
personal data protection, insider information etc. Non-com-
pliance could lead to sanctions, fines, higher costs or inability
to continue manufacturing some products. To mitigate these
risks, Electrolux has inhouse lawyers, in all business areas as well
as centrally, to monitor regulatory changes and to attend to
compliance matters. Regular training for employees is among
the most important actions.
In addition, the development regarding sustainability can
result in new regulatory requirements. They could impact prod-
uct development, supply base, operations and sales. Carbon
taxes are expected to have an impact on energy intensive
industries such as power generation, transport, steel, aluminum,
and plastics producers. Finished goods could also be directly
impacted through carbon import duties, such as the European
Union ‘carbon border adjustment mechanism’. To mitigate
these risks, Electrolux drives resource and energy efficiency
throughout the value chain. The Group aims to be fully supplied
with electricity generated from renewable sources. That is not
only reducing carbon emission, but also reducing the risk from
carbon related taxes.
Market risks
A financial crisis and an economic downturn may affect con-
sumers’ purchasing power and behavior, resulting in a lower
market demand that could impact Electrolux sales. Major
changes in society, for instance resulting from pandemics, can
lead to emerging risks such as changes in consumer behav-
ior. To mitigate these risks, Electrolux closely follows market
and sales developments and changes in consumer behavior.
Electrolux also focuses on an agile manufacturing set-up for fast
adaptation to changes in demand. In times of strong market
demand, it is also essential that Electrolux can benefit from its
global scale by delivering new innovative products and out-
standing consumer experiences with a high speed to market.
Electrolux markets are also subject to price competition. This
is particularly evident in the low-cost segments and in product
categories with significant overcapacity. In markets with high
inflation combined with currency rate fluctuations, Electrolux
has a better possibility to carry out price increases to offset
potential negative effects.
Raw material and logistics impact
Materials account for a large share of the Group’s costs.
Electrolux purchases raw materials and components for
approximately SEK 48bn, of which approximately SEK 17bn
referred to raw materials in 2021. Fluctuations in commodity
prices impact the Group’s input costs and, therefore, its profit-
ability. Logistics accounted for approximately 7% of net sales in
2021. In order to mitigate increases in prices for raw material,
components and logistics, Electrolux raises prices of its prod-
ucts, improves cost efficiency and negotiates more favorable
purchasing contracts for commodities such as steel and
chemicals.
ELECTROLUX ANNUAL REPORT 2021
Internal risks
Supply chain risks
Electrolux is heavily dependent on deliveries of raw material
and components to its factories and a functioning global
logistics system that can deliver products from the supply and
manufacturing systems to its customers and consumers. The
availability of many components depends on suppliers. Their
potential interruption or lack of capacity would affect deliveries.
Shortages of electronic and other components including
disturbances in logistical systems are closely monitored and
actions are taken to minimize negative impacts. Also distur-
bances affecting the ability of Electrolux suppliers of finished
goods to manufacture and deliver products might affect the
Group’s financial result and market shares negatively in case
of shortfalls in delivery or quality issues. A global pandemic like
the coronavirus, natural catastrophes, political unrest or large
fires impact global suppliers and the supply chain. This causes
manufacturing and delivery disruptions which may impact
customers significantly as well as increase costs associated
with layoffs, manufacturing adaptation, etc. Electrolux builds
and adapts its business continuity plans to address these key
risks and also collaborates with selected large suppliers to
monitor some of their major risks.
IT and cyber risks
The digital transformation of the global economy, and of
Electrolux more specifically, leads to great opportunities.
As Electrolux uses technology to speed up the information
exchange, it also creates greater exposure. Electrolux continu-
ously prepares for cyber attacks by assessing its cyber risk profile,
remediates where recommended and proactively manages
its defense. The coronavirus increased the cyber risks, with most
of the Group’s employees working from home. Cyber security
control failures have become an emerging risk closely moni-
tored by Electrolux. Specific trainings have been performed to
improve awareness. IT failures, for example in key applications
or hardware, may also have significant impacts on delivery,
production, sales and other critical systems and functions.
Electrolux IT department constantly monitors these risks.
Ethics related compliance risks
Electrolux is exposed to a broad range of ethics and sustain-
ability related factors such as human rights, including privacy
aspects, employment conditions and corruption. Violation of
anti-corruption legislation could lead to large fines or admin-
istrative, civil or criminal sanctions. Additionally, violations of
human rights and ethics related norms could impact the Group’s
brands or the corporate reputation negatively. To mitigate these
risks, Electrolux has extensive internal governance documents
and policies and conducts training for employees.
Key people and talents
Evolving industry trends and new technologies require new
talents in key areas. The inability to attract competences for
the future, or a lack of strong succession planning, may impact
Electrolux position in the market negatively. An emerging risk for
Electrolux is also the inability to attract talents, by not being able
to accommodate their post-pandemic work preferences. This
could have a negative impact on Electrolux innovation strategy.
To mitigate this risk, Electrolux constantly works with the com-
pany values and uses communication channels like social
media to share those directly or via existing employees. The
Group also builds and continuously reviews its talent pipeline
and adapt its work conditions.
Risks, risk management and risk exposure are described in more detail in Note 1 Accounting
principles, Note 2 Financial risk management and in Note 18 Financial instruments.
30
Board of Directors’ report and financial statements
The historical development of the Electrolux share price has been adjusted to take into account the distribution of Electrolux Professional AB to Electrolux shareholders on March 23, 2020. The
share price is also adjusted for all types of corporate actions, including splits and redemptions, with the exception of dividends.
Share information and ownership
According to Monitor by Modular Finance AB, there were 73,578
shareholders in AB Electrolux as of December 31, 2021. Investor
AB is the largest shareholder, owning 16.4% of the share capital
and 28.4% of the voting rights. Information on the shareholder
structure is updated quarterly at www.electroluxgroup.com.
Distribution of shareholdings
Shareholding
1–1,000
1,001–10,000
10,001–20,000
20,001–
Total
Ownership, %
Number of
shareholders
As % of
shareholders
4.1
4.5
1.0
90.4
100
67,690
5,321
203
364
73,578
92.0
7.2
0.3
0.5
100
Source: Monitor by Modular Finance AB. Compiled and processed data from various
sources, including Euroclear, Morningstar and the Swedish Financial Supervisory Authority
( Finansinspektionen) as of December 31, 2021.
Articles of Association
AB Electrolux Articles of Association stipulate that the Annual
General Meeting (AGM) shall always resolve on the appoint-
ment of the members of the Board of Directors. Apart from that,
the articles do not include any provisions for appointing or
dismissing members of the Board of Directors or for changing
the articles.
A shareholder participating in the AGM is entitled to vote for
the full number of shares which he or she owns or represents.
Outstanding shares in the company may be freely transferred,
without restrictions under law or the company’s Articles of
Association. Electrolux is not aware of any agreements between
shareholders, which limit the right to transfer shares. The full
Articles of Association can be downloaded at
www.electroluxgroup.com
Effect of significant changes in ownership structure
on long-term financing
The Group’s long-term financing is subject to conditions, which
stipulate that lenders may request advance repayment in the
event of significant changes in the ownership of the company.
Such significant change could result from a public bid to
acquire Electrolux shares.
Share price performance
The Electrolux shares are listed on the exchange Nasdaq
Stockholm, Sweden. The Electrolux B share increased by 25%
in 2021, underperforming the broader Swedish market index,
OMX Stockholm, which increased by 35% during the same
period. The opening price for the Electrolux B share in 2021
was SEK 175.17. The highest closing price was SEK 239.20 on
March 25, while the lowest closing price was SEK 171.37 on
January 7. The closing price for the B share at year-end 2021
was SEK 219.50.
Total shareholder return during the year was 30%. Over the
past ten years, the average total return on an investment in
Electrolux B shares has been 14% annually. The corresponding
performance for the OMX Stockholm Return Index was 15%.
Share capital and ownership structure
As of December 31, 2021, the share capital of AB Electrolux
amounted to approximately SEK 1,545m, corresponding to
308,920,308 shares. The share capital of Electrolux consists of
Class A shares and Class B shares. An A share entitles the holder
to one vote and a B share to one-tenth of a vote. All shares enti-
tle the holder to the same proportion of assets and earnings and
carry equal rights in terms of dividends. In accordance with the
Swedish Companies Act, the Art icles of Association of Electrolux
also provide for specific rights of priority for holders of different
types of shares, in the event that the company issues new shares
or certain other instruments.
According to Electrolux Articles of Association, owners of
Class A shares have the right to have such shares converted to
Class B shares. The purpose of the conversion clause is to give
holders of Class A shares an opportunity to achieve improved
liquidity in their shareholdings. Conversion re duces the total
number of votes in the company. 41 A shares were converted
to B shares in 2021.
The total number of registered shares in the company
amounts to 308,920,308 shares, of which 8,192,498 are Class A
shares and 300,727,810 are Class B shares, and the total number
of votes amounts to 38,265,279.
Major shareholders
Investor AB
Handelsbanken Funds
Swedbank Robur Funds
Alecta Pension Insurance
BlackRock, Inc.
Didner & Gerge Funds
Vanguard
Carnegie Funds
Third Swedish National Pension Fund
Norges Bank
Share
capital, %
Voting
rights, %
16.4
28.4
4.3
4.1
3.4
2.8
2.5
2.2
1.7
1.7
1.5
3.5
3.3
3.9
2.2
2.0
1.8
1.4
1.3
1.2
Total, ten largest shareholders
40.6
49.0
Source: Monitor by Modular Finance AB. Compiled and processed data from various sources,
including Euroclear, Morningstar and the Swedish Financial Supervisory Authority
(Finansinspektionen) as of December 31, 2021.
OWNERSHIP STRUCTURE
Swedish institutions and mutual funds, 62%
Foreign investors, 29%
Swedish private investors, 9%
At year-end, about 29% of the total share capital
was owned by foreign investors.
Source: Monitor by Modular Finance AB.
Compiled and processed data from various
sources, including Euroclear, Morningstar and
the Swedish Financial Supervisory Authority
(Finansinspektionen) as of December 31, 2021.
ELECTROLUX ANNUAL REPORT 2021
Board of Directors’ report and financial statements 31
Distribution of funds to shareholders
Dividend 2020, share redemption and buybacks
The Annual General Meeting in March 2021 decided to adopt
the Board’s proposed dividend of SEK 8.00 per share for 2020,
which was paid out in two equal installments. In addition, an
Extraordinary General Meeting in August 2021 resolved to
adopt the Board's proposed cash distribution of SEK 17.00 per
share, which was made through an automatic share redemption
procedure.
In October 2021, the Board of Directors resolved to repur-
chase a maximum of 9,369,172 own series B shares during the
period October 28, 2021 to March 25, 2022 for a maximum
amount of SEK 2,800m. During 2021 4,320,057 shares of series
B, for a total amount of SEK 894m, have been repurchased.
All acquisitions have been carried out on Nasdaq Stockholm
by Exane BNP Paribas on behalf of AB Electrolux.
Proposed dividend
The Board of Directors proposes a dividend for 2021 of SEK 9.20
(8.00) per share, for a total dividend payment of approximately
SEK 2,558m (2,299). The approximate total dividend payment for
2021 is calculated based on the number of outstanding shares
as per February 17, 2022. The dividend is proposed to be paid in
two equal installments, the first with the record date April 1, 2022
and the second with the record date September 30, 2022. The
first installment is estimated to be paid on April 6, 2022 and the
second installment on October 5, 2022.
Electrolux target is for the dividend to correspond to approxi-
mately 50% of the annual income.
Proposal for resolution on acquisition of own shares
Electrolux has, for several years, had a mandate from the
Annual General Meetings to acquire own shares.
The Board of Directors proposes the Annual General Meeting
2022 to authorize the Board of Directors, for the period until
the next Annual General Meeting, to resolve on acquisitions
of shares in the company and that the company may acquire
as a maximum so many shares of series B that, following each
acquisition, the company holds a maximum of 10% of all shares
issued by the company.
The purpose of the proposal is to be able to adapt the com-
pany’s capital structure, and to use repurchased shares on
account of potential company acquisitions and the company’s
share related incentive programs.
The Board’s intention is to continue with share buybacks
over time and to continue to reduce Electrolux number of shares
through subsequent share cancellations, which will further
improve earnings per share. In line with this, the Board has
announced its intention to proceed with a new share buyback
program after the AGM 2022 for an amount of approximately
SEK 2.5bn. Additional details of the intended share buyback
program will be communicated as and when decided.
Proposal for cancellation of shares and simultanous
bonus issue
The Board of Directors proposes the Annual General Meeting
2022 to resolve to cancel all shares of series B that Electrolux
owned on December 31, 2021, with a simultaneous bonus issue
without issuing any new shares to restore the share capital to its
current level.
As of December 31, 2021, Electrolux held 25,842,915 shares
of series B in Electrolux, corresponding to approximately 8.4%
of the total number of shares in the company.
Number of shares
Number of shares as of January 1, 2021
8,192,539
300,727,769
308,920,308
21,522,858
287,397,450
Change during the year
–41
41
—
4,320,057
–4,320,057
Total number of shares as of December 31, 2021
8,192,498
300,727,810
308,920,308
25,842,915
283,077,393
As % of total number of shares
8.4%
A shares
B shares
Shares, total
Shares held
by Electrolux
Shares held
by other
shareholders
TOTAL DISTRIBUTION TO SHAREHOLDERS
SEKM
10,000
8,000
6,000
4,000
2,000
0
Electrolux has a
long tradition of
high total distribution
to share holders.
In 2021 Electrolux
repurchased own
shares of series B
for a total amount
of SEK 894m.
12
13
14
15
16
17
18
19
20
21
Dividend
Distribution of Electrolux Professional AB
Redemption
ELECTROLUX ANNUAL REPORT 2021
32 Board of Directors’ report and financial statements
Employees
Electrolux corporate culture
Teamship is the Electrolux way of working. It is about setting
aligned goals that allow clear choices and continuous improve-
ment. It is about knowing how to collaborate. It is about trans-
parency and a learning organization. Finally, it is about engage-
ment and passion about outstanding consumer experiences.
Wherever Electrolux operates in the world, the company
applies the same high ethical standards and principles of
conduct.
Electrolux has a global ethics program, encompassing both
ethics training and a whistleblowing system – the Electrolux
Ethics Helpline. Through the Electrolux Ethics Helpline, employ-
ees can report suspected misconduct in local languages.
Reports may be submitted anonymously if legally permitted.
Committee). Remuneration for other members of Group
Management is resolved upon by the People Committee and
reported to the Board of Directors. The People Committee shall
also monitor and evaluate programs for variable remuneration
for the Group Management, the application of the guidelines
for executive remuneration as well as the current remuneration
structures and compensation levels in the Company. The Board
of Directors shall, based on the recommendation from the
People Committee, prepare a proposal for new guidelines
at least every fourth year and submit it to the Annual General
Meeting. The President and CEO and other members of the
Group Management do not participate in the Board of Directors’
processing of and resolutions regarding remuneration related
matters in so far as they are affected by such matters.
Code of Conduct
The Group has a Code of Conduct that defines high employ-
ment standards for all Electrolux employees in all countries and
business areas. It incorporates issues such as child and forced
labor, health and safety, workers’ rights and environmental
compliance. Key policies in this context include the Workplace
Policy, the Anti-Corruption Policy and the Environmental Policy.
Number of employees
The average number of employees of Electrolux increased in
2021 to 51,590 (47,543), of whom 1,526 (1,414) were in Sweden.
Salaries and remuneration in 2021 amounted to SEK 16,829m
(15,666), of which SEK 1,210m (1,074) refers to Sweden.
Remuneration guidelines for Group Management
The following guidelines were approved by the Annual General
Meeting 2020 and apply until the Annual General Meeting 2024
unless any changes are proposed.
The guidelines apply to the remuneration and other terms
of employment for the President and CEO, other members of
the Group Management of Electrolux (’Group Management’)
and, if applicable, remuneration to board members for work
in addition to the board assignment. The Group Management
currently comprises nine executives.
The guidelines shall be applied to employment and con-
sultancy agreements entered into after the Annual General
Meeting in 2020 and to changes made to existing agreements
thereafter. The guidelines shall be in force until new guidelines
are adopted by the General Meeting. These guidelines do
not apply to any other remuneration decided or approved by
the General Meeting.
Remuneration for the President and CEO and, if applicable,
members of the Board of Directors is resolved upon by
AB Electrolux Board of Directors, based on the recommenda-
tion of the People Committee (formerly named Remuneration
EMPLOYEES1)
EMPLOYEES
SEKM
60,000
55,000
50,000
45,000
40,000
Average number of employees
Net sales per employee
The average number of employees
increased to 51,590 (47,543) in 2021.
2.60
2.45
2.30
2.15
2.00
17
18
19
20
21
1) The figures for 2018, 2019 and 2020 are for continuing operations, exclusive of
Electrolux Professional.
Note 27 of the Annual Report includes a detailed description of existing remuneration
arrangements for Group Management, including fixed and variable compensation,
long-term incentive programs and other benefits.
Electrolux has a clear strategy to deliver profitable growth
and create shareholder value. A prerequisite for the successful
implementation of the Company’s business strategy and safe-
guarding of its long-term interests, including its sustainability, is
that the Company is able to recruit and retain qualified personnel.
To this end, it is necessary that the Company offers competitive
remuneration in relation to the country or region of employment
of each Group Management member. These guidelines enable
the Company to offer the Group Management a competitive
total remuneration. More information on the Company’s strategy
can be found on the Company’s website and in the most recent
annual report, www.electroluxgroup.com.
The remuneration terms shall emphasize ‘pay for perfor-
mance’, and vary with the performance of the individual and the
Group. The total remuneration for the Group Management shall
be in line with market practice and may comprise of the follow-
ing components: fixed compensation, variable compensation,
pension benefits and other benefits.
Employment contracts governed by rules other than Swedish
may be duly adjusted for compliance with mandatory rules or
established local practice, taking into account, to the extent
possible, the overall purpose of these guidelines.
Fixed compensation
The Annual Base Salary (’ABS’) shall be competitive relative to
the relevant market and reflect the scope of the job responsi-
bilities. Salary levels shall be reviewed periodically (usually
annually) to ensure continued competitiveness and
to recognize individual performance.
Variable compensation
Variable compensation consists of both short-term and long-
term incentives. Long-term incentives consist of long-term
share-related incentive programs (’LTI programs’). Such pro-
grams are resolved upon by the General Meeting and are
therefore excluded from these guidelines. Each year, the Board
of Directors will evaluate whether or not an LTI program shall
be proposed to the General Meeting. LTI programs shall be
distinctly linked to the business strategy and shall always be
designed with the aim to further enhance the common interest
of participating employees and Electrolux shareholders of a
good long-term development for Electrolux. For more informa-
tion regarding these LTI programs, including the criteria which
the outcome depend on, please see the section Remuneration
report on page 121–123.
ELECTROLUX ANNUAL REPORT 2021
Board of Directors’ report and financial statements 33
Following the ‘pay for performance’ principle, variable
compensation shall represent a significant portion of the total
compensation opportunity for Group Management. Variable
compensation shall always be measured against pre-defined
targets and have a maximum above which no payout shall be
made.
Variable compensation shall mainly relate to financial perfor-
mance targets. Non-financial targets may also be used in order
to strengthen the focus on delivering on the Company’s business
strategy and long-term interests, including its sustainability. The
targets shall be specific, clear, measurable and time bound and
be determined by the Board of Directors.
Short Term Incentive (STI)
Members of the Group Management shall participate in an
STI plan under which they may receive variable compensation.
The objectives in the STI plan shall mainly be financial and the
measurement period shall be one year. The objectives shall
mainly be set based on financial performance of the Group
and, for the business area heads, of the business area for which
the Group Management member is responsible, such as profit,
financial efficiency and sales. Financial objectives will comprise
at least 80% of the weighting. Non-financial objectives may be
related to sustainability, customer satisfaction, quality or com-
pany culture.
To which extent the criteria for awarding variable cash
remuneration has been satisfied shall be determined by the
People Committee when the measurement period has ended.
For financial objectives, the evaluation shall be based on the
annual financial performance in accordance with the most
recent interim report for the fourth quarter made public by the
Company.
The maximum STI entitlements shall be dependent on job
position and may amount to a maximum of 100% of ABS.
Reflecting current market conditions, the STI entitlement for
Group Management members employed in the U.S. may
amount to a maximum of 150% of ABS.
Extraordinary arrangements
Additional variable compensation may be approved in
extraordinary circumstances, under the conditions that such
extraordinary arrangement is made for recruitment or retention
purposes, is agreed on an individual basis, does not exceed
three (3) times the ABS and is earned and/or paid out in install-
ments over a minimum period of two (2) years. Such additional
variable remuneration may also be paid on an individual level
for extraordinary performance beyond the individual’s ordinary
tasks and shall in these situations not exceed 30% of the ABS
and be paid in one installment.
Right to reclaim variable remuneration
Terms and conditions for variable remuneration should be
designed to enable the Board, under exceptional financial
circumstances, to limit or cancel payments of variable remu-
neration provided that such actions are deemed reasonable
(malus). The Board shall also have the possibility, under
applicable law or contractual provisions and subject to the
restrictions that may apply under law or contract, to in whole
or in part reclaim variable remuneration paid on incorrect
grounds (claw-back).
Pension and benefits
Old age and survivor’s pension, disability benefits and health-
care benefits shall be designed to reflect home country prac-
tices and requirements. When possible, pension plans shall be
based on defined contribution. In individual cases, depending
on provisions in collective agreements, tax and/or social secu-
rity legislation to which the individual is subject, other schemes
and mechanisms for pension benefits may be approved.
Defined pension contributions shall not exceed 40% of the ABS
unless the entitlement is higher under applicable collective
agreements.
Other benefits, such as company cars and housing, may be
provided on an individual level or to the entire Group Manage-
ment. Costs relating to such benefits may amount to not more
than 20% of the ABS. Members of the Group Management who
are expatriates, may receive additional remuneration and
other benefits to the extent reasonable in light of the special
circumstances associated with the expatriate arrangement.
Such benefits shall be determined in line with the Group’s
Directive on International Assignments and may for example
include relocation costs, housing, tuition fees, home travel,
tax support and tax equalization.
Notice of termination and severance pay
The notice period shall be twelve months if Electrolux takes
the initiative to terminate the employment and six months if the
Group Management member takes the initiative to terminate
the employment.
In individual cases, contractual severance pay may be
approved in addition to the notice periods. Contractual sever-
ance pay may only be payable upon Electrolux termination of
the employment arrangement or where a Group Management
member gives notice as the result of an important change in the
working situation, because of which he or she can no longer
perform to standard. This may be the case in e.g. the event of a
substantial change in ownership of Electrolux in combination
with a change in reporting line and/or job scope.
Contractual severance pay may for the individual include
the continuation of the ABS for a period of up to twelve months
following termination of the employment agreement; no other
benefits shall be included. These payments shall be reduced
with the equivalent value of any income that the individual earns
during that period of up to twelve months from other sources of
income, either from employment or from other business activities.
In addition to the above, compensation for any non-compete
undertaking may be awarded. Such compensation shall be
based on the ABS at the time of notice of termination of the
employment, unless otherwise stipulated by mandatory collec-
tive agreement provisions, and be awarded over the period for
which the non-compete clause applies, which should not exceed
twelve months after termination of the employment. The com-
pensation shall be reduced by an amount corresponding to any
income that the person receives from other sources of income,
either from employment or from other business activities.
Salary and employment conditions for employees
In the preparation of the Board of Directors’ proposal for these
remuneration guidelines, salary and employment conditions
for employees of the Company have been taken into account
by including information on the employees’ total income, the
components of the remuneration and increase and growth rate
over time, in the People Committee’s and the Board of Directors’
basis of decision when evaluating whether the guidelines and
the limitations set out herein are reasonable.
ELECTROLUX ANNUAL REPORT 2021
34 Board of Directors’ report and financial statements
Cont. Remuneration guidelines for Group Management.
Consultancy fees
If a member of the Board of Directors (including through a
wholly-owned subsidiary) should carry out services to Electrolux
in addition to the board assignment, specific fees for this can
be paid out (consultancy fees), provided that such services
contribute to the implementation of Electrolux business strategy
and the safeguarding of Electrolux long-term interests, including
its sustainability. Such consultancy fee may for each member
of the Board of Directors not exceed the annual remuneration
for the board assignment. The fee shall be in line with market
practice.
Deviations from the guidelines
The Board of Directors may temporarily resolve to deviate from
the guidelines, in whole or in part, if in a specific case there is
special cause for the deviation and a deviation is necessary to
serve the Company’s long-term interests, including its sustain-
ability, or to ensure the Company’s financial viability. The People
Committee’s tasks include preparing the Board of Directors’
resolutions in remuneration related matters. This includes any
resolutions to deviate from the guidelines.
Events after year-end 2021
January 26. Electrolux charged MUSD 85 to 2021 result after
arbitration in U.S. tariff case
Electrolux charged USD 85m (SEK 727m) to earnings in 2021 after
an appeals panel upheld a U.S. Department of Commerce (DOC)
decision regarding tariffs on washing machines imported into the
U.S. from Mexico in 2016/2017.
As previously communicated, Electrolux North America appealed
a 2017 decision by the DOC to set a tariff rate of 72.41%. The rate was
set by the DOC after Electrolux prior external counsel failed to timely
file responses to requests for data. Electrolux has not previously made
a provision related to this process as Electrolux believed that success
was more likely than not.
Electrolux will pursue appropriate legal action to recover the
amount of the increased tariff rate and other costs from its prior coun-
sel. For comparison, the final rates since 2016–17 have been between
2% and 4%. However, as further appeals of this type of arbitration rul-
ing are rarely successful, Electrolux will pay the outstanding tariff plus
accrued interest. Payment is expected to occur during 2022 and until
then the amount is recognized as a current liability.
The expense of USD 85m (SEK 727m) impacted the operating profit
of business area North America in the fourth quarter 2021 and was
reported as a non-recurring item. Income for the period was reduced
by USD 63m (SEK 543m).
February 8. Electrolux Nomination Committee proposes re-election
of board members
In preparation for the Electrolux Annual General Meeting on
March 30, Electrolux Nomination Committee has decided to propose
the re-election of all board members. Staffan Bohman is proposed
to be re-elected as Chairman of the Board of Directors, and Petra
Hedengran, Henrik Henriksson, Ulla Litzén, Karin Overbeck, Fredrik
Persson, David Porter and Jonas Samuelson as Board Members.
For more information, visit www.electroluxgroup.com
ELECTROLUX ANNUAL REPORT 2021
Board of Directors’ report and financial statements 35
Parent Company income statement
Income statement
SEKm
Net sales
Cost of goods sold
Gross operating income
Selling expenses
Administrative expenses
Other operating expenses
Operating income
Financial income
Financial expenses
Financial items, net
Income after financial items
Appropriations
Income before taxes
Taxes
Income for the period
Total comprehensive income for the period
SEKm
Income for the period
Other comprehensive income
Exchange rate differences
Cash flow hedges
Income tax relating to other comprehensive income
Other comprehensive income, net of tax
Total comprehensive income for the period
NotE
4
6
9
9
21
10
2021
43,805
–36,717
7,088
–3,746
–1,992
–75
1,275
3,717
–457
3,260
4,535
–20
4,515
–405
4,110
2021
4,110
21
2
0
23
4,133
2020
40,621
–34,106
6,515
–3,582
–2,096
–382
455
7,248
–1,066
6,182
6,637
–36
6,601
–137
6,464
2020
6,464
–85
–1
0
–86
6,378
The Parent Company comprises the functions of the Group’s
head office in Sweden, as well as five companies operating on
a commission basis for AB Electrolux.
Net sales for the Parent Company, AB Electrolux, during
2021 amounted to SEK 43,805m (40,621) of which SEK 36,581m
(33,349) referred to sales to Group companies and SEK 7,224m
(7,272) to external customers. Income after financial items
was SEK 4,535m (6,637), including dividends from subsidiaries
amounting to SEK 3,434m (6,782). Income for the period
amounted to SEK 4,110m (6,464).
Income tax related to group contributions is reported in the
income statement. Income tax related to cash flow hedges is
reported in other comprehensive income.
Capital expenditures in tangible and intangible assets
amounted to SEK 860m (935). Liquid funds at the end of the
period amounted to SEK 6,705m, compared to SEK 15,049m
at the start of the year.
Undistributed earnings in the Parent Company at the
end of the period amounted to SEK 15,002m, compared to
SEK 19,453m at the start of the year. Dividend payments to
shareholders for 2020 amounted to SEK 2,299m. Distribution
to the shareholders of SEK 17 per share through a share
redemption procedure, amounted to SEK 4,886m.
For information on the number of employees, salaries and
remuneration, see Note 27. For information on shareholdings
and participations, see Note 29.
ELECTROLUX ANNUAL REPORT 2021
36 Board of Directors’ report and financial statements
Parent Company balance sheet
SEKm
ASSETS
Non–current assets
Intangible assets
Property, plant and equipment
Deferred tax assets
Financial assets
Total non–current assets
Current assets
Inventories
Receivables from subsidiaries
Trade receivables
Derivatives with subsidiaries
Derivatives
Other receivables
Prepaid expenses and accrued income
Cash and bank
Total current assets
Total assets
EQUITY AND LIABILITIES
Equity
Restricted equity
Share capital
Statutory reserve
Development reserve
Non–restricted equity
Retained earnings
Income for the period
Total equity
Untaxed reserves
Provisions
Provisions for pensions and similar commitments
Other provisions
Total provisions
Non–current liabilities
Payable to subsidiaries
Bond loans
Other non–current loans
Total non–current liabilities
Current liabilities
Payable to subsidiaries
Accounts payable
Other liabilities
Short–term borrowings
Derivatives with subsidiaries
Derivatives
Accrued expenses and prepaid income
Total current liabilities
Total liabilities and provisions
Total liabilities, provisions and equity
NotE
December 31, 2021
December 31, 2020
13
12
14
15
17
20
21
22
23
18
18
18
24
2,201
273
309
37,144
39,927
3,376
12,531
1,256
83
179
364
490
6,705
24,984
64,911
1,545
3,017
1,552
6,114
10,892
4,110
15,002
21,116
586
424
1,072
1,496
75
9,774
365
10,214
22,410
2,318
509
4,158
104
49
1,951
31,499
43,209
64,911
1,834
243
545
31,052
33,674
2,502
18,211
1,154
154
135
293
340
15,049
37,838
71,512
1,545
3,017
1,162
5,724
12,989
6,464
19,453
25,177
547
440
1,110
1,550
69
13,634
425
14,128
25,415
1,752
489
248
146
259
1,801
30,110
45,788
71,512
ELECTROLUX ANNUAL REPORT 2021
Board of Directors’ report and financial statements 37
Parent Company change in equity
SEKm
Opening balance, January 1, 2020
Income for the period
Exchange rate differences
Cash flow hedges
Income tax relating to other comprehensive income
Other comprehensive income, net of tax
Total comprehensive income for the period
Share-based payment
Development reserve
Dividend
Total transactions with equity holders
Closing balance, December 31, 2020
Income for the period
Exchange rate differences
Cash flow hedges
Income tax relating to other comprehensive income
Other comprehensive income, net of tax
Total comprehensive income for the period
Share-based payments
Development reserve
Dividend
Bonus issue
Redemption of shares
Repurchase of shares
Total transactions with equity holders
Closing balance, December 31, 2021
Restricted equity
Non-restricted equity
Statutory
reserve
Development
reserve
Fair value
reserve
Retained
earnings
3,017
1,035
Share
capital
1,545
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,545
3,017
—
—
—
—
—
—
—
—
—
772
–772
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,545
3,017
—
—
—
—
—
—
—
127
—
127
1,162
—
—
—
—
—
—
—
389
—
—
—
—
389
1,551
Total
equity
28,491
6,464
–85
–1
0
–86
6,378
69
—
–9,761
–9,692
25,177
4,110
21
2
0
23
4,133
–116
0
22,823
6,464
—
—
—
—
6,464
69
–127
–9,7611)
–9,819
19,468
4,110
—
—
—
—
4,110
–116
–389
–2,299
–2,299
–772
–4,113
–894
–8,583
14,995
0
–4,886
–894
–8,194
21,116
71
—
–85
–1
0
–86
–86
—
—
—
—
–15
—
21
2
0
23
23
—
—
—
—
—
—
—
8
1) Dividend payment to shareholders SEK 2,012m and distribution of Electrolux Professional AB SEK 7,749m.
ELECTROLUX ANNUAL REPORT 2021
38 Board of Directors’ report and financial statements
Parent Company cash flow statement
SEKm
Operations
Income after financial items
Depreciation and amortization
Capital gain/loss included in operating income
Share-based compensation
Group contributions
Taxes paid
Cash flow from operations, excluding change in operating assets and liabilities
Change in operating assets and liabilities
Change in inventories
Change in trade receivables
Change in current intra-group balances
Change in other current assets
Change in other current liabilities and provisions
Cash flow from operating assets and liabilities
Cash flow from operations
Investments
Change in shares and participations
Capital expenditure in intangible assets
Capital expenditure in property, plant and equipment
Other
Cash flow from investments
Total cash flow from operations and investments
Financing
Change in short-term investments
Change in short-term borrowings
Change in intra-group borrowings
New long-term borrowings
Amortization of long-term borrowings
Dividend
Redemption of shares
Repurchase of shares
Cash flow from financing
Total cash flow
Cash and cash equivalents at beginning of period
Exchange-rate differences referring to cash and cash equivalents
Cash and cash equivalents at end of period
2021
2020
4,535
6,637
437
104
–116
19
–169
4,811
–874
–102
5,509
–265
472
4,740
9,551
–4,536
–730
–130
–1,632
–7,028
2,523
—
94
–2,799
0
–104
–2,299
–4,886
–894
–10,888
–8,365
15,049
21
6,705
401
760
69
82
–103
7,846
536
–602
4,619
58
605
5,216
13,062
–40
–575
–360
115
–860
12,202
—
–566
–5,855
9,785
–4,503
–2,012
—
—
–3,151
9,051
6,084
–86
15,049
ELECTROLUX ANNUAL REPORT 2021
Notes
40 Notes
All amounts in SEKm unless otherwise stated
Notes
Contents
Note 1
Accounting principles
Note 2
Financial risk management
Note 3
Segment information
Note 4
Revenue recognition
Note 5
Operating expenses
Note 6
Other operating income and expenses
Note 7
Material profit or loss items in operating income
Note 8
Leases
Note 9
Financial income and financial expenses
Note 10
Taxes
Note 11 Other comprehensive income
Note 12
Property, plant and equipment, owned
Note 13 Goodwill and other intangible assets
Note 14 Other non-current assets
Note 15
Inventories
Note 16 Other current assets
Note 17
Trade receivables
Note 18
Financial instruments
Note 19 Assets pledged for liabilities to credit institutions
57
61
Note 20
Share capital, number of shares and earnings per share 62
Note 21 Untaxed reserves, Parent Company
Note 22
Post-employment benefits
Note 23 Other provisions
Note 24 Other liabilities
Note 25 Contingent assets and liabilities
Note 26 Acquired, divested and discontinued operations
Note 27
Employees and remuneration
Note 28
Fees to auditors
Note 29
Shares and participations
Note 30
Transactions with related parties
Note 31
Proposed distribution of earnings
Auditor’s report
63
63
67
67
68
69
70
73
73
74
75
76
41
43
45
47
48
49
49
50
51
51
52
53
54
55
56
56
56
AB Electrolux (publ), 556009-4178
ELECTROLUX ANNUAL REPORT 2021
Notes 41
All amounts in SEKm unless otherwise stated
Note 1 Accounting principles
This section describes the comprehensive basis of preparation which has
been applied in preparing the financial statements. Accounting principles
for specific accounting areas and individual line items are described in the
related notes. For additional information on accounting principles, please
contact Electrolux Investor Relations.
The following apply to acquisitions and divestments:
• Companies acquired are included in the consolidated income statement
as of the date when Electrolux gains control.
• Companies divested are included in the consolidated income statement
up to and including the date when Electrolux loses control.
Basis of preparation
The consolidated financial statements are prepared in accordance with
International Financial Reporting Standards (IFRS) as endorsed by the
European Union (EU). The consolidated financial statements have been
prepared under the historical cost convention, except for financial instru-
ments at fair value (including derivative financial instruments). Some addi-
tional information is disclosed based on the standard RFR 1 issued by the
Swedish Financial Reporting Board and the Swedish Annual Accounts Act.
As required by IAS 1, Electrolux companies apply uniform accounting rules,
irrespective of national legislation, as defined in the Electrolux Accounting
Manual which is fully compliant with IFRS. The policies set out below have
been consistently applied to all years presented with the exception of new
accounting standards where the application follows the rules in each par-
ticular standard. For information on new standards, see the section on new
or amended accounting standards below.
Enumerated amounts presented in tables and statements may not
always agree with the calculated sum of the related line items due to round-
ing differences. The aim is for each line item to agree with its source and
therefore there may be rounding differences affecting the total when add-
ing up the presented line items.
The Parent Company applies the same accounting principles as the
Group, except in the cases specified in the section entitled ‘Parent Company
accounting principles’.
The financial statements were authorized for issue by the Board of Direc-
tors on February 17, 2022. The balance sheets and income statements are
subject to approval by the Annual General Meeting of shareholders on
March 30, 2022.
Principles applied for consolidation
The consolidated financial statements have been prepared by use of the
acquisition method of accounting, whereby the assets and liabilities and
contingent liabilities assumed in a subsidiary on the date of acquisition are
recognized and measured to determine the acquisition value to the Group.
The cost of an acquisition is measured as the fair value of the assets
given, equity instruments issued and liabilities incurred or assumed at the
date of exchange. The consideration transferred includes the fair value of
any asset or liability resulting from a contingent consideration arrange-
ment. Costs directly attributable to the acquisition effort are expensed as
incurred. On an acquisition-by-acquisition basis, the Group recognizes any
non- controlling interest in the acquiree either at fair value or at the non-
controlling interest’s proportionate share of the acquiree’s net assets.
The excess of the consideration transferred, the amount of any non-
controlling interest in the acquiree and the acquisition-date fair value of any
previous equity interest in the acquiree over the fair value of the identifiable
net assets acquired is recorded as goodwill. If the fair value of the acquired
net assets exceeds the cost of the business combination, the identification
and measurement of the acquired assets must be reassessed. Any excess
remaining after that reassessment represents a ‘bargain purchase’ and is
recognized immediately in the statement of comprehensive income.
The consolidated financial statements for the Group include the financial
statements of the Parent Company and its directly and indirectly owned
subsidiaries after:
• elimination of intra-group transactions, balances and unrealized intra-
group profits, and
• carrying values, depreciation and amortization of acquired surplus
values.
Definition of Group companies
The consolidated financial statements include AB Electrolux and all com-
panies over which the Parent Company has control, i.e., the power to direct
the activities; exposure to variable return and the ability to use its power.
When the Group ceases to have control, any retained interest in the entity is
remeasured at its fair value, with the change in carrying amount recognized
in profit or loss.
At year-end, the Group consisted of 136 (133) companies with 192 (184)
operating units.
Associated companies
Associates are all companies over which the Group has significant influ-
ence but not control, generally accompanying a shareholding of between
20 and 50% of the voting rights. Investments in associated companies are
accounted for in accordance with the equity method.
Foreign currency translation
Foreign currency transactions are translated into the functional currency
using the exchange rate prevailing at the date of each transaction.
Monetary assets and liabilities denominated in foreign currencies are
measured at year-end exchange rates and any exchange-rate differ-
ences are included in income for the period, except when deferred in other
comprehensive income for the effective part of qualifying net investment
hedges.
The consolidated financial statements are presented in Swedish krona
(SEK), which is the Parent Company’s functional currency and the Group’s
presentation currency according to IAS 21.
The balance sheets of foreign subsidiaries are translated into SEK at year-
end closing rates. The income statements are translated at the average
rates for the year. Translation differences thus arising are included in other
comprehensive income.
Exchange rates
SEK
Exchange rate
ARS
AUD
BRL
CAD
CHF
CLP
CNY
EUR
GBP
HUF
MXN
RUB
THB
USD
2021
2020
Average
0.0904
6.42
1.59
6.82
9.40
End of
period
0.0880
6.57
1.62
7.07
9.88
Average
0.1320
6.34
1.81
6.84
9.77
End of
period
0.0973
6.28
1.58
6.41
9.26
0.0113
0.0107
0.0116
0.0115
1.33
10.15
11.78
0.0283
0.4216
0.1159
0.2685
8.57
1.42
10.24
12.21
0.0277
0.4407
0.1207
0.2705
9.04
1.33
10.48
11.83
0.0298
0.4317
0.1275
0.2938
9.18
1.25
10.06
11.14
0.0276
0.4126
0.1095
0.2735
8.19
New or amended accounting standards applied in 2021
The following amended accounting standards were applicable from
January 1, 2021: IFRS 4 Insurance Contracts – deferral of IFRS9 (endorsed
by the EU December 15, 2020); and IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
through the Interest Rate Benchmark Reform – Phase 2 (endorsed by the EU
on January 13, 2021).
The amended standards did not have any material impact on Electrolux
financial statements.
New or amended accounting standards to be applied after 2021
The new or amended accounting standards presented below have
been published but are not mandatory for 2021 and have not been early
adopted by Electrolux.
Endorsed bu the EU on November 19, 2021: IFRS 17 Insurance Contracts.
Endorsed by the EU on June 28, 2021: IFRS 3 Business Combinations; IAS 16
Property, Plant and Equipment; IAS 37 Provisions, Contingent Liabilities and
Contingent Assets; and Annual Improvements 2018-2020.
Not yet endorsed by the EU: amendments to IAS 1 Presentation of Finan-
cial Statements: Classification of Liabilities as Current or Non-current; IAS
1 and IFRS Practice Statement 2: Disclosure of Accounting policies; IAS 8
Accounting policies, Changes in Accounting Estimates and Errors: Defini-
ELECTROLUX ANNUAL REPORT 2021
42 Notes
All amounts in SEKm unless otherwise stated
Cont. Note 1
tion of Accounting Estimates; IAS 12 Income Taxes: Deferred Tax related to
Assets and Liabilities arising from a Single Transaction; and amendments to
IFRS 17 Insurance Contracts.
The new or amended standards are not expected to have any material
impact on Electrolux financial statements.
Critical accounting policies and key sources of estimation uncertainty
Use of estimates
Management has made a number of estimates and assumptions relating to
the reporting of assets and liabilities and the disclosure of contingent assets
and liabilities to prepare the financial statements in conformity with IFRS.
Actual results may differ from these estimates under different assumptions or
conditions. Below, Electrolux has summarized the accounting policies that
require more subjective judgement by management in making assumptions
or estimates regarding the effects of matters that are inherently uncertain.
Asset impairment and useful lives
Non-current assets, including goodwill, are evaluated for impairment yearly
or whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. An impaired asset is written
down to its recoverable amount, being the higher of fair value less costs
of disposal and value in use. Impairment charges are recorded when the
information shows that the carrying amount of an asset is not recoverable.
In many cases, market value is not available and the fair value has been
estimated by using the discounted cash flow method based on expected
future results. Differences in the estimation of expected future results and
the discount rates used may result in different asset valuations. The yearly
impairment testing of goodwill and other intangible assets with indefinite
useful lives, including sensitivity analyses performed, has not indicated any
impairment. See Note 13 for more information.
Property, plant and equipment are depreciated on a straight-line basis
over their estimated useful lives. Useful lives for property, plant and equip-
ment are estimated between 10 and 40 years for buildings, 15 years for
land improvements and between 3 and 15 years for machinery, technical
installations and other equipment. Management regularly reassesses the
useful lives of all significant assets. The carrying amount of property, plant
and equipment at year-end 2021 amounted to SEK 25,422m. The carrying
amount for goodwill at year-end 2021 amounted to SEK 6,690m.
Deferred taxes
In the preparation of the financial statements, Electrolux estimates the
income taxes in each of the tax jurisdictions in which the Group operates
as well as any deferred taxes based on temporary differences. Deferred
tax assets relating mainly to tax loss carry-forwards, energy-tax credits and
temporary differences are recognized in those cases when future taxable
income is expected to permit the recovery of those tax assets. Changes in
assumptions in the projection of future taxable income as well as changes
in tax rates could result in significant differences in the valuation of deferred
taxes. As of December 31, 2021, Electrolux had a net amount of SEK 5,746m
recognized as deferred tax assets in excess of deferred tax liabilities. As
of December 31, 2021, the Group had tax loss carry-forwards and other
deductible temporary differences of SEK 3,633m, which have not been
included in the computation of deferred tax assets.
Current taxes
Electrolux estimates regarding uncertain outcome of tax audits and tax
litigations are based on management’s best estimates and recorded in the
balance sheet. These estimates might differ from the actual outcome and
the timing of the potential effect on Electrolux cash flow is normally not pos-
sible to predict.
In recent years, tax authorities have been focusing on transfer pricing.
Transfer-pricing matters are normally very complex, include high amounts
and it might take several years to reach a conclusion.
Trade receivables and calculation of loss allowance
Receivables are reported net of provision for expected credit losses. The
net value reflects the amounts that are expected to be collected, based on
circumstances known at the balance sheet date. Changes in circumstances
such as higher than expected defaults or changes in the financial situation
of a significant customer could lead to significantly different valuations.
When measuring expected credit loss the Group uses reasonable and
supportable forward looking information, which is based on assumptions
regarding the future movement of different economic drivers and how these
drivers will affect each other. A sensitivity analysis is presented in Note 17.
At year-end 2021, trade receivables, net of provisions for expected credit
losses, amounted to SEK 23,110m. The total provision for expected credit
losses at year-end 2021 was SEK 466m.
Post-employment benefits
Electrolux sponsors a number of defined contribution and defined ben-
efit pension plans for its employees. The pension calculations, referring to
defined benefit plans, are based on actuarial assumptions regarding dis-
count rates, mortality rates, as well as future salary and pension increases.
The calculation of the pension obligation also depends on the discount
rate. Changes in assumptions directly affect the defined benefit obligation,
service cost, interest income and expense. The discount rate used for the
calculation of expenses during 2021 was 1.44% in average, which was the
same rate used to estimate liabilities at the end of 2020. Sensitivities for the
main assumptions are presented in Note 22.
Restructuring
Restructuring charges include required write-downs of assets and other
non-cash items, as well as estimated costs for personnel reductions and
other direct costs related to the termination of the activity. The charges
are calculated based on detailed plans for activities that are expected to
improve the Group’s cost structure and productivity. In general, the out-
come of similar historical events in previous plans are used as a guideline
to minimize these uncertainties. The total provision for restructuring at year-
end 2021 was SEK 1,240m.
Warranties
As is customary in the industry in which Electrolux operates, many of the
products sold are covered by an original warranty, which is included in the
price and which extends for a predetermined period of time. Provisions for
this original warranty are estimated based on historical data regarding
service rates, cost of repairs, etc. As of December 31, 2021, Electrolux had a
provision for warranty commitments amounting to SEK 2,427m.
Disputes
Electrolux is involved in disputes in the ordinary course of business. The
disputes concern, among other things, product liability, alleged defects in
delivery of goods and services, patent rights and other rights and other
issues on rights and obligations in connection with Electrolux operations.
Such disputes may prove costly and time consuming and may disrupt
normal operations. In addition, the outcome of complicated disputes is
difficult to foresee. It cannot be ruled out that a disadvantageous outcome
of a dispute may prove to have a material adverse effect on the Group’s
earnings and financial position.
Parent Company accounting principles
The Parent Company has prepared its Annual Report in compliance with
Swedish Annual Accounts Act (1995:1554) and recommendation RFR2,
Accounting for Legal Entities of the Swedish Financial Reporting Board.
RFR2 prescribes that the Parent Company in the Annual Report of a legal
entity shall apply all International Financial Reporting Standards and inter-
pretations approved by the EU as far as this is possible within the framework
of the Annual Accounts Act, taking into account the connection between
accounting and taxation. The recommendation states which exceptions
from IFRS and additions that shall or can be made.
Shares in subsidiaries
Holdings in subsidiaries are recognized in the Parent Company financial
statements according to the cost method of accounting. The value of sub-
sidiaries are tested for impairment when there is an indication of a decline
in the value.
