Creating lasting value

Social and environmental responsibility is not new to Electrolux. In fact, our investments in environmentally-sound products extend over decades. A new trend, however, is that consumers are starting to demand it.
I notice this trend often when I talk with both our consumers and our retailers. They recognize the role energy-lean appliances have in tackling climate change. I believe that the time for sustainable products has arrived. Today, just under a quarter of our gross prots in Europe comes from products with a strong sustainability prole. Our aim is to build on our competitive advantage in environmental excellence to increase this share. This generates lasting value for households, for the environment and for the Electrolux brand. I am proud of our achievements. We have dedicated signicant resources human and nancial to sustainable innovation. Continuing to meet or even exceed our customers expectations in this area is a challenge to which Electrolux has a long-term commitment. The right climate for change To raise the prole of our most environmentally-sound appliances, every business sector is launching a green range of products. They will proactively market and sell the most efcient appliances in terms of energy and water consumption. As standards of living improve around the world and more households acquire appliances, we have to minimize the impact this has on our planet by helping consumers leapfrog to energy-lean technologies. Our efforts dont stop at products. We are improving the efciency of our operations. Group Management has committed to cutting energy use across all our factories by 15% by 2009. This will also help us reduce our CO2 emissions and improve our oper-
ating margins. This is a rst step. By becoming systematically aware of our energy use, we can reduce still further. With our footprint becoming increasingly global, our aspiration is for the imprint we leave to be a positive one environmentally, socially and ethically. Through our Responsible Sourcing Program, we are engaging suppliers to pursue the standards dened in our Code of Conduct and Environmental Policy. In China, Latin America and Eastern Europe, we are actively raising workplace standards and enhancing business practices. We can be part of the solution. Electrolux is driving the shift to more energy-efcient products. The technology already exists to help us lead more climate-smart lives. Whats needed now are strong market incentives that support green consumer choices. I urge governments to explore how tax credits can help to reduce societys carbon footprint. We live in a globalized, resource-constrained age. Transforming these constraints into opportunities will allow us to create lasting value.

Stockholm, April 2008

Hans Strberg President and Chief Executive Ofcer

Restructuring

A core part of our long-term business strategy is to locate 60% of our plants in countries with a lower cost base by 2010. This is essential for Electrolux to maintain a leadership position in an increasingly competitive global appliance market. As well as boosting our presence in emerging growth markets, restructuring our operations provides an opportunity to raise social and environmental standards throughout the world. We realize, however, that plant closure comes at a cost for the people and regions involved. How effectively we manage this restructuring process is vital for our reputation as a responsible citizen. Through constructive engagement and dialogue we are trying to ensure positive outcomes for all involved. Approximately 650 employees were affected by closures announced in 2007. More on p. 32

800 600

Initial audits 20052006 Zero tolerance Major non- Minor nonconformance conformance Total ndings Follow up 2007
% Climate change Recycling Fair treatment of employees
Result of the Electrolux materiality process, %
Chemicals in the environment Health and safety in the workplace Environment & labor standards in supply chain
In total, 500 employees responded to the materiality survey that we conducted in early 2007. We polled representatives from the top ten investors in Electrolux, along with retailers and consumer organizations. All were requested to select ve top issues from a list of 13. The chart shows how individual stakeholder groups ranked the issues.
Company values Globalization Anti-corruption Equal opportunity (gender and ethnic) Contributing to local communities Global income gap Restructuring 0 Customers and consumer organizations (7) Investors (9) 100
Electrolux employees (503)

climate change

Climate change strategies
Tackling climate change is a responsibility Electrolux takes seriously. It is an issue that also presents opportunities. Our climate-smart appliances meet the demands of growing numbers of engaged consumers. Our target to reduce energy use is also a win-win investment: less CO2 in the atmosphere and operational savings for Electrolux.
With our biggest environmental impacts occurring during the product use phase, by far our greatest potential to reduce CO2 is to sell energy-lean products. In 2007, products with the best environmental performance represented 17% of Electrolux units sold and 22% of our gross prots in Europe a rise from 2006 of 11% and 16% respectively. Goals for products and operations To build on this momentum, in 2008 each business sector will dene a green range of products that are energy and water lean, or which feature climate-smart functions. The product sales and protability will be tracked on an annual basis. Group Management has also committed to reduce energy use in our operations generating savings of approximately SEK 100m (12m) annually. (See p. 12) As a rst step, it is an ambitious target, but not an unrealistic one says Henrik Sundstrm, Vice President, Sustainability Affairs. Yet there are challenges in applying common, group-wide targets because of differences in regions, consumer preferences, products, and even the energy mix in facilities. To track progress against our target, a management system has been set up at Group level. Evaluations will also be conducted on a per unit basis through yearly performance assessments.

2006 Design Lab Winner

Metin Kaplan describes his internship at Electrolux Product Design: The company working style is very open to new ideas; if I want to try something extreme, my boss doesnt stop me, he encourages me, even if it doesnt go into production. There is always someone to ask materials or production questions is it easy to recycle, more sustainable, energy-efcient to build? Describing the benets of Design Lab for students, Metin says Design Lab is getting better and better and is a popular competition because no others give such a great opportunity for a six-month internship you cant buy that. Metin Kaplan won in 2006 for Nevale, a food carrier.
2007 Design Lab winner: E-wash, clothes washing for apartments, using natural soap nuts to replace detergents.

OUR JURY ON THE SOAPBOX

Matali Crasset on how consumers are responding to environmental issues: Consumers can change their behavior if it makes sense to them. With technology you can do the best, but also the worst. It all depends on what you use technology for, so manufacturers should domesticate technology rst and make sure it can bring something to our lives. As a designer, environmental issues apply to almost every project. Design is all about questioning our work every day and nding new ways of thinking. And this is even more crucial concerning environmental issues.
Matali Cresset, industrial designer
Jason Bradbury on the work presented at Design Lab: The quality of the visualization techniques used by the students was way in advance of what I had expected. The way in which some of them can work in 3D is fascinating. But they have also gone the extra mile to come up with designs that stand apart from the rest. As an up-and-coming designer, if you want to be in the top bracket then its important to look beyond your college library.
Jason Bradbury, TV Presenter, consumer gadgets and electronics
Celine Cousteau on the challenges facing designers, manufacturers and educators to address the environmental imperative: Manufacturing is going to have to change. The designs that the [Design Lab] students have come up with are very innovative and built upon the kind of technology that will have to be included. Human beings dont like to change, but if a product can be creative and attractive as well as being environmentally smart, then they will go for it. Ultimately though, it is about creating a real connection to the issues and why they matter. To this end, environmental education should be mandatory in all schools.
Celine Cousteau, ocean explorer and environmentalist
Henrik Otto on designers contribution to sustainability: Designers can play an important role because they have a natural curiosity and ask questions about materials and processes. At Electrolux, our strategy of being thoughtful design innovators means we have to be considerate in every aspect of product development, and we know we need to include sustainability to stay on top of peoples shopping lists. Innovation and creativity are equally important and Design Lab is a really good litmus test for us students entering the competition have no preconceptions, giving us the opportunity to look at ourselves through their eyes.