Foreign currency translations
The Annual Report is presented in Swedish krona (SEK), which is the
Parent Company’s accounting currency according to the Swedish Annual
Accounts Act. One of the companies operating on a commission basis for
AB Electrolux has euro as its functional currency. The balance sheet of the
commissioner company has been translated into SEK at year-end rate. The
income statement has been translated at the average rate for the year.
Translation differences thus arising have been included in Other compre-
hensive income.
Anticipated dividends
Dividends from subsidiaries are recognized in the income statement after
decision by the annual general meeting in the respective subsidiary. Anti-
cipated dividends from subsidiaries are recognized in cases where the
Parent Company has exclusive rights to decide on the size of the dividend
and the Parent Company has made a decision on the size of the dividend
before the Parent Company has published its financial reports.
ELECTROLUX ANNUAL REPORT 2021
Notes 43
All amounts in SEKm unless otherwise stated
equal to the period’s total expenditure of own developed intangible assets
has been transferred from unrestricted equity to the development reserve
within restricted equity.
Appropriations and untaxed reserves
The Parent Company reports additional fiscal depreciation, required by
Swedish tax law, as appropriations in the income statement. In the balance
sheet, these are included in untaxed reserves.
Leases
All lease agreements where the Parent Company is a lessee are reported
in accordance with the exemption to IFR16 in RFR2, i.e. right-of-use assets
and lease liabilities are not reported in the balance sheet. The leasing fee
is recognized as an expense on a straight-line basis over the lease period.
Critical judgements and uncertainties
Valuation of shares in subsidiaries is an area involving judgement and/or
uncertainties for the Parent Company, in addition to the applicable critical
accounting policies and key sources of estimation presented for the Group.
Financial statements presentation
The Parent Company presents the income statement and the balance
sheet in compliance with the Swedish Annual Accounts Act (1995:1554) and
recommendation RFR2.
At year-end 2021 the Group had net liquid funds of SEK 5,560m (18,864),
well above target. Liquid funds shall be deposited in bank accounts or
invested in instruments with high liquidity and issued by creditworthy issuers.
See separate section “Credit risk in financial activities” within this note. The
liquidity risk is considered low at the end of 2021 given the size of liquid funds
available.
Interest-rate risk on liquid funds and borrowings
Interest-rate risk refers to the adverse effects of changes in interest rates
on the Group’s income. The main factors determining this risk include the
interest-fixing period.
Interest-rate risk in liquid funds
Liquidity is either deposited in bank accounts or invested in instruments,
normally with maturities between 0 and 3 months. A downward shift in
the yield curves of one percentage point would reduce the Group’s inter-
est income by approximately SEK 108m (194). For more information, see
Note 18.
Interest-rate risk in borrowings
The debt financing of the Group is managed by Group Treasury in order
to ensure efficiency and risk control. Debt is primarily raised at Parent
Company level and transferred to subsidiaries through internal loans or
capital injections. In this process, swap instruments are used to convert
the funds to the required currency. Short-term financing is also undertaken
locally in subsidiaries where there are capital restrictions. The Group’s
borrowings contain no financial covenants that can trigger premature
cancellation of the loans. For more information, see Note 18.
Group Treasury manages the long-term loan portfolio to keep the
average interest-fixing period between 0 and 3 years. Derivatives, such
as interest-rate swap agreements, are used to manage the interest-rate
risk by changing the interest from fixed to floating or vice versa. For those
derivatives Electrolux practice hedge accounting, which have affected
other comprehensive income by SEK –2m (–2) during 2021. On the basis of
2021 long-term interest-bearing borrowings with an average interest fix-
ing period of 1.2 years (1.6), a one percentage point shift in interest rates
would impact the Group’s interest expenses by approximately SEK +/–53m
(78) and the other comprehensive income by approximately SEK +/-2m (4).
This calculation is based on a parallel shift of all yield curves simultaneously
by one percentage point. Electrolux acknowledges that the calculation is
an approximation and does not take into consideration the fact that the
interest rates on different maturities and different currencies might change
differently.
Cont. Note 1
Taxes
The Parent Company’s financial statements recognize untaxed reserves
including deferred tax. The consolidated financial statements, however,
reclassify untaxed reserves to deferred tax liability and equity. Tax on group
contribution is reported in the income statement.
Group contributions
Group contributions provided or received by the Parent Company are
recognized as appropriations in the income statement. Shareholder con-
tributions provided by the Parent Company are recognized in shares and
participations which are subject to impairment tests as indicated above.
Pensions
The Parent Company reports pensions in the financial statements in accor-
dance with the exemption in RFR2. According to RFR2, IAS 19 shall be
adopted regarding supplementary disclosures when applicable.
Intangible assets
The Parent Company amortizes trademarks in accordance with RFR2. The
Electrolux trademark in North America is amortized over 40 years using the
straight-line method. All other trademarks are amortized over their useful
lives, estimated to 10 years, using the straight-line method.
Development reserve
The Parent Company’s financial statements recognize a development
reserve in compliance with the Swedish Annual Accounts Act. An amount
Note 2 Financial risk management
Financial risk management
The Group is exposed to a number of risks from liquid funds, trade receiv-
ables, customer-financing receivables, payables, borrowings, commodities
and foreign exchange. The risks include:
• Liquidity risk from the Group’s liquidity requirements
• Interest-rate risk on liquid funds and borrowings
• Financing risk in relation to the Group’s capital requirements
• Foreign-exchange risk on commercial flows and net investments in
foreign subsidiaries
• Commodity-price risk affecting the expenditure on raw materials
and components; and
• Credit risk relating to financial and commercial activities
Comparative information regarding risks described and quantified in this
note are for total Group, including discontinued operations, unless other-
wise stated.
The Board of Directors of Electrolux has established several policies for
the Group (hereinafter all policies are referred to as the Financial Policy)
to monitor and manage the financial risks relating to the operations of
the Group.
Group Treasury in Stockholm, supported by three regional treasury
centers located in Asia, North America, and Latin America, provide services
to the business, co-ordinate access to financial markets, monitor and
manage the financial risks through internal risk reports.
The Group seeks to minimize the effects of these risks by using derivatives
to hedge the exposures. The Group’s Financial Policy governs the use of
financial derivatives and provide principles for the management of foreign
exchange risk, interest rate risk, credit risk, the use of financial derivatives
and non-derivative financial instruments, and the investment of excess
liquidity. The internal auditors review on a continuous basis compliance with
policies and exposure limits. Policy compliance is reported on a monthly
basis by Group Treasury to the Board of Directors.
Liquidity risk
Liquidity risk is defined as the risk of the Group not being able to meet its
payment obligations due to lack of liquidity or due to the inability to convert
assets into liquidity without incurring a loss.
Liquid funds as defined by the Group consist of cash and cash equiva-
lents, short-term investments, financial derivative assets, prepaid interest
expenses and accrued interest income. Electrolux Financial Policy stipu-
lates that the level of liquid funds including unutilized committed credit facili-
ties shall correspond to at least 2.5% of annualized net sales, at year-end
2021 this level was 24.4% (40.6). In addition, net liquid funds defined as liquid
funds less short-term borrowings shall exceed zero, taking into account
fluctuations arising from acquisitions, divestments, and seasonal variations.
ELECTROLUX ANNUAL REPORT 2021
44 Notes
All amounts in SEKm unless otherwise stated
Cont. Note 2
The Group’s exposure to the reform of IBOR-rates is limited. At year-end
2021, the Group had one floating rate loan denominated in USD maturing
after the indicated USD LIBOR cessation date, see Note 18.
Capital structure and credit rating
The Group defines its capital as equity stated in the balance sheet includ-
ing non-controlling interests. On December 31, 2021, the Group’s capital
amounted to SEK 18,610m (18,709). The Group’s objective is to have a capi-
tal structure resulting in an efficient weighted cost of capital and sufficient
credit worthiness where operating needs and the needs for potential acqui-
sitions are considered.
To achieve and keep an efficient capital structure, the Financial Policy
states that the Group’s long-term ambition is to maintain a long-term rating
within a safe margin from a non-investment grade. In December 2021, S&P
Global Ratings confirmed the Group’s rating as shown in the table below.
Rating
Long-term
debt
Outlook
Short-
term debt
Short-term
debt, Nordic
S&P Global Ratings
A–
Stable
A–2
K–1
When monitoring the capital structure, the Group uses different key figures,
which are consistent with methodologies used by rating agencies and
banks. The Group manages the capital structure and makes adjustments to
adapt to changes in economic conditions. In order to maintain or adjust the
capital structure, the Electrolux Board of Directors may propose to adjust
dividends paid to shareholders, return capital to shareholders, buy back
own shares, issue new shares, or sell assets to reduce debt.
Financing risk
Financing risk refers to the risk that financing of the Group’s capital require-
ments and refinancing of existing borrowings could become more difficult
or more costly. This risk can be decreased by ensuring that maturity dates
are evenly distributed over time, and that total short-term borrowings do
not exceed liquidity levels. The financial net debt, total borrowings less liquid
funds, excluding seasonal variances, shall be long-term according to the
Financial Policy. The Group’s goals for long-term borrowings include an
even spread of maturities. The average time to maturity shall be at least
2 years and a maximum of SEK 5,000m of the long-term borrowings may
mature during a 12-month period. In March 2020, to ensure financial flex-
ibility and to mitigate the potential impact from the coronavirus pandemic,
the Board of Directors approved a temporary exception from the long-term
borrowing limits.
Foreign exchange risk
Foreign exchange risk refers to the adverse effects of changes in foreign
exchange-rates on the Group’s income and equity. In order to manage such
effects, the Group hedges these risks within the framework of the Financial
Policy. Electrolux uses external loans denominated in foreign currencies
as well as various derivatives to facilitate internal lending and to manage
the foreign exchange exposure for the Group. The Group’s overall currency
exposure is managed centrally.
Transaction exposure from commercial flows
The Financial Policy stipulates to what extent commercial flows are to be
hedged. Hedging with currency derivatives is, in most cases, applied on
invoiced flows. This means that currency exposures from forecasted flows
should normally be managed by natural hedges, price adjustments and
cost reductions. However, in cases when both price and volume is com-
mitted, Electrolux may hedge also forecasted flows. For those derivatives
Electrolux practice hedge accounting, which has affected other compre-
hensive income by SEK -37 m (33) during 2021.
Group subsidiaries cover their risks in commercial currency flows mainly
through the Group’s treasury centers. Group Treasury thus assumes the
currency risks and covers such risks externally by the use of currency deriva-
tives.
The Group’s geographically widespread production reduces the effects
of changes in exchange-rates. The remaining transaction exposure is
either related to internal sales from producing entities to sales companies
or external exposures from purchasing of components and input material
for the production paid in foreign currency. These external imports are often
priced in U.S. dollar (USD). The global presence of the Group, however, leads
to a significant netting of the transaction exposures. For additional informa-
tion on exposures and hedging, see Note 18.
Translation exposure from consolidation of entities outside Sweden
Changes in exchange-rates also affect the Group’s income in connection
with translation of income statements of foreign subsidiaries into SEK.
Electrolux does not hedge such exposure. The translation exposures arising
from income statements of foreign subsidiaries are included in the sensitivity
analysis mentioned below.
Foreign-exchange sensitivity from transaction
and translation exposure
The major net export currencies that Electrolux is exposed to are the U.S.
dollar, the Chinese renminbi and the euro. The major import currencies
that Electrolux is exposed to are the British pound, the Australian dollar,
the Canadian dollar and the Brazilian real. These currencies represent the
majority of the exposures of the Group, but are largely offsetting each other
as different currencies represent net inflows and outflows. A change up
or down by 10% in the value of each currency against the Swedish krona
would affect the Group’s profit and loss for one year by approximately
SEK +/– 730m (580), as a static calculation. The model assumes the distribu-
tion of earnings and costs effective at year-end 2021 and does not include
any dynamic effects, such as changes in competitiveness or consumer
behavior arising from such changes in exchange rates.
Sensitivity analysis of major currencies
Risk
Currency
AUD/SEK
BRL/SEK
GBP/SEK
CAD/SEK
CHF/SEK
RUB/SEK
THB/SEK
CNY/SEK
EUR/SEK
USD/SEK
Change
Profit or loss
impact 2021
Profit or loss
impact 2020
–10%
–10%
–10%
–10%
–10%
–10%
–10%
–10%
–10%
–10%
–388
–371
–303
–305
–238
–169
228
236
324
1,070
–356
–334
–242
–242
–207
–131
185
199
471
866
Exposure from net investments (balance sheet exposure)
The net of assets and liabilities in foreign subsidiaries constitute a net
investment in foreign currency, which generates a translation difference
in the consolidation of the Group. This exposure can have an impact on
the Group’s total comprehensive income, and on the capital structure. The
exposure is normally handled by natural hedges including matching assets
with debts in the same currency. In exceptional cases the exposure can be
managed by currency derivatives implemented on Group level and carried
out by the Parent Company. For those derivatives Electrolux practice hedge
accounting, which has affected other comprehensive income by SEK 0m
(–104) during 2021. There were no outstanding net investment hedges at
year-end 2021.
A change up or down by 10% in the value of each currency against the
Swedish krona would affect the net investment of the Group by approxi-
mately SEK +/– 3,292m (2,864), as a static calculation at year-end 2021.
Commodity-price risks
Commodity-price risk is the risk that the cost of direct and indirect materials
could increase as underlying commodity prices rise in global markets. The
Group is exposed to fluctuations in commodity prices through agreements
with suppliers, whereby the price is linked to the raw material price on the
world market. This exposure can be divided into direct commodity expo-
sure, which refers to pure commodity exposures, and indirect commodity
exposure, which is defined as exposure arising from only part of a com-
ponent. Commodity-price risk is mainly managed through contracts with
the suppliers. A change in price up or down by 10% in steel would affect the
Group’s profit or loss with approximately SEK +/– 900m (600) and in plastics
with approximately SEK +/– 500m (350), based on volumes in 2021.
Credit risk
Credit risk in financial activities
Exposure to credit risks arises from the investment of liquid funds, and
derivatives. In order to limit exposure to credit risk, the Group has adopted
a policy of only dealing with creditworthy counterparties. A counterpart list
has been established, which specifies the maximum allowable exposure in
relation to each counterpart. The Group only transacts investments of liquid
funds and derivatives with issuers and counterparts holding a long-term
rating of at least A- credit rating, as these are considered to have low credit
ELECTROLUX ANNUAL REPORT 2021
Cont. Note 2
risk for the purpose of impairment assessment. S&P Global Ratings or similar
independent rating agencies supply the credit rating information. Group
Treasury can allow exceptions from this rule, e.g., to enable money deposits
within countries rated below A-, but this represents only a minor part of the
total liquidity in the Group.
The Group strives for master netting agreements (ISDA) with all
counterparts for derivative transactions. Assets and liabilities will only
be netted from a credit risk perspective for counterparts with valid ISDA-
agreements. As a result of these policies and limitations, the credit risk from
external financial activities is not material.
Impact from netting agreements on gross exposure from derivatives
Gross
amount
Impact
of netting
agreements
Net
position Change
December 31, 2021
Interest and currency risk
derivatives reported as
assets
Interest and currency risk
derivatives reported as
liabilities
December 31, 2020
Interest and currency risk
derivatives reported as
assets
Interest and currency risk
derivatives reported as
liabilities
204
–49
155
24%
75
–49
26
66%
135
–111
24
83%
332
–111
221
33%
Group Treasury manage a majority of the subsidiary financing through
internal loans from the Parent Company, there is a material credit risk
originating from internal loans. The Parent Company calculates expected
credit losses (ECL) from lending to its subsidiaries. The model defines if it is
the entity, or the country where the entity is situated, that accounts for the
primary source of credit risk. The credit risk is translated into a probability
of default factor based on S&P Global Ratings historic values. The lending
exposure is multiplied by the probability of default and a loss given default
to result in the ECL of the subsidiary. The model allows for a management
overlay to adjust the ECL provision, if management possesses information
that qualifies for such an adjustment. Management overlay takes forward
looking factors into consideration.
The opening expected credit loss provision in the Parent Company for
2021 amounted to SEK 128m (86) primarily originating from internal loans
to Argentina. The closing expected credit loss provision in the Parent Com-
Note 3 Segment information
Reportable segments – Business areas
The Group’s operations are divided into four reportable segments: Europe;
North America; Latin America and Asia-Pacific, Middle East and Africa.
All the segments are producing appliances for the consumer market and
products comprise mainly of refrigerators, freezers, cookers, dryers, wash-
ing machines, dishwashers, microwave ovens, vacuum cleaners and other
small appliances.
The segments are regularly reviewed by the President and CEO, the
Group’s chief operating decision maker.
The segments are responsible for the operating results and the net assets
used in their businesses, whereas financial items and taxes, as well as net
debt and equity, are not reported per segment. The operating results and
net assets of the segments are consolidated using the same principles
as for the total Group. Operating costs not included in the segments are
shown under Group Common costs, which mainly are costs related to group
management activities typically required to run the Electrolux Group.
Sales between segments are made on market conditions with arm’s-
length principles.
ELECTROLUX ANNUAL REPORT 2021
Notes 45
All amounts in SEKm unless otherwise stated
pany amounted to SEK 74m (128), mainly due to decreased internal lending
to Latin and North America. ECL provision for loans made to companies
with a minority shareholding amounted to SEK 7m (9).
To reduce the settlement risk in foreign exchange transactions done with
banks, Group Treasury uses Continuous Linked Settlement (CLS). CLS elimi-
nates temporary settlement risk since both legs of a transaction are settled
simultaneously.
Credit risk in trade receivables
Electrolux sells to a substantial number of customers in the form of large
retailers, buying groups and independent stores. Sales are made on the
basis of normal delivery and payment terms. The Electrolux Group Credit
Directive defines how credit management is to be performed in the
Electrolux Group to achieve competitive and professionally performed
credit sales, limited bad debts, and improved cash flow and optimized
profit. On a more detailed level, it also provides a minimum level for
customer and credit risk assessment, clarification of responsibilities and the
framework for credit decisions. The credit-decision process combines the
parameters risk/reward, payment terms and credit protection in order to
obtain as much paid sales as possible. In some markets, Electrolux uses
credit insurance as a mean of protection. For many years, Electrolux has
used the Electrolux Rating Model (ERM) to have a common and objective
approach to credit-risk assessment that enables more standardized and
systematic credit evaluations to minimize inconsistencies in decisions. The
ERM is based on a risk/reward approach and is the basis for the customer
assessment. The Electrolux Rating Model consists of three different parts:
Customer and Market Information; Warning Signals; and a Credit Risk
Rating (CR2). Through CR2 the customers are classified in risk categories.
Credit approvals and other monitoring procedures are also in place to
ensure that follow-up action is taken to recover overdue debts. Further-
more, the Group reviews the recoverable amount of each trade debt and
debt investment on an individual basis at the end of the reporting period to
ensure that adequate loss allowance is made for irrecoverable amounts.
In this regard, management considers that the Group’s credit risk is signifi-
cantly reduced.
Trade receivables relate to a large number of customers, spread across
diverse geographical areas. However, there is a concentration of large
credit exposures on a number of customers in, primarily, the U.S., Latin
America and Europe. Concentration of credit risk related to a single coun-
terparty did not exceed 9.9% (8.4) of total trade receivables at any time
during the year. For more information, see Note 17.
The Group defines default as customers where significant financial dif-
ficulties have been identified , or when the receivable is more than 90 days
past due, whichever occurs first. A receivable is written off when there are
indications of no realistic prospect of recovery or at a 360 days overdue
whichever occurs first. There is a limited use of enforcement activities.
Net sales
Operating income
Europe
North America
Latin America
Asia-Pacific, Middle East
and Africa
Group Common costs
Total
Financial items, net
Income after financial items
2021
2020
49,384
46,038
40,468
38,219
19,958
16,915
15,820
14,788
125,631 115,960
—
—
125,631 115,960
—
—
—
—
Inter-segment sales exist with the following split:
Europe
North America
Latin America
Asia-Pacific, Middle East and Africa
Eliminations
2021
4,002
688
1,336
1,511
7,538
–737
6,801
–546
6,255
2021
1,644
363
2
1,638
3,647
2020
3,643
1,215
666
1,038
6,562
–783
5,778
–681
5,096
2020
1,256
267
1
1,205
2,729
46 Notes
All amounts in SEKm unless otherwise stated
Cont. Note 3
The segments are responsible for the management of the operational assets and their performance is measured at the same level, while financing is
managed by Group Treasury at group or country level. Consequently, liquid funds, interest-bearing receivables, interest-bearing liabilities and equity are
not allocated to the business segments.
Assets
December 31
Equity and liabilities
December 31
Net assets
December 31
Europe
North America
Latin America
Asia-Pacific, Middle East and Africa
Other1)
Total operating assets and liabilities
Liquid funds
Total borrowings
Lease liabilities
Pension assets and liabilities
Equity
Total
1) Includes common functions and tax items.
Europe
North America
Latin America
Asia-Pacific, Middle East and Africa
Other2)
Acquisitions/Divestments
Financial items paid
Taxes paid
Total
1) Cash flow from operations and investments.
2) Includes common functions.
Geographical information
USA
Brazil
Germany
Australia
France
Canada
United Kingdom
Sweden (country of domicile)
Italy
Switzerland
Other
Total
2021
30,165
26,890
14,830
12,579
10,175
94,639
11,236
—
—
1,732
—
2020
25,796
20,667
11,190
11,414
8,798
77,865
20,467
—
—
1,272
—
107,607
99,604
Depreciation and
amortization
2021
1,520
1,455
483
669
363
—
—
—
2020
1,595
1,363
533
738
358
—
—
—
2021
28,416
17,513
8,937
7,679
4,893
2020
24,390
14,582
6,663
7,418
4,546
2021
1,749
9,376
5,893
4,900
5,282
2020
1,406
6,086
4,526
3,996
4,252
67,437
57,599
27,201
20,265
—
—
15,881
15,727
3,055
2,623
18,610
107,607
2,618
4,951
18,709
99,604
—
—
—
—
—
—
Capital expenditure
Cash flow1)
2021
2,787
1,311
933
727
285
—
—
—
2020
2,155
1,772
665
562
183
—
—
—
2021
3,700
–966
20
839
–392
–1,006
–470
–1,480
244
—
—
—
—
—
—
2020
3,551
965
1,577
2,551
–92
–8
–596
–1,132
6,816
4,489
4,587
6,043
5,338
Tangible and intangible fixed assets located in the Group’s country of domi-
cile, Sweden, amounted to SEK 4,503m (2,164). Tangible and non-tangible
fixed assets located in all other countries amounted to SEK 34,380m (30,488).
Individually material countries in this aspect are USA with SEK 10,608m
(9,164), Italy with SEK 6,115m (3,707) and Poland with SEK 3,021m (2,508)
respectively.
No single customer of the Group represents 10% or more of the external
revenue.
Net sales1)
2021
2020
36,540
35,001
13,243
12,133
6,169
5,531
4,413
4,211
4,167
4,058
3,690
3,356
6,105
5,461
4,058
3,343
3,708
4,031
3,202
3,192
40,253
35,726
125,631 115,960
1) Revenues attributable to countries on the basis of customer location.
ELECTROLUX ANNUAL REPORT 2021
Notes 47
All amounts in SEKm unless otherwise stated
Customer incentives
Customer incentives include promotional activities as e.g. coupons, gift
cards, free products and loyalty/cash points. Customer incentives are
additional performance obligations providing the customer with a mate-
rial right, i.e. the customer is purchasing a product or service in the original
purchase and the right to a free or discounted product or service in the
future. The customer is effectively paying in advance for future products or
services. Revenue is therefore allocated to two performance obligations,
the originally purchased product and the product bought in the future (pay-
ment in advance). A liability is recognized for the rebate until it’s used or
expires unused.
Within Electrolux a common promotional activity is to offer free products
in combination with other sales. When the free products are related to
the Electrolux product range, revenue is allocated to both the ordinary
products sold and the free products.
When the free products are unrelated to the Electrolux product range,
the free products are recognized as marketing/sales cost.
Warranties
The most common warranty for Electrolux is to replace a faulty product
under legal and common practice warranty terms. In those cases warranty
is recognized as a provision. Electrolux also sells extended warranty where
the revenue is recognized during the warranty period, which usually starts
after the legal warranty period. Sometimes warranty offered is including a
service part and if it is difficult to separate the warranty from the service the
two are bundled together and revenue is recognized over the warranty
period.
Sales with a right of return
A right of return is not a separate performance obligation, but it affects the
transaction price for the transferred goods. Returns rights are commonly
granted in the retail and consumer industry.
Regarding a right of return which follows from legislation, statutory
requirements, business practice or is stipulated in the contract with the
customer, revenue is not recognized for goods expected to be returned.
Instead, a liability is recognized for expected refunds to customers. An asset
is also recorded for the expected returned item. The estimated amount of
returned goods in each sale with a right of return, is based on a probability-
weighted approach or most likely outcome, whichever is most predictive.
The estimate is revised on each reporting date.
Principal versus agent
In some countries Electrolux acts as an agent, i.e. Electrolux arranges for
goods or services to be provided by an external supplier to the customer.
Electrolux records as revenue the commission fee earned for facilitating
the transfer of goods or service or the net amount of consideration that the
company retains after paying the other party the consideration received in
exchange for the goods or services to be provided by that party.
Freight charges
In most cases freight is included in the price of the product sold and revenue
is recognized at the same time as for the product.
Consignment stock or sell-through arrangement
For some customers Electrolux keeps the inventory of products in the ware-
house of the customer or in the customer’s outlet. Transfer of control of the
products are done when the customer lifts the product from the warehouse
or when the product is sold to the end consumer. Electrolux recognizes
revenue when the control has been transferred or when there is a legal right
of forcing a sales transaction.
Revenue types and flows
The vast majority of the Group’s revenues of SEK 125,631m (115,960)
during the year consisted of product sales. Revenue from service activi-
ties amounted to SEK 1,950m (1,797). The Group’s net sales in Sweden
amounted to SEK 4,058m (4,031). Exports from Sweden during the year
amounted to SEK 43,717m (39,289), of which SEK 39,655m (35,235) were
to Group subsidiaries. The major part of the Swedish export comes from
two of the Swedish entities acting as a buying/selling hubs for the European
business meaning that most of the European product flows are routed via
these entities.
Note 4 Revenue recognition
Revenue recognition
Electrolux manufactures and sells appliances mainly in the whole-
sale market to customers being retailers. Electrolux products include
refrigerators, dishwashers, washing machines, cookers, vacuum cleaners,
air conditioners and small domestic appliances.
Sales are recorded net of value-added tax, specific sales taxes, returns,
and trade discounts. Revenues arise from sales of finished products and
services.
Sale of finished products including spare parts and accessories
Sales of products are revenue recognized at a point in time i.e. when control
of the products has transferred, being when the products are delivered to
the customer. Delivery occurs when the products have been shipped to
the specific location, the risks of obsolescence and loss have been trans-
ferred to the customer, and either the customer has accepted the products
in accordance with the sales contract, the acceptance provisions have
lapsed, or there is objective evidence that all criteria for acceptance have
been satisfied. In practice, transfer of control and thus revenue recognition
normally depends on the contractual incoterm.
Transaction price — Volume discounts
The products are often sold with volume discounts based on aggregate
sales over a specific time period, normally 3–12 months. Revenue from these
sales is recognized based on the price specified in the contract, net of the
estimated volume discounts. Accumulated experience is used to estimate
and provide for the discounts using either the expected value method or
an assessment of the most likely amount. Revenue is only recognized to the
extent that it is highly probable that a significant reversal will not occur. A
contract liability is recognized for expected volume discounts payable to
customers in relation to sales made until the end of the reporting period. The
estimated volume discount is revised at each reporting date.
Receivables, contract assets and contract liabilities
A receivable is recognized when the goods are delivered as this is the point
in time that the consideration is unconditional because only the passage of
time is required before the payment is due. If the consideration is conditional
to additional performance, a contract asset is recorded.
If Electrolux receive prepayments from customer a contract liability is
recorded.
Sale of goods and services combined
When contracts include both goods and services the sales value is split
into the separate performance obligations as applicable and revenue is
recognized when each of the separate performance obligations is satisfied.
In general, types of performance obligations that may occur are products,
spare parts, installation, service and support and education.
Sale of services in a separate contract
Electrolux recognizes revenue from services related to installation of
products, repairs or maintenance service when control is transferred,
being over the time the service is provided. For service contracts covering
a longer period revenue is recognized on a linear basis over the contract
period.
Sale of licenses in a separate contract
Electrolux is licensing trade names to other companies. The license provides
the licensee a right to access intellectual property throughout the license
period and revenue is recognized over time. The most common license type
for Electrolux is sales based royalty where the revenue is recognized when
the sales occur.
Payments to customers
Agreements can be made with customers to compensate for various
services or actions the customer takes. This relates to e.g. agreements
under which Electrolux agrees to compensate the customer for e.g.
marketing activities undertaken by the customer. The main rule is that if the
payment is related to a distinct service or product it shall be accounted for
as a purchase of that service or product. If not it shall be deducted from
the related revenue stream. In practice, if the contract doesn’t include any
requirement of follow up from Electrolux side and/or reporting back from
the customer that the service is performed, the payment shall be accounted
for as a reduction of revenue.
ELECTROLUX ANNUAL REPORT 2021
48 Notes
All amounts in SEKm unless otherwise stated
Cont. Note 4
Disaggregation of revenue
Electrolux manufactures and sells appliances mainly in the wholesale mar-
ket to customers being retailers. Electrolux products include refrigerators,
dishwashers, washing machines, cookers, vacuum cleaners, air condition-
ers and small domestic appliances. Electrolux has four business areas with
focus on the consumer market. Sales of services are not material in relation
to Electrolux total net sales.
Geography and product category are considered important attributes
when disaggregating Electrolux revenue. The business areas, also being the
Group’s segments, are based on geography: Europe, North America, Latin
America and Asia-Pacific, Middle East and Africa. In addition, the table to
the right presents net sales by product area Taste (cooking appliances),
Care (dish and laundry appliances) and Wellbeing (e.g. cleaning appli-
ances and small domestic appliances). Products within all product areas
are sold in each of the reportable segments, i.e. the Business Areas.
Disaggregation of revenue
2021
2020
2021
2020
Group
Parent Company
Product Areas
Taste
Care
Wellbeing
Total
77,457
70,593
22,820
20,870
36,415
34,298
17,687
16,591
11,758
11,069
3,298
3,160
125,631 115,960
43,805
40,621
The table below presents the opening and closing balances of contract liabilities as well as movements during the years.
Contract liabilities
Opening balance, January 1, 2020
Gross increase during the period
Paid to/settled with customer
Revenue recognized during the year
Contracts cancelled during the year
Acquisition/divestment of operations
Other changes to contract balances
Exchange-rate differences
Closing balance, December 31, 2020
Gross increase during the period
Paid to/settled with customer
Revenue recognized during the year
Contracts cancelled during the year
Acquisition/divestment of operations
Other changes to contract balances
Exchange-rate differences
Closing balance, December 31, 2021
Advances from
Customers
Customer bonuses/
incentives
Short-term
Long-term
Contract
liabilities, total
Prepaid income – service & warranty
65
1,394
—
–1,307
–5
6
3
–17
139
1,153
—
–1,141
—
—
0
13
164
5,425
19,911
–18,438
—
–444
5
–192
–572
5,696
22,244
–21,026
—
–175
—
77
290
7,106
217
223
—
–204
–9
—
–5
–22
200
206
—
–196
–9
—
—
17
218
298
59
—
–2
–9
—
–6
–21
319
43
—
–4
–9
—
–7
16
358
6,005
21,588
–18,438
–1,513
–467
11
–200
–632
6,354
23,646
–21,026
–1,341
–193
0
70
336
7,846
For the Parent Company contract liabilities amounted to SEK 318m (248).
Note 5 Operating expenses
Cost of goods sold and additional information on costs by nature
Cost of goods sold includes expenses for the following items:
• Finished goods i.e. cost for production and sourced products
• Warranty
• Environmental fees
• Warehousing and transportation
• Exchange-rate changes on payables and receivables and
the effects from currency hedging
Operating expenses
Direct material and components
Sourced products
Depreciation and amortization
Salaries, other renumeration and employer
contribution
Other operating expenses
Total
2021
2020
42,919
18,413
4,489
41,740
16,082
4,587
20,423
32,586
19,075
28,699
118,830
110,183
Operating expenses
Cost of goods sold includes direct material and components amounting
to SEK 42,919m (41,740) and sourced products amounting to SEK 18,413m
(16,082). The depreciation and amortization charge for the year amounted
to SEK 4,489m (4,587). Costs for research and development amounted to
SEK 3,620m (3,575).
Government grants relating to expenses have been deducted in the
related expenses by SEK 60m (267). The decrease for the year is mainly
related to measures due to the coronavirus last year.
Government grants related to assets have been recognized as deferred
income in the balance sheet and will be recognized as income over the
useful life of the assets. The remaining value of these grants, at the end of
2021, amounted to SEK 634m ( 651).
The Group’s operating income includes net exchange-rate differences in
the amount of SEK –78m (–160). The Group’s Swedish factories accounted
for 0.2% (0.2) of the total value of production.
Selling and administration expenses
Selling expenses include expenses for brand communication, sales driving
communication and costs for sales and marketing staff. Selling expenses
also include the cost for impairment of trade receivables.
Administration expenses include expenses for general management,
controlling, human resources, shared service and IT expenses related to
the named functions. Administration costs related to manufacturing are
included in cost of goods sold.
ELECTROLUX ANNUAL REPORT 2021
Note 6 Other operating income and expenses
Note 7 Material profit or loss items in operating income
Notes 49
All amounts in SEKm unless otherwise stated
Other operating income
2021
2020
2021
2020
Group
Parent Company
185
90
90
365
78
73
148
299
—
—
—
—
—
—
—
—
Group
Parent Company
2021
–727
—
41
—
40
—
–95
–741
2020
2021
2020
—
—
–20
–22
–259
–108
–197
–606
—
—
—
—
—
—
–7
—
—
—
–75
—
–75
–375
—
–382
This note summarizes events and transactions with significant effects, which
are relevant for understanding the financial performance when comparing
income for the current period with previous periods, including items such as:
• Capital gains and losses from divestments of product groups or
major units
• Close-down or significant down-sizing of major units or activities
• Restructuring initiatives with a set of activities aimed at reshaping
a major structure or process
• Significant impairment
• Other major non-recurring costs or income
Material items in 2021 amount to SEK –727m and refer to business area
North America and an arbitration in U.S. tariff case on washing machines
imported into the U.S. from Mexico in 2016/2017.
No material items were identified in 2020.
Material profit or loss items
Arbitration in U.S. tariff case
Total
2021
–727
–727
2020
—
—
Effect from material profit or loss items by function
2021
2020
–376
–307
–75
–382
Cost of goods sold
Selling expenses
Administration expenses
Other operating income and expenses
Total
—
—
—
–727
–727
—
—
—
—
—
Gain on sale of property, plant
and equipment
Recovery of overpaid sales tax
Other
Total
Other operating expenses
Arbitration in U.S. tariff case
Loss on sale of property, plant
and equipment
Asbestos litigation
Electrolux Professional separation
project & listing costs
Legal expenses
Impairment
Other
Total
Other operating income and
expenses, net
ELECTROLUX ANNUAL REPORT 2021
50 Notes
All amounts in SEKm unless otherwise stated
Note 8 Leases
The major part of the group’s lease arrangements are those under which
the group is a lessee. This applies to a large number of assets such as ware-
houses, office premises, vehicles, and certain office equipment. The group’s
activities as a lessor are limited.
A contract is, or contains, a lease if the contract conveys the right to
control the use of an identified asset for a period of time in exchange for
consideration. Such an assessment is performed at inception of a contract.
An identified lease agreement is further categorized by the group as either
a short-term lease, a lease of a low-value asset or a standard lease. Short-
term leases are defined as leases with a lease term of 12 months or less.
The group’s definition of low-value assets comprises all personal computers
and laptops, phones, office equipment and furniture and all other assets,
independent of asset class, of a value less than SEK 100k when new. Lease
payments related to short-term leases and leases of low value assets are
recognized as operating expenses on a straight-line basis over the term of
the lease. The group applies the term ‘standard lease’ to all identified leases
which are categorized as neither short-term leases nor leases of a low-value
asset. Thus, a standard lease is a lease agreement for which a right-of-use
asset and a corresponding lease liability are recognized at commencement
of the lease, i.e. when the asset is available for use. The group’s right-of-use
assets and its long-term and short-term lease liabilities are presented as
separate line items in the consolidated statement of financial position.
Assets and liabilities arising from a lease are initially measured on a pres-
ent value basis. The lease liability is determined as the present value of all
future lease payments at the commencement date, discounted using the
Group’s calculated incremental borrowing rate determined by country and
contract duration (12–36 months, 37–72 months and >72 months).
The following lease payments are included in the measurement of a lease
liability:
• fixed payments, less any lease incentives,
• variable lease payments that are based on an index or a rate, initially
measured using the index or rate as at the commencement date,
• amounts expected to be payable under residual value guarantees,
• the exercise price of a purchase option if reasonably certain to exercise
that option, and
• payments of penalties for terminating the lease, if the lease term reflects
the exercise of that option.
Variable lease fees that do not depend on an index or rate (including prop-
erty tax related to leased buildings) are not included in the measure ment of
the lease liability. The related variable payments are charged to the state-
ment of comprehensive income as incurred.
The lease liability is subsequently measured by reducing the carrying
amount to reflect the lease payments made and by increasing the carrying
amount to reflect interest on the lease liability, using the effective interest
method.
A right-of-use asset is measured at cost comprising the amount of the
initial measurement of the lease liability, any lease payments made at or
before the commencement day, less any lease incentives received, and any
initial direct costs, and restoration costs (unless incurred to produce inven-
tories) with the corresponding obligation recognized and measured as a
provision under IAS 37. The right-of-use asset is subsequently measured at
cost less accumulated depreciation, any impairment losses as well as any
remeasurement of the lease liability. Impairment of right-of-use assets is
determined and accounted for in accordance with IAS 36.
A remeasurement of the lease liability, and a corresponding applicable
adjustment to the related right-of-use asset, is performed when:
• the lease term has changed or there is a change in the assessment
of exercise of a purchase option, in which case the lease liability is
remeasured by discounting the revised lease payments using a revised
discount rate,
• the lease payments change due to changes in an index or rate or a
change in expected payment under a guaranteed residual value, in
which cases the lease liability is remeasured by discounting the revised
lease payments using the initial discount rate (unless the lease payments
change is due to a change in a floating interest rate, in which case a
revised discount rate is used), or
• a lease contract is modified and the lease modification is not accounted
for as a separate lease, in which case the lease liability is remeasured by
discounting the revised lease payments using a revised discount rate.
A right-of-use asset is normally depreciated on a straight-line basis over the
shorter of the asset’s useful life and the lease term. However, if ownership of
the asset is reasonably certain to be transferred at the end of the lease, the
right-of-use asset is depreciated over its useful life. Depreciation of a right-
of-use asset starts at the commencement date of the lease.
A lease payment related to a standard lease is accounted for partly as
amortization of the lease liability and partly as interest expense in the state-
ment of comprehensive income.
Lease components are separated from non-lease components for leases
regarding buildings (offices, warehouses etc.). For leases regarding other
asset classes (machinery, vehicles etc.) the lease components and any
associated non-lease components are accounted for as a single arrange-
ment.
In determining the lease term, extension options are only included if it is
determined as reasonably certain to extend, being subject to continuous
re-assessment. Periods after termination options are only included in the
lease term if the lease is reasonably certain not to be terminated. A lease
term is reviewed if a significant event or a significant change in circum-
stances occurs which affects the assessment.
Lease income and expenses
Income from subleasing
Lease expenses:
Short-term leases
Leases of low-value assets
Variable lease payments
Depreciation of right-of-use assets
Group
2021
7
–12
–35
–182
–876
2020
6
–13
–49
–189
–876
Total lease expenses in operating income
–1,105
–1,127
Lease liability interest expense
–105
–108
Total cash outflow for lease contracts amounts to SEK 1,215m (1,270)
for the year. The calculated average lease interest rate for the year was
3.5% (3.7). Lease commitments related to leases not yet commenced per
December 31 amount to SEK 170m (36).
Maturity profile of lease liabilities is presented in Note 18.
For the Parent Company, lease expenses for the year amounted to
SEK 113m (118) and future lease payment obligations at year end amount
to SEK 208m (502). The most relevant lease agreement for the Parent
company during the year was the office rental agreement regarding
Electrolux headquarters in Stockholm. The agreement was discontinued in
December, 2021, as the property holding company became a fully-owned
subsidiary of AB Electrolux.
ELECTROLUX ANNUAL REPORT 2021
Cont. Note 8
Property, plant and equipment, right-of-use
Group
Carrying amount
Opening balance, January 1, 2020
Acquisition of operations
Additions
Cancellations
Depreciation
Exchange rate differences
Closing balance, December 31, 2020
Acquisition of operations
Additions
Cancellations
Depreciation
Exchange rate differences
Closing balance, December 31, 2021
Notes 51
All amounts in SEKm unless otherwise stated
Land
Buildings
Machinery
Other equipment
5
—
4
—
–1
–1
7
0
1
0
–1
0
7
2,289
12
384
8
–622
–208
1,864
7
1,125
–198
–633
128
2,293
42
—
15
0
–15
–2
40
—
13
–8
–14
1
32
476
—
246
–7
–238
–36
440
24
196
–9
–228
15
439
Total
2,811
12
649
0
–876
–246
2,351
31
1,335
–215
–876
145
2,771
Note 9 Financial income and financial expenses
Note 10 Taxes
Financial income
Interest income
from subsidiaries
from others
Dividends from subsidiaries
Other financial income
Total
Financial expenses
Interest expenses
to subsidiaries
to others
Lease liability interest expenses
Pension interest expenses, net
Exchange-rate differences, net
Other financial expenses
Total
Financial items, net
Group
Parent Company
2021
2020
2021
2020
—
44
—
—
44
—
–286
–105
–17
–8
–173
–589
–546
—
74
—
—
74
264
2
442
3
3,434
6,782
17
21
3,717
7,248
—
–363
–108
–41
–70
–173
–755
–681
–68
–260
—
—
–49
–80
–96
–313
—
—
–472
–185
–457 –1,066
3,260
6,182
Interest expenses to others, for the Group and Parent Company, include
gains and losses on derivatives used for managing the Group’s interest
fixing. For information on financial instruments, see Note 18. For more
information on post-employment benefits, see Note 22.
Cash flow: Financial items paid, net
Interest and similar items received amounted to SEK 58m (72), interest and
similar items paid amounted to SEK –430m (–504) and other financial items
received and paid amounted to SEK –98m (–163).
ELECTROLUX ANNUAL REPORT 2021
Current taxes
Deferred taxes
Taxes in income for the period,
continuing operations
Taxes in income for the period,
discontinued operations
Taxes related to OCI
Taxes included in total
comprehensive income
Group
Parent Company
2021
2020
–1,512 –1,283
–65
175
2021
–169
–236
2020
–103
–34
–1,577 –1,108
–405
–137
—
–576
—
2
—
0
—
0
–2,153 –1,106
–405
–137
Deferred taxes include an effect of SEK 3m (–11) due to changes in tax rates.
The consolidated accounts include deferred tax liabilities of SEK 121m (113)
related to untaxed reserves in the Parent Company.
Theoretical and actual tax rates
Group
Parent Company
%
Theoretical tax rate
Non-taxable/non-deductible
income statement items, net
Non-recognized tax losses carried
forward
Utilized non-recognized tax losses
carried forward
Other changes in recognition of
deferred tax
Withholding tax
Other
Actual tax rate
2021
25.8
2020
24.7
2021
20.6
2020
21.4
–0.8
–16.9
–20.5
0.5
0.6
1.1
–0.9
–1.6
–0.2
3.6
–4.2
25.2
–4.3
1.9
0.7
21.7
—
—
—
3.5
1.9
9.1
—
—
0.1
1.6
–0.4
2.1
For the Group in 2021, ‘Other’ contains -3.5% related to a positive outcome
in a tax court case in Brazil.
The theoretical tax rate for the Group is calculated on the basis of the
weighted total income after financial items per country, multiplied by the
local statutory tax rates.
Non-taxable/non-deductible items in the Parent Company are mainly
related to dividends from subsidiaries.
Non-recognized deductible temporary differences
As of December 31, 2021, the Group had tax loss carry-forwards and other
deductible temporary differences of SEK 3,633m (4,305), which have not
been included in computation of deferred tax assets. The decision not to
recognize certain temporary differences is based on an assessment where
the likelihood of future utilization is evaluated for each of the temporary
items. The Group typically does not recognize temporary differences in
situations where the ability to utilize these is considered limited.
52 Notes
All amounts in SEKm unless otherwise stated
Cont. Note 10
The non-recognized deductible temporary differences will expire as follows:
Note 11 Other comprehensive income
Non-recognized temporary differences
2021
2022
2023
2024
2025
2026
And thereafter
Without time limit
Total
December 31
2021
n/a
30
38
67
60
70
975
2,393
3,633
2020
26
31
34
90
56
n/a
813
3,255
4,305
The tables below show deferred tax assets and liabilities at the end of each
reporting period and the change in net deferred tax assets and liabilities.
Deferred tax assets and deferred tax liabilities
Deferred tax assets:
Property, plant and equipment
Provision for Pension obligations
Provision for restructuring
Other provisions
Inventories
Accrued expenses and prepaid income
Unused tax losses carried forward
Tax credits
Other deferred tax assets
Deferred tax assets before netting of deferred tax
assets and liabilities
Netting of deferred tax assets and liabilities
Deferred tax assets, net
Deferred tax liabilities:
Property, plant and equipment
Other provisions
Inventories
Other taxable temporary differences
Deferred tax liabilities before netting of deferred tax
assets and liabilities
Netting of deferred tax assets and liabilities
Deferred tax liabilities, net
2021
2020
327
422
230
817
93
579
422
333
913
270
780
95
452
521
2,903
1,711
2,760
1,431
7,505
7,554
–1,760 –1,490
6,064
5,746
926
81
339
890
949
84
250
684
1,967
2,236
–1,760 –1,490
476
476
Deferred tax assets and liabilities, net
5,269
5,588
Deferred tax assets and liabilities, net opening
balance before restatement due to change in
accounting principles
Restatement of opening balance due to change in
accounting principles
Deferred tax assets and liabilities, net opening
balance
Recognized in income statement, continuing
operations
Recognized in income statement, discontinued
operations
Recognized in other comprehensive income
Acquisitions of operations
Exchange rate differences
Discontinued operations
2021
2020
5,588
6,057
—
—
5,588
6,057
–65
175
—
–584
1
329
—
—
–25
35
–654
—
Deferred tax assets and liabilities, net closing balance
5,269
5,588
As per December 31, the Parent Company reported deferred tax assets
amounting to SEK 309m (545) which mainly relate to unused tax losses
carried forward, pensions and restructuring provisions.
Items that will not be reclassified to income
for the period:
Remeasurement of provisions for post-employment
benefits
Opening balance, January 1
Gain/loss taken to other comprehensive income
Income tax relating to items that will not be reclassified
Closing balance, December 31
Items that may be reclassified subsequently to income
for the period:
Cash flow hedges
Opening balance, January 1
Gain/loss taken to other comprehensive income
Transferred to profit and loss on sale
Closing balance, December 31
Exchange differences on translation of
foreign operations
Opening balance, January 1
Net investment hedge
Translation differences
Transferred to profit and loss, discontinued operations
Closing balance, December 31
Group
2021
2020
172
2,746
–584
2,333
14
2
–37
–21
29
189
–46
172
–18
–1
33
14
–5
–4,588 –1,261
–104
1,289 –3,150
–72
–3,303 –4,588
—
Income tax relating to items that may be reclassified
Opening balance, January 1
Cash flow hedges
Net investment hedges
Closing balance, December 31
Non-controlling interests, translation differences
–19
8
1
–11
–68
–7
55
–19
0
Other comprehensive income, net of tax
3,419 –3,102
Income taxes affecting other comprehensive income during the year
amounted to a total of SEK –576m (2) of which SEK –584m (–46) related to
remeasurement of provisions for post-employment benefits and SEK 9m
(48) related to financial instruments for hedging.