Henrik Otto, Senior Vice President, Global Design, Electrolux

sound business practices

Listening to you
Understanding the concerns of consumers is central to Thinking of you. As a sustainable brand, we are accountable to many stakeholders customers, employees, shareholders and others affected by our operations and products.
To be a trusted partner, we know it is important to provide insight into our priorities, progress and how we work. Dialogue also provides a win-win opportunity listening helps us dene our strategy and nd common ground. Electrolux encourages engagement with investors, consumer and trade organizations, customers, legislators, and non-governmental organizations. Group Sustainability Affairs has overall responsibility to encourage discussion on sustainability-related issues, and top management was actively involved during 2007. Shanghai roundtable Owner-representatives are also engaged. Investor AB is the Groups largest owner, with close to 12% of the share capital. In fall 2007, Investors chairman, Jacob Wallenberg, spoke about the role of energy-efcient appliances in tackling climate change at the International Business Council of the Mayor of Shanghai, chaired by Mayor Han Zheng. The focus of the meeting was how business and government partnerships can address environmental challenges. The meeting was a platform to discuss how private industry can help nd sound, sustainable solutions for mega-cities. Investor AB has a stake in the sustainability agenda of Electrolux. This was an opportunity for me to both contribute, and garner feedback, on their approach, Mr. Wallenberg comments. Strength in numbers Another forum for engagement is our membership of organizations such as Business for Social Responsibility, the UN Global Compact and CECEDthe European Appliance Industry Association. In them, we discuss issues such as revisions in the EU energy labelling scheme and effective supply chain management. We also participate in the Swedish working group for the development of ISO26000, international guidelines on management of social responsibility. Union representation on the Board While intensity of contact with external stakeholders varies by issue, one dialogue remains constant that with employees. The Groups Board of Directors comprises non-executive members, the President and, in accordance with Swedish law, three employee representatives and three deputies. Their purpose is to provide employee input into company decision-making. Our most important contribution to the Board is that we have knowledge of the company from the inside. The accumulated competence of our members gives insight into all aspects of the Gunilla Brandt Employee representative on business, says Gunilla Brandt, the Board of Directors for Unionen representative of the Swedish trade union, Unionen. Dialogue with employees Our Employee Attitude Survey (EAS) is a web-based tool for anonymous employee feedback. EAS 2007 was the most comprehensive survey to date, with more than 10,000 employees contributing including, for the rst time, all ofce workers in Asia. More examples of dialogue are on pages 9, 15, 19, 32 and 34

Policy Code of Ethics Policy Holder* VP, Group Sustainability Affairs VP, Group Sustainability Affairs Reports to Policy Approver SVP, Board of Communications Directors and Branding SVP, Board of Communications Directors and Branding SVP, Legal Affairs Board of Directors
Workplace Code of Conduct
Policy on Corporate Countering Bribery Legal Affairs and Corruption Environmental Policy VP, Group Sustainability Affairs
SVP, Group Communications Management and Branding
*Responsible for developing, communicating, monitoring and enforcing
Awareness of, and compliance with, the Workplace Code of Conduct are assessed through the ALFA (Awareness-Learning-Feedback-Assessment) system and on-site audits. Internal and external audits also monitor implementation of the Environmental Policy. A key priority for 2008 is to ensure group-wide policies are communicated across the organization. Particular focus will be placed on the Code of Conduct and the Electrolux Code of Ethics, which formalizes the principles for our relations with employees, shareholders, business partners and other stakeholders. Ensuring that everyone at Electrolux upholds high social and environmental values is vital in building the trust on which our brand success depends.
An analysis of our governance structure in relation to the GRI G3. Formulations of sustainability related codes and policies. 2007 Corporate Governance Report.
ALFA tracks Code of Conduct

*53 factories

Awareness of the Code Manager responsible for the Code Awareness of Management Practices
Manager responsible for Management Practices Initiated implementation of Management Practices Completed implementation of Management Practices Communicated the Code to all relevant managers Communicated the Code to all employees Documentation demonstrating compliance with the Code
Data covers 100% of our production facilites. Levels of awareness of the Code of Conduct, and how it is organized and communicated to managers and employees are high throughout the Group. Although implementation levels for managment practices are also high, there is room for improvement in 2008.
Data covers 100% of our production facilites.
Training and engaging staff
Training staff in our facilities about the Workplace Code of Conduct ensures that our ethical standards are upheld across the globe.
Code of Conduct Quiz in Thailand
New members of staff at Rayong Major Appliances and Professional Indoor facilities in Thailand learn about our Code during induction. This includes a game and a Question and Answer session to bring issues into sharp relief. To refresh awareness, a prize quiz in the facility newsletter was run to test employees knowledge and incorrect answers were followed up. To check that the Code is being properly applied, the facility was audited in 2007. No major issues were raised. Suppliers remain a challenge, however, as Likhit Somboon, HR Director, Thailand Manufacturing explains: We send suppliers a questionnaire and audit their factory for a day. Work on this will continue through the action plan within our Responsible Sourcing Program. (See p. 26)