ELECTROLUX ANNUAL REPORT 2021
Notes 53
All amounts in SEKm unless otherwise stated
Note 12 Property, plant and equipment, owned
Property, plant, and equipment are stated at historical cost less straight-line
accumulated depreciation, adjusted for any impairment charges. Land is
not depreciated as it is considered to have an unlimited useful life. All other
depreciation is calculated using the straight-line method and is based on
the following estimated useful lives:
• Land
• Land improvements
• Buildings
• Machinery and technical installations
• Other equipment
No depreciation
0–15 years
10–40 years
3–15 years
3–10 years
Group
Acquisition costs
Opening balance, January 1, 2020
Acquired during the year
Acquisition of operations
Transfers and reclassifications
Sales, scrapping, etc.
Exchange-rate differences
Closing balance, December 31, 2020
Acquired during the year
Acquisition of operations
Transfers and reclassifications
Sales, scrapping, etc.
Exchange-rate differences
Closing balance, December 31, 2021
Accumulated depreciation
Opening balance, January 1, 2020
Depreciation for the year
Transfers and reclassifications
Sales, scrapping, etc.
Impairment
Exchange-rate differences
Closing balance, December 31, 2020
Depreciation for the year
Transfers and reclassifications
Sales, scrapping, etc.
Impairment
Exchange-rate differences
Closing balance, December 31, 2021
Net carrying amount, December 31, 2020
Net carrying amount, December 31, 2021
Land and land
improvements
Buildings
Machinery
and technical
installations
Other
equipment
Plants under
construction
and advances
Total
1,506
1
—
43
–71
–146
1,334
130
950
232
–10
64
2,700
307
27
0
–12
—
–37
284
29
70
–2
—
18
398
1,050
2,302
10,683
217
8
887
–102
–1,279
10,414
378
914
1,867
–158
516
13,931
5,504
360
82
–93
–2
–594
5,257
447
795
–147
—
262
6,614
5,158
7,317
41,774
963
0
1,999
–1,867
–4,894
37,974
1,236
1
269
–846
1,921
40,555
32,409
2,213
–69
–1,760
–51
–3,643
29,098
2,025
–934
–811
2
1,449
30,829
8,876
9,726
2,927
184
0
160
–213
–261
2,797
185
1
333
–118
84
3,282
2,336
287
–13
–200
—
–200
2,210
321
58
–109
—
65
2,545
587
737
5,847
2,959
—
–3,001
–7
–679
5,119
2,918
106
–2,712
–4
286
5,712
379
—
0
1
3
–45
338
—
1
0
—
34
374
4,781
5,339
62,737
4,325
9
88
–2,260
–7,259
57,639
4,847
1,972
–11
–1,137
2,871
66,181
40,935
2,886
—
–2,064
–50
–4,520
37,187
2,822
–10
–1,069
2
1,828
40,759
20,452
25,422
Total net impairment for the year was SEK —m (-2) on buildings and land, and SEK 2m (-51) on machinery and other equipment and SEK —m (3) on plants
under construction. The impairment in 2021 relates to business area Asia-Pacific, Middle East and Africa and 2020 mainly to business areas Europe, North
America and Latin America.
Parent Company
Acquisition costs
Opening balance, January 1, 2020
Acquired during the year
Transfer of work in progress and advances
Sales, scrapping, etc.
Exchange-rate differences
Closing balance, December 31, 2020
Acquired during the year
Transfer of work in progress and advances
Sales, scrapping, etc.
Exchange-rate differences
Closing balance, December 31, 2021
Accumulated depreciation
Opening balance, January 1, 2020
Depreciation for the year
Sales, scrapping, etc.
Exchange-rate differences
Closing balance, December 31, 2020
Depreciation for the year
Sales, scrapping, etc.
Exchange-rate differences
Closing balance, December 31, 2021
Net carrying amount, December 31, 2020
Net carrying amount, December 31, 2021
ELECTROLUX ANNUAL REPORT 2021
Land and land
improvements
Buildings
Machinery
and technical
installations
Other
equipment
Plants under
construction
and advances
1
—
—
—
—
1
—
—
—
—
1
1
—
—
—
1
—
—
—
1
0
0
1
—
—
—
—
1
—
—
—
—
1
1
—
—
—
1
—
—
—
1
0
0
78
297
28
–187
–3
213
71
15
7
2
308
69
38
–5
–3
99
64
19
1
183
114
125
439
15
33
–4
–3
480
—
5
–31
1
455
345
30
—
–2
373
25
–31
1
368
107
87
38
48
–61
–2
–1
22
59
–20
—
—
61
0
—
—
—
0
—
—
—
0
22
61
Total
557
360
0
–193
–7
717
130
0
–24
3
826
416
68
–5
–5
474
89
–12
2
553
243
273
54 Notes
All amounts in SEKm unless otherwise stated
Note 13 Goodwill and other intangible assets
Goodwill
Goodwill is reported as an indefinite life intangible asset at cost less
accumulated impairment losses.
Product development
Electrolux capitalizes expenses for certain own development of new
products provided that the level of certainty of their future economic
benefits and useful life is high. The intangible asset is only recognized if the
product is sellable on existing markets and that resources exist to complete
the development. Only expenditures which are directly attributable to the
new product’s development are recognized. Capitalized development
costs are amortized over their useful lives, up to 5 years, using the straight-
line method.
Software
Acquired software licenses and development expenses are capitalized on
the basis of the costs incurred to acquire and bring to use the specific soft-
ware. These costs are amortized over useful lives, between 3 and 5 years,
using the straight-line method.
Trademarks
Trademarks are reported at historical cost less amortization and impair-
ment. The Electrolux trademark in North America, acquired in 2000, is
regarded as an indefinite life intangible asset and is not amortized in the
group accounts. One of the Group’s key strategies is to develop Electrolux
into the leading global brand within the Group’s product categories. This
acquisition gave Electrolux the right to use the Electrolux brand worldwide,
whereas it previously could be used only outside of North America. The total
carrying amount for the Electrolux brand is SEK 410m, included in the item
Other in the table on the next page. All other trademarks are amortized over
their useful lives, estimated to 5 to 10 years, using the straight-line method.
Customer relationships
Customer relationships are recognized at fair value in connection with
acquisitions. The values of these relationships are amortized over their esti-
mated useful lives, between 5 and 15 years, using the straight-line method.
Intangible assets with indefinite useful lives
Goodwill as at December 31, 2021, had a total carrying value of SEK 6,690m.
The allocation, for impairment-testing purposes, on cash-generating units
is shown in the table below.
All intangible assets with indefinite useful lives are tested for impairment
at least once every year. Single assets are tested more often in case there
are indications of impairment. The recoverable amounts of the cash-
generating units have been determined based on value in use calcula-
tions. The cash-generating units equal the business areas. Costs related
Goodwill, value of trademark and discount rate
to group services and global leverage activities are carried by the cash-
generating units and therefore included in the impairment testing of each
cash- generating unit. Common group costs that cannot be allocated on a
reasonable and consistent basis to any of the individual cash-generating
units are included in impairment testing in the total carrying amount of all
cash-generating units combined.
Value in use is calculated using the discounted cash flow model based
on by Group management approved forecasts for the coming four years.
The forecasts are built up from the estimate of the units within each business
area. The preparation of the forecast requires a number of key assumptions
such as volume, price, product mix, prices for raw material and compo-
nents, which will create a basis for future sales growth and gross margin.
These figures are set in relation to historic figures and external reports on
market development. The cash flow for the last year of the four-year period
is used as the base for the perpetuity calculation. The discount rates are
based on the pre-tax Electrolux Group WACC (Weighted Average Cost of
Capital) with adjustments for country specific risk premiums and inflation
rates for each individual country. The individual country discount rates
are used to calculate a weighted average discount rate for each cash-
generating unit.
The pre-tax discount rates used in 2021 were within a range of 9.6% (9.5)
to 14.8% (14.8). For the calculation of the in-perpetuity value, Gordon’s
growth model is used. According to Gordon’s model, the terminal value of a
growing cash flow is calculated as the starting cash flow divided by cost of
capital less the growth rate. Cost of capital less growth of 2% (2%) is within
the range of 7.6 to 12.8%.
Sensitivity analyses have been carried out based on a reduction of the
operating margin by 0.5 percentage points and by an increase in the cost
of capital by one percentage point respectively. None of the sensitivity
analyses led to a reduction of the recoverable amount below the carrying
amount for any of the cash-generating units, i.e. the hypothetical changes
in key assumptions would not lead to any impairment. The calculations
are based on management’s assessment of reasonably possible adverse
changes in operating margin and cost of capital, yet they are hypothetical
and should not be viewed as an indication that these factors are likely
to change. The sensitivity analyses should therefore be interpreted with
caution.
As from 2019, right-of-use assets are included in the carrying amount
of each cash-generating unit. Accordingly, lease payments, representing
lease liability amortization and interest expense, are not considered in
the forecasted cash flows. However, the forecasted cash flows have been
charged with a ‘replacement capital expenditure’ for right-of-use assets,
calculated based on an assumed normalized level of depreciation per
cash-generating unit and a calculated average remaining lease period of
contracts existing at December 31.
Europe
North America
Latin America
Asia-Pacific, Middle East and Africa
Total
2021
2020
Goodwill
Electrolux
trademark
Discount
rate, %
Goodwill
Electrolux
trademark
Discount
rate, %
499
1,610
909
3,672
6,690
—
410
—
—
410
9.6
10.1
14.8
11.1
434
1,458
978
3,499
6,369
—
410
—
—
410
9.5
9.7
14.8
11.3
ELECTROLUX ANNUAL REPORT 2021
Cont. Note 13
Goodwill and other intangible assets
Acquisition costs
Opening balance, January 1, 2020
Acquired during the year
Acquisition of operations
Internally developed
Reclassification
Fully amortized
Sales, scrapping etc.
Exchange-rate differences
Closing balance, December 31, 2020
Acquired during the year
Acquisition of operations
Internally developed
Reclassification
Fully amortized
Sales, scrapping etc.
Exchange-rate differences
Closing balance, December 31, 2021
Accumulated amortization
Opening balance, January 1, 2020
Amortization for the year
Reclassification
Fully amortized
Impairment
Sales, scrapping etc.
Exchange-rate differences
Closing balance, December 31, 2020
Amortization for the year
Reclassification
Fully amortized
Impairment
Sales, scrapping etc.
Exchange-rate differences
Closing balance, December 31, 2021
Carrying amount, December 31, 2020
Carrying amount, December 31, 2021
Notes 55
All amounts in SEKm unless otherwise stated
Group
Other intangible assets
Parent
Company
Product
develop-
ment
Goodwill
Software
Other
Total other
intangible
assets
Trademarks,
software, etc.
7,071
4,096
3,475
2,352
9,923
3,746
—
13
—
—
—
—
–715
6,369
—
57
—
—
—
—
264
6,690
0
—
—
—
—
—
—
0
—
—
—
—
—
—
0
6,369
6,690
—
—
563
–40
–1,719
–62
–395
2,443
—
—
578
–13
–114
–14
101
2,981
2,818
339
–6
–1,719
—
–58
–225
1,149
335
–7
–114
—
–6
28
1,385
1,294
1,596
177
—
272
–48
–743
–130
–255
2,748
261
5
332
7
–80
–43
105
1
—
—
—
–7
—
–179
2,167
25
1
—
17
—
—
6
3,335
2,216
2,012
319
6
–743
–1
–61
–123
1,409
329
—
–80
—
–24
54
1,688
1,339
1,647
1,276
167
—
–7
—
—
–116
1,320
127
17
—
—
—
–5
1,459
847
757
178
—
835
–88
–2,469
–192
–829
7,358
286
6
910
11
–194
–57
212
8,532
6,106
825
0
–2,469
–1
–119
–464
3,878
791
10
–194
—
–30
77
4,532
3,480
4,000
—
—
575
—
–604
–194
–51
3,472
—
—
730
—
—
–39
28
4,191
1,974
333
—
–604
—
–41
–24
1,638
348
—
—
—
–9
13
1,990
1,834
2,201
Included in the item Other are trademarks of SEK 584m (610) and customer relationships etc. amounting to SEK 173m (237). Amortization of intangible assets
is included within Cost of goods sold with SEK 337m (330), Administrative expenses with SEK 255m (272) and Selling expenses with SEK 199m (223) in the
income statement.
Note 14 Other non-current assets
Shares in subsidiaries
Participations in other companies
Long-term receivables in
subsidiaries
Other receivables
Total
Group
December 31
Parent Company
December 31
2021
2020
2021
2020
—
—
—
634
634
—
—
—
878
878
34,056 29,401
59
256
2,986
1,367
43
28
37,144 31,052
For Group, ‘Other receivables’ include mainly recoverable import duties
and long-term operational tax credits.
See Note 29 for information on the major subsidiaries held by the
Parent Company. A detailed specification of the Parent Company’s shares
in subsidiaries has been submitted to the Swedish Companies Registration
Office and is available upon request from AB Electrolux Investor relations.
ELECTROLUX ANNUAL REPORT 2021
56 Notes
All amounts in SEKm unless otherwise stated
Note 15 Inventories
Raw materials
Products in progress
Finished products
Advances to suppliers
Total
Group
December 31
Parent Company
December 31
2021
2020
2021
2020
5,139
2,894
264
299
—
—
—
—
15,029
9,994
3,376
2,502
46
26
—
—
20,478 13,213
3,376
2,502
Inventories and work in progress are valued at the lower of cost, at normal
capacity utilization, and net realizable value. Net realizable value is defined
as the estimated selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs necessary to make
the sale at market value. The cost of finished goods and work in progress
comprises development costs, raw materials, direct labor, tooling costs,
other direct costs and related production overheads. The cost of invento-
ries is assigned by using the weighted average cost formula. Provisions for
obsolescence are included in the value for inventory.
The cost of inventories recognized as expense and included in Cost
of goods sold amounted to SEK 79,169m (79,156) for the Group and SEK
36,717m (34,106) for the Parent Company.
which considers forward looking analysis, including macroeconomic fac-
tors impacting the different customer segments and more specific forward-
looking factors such as signs of bankruptcy, officially known insolvency
etc. Electrolux uses credit insurance as a mean of protection. The Group’s
internal guidelines to the companies is to at least reserve 0.11 % for cur-
rent trade receivables and for receivables maximum 15 days past due. For
trade receivables past due between 16 to 60 days Electrolux reserves 1%
and increase to 5% for receivables past due between 61 to 90 days. For
trade receivables past due between 91 to 180 days Electrolux reserves 20%.
Trade receivables that are 6 months past due but less than 12 months is
reserved at 40% and receivables that are 12 months past due and more
are reserved at 100%. The percentages for ECL are under continuous reas-
sessment. There is no significant impact on provisions from changes in the
forward looking factors.
If trade receivables past due between 16 and 60 days had been 10%
higher/lower as of December 2021, the loss allowance on trade receivables
would have increased/decreased SEK 0.7m (2.3). If trade receivables past due
between 61 and 180 days had been 10% higher/lower as of December 2021,
the loss allowance on trade receivables would have increased/decreased SEK
7.7m (4.1).
Provision for accounts receivable
Write-downs due to obsolescence amounted to SEK 215m (60) for the
Provision, January 1
Group and SEK 22m (0) for the Parent Company.
Reversals of previous write-downs, due to inventories either scrapped
or sold, amounted to SEK 53m (161) for the Group and SEK 0m (47) for the
Parent Company.
The amounts have been included in the item Cost of goods sold in the
income statements.
Acquisition of operations
New/released provisions
Receivables written off against
provision
Exchange-rate differences and
other changes
Provision, December 31
Group
Parent Company
2021
–698
0
2020
–882
0
–168
–341
430
426
–30
–466
99
–698
2021
–17
2020
–22
—
8
—
—
–9
—
4
1
—
–17
Note 16 Other current assets
VAT receivable
Other tax recoverable
Miscellaneous short-term receivables
Provisions for doubtful accounts
Prepaid expenses and accrued income
Prepaid interest expenses and accrued
interest income
Total
Group
December 31
2021
1,057
204
2020
950
198
2,041
1,776
–85
1,411
–85
989
4
18
4,632
3,846
New /released provisions of SEK -168m (-341) are mainly due to increased
provisions in North America for higher credit risk on a limited number of
buyers mainly in the US. The fair value of trade receivables equals their car-
rying amount as the impact of discounting is not significant. Electrolux has a
credit exposure on a number of major customers, primarily in the U.S., Latin
America and Europe. Receivables concentrated to customers with credit
limits amounting to SEK 300m or more represent 39.2% (40.7) of the total
trade receivables. The creation and usage of provisions for impaired receiv-
ables have been included in selling expenses in the income statement.
There has been no significant impact from the Covid pandemic on the
credit risk and the expected credit loss.
Timing analysis of trade receivables past due
Trade receivables not past due
21,404 18,741
1,247
1,133
Group
Parent Company
2021
2020
2021
2020
Note 17 Trade receivables
Total trade receivables past due,
whereof:
1,706
1,203
Group
Parent Company
2021
2020
2021
2020
Past due 1 - 15 days
Past due 16 - 60 days
Past due 2 – 6 months
Past due 6 –12 months
Trade receivables
23,576 20,642
1,265
1,171
Provision for expected credit losses
–466
–698
–9
–17
Past due more than 1 year
Provision on expected credit loss
Trade receivables, net
23,110 19,944
1,256
1,154
Total trade receivables
23,576 20,642
1,265
1,171
Provisions in relation to trade
receivables, %
2.0
3.4
0.7
1.5
Past due, in relation to trade
receivables, %
9.2
9.2
1.4
3.2
Trade receivables are recognized initially at fair value and subsequently
measured at amortized cost using the effective interest method, less pro-
vision for expected credit losses (ECL). The Group applies the simplified
approach for trade receivables and uses a matrix to estimate the expected
credit losses. The change in amount of the provision is recognized in the
income statement within selling expenses. The expected loss calculation is
based on historical data and is adjusted through a management overlay
ELECTROLUX ANNUAL REPORT 2021
425
519
462
288
12
466
491
253
265
194
0
698
9
9
0
0
0
0
9
21
21
0
0
0
0
17
Notes 57
All amounts in SEKm unless otherwise stated
means that the provision for bad debts will equal the lifetime expected loss.
To measure the expected credit losses, trade receivables are grouped into
six categories based on shared credit risk characteristics and days past due.
If the provision is considered insufficient due to individual considerations,
the provision is extended to cover the extra anticipated losses.
Derecognition
Financial assets, or a portion thereof, are derecognized when the contrac-
tual rights to receive the cash flows from the assets have expired, or when
they have been transferred and either (i) the Group transfers substantially
all the risks and rewards of ownership, or (ii) the Group neither transfers nor
retains substantially all the risks and rewards of ownership and the Group
has not retained control of the asset.
Financial liabilities
Classification and subsequent measurement
All of the Groups financial liabilities, excluding derivatives, are
classified as subsequently measured at amortized cost.
Derecognition
Financial liabilities are derecognized when they are extinguished, i.e. when
the obligation specified in the contract is discharged, cancelled or expires.
Derivatives and hedging activities
Derivatives are initially recognized at fair value on the date on which the
derivative contract is entered into and are subsequently re-measured at
fair value. All derivatives are carried as assets when fair value is positive
and as liabilities when fair value is negative. Fair value gain or loss related
to derivatives not designated or not qualifying as hedging instruments is
recognized in profit or loss.
The Group applies the hedge accounting requirements of IFRS 9. For
derivatives designated and qualifying as hedging instruments, the method
of recognizing the fair value gain or loss depends on the nature of the item
being hedged. Derivatives are designated as either:
• Hedges of the fair value of recognized assets or liabilities or firm
commitments (fair value hedges);
• Hedges of highly probable future cash flows attributable to a
recognized asset or liability (cash flow hedges); or
• Hedges of a net investment in a foreign operation (net investment
hedges).
The Group documents, at the inception of the hedge, the relationship
between hedged items and hedging instruments, as well as its risk manage-
ment objective and strategy for undertaking various hedge transactions.
The Group also documents its assessment, both at the hedge inception and
on an ongoing basis, of whether the derivatives that are used in hedging
transactions are highly effective in offsetting changes in fair values or cash
flows of hedged items based on the following hedge effectiveness require-
ments:
• There is an economic relationship between the hedged item and the
hedging instrument;
• The effect of credit risk does not dominate the value changes that result
from that economic relationship; and
• The hedge ratio of the hedging relationship is the same as that resulting
from the quantity of the hedged item that the Group actually hedges and
the quantity of the hedging instrument that the Group actually uses to
hedge that quantity of hedged item.
Fair value hedge
Changes in the fair value of derivatives that are designated and qualify as
fair value hedges are recorded in the statement of comprehensive income,
together with changes in the fair value of the hedged asset or liability that
are attributable to the hedged risk.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are
designated and qualify as cash flow hedges is recognized in equity via
other comprehensive income. The gain or loss relating to the ineffective
portion is recognized immediately in the statement of comprehensive
income. Amounts accumulated in equity are recycled to the statement
of profit or loss in the periods when the hedged item affects profit or loss.
They are recorded in the income or expense lines in which the revenue or
expense associated with the related hedged item is reported.
Note 18 Financial instruments
Additional and complementary information is presented in the following
notes to the Annual Report: Note 2, Financial risk management, describes the
Group’s risk policies in general and regarding the principal financial instru-
ments of Electrolux in more detail. Note 17, Trade receivables, de scribes the
trade receivables and related credit risks.
The information in this note highlights and describes the principal financial
instruments of the Group regarding specific major terms and conditions when
applicable, the exposure to risk and the fair values at year end.
Financial instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognized when the entity
becomes party to the contractual provisions of the instrument. Regular way
purchases and sales of financial assets are recognized on trade date, the
date on which the Group commits to purchase or sell the asset.
At initial recognition, the Group measures a financial asset or financial
liability at its fair value plus or minus, in the case of a financial asset or
financial liability not at fair value through profit or loss, transaction costs
that are incremental and directly attributable to the acquisition or issue of
the financial asset or financial liability, such as fees and commissions. Trans-
action costs of financial assets and financial liabilities carried at fair value
through profit or loss are expensed in profit or loss.
Financial assets
Classification and subsequent measurement
The Group classifies its financial assets in the following measurement
categories:
• Fair value through profit or loss (FVPL);
• Fair value through other comprehensive income (FVOCI); or
• Amortized cost.
The classification requirements for debt and equity instruments are
described below.
Debt instruments are those instruments that meet the definition of a financial
liability from the issuer’s perspective, such as trade receivables, loan
receivables as well as government bonds.
The Group classifies its debt instruments into one of the following two
measurement categories:
Amortized cost: Assets that are held for collection of contractual cash
flows where those cash flows represent solely payments of principal and
interest (SPPI), and are not designated as FVPL, are measured at amor-
tized cost. The carrying amount of these assets is adjusted by any expected
credit loss allowance recognized (see impairment below). Interest income
from these financial assets is included in the financial net using the effective
interest rate method.
Fair value through profit or loss (FVPL): Assets that do not meet the criteria
for amortized cost are measured at fair value through profit and loss. A gain
or loss on a financial debt investment that is subsequently measured at
fair value through profit or loss and is not part of a hedging relationship
is recognized in the financial net in the period in which it arises. Interest
income from these financial assets is included in the financial net using the
effective interest rate method. Trade receivables sold on non-recourse
terms are categorized as ‘Hold to Sell’ with gain or loss reported in operat-
ing income.
The Group reclassifies debt investments when and only when its business
model for managing those assets changes.
Equity instruments are instruments that meet the definition of equity from the
issuer’s perspective; that is, instruments that do not contain a contractual
obligation to pay and that evidence a residual interest in the issuer’s net
assets. Gains and losses on equity investments at FVPL are included in the
financial net in the statement of comprehensive income. The Group does
not have any material investments in equity instruments.
Impairment and expected credit loss
The Group assesses on a forward-looking basis the expected credit losses
(ECL) associated with its debt instrument assets not carried at fair value. The
Group recognizes a provision for such losses at each reporting date. The
measurement of ECL reflects an unbiased and probability-weighted amount
based on reasonable and supportable information available such as past
events, current condition and forecasts of future economic conditions.
For trade receivables, the group applies the ‘simplified approach’, which
ELECTROLUX ANNUAL REPORT 2021
58 Notes
All amounts in SEKm unless otherwise stated
Cont. Note 18
Net investment hedge
Hedges of net investments in foreign operations are accounted for similarly
to cash flow hedges. Any gain or loss on the hedging instrument relating to
the effective portion of the hedge is recognized directly in equity via other
comprehensive income; the gain or loss relating to the ineffective portion is
recognized immediately in the statement of comprehensive income. Gains
and losses accumulated in equity are included in the statement of compre-
hensive income when the foreign operation is disposed of as part of the
gain or loss on the disposal.
Liquidity profile
Cash and cash equivalents
Short-term investments
Financial derivative assets
Prepaid interest expenses and accrued
interest income
Net debt
At year-end 2021, the Group’s financial net debt position amounted to
SEK 4,645m (net cash position of 4,741). The table below presents how the
Group calculates net debt and what it consists of.
Liquid funds
% of annualized net sales1)
Net liquidity
Fixed interest term, days
December 31
2021
2020
10,923 20,196
165
144
172
81
4
18
11,236 20,467
24.4
40.6
5,560 18,864
9
0.3
17
0.5
Net debt
Short-term loans
Short-term part of long-term loans
Trade receivables with recourse
Short-term borrowings
Financial derivative liabilities
Accrued interest expenses and prepaid
interest income
Total short-term borrowings
Long-term borrowings
Total borrowings
Cash and cash equivalents
Short-term investments
Financial derivative assets
Prepaid interest expenses and accrued
interest income
Liquid funds
Financial net debt
Lease liabilities
Net provision for post-employment benefits
Net debt
Revolving credit facility1)
December 31
2021
1,288
4,187
87
2020
1,012
277
40
5,563
1,329
48
65
210
64
5,675
1,603
10,205
14,123
15,881
15,727
10,923
20,196
165
144
4
172
81
18
11,236
20,467
4,645
3,055
891
8,591
–4,741
2,618
3,679
1,556
20,244
23,057
1) For details on the Group’s committed revolving credit facilities, see below under “Liquid funds”.
The facilities are not included in net borrowings, but can be used for short-term and long-term
funding.
Liquid funds
Liquid funds as defined by the Group consist of cash and cash equivalents,
short-term investments, financial derivative assets and prepaid interest
expenses and accrued interest income. Cash and cash equivalents consist
of cash on hand, bank deposits and other short-term highly liquid invest-
ments with a maturity of 3 months or less.
The table to the right presents the key data of liquid funds. The carrying
amount of liquid funds is approximately equal to fair value.
Changes in liabilities arising from financing
Effective yield, % (average per annum)
1) Liquid funds in relation to net sales, page 84 for definition.
For 2021, liquid funds, including unused committed revolving credit facilities
amounted to 24.4.% (40.6) of annualized net sales, well above the Financial
Policy target of 2.5%. Net liquidity is calculated by deducting short-term
borrowings from liquid funds. Unused committed revolving credit facilities
as per December 31, 2021 consists of multi-currency sustainability linked
facility of EUR 1,000m (1,000), maturing 2026 and SEK 10,000m (10,000),
maturing 2025. In January 2022, Electrolux voluntarily cancelled the SEK
10,000m revolving credit facility.
Interest-bearing liabilities
Borrowings are initially recognized at fair value net of transaction costs
incurred. After initial recognition, borrowings are valued at amortized cost
using the effective interest method.
In 2021, SEK 284m (4,555) of long-term borrowings matured or were
amortized. These maturities were partly refinanced to the amount of SEK 0m
(9,793). In December Electrolux borrowed USD 282m, 7-year at a fixed rate,
with start January 2022, utilizing the loan credit facility signed with the Euro-
pean Investment bank in November.
At year-end 2021, the Group’s total interest-bearing liabilities amounted
to SEK 15,681m (15,412), of which SEK 14,392m (14,400) referred to long-
term borrowings including maturities within 12 months. Long-term borrow-
ings with maturities within 12 months amounted to SEK 4,187m (277). The
outstanding long-term borrowings have mainly been made under the Euro
Medium-Term Note Program and via bilateral loans. The majority of total
long-term borrowings, SEK 14,297m (14,307), is raised at Parent Company
level. Electrolux also has unused committed revolving credit facilities of SEK
20,244m (23,057) (details stated above under “Liquid funds”). However,
Electrolux expects to meet any future requirements for short-term borrow-
ings through bilateral bank facilities and capital market programs such as
commercial paper programs.
At year-end 2021, the average interest-fixing period for long-term
borrowings was 1.2 years (1.6). The calculation of the average interest-
fixing period includes the effect of interest-rate swaps used to manage the
interest-rate risk of the debt portfolio. The average interest rate for the total
borrowings was 1.4% (1.4) at year-end.
The fair value of the interest-bearing borrowings was SEK 14,547m
(14,674). The fair value including swap transactions used to manage the
interest fixing was approximately SEK 14,554m (14,667).
Cash Flow
Non Cash flow
Opening
Balance
Amorti-
zation
New
debt
Net cash
change
Acqui-
sitions
Reclassi-
fications
Additions/
Cancel-
lations
Exchange
rate
differences
Discon-
tinued
operations
Closing
Balance
2021
Long-term borrowings (including
short-term part of long-term)
Short-term borrowings (excluding
short-term part of long-term)
Lease liabilities
Total
2020
14,400
-284
1,052
2,618
—
-880
18,070
-1,164
1
—
—
1
—
-445
—
-445
Long-term borrowings (including
short-term part of long-term)
Short-term borrowings (excluding
short-term part of long-term)
Lease liabilities
Total
9,682
–4,555
9,793
—
1,909
3,150
—
–911
—
—
14,740
–5,466
9,793
–567
—
–567
30
733
—
762
—
—
—
—
—
—
—
—
9
–9
—
—
—
—
1,154
1,154
—
—
656
656
245
36
163
444
–528
–282
–278
–1,085
—
—
—
—
—
—
—
—
14,392
1,375
3,055
18,823
14,400
1,052
2,618
18,069
ELECTROLUX ANNUAL REPORT 2021
Cont. Note 18
The table below sets out the carrying amount of the Group’s borrowings.
Notes 59
All amounts in SEKm unless otherwise stated
Borrowings
Issue/maturity date
Bond loans
2017–2024
2018–2023
2018–2023
2018–2025
2019–2024
2019–2022
2019–2024
2019–2024
2020–2022
2020–2022
2020–2023
2020–2023
2020–2025
2020–2027
Total bond loans4)
Other long-term loans5)
2017–20264)
Total other long-term loans
Long-term borrowings
Short-term part of long-term loans6)
2019–2022
2020–2022
2020–2022
2013–20214)
2017–20264)
Total short-term part of long-term loans
Other short-term loans
Total other short-term loans
Trade receivables with recourse
Short-term borrowings
Long-term and short-term borrowings
Fair value of financial derivative
liabilities
Accrued interest expenses and
prepaid interest income
Total borrowings
Description of loan
Interest rate, %
Currency
Carrying amount,
December 31
Nominal value
(in currency)
2021
2020
Euro MTN Program
Euro MTN Program
Euro MTN Program
Euro MTN Program
Euro MTN Program
Euro MTN Program
Euro MTN Program
Euro MTN Program
Euro MTN Program
Euro MTN Program
Euro MTN Program
Euro MTN Program
Euro MTN Program
Euro MTN Program
Floating1) 2)
1.125
Stibor 3M + 0.58
Fixed1)
1.103
Stibor 3M + 0.75
0.885
Stibor 3M + 0.75
Stibor 3M + 0.60
0.405
Stibor 3M + 1.85
1.995
Fixed1) 3)
Fixed1)
SEK
SEK
SEK
USD
SEK
SEK
SEK
SEK
SEK
SEK
SEK
SEK
NOK
USD
350
200
800
73
1,000
1,250
750
750
2,550
250
1,700
1,700
500
150
Amortizing bank loan Nordic
Investment Bank, long-term part
Other long-term loans
Floating
USD
75
350
350
200
200
803
802
598
660
1,000
1,000
1,256
—
750
750
755
754
2,564
—
250
—
1,700
1,700
1,700
1,700
480
503
1,356
1,228
9,774 13,634
365
66
431
425
64
489
10,205 14,123
Euro MTN Program
Stibor 3M + 0.75
Euro MTN Program
Stibor 3M + 0.60
Euro MTN Program
0.405
Amortizing bank loan Nordic
Investment Bank, short-term part
Amortizing bank loan Nordic
Investment Bank, short-term part
Other short-term part of
long-term loans
Floating
Floating
Short-term bank loans in Canada
Short-term bank loans in Egypt
Short-term bank loans in Brazil
Short-term bank loans in Thailand
Short-term bank loans in Chile
Other bank borrowings and
commercial papers
Floating
Floating
Floating
Floating
Floating
SEK
SEK
SEK
SEK
USD
CAD
EGP
BRL
THB
CLP
1,250
1,252
2,550
2,552
250
154
75
30
—
511
—
—
—
—
—
250
—
154
104
94
29
4,187
212
—
829
—
—
29
277
—
20
513
82
153
247
1,288
87
5,563
244
1,012
40
1,329
15,768 15,452
48
65
210
64
15,881 15,727
1) Private placement
2) The interest-rate fixing profile of nominal amount SEK 100m has been adjusted with an interest-rate swap, where floating rate is swapped for fixed interest rate.
The Group applies hedge accounting of cash flows on the relation, and the net effect on the income statement from this hedge for 2021 was SEK -2m (1).
3) The interest-rate fixing profile of the loan has been adjusted with an interest-rate swap, where fixed interest rate is swapped for floating interest rate.
The Group applies hedge accounting of fair value on the relation, and the net effect on the income statement from this hedge for 2021 was SEK 13m (3).
4) Loans raised on Parent Company level amount to a total of SEK 14,297m (14,307).
5) In November Electrolux signed a EUR 250m loan credit facility with the European Investment Bank. In December the facility was fully utilized and Electrolux
borrowed USD 282m, 7-year at a fixed rate with start January 2022.
6) Long-term borrowings with maturities within 12 months are classified as short-term borrowings in the Group’s balance sheet.
ELECTROLUX ANNUAL REPORT 2021
60 Notes
All amounts in SEKm unless otherwise stated
Cont. Note 18
Other short-term loans pertain mainly to countries with capital restrictions. The average maturity of the Group’s long-term borrowings including long-
term borrowings with maturities within 12 months was 1.9 years (2.8 ), at the end of 2021. The table below presents the repayment schedule of long-term
borrowings.
Repayment schedule of long-term borrowings, December 31
Debenture and bond loans
Bank and other loans
Short-term part of long-term loans
Total
2022
—
—
4,187
4,187
2023
4,402
170
—
4,572
2024
2,854
104
—
2,958
2025
1,163
104
—
1,267
2026
—
53
—
53
2027—
1,356
—
—
Total
9,774
431
4,187
1,356
14,392
Commercial flows
The table below shows the forecasted transaction flows, imports and exports, for the 12-month period of 2022 and hedges at year-end 2021.
The hedged amounts are dependent on the hedging policy for each flow considering the existing risk exposure. The effect of hedging on operating
income during 2021 amounted to SEK –108m (–57). At year-end 2021, the unrealized fair value of forward contracts for hedging of forecasted transaction
flows amounted to SEK -37m (33). Nominal amount of forecasted transacion flows hedged as per December 31, 2021, was SEK 818m (1,368). The hedge
accounting relations have an average maturity period of 7 months (6).
Forecasted transaction flows and hedges
Inflow of currency, long position
Outflow of currency, short position
Gross transaction flow
Hedges
Net transaction flow
AUD
3,304
–197
3,107
–571
2,537
BRL
3,577
–569
3,008
–837
2,170
CAD
3,004
0
3,004
CHF
2,605
–260
2,345
CLP
1,303
CNY
240
EUR
GBP
THB
USD
Other
Total
2,737
3,872
2,713
5,847
13,950
43,152
–71
–2,607
–8,977
–882
–5,075 –17,818
–6,698 –43,152
1,231
–2,366
–6,240
2,990
–2,362 –11,971
–356
–1,078
–275
431
547
–222
–4
2,891
2,648
1,268
956
–1,935
–5,693
2,769
–2,366
–9,080
7,252
–526
6,726
0
0
0
Maturity profile of financial liabilities and derivatives
The table below presents the undiscounted cash flows of the Group’s contractual liabilities related to financial instruments based on the remaining period at
the balance sheet date to the contractual maturity date. Floating interest cash flows with future fixing dates are estimated using the forward-forward interest
rates at year-end. Any cash flow in foreign currency is converted to Swedish krona using the FX spot rates at year-end. The short-term liabilities from account
payables are matched by positive cash flow from trade receivables. The loan maturities can be offset by the available liquidity and/or a combination by
new issued bonds, commercial papers or bank loans. On top of the other sources, Electrolux has unused committed revolving credit facilities of SEK 20,244m
(23,057), see details stated above under ‘Liquid funds’.
Maturity profile of financial liabilities and derivatives – undiscounted cash flows
≤ 0.5
year
> 0.5 year
< 1 year
> 1 year
< 2 years
> 2 years
< 5 years
> 5 years
Total
Loans
Net settled derivatives
Lease liabilities
Gross settled derivatives
whereof outflow
whereof inflow
Accounts payable
Financial guarantees
Total
–5,540
7
–449
75
–26,483
26,558
–38,182
–1,108
–45,196
–114
–8
–419
–1
–566
566
—
—
–4,732
–4,401
–1,422
–16,209
–5
–681
–1
–1,093
—
–628
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
–6
–3,270
74
–27,049
27,124
–38,182
–1,108
–58,701
–542
–5,418
–5,495
–2,050
Net gain/loss, fair value and carrying amount on financial instruments
The tables below and overleaf present net gain/loss on financial instruments, the effect in the income statement and equity, and the fair value and carrying
amount of financial assets and liabilities. Net gain/loss can include both exchange-rate differences and gain/loss due to changes in interest-rate levels.
Net gain/loss, income and expense on financial instruments
Recognized in operating income
Financial assets and liabilities at fair value through
profit and loss
Financial assets and liabilities at amortized cost
Total net gain/loss, income and expense
Recognized in financial items
Financial assets and liabilities at fair value through
profit and loss
Financial assets at amortized cost
Other financial liabilities at amortized cost
Total net gain/loss, income and expense
2021
2020
Gain/loss
in profit
and loss
Gain/loss
in OCI
Interest
income
Interest
expense
Gain/loss
in profit
and loss
Gain/loss
in OCI
Interest
income
Interest
expense
35
–113
–78
–8
—
—
–8
–37
—
–37
–2
—
–5
–7
—
—
—
—
44
—
44
—
—
—
–76
—
–383
–459
9
–176
–167
–73
—
—
–73
33
—
33
—
—
–161
–161
—
—
—
—
74
—
74
—
—
—
–67
—
–470
–537
ELECTROLUX ANNUAL REPORT 2021
Cont. Note 18
Fair value and carrying amount on financial assets and liabilities
Financial assets
Financial assets at fair value through profit or loss
Whereof short-term investments
Whereof other financial assets
Financial assets at amortized cost
Whereof trade receivables
Whereof short-term investments
Whereof cash and cash equivalents
Derivatives
Whereof derivatives at fair value through profit or loss
Whereof derivatives in hedge relations
Total financial assets
Financial liabilities
Financial liabilities at amortized cost
Whereof long-term borrowings
Whereof short-term borrowings
Whereof accounts payable
Derivatives
Whereof derivatives at fair value through profit or loss
Whereof derivatives in hedge relations
Total financial liabilities
Notes 61
All amounts in SEKm unless otherwise stated
2021
2020
Fair value
hierarchy
level
Fair value
Carrying
amount
Fair value
Carrying
amount
1
3
2
2
2
2
227
162
65
34,036
23,110
3
227
162
65
34,036
23,110
3
225
160
65
40,152
19,944
12
225
160
65
40,152
19,944
12
10,923
10,923
20,196
20,196
204
204
—
204
204
—
135
89
46
135
89
46
34,467
34,467
40,512
40,512
54,207
10,455
5,570
38,182
75
68
7
53,950
10,205
5,563
38,182
75
68
7
47,123
14,484
1,333
31,306
332
329
3
46,758
14,123
1,329
31,306
332
329
3
54,282
54,025
47,455
47,090
Fair value estimation
Valuation of financial instruments at fair value is done at the most accurate
market prices available. Instruments which are quoted on the market, e.g.
the major bond and interest-rate future markets, are all marked-to-market
with the current price. The foreign-exchange spot rate is used to convert the
value into Swedish krona. For instruments where no reliable price is avail-
able on the market, cash flows are discounted using the deposit/swap curve
of the cash flow currency. If no proper cash flow schedule is available, e.g.
as in the case with forward-rate agreements, the underlying schedule is
used for valuation purposes. To the extent option instruments are used, the
valuation is based on the Black & Scholes formula.
The carrying value less impairment provision of trade receivables and
payables are assumed to approximate their fair values. The fair value of
financial liabilities is estimated by discounting the future contractual cash
flows at the current market-interest rate that is available to the Group for
similar financial instruments. The Group’s financial assets and liabilities at fair
value are measured according to the following hierarchy:
Level 1: Fair value is based on quoted prices in active markets for identical
assets or liabilities.
Level 2: Fair Value is based on other than quoted prices included in level
1 that are observable for assets or liabilities either directly or indirectly such
as interest rate curves and FX rates.
Level 3: : Inputs for Fair Value Calculations of the assets or liabilities that
are not entirely based on observable market data.
Note 19 Assets pledged for liabilities to credit institutions
Pledged assets
Total
Group
December 31
Parent Company
December 31
2021
2020
2021
2020
—
—
—
—
—
—
—
—
ELECTROLUX ANNUAL REPORT 2021
62 Notes
All amounts in SEKm unless otherwise stated
Note 20 Share capital, number of shares and earnings per share
The equity attributable to equity holders of the Parent Company consists of
the following items:
Other paid-in capital
Other paid-in capital relates to payments made by owners and includes
share premiums paid.
Share capital
As per December 31, 2021 the share capital of AB Electrolux consisted of
8,192,498 Class A shares and 300,727,810 Class B shares with a quota value
of SEK 5 per share. All shares are fully paid. One A share entitles the holder to
one vote and one B share to one-tenth of a vote. All shares entitle the holder
to the same proportion of assets and earnings, and carry equal rights in
terms of dividends.
Share capital
Share capital, December 31, 2020
8,192,539 Class A shares, quota value SEK 5
300,727,769 Class B shares, quota value SEK 5
Total
Share capital, December 31, 2021
8,192,498 Class A shares, quota value SEK 5
300,727,810 Class B shares, quota value SEK 5
Total
41
1,504
1,545
41
1,504
1,545
Number of shares
Shares, December 31, 2020
Class A shares
Class B shares
Total
—
8,192,539
8,192,539
21,522,858 279,204,911 300,727,769
21,522,858 287,397,450 308,920,308
Conversion of Class A shares into Class B shares
Class A shares
Class B shares
Split 2:1
Class A shares
Class B shares
Redemption of shares
Class A shares
Class B shares
Repurchase of shares
Class A shares
Class B shares
Shares, December 31, 2021
Class A shares
Class B shares
Total
—
—
–41
41
–41
41
–
8,192,498
8,192,498
21,522,858 279,204,952 300,727,810
—
–8,192,498
–8,192,498
–21,522,858 –279,204,952 –300,727,810
—
—
4,320,057
–4,320,057
—
—
—
8,192,498
8,192,498
25,842,915 274,884,895 300,727,810
25,842,915 283,077,393 308,920,308
Owned by
Electrolux
Owned
by other
shareholders
Earnings per share, SEK
Total
Basic, continuing operations
Basic, discontinued operations
Other reserves
Other reserves include the following items: cashflow hedges which refer
to changes in valuation of currency contracts used for hedging future for-
eign currency transactions; and exchange-rate differences on translation
of foreign operations which refer to changes in exchange rates when net
investments in foreign subsidiaries are translated to SEK. The amount of
exchange-rate changes includes the value of hedging contracts for net
investments. Finally, other reserves include tax relating to the mentioned
items.
Retained earnings
Retained earnings, including income for the period, include the income of
the Parent Company and its share of income in subsidiaries and associated
companies. Retained earnings also include remeasurement of provision for
post-employment benefits, reversal of the cost for share-based payments
recognized in income, income from sales of own shares and the amount
recognized for the common dividend.
Earnings per share
Income for the period attributable to
equity holders of the Parent Company
Basic, total Group
Diluted, continuing operations
Diluted, discontinued operations
Diluted, total Group
Average number of shares, million
Basic
Diluted
2021
2020
4,678
6,584
16.31
13.88
—
16.31
16.21
—
9.03
22.91
13.86
9.02
16.21
22.88
286.9
288.5
287.4
287.7
Basic earnings per share is calculated by dividing the income for the period
attributable to the equity holders of the Parent Company with the average
number of shares. The average number of shares is the weighted average
number of shares outstanding during the year, after repurchase of own
shares. Diluted earnings per share is calculated by adjusting the weighted
average number of ordinary shares outstanding with the estimated num-
ber of shares from the share programs. Share programs are included in the
dilutive potential ordinary shares as from the start of each program. The
dilution in the Group is a consequence of the Electrolux long-term incentive
programs.
The average number of shares during the year has been 286,852,239
(287,397,450) and the average number of diluted shares has been
288,472,807 (287,719,454 ).
ELECTROLUX ANNUAL REPORT 2021
Notes 63
All amounts in SEKm unless otherwise stated
December 31, 2021
Appropriations
December 31, 2020
396
0
161
0
29
586
17
0
17
0
5
39
–19
20
379
0
144
0
24
547
USA
The number of pension plans in the U.S. has been significantly reduced over
the years through plan consolidation. The defined benefit plans are closed
for future accruals and employees are offered defined contribution plans.
Pensions in payment are not generally subject to indexation.
United Kingdom
The defined benefit plan is closed for future accruals and employees are
offered defined contribution. The funding position is reassessed every three
years and a schedule of contributions is agreed between the Trustee and
the company, if so required. The Trustee decides the investment strategy
and consults with the company. Benefits are paid from the plan assets.
Sweden
The main defined benefit plan in Sweden is the collectively agreed pen-
sion plan for white collar employees, the ITP 2 plan. Benefits in payment
are indexed according to the decisions of the Alecta insurance company,
typically those follow inflation. The plan is semi-closed, meaning that only
new employees born before 1979 are covered by the ITP 2. A defined con-
tribution solution (ITP 1) is offered to employees born after 1978. Electrolux
has chosen to fund the pension obligation (ITP 2) by a pension foundation.
Germany
There are several defined benefit plans based on final salary in Germany.
Benefits in payment are indexed every three years according to inflation
levels. All plans are closed for new participants. Electrolux has arranged
a Contractual Trust Arrangement (CTA) and the funds are held by a local
bank who acts as the trustee for the scheme. The assets are managed by
a fund management company, Electrolux performs an oversight on the
strategy via an investment committee with members both from Group staff
functions and the local German company. No minimum funding require-
ments or regular funding obligations apply to CTAs. If there is a surplus
under both German GAAP and IFRS rules, Electrolux can take a refund up to
the German GAAP surplus. Benefits are paid directly by the company and
Electrolux can refund itself for pension pay-outs. Over time, Electrolux will
have access to any residual funds after the last beneficiary has left the plan.
Switzerland
In Switzerland benefits are career average in nature, with indexation
of benefits following decisions of the foundation board, subject to legal
minima. Contributions are paid to the pension foundation and a recovery
plan has to be set up if the plans are underfunded on the local funding
basis. Swiss laws do not state any specific way of calculating an employer‘s
additional contribution and because of that there is normally no minimum
funding requirement. Benefits are paid from the plan assets.
Other countries
There is a variety of smaller plans in other countries and the most important
of those are in France, Italy and Canada. The pension plans in France and
Italy are mainly unfunded. In Canada there are both funded and unfunded
pension plans. A mix of final salary and career average exists in these coun-
tries. Some plans are open for new entrants.
Note 21 Untaxed reserves, Parent Company
Accumulated depreciation in excess of plan
Brands
Licenses
Machinery and equipment
Buildings
Other
Total
Group contributions
Total appropriations
Note 22 Post-employment benefits
Post-employment benefits
The Group sponsors pension plans in many of the countries in which it has
significant activities. Pension plans can be defined contribution or defined
benefit plans or a combination of both. Under defined benefit pension
plans, the company enters into a commitment to provide post-employment
benefits based upon one or several parameters for which the outcome is
not known at present. For example, benefits can be based on final salary, on
career average salary, or on a fixed amount of money per year of employ-
ment. Under defined contribution plans, the company’s commitment is to
make periodic payments to independent authorities or investment plans,
and the level of benefits depends on the actual return on those invest-
ments. Some plans combine the promise to make periodic payments with
a promise of a guaranteed minimum return on the investments. These plans
are also defined benefit plans.
In some countries, Electrolux makes provisions for compulsory severance
payments. These provisions cover the Group’s commitment to pay employees
a lump sum upon reaching retirement age, or upon the employees’ dismissal
or resignation.
In addition to providing pension benefits and compulsory severance
payments, the Group provides healthcare benefits for some of its employees
in certain countries, predominantly so in the U.S.
The cost for pension is disaggregated into three components; service
cost, financing cost or income and remeasurement effects. Service cost
is reported within Operating income and classified as Cost of goods sold,
Selling expenses or Administrative expenses depending on the function
of the employee. Financing cost or income is recognized in the Financial
items and the remeasurement effects in Other comprehensive income. The
Projected Unit Credit Method is used to measure the present value of the
obligations and costs.
Net provisions for post-employment benefits in the balance sheet repre-
sent the present value of the Group’s obligations less market value of plan
assets. The remeasurements of the obligations are made using actuarial
assumptions determined at the balance sheet date. Changes in the present
value of the obligations due to revised actuarial assumptions and experi-
ence adjustments on the obligation are recorded in Other comprehensive
income as remeasurements. The actual return less calculated interest
income on plan assets is also recorded in other comprehensive income as
remeasurements. Past-service costs are recognized immediately in income
for the period.
Some features of the defined benefit plans in the main countries are
described below.
ELECTROLUX ANNUAL REPORT 2021
64 Notes
All amounts in SEKm unless otherwise stated
Cont. Note 22
Explanation of amounts in the financial statements relating to defined benefit obligations.
Information by country December 31, 2021
Amounts included in the balance sheet
Present value of funded and unfunded obligations
7,442
1,783
7,941
2,876
4,088
2,683
798
27,611
Fair value of plan assets (after change in asset ceiling)
–8,316
–1,776
–7,929
–2,464
–3,065
–2,979
–191
–26,720
USA
Medical
USA
UK
Sweden Germany
Switzer–
land
Other
Total
Total (surplus)/deficit
Whereof reported as:
Pension plan assets
Provisions for post-employment benefit plans
Total funding level for all pension plans, %
Average duration of the obligation, years
Amounts included in total comprehensive income
Service cost
Net interest cost
Remeasurements (gain)/loss
Total expense (gain) for defined benefit plans
Expenses for defined contribution plans
Amounts included in the cash flow statement
Contributions by the employer
Reimbursement
Benefits paid by the employer
Major assumptions for the valuation of the liability
Longevity, years1)
Male
Female
Inflation, %2)
Discount rate, %
Information by country December 31, 2020
Amounts included in the balance sheet
–874
—
—
112
10.3
—
–16
–79
–95
—
—
48
20.7
22.6
3.00
2.60
7
—
—
100
9.2
—
—
12
12
23
—
—
20.7
22.3
—
2.60
12
412
1,023
–296
607
891
—
—
100
15.2
—
3
—
—
86
22.2
159
19
–196
–193
–1,889
–1,712
—
—
—
20.8
23.6
3.50
1.60
—
–86
109
22.7
24.8
1.75
1.60
—
—
75
14.3
23
9
–241
–209
—
—
172
20.4
23.8
2.00
0.90
—
—
111
12.8
37
—
–355
–318
33
—
—
21.8
24.8
1.00
0.10
—
—
24
—
3
2
2
7
1
—
26
—
—
—
—
1,732
2,623
97
14.0
222
17
–2,746
–2,507
678
57
–86
355
21.2
23.6
2.62
1.67
USA
Medical
USA
UK
Sweden Germany
Switzer–
land
Other
Total
Present value of funded and unfunded obligations
7,635
1,837
7,165
4,644
4,136
2,674
783
28,874
Fair value of plan assets (after change in asset ceiling)
–8,316
–1,828
–6,978
–2,523
–2,755
–2,611
–184
–25,195
Total (surplus)/deficit
Whereof reported as:
Pension plan assets
Provisions for post-employment benefit plans
Total funding level for all pension plans, %
Average duration of the obligation, years
Amounts included in total comprehensive income
Service cost
Net interest cost
Remeasurements (gain)/loss
Total expense (gain) for defined benefit plans
Expenses for defined contribution plans
Amounts included in the cash flow statement
Contributions by the employer
Reimbursement
Benefits paid by the employer
Major assumptions for the valuation of the liability
Longevity, years1)
Male
Female
Inflation, %2)
Discount rate, %
–681
—
—
109
9.9
7
–1
–371
–365
—
—
29
20.7
22.6
3.00
2.30
9
—
—
100
9.8
—
5
–126
–121
27
—
—
20.7
22.3
—
2.30
187
2,121
1,381
—
—
97
—
—
54
—
—
67
63
—
—
98
15.5
18.7
14.6
13.2
15
1
167
183
30
—
—
20.8
23.6
3.00
1.50
182
21
135
338
—
–83
115
23.0
24.8
1.75
1.10
23
12
156
191
—
—
165
20.4
23.8
1.80
0.70
47
—
–131
–84
30
—
—
22.7
24.8
1.00
0.10
599
3,679
—
—
23
—
4
4
–19
–11
1
—
34
—
—
—
—
1,272
4,951
87
13.7
277
41
–189
129
600
88
–83
342
21.2
23.6
2.37
1.44
1) Expressed as the average life expectancy of a 65-year-old person in number of years.
2) General inflation impacting salary and pensions increase. For USA Medical, the number refers to the inflation of healthcare benefits.
ELECTROLUX ANNUAL REPORT 2021
Notes 65
All amounts in SEKm unless otherwise stated
Cont. Note 22
Reconciliation of change in present value of funded
and unfunded obligations
Opening balance, January 1
Current service cost
Special events
Interest expense
Remeasurement arising from changes
in financial assumptions
Remeasurement from changes in
demographic assumptions
Remeasurement from experience
Contributions by plan participants
Benefits paid
Exchange differences
Settlements and other
Closing balance, December 31
Reconciliation of change in the fair value of plan assets
Opening balance, January 1
Interest income1)
Return on plan assets, excluding amounts included in
interest1)
Effect of asset ceiling
Net contribution by employer
Contribution by plan participants
Benefits paid
Exchange differences
Settlements and other
Closing balance, December 31
1) The actual return on plan assets amounts to SEK 2,279m (2,009).
Risks
There are mainly three categories of risks related to defined benefit obli-
gations and pension plans. The first category relates to risks affecting the
actual pension payments. Increased longevity and inflation of salary and
pensions are risks that may increase the future pension payments and,
hence, increase the pension obligation. The second category relates to
investment return. Pension plan assets are invested in a variety of financial
instruments and are exposed to market fluctuations. Poor investment
return may reduce the value of investments and render them insufficient
to cover future pension payments. The third category relates to measure-
ment and affects the accounting for pensions. The discount rate used for
measuring the present value of the obligation may fluctuate which impacts
the valuation of the Defined Benefit Obligation (DBO). The discount rate
also impacts the size of the interest income and expense that is reported
in the Financial items and the service cost. When determining the discount
rate, the Group uses AA rated corporate bond indexes which match the
duration of the pension obligations. In Sweden, mortgage-backed bonds
are used for determining the discount rate. Expected inflation and mortality
assumptions are based on local conditions in each country and changes in
those assumptions may also affect the measured obligation and, therefore,
the accounting entries.
Investment strategy and risk management
The Group manages the allocation and investment of pension plan assets
with the aim of decreasing the total pension cost over time. This means that
certain risks are accepted in order to increase the return. The investment
horizon is long-term and the allocation ensures that the investment port-
folios are well diversified. In some countries, a so called trigger-points
scheme is in place, whereby the investment in fixed income assets increases
as the funding level improves. The Board of Electrolux annually approves the
limits for asset allocation. The final investment decision often resides with
the local trustee that consults with Electrolux. The risks related to pension
obligations, e.g., mortality exposure and inflation, are monitored on an
ongoing basis. Buy-out premiums are also monitored and other potential
liability management actions are also considered to limit the exposure to
the Group.
2021
2020
28,874 30,834
222
—
416
248
6
540
–507
1,485
–234
–417
35
–222
–112
35
–1,586 –1,676
1,867 –2,299
–1,059
34
27,611 28,874
2021
2020
25,194 26,938
399
499
1,880
1,510
–292
–170
–30
35
5
35
–1,232 –1,334
1,945 –2,312
–1,179
23
26,720 25,195
Below is the sensitivity analysis for the main financial assumptions and the potential impact on the present value of the defined pension obligation. Note that
the sensitivities are not meant to express any view by Electrolux on the probability of a change.
Sensitivity analysis on defined benefit obligation
Longevity +1 year
Inflation +0.5%1)
Discount rate +1%
Discount rate –1%
USA
260
—
–637
802
USA
Medical
UK
Sweden Germany
110
—
–152
177
365
348
–1,097
1,380
96
336
–547
733
285
283
–538
682
Switzer-
land
93
29
–320
428
Other
7
14
–58
69
Total
1,216
1,010
–3,385
4,271
1) The inflation change feeds through to other inflation-dependent assumptions, i.e., pension increases and salary growth.
In the coming year, the Group expects to pay a total of SEK 232m in contributions to the pension funds and as payments of benefits directly to the employees.
MARKET VALUE OF PLAN ASSETS BY CATEGORY
2021
2020
Fixed income, SEK 15,805m
Equity, SEK 5,219m
Hedge funds, SEK 2,598m
Real estate, SEK 1,876m
Infrastructure, SEK 518m
Private equity, SEK 179m
Cash, SEK 525m
Fixed income, SEK 12,558m
Equity, SEK 6,815m
Hedge funds, SEK 1,887m
Real estate, SEK 2,328m
Infrastructure, SEK 426m
Private equity, SEK 173m
Cash, SEK 1,008m
ELECTROLUX ANNUAL REPORT 2021
66 Notes
All amounts in SEKm unless otherwise stated
Cont. Note 22
Market value of plan assets without quoted prices
Fixed income
Real estate
Infrastructure
Private equity
December 31
2021
1,412
1,876
518
179
2020
1,052
2,328
426
173
Governance
Defined benefit pensions and pension plan assets are governed by the
Electrolux Pension Board, which resumes 3 to 4 times per year and has the
following responsibilities:
• Implementation of pension directives of the AB Electrolux Board of
Directors.
• Evaluation and approval of new plans, changes to plans or termination
of plans.
• Approval of the Group’s and local pension funds’ investment strategies.
• Approval of the Group’s global and local benchmarks for follow up of
pension plan assets.
• Approval of the election of company representatives in the Boards of
Trustees.
• Approval of the financial and actuarial assumptions to be used in the
measurement of the defined benefit obligations.
Parent Company
According to Swedish accounting principles adopted by the Parent
Company, defined benefit liabilities are calculated based upon officially
provided assumptions, which differ from the assumptions used in the Group
under IFRS. The pension benefits are secured by contributions to a sepa-
rate fund or recorded as a liability in the balance sheet. The accounting
principles used in the Parent Company’s separate financial statements
differ from the IFRS principles, mainly in the following:
• The pension liability calculated according to Swedish accounting
principles does not take into account future salary increases.
• The discount rate used in the Swedish calculations is set by the Swedish
Pension Foundation (PRI) and was for 2021 4,0% (4,0). The rate is the
same for all companies in Sweden.
• Changes in the discount rate and other actuarial assumptions are
recognized immediately in the profit or loss and the balance sheet.
• Deficit must be either immediately settled in cash or recognized as a
liability in the balance sheet.
• Surplus cannot be recognized as an asset, but may in some cases be
refunded to the company to offset pension costs.
Change in the present value of defined benefit pension obligation for
funded and unfunded obligations
Opening balance, January 1, 2020
1,759
437
2,196
Funded Unfunded
Total
Current service cost
Interest cost
Benefits paid
Closing balance, December 31, 2020
Current service cost
Interest cost
Benefits paid
Closing balance, December 31, 2021
70
71
–85
1,815
356
56
–1,258
969
15
18
–30
440
10
17
85
89
–115
2,255
366
73
–43 –1,301
424
1,393
Change in fair value of plan assets
Opening balance, January 1, 2020
Actual return on plan assets
Contributions and compensation to/from the fund
Closing balance, December 31, 2020
Actual return on plan assets
Contributions and compensation to/from the fund
Closing balance, December 31, 2021
Amounts recognized in the balance sheet
Present value of pension obligations
Fair value of plan assets
Surplus/deficit
Limitation on assets in accordance with Swedish
accounting principles
Net provisions for pension obligations
Whereof reported as provisions for pensions
Amounts recognized in the income statement
Current service cost
Interest cost
Total expenses for defined benefit pension plans
Insurance premiums
Total expenses for defined contribution plans
Special employer’s contribution tax
Cost for credit insurance FPG
Total pension expenses
Compensation from the pension fund
Total recognized pension expenses
Funded
2,538
108
–83
2,563
1,165
–1,264
2,464
December 31
2021
2020
–1,393 –2,255
2,464
1,071
2,563
308
–1,495
–424
–424
–748
–440
–440
2021
2020
366
73
439
141
141
37
4
621
–1,264
–643
85
89
174
112
112
34
3
323
–83
240
The Swedish Pension Foundation
The pension liabilities of the Group’s Swedish defined benefit pension
plan (PRI pensions) are funded through a pension foundation established
in 1998. The market value of the assets of the foundation amounted at
December 31, 2021, to SEK 2,464m (2,563) and the pension commitments
to SEK 969m (1,815). The Swedish Group companies recorded a liability
to the pension fund as per December 31, 2021, in the amount of SEK 0m
(0). Contributions to the pension foundation during 2021 amounted to
SEK 0m (0). Contributions from the pension foundation during 2021
amounted to SEK 1,264m (83).
ELECTROLUX ANNUAL REPORT 2021
Note 23 Other provisions
Group
Parent Company
Notes 67
All amounts in SEKm unless otherwise stated
Opening balance, January 1, 2020
Acquisitions of operations
Provisions made
Provisions used
Unused amounts reversed
Reclassifications
Exchange-rate differences
Closing balance, December 31, 2020
Of which current provisions
Of which non-current provisions
Provisions for
restructuring
Warranty
commitments
Claims
1,729
—
475
–602
–122
139
–133
1,486
629
857
2,086
1,377
10
418
–284
–26
—
–164
2,039
1,004
1,035
—
415
–497
—
—
–142
1,153
246
907
Other
2,991
—
Total
8,183
10
2,083
3,391
–863
–424
–11
–370
3,406
637
2,769
–2,247
–572
128
–809
8,083
2,516
5,567
Opening balance, January 1, 2021
1,486
2,039
1,153
3,406
8,083
Provisions for
restructuring
Warranty
commitments
Other
534
—
297
–250
–16
—
–14
551
370
181
551
—
—
–184
–5
—
3
365
259
106
452
—
68
—
—
—
–13
507
133
374
507
—
96
—
—
—
7
610
153
457
38
—
42
–25
–2
—
–1
52
—
52
52
—
44
—
—
—
1
97
12
85
Total
1,024
—
407
–275
–18
—
–28
1,110
503
607
1,110
—
140
–184
–5
—
11
1,072
424
648
—
6
1,460
2,421
–872
–453
–1,932
–512
–1,104
–1,112
—
366
–520
—
25
94
146
1,118
2,584
301
816
635
1,948
413
7,368
2,704
4,664
plan implementation or communicated its main features to those affected
by the restructuring. Provisions for restructuring represent the expected
costs to be incurred as a consequence of the Group’s decision to close
some factories, rationalize production and reduce personnel, both for
newly acquired and previously owned companies. The amounts are based
on management’s best estimates and are adjusted when changes to these
estimates are known. The larger part of the restructuring provisions as per
December 31, 2021, will be consumed in 2022 and 2023.
Provisions for claims refer to the Group’s captive insurance companies.
Other provisions include mainly provisions for environmental liabilities,
asbestos claims or other liabilities. The timing of any resulting outflows for
provisions for claims and other provisions is uncertain.
Acquisitions of operations
Provisions made
Provisions used
Unused amounts reversed
Reclassifications
Exchange-rate differences
Closing balance, December 31, 2021
Of which current provisions
Of which non-current provisions
6
51
–282
–46
–52
77
1,240
566
674
—
544
–258
–13
19
96
2,427
1,201
1,226
Provisions are recognized when the Group has a present obligation as a
result of a past event, and it is probable that an outflow of resources will be
required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation. The amount recognized as a provision is the
best estimate of the expenditure required to settle the present obligation at
the balance sheet date. Where the effect of time value of money is material,
the amount recognized is the present value of the estimated expenditures.
Provisions for warranty are recognized at the date of sale of the products
covered by the warranty and are calculated based on historical data for
similar products. Provisions for warranty commitments are recognized as a
consequence of the Group’s policy to cover the cost of repair of defective
products. Warranty is normally granted for one to two years after the sale.
Restructuring provisions are recognized when the Group has both
adopted a detailed formal plan for the restructuring and either started the
Note 24 Other liabilities
Group
December 31
Parent Company
December 31
Accrued holiday pay
Other accrued payroll costs
Accrued interest expenses
Contract liabilities1)
Other accrued expenses
Prepaid income grants
Other prepaid income
VAT liabilities
Personnel related liabilities
2021
1,100
2,233
65
7,846
4,023
634
109
908
979
2020
950
2,038
64
6,354
3,778
651
134
937
876
Other operating liabilities
1,848
1,332
2021
2020
290
692
62
—
712
—
195
—
—
—
268
570
61
—
717
—
185
—
—
—
Total
19,745 17,114
1,951
1,801
1) Specification of the movement in contract liabilities is presented in Note 4.
Other accrued expenses include for example accruals for fees, advertising
and sales promotion. Other operating liabilities include for example opera-
tional taxes.
ELECTROLUX ANNUAL REPORT 2021
68 Notes
All amounts in SEKm unless otherwise stated
Note 25 Contingent assets and liabilities
Guarantees and other
commitments
On behalf of subsidiaries
On behalf of external
counterparties
Total
Group
December 31
Parent Company
December 31
2021
2020
2021
2020
—
—
—
—
1,108
1,108
893
893
996
996
927
927
A large part of the guarantees and other commitments on behalf of external
counterparties, is related to U.S. sales to dealers financed through external
finance companies with a regulated buy-back obligation of the products in
case of dealer’s bankruptcy.
In addition to the above contingent liabilities, guarantees for fulfillment of
contractual undertakings are given as part of the Group’s normal course of
business. There was no indication at year-end that payment will be required
in connection with any contractual guarantees.
Legal proceedings
Litigation and claims related to asbestos are pending against the Group in
the U.S. Almost all of the cases refer to externally supplied components used
in industrial products manufactured by discontinued operations prior to the
early 1970s. The cases involve plaintiffs who have made substantially identi-
cal allegations against other defendants who are not part of the Electrolux
Group.
As of December 31, 2021, the Group had a total of 3,315 (3,403) cases
pending, representing approximately 3,324 (approximately 3,440) plaintiffs.
During 2021, 1,264 new cases with approximately 1,267 plaintiffs were filed
and 1,352 pending cases with approximately 1,383 plaintiffs were resolved.
The Group continues to operate under a 2007 agreement with certain
insurance carriers who have agreed to reimburse the Group for a portion
of its costs relating to certain asbestos lawsuits. The agreement is subject
to termination upon 60 days notice and if terminated, the parties would
be restored to their rights and obligations under the affected insurance
policies.
It is expected that additional lawsuits will be filed against Electrolux. It is not
possible to predict the number of future lawsuits. In addition, the outcome
of asbestos lawsuits is difficult to predict and Electrolux cannot provide
any assurances that the resolution of these types of lawsuits will not have
a material adverse effect on its business or on results of operations in the
future.
The Group is involved in a legal proceeding in Egypt relating to the priva-
tization of an Egyptian subsidiary. The proceeding is currently on-going in
the court of first instance in Cairo, Egypt. Electrolux believes that the lawsuit
is without legal merit.
In October 2013, Electrolux became subject of an investigation by the
French Competition Authority regarding a possible violation of antitrust
rules. The Authority has thereafter decided to conduct two separate
investigations whereof one was completed in December 2018. The other
investigation is still ongoing, and the Authority has so far not communicated
any conclusions. Given the nature of the investigation, it cannot be ruled out
that the outcome could have a material impact on Electrolux financial result
and cash flow. At this stage it is however not possible to evaluate the extent
of such an impact.
In 2019 an order was issued by the Italian Environmental Authorities for
certain remediation actions connected to contamination at a manufactur-
ing site in Aviano (Italy), a site that Electrolux subsidiary INFA s.p.a. (“INFA”)
divested to the current operator of the site, Sarinox s.p.a. (“Sarinox”), in
2001. Following certain court proceedings, the order became final against
Sarinox in the fourth quarter of 2021. Pursuant to the order, Sarinox shall,
inter alia, participate in projects to improve the groundwater quality in
the Friuli region, Italy (whereby interventions for a cost of EUR 42m are
mentioned in the order), and take certain other measures to clean 42m
cubic meters of contaminated groundwater in the region. Although INFA
is not liable to perform the obligations under the order from the Environ-
mental Authority, it is possible that the situation can evolve and result in a
liability for INFA in its capacity as former owner and operator or seller of the
site. However, it is at this stage not possible to evaluate the extent of such a
potential liability. No provision relating to this matter has been set.
ELECTROLUX ANNUAL REPORT 2021
Notes 69
All amounts in SEKm unless otherwise stated
Note 26 Acquired, divested and discontinued operations
Acquired operations
Consideration:
Cash paid for acquisitions made during the year
Fair value of holding
Total consideration
Recognized amounts of assets acquired
and liabilities assumed:
Total net assets acquired
Assumed net debt / cash
Goodwill
Total
2021
2020
91
—
91
23
11
58
91
73
48
121
55
54
12
121
Payments for acquisitions:
2021
2020
Cash paid for acquisitions of operations
Cash and cash equivalents in acquired operations
Cash paid related to deferred consideration
from acquisitions made in earlier years
Payments for acquisition of non-controlling interest in
CTI SA and Somela SA, Chile
Payment for acquisition of Gångaren 13 Holding AB
Total paid
Acquisitions in 2021
91
–76
—
1
990
1,006
73
–66
0
0
—
8
CSAV Group
On July 8, 2021, Electrolux acquired La Compagnie du SAV (CSAV) a
French service provider specialized in repairing domestic appliances.
Through the acquisition Electrolux strengthens its service network in
France. CSAV is headquartered in Lisses, south of Paris, and employs
around 200 people. Net sales in 2020 amounted to around EUR 25m. The
operations are included in Business Area Europe.
Gångaren 13 Holding AB
On December 7, 2021, Electrolux acquired 50% of the shares in the Swedish
company Gångaren 13 Holding AB. Before the acquisition, Electrolux held
50% of the shares in the company. The acquired company is accounted
for as a fully owned subsidiary as from the acquisition date. Gångaren 13
Holding AB is the owner of Electrolux corporate head office in Stockholm.
The purchase price for the additional 50% amounts to SEK 990m and as
the acquisition mainly comprises a property, it has been classified as an
asset acquisition, which means that it is included in the group accounts at
accumulated cost, without effects from deferred taxes.
.
Acquisitions in 2020
Guangdong De Yi Jie Appliances
In August, 2020, Electrolux acquired 60% of the shares in the Chinese com-
pany Guangdong De Yi Jie Appliances Co., LTD, a company that sells AEG
household appliances in China. Before the acquisition, Electrolux held
40% of the shares in the company. The acquired company is accounted
for as a fully owned subsidiary as from August 31, 2020. The transaction has
resulted in a preliminary goodwill of SEK 12m. The net cash flow effect from
the acquisition is SEK –7m. The operations are included in business area
Asia-Pacific, Middle East and Africa.
Discontinued operations
Business area Electrolux Professional was separated from the Electrolux
Group in the first quarter of 2020 as it was distributed to the shareholders
and listed at Nasdaq Stockholm on March 23, 2020. A settlement gain was
calculated as the difference between the carrying amount of the assets
distributed and the carrying amount of the dividend payable, measured at
the fair market value of Electrolux Professional at listing. For more informa-
tion, see Notes 1 and 26 in the Annual Report 2020.
The income statement and cash flow statement presented below con-
sists of Electrolux Professional’s contribution to Electrolux Group consoli-
dated financial information up until the separation on March 23, 2020.
Income statement, discontinued operations
Net sales
Cost of goods sold
Gross operating income
Selling expenses
Administrative expenses
Other operating income and expenses
Operating income
Financial items, net
Income after financial items
Taxes
Income for the period, discontinued operations
Cash flow, discontinued operations
Cash flow from operations
Cash flow from investments
Cash flow from financing
Total cash flow
2021
2020
—
1,884
— –1,191
—
—
—
—
—
—
—
—
—
693
–349
–161
2
185
–1
184
–40
144
2021
2020
—
—
—
—
68
–87
1,195
1,177
ELECTROLUX ANNUAL REPORT 2021
70 Notes
All amounts in SEKm unless otherwise stated
Note 27 Employees and remuneration
Employees and employee benefits
In 2021, the average number of employees was 51,590 (47,543), of which
31,871 (29,644) were men and 19,719 (17,899) were women.
A detailed specification of the average number of employees by country
has been submitted to the Swedish Companies Registration Office and is
available upon request from AB Electrolux, Investor Relations. See also
Electrolux website www.electroluxgroup.com.
Average number of employees, by geographical area
Europe
North America
Latin America
Asia-Pacific, Middle East and Africa
Total
Group
2021
2020
19,026 18,727
8,383
6,752
15,852 14,113
8,329
7,951
51,590 47,543
Salaries, other remuneration and employer contributions
Parent Company
whereof pension costs1)
Subsidiaries
whereof pension costs
Total
whereof pension costs
2021
Salaries and
remuneration
Employer
contributions
1,187
—
15,642
—
16,829
—
696
323
2,898
577
3,594
900
1) Includes SEK 5m (10) refering to the President’s predecessors according to local GAAP.
Salaries and remuneration for Board members, senior managers and other employees
Parent Company
Other
Total
Board mem-
bers and senior
managers1)
87
309
396
2021
Other
employees
1,100
15,333
16,433
2020
Salaries and
remuneration
Employer
contributions
1,050
—
14,616
—
15,666
—
624
294
2,785
583
3,409
877
Total
1,674
294
17,401
583
19,075
877
2020
Board mem-
bers and senior
managers1)
75
326
401
Other
employees
975
14,290
15,265
Total
1,050
14,616
15,666
Total
1,883
323
18,540
577
20,423
900
Total
1,187
15,642
16,829
1) According to the definition of Senior managers in the Swedish Annual Accounts Act.
Of the Board members in Group companies, 84 (80) were men and 19 (15) women, of whom 5 (5) men and 3 (3) women in the Parent Company. According
to the definition of Senior managers in the Swedish Annual Accounts Act, the number of Senior managers in the Group consisted of 189 (182) men and 82
(78) women, of whom 6 (7) men and 2 (2) women in the Parent Company. The total pension cost for Board members and Senior managers in the Group
amounted to SEK 27m (29).
Compensation to Board members
´000 SEK
Ordinary
compen sation
Compen sation for
committee work1)
Total
compen sation
Ordinary
compen sation
Compen sation for
committee work1)
Total
compen sation
2021
2020
Staffan Bohman, Chairman
2,263
Petra Hedengran
Henrik Henriksson
Hasse Johansson (up to AGM 2020)
Ulla Litzén
Karin Overbeck
Fredrik Persson
David Porter
Jonas Samuelson, President
Ulrika Saxon (up to AGM 2020)
Kai Wärn (up to AGM 2021)
Mina Billing
Viveca Brinkenfeldt Lever
Peter Ferm
Total compensation
659
659
—
659
659
659
659
—
—
159
—
—
—
300
355
—
—
290
—
185
—
—
—
—
—
—
—
2,563
1,014
659
—
949
659
844
659
—
—
159
—
—
—
2,200
640
480
160
640
480
640
640
—
160
640
—
—
—
260
310
—
—
280
—
160
—
—
—
100
—
—
—
2,460
950
480
160
920
480
800
640
—
160
740
—
—
—
6,376
1,130
7,506
6,680
1,110
7,790
1) Includes compensation for work relating to investments, modularization and quality.
Compensation to the Board of Directors
The Annual General Meeting (AGM) determines the compensation to the
Board of Directors for a period of one year until the next AGM. The com-
pensation is distributed between the Chairman, other Board Members and
remuneration for committee work. The Board decides the distribution of the
committee fee between the committee members. Compensation is paid out
in advance each quarter. Compensation paid in 2021 refers to one fourth of
the compensation authorized by the AGM in 2020 and three fourths of the
compensation authorized by the AGM in 2021. Total compensation paid in
cash in 2021 amounted to SEK 7.5m, of which SEK 6.4m referred to ordinary
compensation and SEK 1.1m to committee work.
People Committee
For information on the People Committee, see the Corporate Governance
Report on page 102.
ELECTROLUX ANNUAL REPORT 2021
Notes 71
All amounts in SEKm unless otherwise stated
Remuneration and terms of employment for other
members of Group Management in 2021
Like the President, other members of Group Management receive a remu-
neration package that comprises fixed salary, variable salary based on
annual targets, long-term performance-share programs and other benefits
such as pensions and insurance.
Base salary is revised annually per January 1. The average base-salary
increase for members of Group Management in 2021 was 5.9% (5.0).
Variable salary in 2021 is based on financial and non-financial targets
on business area and Group level. Variable salary for business area heads
and heads of Group Operations and Consumer Experience varies between
a minimum (no pay-out) and a maximum of 100% of annual base salary,
which is also the cap. Group Management members in the USA have a
maximum of up to 150% of annual base salary.
Group Management members that are Group staff heads receive vari-
able salary that varies between a minimum (no pay out) and a maximum of
80%, which is also the cap.
The members of Group Management participate in the Group’s long-
term performance based share programs. For further information on these
programs, see below.
The notice period for Group Management members employed in
Sweden is 12 months for the company and 6 months for the employee. Cer-
tain members of Group Management are entitled to 12 months’ severance
pay based on base salary with deduction for other income during the 12
months severance period. Severance pay is applicable if the employment
is terminated by the company. It is also applicable if the employment is
terminated by the Group Management member provided serious breach
of contract on the company’s behalf or if there has been a major change
in ownership structure in combination with changes in management and
changed individual accountability.
For members of Group Management employed outside of Sweden,
varying terms of employment and benefits, such as company car, may
apply depending upon the country of employment.
Pensions for other members of Group Management
Group Management members employed in Sweden as from 2012 receive
a pension entitlement where the aggregated contribution is 35% of annual
base salary. The retirement age is 65 years.
Group Management members employed in Sweden before 2012 are
covered by the Alternative ITP plan, as well as a supplementary plan.
The Alternative ITP plan is a defined contribution plan where the
contribution increases with age. The contribution is between 20 and 40 %
of pensionable salary, between 7.5 and 30 income base amounts. The con-
tribution to the supplementary plan is 35% of annual base salary. Accrued
capital is subject to a real rate of return of 3.5% per year.
The retirement age (60) for one member employed prior to 2012 has
been amended. The member’s employment and pension entitlement is
continued post age 60.
For members of Group Management employed outside of Sweden,
varying pension terms and conditions apply, depending upon the country
of employment.
Share-based compensation
Over the years, Electrolux has implemented several long-term incentive
programs (LTI) for senior managers. These programs are intended to
attract, motivate, and retain the participating managers by providing long-
term incentives through benefits linked to the company’s share price. They
have been designed to align management incentives with shareholder
interests.
For Electrolux, the share-based compensation programs are classified
as equity settled transactions, and the cost of the granted instrument’s fair
value at grant date is recognized over the vesting period which is 3.0 years
(2.7 for 2019 program). At each balance sheet date, the Group revises the
estimates to the number of shares that are expected to vest. Electrolux rec-
ognizes the impact of the revision to original estimates, if any, in the income
statement, with a corresponding adjustment to equity.
In addition, the Group provides for employer contributions expected to
be paid in connection with the share-based compensation programs. The
costs are charged to the income statement over the vesting period. The
provision is periodically revalued based on the fair value of the instruments
at each closing date.
Cont. Note 27
Remuneration guidelines for Group Management
The current remuneration guidelines were approved by the AGM in 2020.
The guidelines apply until the AGM 2024 and are described below. The
detailed guidelines can be found on page 32 in the Annual Report.
Electrolux has a clear strategy to deliver profitable growth and create
shareholder value. A prerequisite for the successful implementation of the
Company’s business strategy and safeguarding of its long-term interests,
including its sustainability, is that the Company is able to recruit and retain
qualified personnel. To this end, it is necessary that the Company offers
competitive remuneration in relation to the country or region of employ-
ment of each Group Management member. These guidelines enable the
Company to offer the Group Management a competitive total remunera-
tion. The total remuneration for the Group Management shall be in line with
market practice and may comprise the following components: fixed com-
pensation, variable compensation, pension benefits and other benefits.
Following the ‘pay for performance’ principle, variable compensation shall
represent a significant portion of the total compensation opportunity for
Group Management. Variable compensation shall always be measured
against pre-defined targets and have a maximum above which no pay-
out shall be made. Variable compensation shall mainly relate to financial
performance targets. Non-financial targets may also be used in order to
strengthen the focus on delivering on the Company’s business strategy and
long-term interests, including its sustainability. The targets shall be specific,
clear, measurable and time bound and be determined by the Board of
Directors.
Since 2004, Electrolux has offered long-term performance share pro-
grams for senior managers of the Group. The alignment of Electrolux top
management incentives with the interest of shareholders is a longstand-
ing priority of the Board of Directors. Ownership of Electrolux shares by
the Group’s CEO and other Group Management members is an important
measure to strengthen this alignment.
Thus the Board recommends that the CEO shall build up a personal hold-
ing of B-shares in Electrolux representing a value of one gross annual base
salary and for Group Management members to build up a personal holding
of B-shares in Electrolux representing a value of 50% of one gross annual
base salary.
Remuneration and terms of employment for the President in 2021
The remuneration package for the President comprises fixed salary,
variable salary based on annual targets, a long-term performance-
share program and other benefits such as pension and insurance.
For the President, the annualized base salary for 2021 has been set at
SEK 12.4m.
The variable salary is based on annual financial and non-financial tar-
gets for the Group. Each year, a performance range is determined with a
minimum and a maximum. If the performance outcome for the year is below
or equal to the minimum level, no pay-out will be made. If the performance
outcome is at or above the maximum, pay-out is capped at 100% of the
annualized base salary. If the performance outcome is between minimum
and maximum, the pay-out shall be determined on a linear basis.
The President participates in the Group’s long-term performance based
share programs. For further information on these programs, see below.
The notice period for the company is 12 months, and for the President
6 months. The President is entitled to 12 months severance pay based on
base salary with deduction for other income during the 12 months sever-
ance period. Severance pay is applicable if the employment is terminated
by the company. It is also applicable if the employment is terminated by the
President provided serious breach of contract on the company’s behalf or
if there has been a major change in ownership structure in combination with
changes in management and changed individual accountability.
Pensions for the President
The President is covered by the collectively agreed ITP plan, the alternative
rule of the plan, and Electrolux Pension Plan for CEO. The Electrolux Pension
Plan for CEO is a defined contribution plan. The employer contribution to
the plan for the President is equivalent to 35% of annual base salary, which
also includes the contributions for the benefits of the ITP-plan, alternative
ITP and any insurable supplementary disability and survivor’s pension.
In addition, the Company provides a disability pension of maximum
SEK 1.2m per year if long term disability occurs. The retirement age for the
President is 65.
The capital value of pension commitments for the President in 2021, prior
Presidents, and survivors is SEK 183m (206), whereof SEK 42m (36) relates to
the current President.
ELECTROLUX ANNUAL REPORT 2021
72 Notes
All amounts in SEKm unless otherwise stated
Cont. Note 27
Performance-share programs 2019, 2020 and 2021
The Annual General Meeting on March 25, 2021, approved a long-term
incentive program for 2021. The program is in line with the Group’s princi-
ples for remuneration based on performance, and is an integral part of the
total compensation for Group Management and other senior managers.
Electrolux shareholders benefit from this program since it facilitates recruit-
ment and retention of competent executives and aligns management inter-
est with shareholder interest as the program drives executive shareholding
and the participants are more aligned with the long-term strategy of the
company. The General Meetings of Electrolux has also approved long-term
incentive programs for 2019 and 2020.
The allocation of shares in the 2019 program is determined by the posi-
tion level and the outcome of three financial objectives; (1) earnings per
share, (2) return on net assets and (3) organic sales growth (adjusted sales
growth as from 2018). Performance outcome of the three financial objec-
tives was determined by the Board after the expiry of the one-year perfor-
mance period. The allocation of shares in the 2020 and 2021 programs is
determined by the position level and the outcome of three objectives; (1)
earnings per share, (2) return on net assets and (3) CO2 reduction. Perfor-
mance outcome of (1) and (2) is determined by the Board after the expiry of
the one-year performance period and (3) after the expiry of the three-year
performance period.
For the 2019, 2020 and 2021 programs allocation is linear from minimum
to maximum. There is no allocation if the minimum level is not reached. If the
maximum is reached, 100% of shares will be allocated. Should the achieve-
ment of the objectives be below the maximum but above the minimum, a
proportionate allocation will be made. The shares will be allocated after the
three-year period free of charge.
If a participant’s employment is terminated during the three-year program
period, the participant will be excluded from the program and will not
receive any shares or other benefits under the program. However, under
certain circumstances, including for example a participant’s death, disabil-
ity, retirement or the divestiture of the participant’s employing company,
a participant could be entitled to reduced benefits under the program.
Each of the 2019, 2020 and 2021 program covers 253 to 282 senior man-
agers and key employees in almost 30 countries. Participants in the 2021
program comprise six groups, i.e., the President, other members of Group
Management, and four groups of other senior managers. All programs
comprise Class B shares.
The performance outcome for the financial targets in the share program
for 2021 was 100%. The outcome of the CO2 target in the share program
for 2021 will be determined after the expiry of the three year performance
period.
For 2021, LTI programs resulted in a cost of SEK 138m (including a cost of
SEK 28m in employer contribution) compared to a cost of SEK 65m in 2020
(including a cost of SEK 13m in employer contribution). The total provision
for employer contribution in the balance sheet amounted to SEK 52m (17).
Repurchased shares for LTI programs
The Annual General Meeting in 2020 resolved that the company shall be
entitled to sell B shares in the company for the purpose of covering costs,
including social security charges, that may arise as a result of the 2018 pro-
gram, but this mandate has not been used by the company.
Allocation of shares for the 2018 program
The 2018 performance-share program met 1.5% of the maximum
performance and performance shares were allocated during 2021 to the
partici pants according to the terms and conditions of the 2018 share program.
Remuneration to Group Management
’000 SEK
Annual
fixed
salary1)
Variable
salary2)
Long-
term PSP
(cost)3)
Other
remuner-
ation4)
Total
pension
contri-
bution
Social
contri-
bution
Annual
fixed
salary1)
Variable
salary2)
Long-
term PSP
(cost)3)
Other
remuner-
ation4)
Total
pension
contri-
bution
Social
contri-
bution
President and CEO
12,719
12,400
9,177
8
4,340
7,260
11,553
10,378
4,151
9
3,993
4,328
2021
2020
Other members
of Group
Management5)
Total
38,636
51,355
35,601
48,001
23,302
32,479
2,750
2,758
9,649
13,989
12,801
20,061
41,129
52,682
31,959
42,337
9,832
13,983
12,757
12,766
12,117
16,110
11,178
15,506
1) The annual fixed salary includes vacation salary, paid vacation days and salary deductions for company car.
2) For 2021: variable salary earned 2021 and to be paid in 2022, and for 2020: variable salary earned 2020 and paid in 2021.
3) Cost for share-based incentive programs are accounted for according to IFRS 2, Share-based payments. If the expected cost of the program is reduced,
the previous recorded cost is reversed and an income is recorded in the income statement. The cost includes social contribution cost for the program.
4) Includes allowances and other benefits such as gross-up of tax, housing and company car, severance pay, and costs for extraordinary arrangements.
5) Other members of Group Management comprised of 8 people at the end of 2021, and of 9 people at the end of 2020.
Number of potential shares per participant, per category and year
Group 1, President and CEO
Group 2, other members of Group Management
Group 3
Group 4
Group 5
Group 6
Maximum number of B shares1)
Maximum value, SEK2)
2021
59,702
18,213
10,609
6,029
4,437
2,841
2020
69,637
21,148
12,576
7,394
5,318
3,604
2019
2021
2020
2019
53,543 12,400,000 11,693,460 11,408,250
17,928
11,189
6,132
4,297
2,967
3,782,796
3,551,120
3,820,000
2,203,430
2,111,712
2,384,000
1,252,228
1,241,534
1,306,000
921,495
590,054
892,922
605,219
916,000
632,000
1) The maximum performance value for the participant in Group 1 will be 100 per cent, Group 2, 90 per cent, Group 3, 80 per cent, Group 4, 60 per cent, Group 5, 50 per cent and Group 6, 40 per
cent of the participants annual base salary. At maximum performance the aggregated value is converted to the average number of shares and average value per participant in respective
category. The calculation was based on a share price of SEK 213.07 for 2019, SEK 184,84 for 2020 and SEK 224.67 for 2021 which is the average closing price of the Electrolux Class B share on
the Nasdaq Stockholm during a period of ten trading days before the day participants were invited to participate in the program, adjusted for net present value of dividends for the period until
shares are allocated. Due to the extra cash distribution that was distributed during 2021, it was decided to adjust the maximum number of shares. No adjustment was made to 2019 since the
plan outcome is 0. The maximum number of shares in the above table represents the adjusted numbers.
2) For the 2019 program there will be no allocation as the outcome was 0. For the 2020 program the outcome of the financial targets was 100% resulting in 1,255,834 shares, 313,958 shares are still
subject to the CO2 reduction target. For the 2021 program the outcome of the financial targets was 100% resulting in 1,143,820 shares, 285,956 shares are still subject to the CO2 reduction tar-
get. Decision on final outcome and allocation of shares under the 2020 and 2021 programs will be made after the expiry of the respective three year performance period for the CO2 reduction
target. Maximum value refers to value at grant.
Performance-share program 2021
CO2 Reduction, %1)
Earnings per share, SEK
Return on net assets, %
Total allocation
Objectives
Allocation of shares
Minimum
Maximum
Actual
Outcome, % Weight, % Allocation, %
0
12.0
19.0
100
18.0
27.0
TBD
18.4 2)
31.6 2)
TBD
100
100
20
60
20
100
TBD
60
20
80
1) Measured over 2021 – 2023, outcome will be presented in the 2023 annual report. Outcome of the CO2 reduction for the 2020 program will be presented in the 2022 annual report.
2) Including adjustments for one-off items, acquisitions and divestments.
ELECTROLUX ANNUAL REPORT 2021
Note 28 Fees to auditors
At the 2021 Annual General Meeting Deloitte was appointed auditor for the period until the end of the 2022 Annual General Meeting.
Notes 73
All amounts in SEKm unless otherwise stated
Deloitte
Audit fees1)
Audit-related fees2)
Tax fees3)
All other fees4)
Total fees to Deloitte5)
Audit fees to other audit firms
Total fees to auditors
Group
Parent Company
2021
2020
2021
2020
59
2
—
0
61
0
61
63
2
4
0
69
0
69
11
0
—
—
11
—
11
10
0
—
—
10
—
10
1) Audit fees consist of fees for the annual audit-services engagement and other audit services, which are those services that only the external auditors reasonably can provide, and include
the Group audit; statutory audits; comfort letters and consents; and attest services.
2) Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit of the accounts and annual reports of the Group and group
companies traditionally performed by the external auditors, and include consultations concerning financial accounting and reporting standards; internal control reviews as well as review of
interim reports.
3) Tax fees include for example tax compliance and tax consultation services.
4) All other fees include fees for transaction support services, financial advisory and other services.
5) Of audit-related fees, SEK 0m pertains to Deloitte Sweden, of tax fees, no amount pertains to Deloitte Sweden and of all other fees, no amount pertains to Deloitte Sweden.
Note 29 Shares and participations
Investments in associated companies
Electrolux participation in Gångaren 13 Holding AB, Sweden, increased
from 50% to 100% through an acquisition in December, 2021. Gångaren 13
Holding AB is a real estate company owning the corporate head office in
Sweden.
The holdings in the South African associated companies SYR Africa and
Llitha Solar remained unchanged during the year. SYR Africa is currently not
trading. Llitha Solar carry out marginal business activities.
The holdings in Next-Tech BVBA/SPRL, Belgium, remained unchanged
during the year. Next-Tech designs and provides software and hardware
solutions for domestic kitchen retailers.
In August 2020 Electrolux acquired the remaining 60% of the Chinese
company Guangdong De Yi Jie Appliances Co., LTD. The company sells AEG
household appliances.
All associated companies are unlisted.
Investments in associated companies
Company
Gångaren 13 Holding AB, Sweden
SYR Africa (Pty), South Africa
Llitha Solar (Pty) LTD, South Africa
Next-Tech BVBA/SPRL, Belgium
Guangdong De Yi Jie Appliances Co., LTD, China
Vitality Ventures Group, Hong Kong
Tradeplace B.V., The Netherlands
Total
2021
2020
Holding, %
Carrying
amount
Net
income1)
Holding, %
Carrying
amount
Net
income1)
n/a
50
49
49
n/a
22
20
—
—
22
45
n/a
9
0
76
14
—
—
—
n/a
–3
0
11
50
50
49
49
n/a
22
20
201
—
22
44
n/a
7
0
274
15
—
0
–50
–5
–4
0
–44
1) Represents the Group’s share of net income and is reported in the line Other operating income and expenses in the consolidated statement of comprehensive income. Regarding Gångaren 13
Holding AB net income refers to the Group's share up until December 2021. Regarding Guangdong De Yi Jie Appliances Co.,LTD net income refers to the Group's share up until August 2020.
ELECTROLUX ANNUAL REPORT 2021
74 Notes
All amounts in SEKm unless otherwise stated
Cont. Note 29
Group companies
The following table lists the major companies included in the Electrolux Group. A detailed specification of Group companies has been submitted to the
Swedish Companies Registration Office and is available upon request from AB Electrolux Investor Relations.
Subsidiaries
Major Group companies
Argentina
Australia
Austria
Belgium
Brazil
Canada
Chile
China
Denmark
Egypt
Finland
France
Germany
Hungary
Italy
Mexico
Frimetal S.A.
Electrolux Home Products Pty. Ltd
Electrolux Austria GmbH
Electrolux Home Products Corporation N.V.
Electrolux do Brasil S.A.
Electrolux Canada Corp.
Electrolux de Chile S.A.
Electrolux (Hangzhou) Domestic Appliances Co. Ltd
Electrolux (China) Home Appliance Co. Ltd
Guangdong De Yi Jie Appliances Co., Ltd
Electrolux Home Products Denmark A/S
Electrolux Egypt for Home Appliances S.A.E.
Oy Electrolux Ab
Electrolux France SAS
Electrolux Home Products France SAS
Electrolux Deutschland GmbH
Electrolux Rothenburg GmbH Factory and Development
Electrolux Lehel Kft
Electrolux Appliances S.p.A.
Electrolux Italia S.p.A.
Electrolux de Mexico, S.A. de C.V.