People vision

Electrolux is grounded on the skills and insight of our employees. With our newly-dened People Vision, we are nurturing competence throughout the Group, says Carina Malmgren Heander, Head of Group Staff Human Resources.
The Group is undergoing a major change in business strategy, by shifting from a production to a consumer-oriented company. Since we are built on the experience of our employees, we will grow by optimizing our existing talent pool as we move forward. rward. The People Vision, dened in 2007, was launched to dene how e this will be achieved. Our vision is to have an innovative culture with diverse, out, standing employees. It is based on people who drive change and e go further in delivering on the Groups strategy and performance ance objectives, Heander, explains. Lingua Franca A number of Group functions are in place to enable this, including luding HR policies, leadership programs and an internal recruitment tool, but cultivating a global approach in a decentralized organization is on challenging. A decentralized organization is designed to help us lp stay close to the business in terms of needed competence, tence, explains Heander, yet we need to speak the same language. To reinforce our shared approach, in 2007 all Electrolux HR policies were revised. Our Grandparent Principle is intended to ded improve transparency. The Recruitment Policy aims to ensure fair re hiring and our Compensation Policy denes a consistent approach oach to remuneration. HR training is conducted on each of these. In 2007, the Boards Audit Committee appraised the effectiveectiveness of our Appointment of Senior Managers policy in creating eating balanced teams. It also assessed how management teams uphold the Code of Conduct. Its conclusions will be followed up in 2008. Sustainability and the People Vision As well as furthering the best interests of all our employees, we s, want to provide them with the tools to contribute to our sustaintainability goals. We aim to develop an organization that is appealing pealing to employees as human beings, Heander states. Health and safety is fundamental to me it must be a zero accident approach. roach. That, and work with the Code of Conduct needs to be a priority in ty every organization. Sustainability is also included in induction ction programs for all new senior managers. Diversity It is important that our organization mirror our consumers our s brand is global and women most often determine choice of appliance. Increasing staff gender, age and cultural diversity is vital. tal. The share of women represented among senior managers and Group Management increased in 2007, while representation on the Board of Directors declined. The absolute number of women remained the same, however. Approximately 140 senior and managerial al positions were lled, about 27% t 27% of them by women. A similar percentage of leadership program participants were female. There are three women executives in Group Management. Four of eleven members of Group management and four of nine ownerelected members of the Board were non-Swedes. For more on employee feedback, see p. 18.

HR related indicators, p. 40 Includes diversity, remuneration to senior management, the Electrolux People Process.

Partners in change

Strong relationships with retailers lie at the heart of our business model. Sustainability is an important part of our dialogue with them. At times, we cooperate informally to impact consumer choices through communication. Increasingly, dealers stipulate formal commitment to performance standards.

Europe:

North America:

Committing to change

Magnus Yngen, Head of Major Appliances in Europe has seen growing engagement with sustainability among retailers. When I meet with leaders from retailers, the subject pops up with about 75% of those I visit.

An evolving agenda

Between 8590% of Electrolux sales in North America are conducted through a wide range of retailers. Electrolux works through approximately 1,000 primary customers. These include three key national chains, SEARS, Lowes and Best Buy, several regional dealers and a few hundred independent dealers.
Engagement among retailers
Magnus Yngen Executive Vice-President, Major Appliances Europe

Keith R. McLoughlin

Executive Vice-President, Major Appliances North America
In many ways, retailers have gone beyond compliance to focus on the opportunities for change that exist in the products they offer. I think that when it comes to sustainability, the main focus among retailers is to choose products that allow them to present themselves as proactive companies, says Yngen. Electrolux strives to be a trusted, credible partner in these regards. The best, most advanced retailers would nd a competent partner in Electrolux.
Growing awareness of environment and labour issues:
Its ultimately about delivering value, says Keith McLoughlin, Head of Electrolux Major Appliances in North America, as he describes the rising importance of sustainability in building relationships. Many retailers had already been focusing on doing the right thing from quality and societal standpoints. But there certainly has been an increase in dialogue in the last year. With some, sustainability has become a key strategy platform, and they are demonstrating this through their own brand of eco-products, or their own environmental trademark. In North America in 2007, a fairly substantial shift has occurred among consumers. The climate change debate has done a remarkably good job in raising awareness. And growing attention to the impact of globalization has put fuel on the re.

Working together to impact change
For those retailers with active shop oors, sales people are trained in the products on offer, and there is a greater opportunity to engage with consumers. For unassisted shop oors, printed information must be informative and credible in order to help consumers make smart choices. The most important decision point is the store oor. Product point of sales material has to cover a lot of ground. Our challenge is to get the sustainability message across in this environment. Thats where energy labelling comes in. Labelling is efcient, credible, and straightforward communication to consumers. Thats why I believe its important that suppliers and retailers align on the importance of energy labelling both on its purpose and how to make it more effective. Labelling can be a tremendous change driver together with competition and voluntary agreements. Transporting goods is another way to work together to directly reduce our impact on CO2. That is something that we can bring to the table that can easily be addressed jointly.

Priority issues

Retailers are focused rstly on energy consumption. Secondly, they dont want to sell products that are harmful to the environment (like CFCs, toxic solvents, or lead-based materials). The third criterion relates to labor practices. They count on us to manage products sourced from around the world in a way that is in line with sound labor practices. Our increased outsourcing in low-cost countries makes this an important part of our work.
Value share of sales through retailers in Europe
% 20 Consumer electronic retailers Other distribution channels Consumer retailers continue to represent the primary distribution channel for Electrolux. In Europe, approximately 74% of the value share of sales was sold through these channels. Source: GfK, 2006 xx,x xx,x
John Lewis, a major retailer in the UK, has more than doubled its purchases of Electrolux products over the last three years. The John Lewis Partnership, its parent company, has a long history of social responsibility. In turn, it expects all suppliers to adhere to its Responsible Sourcing Code of Practice. Social, ethical and environmental performance is increasingly important in supplier selection and product sourcing, explains Vic Sinclair, appliance buyer for John Lewis. The retailer has observed a strong increase in the sale of ethically certied goods and merchandise with better environmental performance. John Lewis intends to increase its range of energy-efcient products and proposes that by 2009, 97% of its large electrical appliances will be A or A+ rated. As of summer 2009, consumers will nd IKEA-designed appliances manufactured by Electrolux in IKEA stores Europe-wide. IKEA places far-reaching demands and expectations on its suppliers. Social and environmental criteria are among the most rigorous. Inclusion in their product portfolio is not only a litmus test of the Groups practices; it is testimony to the fact that a sustainable approach creates greater business value. Electrolux shares IKEAs commitment to promoting good business practices. The Group endorses the IKEA Code of Conduct, and will work with IKEA to monitor that Electrolux facilities and suppliers meet their high standards. Both the IKEA and Electrolux Codes of Conduct are grounded on the same universal values regarding human rights, the environment and workplace practices. Sears Holdings is North Americas leading home appliance retailer with 3,800 retail stores in the US and Canada. Sears sells Frigidaire and some products belonging to their brand Kenmore are manufactured by Electrolux Major Appliances. Sears and Electrolux work together to pioneer new Energy Star products within their product line: Our goal is to develop innovative appliances that help save customers time, money, and precious resources, says Ellen Sauser, Associate Buyer, Dishwashers, Compactors and Disposers. Applying rigorous quality standards, Sears conducts audits at its suppliers factories. The partnership approach also embraces communication, for example, the Plant the Seeds of Change campaign produced by Electrolux for consumers. The material has been used by Sears in management events to raise awareness amongst dealers and employees about the potential of energy-efcient appliances.

responsible sourcing avsnitt

Supplying change

Since 2004, supply chain Code of Conduct monitoring has been an integrated part of sourcing from China. As we rene our procedures, work conditions are improving amongst most suppliers but better detection also reveals more cases of non-conformance to resolve.
In 2007, 102 audits were conducted by Electrolux Code of Conduct specialists and 14 by external auditors worldwide. Our program placed particular focus on Asia. Following his 50th re-audit, Andrew Feng, Corporate Social Audit Manager within Electrolux Purchasing in China, drew two conclusions: the number of non-compliance cases was dramatically reduced by 38% but only seven out of 50 were in full compliance with our Code of Conduct. Our audit methodology has improved, which is why were nding more non-compliance by some suppliers than we did during initial audits, says Henrik Dahlstrm, Director of the Responsible Sourcing Program. While most categories show improvement, health and safety, child labor and working hours remain an issue in China. (See p. 28 and p. 29) Managing risk Responsible sourcing helps ensure that suppliers uphold the values enshrined in the Electrolux Code of Conduct and Environmental Policy. Supplier assessments take into account four areas of risk: 1. Geographical location (Asia, Latin America and Eastern Europe) 2. Extent of business with a supplier 3. Type of supplier relationship 4. Type of operation 2007 milestones Of ve objectives set in our 2006 Sustainability Report, four were achieved: Code of Conduct specialists are in place in China. Specialist teams in Eastern Europe and Latin America were approved by Group Management. Four purchaser training sessions were held in China and Thailand and one in Sweden. Follow-up audits were conducted in China with all active suppliers audited in 20052006.
Work in cooperation with Global Purchasing on our fth objective, the development of common procedures for Code of Conduct assessments, is ongoing. Our end goal is to introduce a methodology that includes all aspects of the purchasing organization. Achieving transparency and engagement along the supply chain is a long-term goal of Electrolux. Through training, we are helping suppliers foster a sense of ownership of the issues and facilitate sustained improvement.