The Netherlands
Electrolux Associated Company B.V.
Norway
Poland
Romania
Russia
Singapore
Spain
Sweden
Switzerland
Thailand
Ukraine
United Kingdom
USA
Electrolux Home Products (Nederland) B.V.
Electrolux Home Products Norway AS
Electrolux Poland Spolka z.o.o.
SC Electrolux Romania SA
LLC Electrolux Rus
Electrolux SEA Pte Ltd
Electrolux España, S.A.U.
Electrolux HemProdukter AB
Electrolux Appliances AB
Electrolux AG
Electrolux Thailand Co. Ltd.
DC Electrolux LLC
Electrolux Plc
Electrolux Home Products, Inc.
Electrolux North America, Inc.
Note 30 Transactions with related parties
Transactions with associated companies
Net sales to associates
Purchases from associates
Receivables on associates
Payables to associates
Loans to associates
Group
Parent company
2021
2020
2021
2020
7
6
2
1
12
67
14
1
2
12
—
—
—
1
12
56
—
—
2
12
Holding, %
100
100
100
100
100
100
99.88
100
100
100
100
99.97
100
100
100
100
100
100
100
100
100
100
100
100
100
99.83
100
100
100
100
100
100
100
100
100
100
100
The Group’s related parties are its associated companies, joint ventures,
the Parent company’s largest shareholder Investor AB, Board members of
AB Electrolux and Group Management members. Commercial terms and
market prices apply to all transactions with related parties.
Investment details in associated companies are disclosed in Note 29.
Transactions and balances with associated companies are disclosed in
the table to the left.
Investor AB controls approximately 28% (28) of the voting rights in AB
Electrolux. The Group has not had any transactions with Investor AB dur-
ing the year, other than dividends declared, and there are no outstanding
balances with Investor AB. Investor AB has controlling or significant influ-
ence over companies with which Electrolux may have transactions within
the normal course of business. Commercial terms and market prices apply
to any such transactions.
In December 2021, AB Electrolux acquired the remaining 50% of the
shares in the Swedish company Gångaren 13 Holding AB from Electrolux
Swedish pension foundation. The transaction was carried out under com-
mercial terms and at market price. See note 26 for more information.
Remuneration to members of the Board of Directors and Group manage-
ment are disclosed in Note 27.
ELECTROLUX ANNUAL REPORT 2021
Notes 75
All amounts in SEKm unless otherwise stated
‘000 SEK
15,002,130
2,557,860
12,444,270
15,002,130
Note 31 Proposed distribution of earnings
The Board of Directors proposes that income for the period and retained earnings be distributed as follows:
A dividend to the shareholders of SEK 9.20 per share1), totaling
To be carried forward
Total
1) Calculated on the number of outstanding shares as per February 17, 2022.
The Board of Directors has proposed that the Annual General Meeting 2022
resolves on a dividend to the shareholders of SEK 9.20 per share to be paid in
two installments. The record date for the first installment of SEK 4.60 per share
is proposed to be Friday April 1, 2022 and the record date for the second
installment of SEK 4.60 per share is proposed to be Friday September 30,
2022. On account hereof, the Board of Directors hereby makes the following
statement according to Chapter 18 Section 4 of the Swedish Companies Act.
The Board of Directors finds that there will be full coverage for the
restricted equity of the Company, after distribution of the proposed dividend.
It is the Board of Directors’ assessment that after distribution of the pro-
posed dividend, the equity of the Company and the Group will be sufficient
with respect to the kind, extent, and risks of the operations. The Board of
Directors has hereby considered, among other things, the Company’s and
the Group’s historical development, the budgeted development and the
state of the market.
If financial instruments currently valued at fair value in accordance with
Chapter 4 Section 14a of the Swedish Annual Accounts Act instead had
been valued according to the lower of cost or net realizable value, including
cumulative revaluation of external shares, the equity of the company would
decrease by SEK 35,566 thousand.
After the proposed dividend, the financial strength of the Company and
the Group is assessed to continue to be good in relation to the industry in
which the Group is operating. The dividend will not affect the ability of the
Company and the Group to comply with its payment obligations. The Board
of Directors finds that the Company and the Group are well prepared to
handle any changes in respect of liquidity, as well as unexpected events.
The Board of Directors is of the opinion that the Company and the Group
have the ability to take future business risks and also cope with potential
losses. The proposed dividend will not negatively affect the Company’s and
the Group’s ability to make further commercially motivated investments in
accordance with the strategy of the Board of Directors.
The Board of Directors declare that the consolidated financial state-
ments have been prepared in accordance with IFRS as adopted by the
EU and give a true and fair view of the Group’s financial position and results
of operations. The financial statements of the Parent Company have been
prepared in accordance with generally accepted accounting principles
in Sweden and give a true and fair view of the Parent Company’s financial
position and results of operations.
The statutory Administration Report of the Group and the Parent
Company provides a fair review of the development of the Group’s and the
Parent Company’s operations, financial position and results of operations
and describes material risks and uncertainties facing the Parent Company
and the companies included in the Group.
Stockholm, February 17, 2022
AB ELECTROLUX (PUBL)
556009-4178
Staffan Bohman
Chairman of the Board of Directors
Jonas Samuelson
Board member and President
and Chief Executive Officer
Petra Hedengran
Board member
Ulla Litzén
Board member
Fredrik Persson
Board member
Henrik Henriksson
Board member
Karin Overbeck
Board member
David Porter
Board member
Viveca Brinkenfeldt Lever
Board member,
employee representative
Peter Ferm
Board member,
employee representative
Wilson Quispe
Board member,
employee representative
Our audit report was submitted on February 22, 2022
Deloitte AB
Jan Berntsson
Authorized Public Accountant
ELECTROLUX ANNUAL REPORT 2021
76 Auditor's report
Auditor's report
To the general meeting of the shareholders of AB Electrolux (publ)
corporate identity number 556009-4178
Report on the annual accounts
and consolidated accounts
Opinions
We have audited the annual accounts and consolidated
accounts of AB Electrolux (publ) for the financial year 2021-
01-01 – 2021-12-31. The annual accounts and consolidated
accounts of the company are included on pages14–75 in this
document.
In our opinion, the annual accounts have been prepared in
accordance with the Annual Accounts Act and present fairly, in
all material respects, the financial position of the parent com-
pany as of 31 December 2021 and its financial performance
and cash flow for the year then ended in accordance with the
Annual Accounts Act. The consolidated accounts have been
prepared in accordance with the Annual Accounts Act and
present fairly, in all material respects, the financial position of the
group as of 31 December 2021 and their financial performance
and cash flow for the year then ended in accordance with
International Financial Reporting Standards (IFRS), as adopted
by the EU, and the Annual Accounts Act. The statutory admin-
istration report is consistent with the other parts of the annual
accounts and consolidated accounts.
We therefore recommend that the general meeting of share-
holders adopts the income statement and balance sheet for the
parent company and the group.
Our opinions in this report on the annual accounts and
consolidated accounts are consistent with the content of the
additional report that has been submitted to the parent com-
pany's audit committee in accordance with the Audit Regulation
(537/2014/EU) Article 11.
Basis for Opinions
We conducted our audit in accordance with International
Standards on Auditing (ISA) and generally accepted auditing
standards in Sweden. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities section. We
are independent of the parent company and the group in accor-
dance with professional ethics for accountants in Sweden
and have otherwise fulfilled our ethical responsibilities in
accordance with these requirements. This includes that, based
on the best of our knowledge and belief, no prohibited services
referred to in the Audit Regulation (537/2014/EU) Article 5.1 have
been provided to the audited company or, where applicable,
its parent company or its controlled companies within the EU.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinions.
Key Audit Matters
Key audit matters of the audit are those matters that, in our
professional judgment, were of most significance in our audit of
the annual accounts and consolidated accounts of the current
period. These matters were addressed in the context of our audit
of, and in forming our opinion thereon, the annual accounts
and consolidated accounts as a whole, but we do not provide
a separate opinion on these matters.
Revenue Recognition
Revenues in the group consist primarily of sales of appliances
to retailers. Net sales in the group consist of a large number of
transactions and amounted in 2021 to 125,631 MSEK. Revenues
are reduced with rebates to customers in the period that they
are incurred. Revenue recognition in the correct period and
to the correct amount considering delivery terms and rebates
constitutes a key audit matter in our audit.
Accounting principles and disclosures related to revenue
recognition can be found in note 4.
Our audit procedures
Our audit procedures included, but were not limited to:
• assessing the group’s accounting principles for revenue
recognition and its compliance with IFRS,
• audit of the internal control environment regarding revenue
recognition and test of identified key controls, including IT
controls,
• analytical procedures,
• detailed testing of sales transactions on a sample basis to
confirm proper revenue cut off, and
• detailed testing of terms of sales for conditional rebates by
third party confirmation.
Valuation of inventory
The group carries significant inventories of goods held by
several production and sales units in many countries. Valuation
of inventory has been subject to managements estimates
especially considering large fluctuations in prices for compo-
nents and raw material. Processes for valuation of inventory
constitutes a key audit matter in our audit.
Accounting principles and disclosures related to inventory
can be found in note 15.
Our audit procedures
Our audit procedures included, but were not limited to:
• assessing the group’s accounting principles for inventory in
compliance with IFRS,
• audit of the internal control environment regarding valua-
tion of inventory and test of identified key controls including IT
systems,
• on a sample basis testing valuation of inventory, and
• evaluating management’s estimates related to provisions for
obsolescence.
Accounting for legal proceedings
Electrolux is involved in several legal proceedings which could
have a significant impact on the group’s result and financial
position. Processes to assess, evaluate and account for legal
proceedings constitutes a key audit matter in our audit.
Further information on the group’s legal proceedings and
management of these can be found in note 25.
ELECTROLUX ANNUAL REPORT 2021
Auditor's report 77
Our audit procedures
Our audit procedures included, but were not limited to:
• quarterly meetings with the Group Head of Legal regarding
significant ongoing legal proceedings,
• obtaining legal statements from a selection of the group’s
external lawyers, and
• evaluating management’s judgments and estimates related t
o legal proceedings and the accounting for these.
Other information than the annual accounts and
consolidated accounts
This document also contains other information than the annual
accounts and consolidated accounts and is found on pages
1-13 and 79-124 The Board of Directors and the Managing
Director are responsible for this other information.
Our opinion on the annual accounts and consolidated
accounts does not cover this other information and we do not
express any form of assurance conclusion regarding this other
information.
In connection with our audit of the annual accounts and
consolidated accounts, our responsibility is to read the informa-
tion identified above and consider whether the information is
materially inconsistent with the annual accounts and consoli-
dated accounts. In this procedure we also take into account our
knowledge otherwise obtained in the audit and assess whether
the information otherwise appears to be materially misstated.
If we, based on the work performed concerning this informa-
tion, conclude that there is a material misstatement of this other
information, we are required to report that fact. We have noth-
ing to report in this regard.
Responsibilities of the Board of Directors and
the Managing Director
The Board of Directors and the Managing Director are respon-
sible for the preparation of the annual accounts and consoli-
dated accounts and that they give a fair presentation in accor-
dance with the Annual Accounts Act. The Board of Directors and
the Managing Director are also responsible for such internal
control as they determine is necessary to enable the prepara-
tion of annual accounts and consolidated accounts that are
free from material misstatement, whether due to fraud or error.
In preparing the annual accounts and consolidated
accounts, The Board of Directors and the Managing Director
are responsible for the assessment of the company’s and the
group’s ability to continue as a going concern. They disclose,
as applicable, matters related to going concern and using the
going concern basis of accounting. The going concern basis
of accounting is however not applied if the Board of Directors
and the Managing Director intend to liquidate the company, to
cease operations, or has no realistic alternative but to do so.
The Audit Committee shall, without prejudice to the Board
of Director’s responsibilities and tasks in general, among other
things oversee the company’s financial reporting process.
Auditor’s responsibility
Our objectives are to obtain reasonable assurance about
whether the annual accounts and consolidated accounts as
a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor’s report that includes our
opinions. Reasonable assurance is a high level of assurance but
is not a guarantee that an audit conducted in accordance with
ISAs and generally accepted auditing standards in Sweden will
always detect a material misstatement when it exists. Misstate-
ments can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on
the basis of these annual accounts and consolidated accounts.
An additional description of our responsibility for the audit of the
annual accounts and the consolidated accounts is located at
the Swedish Inspectorate of Auditors’ web page:
www.revisorsinspektionen.se/revisornsansvar. This description
is a part of the auditor’s report.
Report on other legal and regulatory
requirements
Opinions
In addition to our audit of the annual accounts and consoli-
dated accounts, we have also audited the administration of the
Board of Directors and the Managing Director of AB Electrolux
(publ) for the financial year 2021–01–01 – 2021–12–31 and the
proposed appropriations of the company’s profit or loss.
We recommend to the general meeting of shareholders that
the profit to be appropriated in accordance with the proposal in
the statutory administration report and that the members of the
Board of Directors and the Managing Director be discharged
from liability for the financial year.
Basis for Opinions
We conducted the audit in accordance with generally accepted
auditing standards in Sweden. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities
section. We are independent of the parent company and the
group in accordance with professional ethics for accountants in
Sweden and have otherwise fulfilled our ethical responsibilities
in accordance with these requirements.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinions.
Responsibilities of the Board of Directors
and the Managing Director
The Board of Directors is responsible for the proposal for appro-
priations of the company’s profit or loss. At the proposal of a
dividend, this includes an assessment of whether the dividend
is justifiable considering the requirements which the company’s
and the group’s type of operations, size and risks place on the
size of the parent company’s and the group’s equity, consolida-
tion requirements, liquidity and position in general.
The Board of Directors is responsible for the company’s orga-
nization and the administration of the company’s affairs. This
includes among other things continuous assessment of the com-
pany’s and the group´s financial situation and ensuring that
the company's organization is designed so that the account-
ing, management of assets and the company’s financial affairs
otherwise are controlled in a reassuring manner. The Managing
Director shall manage the ongoing administration according to
the Board of Directors’ guidelines and instructions and among
other matters take measures that are necessary to fulfill the
company’s accounting in accordance with law and handle the
management of assets in a reassuring manner.
Auditor’s responsibility
Our objective concerning the audit of the administration, and
thereby our opinion about discharge from liability, is to obtain
audit evidence to assess with a reasonable degree of assurance
whether any member of the Board of Directors or the Managing
Director in any material respect:
• has undertaken any action or been guilty of any omission
which can give rise to liability to the company, or
• in any other way has acted in contravention of the Companies
Act, the Annual Accounts Act or the Articles of Association.
ELECTROLUX ANNUAL REPORT 2021
78 Auditor's report
Our objective concerning the audit of the proposed appropria-
tions of the company’s profit or loss, and thereby our opinion
about this, is to assess with reasonable degree of assurance
whether the proposal is in accordance with the Companies Act.
Reasonable assurance is a high level of assurance but is not a
guarantee that an audit conducted in accordance with gener-
ally accepted auditing standards in Sweden will always detect
actions or omissions that can give rise to liability to the com-
pany, or that the proposed appropriations of the company’s
profit or loss are not in accordance with the Companies Act.
An additional description of our responsibility for the audit
of the administration of the Board of Directors and the Manag-
ing Director is located at the Swedish Inspectorate of Auditors’
web page: www.revisorsinspektionen.se/revisornsansvar. This
description is a part of the auditor’s report.
The auditor’s examination of the Esef report
Opinions
In addition to our audit of the annual accounts and consoli-
dated accounts, we have also examined that the Board of
Directors and the Managing Director have prepared the annual
accounts and consolidated accounts in a format that enables
uniform electronic reporting (the Esef report) pursuant to
Chapter 16, Section 4 a of the Swedish Securities Market
Act (2007:528) for AB Electrolux (publ) for the financial year
2021–01–01 – 2021–12–31.
Our examination and our opinion relate only to the statutory
requirements.
In our opinion, the Esef report 70d7d39e2aac4579ce-
427d333233a5ef9cf802cdc79e795531412e841196b9b4
has been prepared in a format that, in all material respects,
enables uniform electronic reporting.
Basis for opinion
We have performed the examination in accordance with FAR’s
recommendation RevR 18 Examination of the Esef report. Our
responsibility under this recommendation is described in more
detail in the Auditors’ responsibility section. We are indepen-
dent of AB Electrolux in accordance with professional ethics for
accountants in Sweden and have otherwise fulfilled our ethical
responsibilities in accordance with these requirements.
We believe that the evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Responsibilities of the Board of Directors
and the Managing Director
The Board of Directors and the Managing Director are respon-
sible for the preparation of the Esef report in accordance with
the Chapter 16, Section 4 a of the Swedish Securities Market
Act (2007:528), and for such internal control that the Board of
Directors and the Managing Director determine is necessary
to prepare the Esef report without material misstatements,
whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to obtain reasonable assurance whether
the Esef report is in all material respects prepared in a format
that meets the requirements of Chapter 16, Section 4(a) of the
Swedish Securities Market Act (2007:528), based on the proce-
dures performed.
RevR 18 requires us to plan and execute procedures to
achieve reasonable assurance that the Esef report is prepared
in a format that meets these requirements.
Reasonable assurance is a high level of assurance, but it is
not a guarantee that an engagement carried out according to
RevR 18 and generally accepted auditing standards in Sweden
will always detect a material misstatement when it exists. Mis-
statements can arise from fraud or error and are considered
material if, individually or in aggregate, they could reasonably
be expected to influence the economic decisions of users taken
on the basis of the Esef report.
The audit firm applies ISQC 1 Quality Control for Firms that
Perform Audits and Reviews of Financial Statements, and other
Assurance and Related Services Engagements and accordingly
maintains a comprehensive system of quality control, including
documented policies and procedures regarding compliance
with professional ethical requirements, professional standards
and legal and regulatory requirements.
The examination involves obtaining evidence, through vari-
ous procedures, that the Esef report has been prepared in a
format that enables uniform electronic reporting of the annual
accounts and consolidated accounts. The procedures selected
depend on the auditor’s judgment, including the assessment of
the risks of material misstatement in the report, whether due to
fraud or error. In carrying out this risk assessment, and in order
to design audit procedures that are appropriate in the circum-
stances, the auditor considers those elements of internal control
that are relevant to the preparation of the Esef report by the
Board of Directors and the Managing Director, but not for the
purpose of expressing an opinion on the effectiveness of those
internal controls. The examination also includes an evaluation of
the appropriateness and reasonableness of assumptions made
by the Board of Directors and the Managing Director.
The procedures mainly include a technical validation of the
Esef report, i.e., if the file containing the Esef report meets the
technical specification set out in the Commission’s Delegated
Regulation (EU) 2019/815 and a reconciliation of the Esef report
with the audited annual accounts and consolidated accounts.
Furthermore, the procedures also include an assessment
of whether the Esef report has been marked with iXBRL which
enables a fair and complete machine-readable version of the
consolidated statement of financial performance, financial
position, changes in equity and cash flow.
Deloitte AB was appointed auditor of AB Electrolux (publ) by
the general meeting of the shareholders on March 25, 2021 and
has been the company’s auditor since April 5, 2018.
Stockholm, February 22, 2022
Deloitte AB
Signature on Swedish original
Jan Berntsson
Authorized Public Accountant
This is a translation of the Swedish language original.
In the event of any differences between this translation and
the Swedish language original, the latter shall prevail.
ELECTROLUX ANNUAL REPORT 2021
80 Eleven-year review
All amounts in SEKm unless otherwise stated
Eleven-year review
2011
2012 1)
2013
2014
2015
2016
20171)
2018
20187)
2019
2020
2021
5 years
10 years
Compound annual growth rate, %
101,598
109,994
109,151
112,143
123,511
121,093
120,771
124,129
115,463
118,981
115,960
125,631
0.7
SEKm
Net sales and income
Net sales
Organic growth, %
Depreciation and amortization
Items affecting comparability 2)/ Non-recurring items 6)
Operating income
Income after financial items
Income for the period
Cash flow
Cash flow from operations
Cash flow from investments
of which capital expenditure in property, plant and equipment
Cash flow from operations and investments
Cash flow from operations and investments excluding acquisitions
and divestments of operations
Dividend, redemption and repurchase of shares
Capital expenditure in property, plant and equipment
as % of net sales
Margins 3)
Operating margin, %
Income after financial items as % of net sales
Financial position
Total assets
Net assets
Working capital
Trade receivables
Inventories
Accounts payable
Total equity
Interest-bearing liabilities
Provisions for post-employment benefits, net
Net debt
Data per share , SEK
Income for the period
Equity
Dividend4)
0.2
3,173
–138
3,017
2,780
2,064
5,399
–10,049
–3,163
–4,650
906
–1,850
3.1
3.1
2.9
76,384
27,011
–5,180
19,226
11,957
18,490
20,644
14,206
—
6,367
7.25
73
6.50
5.5
3,251
–1,032
4,000
3,154
2,365
7,080
–4,702
–4,090
2,378
2,542
–1,868
3.7
4.6
3.8
75,194
25,890
–6,505
18,288
12,963
20,590
15,726
13,088
4,479
10,164
8.26
55
6.50
4.5
3,356
–2,475
1,580
904
672
4,455
–4,734
–3,535
–279
–74
–1,860
3.2
3.7
3.1
76,001
24,961
–5,800
19,441
12,154
20,607
14,308
14,905
2,980
10,653
2.35
50
6.50
Trading price of B-shares at year-end
109.70
170.50
168.50
Key ratios
Return on equity, %
Return on net assets, %
Net assets as % of net sales 5)
Trade receivables as % of net sales 5)
Inventories as % of net sales 5)
Net debt/equity ratio
Interest coverage ratio
Dividend as % of total equity
Other data
Average number of employees
Salaries and remuneration
Number of shareholders
Average number of shares after buy-backs, million
Shares at year end after buy-backs, million
10.4
13.7
23.8
17.0
10.5
0.31
5.84
9.0
52,916
13,137
58,800
284.7
284.7
14.4
14.8
22.5
15.9
11.3
0.65
2.72
11.8
59,478
13,785
51,800
285.9
286.1
4.4
5.8
21.8
17.0
10.6
0.74
2.11
13.0
60,754
13,521
51,500
286.2
286.2
1.1
3,671
–1,199
3,581
2,997
2,242
7,822
–3,759
–3,006
4,063
4,132
–1,861
2.7
3.2
2.7
85,688
26,099
–8,377
20,663
14,324
25,705
16,468
14,703
4,763
9,631
7.83
57.52
6.50
228.80
15.7
14.2
20.4
16.2
11.2
0.58
5.16
11.3
60,038
14,278
46,500
286.3
286.3
2.2
3,936
—
2,741
2,101
1,568
8,267
–3,403
–3,027
4,864
4,955
–1,870
2.5
2.2
1.7
83,471
21,412
–12,234
17,745
14,179
26,467
15,005
13,097
4,509
6,407
5.45
52.21
6.50
205.20
9.9
11.0
17.3
14.3
11.5
0.43
3.75
12.4
58,265
15,858
45,485
287.1
287.4
–2,385
–2,443
-49.7
n.m.
–1.1
3,934
—
6,274
5,581
4,493
10,165
–2,557
–2,830
7,608
7,432
–1,868
2.3
5.2
4.6
85,848
18,098
–14,966
19,408
13,418
28,283
17,738
10,202
4,169
360
15.64
61.72
7.50
226.30
29.4
29.9
14.2
15.2
10.5
0.02
3.75
10.5
55,400
15,886
48,939
287.4
287.4
–0.4
3,977
—
7,407
6,966
5,745
10,024
–8,200
–3,892
1,824
5,229
–2,155
3.2
6.1
5.8
89,542
20,678
–15,873
20,747
14,655
31,114
20,480
9,537
2,634
197
19.99
71.26
8.30
264.30
31.9
36.0
17.5
17.5
12.4
0.01
12.16
11.6
55,692
16,470
45,295
287.4
287.4
1.3
4,150
–1,343
5,310
4,887
3,805
8,046
–6,506
–4,650
1,540
2,149
–2,385
3.7
4.3
3.9
97,312
23,574
–16,848
21,482
16,750
34,443
21,749
9,982
3,814
1,825
13.24
75.67
8.50
187.10
18.2
22.7
19.0
17.3
13.5
0.08
9.05
11.2
54,419
17,363
49,870
287.4
287.4
1.2
3,981
–1,343
4,176
3,754
2,854
—
—
—
—
—
3.9
3.6
3.3
—
—
—
—
—
20,306
–17,077
19,824
15,451
32,996
9.93
—
8.50
187.10
—
20.2
17.5
17.1
13.4
—
—
—
51,253
15,829
49,870
287.4
287.4
–1.0
4,821
–1,344
3,189
2,456
1,820
7,314
–6,994
–5,320
321
348
4.5
2.7
2.1
106,808
26,172
–17,390
20,847
16,194
33,892
22,574
10,989
3,866
7,683
6.33
78.55
7.00
229.90
11.4
12.0
22.3
17.7
13.8
0.34
2.57
10.8
48,652
16,318
50,544
287.4
287.4
3.2
4,587
—
5,778
5,096
3,988
11,932
–5,115
–4,325
6,816
6,824
–2,012
3.7
5.0
4.4
99,604
20,265
–19,191
19,944
13,213
31,306
18,709
15,412
3,679
1,556
13.88
65.10
8.00
191.35
34.1
22.6
22.0
18.6
12.3
0.08
5.04
10.8
47,543
15,666
59,401
287.4
287.4
14.2
4,489
-727
6,801
6,255
4,678
7,059
-6,815
-4,847
244
1,250
-8,079
3.9
5.4
5.0
107,607
23,860
-17,726
23,110
20,478
38,182
18,610
15,681
891
8,591
16.31
65.74
9.20
219.50
24.4
28.5
19.0
17.9
15.9
0.46
7.29
12.4
51,590
16,829
73,578
286.9
283.1
1.6
2.3
0.8
-7.0
4.6
5.7
3.6
8.8
6.2
1.0
9.0
-26.6
88.6
0.8
1.3
4.2
-0.6
-1.4
1.2
8.5
2.1
8.5
8.4
8.5
2.7
3.5
-1.2
1.9
5.5
7.5
-1.0
1.0
8.4
-1.0
3.5
7.2
-0.3
2.5
2.3
1) Amounts for 2012 have been restated where applicable as a consequence of the amended standard for pension accounting, IAS 19 Employee Benefits and 2017
as a consequence of the introduction of IFRS 15 Revenue from Contracts with Customers.
2) As of 2015 the accounting concept of Items affecting comparability is no longer in use. As from 2018, non-recurring items are presented, see page 84 for definition.
3) Items affecting comparability are excluded for the years 2011 to 2013. 2014 has been restated.
4) 2021: Proposed by the Board.
5) Annualized net sales, calculated at end of period exchange rates.
6) For more information, see Note 7.
7) Certain amounts have been restated for discontinued operations as a consequence of the distribution of the Professional business area in 2020.
ELECTROLUX ANNUAL REPORT 2021
2011
2012 1)
2013
2014
2015
2016
20171)
2018
20187)
2019
2020
2021
5 years
10 years
Compound annual growth rate, %
Eleven-year review 81
All amounts in SEKm unless otherwise stated
101,598
109,994
109,151
112,143
123,511
121,093
120,771
124,129
115,463
118,981
115,960
125,631
0.7
–1.1
3,934
—
6,274
5,581
4,493
10,165
–2,557
–2,830
7,608
7,432
–1,868
2.3
5.2
4.6
85,848
18,098
–14,966
19,408
13,418
28,283
17,738
10,202
4,169
360
15.64
61.72
7.50
226.30
29.4
29.9
14.2
15.2
10.5
0.02
3.75
10.5
55,400
15,886
48,939
287.4
287.4
–0.4
3,977
—
7,407
6,966
5,745
10,024
–8,200
–3,892
1,824
5,229
–2,155
3.2
6.1
5.8
89,542
20,678
–15,873
20,747
14,655
31,114
20,480
9,537
2,634
197
19.99
71.26
8.30
264.30
31.9
36.0
17.5
17.5
12.4
0.01
12.16
11.6
55,692
16,470
45,295
287.4
287.4
1.3
4,150
–1,343
5,310
4,887
3,805
8,046
–6,506
–4,650
1,540
2,149
–2,385
3.7
4.3
3.9
97,312
23,574
–16,848
21,482
16,750
34,443
21,749
9,982
3,814
1,825
13.24
75.67
8.50
187.10
18.2
22.7
19.0
17.3
13.5
0.08
9.05
11.2
54,419
17,363
49,870
287.4
287.4
1.2
3,981
–1,343
4,176
3,754
2,854
—
—
—
—
—
–1.0
4,821
–1,344
3,189
2,456
1,820
7,314
–6,994
–5,320
321
348
–2,385
–2,443
3.9
3.6
3.3
—
20,306
–17,077
19,824
15,451
32,996
—
—
—
—
9.93
—
8.50
187.10
—
20.2
17.5
17.1
13.4
—
—
—
51,253
15,829
49,870
287.4
287.4
4.5
2.7
2.1
106,808
26,172
–17,390
20,847
16,194
33,892
22,574
10,989
3,866
7,683
6.33
78.55
7.00
229.90
11.4
12.0
22.3
17.7
13.8
0.34
2.57
10.8
48,652
16,318
50,544
287.4
287.4
3.2
4,587
—
5,778
5,096
3,988
11,932
–5,115
–4,325
6,816
6,824
–2,012
3.7
5.0
4.4
99,604
20,265
–19,191
19,944
13,213
31,306
18,709
15,412
3,679
1,556
13.88
65.10
8.00
191.35
34.1
22.6
22.0
18.6
12.3
0.08
5.04
10.8
47,543
15,666
59,401
287.4
287.4
14.2
4,489
-727
6,801
6,255
4,678
7,059
-6,815
-4,847
244
1,250
-8,079
3.9
5.4
5.0
107,607
23,860
-17,726
23,110
20,478
38,182
18,610
15,681
891
8,591
16.31
65.74
9.20
219.50
24.4
28.5
19.0
17.9
15.9
0.46
7.29
12.4
51,590
16,829
73,578
286.9
283.1
ELECTROLUX ANNUAL REPORT 2021
2.1
8.5
8.4
8.5
2.7
1.6
2.3
0.8
-7.0
-49.7
n.m.
4.6
5.7
3.6
8.8
6.2
1.0
9.0
-26.6
88.6
0.8
1.3
4.2
-0.6
-1.4
1.2
8.5
3.5
-1.2
1.9
5.5
7.5
-1.0
1.0
8.4
-1.0
3.5
7.2
-0.3
2.5
2.3
Depreciation and amortization
Items affecting comparability 2)/ Non-recurring items 6)
SEKm
Net sales and income
Net sales
Organic growth, %
Operating income
Income after financial items
Income for the period
Cash flow
Cash flow from operations
Cash flow from investments
of which capital expenditure in property, plant and equipment
Cash flow from operations and investments
Cash flow from operations and investments excluding acquisitions
and divestments of operations
Dividend, redemption and repurchase of shares
Capital expenditure in property, plant and equipment
Income after financial items as % of net sales
as % of net sales
Margins 3)
Operating margin, %
Financial position
Total assets
Net assets
Working capital
Trade receivables
Inventories
Accounts payable
Total equity
Net debt
Data per share , SEK
Income for the period
Equity
Dividend4)
Key ratios
Return on equity, %
Return on net assets, %
Interest-bearing liabilities
Provisions for post-employment benefits, net
Net assets as % of net sales 5)
Trade receivables as % of net sales 5)
Inventories as % of net sales 5)
Net debt/equity ratio
Interest coverage ratio
Dividend as % of total equity
Other data
Average number of employees
Salaries and remuneration
Number of shareholders
Average number of shares after buy-backs, million
Shares at year end after buy-backs, million
0.2
3,173
–138
3,017
2,780
2,064
5,399
–10,049
–3,163
–4,650
906
–1,850
3.1
3.1
2.9
76,384
27,011
–5,180
19,226
11,957
18,490
20,644
14,206
—
6,367
7.25
73
6.50
10.4
13.7
23.8
17.0
10.5
0.31
5.84
9.0
5.5
3,251
–1,032
4,000
3,154
2,365
7,080
–4,702
–4,090
2,378
2,542
–1,868
3.7
4.6
3.8
75,194
25,890
–6,505
18,288
12,963
20,590
15,726
13,088
4,479
10,164
8.26
55
6.50
14.4
14.8
22.5
15.9
11.3
0.65
2.72
11.8
4.5
3,356
–2,475
1,580
904
672
4,455
–4,734
–3,535
–279
–74
–1,860
3.2
3.7
3.1
76,001
24,961
–5,800
19,441
12,154
20,607
14,308
14,905
2,980
10,653
2.35
50
6.50
4.4
5.8
21.8
17.0
10.6
0.74
2.11
13.0
52,916
13,137
58,800
284.7
284.7
59,478
13,785
51,800
285.9
286.1
60,754
13,521
51,500
286.2
286.2
1.1
3,671
–1,199
3,581
2,997
2,242
7,822
–3,759
–3,006
4,063
4,132
–1,861
2.7
3.2
2.7
85,688
26,099
–8,377
20,663
14,324
25,705
16,468
14,703
4,763
9,631
7.83
57.52
6.50
228.80
15.7
14.2
20.4
16.2
11.2
0.58
5.16
11.3
60,038
14,278
46,500
286.3
286.3
2.2
3,936
—
2,741
2,101
1,568
8,267
–3,403
–3,027
4,864
4,955
–1,870
2.5
2.2
1.7
83,471
21,412
–12,234
17,745
14,179
26,467
15,005
13,097
4,509
6,407
5.45
52.21
6.50
205.20
9.9
11.0
17.3
14.3
11.5
0.43
3.75
12.4
58,265
15,858
45,485
287.1
287.4
Trading price of B-shares at year-end
109.70
170.50
168.50
1) Amounts for 2012 have been restated where applicable as a consequence of the amended standard for pension accounting, IAS 19 Employee Benefits and 2017
as a consequence of the introduction of IFRS 15 Revenue from Contracts with Customers.
2) As of 2015 the accounting concept of Items affecting comparability is no longer in use. As from 2018, non-recurring items are presented, see page 84 for definition.
3) Items affecting comparability are excluded for the years 2011 to 2013. 2014 has been restated.
4) 2021: Proposed by the Board.
5) Annualized net sales, calculated at end of period exchange rates.
6) For more information, see Note 7.
7) Certain amounts have been restated for discontinued operations as a consequence of the distribution of the Professional business area in 2020.
82 Operations by business area yearly
All amounts in SEKm unless otherwise stated
Operations by business
area yearly
SEKm
Europe
Net sales
Operating income
Margin, %
North America
Net sales
Operating income
Margin, %
Latin America
Net sales
Operating income
Margin, %
Asia-Pacific, Middle East and Africa
Net sales
Operating income
Margin, %
Other
20171)
2018
20192)
2020
2021
39,231
2,772
7.1
42,083
2,796
6.6
43,321
2,128
4.9
39,804
1,104
2.8
18,277
17,963
483
2.6
492
2.7
45,420
2,493
5.5
38,954
–516
–1.3
19,653
1,821
9.3
13,457
1,077
8.0
14,375
14,954
979
6.8
446
3.0
46,038
3,643
7.9
38,219
1,215
3.2
16,915
666
3.9
14,788
1,038
7.0
49,384
4,002
8.1
40,468
688
1.7
19,958
1,336
6.7
15,820
1,511
9.6
Operating income, common Group costs, etc.
–775
–527
–1,055
–783
-737
Total, continuing operations
Net sales
Operating income
Margin, %
113,048
115,463
118,981
115,960
125,631
6,353
5.6
4,176
3.6
3,189
2.7
5,778
5.0
6,801
5.4
1) Electrolux applies the new standard for revenue recognition, IFRS 15 Revenue from Contracts with Customer, as of January 1, 2018. Reported figures for 2017 have been restated to
enable comparison.
2) Earlier years presented have been restated due to changes in the business area structure in 2019.
Non-recurring items1)
Europe
North America
Latin America
Asia-Pacific, Middle East and Africa
Common Group cost
Total, continuing operations
2017
—
—
—
—
—
—
20182)
–747
–596
—
—
—
–1,343
20193)
–752
–1,071
1,101
–398
–224
–1,344
2020
—
—
—
—
—
—
20214)
—
-727
—
—
—
-727
1) For more information, see Note 7 in the annual reports.
2) Non-recurring items 2018: SEK –596m refers to the consolidation of freezer production in North America, SEK –747m refers to business area Europe and includes a fine of SEK –493m,
relating to an investigation by the French Competition Authority, and a cost of SEK –254m relating to an unfavorable court ruling in France.
3) Non-recurring items 2019: SEK –829m relates to the consolidation of U.S. cooking production and SEK –225m to the closure of a refrigeration production line in Latin America,
recovery of overpaid sales tax in Brazil of SEK 1,403m, a legal settlement in the U.S. of SEK –197m and restructuring charges for efficiency measures and outsourcing projects across business
areas and Group common costs of SEK –1,496m.
4) Non-recurring items 2021: SEK –727m refers to business area North America and arbitration in U.S. tariff case on washing machines imported into the U.S. from Mexico in 2016/2017.
ELECTROLUX ANNUAL REPORT 2021
Quarterly information
Quarterly information 83
All amounts in SEKm unless otherwise stated
Net sales and income by business area per quarter
SEKm
Europe
Net sales
Operating income
Operating margin, %
North America
Net sales
Operating income
Operating margin, %
Latin America
Net sales
Operating income
Operating margin, %
Asia-Pacific, Middle East and Africa
Net sales
Operating income
Operating margin, %
Other
Q1
2021
Q2
2021
Q3
2021
Q4
2021
Full year
2021
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Full year
2020
11,637
11,721
11,905
14,122
49,384
10,908
8,888
12,317
13,925
46,038
1,122
1,013
9.6
8.6
833
7.0
1,034
4,002
7.3
8.1
558
5.1
244
2.8
1,522
12.4
1,319
3,643
9.5
7.9
9,002
10,132
10,378
10,955
40,468
8,409
8,537
10,993
10,281
38,219
493
5.5
558
5.5
196
1.9
-559
-5.1
688
1.7
–299
–3.6
–173
–2.0
990
9.0
697
6.8
1,215
3.2
4,516
4,782
4,910
5,750
19,958
3,826
2,822
4,779
5,488
16,915
423
9.4
327
6.8
387
7.9
200
3.5
1,336
6.7
–15
–0.4
–183
–6.5
440
9.2
424
7.7
666
3.9
3,871
3,668
3,736
4,545
15,820
3,434
3,230
3,916
4,209
14,788
393
10.1
312
8.5
362
9.7
445
9.8
1,511
9.6
44
1.3
159
4.9
459
11.7
376
8.9
1,038
7.0
Operating income, common group costs, etc.
-134
-226
-139
-237
-737
–165
–109
–191
–318
–783
Total, continuing operations
Net sales
Operating income
Operating margin, %
29,026
30,303
30,929
35,372 125,631
26,578
23,476
32,004
33,902 115,960
2,297
1,983
1,639
7.9
6.5
5.3
882
2.5
6,801
5.4
122
0.5
–62
–0.3
3,220
10.1
2,498
5,778
7.4
5.0
Total Group, including discontinued operations
Income for the period
Earnings per share, SEK1)
1,556
1,383
1,143
5.41
4.81
3.98
596
2.09
4,678
16.31
2,509
8.73
–141
–0.49
2,356
1,860
8.20
6.47
6,584
22.91
Number of shares after buy-backs, million
Average number of shares after buy-backs, million
287.4
287.4
287.4
287.4
287.4
287.4
283.1
285.6
283.1
286.9
287.4
287.4
287.4
287.4
287.4
287.4
287.4
287.4
287.4
287.4
1) Basic, based on average number of shares, excluding shares owned by Electrolux.
Non-recurring items 1)
Europe
North America
Latin America
Asia-Pacific, Middle East and Africa
Common Group cost
Total, continuing operations
Q1
2021
Q2
2021
Q3
2021
Q4
20212)
Full year
2021
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Full year
2020
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
-727
-727
—
—
—
—
—
—
-727
-727
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1) For more information, see Note 7.
2) Non-recurring item of SEK -727m in the fourth quarter of 2021 refers to business area North America and arbitration in U.S. tariff
case on washing machines imported into the U.S. from Mexico in 2016/2017.
ELECTROLUX ANNUAL REPORT 2021
84 Definitions
All amounts in SEKm unless otherwise stated
Definitions
This report includes financial measures as required by the financial report-
ing framework applicable to Electrolux, which is based on IFRS. In addition,
there are other measures and indicators that are used to follow up, analyze
and manage the business and to provide Electrolux stakeholders with use-
ful financial information on the Group’s financial position, performance and
development in a consistent way. These other measures and indicators are
considered essential in supporting the Group’s financial goals to achieve
a combination of continuous growth, high profitability, a stable cash flow,
and an optimal capital base to generate a high total return for Electrolux
shareholders. Thus, there are measures related to growth, profitability and
capital, share-based measures and capital indicators which are considered
relevant to present on a continuous basis. Below is a list of definitions of all
measures and indicators used, referred to and presented in this report.
Computation of average amounts and
annualized income statement measures
In computation of key ratios where averages of capital balances are related
to income statement measures, the average capital balances are based
on the opening balance and all quarter-end closing balances included in
the reporting period, and the income statement measures are annualized,
translated at average rates for the period. In computation of key ratios
where end-of-period capital balances are related to income statement
measures, the latter are annualized, translated at end-of-period exchange
rates. The calculation of Net debt/EBITDA is an exception, see definition
below. Adjustments are made for acquired and divested operations.
Growth measures
Change in net sales
Current year net sales for the period less previous year net sales for the
period as a percentage of previous year net sales for the period.
Sales growth
Change in net sales adjusted for currency translation effects.
Organic growth
Change in net sales, adjusted for changes in exchange rates,
acquisitions and divestments.
Acquisitions
Change in net sales, adjusted for organic growth, changes in exchange
rates and divestments. The impact from acquisitions relates to net sales
reported by acquired operations within 12 months after the acquisition date.
Divestments
Change in net sales, adjusted for organic growth, changes in exchange
rates and acquisitions. The impact from divestments relates to net sales
reported by the divested operations within 12 months before the divestment
date.
Profitability measures
EBITA
Operating income excluding amortization of intangible assets.
EBITA margin
EBITA expressed as a percentage of net sales.
EBITDA
Operating income excluding depreciation and amortization.
Operating margin (EBIT margin)
Operating income (EBIT) expressed as a percentage of net sales.
Operating margin (EBIT margin) excluding non-recurring items
Operating income (EBIT) excluding non-recurring items, expressed as
a percentage of net sales.
Return on net assets
Operating income (annualized) expressed as a percentage of
average net assets.
Return on equity
Income for the period (annualized) expressed as a percentage
of average total equity.
Capital measures
Net debt/equity ratio
Net debt in relation to total equity.
Net debt/EBITDA
Net debt at end of period in relation to EBITDA, excluding non-recurring
items, calculated at average rates for the period.
Equity/assets ratio
Total equity as a percentage of total assets less liquid funds.
Capital turnover-rate
Net sales (annualized) divided by average net assets.
Share-based measures
Earnings per share, Basic
Income for the period attributable to equity holders of the Parent
Company divided by the average number of shares excluding shares
held by Electrolux.
Earnings per share, Diluted
Income for the period attributable to equity holders of the Parent Company
divided by the average number of shares after dilution, excluding shares
held by Electrolux.
Equity per share
Total equity divided by total number of shares excluding shares held
by Electrolux.
Capital indicators
Liquid funds
Cash and cash equivalents, short-term investments, financial derivative
assets1) and prepaid interest expenses and accrued interest income1).
Liquid funds in relation to net sales
The sum of liquid funds and non-utilized credit facilities divided by annualized
net sales.
Operating working capital
Inventories and trade receivables less accounts payable.
Working capital
Total current assets exclusive of liquid funds, less non-current other provisions
and total current liabilities exclusive of total short-term borrowings.
Net assets
Total assets exclusive of liquid funds and pension plan assets, less deferred
tax liabilities, non-current other provisions and total current liabilities
exclusive of total short-term borrowings.
Total borrowings
Long-term borrowings and short-term borrowings, financial derivative
liabilities1), accrued interest expenses and prepaid interest income1).
Total short-term borrowings
Short-term borrowings, financial derivative liabilities1), accrued interest
expenses and prepaid interest income1).
Interest-bearing liabilities
Long-term borrowings and short-term borrowings exclusive of liabilities
related to trade receivables with recourse1).
Financial net debt
Total borrowings less liquid funds.
Net provision for post-employment benefits
Provisions for post-employment benefits less pension plan assets.
Net debt
Financial net debt, lease liabilities and net provision for post-employment
benefits.
Other measures
Operating cash flow after investments
Cash flow from operations and investments adjusted for financial items
paid, taxes paid and acquisitions/divestments of operations.
Interest coverage ratio
Operating income plus interest income in relation to total interest expenses.
Non-recurring items
Material profit or loss items in operating income2) which are relevant for
understanding the financial performance when comparing income for the
current period with previous periods.
1) See table Net debt on page 24.
2) See Note 7 for more information.
ELECTROLUX ANNUAL REPORT 2021
Sustainability
reporting
86 Sustainability reporting
Sustainability reporting
Electrolux is a global leader in household appliances and sustainability is part of the
company’s business model. This section presents the Group’s sustainability work and
the results in 2021.
Electrolux shapes living for the better by reinventing taste, care
and wellbeing experiences, making life more enjoyable and
sustainable for millions of people. As a leading global appli-
ance company, Electrolux places the consumer at the heart of
everything it does. Through the company’s brands, including
Electrolux, AEG and Frigidaire, approximately 60 million house-
hold products are sold in more than 120 markets every year. In
2021, Electrolux had sales of SEK 126bn and employed approxi-
mately 52,000 people around the world. For more
information, visit www.electroluxgroup.com.
KEY RESULTS 2021
19/31%
products with leading performance accounted
for 19% of total units sold and 31% of gross profit
for consumer products in 2021
- 8%
absolute CO2 emissions in operations
during 2021 compared to 2020
95%
share of electricity from
renewable sources
>18,000
people took part in the Electrolux Food Foundation’s
activities aimed at educating kids, adults and professionals
in sustainable cooking and UN’s Sustainable Development
Goals (SDGs) and sustainable eating
Business model and sustainable development
To achieve the Electrolux purpose – Shape living for the better
– and drive profitable growth, Electrolux uses a business model
that focuses on delivering outstanding consumer experiences
in Taste, Care and Wellbeing. The objective is to create a steady
stream of consumer-relevant innovations under well-established
brands in key experience areas.
ment and in society. Sustainability is a key part of the strategy,
integrated in everything the Group does, as the company rec-
ognizes the growing importance of sustainability performance.
This includes the impact of Electrolux business operations and
products on the planet and society.
Electrolux is continuously making progress on sustainability
With 60 million home appliances sold annually, Electrolux has
long recognized the impact the company has on the environ-
and is acknowledged as a sustainability leader in the house -
hold durables industry.
ELECTROLUX ANNUAL REPORT 2021
Sustainability reporting 87
Electrolux in a changing world
The world in which Electrolux operates is constantly changing.
Demographic trends are increasing pressure on resources,
rapid technological development requires new business
approaches, and planetary boundaries are influencing decision
making at all levels. Such global megatrends create challenges
for Electrolux – and also bring about business opportunities.
Demographics
Global demographic trends – such as population growth, the
growing middle class, an aging population and urbanization
– are increasing the demand for home appliances, which puts
more pressure on natural resources. Between 2015 and 2030,
another billion people are expected to buy their first refrigerator.
Implications for Electrolux:
• Significant growth potential in emerging markets.
• Continued need to decrease the overall environmental
footprint of products.
• Growing importance of the elderly consumer group and the
increasing number of smaller households.
• Potential for new business models, such as shared ownership.
Resources and planetary boundaries
The need to reduce greenhouse gas emissions, and adapt to a
changing climate and resource limitations, will drive manufac-
turers toward circular business models that promote resource
efficiency, cleaner chemistry and waste reduction.
Implications for Electrolux:
• Continued need to improve the environmental performance
of products.
• Pressure to reduce water consumption in areas with water
scarcity.
• Competition for some metals and minerals.
• Growing importance of the circular economy.
• Expectations to go beyond chemical legislation.
• Problems with plastic waste pollution increasing pressure on
recycling solutions.
Technology
New technologies are scaled rapidly and globally, with purchasing
decisions increasingly influenced by online information and
social media. The Internet of Things (IoT) promises to connect
billions of products in the near future.
Implications for Electrolux:
• Greater consumer empowerment and awareness require
transparency and sustainable business practices.
• Digitalization will drive the next wave of operational efficiency,
including closer integration with suppliers.
• Connectivity offers opportunities for new business models that
result in better resource efficiency.
• IoT enables a lifelong relationship between producers and
consumers, but requires high standards of data security and
privacy.
Materiality
Material issues are topics that reflect the most significant eco-
nomic, environmental and social impacts for Electrolux.
The materiality process aims to identify and understand
the topics that are important to stakeholders, as well as to the
Group’s business strategy. It is an important way of evaluating
the ability to create and sustain value.
Electrolux draws on insights from global trends and drivers,
market intelligence, product research, internal and external
dialogue, expert opinion and consumer surveys, and other
sources of information to develop an up-to-date understanding
of the prevailing business context.
The material issues are expressed in the Group’s sustainability
framework – For the Better 2030 – as nine goals with defined
2030 sustainability targets, and supported by key performance
indicators (KPIs). See page 88 or www.electroluxgroup.com/
sustainability for more details about For the Better.
AVERAGE CO2 IMPACT DURING THE LIFETIME OF APPLIANCES1)
Recycling 1%
Materials, 7%
Manufacturing, 1%
Transportation, 1%
Product usage, 85%
Greenhouse gas, 5%
The product life cycle perspective guides how to best reduce
climate impacts. The greatest carbon emission impacts in the
Electrolux value chain occur from energy consumption when
products are used. See page 89 for more on the company’s
Climate Targets.
1) The graph is based on the Group’s total CO₂ impact in 2015 (82 million metric tons)
used for setting Science Based Targets.
ELECTROLUX ANNUAL REPORT 2021
88 Sustainability reporting
For the Better 2030
In 2020, Electrolux launched its Group sustainability framework – For the Better 2030. See the
separate Electrolux Sustainability Report 2021 for more on the company’s sustainability achievements.
FOR THE BETTER 2030
The Electrolux sustainability framework comprises of three areas: Better Company, Better Solutions and Better Living, which are divided into nine goals to make a positive
difference for the better. For the Better 2030 includes the company’s Climate Goals and overarching objectives to become climate neutral and more circular.
Better Company
Better Solutions
Better Living
Be climate neutral and drive clean
and resource-efficient operations
Lead in energy- and
resource-efficient solutions
Make healthy and sustainable eating
the preferred choice
Act ethically, lead in diversity
and respect human rights
Offer circular products and
business solutions
Make clothes last twice as long
with half the environmental impact
Drive supply chain
sustainability
Eliminate harmful materials
Make the home a healthier place to
thrive in, with half the carbon footprint
Support the UN Sustainable Development Goals and Climate Goals
Better Company
Electrolux aspires to demonstrate its sustainability leadership
throughout the company and acknowledges the supply chain
as part of its goals as a brand.
Be climate neutral and drive clean and
resource-efficient operations
Electrolux will continue to reduce its environmental footprint by
shifting to renewable energy and optimizing energy use and other
resources throughout its operations. The ambition is to have cli-
mate neutral operations by 2030. In 2021, absolute CO2 emissions
were reduced by 8% compared to the previous year, and energy
efficiency improved by 43% compared to 2005. By the end of
2021, 56% of the total energy used came from renewable sources.
In addition, the Group has its own solar photovoltaic systems in
seven countries.
Act ethically, lead in diversity and respect human rights
Electrolux will earn the trust of everyone impacted by its opera-
tions, demonstrating its commitment to ethics, diversity and
human rights through its words and actions. This includes work-
ing to ensure the health and safety of Electrolux employees,
and promoting societal benefit through community investment
activities. The Group achieved its lowest recorded injury rate
level reaching TCIR 0.43 for 2021. Work with local human rights
impact assessments continued during 2021, although work was
affected by the coronavirus pandemic and some activities were
conducted digitally. E-learning on the Antitrust Policy was rolled
out during the year.
Drive supply chain sustainability
Electrolux will take its sustainability leadership agenda into
the supply chain by working with suppliers to comply with the
Group’s high expectations, no matter where they are located.
The company drives and supports the transition to more sustain-
able practices. The Responsible Sourcing Program has adapted
to the new conditions presented by Covid-19 pandemic. Devel-
opment activities have been carried out with our suppliers with
a total of 237 supplier audits having been performed in 2021,
both physical and digital. The Electrolux Supplier Awards have
continued to encourage and motivate suppliers to be best in
class in terms of Sustainability performance, through the Sup-
plier Sustainability Award, reflecting the need for suppliers to
support all For the Better 2030 goals. Electrolux also secured
the commitment from its top 281 suppliers to disclose emissions
and set targets through the CDP Supply Chain Program, which
will play a key role in achieving the company’s target for zero net
carbon emissions throughout its supply chain by 2050.
OPERATIONAL RESOURCE EFFICIENCY
EMISSION REDUCTIONS
INDEX
100
80
60
40
20
0
17
18
19
20
21
Water consumption
Energy consumption
CO2 emissions
Scope 1 and 21,3)
Scope 31)
78%reduction compared to 2015
~20%reduction compared to 2015
ELECTROLUX ANNUAL REPORT 2021
Sustainability reporting 89
Better Solutions
Electrolux works to continuously improve its products and
services to make them better for consumers and the planet,
and to take leadership on global sustainability challenges with
a scientific and long-term approach.
Lead in energy and resource-efficient solutions
Tackling climate change and the increasing demand for water
are among the most urgent challenges facing society. Electrolux
contributes by offering resource-efficient products that help
consumers to live better lives, save money and reduce their
environmental footprint. In 2021, the most efficient products in
the Electrolux range represented 19% of products sold and 31%
of gross profit.
Offer circular products and business solutions
Electrolux aims to contribute to the circular economy by integrat-
ing recycled materials into product platforms, promoting recy-
clability, using more sustainable packaging solutions, increasing
the availability of spare parts to repair Electrolux products, and
Better Living
Electrolux uses its global reach and presence to drive and con-
tribute to positive change, reaching beyond the company’s own
products and footprint.
Make healthy and sustainable eating the preferred choice
Electrolux will promote sustainable eating by helping consum-
ers to reduce food waste, adopt more plant-based eating,
minimize nutrition loss in cooking, and enhance sustainable
eating experiences. By offering new products, solutions and
partnerships, Electrolux can promote more sustainable eating.
In 2021, various products and solutions that help consumers to
reduce food waste, ensure food quality and promote healthier
and more sustainable eating were launched. Ongoing cam-
paigns positively influence consumer behavior to promote more
sustainable habits in managing and eating food. Long-term
partnerships with various food expert organizations to promote
more sustainable habits in managing and eating food were
established. The website Replate.com was developed by the
Electrolux Food Foundation and its partners to inspire people to
shift to more sustainable food habits.
Make clothes last twice as long with half the
environmental impact
Electrolux has the objective to make clothes last longer and
reduce the environmental impact of garment care while caring
for all fabrics. By providing new products, solutions, campaigns
and partnerships Electrolux can promote more sustainable
developing circular business solutions. Progress in 2021 included
carrying out cross-functional workshops to increase awareness
on circular practices and business models. In addition, special
focus during the year has been on packaging and product
material footprint and continued focus on plastics. The coop-
eration with Stena Recycling has been extended to include
recyclability studies for new product groups.
Eliminate harmful materials
Electrolux has a robust approach to choosing materials for its
products to protect human health and the environment. The
Group continues to implement its common process for chemical
management. New scientific findings and stakeholder require-
ments are used to update the Group’s Restricted Materials List.
During the year, the global roll out of the Eco@web tool contin-
ued. New functionalities were implemented in the Eco@web tool
to automate responses to new requirements from fast-moving
chemical legislative developments.
garment care. In 2021, various product innovations that care for
garments to make them last longer and reduce environmental
impact by enabling consumers to use less energy, water and
detergent were launched. The global Make it Last campaign
(see page 9) to inspire better garment care among consum-
ers to make their clothes last longer was rolled out in APAC and
North America. The 50L Home partnership, to reimagine how we
use water in our homes, published the “A Circular Water Future”
white paper.
Make the home a healthier place to thrive in, with half the
carbon footprint
Electrolux will inspire more sustainable habits in caring for
homes, pioneer knowledge and new standards for a healthier
home environment, and enable wellbeing at home with reduced
environmental impact. By providing new products, solutions
and partnerships, Electrolux can make the indoor environment
healthier and more sustainable. In 2021, Electrolux sharpened
and refined the overall sustainability ambition for this Goal in
terms of carbon footprint, business models and communica-
tion with consumers. Various consumer air, water and floor
products and solutions that can make the indoor environment
healthier and enable consumers to care for it more sustainably
were launched. The collaboration with Stena Recycling reached
another industry milestone by developing the first vacuum
cleaner prototype with a recyclability of 90%.
The Electrolux climate neutrality roadmap
Targets:
80%
25%
reduction in carbon emissions
in operations. Scope 1 and 21), 3)
Climate neutral
operations2)
reduction in carbon emissions in
product use. Scope 31), 3)
Climate neutral across
the value chain
This long-term ambition supports the
United Nations Global Compact Business
Ambition for 1.5° C. Scope 1, 2 and 3.
2015
2025
2030
2050
1. Science based target (SBT)
2. Company target (Scope 1 + 2 = 0)
3. Includes contributions from energy use and greenhouse gas fugitive emissions.
ELECTROLUX ANNUAL REPORT 2021
90 Sustainability reporting
Managing sustainability – Risks and Opportunities
Governance
The Group’s sustainability framework – For the Better – is directly
overseen by the Group Management and the Business Areas’
Management teams that have been engaged in the develop-
ment of the priorities and objectives for the nine goals and the
climate goals.
In 2019, Electrolux formed the Sustainability Board led by
the CEO, tasked with assessing priorities, monitoring progress
and evaluating risks. The board proposes actions and targets
to Group Management and will be essential in delivering on
Electrolux sustainability targets going forward.
Regular education and communication on the Code of
Conduct and key Group Policies was introduced. All office based
staff must acknowledge the Code of Conduct by electronic
signature.
Each business area is responsible for contributing to the fulfill-
ment of the Group’s sustainability targets under the nine goals,
and several of the KPIs are broken down and monitored at
business area level. Reference groups and steering groups with
Group Management and senior management participation are
in place for various programs, for example, the Ethics & Human
Rights Steering Group, Group Operations, External Affairs, and
Chemicals.
A number of Group functions are accountable for identifying
and managing non-financial risks in their area of responsibil-
ity. Risks are reported to Group Management and fed into the
materiality process.
Key sustainability governance responsibilities:
• The Board of Directors is responsible for identifying how sus-
tainability issues impact risks to and business opportunities for
the company.
• Electrolux Group Management makes decisions about sus-
tainability priorities and monitors progress.
• Group Internal Audit evaluates and improves governance,
internal control and risk management processes.
• Group Risk Management supports the business to identify and
assess key risks in operations and critical suppliers.
• Group Legal Affairs is responsible for implementing an anti-
corruption program.
• Sourcing Boards are responsible for monitoring supplier com-
pliance, with the support of the Responsible Sourcing team.
• Group Sustainability assesses materiality, develops policies,
targets, monitors the implementation of programs, and man-
ages the Responsible Sourcing program.
• The Ethics Helpline (whistleblower function) and programs for
ethics and human rights are overseen by the Ethics & Human
Rights Steering Group.
Aspect
Policies
Environment
• Environmental Policy
• Workplace Policy
Key areas
• Product design
• Efficiency in operations
• Influencing legislation
Social, labor and human rights
• Workplace Policy
• Supplier Workplace Standard
• Workplace Directive
• Child and forced labor
• Health and safety, working
hours, compensation
• Discrimination and harassment
• Environmental management
systems
• Freedom of association,
collective bargaining
The full text of Electrolux policies is available at www.electroluxgroup.com/en/category/sustainability/codes-and-policies
Anti-corruption
• Anti-Corruption Policy
• Conflict of Interest Policy
• Conflict of interest
• Bribes or other improper
benefits
• Business partners and
customers
• Political contributions
Environment
From a product life-cycle perspective, Electrolux has a relatively
large environmental impact – including energy consumption,
use of materials and chemicals. Generally, the most significant
impacts occur during a product’s use phase, and the Group’s
strategy is to improve product performance.
The Electrolux Environmental Policy outlines how Electrolux
aims to improve environmental performance in production and
product use, as well as how to design products for disposal.
Requirements for the Group’s operations and in supply chain
are described in the Workplace Directive. All Electrolux facto-
ries with more than 50 employees are required to be ISO 14001
and ISO 50001 certified.
Group requirements on suppliers are described in the
Supplier Workplace Standard and the Workplace Directive.
Compliance is mandatory when evaluating potential and
existing suppliers. The Group’s strategic suppliers of components
and finished products must take energy efficiency measures,
and report on energy and water. Some have also been included
in the WWF Water Risk Filter assessment.
Electrolux responds to the annual CDP Climate and Water
questionnaires. In 2021, Electrolux achieved A- for CDP Climate
and A for CDP Water Security.
The Group’s proactive approach aims to develop and pro-
mote sales of products with lower environmental impact. Readi-
ness for more stringent product legislation, for example, can
lead to increased sales. For many years, products with superior
environmental performance have delivered higher profit margins.
ELECTROLUX ANNUAL REPORT 2021
Sustainability reporting 91
Electrolux products are affected by legislation in areas including
energy consumption, producer responsibility, and management
of hazardous substances. Some customers have requirements
that go beyond legislation.
The main environmental risks are related to regulatory and
customer requirements (see pages 92 - 93). Not meeting require-
ments could result in fines or limitations in production permits,
reduced sales or product withdrawal. Electrolux has processes
in place to mitigate these risks, including ISO management
systems, internal audits, a Responsible Sourcing program, and
targets in the product development plans. The Group’s programs
to reduce operational resource consumption and to introduce
more recycled materials in products are saving costs.
In 2018, the Group’s Science Based Target in line with the
Paris Agreement (COP 21) was approved.
In March 2019, Electrolux introduced the world’s first green
bond framework in its industry to raise funds earmarked for
investments contributing to reduced environmental impacts
from the company’s products and operations. The proceeds
are used to finance projects identified within the environmental
sections in the Electrolux sustainability framework For the Better.
In 2021, Electrolux also entered into a multi-currency revolving
credit facility linked to its sustainability goals.
To increase the internal focus on actions to reduce climate
change, a performance target linked to the Groups Science
Based Target, within the long-term share-related incentive
programs for senior managers, was updated in 2021.
Please see Electrolux Green Bond Framework and Green
Bond Impact Report: www.electroluxgroup.com/en/green-
bond-framework-29317/
Social, labor and human rights
Electrolux reputation is built on trust, which means that all
actions and decisions must be governed by principles of ethics,
integrity, and respect for people and care for the environment –
no matter where the Group operates in the world.
Consumers are increasingly making purchasing decisions
based on their trust in companies and how they contribute to
society. Additionally, employees prefer to work for a company
with values that match their own. Respecting human rights and
being an ethical company goes beyond simply meeting legal
requirements. It is about guiding employees to know what is
right and wrong, and how to make decisions accordingly. The
goals in For the Better 2030 reflect the Group’s commitment to
build a strong culture for ethics and human rights.
The key human rights risks include freedom of association,
discrimination and working conditions. Other risks are privacy
of information, and corruption.
The Electrolux Code of Conduct contains the Group’s Human
Rights policy statement, firmly stating that human rights shall be
respected. All employees are required to do the Code of Conduct
e-learning as part of onboarding and recurring campaigns. The
Group’s human rights commitment is further detailed through a
Human Rights Directive. The Workplace Policy, the Supplier Work-
place Standard and the Workplace Directive contain mandatory
requirements relating to labor rights, health, safety and environ-
Anti-corruption
Corruption poses a threat to sustainable economic and social
development around the world. Corruption could also have
severe negative impacts for the Group by obstructing busi-
ness growth, increasing costs and imposing serious legal and
reputational risks. Operating in 58 countries all over the world,
including countries in emerging markets, Electrolux is exposed
to risks related to corruption and bribery. These risks may arise
in several phases of the value chain, such as in purchasing and
sales.
Electrolux has zero tolerance of corruption and works contin-
uously to raise awareness among employees in order to mini-
mize the risk for corruption. Measures against corruption are
included in the Anti-Corruption Policy, which all employees are
required to follow. This policy provides guidance to employees
on how to do the right thing and explains which actions consti-
tute unlawful and inappropriate behavior.
Employees can report ethical misconduct through a whistle-
blower system. In 2021, 411 (258) reports were received, out
of which 11 (16) reports in the area of business integrity were
investigated. Business integrity includes allegations related
to corruption, fraud, theft, internal control and anti-trust.
ELECTROLUX ANNUAL REPORT 2021
ment within Electrolux and suppliers. In 2021, the Workplace Direc-
tive was updated to reflect emerging stakeholder expectations.
Electrolux monitors performance and manages risks
through internal and external audits, for manufacturing units,
local human rights assessments, education, the Ethics Helpline,
management-labor dialogue, as well as health and safety
committees. Risks in the supply chain are addressed through
audits and training efforts as part of the Responsible Sourcing
program and the Conflict Minerals program.
Human rights procedures engage many functions through-
out the organization, from Human Resources to Purchasing and
Group Operations. Accountability for the ethics program and
the oversight of human rights lies with the Ethics & Human Rights
Steering Group, which comprises of senior management repre-
sentatives from Group functions.
Electrolux conducts human rights impact assessments at
both Group and local level, in line with the UN Guiding Principles
on Business and Human Rights. Five issues and three business
processes constitute the Group’s salient human rights issues.
The methodology for the assessments focuses on identifying the
risk of harming people, as a direct or indirect result of Electrolux
operations. In 2021, the focus was on the planning of an assess-
ment in South Africa. However, due to a strike, the actual con-
duct of the assessment was postponed to early 2022.
Electrolux conducts Group-wide e-learning courses on anti-
corruption. These initiatives complement the tailored training
that certain functions such as sales, procurement and senior
management receive (roles that are more exposed to corrup-
tion risks). Such training sessions have been conducted locally
throughout the organization by either in-house legal counsel or
by external experts. Training requirements are continuously mon-
itored and evaluated based on business needs, and the legal
and risk context. The local human rights assessments include the
review and assessment of corruption risks.
>12,000
employees had completed the e-learning on the
Anti-Corruption Policy by the end of 2021
92 Sustainability reporting
Impacts throughout the value chain
A value chain
perspective helps
Electrolux identify how
it can best manage its
impacts and create
maximal value.
This approach makes it
easier to identify opportuni-
ties, minimize or enhance
impacts, and understand
boundaries. It also helps the
company to understand
how its actions and impacts
are interrelated.
The following section
identifies the Group’s key
sustainability risks and
impacts, and how they are
managed. It also identifies
the degree of influence
along the value chain, and
the value created for the
company and the society.
Product
development
Suppliers
Electrolux
operations
Close collaboration between
Design, Marketing and R&D
enables new products to
offer best-in-class consumer
experiences. The ambition
is to develop solutions with
leading environmental per-
formance. Timely innovation
is key to meeting forthcoming
legal requirements and mar-
ket demands. The focus is on
energy, water and material
efficiency, as well as chemical
use in appliances.
Risks
• Not meeting regulatory or
market requirements.
• Not meeting consumer
expectations.
• Not adapting to a low-
carbon economy.
How impacts are managed
• Continuously improve prod-
uct efficiency.
• Increase use of recycled
materials.
• Eliminate harmful materials.
• Integrate future require-
ments into product develop-
ment plans.
• Participate in the UN’s
United for Efficiency
program.
Ability to influence - High
Generating value
Products with leading envi-
ronmental performance
deliver customer value in line
with the business strategy,
while reducing negative
impact on the environment.
Electrolux relies on thousands
of first-tier suppliers, many in
emerging markets. The focus
is on safeguarding Electrolux
standards and developing
supplier capacity to improve
sustainability performance.
Electrolux also requires all its
suppliers to comply with the
Electrolux Supplier Workplace
Standard and the Workplace
Directive. These requirements
are the same as Electrolux
internal policies.
Risks
• Connections to social,
ethical and human rights
violations.
• Severe weather conditions
caused by climate change
could negatively affect
supply.
• Business interruptions due to
unethical business practices
in the supply chain.
How impacts are managed
• Apply a risk-based
approach to identify suppli-
ers in scope.
• Assess the climate impact
of key suppliers.
• Conduct auditing to safe-
guard standards.
• Hold training and drive
improvement programs.
Ability to influence - Medium
Generating value
Enforcing Electrolux stan-
dards supports human rights
and raises environmental,
labor and economic stan-
dards, particularly in emerg-
ing markets. This also builds
trust and a resilient supply
chain, while reducing busi-
ness and reputational risks.
Electrolux has 35 finished goods
factories and 6 factories making
components and accessories,
and sales in more than 120
markets, with approximately
52,000 employees. The main
focus areas are to reduce the
environmental footprint, main-
tain high ethical standards and
working conditions, as well as to
have a positive impact in local
communities.
Risks
• Disruptions due to emissions
and discharges as a result of
incidents.
• Disruptions caused by severe
weather as a result of climate
change.
• Impact due to social, ethical
and human rights violations.
• Corruption related to weak
governance.
How impacts are managed
• Implement and maintain
systems for environment,
resource efficiency, and health
and safety.
• Governance systems and
training to enforce sustain-
ability policies.
• Assess the climate impact
on operations.
• Conduct human rights impact
assessments. Support local
community programs.
Ability to influence - High
Generating value
Electrolux creates commu-
nity benefit by providing jobs,
knowledge transfer and eco-
nomic opportunities. Positive
employee relationships pro-
mote competence develop-
ment, employee wellbeing and
job satisfaction. Local commu-
nity engagement creates good
stakeholder relations, improves
employee pride and enhances
brand reputation.
ELECTROLUX ANNUAL REPORT 2021
Sustainability reporting 93
Transport
Sales
Consumer use
End-of-life
Addressing transportation is
part of a life-cycle approach
to the Group’s overall impacts.
Electrolux emits more CO2
transporting its goods than it
emits through the total energy
used in the Group operations.
The Group uses its pur-
chasing power to influence
the logistics industry by
developing more sustainable
transport solutions in col-
laboration with our logistics
partners.
Risks
• Emissions from transporta-
tion.
• Labor conditions in logistics
companies.
• Disruptions in supply chain
can impact climate foot-
print due to shifts in mode of
transportation.
• Disruptions caused by
severe weather as a result
of climate change.
How impacts are managed
• Implement collaborative
solutions to mitigate logis-
tics-related impacts.
• Promote efficient modes of
transport.
Ability to influence - Medium
Generating value
Helping to create a more
sustainable transport indus-
try strengthens the Group’s
brand reputation. Transport
is included in the Electrolux
carbon target. It also sup-
ports suppliers in their work to
improve their environmental
and labor standards.
Electrolux sells approximately
60 million products in over 120
markets every year, primarily
through retailers. Energy and
performance labeling, and
sustainability communica-
tion allow us to raise product
efficiency awareness among
consumers.
As the main environmen-
tal impacts of Electrolux
products occur when they
are used, product energy
and water efficiency is a top
priority.
Greater use of connected
products in the future will help
improve optimal product use.
Risks
• Failure to effectively inform
consumers on product use.
• Not meeting consumer
expectations on product
efficiency.
• Limited opportunity to influ-
ence decision-making at the
point-of-purchase.
• Corruption.
How impacts are managed
• Continuously improve
product performance and
efficiency.
• Improve pre- and point of
purchase communication.
• Secure third party endorse-
ment of products (such as
best-in-test recognitions).
• Communicate on themes
such as food storage, reduc-
ing food waste, caring for
clothes and textiles.
• Conduct Group-wide train-
ings on anti-corruption.
Ability to influence - Medium
Generating value
Promoting transparency
and the Group’s sustainable
product offering contributes
to retailer sustainability goals,
strengthens brands and
builds customer loyalty. As
sales of the Group’s products
with leading environmental
performance demonstrate,
an efficient product offering is
a profitable strategy.
Risks
• Not meeting expectations
on product performance.
• Consumers not using prod-
ucts in an optimal way.
• Product safety.
• Data privacy for users of
connected products.
How impacts are managed
• Continuously improve
product performance and
efficiency.
• Prepare for increased data
privacy regulation.
• Follow the product safety
governance and proce-
dures.
• Increase development
and sales of connected
products.
Ability to influence - Medium
Generating value
Appliances deliver social
benefits that many take for
granted – such as food pres-
ervation, hygiene standards,
freeing up time from house-
hold chores, and facilitating
equal opportunities – factors
that are particularly sig-
nificant in emerging markets.
Providing efficient products,
raising consumer awareness
and increasing appliance
connectivity can help counter
rising global CO2 emissions,
while reducing food waste
and the wear of clothes.
Legislation on appliance
recycling is being introduced
in more markets. On aver-
age, materials account for
approximately 7% of a prod-
uct’s life-cycle impact, and
Electrolux market research
indicates that it is a top
priority for consumers.
In Europe, the region
with the most comprehen-
sive producer responsibility
legislation, 80% of the materi-
als from collected end-of-life
large appliances must be
recovered.
Risks
• Not meeting expectations
beyond legislation.
• Waste of resources due to
a lack of recycling.
• Illegal trade of discarded
products and recycled
materials.
How impacts are managed
• Establish a more circular
business by using recycled
materials.
• Eliminate harmful materials
to enable higher quality
recycled materials and
decrease environmental
impact.
• Promote proper recycling
as part of producer respon-
sibility.
Ability to influence - Low
Generating value
Building resource-efficient
and closed-loop systems help
reduce environmental impact
and overall resource con-
sumption. Innovative designs
that allow material reuse
save money and energy, and
increase consumer trust in the
Electrolux brand.
ELECTROLUX ANNUAL REPORT 2021
94 Sustainability reporting
EU Taxonomy Report 2021
Introduction
This is the first EU Taxonomy report by Electrolux, which is pre-
pared in accordance with the EU taxonomy regulation for the
establishment of a framework to facilitate sustainable invest-
ment.
The purpose of the taxonomy is to establish common defini-
tions and reporting about the economic activities that are in
line with the EU sustainability objectives for 2030.
As a leading global appliance company, Electrolux must
adhere to local legislation regarding, for example, product
efficiency and product labelling wherever it operates in the
world. However, there are no global performance standards
for appliances but rather fundamental differences in the
standards across the world for the respective markets.
The EU Taxonomy describes, among other things, which
economic activities that are within the scope of the taxonomy
Background and Electrolux approach
The main technical screening criteria for substantial contribution
to climate change mitigation for Electrolux products are based
on the EU framework regulation for energy labelling of appli-
ances and air conditioners (the “EU Labelling Framework”)2).
The energy labels for washing machines, washer dryers, dish
washers and refrigerators/freezers were revised in 2021. Tumble
dryers, ovens, hoods and air conditioners continue using the
older energy scales, but the scales are expected to be revised in
the coming years.
The new energy labelling schemes have much stricter per-
formance requirements resulting in a major downgrade of the
energy classes, e.g. a refrigerator previously in energy efficiency
class A+++ could move to class C, D or E after rescaling without
any significant change in its energy consumption. Since the
applicable taxonomy screening criteria only deem products
Included activities
Eligible activities in this report include economic activities for
Electrolux that, according to the taxonomy regulation, poten-
tially could be defined as “taxonomy aligned” activities based
on the technical screening criteria:
• Electrolux is a manufacturer of energy efficiency equipment
for buildings, i.e. household appliances and cooling and
ventilation systems
• The sales of products covered by the EU framework for energy
labelling regulation are included, i.e. washing machines,
washer dryers, tumble dryers, dish washers, refrigerators/
freezers, ovens, hoods and air conditioners (vacuum cleaners
are not included as the implementation directive has been
repealed)
(being “taxonomy eligible activities”) and which of such activi-
ties qualify as environmentally sustainable (being “aligned
economic activities”), by meeting EU Taxonomy’s techni-
cal screening criteria. For Electrolux products to be deemed
“aligned” with screening criteria, activities must comply with
certain EU specific standards (see further below).
For the above reasons, Electrolux has deemed that the eli-
gable activities in this report should focus on the EU market.
In 2021, the EU market accounted for 29% of Group Net Sales.
The EU Taxonomy framework is still under development
therefore the content and format of this report will develop over
time in parallel with the progress of the taxonomy. The Electrolux
Taxonomy report for 2021 is limited to information about tax-
onomy eligible activities.
environmentally sustainable if they are within “the highest two
populated classes of energy efficiency”, this rescaling, as well
as a gradual shift of sales towards more efficient appliances,
will create dynamic conditions for what will be defined as an
environmentally sustainable product.
Electrolux is investing in new product architectures with
further improved energy efficiency with the objective to meet
the current and future technical screening criteria for potentially
aligned economic activities. The Group monitors the develop-
ment of product legislation to be prepared for future changes.
Electrolux long-term ambition is to ensure that its entire value
chain is climate neutral by 2050. To achieve this improving prod-
uct efficiency is fundamental since carbon emissions as a result
of energy consumption during product use is dominating.
• Only the sales to the EU market are assessed as taxonomy
eligible since necessary information could be made avail-
able to determine if a product potentially could be defined as
“taxonomy aligned”
• “Manufacturer” is defined as manufacturing in-house or by
third party and selling that product under Electrolux own
name or trademarks3). Private labels are excluded.
Electrolux considers this approach to be in compliance with
the EU Taxonomy regulation, its purpose and the definition of
“manufacturing” as set out in other relevant EU legislations.
Since parts of the EU Taxonomy framework are still under devel-
opment this report is limited to information about taxonomy
eligible activities, in line with applicable requirements, based
on “substantial contribution” to “climate change mitigation”.
ELECTROLUX ANNUAL REPORT 2021
Sustainability reporting 95
Excluded activities
As a majority of Electrolux products are sold outside the Euro-
pean market they are not in the scope of the EU framework reg-
ulation for energy labelling and therefore will not be compatible
with technical screening criteria in the taxonomy. The energy
labelling varies from market to market, and it sends strong
signals to consumers who want to buy products with superior
performance. However, different energy labelling systems are
not comparable for the purpose of the EU Taxonomy report.
Several product categories sold in the EU are not included in the
EU framework for energy labelling and hence are not assessed
as taxonomy eligible in the EU taxonomy, e.g. cooktops and
small kitchen appliances. Vacuum cleaners are also excluded
from the taxonomy as the regulation for energy labelling has
been repealed. Since 1997, Electrolux has internally tracked the
most-resource efficient products sold in the Group and each
year the criteria have become more stringent. In 2021, the most
resource-efficient products accounted for 19% of total units
sold and 31% of gross profit.
For further reading see Better Solutions page 89.
Reporting on Key Performance Indicators
According to the EU Taxonomy framework, Electrolux is
regarded as a manufacturer of energy efficiency equipment for
buildings. For 2021, the EU Taxonomy report only includes eligi-
bility based on economic activities that pursue substantial con-
tribution of climate change mitigation. Further, the economic
activities reported on below are only such activities that have
technical screening criteria to formally permit such activities to
potentially being deemed as aligned economic activity within
the current EU Taxonomy framework. The applicable technical
screening criteria for potentially aligned economic activities for
Electrolux are associated with:
• household appliances; and
• cooling and ventilation systems, which are rated in the highest
two populated classes of energy efficiency in accordance with
EU Regulation (EU) 2017/1369, and delegated acts adopted
thereunder.
The numerator in the Key Performance Indicators presented
in the table below only encompass household appliances and
cooling and ventilation systems, which are sold by Electrolux
in the EU Market under its own brands; and not all household
products sold by Electrolux worldwide or products sold under
private brands.
2021
Turnover I
Capital expenditure II
Operating expenditure III
Total (mSEK)
125,631
6,043
4,622
Proportion of Taxonomy
eligible economic
activities (%) IV
Proportion of Taxonomy
non-eligible economic
activities (%)
19
31
29
81
69
71
I – Turnover is the part of net turnover which is derived from
products or services, which equals Electrolux total Net Sales.
See Consolidated statement of comprehensive income , p17.
II – Capital expenditures (CapEx) are additions to tangible
and intangible assets during the year. The total CapEx is
reported in Note 12 and 13.
III – Operating expenditures (OpEx), in the context of the
taxonomy and according to the regulation, is defined as direct
non-capitalized costs that relate to research and development
(R&D), building renovation measures, short-term lease, main-
tenance and repair, as well as direct expenditures relating to
the day-to-day servicing of assets, i.e. not the total operating
expenses, but only expenses associated with maintaining the
value of assets linked to eligible products. In this report R&D
and maintenance are included as the other areas are deemed
to be non-material.
IV – Eligible economic activities are those that have technical
screen criteria to formally permit such activities to potentially
being deemed as aligned economic activity within the current
EU Taxonomy framework, i.e. sales of washing machines, washer
dryers, tumble dryers, dish washers, refrigerators/freezers,
ovens, hoods and air conditioners under own brand names on
the EU Market. CapEx refers to Electrolux investments in assets
used to manufacture these products regardless of where they
are located. OpEx refers to expenses associated with maintain-
ing the value of these assets.
1) The European Union member states
2) Regulation (EU) 2017/1369 of the European Parliament and of the Council of 4 July 2017
3) ‘Manufacturer’ means a natural or legal person who manufactures a product or has a product designed or manufactured, and markets that product
under its name or trademark (Regulation (EU) 2019/1020)
ELECTROLUX ANNUAL REPORT 2021
96 Sustainability reporting
The sustainability reporting section in the administration report has been developed to fulfill the requirements in the Swedish Annual
Accounts Act and the EU Taxonomy Regulation (EU 2020/852). For more detailed information on Electrolux and sustainability, please
read the Sustainability Report prepared according to the GRI Standards at: www.electroluxgroup.com/sustainability
Sustainability reporting and information
The Electrolux sustainability routines and systems for informa-
tion and communication aim at providing key stakeholders
with accurate, relevant and timely information concerning the
targets and results of the Group’s sustainability framework, For
the Better 2030.
The sustainability reporting section in the administration
report has been developed to fulfill the requirements in the
Swedish Annual Accounts Act. This report also highlights how
the Group’s priorities reflect its commitment to the ten principles
of the UN Global Compact. Unless otherwise indicated, sustain-
ability disclosures include all operations that potentially can
affect Group performance for calendar year 2021.
Sustainability information is shared regularly in the form of:
• Electrolux Sustainability Report, including
-United Nations Global Compact, Communication on
Progress
-United Nations Guiding Principles Reporting Framework
• Sustainability in Brief
• Mandatory reporting regarding transparency in the
supply chain
• Press releases
• Meetings with key stakeholders worldwide
• Responses to questionnaires from investors and analysts
• Annual submission to CDP for climate and water
Reports, policies and press releases are available at:
www.electroluxgroup.com
Stockholm, February 17, 2022
AB Electrolux (publ)
Board of Directors
Auditor’s report on the statutory sustainability report
To the general meeting of the shareholders in AB Electrolux
(publ), corporate identity number 556009-4178.
Engagement and responsibility
It is the Board of Directors who is responsible for the statutory
sustainability report for the year 2021 on pages 86–96 and that
it has been prepared in accordance with the Annual Accounts
Act.
The scope of the audit
Our examination has been conducted in accordance with FAR’s
auditing standard RevR 12 The auditor’s opinion regarding the
statutory sustainability report. This means that our examination
of the statutory sustainability report is substantially different
and less in scope than an audit conducted in accordance with
International Standards on Auditing and generally accepted
auditing standards in Sweden. We believe that the examination
has provided us with sufficient basis for our opinion.
Opinion
A statutory sustainability report has been prepared.
Stockholm, February 22, 2022
Deloitte AB
Signature on Swedish original
Jan Berntsson
Authorized Public Accountant
This is a translation of the Swedish language original.
In the event of any differences between this translation and
the Swedish language original, the latter shall prevail.
ELECTROLUX — A LEADER IN THE HOUSEHOLD DURABLES INDUSTRY
The Group’s sustainability performance strengthens relations with
investors and Electrolux is recognized as a leader in the household
durables industry. In 2021, Electrolux was included in the Dow Jones
Sustainability Index (DJSI) World and Europe indexes and thereby
ranks among the top 10% of the world’s 2,500 largest companies for
social and environmental performance. Additionally, Electrolux has
received recognition from other indexes and organizations, including
SAM, OEKOM, CDP and UN Global Compact Top 100.
ELECTROLUX ANNUAL REPORT 2021
Climate Risk Disclosures 97
Climate Risk Disclosures
About this Report
This is the second Electrolux climate report based on the Task
Force on Climate-related Financial Disclosure (TCFD) recom-
mendations. Assessments, findings and conclusion in this Climate
Risk Disclosures report replaces earlier ones . The purpose of the
report is to assess how climate change could affect Electrolux in
the long term, but also the role Electrolux plays in mitigating cli-
mate change. In accordance with the TCFD recommendations,
this report is based on two potential future climate scenarios and
how these could impact climate-related risks and opportunities
for Electrolux in the future. The two main events in 2021 that had
an impact on this report were the IPCC Sixth Assessment Report
(AR6) and the 26th UN Climate Change Conference of the Par-
ties (COP26) in Glasgow. The AR6 underpinned the scientific
consensus of the findings in the report.
IEA concluded that the climate pledges announced at COP 26,
if met in full and on time, would be enough to hold the rise in
global temperatures to 1.8 °C by 2100.
The scenarios used for the assessment have been selected to
represent two possible future developments paths, where each
scenario is characterized by different societal impacts. For each
scenario long-term perspectives of 10 and 30 years have been
used to assess climate-related risks and possibilities based on
what the Group considers to be best available knowledge. The
climate report describes the Group’s continuous assessment of
climate-related risks and opportunities based on the develop-
ment of stakeholder expectations, scientific findings, regulatory
requirements and frameworks for company reporting. Electrolux
is committed to annually publish a climate report based on the
TCFD recommendations and the company plans to further
develop its reporting going forward, as climate science and
more extensive analyses evolve. This report is structured around
the four TCFD elements describing how organizations oper-
ate: governance, strategy, risk management, and metrics and
targets. All these elements are related to climate-related risks
and opportunities.
Governance
Strategy
Disclose the organization’s
governance around
climate-related risks and
opportunities.
Disclose the actual and
potential impacts of climate-
related risks and opportuni-
ties on the organization’s
businesses, strategy, and
financial planning where such
information is material.
Risk
Management
Disclose how the
organization identifies,
assesses, and manages
climate-related risks.
Metrics and
Targets
Disclose the metrics and
targets used to assess
and manage relevant
climate-related risks and
opportunities where such
information is material.
Governance
Electrolux has governance structures to effectively
manage climate-related risks and opportunities.
Climate change management
The Electrolux climate change strategy is managed by Group
Sustainability (GS) in close cooperation with other Group staff
functions and the Business Areas.
The Head of GS reports to the Chief Experience Officer (CXO)
and has regular meetings with the Sustainability Board and
Group Management.
The CEO reports climate-related progress to the Board,
which oversees the overall company strategy. The Electrolux
Sustainability Board, chaired by the CEO, is a forum to raise
sustainability topics and review the implementation of the
different sustainability programs.
Other members of the Sustainability Board are the Chief
Financial Officer (CFO), Chief Operations Officer, CXO, Head
of HR & Communications, General Counsel and Head of GS.
The Sustainability Board gives recommendations to Electrolux
Group Management, which makes decisions about sustainability
and climate-related issues.
Group Risk Management manages the Electrolux Enterprise
Risk Management (ERM) program. This program is governed by
the ERM board, which consists of the CEO, CFO, General Counsel,
VP Group Treasury, Head of Group Internal Audit, and Head
of Group Risk Management. The ERM program manages risks
related to direct climate impacts and covers both identified and
emerging risks, and with a time-horizon of around three years.
In 2021 it was decided to include physical climate risks in the
ERM and to report the outcome to the Sustainability Board. To
increase the internal focus on actions to reduce climate change,
a performance target linked to the Group’s Science Based
Target, within the long-term share-related incentive programs
for senior managers, was implemented in 2021 in addition to the
program in 2020.
ELECTROLUX ANNUAL REPORT 2021
98 Climate Risk Disclosures
Strategy
Climate change is a core element of the Electrolux
Group sustainability framework, which includes the
company’s climate targets, various climate-related
activities and work with its stakeholders.
For the Better 2030
The Group’s sustainability framework – For the Better 2030 –
consists of Better Company, Better Solutions and Better Living.
It covers all the lifecycle stages of the company’s products –
from raw materials and manufacturing to product use and
how Electrolux can contribute to more sustainable living for
consumers around the world.
For the Better 2030 includes the company’s work with climate
change and its climate targets through the Electrolux Climate
Neutrality Roadmap (see below). Climate-related topics in
the sustainability strategy include the objective to ‘Be climate
neutral and drive clean, resource-efficient operations’ (scope
1 and 2 emissions) and the objective to ‘Lead in energy- and
resource-efficient solutions’ (scope 3 emissions). Scope 1 and 3
are also addressed through the objective to ‘Eliminate harmful
materials’, by phasing out hydrofluorocarbons (HFCs).
See the Electrolux Annual Report 2021, Sustainability Reporting
on p.88 for more details about For the Better 2030.
The Electrolux Climate Neutrality Roadmap
The company’s long-term ambition is to ensure that its entire
value chain is climate neutral by 2050. This supports the United
Nation’s Global Compact – Business Ambition for 1.5° C, which
Electrolux President and CEO Jonas Samuelson has signed.
Two shorter-term company targets act as stepping stones to its
long-term ambition:
• Science Based Target – aims to reduce company scope 1 and
2 emissions by 80% between 2015 and 2025, and the absolute
scope 3 emissions from the use of sold products by 25% during
the same time period.
• For the Better 2030 sustainability framework target – aims to
achieve climate neutral operations by 2030 (scope 1 and 2
emissions).
Climate targets include increasing the amount of renewable
electricity from 95% in 2021 to 100% by 2025.
Initiatives contributing toward the company’s strategy
Electrolux has a variety of initiatives that are fundamental for
driving its climate objectives forward. These include financial
mechanisms and partner collaborations.
Electrolux Green Bond Framework
In 2019, Electrolux became the first company in its industry to
launch a Green Bond Framework to fund climate investments
and other environmental initiatives. In 2021, Electrolux also
entered into a multi-currency revolving credit facility linked to
its sustainability goals.
Long-term Incentive program
Within LTI 2021 a new performance target was introduced,
linked to reducing climate impact in accordance the Group’s
Science Based Target.
Examples of Electrolux climate-related collaborations
United for Efficiency (U4E) – Electrolux participates in the United
Nations led initiative United for Efficiency to support developing
countries and emerging economies in setting up effective
product performance and labelling systems to help facilitate
a complete market transformation to energy-efficient cooling
appliances. Currently, only 50% of the use phase emissions from
products sold by Electrolux are covered by product efficiency
standards.
The Cool Coalition – The Cool Coalition was initiated by
UNEP with the objective to improve the energy efficiency and
to reduce the environmental impact of cooling appliances.
Electrolux has made the commitment to phase out or replace
high-impact greenhouse gases in all appliances with, gases that
have low global warming impact by 2023.
THE ELECTROLUX CLIMATE NEUTRALITY ROADMAP
Targets:
80%
25%
reduction in carbon emissions
in operations. Scope 1 and 21), 3)
Climate neutral
operations2)
reduction in carbon emissions in
product use. Scope 31), 3)
Climate neutral across
the value chain
This long-term ambition supports the
United Nations Global Compact Business
Ambition for 1.5° C. Scope 1, 2 and 3.
2015
2025
2030
2050
1. Science based target (SBT)
2. Company target (Scope 1 + 2 = 0)
3. Includes contributions from energy use and greenhouse gas fugitive emissions.
About TCFD
The international Task Force on Climate-related Financial Disclosure
(TCFD) was formed in 2015 by the Financial Stability Board and tasked
with correcting the shortage of information regarding companies’
work with, and management of, climate change. In 2017, the TCFD
released climate-related financial disclosure recommendations
designed to help companies promote more informed investment,
credit and underwriting decisions and enable stakeholders to better
understand the financial system’s exposure to climate-related risks.
ELECTROLUX ANNUAL REPORT 2021
Climate Risk Disclosures 99
The Electrolux climate scenarios
Electrolux mainly uses two different climate scenarios based on
data from the International Panel on Climate Change (IPCC)
and the International Energy Agency (IEA) to assess the resilience
of its business. This includes its potential medium- and long-term
climate-related risks and opportunities throughout the appli-
ance industry value chain.
According to the TCFD Recommendations, companies should
base their climate-related risks and opportunities on two different
climate scenarios. In alignment with these recommendations,
the two scenarios Electrolux uses have different levels of projected
emission reductions over the time horizons of 10 years and 30
years1). They are referred to as the Rapid Transition Scenario
and the Changing Climate Scenario.
The Rapid Transition Scenario
This scenario would involve rapidly declining emissions
in the coming decades, mainly driven by legislation and
taxes, resulting in a global average temperature rise
of between 0.3°C to 1.7°C by 2100. This pathway would
require transitional changes to achieve the UN Paris
Climate Agreement, including a decline in emissions from
2020.
Key climate implications
• A mean global warming increase by 1.5 to 1.7 °C
between 2046 and 2065.
• A mean sea level increase of 0.09 m to 0.19 m between
2046 and 2065.
Implications for the appliance industry
• Stringent product energy legislation – will impact
product development and sales.
• Carbon taxes – will impact suppliers, operations
and sales.
• Digitalization and smart demand-side management
– will impact product development and sales.
The climate implications in this scenario are based on the
IPCC Scenario RCP 2.6 and the IEA SDS Scenario2).
The Changing Climate Scenario
This scenario would involve slowly declining emissions
resulting in a temperature increase of between 2.1°C to
3.5°C by 2100. This ‘intermediate’ pathway would follow
the current emission path to peak in 2040 with long-term
physical risks as a result of climate change.
Key climate implications
• A mean global warming increase of approximately
1.5 °C in 2030 and 2.0°C 2050.
• A mean sea level increase of between 0.09 m in 2030
and 0,20 m in 2050.
Implications for the appliance industry
• Greater acute physical risks due to more frequent and/
or more severe weather systems, such as hurricanes
and floods – will impact suppliers, operations and
transport in the appliance industry.
• Greater chronic physical risks from changing climate
conditions, such as droughts – will impact suppliers,
operations and transport in the appliance industry.
The climate implications in this scenario are based on the
IPCC Scenario RCP 4.5 and the IEA STEPS Scenario3).
1) Electrolux has based its climate scenarios and impacts on two different Representative Concentration Pathways (RCPs) developed by the IPCC (IPCC, 2014: Climate Change 2014: Synthesis
Report).
An RCP describes a greenhouse gas (GHG) concentration trajectory resulting in different climate futures, and ultimately results in different risks and opportunities for Electrolux based on this
forecast
The Electrolux report for 2021 has been updated based on the IPCC report “AR6 Climate Change 2021: The Physical Science Basis”, presented in August 2021.
2) See the Reporting Principles on page 101 for more technical detail on the Rapid Transition Scenario.
3) See the Reporting Principles on page 101 for more technical detail on the Changing Climate Scenario.
Major scenario impacts on the Electrolux value chain
The Rapid Transition and Changing Climate scenarios would both have material impact on the entire Electrolux value chain.
However, their major impacts on the value chain would differ slightly (see the illustration below).
MAJOR IMPACTS FROM THE TWO SCENARIOS ALONG THE VALUE CHAIN
Rapid Transition Scenario
Product
development
Suppliers
Electrolux
operations
Transport
Sales
Consumer use
End-of-Life
Changing Climate Scenario
ELECTROLUX ANNUAL REPORT 2021
100 Climate Risk Disclosures
Risk management
Electrolux has a thorough risk mapping and
decision-making process that manages all risks for
the Group. The two different climate scenarios result
in a variety of risks and opportunities for Electrolux
throughout its value chain.