WWF cooperation

SEKm Electrolux in Italy has enjoyed a 15-year partnership with %
Wasting away Urban waste management has considerable impact on the Dionsequisl, 22% environment and has been a hot media topic recently in Italy. Autpatue deliscing, 2% The Electrolux bio-waste disposal unit manages and colDionseeliscing, 0.2% lects organic household waste, reducing waste volume by as much as 80%. Ruedeliscing, 72% Our patented system of counteracting blades makes it posSequaeliscing, 4% sible to grind all types of organic waste, which is then sprayed with liquid enzymes toGiam,the fermentationaugiam, sit, si stop conullutpat. Ut process and odor build-up. tat diametum do dolorem et ilit wis The unit is compact and can be easily tted to doloborting numsan hendipis et, secte kitchens. It provides the added benet of reducing the ut. ex ent.Gue min henit quantity of unseparated waste going to incinerators and thus minimizes use of plastic rubbish bags. It is available in Italy under the Electrolux brand. (See also p. 4)
of 125,000 WWF. WWF Italia, the local chapter10 one of the worlds foreDionsequisl most environmental organizations, has collaborated with us to Autpatue deliscing 8 100,000 raise awareness among schoolchildren of environmental issues and the role of efcient appliances. Giam, conullutpat. Ut Together, we produced and distributed 200,000 copies of 6 75,000 augiam, sit, si tat Ecoguida, a booklet on how to use appliances efciently. The diametum do dolorem 4 50,000 guide is illustrated with the best drawings chosen from 16,000 et ilit wis numsan henentries from 1,000 school classes. 2 dipis et, secte 25,000 The theme of the 2008 drawing competition will be water doloborting ex ent.Gue and is targeted to students under the age of 14. 0 min henit ut. Products sold under06 RexElectrolux and Electrolux the 05 brands are endorsed by WWF.

restructuring

Dialogue delivers fair outcomes
The restructuring program at Electrolux will relocate over half our production to lowcost countries. During this process, we aim to be transparent and inclusive, showing respect for individuals. Their experience will affect our reputation globally.
When a factory closure is announced, our rst priority is to consider the impact on employees. Consulting all stakeholders in a timely manner, including labor union representatives, local, national and regional politicians and government authorities, is key. While nobody relishes plant closure, Electrolux is committed to dealing with the process responsibly. Benets of engagement Simon Thomas, HR manager at Spennymoor, UK, due to close at the end of 2008, explains the benets of early engagement with staff: The process of the investigation works really well because there is a gradual acceptance of the situation throughout. It is a genuinely open approach and ensures that all the angles are covered, giving people the condence that the right decision is reached, even if its an unpalatable one. Keeping employees informed on the progress of negotiations is vital, advises Jon Sindt, Managing Director of the recently closed plant in Fredericia, Denmark. You have to keep up a high level of communication. Every time we agreed on something we called all the employees for a big meeting in the canteen and gave an update on where we were and what we had agreed upon. Closing a factory is difcult for all involved, however, and sometimes constructive dialogue is not possible. This was the case in Nuremberg, Germany, where the experience taught Electrolux to not underestimate the difculty of communicating facts in such situations. With investment in employment support, re-training and pre-retirement advice, 551 of the 1,320 people who retrained found new jobs, a further 132 took early retirement and 68 agreed to part-time contracts.