Enterprise Risk Management
The Electrolux Enterprise Risk Management (ERM) framework
and related processes identify, mitigate, communicate and
report risks that can significantly affect the business. Electrolux
follows a risk mapping process for the collection and incorpora-
tion of risk information into decision making and governance
processes. The ERM includes climate-related risks in line with
the Climate Risk Disclosure. Climate-related risks usually have
a longer time-horizon than other ERM-risks.
The Rapid Transition Scenario
As a sustainability leader in its industry, Electrolux is well-
positioned to meet the demands for stringent product energy
legislation, carbon taxes and digitalization in the near future
– to continue to create long-term shareholder value. As
approximately 85% of an appliance’s climate footprint is in its
use phase, Electrolux can play a role in meeting the need for
energy efficient appliances that help mitigate the impact of
climate change.
Primary rapid transition risks
• Increased costs related to designing resource-efficient prod-
ucts – Electrolux has product development roadmaps with the
objective to meet forthcoming energy labelling standards,
such as the EU new labelling standards and stricter minimum
energy performance standards (MEPS) to be implemented
between 2021 and 2023.
• Carbon taxes – Electrolux is well prepared to meet the risks of
higher carbon taxes by driving resource and energy efficiency
throughout the value chain. Carbon taxes on finished goods
could also increase carbon import duties, such as the EU
‘ carbon border adjustment mechanism’.
Opportunities
• Industrial shift to renewable energy – Electrolux is already well
on its way to carbon neutral operations by 2030. According to
the projections in a study by Bloomberg New Energy Finance¹,
Electrolux will not be negatively affected in its operations by
the shift from fossil-based to renewable electricity. An industry
shift to renewable energy could therefore provide Electrolux
with a competitive advantage.
• Product efficiency – More stringent product legislation and
higher energy prices could drive the demand for energy
efficient Electrolux products in the market. The International
Monetary Fund (IMF) has concluded that a carbon tax of
USD 75 per ton of CO2 would increase the average electricity
price across G20 countries by 43%.
• A growing market – The growing middle class, in particular in
Asia and Africa, will continue to expand the market for house-
hold appliances.
• Electrification – The IEA estimates that there is potential for
2.6 billion people to shift from wood burning stoves to using
clean cooking appliances. Electrolux can help meet this
demand for clean and efficient appliances.
The Changing Climate Scenario
In this scenario, Electrolux must adapt to a changing climate in
terms of more frequent and/or more severe weather systems
and greater chronic physical risks from changing climate condi-
tions. Electrolux has started to include “The Changing Climate
Scenario” in its loss prevention program, Blue Risk program,
to improve resilience of its own operations, supply chain and
transport systems, and plans to make more detailed assess-
ments in the coming years. Action on this insight will enable
Electrolux to continue to create long-term shareholder value.
Primary acute and chronic physical risks
• Electrolux operations – Recent internal assessments have not
found that Electrolux factories have significant risks related to
greater acute and chronic physical risks due to more frequent
and severe weather systems and changing climate conditions.
However, more detailed analyses will be conducted based on
reputable external sources, such as the IPCC:
-Acute physical risks – IPCC predict that the scenario will
result in greater acute physical risks, such as more frequent
hurricanes.
-Chronic physical risks – IPCC does not predict a significant
increase in chronic physical risks due to this scenario in the
next 30 years, although uncertainty is high.
• Electrolux suppliers – Significant risks exist among Electrolux
suppliers, although the company has a large amount of
flexibility in its supply chain, which will adapt to the changing
conditions to meet market needs as more resilient suppliers
are likely to survive and thrive.
• Transport systems – The global logistical systems Electrolux
relies on for the movement of its raw materials, components
and finished goods are thought to be resilient to acute and
chronic physical risks as alternative logistical arrangements
are likely found. However, more investigation is required.
Opportunities
• Consumer demand – The need for air conditioning is expected
to grow in a warmer world, particularly in Asia and Africa
with a growing middle class. Electrolux can meet this growing
market demand.
• A growing market – The growing middle class, in particular in
Asia and Africa, will continue to expand the market for house-
hold appliances.
• Electrification – The IEA estimates that there is potential for
2.6 billion people to shift from wood burning stoves to using
clean cooking appliances. Electrolux can help meet this
demand for clean and efficient appliances.
Future development
Electrolux will continue to develop its climate scenario analyses
and assess the potential impacts on its operations. Future devel-
opment includes:
• Define climate risks for specific factory locations
• Update the Electrolux water risk using the WWF Water Risk
Filter for Electrolux factories
1) International Monetary Fund (2019). Fiscal Monitor, How to Mitigate Climate Change
page 21.
ELECTROLUX ANNUAL REPORT 2021
Climate Risk Disclosures 101
CLIMATE-RELATED RISKS AND IMPACTS OF THE RAPID TRANSITION AND THE CHANGING CLIMATE SCENARIOS
Scenario
The Rapid Transition Scenario
The Changing Climate Scenario
Risk Area
Product energy
legislation
Carbon dioxide
price/tax
Physical Risk –
Acute
Physical Risk –
Chronic
Potential impact
on Electrolux
Transformation
investments
Increase in price
for raw materials
Interruptions in
manufacturing and
supply chain
Relocation of
manufacturing
Financial
Impact Area
Costs, Sales,
Reputation
Costs, Sales
Costs, Sales
Costs
Risk (0-3 years)
Emerging Risk (3-10 years)
Long-term Risk (10- years)
Metrics and Targets
Electrolux has comprehensive reporting systems that include
various metrics and targets to assess and manage relevant
climate-related risks and opportunities.
In 2021, Electrolux received a leadership score of A- on
CDP Climate questionnaire. Electrolux also reports in accor-
dance with the GRI Standards.
The following climate related KPIs are reported in the separate
• Greenhouse gas emissions intensity in ton CO2 per million SEK
(GRI 305-4)
• Reduction of GHG emissions (GRI 305-5)
• Emissions of ozone-depleting substances (GRI 305-6)
• Science Based Target results (Scope 1, 2, and 3)
• Electrolux CDP report (www.cdp.net)
Sustainability Report:
• Energy consumption within the organization (GRI 302-1)
• Direct and Indirect CO2 emissions, including fugitive emissions
(GRI 305-1, 305-2)
Details on the company’s overall climate performance are
found on page 89 in the Annual Report and detailed perfor-
mance is reported in the separate Electrolux Sustainability
Report 2021.
REPORTING PRINCIPLES
This section provides some additional technical detail behind the
scenarios and the report’s assumptions.
Electrolux has based its climate scenarios and impacts on two
different Representative Concentration Pathways (RCPs) devel-
oped by the IPCC (IPCC, 2014: Climate Change 2014: Synthesis
Report). An RCP describes a greenhouse gas (GHG) concentration
trajectory resulting in different climate futures, and ultimately results
in different risks and opportunities for Electrolux based on this
forecast. In 2021, the Physical Science Basis, IPCC Sixth Assessment
Report (AR6) was published. The AR6 underpinned the scientific
consensus of the findings in the report. This report has been
updated with the latest predictions regarding temperature and
sea level rise from the AR6.
The Rapid Transition Scenario
The Rapid Transition Scenario is based on RCP 2.6, which would
involve rapidly declining emissions in the coming decades, resulting
in a global average temperature rise of approximately between
1.3–2.4 °C by 2100. For this scenario, the IEA concludes that over-
all CO2 emissions need to peak around 2020 and enter a steep
decline thereafter to achieve a 75% reduction by 2050. The building
sector, including appliances, will see a similar drop, mainly through
energy efficiency, renewable energy technologies and a shift to
low-carbon electricity. This means reducing carbon emissions by
an average of 6% per year to one-eighth of current levels by 2050.
At the same time, demand for electricity in the building sector
is expected to increase as a result of a growing consumer base,
as well as a rising demand for equipment such as air conditioners
and the replacement of gas and wood-burning stoves with electric
appliances. The IEA concludes :
• Significant policy efforts are needed for cooling equipment and
appliances to accelerate technological progress in these end
uses, particularly with substantial growth in appliance and air
conditioner (AC) ownership expected in the coming decade.
• Digitalization and smart demand-side management will further
reduce energy use.
A combination of stringent product energy legislation as well
as carbon dioxide taxes would be required, which would impact
on product development, supply base, operations and sales in
the appliance industry. Higher carbon dioxide taxes are recom-
mended by the IEA and in the EU Green Deal framework. Carbon
prices are expected to have an impact on energy intensive
industries such as power generation, transport, steel, aluminum
and plastics producers. Finished goods could also be impacted
through carbon import duties, such as the EU ‘carbon border
adjustment mechanism’.
The World Bank has estimated that carbon prices of at least
USD 40–80/tCO2 by 2020 and USD 50–100/tCO2 by 2030 are
required to cost-effectively reduce emissions in line with the tem-
perature goals of the Paris Agreement. In a report from the Interna-
ELECTROLUX ANNUAL REPORT 2021
tional Monetary Fund (IMF), it was concluded that a carbon tax of
USD 50 per metric ton in advanced countries (G20) would lead to
an average electricity price increase of 33%, while a carbon tax of
USD 75 per metric ton would lead to an increase in price of 43%.
Today, prices for renewable and fossil-based electricity are
comparable, but prices are expected to decline for renewables by
around 50% over the next 10 years, while fossil-based electricity will
increase by 40% according to data from Bloomberg New Energy
Finance. With a USD 75 per metric ton carbon tax, the price of
natural gas, both for industry and households (mostly for heating
and cooking) would rise significantly, by 70% on average.
The Changing Climate Scenario
The Changing Climate Scenario is based on RCP 4.5, which would
involve slowly declining emissions resulting in approximatley
between 2.1–3.5°C temperature increase by 2100. The IPCC has
conducted risk assessments for each region, including the potential
for risk reduction through adaptation and mitigation, as well as lim-
its to adaptation. In the near term (2030 or in 10 years), projected
levels of global mean temperature increase are not expected
to diverge substantially between different emission scenarios.
However, the IPCC predicts that by the mid-century (in 30 years),
climate change will impact human health, with more frequent hot
and fewer cold temperature extremes over most land areas. It is
also very likely that heat waves will occur with a higher frequency
and longer duration.
The average intensity of tropical cyclones, the proportion of
Category 4 and 5 tropical cyclones and the associated average
precipitation rates are projected to increase with a 2°C global
temperature rise. Sea levels continue to rise at an increasing rate.
Extreme sea level events that are historically rare (once per century
in the recent past) are projected to occur frequently (at least once
per year) in many locations by 2050.
The Changing Climate Scenario will increase acute physical
risks due to more frequent and/or more severe weather systems,
such as hurricanes and floods. It will also increase chronic physical
risks from changing climate conditions, such as droughts and sea
level rise. These physical impacts pose risks for disruption in the
appliance industry, due to the global nature of its operations and
supply chain – particularly in the manufacturing of materials and
components that are situated in parts of the world that are more
likely to be affected by physical risks.
World Energy Outlook
The World Energy Outlook (WEO), published annually by the
International Energy Agency (IEA), includes critical analysis and
descriptions of trends in energy demand and supply. It explores
possible scenarios, how they could develop and some of the
main uncertainties to predict the consequences of different choices
and what they mean for energy security, environmental protection
and economic development.
The IEA defines two scenarios:
• The Sustainable Development Scenario (SDS) – a deep decar-
bonization scenario that considers how people should gain
access to critical energy services while also meeting climate goals.
• The Stated Policies Scenario (STEPS) – reflecting current policies
and plans.
The SDS Scenario is considered to reflect the Group’s Rapid Transition
Scenario, while the STEPS Scenario is more in line with the Chang-
ing Climate Scenario. The IEA report provides recommendations
to policy makers regarding sectors and product categories in order
to achieve the targets in the scenarios.
Disclosure limitations and future development
The following aspects have not been included in this Report:
• Growing consumer demand – driven by a growing middle class,
increasing global incomes, electricity access rates and owner-
ship of appliances and air conditioners.
• Price elasticity – consumer willingness to pay a higher price for
more efficient appliances as a result of more stringent energy
efficiency legislation.
• Mitigable risks – chronic physical risks will develop over time
and could be mitigated by taking action well before they have
materialized to minimize negative impact.
• Climate risk disclosures are currently not included in financial risk
management processes.
Forward-looking statements
This report contains ‘forward-looking’ statements that reflect the
company’s current expectations. Although Electrolux believes that
the expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations
prove to be correct as they are subject to risks and uncertainties
that could cause the actual results to differ materially due to a variety
of factors. These factors include, but are not limited to, changes in
consumer demand, changes in economic, market and competitive
conditions, supply and production constraints, currency fluctuations,
developments in product liability litigation, changes in the regulatory
environment and other government actions. Forward-looking
statements are only accurate as of when they were formulated, and
other than as required by applicable law, the company undertakes
no obligation to update any of them in light of new information or
future events.
1) IEA (2018). Perspectives for the Energy Transition: The Role of
Energy Efficiency.
2) The World Bank Group (2020)), State and Trends of Carbon
Pricing.
3) International Monetary Fund (2019). Fiscal Monitor, How to
Mitigate Climate Change. p21
4) IEA, The World Energy Outlook (WEO) 2019
Corporate
governance
report
Corporate governance report 103
Corporate governance report
Chairman's introduction
As a leading global appliance company, Electrolux
shapes living for the better by reinventing taste, care
and wellbeing experiences to make life more enjoyable
and sustainable for millions of people. Through the
Group’s different brands, we sell approximately 60 million
products in approximately 120 markets every year.
Our large installed base of approximately 400 million
products globally gives us high aftermarket sales
potential.
Corporate Governance Report
This Corporate Governance Report provides details of the
overall governance structure of Electrolux, the interactions
between the formal corporate bodies, internal policies and
procedures as well as relevant control functions and reporting,
which ensures a robust global governance framework and
strong corporate culture.
Board's focus areas during the year
The effects of the coronavirus pandemic have continued
to affect Electrolux also in 2021. While the positive trend of
increased demand has continued in most of core markets,
the supply of products has been significantly constrained by
widespread shortages of critical components and imbalances
in the global logistics systems. However, I am impressed with the
company’s ability to navigate in this constrained environment.
One of the focus areas for the Board this year has been to
continue to support management in the streamlining of the
company. It is important that the ongoing transformation into
a more consumer centric company continues so resources can
be freed up for an even higher pace of innovation and further
investments into brands, operational excellence and digital
capabilities, eventually leading to increased value market
shares. Electrolux long-term strategy has been to strengthen
these areas and this is paying off. This year record earnings
have been delivered in all business areas but North America.
Significant investments have been made to modernize the
manufacturing capabilities in North America, Latin America
and Europe, totaling approximately SEK 8bn since 2018. I am
confident that also our North American business area should
be well positioned to generate an improved profitability over
the coming years.
Another important area for the Board has been to optimize
the company’s capital structure. Based on a thorough review
of the Group’s strategic plans and capital structure, the Board in
July decided to adjust the company’s dividend policy; from the
previous target of a dividend corresponding to at least 30% of
the annual income, to approximately 50% of the annual income.
During the year, the Board also decided to distribute SEK 4,886m
(corresponding to SEK 17 per share) to the shareholders through
an automatic share redemption procedure, resulting in a total
distribution of SEK 25 per share to the shareholders in 2021, and to
launch a share buyback program. The intention is to continue with
share buyback programs over several years. The Board believes
that the capital structure should now become well balanced, still
enabling further investments and selective acquisitions in line with
the strategy.
The pandemic has prevented the Board from meeting physi-
cally for a large part of the year. However, by using digital tools,
the work has progressed well given the circumstances. Most of
the Board members were also able to visit the new manufacturing
facilities in the U.S. during the year and could also be physically
present in a multiday session on the strategy.
I would like to take this opportunity to thank my fellow Board
members for good cooperation, constructive contributions and
engaged work. I would also like to thank Electrolux management
and all employees for their exceptional work efforts during an
additional eventful year.
Staffan Bohman
Chairman of the Board
ELECTROLUX ANNUAL REPORT 2021
104 Corporate governance report
Governance in Electrolux
Electrolux strives to maintain strict norms and efficient gover-
nance processes to ensure that all operations create long-term
value for shareholders and other stakeholders. This involves the
maintenance of an efficient organizational structure, systems for
internal control and risk management and transparent internal
and external reporting.
The Electrolux Group comprises 136 companies with sales in
approximately 120 markets. The parent company of the Group
is AB Electrolux, a public Swedish limited liability company. The
company’s shares are listed on Nasdaq Stockholm.
The governance of Electrolux is based on the Swedish
Companies Act, Nasdaq Stockholm’s Nordic Main Market
Rulebook for Issuers of Shares ("Rulebook for Issuers") and
the Swedish Code of Corporate Governance (the “Code”),
GOVERNANCE STRUCTURE
as well as other relevant Swedish and foreign laws and regu-
lations. The Code is published on the website of the Swedish
Corporate Governance Board, which admini strates the Code:
www.corporategovernanceboard.se
This corporate governance report has been drawn up as
a part of Electrolux application of the Code. Electrolux did not
report any deviation from the Code in 2021. There has been
no infringement by Electrolux of applicable stock exchange
rules and no breach of good practice on the securities market
reported by the disciplinary committee of Nasdaq Stockholm
or the Swedish Securities Council in 2021.
Below is Electrolux formal governance structure.
Shareholders
by the AGM
External Audit
Board of
Directors
Nomination
Committee
People
Committee
Audit Committee
Group Internal Audit
President and Group
Management
Business
area Boards
Internal Bodies
Major external regulations
• Swedish Companies Act.
• Rulebook for issuers.
• Swedish Code of Corporate Governance.
Major internal regulations
• Articles of Association.
• Board of Directors’ working procedures.
• Policies for information, finance, credit, accounting manual, etc.
• Processes for internal control and risk management.
• Code of Conduct, Anti-Corruption Policy and Workplace Policy.
Electrolux is a leading global appliance company that has shaped living for the better for more than 100 years. We reinvent taste, care and wellbeing
experiences for millions of people around the world, always striving to be at the forefront of sustainability in society through our solutions and
operations. Under our brands, including Electrolux, AEG and Frigidaire, we sell approximately 60 million household products in approximately
120 markets every year. In 2021, Electrolux had sales of SEK 126bn and employed 52,000 people around the world. For more information go to
www.electroluxgroup.com
AB Electrolux (publ) is registered under number 556009-4178 with the Swedish Companies Registration Office. The registered office of the Board of
Directors is in Stockholm, Sweden. The address of the Group headquarters is S:t Göransgatan 143, SE-105 45 Stockholm, Sweden.
ELECTROLUX ANNUAL REPORT 2021
Corporate governance report 105
Highlights 2021
• Re-election of Staffan Bohman as Chairman of the Board.
• Adjusted dividend policy, with a target of a dividend corresponding to approximately 50% of
the annual income.
• Extra cash distribution to the shareholders of Electrolux, made through a share redemption procedure.
• Resolution to repurchase a maximum of 9,369,172 own series B shares during the period October 28,
2021 to March 25, 2022 for a total maximum amount of SEK 2,800 million.
Shares and shareholders
The Electrolux shares are listed on Nasdaq Stockholm. At year-
end 2021, Electrolux had 73,578 shareholders according to
Monitor by Modular Finance AB. Of the total share capital, 62%
was owned by Swedish institutions and mutual funds, 29% by for-
eign investors and 9% by Swedish private investors, see below.
Investor AB is the largest shareholder, holding 16.4% of the share
capital and 28.4% of the voting rights. The ten largest sharehold-
ers accounted for 40,6% of the share capital and 49,0% of the
voting rights in the company.
Voting rights
The share capital of AB Electrolux consists of Class A shares
and Class B shares. One A share entitles the holder to one vote
and one B share to one-tenth of a vote. Both A shares and B
shares entitle the holders to the same proportion of assets and
earnings and carry equal rights in terms of dividends. Owners
of A shares can request to convert their A shares into B shares.
Conversion reduces the total number of votes in the company.
As of December 31, 2021, the total number of registered
shares in the company amounted to 308,920,308 shares, of
which 8,192,498 were Class A shares and 300,727,810 were
Class B shares. The total number of votes in the company was
38,265,279. Class B shares represented 78.6% of the voting
rights and 97.3% of the share capital.
Dividend policy
Electrolux target is for the dividend to correspond to approxi-
mately 50% of the annual income. Previously, the dividend
policy stated a target of a dividend corresponding to at least
30 % of the annual income but in 2021, the Board decided to adjust
the dividend policy to approximately 50 % of the annual income.
The Annual General Meeting (AGM) in March 2021 decided
to adopt the Board's proposed dividend of SEK 8.00 per share
for the financial year 2020 which, in accordance with the Board's
proposal, was paid out in two equal installments. Further, in
August 2021, an Extra General Meeting (EGM) resolved to
adopt the Board's proposed cash distribution of SEK 17.00 per
share, which was made through an automatic share redemp-
tion procedure.
Shareholders
meeting
General Meetings of shareholders
The decision-making rights of share-
holders in Electrolux are exercised at
shareholders’ meetings. The AGM of AB Electrolux is held in
Stockholm, Sweden, during the first half of the year.
Extraordinary General Meetings may be held at the discretion
of the Board or, if requested, by the auditors or by shareholders
owning at least 10% of all shares in the company.
Participation in decision-making requires the share holder’s
presence at the meeting, either personally or by proxy. In addi-
tion, the shareholder must be registered in the share register by
a stipulated date prior to the meeting and must provide notice of
participation in the manner prescribed. Additional requirements
for participation apply to share holders with holdings in the form
of American Depositary Receipts (ADR) or similar certificates.
Holders of such certificates are advised to contact the ADR
depositary bank, the fund manager or the issuer of the certificates
in good time before the meeting in order to obtain additional
information.
Individual shareholders requesting that a specific issue be
included in the agenda of a shareholders’ meeting can
normally request the Electrolux Board to do so using a specific
address published on the Group's website. The last date
for making such a request for the respective meeting will be
published on the Group’s website.
Decisions at the meeting are usually taken on the basis
of a simple majority. However, as regards certain issues, the
Swedish Companies Act stipulates that proposals must be
approved by shareholders representing a larger number of
the votes cast and the shares represented at the meeting.
Annual General Meeting 2021
Due to the risk of the spread of the coronavirus, the authorities’
regulations and advice and pursuant to temporary legislation,
the AGM 2021 was carried out solely through advance voting
(so-called postal voting) on March 25, 2021. A webcast was
made available in which the President and CEO and Chairman
of the Board reflected on the past year and the strategy ahead.
This webcast was made available on the Group's website prior
OWNERSHIP STRUCTURE
ATTENDANCE AT AGMS 2017–2021
Swedish institutions and mutual funds, 62%
Foreign investors, 29%
Swedish private investors, 9%
Source: Monitor by Modular Finance AB. Compiled
and processed data from various sources, including
Euroclear, Morningstar and the Swedish Financial
Supervisory Authority (Finansinspektionen)
as per December 31, 2021.
The foreign ownership was 29% at year-end 2021 and 33% at year-end 2020.
Foreign investors are not always recorded in the share register. Foreign banks and
other custodians may be registered for one or several customers’ shares, and the
actual owners are then usually not displayed in the register. For additional information
regarding the ownership structure, see above.
The information on ownership structure is updated quarterly on the Group’s website:
www.electroluxgroup.com/corporate-governance
ELECTROLUX ANNUAL REPORT 2021
%
75
60
45
30
15
0
% of share capital
% of votes
Shareholders
ATTENDANCE
1,200
1,000
800
600
400
200
17
18
19
20
21
821 shareholders, representing a total of 52.9% of the share capital and 65.2% of
the votes, were present through postal voting at the 2021 AGM.
106 Corporate governance report
Decisions at the Annual General Meeting 2021
included:
• Re-election of all the Board members, except Kai Wärn
who had declined re-election.
• Re-election of Staffan Bohman as Chairman of the
Board.
• Re-election of Deloitte AB as auditors.
• Remuneration to the Board members.
• Authorization to acquire own shares and to transfer
own shares on account of company acquisitions.
to the AGM: www.electroluxgroup.com. The shareholders had also
the possilibty to submit questions ahead of the AGM 2021.
Extraordinary General Meeting August 2021
An EGM was held on August 27, 2021. Due to the continued
coronavirus situation, also the EGM was conducted without
physical attendance of shareholders, representatives or third
parties and the shareholders were able to exercise their voting
rights only by postal voting. The EGM resolved on an automatic
share redemption procedure, including a 2:1 share split, a
reduction of the share capital by redemption of shares and an
increase of the share capital by way of a bonus issue. The proce-
dure resulted in that a total of SEK 4,886m was distributed to the
shareholders, which corresponds to SEK 17.00 per share.
Annual General Meeting 2022
The next AGM will be held on Wednesday, March 30, 2022 in
Stockholm.
Additional information about the AGM 2022 will be published
in the notice convening the Annual General Meeting.
Nomination
Committee
Nomination Committee
The AGM resolves upon the nomination
process for the Board of Directors and
the auditors. The AGM 2011 adopted an instruction for the
Nomination Committee which applies until further notice. The
instruction involves a process for the appointment of a Nomina-
tion Committee comprised of six members. The members should
be one representative of each of the four largest shareholders,
in terms of voting rights that wish to participate in the Committee,
together with the Chairman of the Electrolux Board and one
additional Board member.
The composition of the Nomination Committee shall be
based on shareholder statistics from Euroclear Sweden AB as
of the last banking day in August in the year prior to the AGM
and on other reliable shareholder information which is provided
to the company at such time. The names of the shareholders and
their representatives shall be announced as soon as they have
been appointed. If the shareholder structure changes during
the nomination process, the composition of the Nomination
Committee may be adjusted accordingly.
The Nomination Committee is assisted in preparing proposals
for auditors by the company’s Audit Committee and the Nomi-
nation Committee’s proposal is to include the Audit Committee’s
recommendation on the election of auditors.
The Nomination Committee’s proposals are publicly
announced no later than on the date of notification of the
AGM. Shareholders may submit proposals for nominees to
the Nomination Committee.
Nomination Committee for the AGM 2021
The Nomination Committee for the AGM 2021 was comprised
of six members. Johan Forssell of Investor AB led the Nomination
Committee’s work.
For the proposal for the AGM 2021, the Nomination
Committee made an assessment of the composition and size of
the current Board as well as the Electrolux Group’s operations.
Areas of particular interest were Electrolux strategies and goals
and the demands on the Board that are expected from the
Group’s positioning for the future. The Nomination Committee
applied rule 4.1 of the Code as diversity policy in its nomination
work. The Nomination Committee considered that a breadth
and variety as regards age, nationality, educational back-
ground, gender, experience, competence and term of office
are represented among the Board members.
The Nomination Committee proposed re-election of all Board
members except Kai Wärn, who had informed the Nomination
Committee that he had declined re-election. The Nomination
Committee also proposed re-election of Staffan Bohman as
Chairman of the Board. After the election at the AGM 2021, three
out of seven Board members elected at the shareholders’ meeting
are women (in this calculation, the President and CEO has not
been included in the total number of Board members).
The Nomination Committee also proposed, in accordance
with the recommendation by the Audit Committee, re-election
of Deloitte AB as the company’s auditors for the period until
the end of the AGM 2022.
A report regarding the work of the Nomination Committee
was included in the Nomination Committee’s explanatory
statement that was published before the AGM 2021. Further
information regarding the Nomination Committee and its work
can be found on the Group’s website:
www.electroluxgroup.com/corporate-governance
Nomination Committee for the AGM 2022
The Nomination Committee for the AGM 2022 is based on the
owner ship structure as of August 31, 2021, and was announced
in a press release on September 16, 2021.
The Nomination Committee’s members are:
• Johan Forssell, Investor AB, Chairman
• Carina Silberg, Alecta
• Marianne Nilsson, Swedbank Robur Funds
• Tomas Risbecker, AMF – Försäkring och Fonder
• Staffan Bohman, Chairman of Electrolux
• Fredrik Persson, Board member of Electrolux
The AGM resolves upon:
• The adoption of the Annual Report.
• Dividend.
• Election of Board members and, if applicable, auditors.
• Remuneration to Board members and auditors.
• Guidelines for remuneration to Group Management.
• Remuneration Report.
• Other important matters.
The Nomination Committee’s tasks include preparing
a proposal for the next AGM regarding:
• Chairman of the AGM.
• Board members.
• Chairman of the Board.
• Remuneration to Board members.
• Remuneration for committee work.
• Amendments of instructions for the Nomination Committee,
• Auditors and auditors’ fees, when these matters are to be
if deemed necessary.
decided by the following AGM.
ELECTROLUX ANNUAL REPORT 2021
Board of
Directors
The Board of Directors
The Board of Directors has the overall
responsibility for Electrolux organization
and administration.
Composition of the Board
The Electrolux Board is comprised of eight members without
deputies, who are elected by the AGM, and three members
with deputies, who are appointed by the Swedish employee
organizations in accordance with Swedish labor law.
The AGM elects the Chairman of the Board. Directly after
the AGM, the Board holds a meeting for formal constitution at
which the members of the committees of the Board are elected,
among other things. The Chairman of the Board of Electrolux is
Staffan Bohman.
All current members of the Board elected by the AGM, except
for the President and CEO, are non-executive members. Two of
the eight Board members, who are elected by the AGM, are not
Swedish citizens.
For additional information regarding the Board of Directors, see pages 114–115. The
information is updated regularly at the Group’s website: www.electroluxgroup.com
Independence
The Board is considered to be in compliance with the Swedish
Companies Act's and the Code's requirements for independence.
The assessment of each Board member’s independence
is presented in the table on page 115.
All Directors except for Petra Hedengran and Jonas
Samuelson have been considered independent. Petra Heden-
gran has been considered independent in relation to the com-
pany and the administration of the company, but not in relation
to major shareholders of Electrolux. Jonas Samuelson has been
considered independent in relation to major shareholders of
Electrolux but not, in his capacity as President and CEO, in rela-
tion to the company and the administration of the company.
Jonas Samuelson has no major shareholdings, nor is he a
part-owner in companies having significant business relations
with Electrolux. Jonas Samuelson is the only member of Group
Management with a seat on the Board.
The Board’s tasks
One of the main tasks of the Board is to manage the Group’s
operations in such a manner as to assure the owners that their
interests in terms of a long-term profitable growth and value
creation are being met in the best possible manner. The Board’s
work is governed by rules and regulations including the Swedish
Companies Act, the Articles of Association, the Code and the
working procedures established by the Board. The Articles of
Association of Electrolux are available on the Group’s website:
www.electroluxgroup.com/corporate-governance
Corporate governance report 107
Working procedures and Board meetings
The Board determines its working procedures each year and
reviews these procedures as required. The working procedures
describe the Chairman’s specific role and tasks, as well as the
responsibilities delegated to the committees appointed by
the Board.
In accordance with the procedures and the Code, the
Chairman shall among other things:
• Organize and distribute the Board’s work.
• Ensure that the Board discharges its duties and has relevant
knowledge of the company.
• Secure the efficient functioning of the Board.
• Ensure that the Board’s decisions are implemented efficiently.
• Ensure that the Board evaluates its work annually.
The working procedures for the Board also include detailed
instructions to the President and CEO and other corporate
functions regarding issues requiring the Board’s approval.
Among other things, these instructions specify the maximum
amounts that various decision-making functions within the
Group are authorized to approve as regards credit limits,
capital expenditure and other investments.
The working procedures stipulate that the meeting for the
formal constitution of the Board shall be held directly after the
AGM. Decisions at this statutory meeting include the election
of members of the committees of the Board and authorization
to sign on behalf of the company. In addition to the statutory
Board meeting, the Board normally holds seven other ordinary
meetings during the year. Four of these meetings are to be
held in conjunction with the publication of the Group’s full-year
report and interim reports. One or two meetings are to be held
in connection with visits to Group operations, subject to travel
restrictions or other concerns. Additional meetings, including
telephone conferences, are held when necessary.
The Board’s work in 2021
During the year, the Board held nine meetings. The attendance
of each Board member at these meetings is shown in the table
on page 115.
All Board meetings during the year followed an agenda,
which, together with the documentation for each item on the
agenda, was sent to Board members in advance of the meet-
ings. Electrolux General Counsel serves as secretary at the
Board meetings.
Each scheduled Board meeting includes a review of the
Group’s results and financial position, as well as the outlook for
the forthcoming quarters, as presented by the President and
CEO. The meetings also deal with investments and the establish-
ment of new operations, as well as acquisitions and divestments.
The Board decides on all investments exceeding SEK 100m and
receives reports on all investments exceeding SEK 25m.
Normally, the head of a business area also reviews a current
strategic issue at the meeting. For an overview of how the
Board’s work is spread over the year, see the table on
pages 108–109.
The Board deals with and decides on Group-related issues
such as:
• Main goals.
• Strategic orientation.
• Essential issues related to financing, investments, acquisitions and
• Follow-up and control of operations, communication and organiza-
divestments.
tion, including evaluation of the Group’s operational and sustainability
management.
• Appointment of and, if necessary, dismissal of the President and CEO.
• Overall responsibility for establishing an effective system of internal
control and risk management as well as a satisfactory process for
monitoring the company’s compliance with relevant laws and other
regulations as well as internal policies.
Remuneration to the Board of Directors 2019–2021
(applicable as from the respective AGM)
SEK
2021
2020
2019
Chairman of the Board
2,285,000 2,200,000 2,200,000
Board member
Chairman of the Audit
Committee
665,000
640,000
640,000
290,000
280,000
280,000
Member of the Audit Committee
185,000
160,000
160,000
Chairman of the People
Committee
Member of the People
Committee
170,000
150,000
150,000
115,000
100,000
100,000
ELECTROLUX ANNUAL REPORT 2021
108 Corporate governance report
Key focus areas for the Board during 2021
• Effects and impacts of the coronavirus pandemic and
imbalances in the global supply chain.
• Adapting Electrolux strategy and business model to
global industry drivers such as increased consumer
power, digitalization, sustainability, consolidation,
and a growing middle class.
• Continued focus on being even more consumer centric,
including strengthening position within aftermarket.
• Optimizing the Group's capital structure, including the
adjustment of the dividend policy, extra cash distribution
and initiating a share buyback program.
• Continued focus on the re-engineering program with
investments in North America, Latin America and
Europe.
• Global streamlining measures to improve efficiency
and sharpen the consumer experience organization.
Ensuring quality in financial reporting
The working procedures determined annually by the Board
include detailed instructions on the type of financial reports and
similar information which are to be submitted to the Board. In
addition to the full-year report, interim reports and the annual
report, the Board reviews and evaluates comprehensive finan-
cial information regarding the Group as a whole and the entities
within the Group.
The Board also reviews, primarily through the Board’s Audit
Committee, the most important accounting principles applied
by the Group in financial reporting, as well as major changes in
these principles. The tasks of the Audit Committee also include
reviewing reports regarding internal control and financial
reporting processes, as well as internal audit reports submitted
by the Group’s internal audit function, Group Internal Audit.
The Group’s external auditors report to the Board as
necessary, but at least once a year. A minimum of one such
meeting is held without the presence of the President and CEO
or any other member of Group Management. The external
auditors also attend the meetings of the Audit Committee.
The Audit Committee reports to the Board after each of its
meetings. Minutes are taken at all meetings and are made
available to all Board members and to the auditors.
Board work evaluation
The Board evaluates its work annually with regard to working
procedures and the working climate, as well as regards the
focus of the Board work. This evaluation also focuses on access
to and requirements of special competence in the Board. The
evaluation is a tool for the development of the Board work and
also serves as input for the Nomination Committee’s work. The
evaluation of the Board is each year initiated and lead by the
Chairman of the Board. The evaluation of the Chairman is led by
one of the other members of the Board. Evaluation tools include
questionnaires and discussions.
In 2021, Board members responded to written questionnaires.
As part of the evaluation process, the Chairman also had indi-
vidual discussions with Board members. The evaluations were
discussed at a Board meeting.
The result of the evaluations was presented for the
Nomination Committee.
Fees to Board members
Fees to Board members are determined by the AGM and
distributed to the Board members who are not employed by
Electrolux. The AGM 2021 decided to increase the fees to the
Chairman and the Board members, see page 107. The proposal
to increase the fees ahead of the 2020 AGM was withdrawn due
to the expected impact from the coronavirus, with the result
that the fees in 2020 remained unchanged compared with the
previous year.
The Nomination Committee has recommended that Board
members appointed by the AGM acquire Electrolux shares and
that these are maintained as long as they are part of the Board.
A shareholding of a Board member should after five years
correspond to the value of one gross annual fee.
Board members who are not employed by Electrolux are
not invited to participate in the Group’s long-term incentive
programs for senior managers and key employees.
For additional information on remuneration to Board members, see Note 27.
OVERVIEW OF VARIOUS ITEMS ON THE BOARD’S AGENDA AND COMMITTEE MEETINGS 2021
• Q4, Consolidated results.
• Report by external auditors.
• Dividend.
• Proposals for the AGM.
Statutory Board meeting:
• Appointment of committee members.
• Signatory powers.
• Rules of procedure of the Board.
• Q1 Quarterly
financial statements.
Ordinary Board meetings
Audit Committee
People Committee
•
•
Jan
•
•
•
•
•
•
Feb
March
Apr
•
•
May
Each scheduled Board meeting included a review of the Group’s results and financial position, as well as the outlook for the forthcoming quarters.
ELECTROLUX ANNUAL REPORT 2021
•
June
•
• •
July
Aug
•
Sep
•
•
•
Oct
•
Nov
•
•
Dec
Corporate governance report 109
People Committee
Audit Committee
Committees of the Board
The Board has established a People
Committee (formerly named Remunera-
tion Committee) and an Audit Committee.
The major tasks of these committees are preparatory and
advisory, but the Board may delegate decision-making powers
on specific issues to the committees. The issues considered at
committee meetings shall be recorded in minutes of the meet-
ings and reported at the following Board meeting. The members
and Chairmen of the committees are appointed at the statutory
Board meeting following election of Board members.
The Board has also determined that issues may be referred
to ad hoc committees dealing with specific matters.
Bohman. At least two meetings are convened annually.
Additional meetings are held as needed.
In 2021, the People Committee held six meetings. The atten-
dance of each Board member at these meetings is shown in
the table on page 115. Significant issues addressed include
evaluation, review and resolution on changes in the
remuneration to members of Group Management, follow-up
and evaluation of previously approved long-term incentive
programs and remuneration guidelines for Group Management,
review of the Remuneration Report for 2021 and review and
preparation of long-term incentive program for 2022. The Head
of Human Resources and Communication participated in the
meetings and was responsible for meeting preparations.
People Committee
(formerly named Remuneration Committee)
One of the People Committee’s primary tasks is to propose
guidelines for the remuneration to the members of Group
Management. The Committee also proposes changes in remu-
neration to the President and CEO, for resolution by the Board,
and reviews and resolves on changes in remuneration to other
members of Group Management on proposal by the President
and CEO. The Committee shall also oversee and make recom-
mendations to the Board regarding the development, recruit-
ment and succession planning of the President and CEO and the
Group Management. In addition, the Committee shall oversee
the overall organizational structure and advise Group Manage-
ment regarding people plans and development of the company
culture. The Committee shall also review the Board's report on
remuneration pursuant to Chapter 8, Section 53 a of the Swedish
Companies Act (Remuneration Report)
The People Committee consists of the following two Board
members: Petra Hedengran (Chairman) and Staffan
Audit Committee
The main task of the Audit Committee is to oversee the processes
of Electrolux financial reporting and internal control in order to
secure the quality of the Group’s external reporting. The Audit
Committee is also tasked with supporting the Nomination
Committee with proposals when electing external auditors.
The Audit Committee has consisted of the following four
Board members: Ulla Litzén (Chairman), Staffan Bohman, Petra
Hedengran and Fredrik Persson. The external auditors report to
the Committee at each ordinary meeting. At least three meet-
ings are held annually. Additional meetings are held as needed.
In 2021, the Audit Committee held eight meetings. The attend-
ance of each Board member at these meetings is shown in the
table on page 115. Electrolux managers have also had regular
contacts with the Committee Chairman between meetings
regarding specific issues. The Group’s Chief Financial Officer
and from time to time other senior management members have
participated in the Audit Committee meetings.
Management.
compensation.
The People Committee’s tasks include for example:
• To prepare and evaluate remuneration guidelines for Group
• To prepare and evaluate targets and principles for variable
• To prepare terms for pensions, notices of termination and severance
• To prepare and evaluate Electrolux long-term incentive programs.
• To review the Remuneration Report.
• To oversee and make recommendations regarding the development,
recruitment, and succession planning as well as evaluate the perfor-
mance of the President and the other members of Group Management.
pay as well as other benefits for Group Management.
• To oversee the overall organizational structure and advise Group.
Management regarding people plans and development of the
company culture.
management, concerning the financial reporting.
The Audit Committee’s tasks include for example:
• To review the financial reporting.
• To monitor the effectiveness of the internal control, including risk
• To follow up the activities of the Group Internal Audit as regards to
organization, recruiting, budgets, plans, results and audit reports.
• To review and approve certain credit limits.
• To keep informed of the external audit and the quality control
performed by the Supervisory Board of Public Accountants and to
evaluate the work of the external auditors.
• To inform the Board of the outcome of the external audit and explain
how the audit contributed to the reliability of the financial reporting as
well as the role of the Committee in this process.
engagements in other tasks than audit services.
• To review, and when appropriate, preapprove the external auditors’
• To evaluate the objectivity and independence of the external auditors.
• To support the Nomination Committee with proposals when electing
Ordinary Board meetings
Audit Committee
People Committee
•
•
Jan
•
•
•
•
•
•
Feb
March
Apr
•
•
May
external auditors.
• Q3 Quarterly
• Share buyback
financial statements
program.
• Board work evaluation.
Aug
•
Sep
•
•
•
Oct
•
Nov
•
•
Dec
• Q2 Quarterly
• Extra dividend.
financial statements.
•
June
•
• •
July
ELECTROLUX ANNUAL REPORT 2021
110 Corporate governance report
External Audit
External auditors
The AGM in 2021 re-elected Deloitte AB
(Deloitte) as the Group’s external auditors
for one year, until the AGM in 2022. The Nomination Committee's
proposal for re-election was based on the recommendation
by the Audit Committee. Authorized Public Accountant Jan
Berntsson is the auditor in charge of AB Electrolux.
Deloitte provides an audit opinion regarding AB Electrolux,
the financial statements of the majority of its subsidiaries, the
consolidated financial statements for the Electrolux Group and
the administration of AB Electrolux. The auditors also conduct
a review of the report for the second quarter.
The audit is conducted in accordance with the Swedish
Companies Act, International Standards on Auditing (ISA) and
generally accepted auditing standards in Sweden.
Audits of local statutory financial statements for legal entities
outside of Sweden are performed as required by law or applica-
ble regulations in the respective countries, including issuance
of audit opinions for the various legal entities.
Deloitte
Audit fees
Audit-related fees
Tax fees
All other fees
Total fees to Deloitte
Audit fees to other audit firms
Total fees to auditors
2021
2020
2019
59
2
—
0
61
0
61
63
2
4
0
69
0
69
47
10
1
1
59
—
59
For details regarding fees paid to the auditors and their non-audit assignments in the Group,
see Note 28.
In 2021, the Audit Committee decided to arrange a selection
procedure ahead of the appointment of the Group's external
auditor at the AGM 2022.
Internal Audit
Group Internal Audit
The internal audit function is responsible
for independent, objective assurance,
in order to systematically evaluate and propose improvements
for more effective governance, internal control and risk
management processes.
The process of internal control and risk management has
been developed to provide reasonable assurance that the
Group’s goals are met in terms of efficient operations, compli-
ance with relevant laws and regulations and reliable financial
reporting.
Internal audit assignments are conducted according to a
risk based plan developed annually and approved by the Audit
Committee. The audit plan is derived from an independent risk
assessment conducted by Group Internal Audit to identify and
evaluate risks associated with the execution of the company
strategy, operations, and processes. The plan is designed to
address the most significant risks identified within the Group and
its business areas. The audits are executed using a methodology
for evaluating the design and effectiveness of internal controls
to ensure that risks are adequately addressed and processes
are operated efficiently.
Opportunities for improving the efficiency in the governance
and internal control and risk management processes identified
in the internal audits are reported to responsible business area
management for action. A summary of audit results is provided
to the Audit Board and the Audit Committee, as is the status of
management’s implementation of agreed actions to address
findings identified in the audits.
For additional information on internal control, see pages 118–119. For additional information
on risk management, see Note 1, Note 2 and Note 18.
Company
Management of
Electrolux
Electrolux – a global leader with a
purpose to shape living for the better
Electrolux has a strategic framework that
connects a consumer experience focused
business model with a clear company purpose – Shape living for
the better. To achieve the purpose and drive profitable growth,
Electrolux uses a business model which focuses on creating
outstanding consumer experiences. By creating desirable solu-
tions and great experiences that enrich peoples’ daily lives and
the health of the planet, Electrolux wants to be a driving force
in defining enjoyable and sustainable living. Focus is to invest in
innovations that are most relevant for creating the outstanding
consumer experience to make great tasting food, the best care
for clothes and to increase wellbeing in the home.
Targeted growth and optimization of the product portfolio
to the most profitable product categories and products with
distinct consumer benefits, will strengthen the presence of
Electrolux in the product categories and channels where the
Group is most competitive. This is supported by a strong foun-
dation of Operational Excellence and Talent, Teamship and
Continuous Improvement, as well as Emerging markets acceler-
ation. Electrolux objective is to grow with consistent profitability,
see the financial targets on page 111.
A sustainable business
Sustainability leadership is crucial to realizing the Electrolux
strategy for long-term profitable growth. In 2021, Electrolux
most resource-efficient products represented 19% of products
sold and 31% of gross profit.
The company takes a consistent approach to sustain ability
in the countries where Electrolux operates. Understanding and
engaging in challenges such as climate change, creating ethical
and safe workplaces, and adopting a responsible approach
to sourcing and restructuring are important for realizing the
business strategy.
Electrolux has a Code of Conduct, which sets out the frame-
work of how Electrolux shall conduct its operations in ethical
and sustainable ways. The Code of Conduct, which has been
approved by the Board, serves as an introduction to the Group
Policies, and its purpose is to increase the clarity on what the
company's principles mean for the employees. There is regular
Sustainable
Consumer
Experience
Innovation
Commercial
Excellence
Outstanding
Branded Lifetime
Consumer
Experiences
World Class
Ownership
Solutions
Emerging Markets Acceleration
Operational Excellence
Talent
Teamship
Continuous
Improvement
ELECTROLUX ANNUAL REPORT 2021
Corporate governance report 111
training and communication of the Code and Group Policies,
and in 2021 online training in the Antitrust Policy was rolled out
to office based employees. At year end the completion rates
was 77% for the Antitrust training.
The Ethics Program encompasses a global whistleblowing
system – Ethics Helpline – through which suspected misconduct
can be reported in local languages. Reports may be submitted
anonymously if legally permitted. The largest categories of
reports in 2021 related to workplace conduct, verbal abuse
and other types of disrespectful behavior.
In line with the UN Guiding Principles on Business and Human
Rights, Electrolux conducts human rights risk assessments at
both global and local levels since 2016. The methodology
for the assessments focuses on identifying the risk of harming
people, as a direct or indirect result of Electrolux operations, and
includes corruption risks as well as opportunities to increase
local positive impacts. In 2021 a local impact assessment was
planned to be conducted of the manufacturing operations in
South Africa but it was postponed until the beginning of 2022
due to a national strike in the country.
The Group’s sustainability performance strengthens relations
with investors and Electrolux is recognized as a leader in the
household durables industry. In 2021, Electrolux was included
in the Dow Jones Sustainability Index (DJSI) World and Europe
indexes and thereby ranks among the top 10% of the world’s 2,500
largest companies for social and environmental performance.
Read more about Electrolux sustainability work:
www.electroluxgroup.com/sustainability
Electrolux as a tax payer
One important aspect of Electrolux company purpose – Shape
living for the better – is to act as a good corporate citizen and
taxpayer wherever Electrolux operates.
Electrolux plays an important role in contributing to public
finances in all jurisdictions where the Group operates. The Group
has approximately 52,000 employees with sales in more than
120 markets.
Of Electrolux Group total tax contribution, as defined in the
below chart, corporate tax represented approximately 17% in
2021. Corporate income taxes are only a portion of the Group’s
total contribution to public finances in Electrolux markets. In
addition to corporate income taxes, Electrolux pays indirect
taxes, customs duties, property taxes, employee related taxes,
environmental charges and a number of other direct or indirect
contributions to governments. The total contribution to public
finances for 2021 amounted to approximately SEK 10.6bn
whereof approximately half related to emerging markets.
Electrolux most transparent contribution to public finances
around the world is corporate income taxes, see Note 10.
Corporate income taxes amounted to SEK 1.7bn in 2021,
representing a global effective tax rate of the Group of 25.2%.
For more information on Electrolux tax policy, see:
www.electroluxgroup.com
Risk management
Active risk management is essential for Electrolux to drive
successful operations. The Group is impacted by various types
of risks.
The Group’s risk management approach follows a decentral-
ized structure, where all business areas are responsible for their
risk management. However, the Board of Directors is ultimately
responsible for Electrolux risk management. In addition to the
business areas, the Group has established internal bodies that
manage risk exposures on a regular basis. Examples of internal
bodies are the Enterprise Risk Management (ERM) Board, the
Ethics & Human Rights Steering Group, the Audit Board and the
Tax Board.
Insurance and loss prevention
Electrolux transfers part of its risks via tailored insurance pro-
grams. Insurable risks are continuously evaluated and moni-
tored by the ERM Board. The Group also owns two captives to
ensure customized insurance solutions and costs efficiencies.
Electrolux loss prevention strategy is also widely developed,
to ensure that the Group assets have the right level of protection
against risks such as natural hazards, which could lead to prop-
erty losses and business interruption. The Group has established
loss prevention procedures and standards to be applied by
each Electrolux site. Business continuity plans are also elabo-
rated and regularly reviewed to ensure successful response to
disruptive events related to natural hazards. Annual risk surveys
and visits are performed, and a consolidation of the results is
reported to the ERM Board.
ERM as part of the Group’s risk management
Electrolux has implemented an Enterprise Risk Management
program which covers Electrolux business areas as well as
global functions. It is overseen by Group Management and the
ERM Board, which is also responsible for securing appropriate
insurance coverage for insurable risks and assesses and facili-
tates the prioritization of the Group risks.
The ERM framework includes processes aimed to identify
and mitigate as well as communicate and report risks with
a special focus on key risks that can significantly affect the
business. Electrolux follows a risk mapping process which is a
management tool for formal collection and incorporation of risk
information into decision making and governance processes.
The risk mappings are therefore a key part of Electrolux ERM
and help to increase the understanding that risk management
is a critical factor for decision making and for driving value. The
core of the risk mapping process is to identify and evaluate
existing and emerging risks, thus enabling the possibility of lever-
aging risk and risk management options that extract value.
Risks are categorized in accordance with Electrolux Group
Risk Universe which includes the following risk categories:
strategic, external and internal risks. Strategic risks are risks
that can jeopardize the execution of the Group’s strategy and
are impacted by external factors such as industry shifts, macro-
economic developments or political instabilities. External risks
ELECTROLUX TOTAL TAXES 2021
Employer tax & fees, 27.2%
Corporate tax, 16.6%
Property tax, 1.5%
Customs, 23.9%
Indirect tax, 25.9%
Environmental tax & fees, 4.9%
Financial targets over a business cycle
The financial goals set by Electrolux aim to strengthen the
Group’s leading, global position in the industry and assist in
generating a healthy total yield for Electrolux shareholders.
The objective is growth with improved profitability.
• Sales growth of at least 4% annually.
• Operating margin of at least 6%.
• Capital turnover-rate of at least 4.
• Return on net assets >20%.
ELECTROLUX ANNUAL REPORT 2021
112 Corporate governance report
consist of natural hazards, geopolitical risks, market risks or
regulations, which can negatively impact the Group’s perfor-
mance. Internal risks mainly consist of operational risks such as
sustainability risks, cyber security risks, supply chain risks and
talent retention risks.
Electrolux also monitors emerging risks. They can either
develop from macro-level changes such as global warming,
consumer behavior or the introduction of AI – artificial intel-
ligence, or from risks that are closer to home (resulting from
industry/sector prospects and trends etc.).
The Group’s risk appetite is based on the impact on its strat-
egy that a risk would have if it materializes. Key risks are linked
to action plans to close risk management gaps and follow up
how risks are evolving after implementation of risk reducing
measures. Risk ownership for critical risks is assigned to business
area executives or individuals formally appointed to work with
specific risks. The approach ultimately supports a risk culture
that encourages engagement and accountability within the
organization.
Management and company structure
Electrolux aims at implementing strict norms and efficient pro-
cesses to ensure that all operations create long-term value for
shareholders and other stakeholders. This involves the mainten-
ance of an efficient organizational structure, systems for inter-
nal control and enterprise risk management and transparent
internal and external reporting.
The Group has a decentralized corporate structure in which
the overall management of operational activities is largely
performed by the business area boards.
Electrolux operations are organized into four geographically
defined business areas.
The following group staff functions supports the business
areas: Finance, Legal Affairs, HR & Communications, Group IT,
Group Operations and Global Consumer Experience organiza-
tion. The Global Consumer Experience organization is globally
responsible for areas such as marketing, design, R&D, product
lines, digital consumer solutions and ownership experience.
There are also a number of internal bodies which are forums
that are preparatory and decision-making in their respective
areas, see chart below. Each body includes representatives
from concerned functions.
In order to fully take advantage of the Group’s global pres-
ence and economies of scale, the Group has established Group
Operations with the responsibility for purchasing, manufacturing
and quality.
President and
Group
Management
President and Group Management
Group Management currently includes
the President and CEO, the four business
area heads and four group staff heads.
The President and CEO is appointed by and receives instruc-
tions from the Board.
The President and CEO, in turn, appoints other members of
Group Management and is respon sible for the ongoing man-
agement of the Group in accordance with the Board’s guide-
lines and instructions. Group Management holds monthly meet-
ings to review the previous month’s results, to update forecasts
and plans and to discuss strategic issues.
A diversified management team
The Electrolux management team, with its extensive expertise,
diverse cultural backgrounds and experiences from various
markets in the world, forms an excellent platform for pursuing
profitable growth in accordance with the Group’s strategy.
Electrolux Group Management represents six different national-
ities. Most of them have previous experience of predominantly
multinational consumer goods companies.
In recent years, a number of major initiatives have been
launched aimed at better leveraging the unique, global position
of Electrolux. In several areas, global and cross-border orga-
nizations have been established to, for example, increase the
pace of innovation in product development, reduce complexity
in manufacturing and optimize purchasing.
Changes in Group Management
The following changes in the Group management have been
made during 2021.
Effective as from October 1, 2021, the Group General Counsel
reports to the Chief Financial Officer instead of to the President
and CEO. The Group General Counsel remains secretary of the
Board of Directors but is not member of Group Management.
For details regarding members of Group Management, see pages 116–117.
The information is updated regularly at the Group’s website:
www.electroluxgroup.com
INTERNAL BODIES
President and Group
Management
Internal bodies
Insider & Disclosure
Committee
Enterprise Risk
Management Board
Ethics & Human Rights
Steering Group
Sustainability Board
Tax Board
Pension Board
Sourcing Board
Audit Board
ELECTROLUX ANNUAL REPORT 2021
Corporate governance report 113
Key focus areas for the President and
Group Management in 2021
• Responding to the dynamic environment caused by the
coronavirus pandemic and imbalances in the global
supply chain.
• Continuing to drive sustainable consumer experience
innovation under sharpened brands.
• Strengthening e-commerce capabilities.
• Further developing the aftermarket business.
• Executing on re-engineering investment program in
North America, Latin America and Europe.
• Continued implementation of the new sustainability
framework, launched in 2020.
• Implementing price increases to mitigate cost inflation.
Business
Area Boards
Business areas
The business area heads are members of
Group Management and have responsi-
bility for the operating income and net assets of their respective
business area.
The overall management of the business areas is the
responsibility of business area boards, which meet quarterly.
The President and CEO is the chairman of all such boards. The
business area board meetings are attended by the President
and CEO, the management of the respective business area and
the group staff heads. The business area boards are responsible
for monitoring on-going operations, establishing strategies,
determining business area budgets and making decisions on
major investments.
Remuneration
Remuneration to
Group Management
Remuneration guidelines for Group
Management are resolved upon by the AGM, based on the
proposal from the Board. Remuneration to the President and
CEO is then resolved upon by the Board, based on proposals
from the People Committee. Changes in the remuneration to
other members of Group Management is resolved upon by the
People Committee, based on proposals from the President
and CEO, and reported to the Board of Directors.
Electrolux shall strive to offer total remuneration that is fair
and competitive in relation to the country of employment or
region of each Group Management member. The remuneration
terms shall emphasize 'pay for performance', and vary with
the performance of the individual and the Group.
Remuneration may comprise of:
• Fixed compensation.
• Variable compensation.
• Other benefits such as pension and insurance.
Following the 'pay for performance' principle, variable compen-
sation shall represent a significant portion of the total compen-
sation opportunity for Group Management. Variable compensa-
tion shall always be measured against pre-defined targets and
have a maximum above which no pay-out shall be made. The
targets shall principally relate to financial performance.
Each year, the Board of Directors will evaluate whether or not
a long-term incentive program shall be proposed to the AGM.
The AGM in March 2021 decided on a long-term share program
for 2021 (LTI 2021) for up to 350 senior managers and key
employees.
For additional information on remuneration, remuneration guidelines, long-term
incentive programs and pension benefits, see Note 27.
TIME-LINE FOR THE LONG-TERM INCENTIVE PROGRAM FOR SENIOR MANAGEMENT 2021
2021
2022
2023
2024
Performance period CO2 reduction
Performance period
financial targets
Start
1
2
3
Year
The calculation of the number of per-
formance shares, if any, is connected to
three performance targets for the Group
established by the Board; (i) earnings
per share, and (ii) return on net assets,
for the 2021 financial year, as well as (iii)
CO2 reduction for the financial years
2021-2023. Allotment of performance
shares, if any, to the participants will be
made in 2024.
Invitations to
participants in
the program.
ELECTROLUX ANNUAL REPORT 2021
Performance
shares
allotted.
114 Corporate governance report
Board of Directors and Auditors
STAFFAN BOHMAN
Chairman
Born 1949. Sweden. B.Sc. Econ.
Elected 2018. Member of the
Electrolux Audit Committee and
the Electrolux People Committee.
Other assignments: Chairman of
the Board of Research Institute
for Industrial Economics and
the German-Swedish Chamber
of Commerce. Board member
of Atlas Copco AB and Åke
Wiberg Foundation. Member of
the Royal Swedish Academy of
Engineering Sciences (IVA).
Previous positions: President
and CEO of Sapa and DeLaval
as well as Board member of,
inter alia., Scania AB, Inter-IKEA
Holding NV and Rezidor Hotel
Group AB.
Holdings in AB Electrolux:
125,000 B-shares. 120,279 call
options, issued by Investor AB
entitling the right to purchase
Electrolux B-shares.
JONAS SAMUELSON
President and CEO
Born 1968. Sweden. M.Sc.
Econ. Elected 2016.
Other assignments: Board
member of Axel Johnson AB
and Volvo Cars AB.
Previous positions: Various
senior positions within
Electrolux including CFO of
AB Electrolux, COO Global
Operations Major Appliances
and Head of Major Appliances
EMEA. Chief Financial Officer
and Executive Vice President
of Munters AB. Various senior
positions within General
Motors, mainly in the U.S.,
and Saab Automobile AB.
Holdings in AB Electrolux:
65,211 B-shares.
PETRA HEDENGRAN
Born 1964. Sweden. M. of Laws.
Elected 2014. Chairman of the
Electrolux People Committee
and member of the Electrolux
Audit Committee.
Other assignments: General
Counsel and member of Group
Management of Investor
AB. Board member of Alecta
and the Association for
Generally Accepted Principles
in the Securities Market (Sw.
Föreningen för god sed på
värdepappersmarknaden).
Previous positions: Attorney
and partner at Advokatfirman
Lindahl. Various positions
within the ABB Financial
Services including General
Counsel of ABB Financial
Services, Nordic Region.
Law Clerk with the Stockholm
District Court. Associate at
Gunnar Lindhs Advokatbyrå.
Holdings in AB Electrolux:
15,900 B-shares.
HENRIK HENRIKSSON
Born 1970. Sweden. B.Sc.
in Business Administration.
Elected 2020.
Other assignments: President
and CEO of H2 Green Steel AB.
Board member of Hexagon
AB, Creades AB, SAAB AB and
the Confederation of Swedish
Enterprise (Sw. Svenskt
Näringsliv).
Previous positions: Various
senior positions within Scania,
including President and CEO
of Scania AB.
Holdings in AB Electrolux:
425 B-shares.
ULLA LITZÉN
Born 1956. Sweden. B.Sc.
Econ. and M.B.A. Elected 2016.
Chairman of the Electrolux
Audit Committee.
FREDRIK PERSSON
Born 1968. Sweden. M.Sc.
Econ. Elected 2012. Member
of the Electrolux Audit
Committee.
Other assignments: Board
member of Epiroc AB, Ratos
AB, Stockholm School of
Economics and the School
of Economics Association.
Previous positions: President
of W Capital Management
AB, wholly-owned by the
Wallenberg Foundations.
Various leading positions
within the Investor Group
including Managing Director
and member of Group
Management of Investor AB.
Holdings in AB Electrolux:
4,000 B-shares.
Other assignments:
Chairman of the Board of
JM AB, the Confederation
of Swedish Enterprise (Sw.
Svenskt Näringsliv) and
Ellevio AB. Board member
of Hufvudstaden AB, ICA
Gruppen AB and Ahlström
Capital Oy.
Previous positions: Various
leading positions within
Axel Johnson AB including
President and CEO. Head of
Research of Aros Securities AB.
Various positions within ABB
Financial Services AB.
Holdings in AB Electrolux:
5,000 B-shares.
DAVID PORTER
Born 1965. USA. Bachelor’s
degree, Finance. Elected 2016.
Other assignments: Head of
Microsoft Stores, Corporate
Vice President, Microsoft Corp.
Previous positions: Head
of Worldwide Product
Distribution at DreamWorks
Animation SKG. Various
positions within WalMart
Stores, Inc.
Holdings in AB Electrolux:
3,315 B-shares.
KARIN OVERBECK
Born 1966. Germany. M.Sc in
Economics, Marketing and
Finance. Elected 2020
Other assignments: CEO
of Freudenberg Home and
Cleaning Solutions GmbH.
Previous positions: Various
senior positions within the
KAO Corporation as well as in
L’Oréal, Tchibo and Unilever.
Holdings in AB Electrolux:
3,135 B-shares.
ELECTROLUX ANNUAL REPORT 2021
Corporate governance report 115
SECRETARY OF THE BOARD
ULRIKA ELFVING
Born 1973. M. of Laws. General Counsel of AB
Electrolux.
Secretary of the Electrolux Board since 2022.1)
Holdings in AB Electrolux: 1,134 B-shares.
1) Appointed as General Counsel of AB Electrolux with
effect from January 1, 2022.
COMMITTEES OF THE
BOARD OF DIRECTORS
People Committee
Petra Hedengran (Chairman) and
Staffan Bohman.
Audit Committee
Ulla Litzén (Chairman), Staffan Bohman,
Petra Hedengran and Fredrik Persson.
AUDITORS
Deloitte AB
JAN BERNTSSON
Born 1964. Authorized Public Accountant.
Other audit assignments: Boliden AB and
Electrolux Professional AB.
Holdings in AB Electrolux: 0 shares.
At the Annual General Meeting in 2021, Deloitte
AB was re-elected as auditors for a period of one
year until the Annual General Meeting in 2022.
EMPLOYEE REPRESENTATIVES
MINA BILLING
Born 1980. Representative
of the Federation of Salaried
Employees in Industry and
Services. Elected 2020.
Board meeting attendance:
1/91)
Holdings in AB Electrolux:
0 shares.
1) Parental leave during most
of 2021.
VIVECA
BRINKENFELDT LEVER
Born 1960. Representative of
the Federation of the Salaried
Employees in Industry and
Services. Elected 2018.
Board meeting attendance:
8/9
Holdings in AB Electrolux:
0 shares.
PETER FERM
Born 1965. Representative
of the Federation of Salaried
Employees in Industry and
Services. Elected 2018.
Board meeting attendance:
9/9
Holdings in AB Electrolux:
100 B-shares.
EMPLOYEE REPRESENTATIVES, DEPUTY MEMBERS
ULRIK DANESTAD
Born 1969. Representative
of the Federation of Salaried
Employees in Industry and
Services. Elected 2020.
Holdings in AB Electrolux:
20 B-shares.
WILSON QUISPE
Born 1978. Representative
of the Federation of Salaried
Employees in Industry and
Services. Elected 2020.
Holdings in AB Electrolux: 500
B-shares.
Holdings in AB Electrolux are stated as of
December 31, 2021 and includes holdings
of related natural and legal persons, when
applicable.
THE BOARD’S REMUNERATION DURING 2021, MEETING ATTENDANCE AND INDEPENDENCE
Staffan Bohman
Petra Hedengran
Henrik Henriksson
Ulla Litzén
Karin Overbeck
Fredrik Persson
David Porter
Jonas Samuelson
Kai Wärn2)
Total remuneration 20 21,
'000 SEK
Board meeting
attendance
People Committee
attendance
Audit Committee
attendance
Indepen dence1)
2,563
1,014
659
949
659
844
659
—
159
9/9
9/9
9/9
9/9
9/9
9/9
9/9
9/9
2/9
6/6
6/6
2/6
7/8
8/8
8/8
8/8
No
No
1) For further information about the independence assessment, see page 107.
2) Kai Wärn declined re-election and resigned from the Board as from the Annual General Meeting in March 2021.
ELECTROLUX ANNUAL REPORT 2021
116 Corporate governance report
Group Management
JONAS SAMUELSON
President and CEO
—
Born 1968. Sweden. M.Sc. in
Business Administration and
Economics. In Group Management
and employed since 2008.
Other assignments: Board member
of Axel Johnson AB and Volvo
Cars AB.
Previous positions: Various senior
positions within Electrolux including
CFO of AB Electrolux, COO Global
Operations Major Appliances
and Head of Major Appliances
EMEA. Chief Financial Officer and
Executive Vice President of Munters
AB. Various senior positions within
General Motors, mainly in the U.S.,
and Saab Automobile AB.
Holdings in AB Electrolux:
65,211 B-shares.
THERESE FRIBERG
Chief Financial Officer
—
Born 1975. Sweden. B.Sc. in
Business Administration. In Group
Management since 2018 and
employed since 1999.
Previous positions: CFO of
Electrolux Major Appliances
EMEA. Other senior positions
within Electrolux including Head of
Group Business Control and Sector
Controller Home Care & SDA.
Holdings in AB Electrolux:
10,527 B-shares
ADAM CICH
Head Business Area Asia
Pacific, Middle East and Africa,
Executive Vice President
—
Born 1968. Poland. M.Sc. in
Business Administartion. In Group
Management since 2020 and
employed since 1996.
Previous positions: SVP Sales and
Acting Head of Business Area Asia
Pacific, Middle East and Africa.
Head of Sales for Electrolux in
Central and Eastern Europe. Other
senior positions in Electrolux include
leadership positions within sales
and product line in Poland, Russia
and CEE region.
Holdings in AB Electrolux:
3,219 B-shares.
CARSTEN FRANKE
Chief Group Operations Officer,
Executive Vice President
—
Born 1965. Germany. Engineer’s
degree (Dipl.-Ing) in Mechanical
Engineering. In Group
Management since 2020 and
employed since 2005.
Previous positions: Various senior
roles within Electrolux Business Area
Europe including Chief Operations
Officer, Vice President Supply Chain,
Vice President Industrial Operations
and Vice President Electrolux Lean
Manufacturing System. Positions
prior to Electrolux include manage-
ment roles at Knorr-Bremse AG and
Maschinenfabrik Reinhausen.
Holdings in AB Electrolux:
5,096 B-shares.
RICARDO CONS
Head Business Area Latin America,
Executive Vice President
—
Born 1967. Brazil. Bachelor
in Business Administration,
Finance and Marketing, MBA in
Team Management. In Group
Management since 2016 and
employed since 1997–2011
and 2016.
Previous positions: General
Management at Franke in
Brazil. Various senior positions
at Electrolux Brazil, including
President Small Appliances Latin
America, Sales and Marketing
Director Major Appliances.
Positions in Volvo Brazil.
Holdings in AB Electrolux:
11,906 B-shares.
OLA NILSSON
Chief Experience Officer,
Executive Vice President
—
Born 1969. Sweden. M.Sc.
in International Business
Administration. In Group
Management since 2016 and
employed since 1994.
Other assignments: Board member
of Fractal Gaming Group AB.
Previous positions: Various senior
positions within Electrolux including
Head of the Home Care & SDA
business area, Senior Vice President
Product Line Laundry Major
Appliances EMEA and President
Small Appliances Asia Pacific.
Holdings in AB Electrolux:
20,257 B-shares
Holdings in AB Electrolux are stated as of December 31, 2021 and
includes holdings of related natural and legal persons, when applicable.
ELECTROLUX ANNUAL REPORT 2021
Corporate governance report 117
ANNA OHLSSON-LEIJON
Head Business Area Europe,
Executive Vice President
—
Born 1968. Sweden. B.Sc. in Business
Administration and Economics. In
Group Management since 2016
and employed since 2001.
Other assignments: Board member
of Atlas Copco AB and Schneider
Electric SE.
Previous positions: Chief Financial
Officer of AB Electrolux. Other senior
positions within Electrolux including
CFO of Major Appliances EMEA
and Head of Electrolux Corporate
Control & Services. Chief Financial
Officer of Kimoda. Various positions
within PricewaterhouseCoopers.
Holdings in AB Electrolux:
18,472 B-shares.
NOLAN PIKE
Head Business Area North
America, Executive Vice President
—
Born 1969. USA. Bachelor of
Business Administration, M.B.A. in
Business Management. In Group
Management since 2020 and
employed since 2013.
Previous positions: Senior Vice
President of Electrolux Consumer
Experience Area Taste. Senior
Vice President of North American
Product Lines at Electrolux. General
management, product and sales
positions at GE. Vice President and
General Manager of Kenmore, and
VP/GMM of home appliances at
Sears Holding Corp.
Holdings in AB Electrolux:
7,170 B-shares.
LARS WORSØE PETERSEN
CHRO & Communications,
Senior Vice President
—
Born 1958. Denmark. M.Sc.
in Economics and Business
Administration. In Group
Management since 2011 and
employed since 1994–2005 and
2011.
Previous positions: CHRO, Senior
Vice President at Husqvarna AB,
2005–2011. Various senior posi-
tions within Electrolux including
Head of Human Resources for
Electrolux Major Appliances North
America and Head of Electrolux
Holding A/S in Denmark.
Holdings in AB Electrolux:
26,875 B-shares.
ELECTROLUX ANNUAL REPORT 2021
118 Corporate governance report
Internal control over financial reporting
The Electrolux Control System (ECS) has been developed to ensure accurate and reliable financial
reporting and preparation of financial statements in accordance with applicable laws and regulations,
generally accepted accounting principles and other requirements for listed companies. The ECS adds
value through clarified roles and responsibilities, improved process efficiency, increased risk awareness
and improved decision support.
The ECS is based on the Internal Control — Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). The five components of this framework
are control environment, risk assessment, control activities, monitor and improve and inform and
communicate.
Control environment
The foundation for the ECS is the control environment, which
determines the individual and collective behavior within the
Group. It is defined by policies and directives, man-
uals, and codes, and enforced by the organ-
izational structure of Electrolux with clear
responsibility and authority based on
collective values.
duct, the Workplace Policy, and the Anti- Corruption Policy, as
well as in policies for information, finance, and in the accounting
manual. Together with laws and external regulations,
these internal guidelines form the control envi-
ronment and all Electrolux employees are
urth Q u arte r
Ele
Fo
c t r o l u x Control Syste
First
Q
Risk
assessment
m
u
a
r
t
e
r
Improve
Inform and
communicate
Control
activities
held accountable for compliance.
All entities within the Electrolux
Group must maintain adequate inter-
nal controls. As a minimum require-
ment, control activities should
address key risks identified within
the Group. Group Management
has the ultimate responsibility
for internal controls within their
areas of responsibility. Group
Management is described on
pages 116–117.
T
Monitor
h
ir
d
Q
u
C
ontrol env i r o n m e
arter
S e
The ECS Program Office, a
department within the Group Inter-
nal Audit function, has developed
the methodology and is responsible
for maintaining the ECS. To ensure timely
a rter
completion of these activities, specific
roles aligned with the company structure, with
n t
u
d Q
n
o
c
clear responsibilities regarding internal control,
have been assigned within the Group.
The Electrolux Board has overall
responsibility for establishing an
effective system of internal con-
trol. Responsibility for maintain-
ing effective internal controls is
delegated to the President and
CEO. The governance structure
of the Group is described on
page 104. Specifically for finan-
cial reporting, the Board has
established an Audit Committee,
which assists in overseeing
relevant policies and important
accounting principles applied by the
Group.
The limits of responsibilities and
authorities are given in directives for del-
egation of authority, manuals, policies and
procedures, and codes, including the Code of Con-
CONTROL ENVIRONMENT — EXAMPLE
Code of Conduct
Minimum standards in the areas of environment,
health and safety, labor standards and human
rights. The Code of Conduct is mandatory for
Electrolux units.
Credit Directive
Rules for customer assessment and credit risk
that clarify responsibilities and are the frame-
work for credit decisions.
Internal Control Directive
Details responsibility for internal controls.
Controls should address the Minimum Internal
Control Requirements (MICR) within every appli-
cable process, for example “Order to Cash”.
Group Finance Policy
Details the general framework for how financial
operations shall be organized and managed
within the Group. The policy contains directives
and other mandatory standards issued by the
Group Finance organization.
Delegation of Authority Directive
Details the approval rights, with monetary,
volume or other appropriate limits, e.g.,
approval of credit limits and credit notes.
Accounting Manual
Accounting principles and reporting instruc-
tions for the Group‘s reporting entities are
contained in the Electrolux Accounting Manual.
The Accounting Manual is mandatory for all
reporting units.
ELECTROLUX ANNUAL REPORT 2021
Risk
assessment
Risk assessment
Risk assessment includes identifying risks
of not fulfilling the fundamental criteria, i.e.,
completeness, accuracy, valuation and reporting for significant
accounts in the financial reporting for the Group as well as risk
of loss or misappropriation of assets.
At the beginning of each calendar year, the ECS Program
Office performs a global risk assessment to determine the
reporting units, data centers and processes in scope for the
ECS activities. Within the Electrolux Group, a number of different
processes generating transactions that end up in significant
accounts in the financial reporting have been identified. All
larger reporting units perform the ECS activities.
The ECS has been rolled out to almost all of the smaller units
within the Group. The scope for smaller units is limited in terms
of monitoring as management is not formally required to test
the controls.
Control
activities
Control activities
Control activities mitigate the risks
identified and ensure accurate and
reliable financial reporting as well as process efficiency.
Control activities include both general and detailed controls
aimed at preventing, detecting and correcting errors and irreg-
ularities. In the ECS, the following types of controls are imple-
mented, documented and tested:
• Manual and application controls — to secure that key risks
related to financial reporting within processes are controlled.
• IT general controls — to secure the IT environment for
key applications.
• Entity-wide controls — to secure and enhance the
control environment.
Corporate governance report 119
Monitor
Improve
Monitor and Improve
Monitor and test of control activities is
performed periodically to ensure that
risks are properly mitigated.
The effectiveness of control activities
is monitored continuously at four levels:
Group, business area, reporting unit, and process. Monitor-
ing involves both formal and informal procedures applied by
management, process owners and control operators, including
reviews of results in comparison with budgets and plans, analytical
procedures, and key-performance indicators.
Within the ECS, management is responsible for testing key
controls. Management testers who are independent of the
control operator perform these activities. Group Internal Audit
maintains test plans and performs independent testing of
selected controls. Controls that have failed must be remediated,
which means establishing and implementing actions to correct
weaknesses.
The Audit Committee reviews reports regarding internal con-
trol and processes for financial reporting. Group Internal Audit
proactively proposes improvements to the control environment.
The Head of Group Internal Audit has dual reporting lines: to
the President and CEO and the Audit Committee for assurance
activities, and to the Chief Financial Officer for other activities.
Inform and
communicate
Inform and communicate
Inform and communicate within the
Electrolux Group regarding risks and
controls contributes to ensuring that the right business
decisions are made.
Guidelines for financial reporting are communicated to
employees, e.g., by ensuring that all manuals, policies and
codes are published and accessible through the Group-wide
intranet as well as information related to the ECS.
To inform and communicate is a central element of the ECS
and is performed continuously during the year. Management,
process owners and control operators in general are respon-
sible for informing and communicating the results within the ECS.
The status of the ECS activities is followed up continuously
through status meetings between the ECS Program Office and
coordinators in the business areas. Information about the status
of the ECS is provided periodically to business area and Group
Management, the Audit Board and the Audit Committee.
ENTERPRISE RISK ASSESSMENT — EXAMPLE
CONTROL ACTIVITIES — EXAMPLE
Closing Routine — Risks assessed
Manage IT — Risks assessed
Order to Cash — Risks assessed
ELECTROLUX ANNUAL REPORT 2021
Risk assessed
Control activity
Process
Closing
Routine
Risk of incorrect financial
reporting.
Manage IT
Risk of unauthorized/incorrect
changes in the IT environment.
Order to Cash Risk of not receiving payment
from customers in due time.
Order to Cash Risk of incurring bad debt.
Reconciliation between general
ledger and accounts receivable sub-
ledger is performed, documented
and approved.
All changes in the IT environment
are authorized, tested, verified and
finally approved.
Customers’ payments are monitored
and outstanding payments are
followed up.
Application automatically blocks
sales orders/deliveries when the
credit limit is exceeded.
120 Corporate governance report
Financial reporting and information
Electrolux routines and systems for information and commu-
nication aim at providing the market with relevant, reliable,
correct and vital information concerning the development of
the Group and its financial position. Specifically for purposes of
considering the materiality of information, including financial
reporting, relating to Electrolux and ensuring timely commu-
nication to the market, an Insider & Disclosure Committee has
been formed.
Electrolux has an information policy and an insider policy
meeting the requirements for a listed company.
Financial information is issued regularly in the form of:
• Full-year reports and interim reports, published as
press releases.
• The Annual Report.
• Press releases on all matters which could have a significant
effect on the share price.
• Presentations and telephone conferences for financial
analysts, investors and media representatives on the day
of publication of full-year and quarterly results.
All reports, presentations and press releases are published on the Group's website:
www.electroluxgroup.com/ir
Stockholm, February 17, 2022
AB Electrolux (publ)
The Board of Directors
Auditor’s report on the Corporate
Governance Statement
To the general meeting of the shareholders in AB Electrolux
(publ) corporate identity number 556009-4178
Engagement and responsibility
It is the Board of Directors who is responsible for the corporate
governance statement for the financial year 2021–01–01 –
2021-12–31 on pages 103–120 and that it has been prepared
in accordance with the Annual Accounts Act.
The scope of the audit
Our examination has been conducted in accordance with FAR’s
auditing standard RevR 16 The auditor’s examination of the cor-
porate governance statement. This means that our examination
of the corporate governance statement is different and substan-
tially less in scope than an audit conducted in accordance with
International Standards on Auditing and generally accepted
auditing standards in Sweden. We believe that the examination
has provided us with sufficient basis for our opinions.
Opinions
A corporate governance statement has been prepared.
Disclosures in accordance with chapter 6 section 6 the second
paragraph points 2–6 the Annual Accounts Act and chapter 7
section 31 the second paragraph the same law are consistent
with the annual accounts and the consolidated accounts and
are in accordance with the Annual Accounts Act.
Stockholm, February 22, 2022
Deloitte AB
Signature on Swedish original
Jan Berntsson
Authorized Public Accountant
This is a translation of the Swedish language original.
In the event of any differences between this translation and
the Swedish language original, the latter shall prevail.
ELECTROLUX ANNUAL REPORT 2021
Remuneration report 121
Remuneration Report
Introduction
This report describes how the guidelines for executive remuneration of AB Electrolux, adopted by the
Annual General Meeting 2020, were implemented in 2021. The report also provides information on
remuneration to the President and CEO and a summary of the company’s outstanding share-related
incentive plans. The report has been prepared in accordance with the Swedish Companies Act and the
Rules on Remuneration of the Board and Executive management and on Incentive Programmes issued
by the Swedish Corporate Governance Board.
Further information on executive remuneration is available in
Note 27 on pages 70–72 in the Annual Report 2021. Informa-
tion on the work of the People Committee in 2021 is set out in the
Corporate Governance Report available on pages 102–120 in
the Annual Report 2021.
Remuneration of the Board of Directors is not covered by this
report. Such remuneration is resolved annually by the Annual
General Meeting and disclosed in Note 27 and in the Corporate
Governance Report in the Annual Report 2021.
Key developments 2021
The CEO summarizes the company’s overall performance in his
statement on pages 4–12 in the Annual Report 2021.
During 2021, an extensive review of Electrolux executive
reward programs was conducted. A similar review took place in
2012 and 2016. The purpose of the review is to improve the pay
for performance alignment, fair pay and talent retention among
Electrolux senior management positions. The outcome of the
review contributed to adjustments in the long-term incentive
program proposed for the AGM 2022.
Electrolux remuneration guidelines
Electrolux has a clear strategy to deliver profitable growth and
create shareholder value. A prerequisite for the successful imple-
mentation of the company’s business strategy and safeguard-
ing of its long-term interests, including its sustainability, is that
the company is able to recruit and retain qualified personnel.
To this end, it is necessary that the company offers competitive
remuneration in relation to the country or region of employ-
ment of each Group Management member. The remuneration
guidelines enable the company to offer the Group Manage-
ment a competitive total remuneration. More information on the
company’s strategy can be found on the company’s website.
The remuneration terms shall emphasize ‘pay for perfor-
mance’, and vary with the performance of the individual and the
Group. The total remuneration for the Group Management shall
be in line with market practice and may comprise of the follow-
ing components: fixed compensation, variable compensation,
pension benefits and other benefits.
The guidelines are found on page 32 in the Annual Report
2021. During 2021, the company has complied with the applica-
ble remuneration guidelines adopted by the General Meeting.
No deviations from the guidelines have been decided and
no derogations from the procedure for implementation of the
guidelines have been made. The auditor’s report regarding the
company’s compliance with the guidelines is available on
www.electroluxgroup.com. No remuneration has been
reclaimed. In addition to remuneration covered by the remu-
neration guidelines, the General Meetings of the company have
resolved to implement long-term share-related incentive plans.
Remuneration for the President and CEO, Jonas Samuelson in 2021 ('000 SEK unless otherwise stated)1)
Fixed remuneration
Variable remuneration
Extraordinary items Pension expense5)
Total remuneration
Base
salary2)
12,719
Other
benefits3)
One-year
variable4)
Multi-year
variable
8
12,400
0
0
4,340
29,467
1) Except for multi-year variable remuneration, the table reports remuneration earned in 2021. Multi-year variable remuneration is reported if vested in 2021.
2) Includes vacation salary and salary deductions for company car.
3) Includes other benefits such as travel allowance, health care benefit and mileage compensation.
4) Variable salary earned 2021 and paid in 2022.
5) Pension is a defined contribution of 35% of annual base salary (excluding vacation salary and salary deductions for company car).
Remuneration for the President and CEO, Jonas Samuelson in 2020 ('000 SEK unless otherwise stated)1)
Fixed remuneration
Variable remuneration
Extraordinary items
Pension expense6)
Total remuneration
Base
salary2)
11,553
Other
benefits3)
One-year
variable4)
Multi-year
variable5)
9
10,378
154
0
3,993
26,087
Proportion of
fixed and variable
remuneration
Variable: 42%
Fixed: 58%
Proportion of
fixed and variable
remuneration
Variable: 40%
Fixed: 60%
1) Except for multi-year variable remuneration, the table reports remuneration earned in 2020. Multi-year variable remuneration is reported if vested in 2020.
2) Includes vacation salary and salary deductions for company car.
3) Includes other benefits such as travel allowance, health care benefit and mileage compensation.
4) Variable salary earned 2020 and paid in 2021.
5) Calculated as number of shares in LTI 2018 that vested on December, 31, 2020 (804 shares) multiplied by the share price of Electrolux B shares on December 31, 2020 (SEK 191.35).
6) Pension is a defined contribution of 35% of annual base salary (excluding vacation salary and salary deductions for company car).
ELECTROLUX ANNUAL REPORT 2021
122 Remuneration report
Share-based remuneration
Outstanding share-related incentive plans
Over the years, Electrolux has implemented several long-term
incentive programs (LTI) for senior managers. These programs
are intended to attract, motivate, and retain the participating
managers by providing long-term incentives through benefits
linked to the company’s share price. They have been designed
to align management incentives with shareholder interests.
The company had during 2021 three ongoing performance-
share programs (2019, 2020 and 2021). The allocation of shares
in the 2019 program is determined by the position level and the
outcome of three financial objectives; (1) earnings per share, (2)
return on net assets and (3) organic sales growth. Performance
outcome of the three financial objectives has been determined
by the Board after the expiry of the one-year performance
period for this program. The allocation of shares in the 2020
and 2021 programs is determined by the position level and the
outcome of three objectives; (1) earnings per share, (2) return
on net assets and (3) CO2 reduction. Performance outcome of
(1) and (2) will be determined by the Board after the expiry of
the one-year performance period and (3) after the expiry of the
respective three-year performance period for these programs.
For the share programs allocation is linear from minimum to
maximum. There is no allocation if the minimum level is not
reached. If the maximum is reached, 100% of shares will be
allocated. Should the achievement of the objectives be below
the maximum but above the minimum, a proportionate alloca-
tion will be made. The shares will be allocated after the three-
year period free of charge.
If a participant’s employment is terminated during the three-
year program period, the participant will be excluded from the
program and will not receive any shares or other benefits under
the program. However, in certain circumstances, including for
example a participant’s death, disability, retirement or the dives-
titure of the participant’s employing company, a participant
could be entitled to reduced benefits under the program.
Each of the 2019, 2020 and 2021 program covers 253 to 282
senior managers and key employees in almost 30 countries.
Participants in the programs comprise six groups, i.e., the Presi-
dent, other members of Group Management, and four groups of
other senior managers. All programs comprise Class B shares.
Additional information about the outstanding LTI programs can
be found in Note 27 in the Annual Report 2021.
Share award plans (for the President and CEO)
The main conditions of share award plans
Specification
of plan
Performance
period
Award
date²)
Vesting
Date
Opening
balance
Share
awards
held at the
beginning
of the year
End of
retention
period
Information regarding the reported financial year¹)
During the year
Closing balance
Awarded
Vested
Subject to a
performance
condition
Awarded and
unvested at
year end
Subject to
a retention
period
LTI 2019³)
LTI 2020⁴)
LTI 2021⁸)
TOTAL
2019
19–05–28
21–12–31
21–12–31
2020–2022
20–11–11
22–12–31
22–12–31
2021–2023
21–04–06
23–12–31
23–12–31
0
0
0
0
0
6,3755)
59,7029)
66,077
0
0
0
0
0
13,9286)
11,94110)
25,869
0
55,709⁷)
47,76111)
103,470
0
0
0
0
1) In 2021, no shares vested since outcome of LTI 2019 was 0.
2) Refers to the date when the share awards were awarded to the participant.
3) The maximum number of shares that could be awarded under LTI 2019 for the CEO was 53,543 shares, the outcome of LTI 2019 resulted in 0 shares for the CEO.
4) The maximum number of shares that could be awarded under LTI 2020 for the CEO is 69,637 shares.
5) Shares awarded as adjustment due to the cash distribution in October 2021. Value at Award Date: 1,313 thousand SEK, calculated as the market price per share multiplied by the number of
awarded shares.
6) Shares subject to CO2 reduction performance target in LTI 2020.
7) Value at Award Date:11,470 thousand SEK calculated as the market price per share multiplied by the number of awarded shares.
8) The maximum number of shares that may be awarded under LTI 2021 is 59,702 for the CEO, the outcome with respect to the financial performance targets resulted in 47,761 shares for
the CEO. The outcome of the CO2-reduction target will be determined after the expiry of the three year performance period. The number of shares was adjusted due to the cash distribution
in October 2021.
9) Value at Award Date: 14,717 thousand SEK, calculated as the market price per share multiplied by the number of awarded shares.
10) Shares subject to CO2 reduction performance target in LTI 2021.
11) Value at Award Date: 11,773 thousand SEK, calculated as the market price per share multiplied by the number of awarded shares.
Application of performance criteria
The performance measures for the CEO’s variable remunera-
tion have been selected to deliver the company’s strategy
and to encourage behavior which is in the long-term interest
of the company. In the selection of performance measures, the
strategic objectives and short- and long-term business priorities
for 2021 have been taken into account. The non-financial
performance measures further contribute to alignment with
sustainability as well as the company values.
ELECTROLUX ANNUAL REPORT 2021
Remuneration report 123
Performance of the President and CEO in the reported financial year: variable cash remuneration
Description of the criteria related to
the remuneration component
Relative weighting of the
performance criteria
a) Measured performance and
b) actual award/ remuneration outcome ('000 SEK)
Group EBIT Margin (%)
Absolute operating income divided by External Net Sales
Group Net Operating Working Capital (%)
NOWC divided by External Net Sales (12 months rolling)
Group Contribution to Fixed Growth (%)
Year over year growth (%) in absolute CTF (External Net Sales with Variable
Costs deducted).
Group Consumer star rating
The average rating of Electrolux products in consumer reviews on around
300 web sites, considering reviews written in the last 6 months of the
calendar year, on a 0-5 scale.
1) Including adjustments for one-off items, acquisitions and divestments.
40%
15%
30%
15%
a) 6.0%1)
b) 4,960
a) 4.1%1)
b) 1,860
a) +10.6%1)
b) 3,720
a) 4.65
b) 1,860
Performance of the President and CEO in the reported financial year: share-based incentives
Name of
plan
Description of the criteria related to
the remuneration component
Relative weighting of the
performance criteria
a) Measured performance and
b) actual award/ remuneration outcome ('000 SEK)
LTI 20 21
Earnings Per Share
Income for the period attributable to equity holders of the Parent
Company divided by the average number of shares excluding
shares held by Electrolux.
Return On Net Assets
Operating income (annualized) expressed as a percentage of
average net assets
CO2 Reduction
Greenhouse gas reductions within the following three areas:
(i) manufacturing, (ii) energy for product use, and (iii) use of
hydrofluorocarbons (HFCs), measured on selected predefined
product categories and regions.
60%
20%
a) 18.41)
b) 7,8622)
a) 31.6%1)
b) 2,6213)
20%
a) To be determined at year end 2023
b) To be determined at year end 2023
1) Including adjustments for one-off items, acquisitions and divestments.
2) Based on market price per share at December 31, 2021 (SEK 219.5) multiplied by the number of shares (35,820). The shares will be released during the first half of 2024.
3) Based on market price per share at December 31, 2021 (SEK 219.5) multiplied by the number of shares (11,941). The shares will be released during the first half of 2024.
Comparative information on the change of remuneration and company performance
Remuneration and company performance ('000 SEK unless otherwise stated)1)
Annual change
Jonas Samuelson, President and CEO
Group Operating Income (EBIT) margin (%)3)
Average remuneration on
a full time equivalent basis of employees4) of AB Electrolux
1) Remuneration earned in the respective years.
2) Remuneration for President and CEO was 10.6% (3,100 thousand SEK) lower in 2020 compared with 2019.
3) The Group Operating Income margin (excluding non-recurring items) was 2.7% in 2019 vs 5.0% in 2020.
4) Excluding members of group management.
2020 vs. 2019
2021 vs. 2020
–3,100 (–10.6%)2)
+3,380 (+13.0%)
+2.3 percentage
points
+1.0 percentage
points
–13 (–1.1%)
+116 (+9.9%)
2021
29,467
6.0%
1,284
ELECTROLUX ANNUAL REPORT 2021
124 Events and reports
Annual General Meeting
The Electrolux Annual General Meeting will be held on March 30,
2022, in Stockholm, Sweden.
Additional information about the Annual General Meeting will
be published in the notice convening the Annual General Meeting.
Proposal for resolution on acquisition of own shares
Electrolux has, for several years, had a mandate from the Annual
General Meetings to acquire own shares.
The Board of Directors proposes the Annual General Meeting
Proposed dividend
The Board of Directors proposes a dividend for 2021 of
SEK 9.20 (8.00) per share, for a total dividend payment of
approximately SEK 2,558m (2,299). The approximate total
dividend payment for 2021 is calculated based on the number
of outstanding shares as per February 17, 2022. The proposed
dividend corresponds to approximately 50% of income for
the period, continuing operations. Last year’s dividend corre-
sponded to approximately 58% of income for the period, con-
tinuing operations.
The dividend is proposed to be paid in two equal installments,
the first with the record date April 1, 2022 and the second with
the record date September 30, 2022. The first installment is esti-
mated to be paid on April 6, 2022 and the second installment on
October 5, 2022.
Proposal for cancellation of shares and simultaneous bonus
issue
The Board of Directors proposes the Annual General Meeting
2022 to resolve to cancel all shares of series B that Electrolux
owned on December 31, 2021, with a simultaneous bonus issue
without issuing any new shares to restore the share capital to its
current level.
As of December 31, 2021, Electrolux held 25,842,915 shares
of series B in Electrolux, corresponding to approximately 8.4% of
the total number of shares in the company.
2022 to authorize the Board of Directors, for the period until
the next Annual General Meeting, to resolve on acquisitions of
shares in the company and that the company may acquire as
a maximum so many shares of series B that, following each
acquisition, the company holds at a maximum 10% of all shares
issued by the company.
The purpose of the proposal is to be able to adapt the com-
pany’s capital structure, and to use repurchased shares on
account of potential company acquisitions and the company’s
share related incentive programs.
The Board’s intention is to continue with share buybacks
over time and to continue to reduce Electrolux number of shares
through subsequent share cancellations, which will further
improve earnings per share. In line with this, the Board has
announced its intention to proceed with a new share buyback
program after the AGM 2022 for an amount up to SEK 2.5bn.
Additional details of the intended buyback program will be
communicated as and when decided.
Proposal for re-election of all board members
The Nomination Committee has proposed re-election of all
board members. Staffan Bohman is proposed to be re-elected
as Chairman of the Board of Directors, and Petra Hedengran,
Henrik Henriksson, Ulla Litzén, Karin Overbeck, Fredrik Persson,
David Porter and Jonas Samuelson as Board members.
DATES REGARDING THE AGM 2022
2021
2022
September
February
March
April
September
October
16 Nomination
Committee
appointed for
AGM 2022
8 Proposals from
Nomination
Committee
presented
30 Proposed record
date for second
installment of the
dividend payment
5 Estimated date
for payment of
second installment
of dividend
2 Notice to AGM
published at the
latest
22 Deadline for
registration in
share register
24 Deadline for
notice of intent to
participate in AGM
30 AGM 2022
1 Proposed record
date for the first
installment of the
dividend payment
6 Estimated date
for payment of
first installment of
dividend
ELECTROLUX ANNUAL REPORT 2021
Reports
and Events
The Electrolux website www.electroluxgroup.com/ir
contains additional and updated information about such
items as business development, strategy and the Electrolux
share, as well as a platform for financial statistics.
Financial reports and major
events in 2022
Jan 28
Consolidated report
Mar 30
Annual General Meeting
Apr 29
Interim report January–March
Jul 21
Interim report January–June
Oct 28
Interim report January–September
How we create value
www.electroluxgroup.com/ir/create-value
Interim Reports
www.electroluxgroup.com/ir
Capital Markets Update
www.electroluxgroup.com/CMU
Sustainability Report
www.electroluxgroup.com/sustainabilityreport2021
341
298
Printed matter
Larsson Offsettryck
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