Vstervik, Sweden

Vstervik, Swedens vacuum cleaner plant in closed in 2005. Our primary focus was to individually tailor employment opportunities for staff. At the same time, we invested in the growth of small and medium-sized businesses. Credit for todays thriving community goes to partnerships between local politicians, local industry and other stakeholders. At closure, Electrolux launched a two-year project to help the 511 employees nd work. By May 2007, 367 were employed or studying fulltime while 71 were unemployed or on disability payments. The remaining 73 were either retired or engaged in job support programs. Electrolux invested a total of SEK 20m towards growing the regional economy and in Forward Vstervik!, a development company jointly owned by government and businesses. We donated our factory facility, currently occupied by 25 companies. The effort has paid off in a 2007 Confederation of Swedish Enterprise regional ranking of economic viability, Vstervik rated 65th of 290 communities in Sweden, compared to a 242nd place in 2004.
Boost to low-cost economies
Where sustainability is concerned, there is a silver lining to the restructuring cloud. Our experience at plants like Vstervik shows that properly managed plant closure can generate positive outcomes. The opening of new plants in emerging economies, meanwhile, also creates signicant opportunities for economic, social and environmental upturns. Among the benets that new plants bring to low-cost countries are jobs, opportunities for local suppliers, technology and knowledge transfer and improved social and environmental standards. Electrolux is receiving recognition for its high standards and commitment to equality at its plants in low-cost economies. In 2007 employees at our Olawa plant in Poland, which produces front-loading, top-loading and compact washing machines, rose to over 1,015 from 540 in 2006. At Olawa, all staff complete Code of Conduct training upon induction. Although union membership is low, it is encouraged. There are 27 members of the national union Solidarnosc, while 87 staff have joined the local trade union. In Hungary, Electrolux Lehel has been praised by the International Labor Organization (ILO), a specialized United Nations agency, for its proactive stance in giving women, minorities and other disadvantaged groups equal opportunities in the workplace. The company was among nine of 32 singled out to receive the agencys award, Good Practices in Workplace Diversity in Hungary.

Rayong, Thailand

At Rayong in Thailand, two factories Indoor Professional and Major Appliances operate from the same site. While Indoor Professional has maintained its size over the last year, Major Appliances has grown by 300%, counting some 620 employees today from 170 in 2006. Front- and top-load washing machines and driers are currently being manufactured with plans for further product expansion in 2008. In 2007, the Thai Labor Authority gave Rayong Major Appliances an award for Best Company in Employee Relations and Welfare. Selected from over 50,000 companies, Rayong was one of only 382 in Thailand to receive the award, which was presented by the Thai Prime Minister General.

our metrics

Economic highlights
Net sales increased to SEK 104,732m (103,848) Operating income rose by 5.7% in 2007, excluding items affecting comparability Operating income improved for all operations except for appliances in Europe Extra costs for new products launched adversely affected income for appliances in Europe Best results ever for appliances in Latin America Strong performance by oor-care operations worldwide Good growth in Asia/Pacic and strong improvement in results Solid performance by appliances in North America and Professional Products The dividend is SEK 4.25 (4.00) per share.

Key data 1)

SEKm, EURm, USDm, unless otherwise stated 2007 EURm 2007 USDm
Net sales and employees in 10 largest countries

SEKm Employees

Net sales Operating income Margin, % Income after nancial items Earnings per share, SEK, EUR, USD Dividend per share, SEK, EUR, USD Return on net assets, % Value creation Average number of employees Net debt/equity ratio Return on equity, %
1) Excluding items affecting comparability.
104,732 4,837 4.6 4,397 11.66 4.25 20.9 2,053 56,898 0.29 22.7
103,848 4,575 4.4 4,367 10.89 4.00 21.2 2,202 55,471 0.02 21.1

11,475 1.26 0.46 222

15,652 1.73 0.63 305
USA Brazil Germany Italy France UK Canada Australia Sweden Spain Other Total
29,571 7,158 7,020 5,109 4,950 4,577 4,488 3,814 2,927 30,161 104,732
10,648 6,754 2,147 8,036 1,466 1,122 1,420 2,144 3,19,244 56,898

Net sales1)

Operating income1)

Earnings per share2)

SEKm 140,000 105,000

SEKm 7,500