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Community

SO1, 9 AND 10

Dialog and maintaining high standards play central roles in the Group’s aim to enhance the positive impacts that Electrolux can bring to new communities and minimizing the negative ones.

Electrolux can support community development in terms of promoting universal standards of doing business, jobs, knowledge transfer and economic opportunity. In return, communities provide the Group with its license to operate. No operations within the Group are deemed to have negative impacts on their local communities.

Aligning acquisitions with Group standards and Codes has been a focus area over the last three years to mitigate potential impacts. Although no acquisitions were made in 2013, Electrolux acquired ten factories in Egypt and three factories in Chile and Argentina during 2011 and one facility in the Ukraine in 2010. Since then, training, the ALFA assessment and audits have been conducted to gauge progress. Mapping and addressing human rights risks provides more information on internal Code of Conduct findings.

Restructuring

Since 2004, Electrolux has been relocating over half of production to low-cost areas to align its operations to its business strategy. The Group is mindful that these decisions affect both individuals and local communities. In setting up new operations or managing organizational change, Electrolux therefore aims to act transparently and responsibly, in dialog with those affected. The below is a review of restructuring initiatives ongoing during 2013.

In the factories

In 2013:

• Plant closures or discontinuation of production were ongoing in Revin France, (affecting 420 employees) and L’Assomption, Quebec (affecting 1,150 employees),
• Downsizing or closures were announced for Mariestad, Sweden (2014, affecting 130 employees), Satu Mare, Romania (2014, affecting around 100 employees), Orange, Australia (2015), affecting some 550 employees.
• Plant evaluations are ongoing for four factories in Italy, which can potentially impact approximately some 4,000 employees.

In the Electrolux experience, where feasible, supporting the search for investors to take over plants and provide jobs for employees has the greatest long-term benefits for both local community and those directly affected by the decision to restructure. This approach is currently under implementation in Revin, France.

Electrolux maintains dialog with local authorities, Workforce Development Agencies, and union representatives to develop a social plan for employees and mitigate potential negative impacts on communities. Social plans may include early retirement schemes, training, severance pay, as well as internal and external job-search support.

Electrolux also announced the need to increase white and blue-collar staff in the following location:

• Memphis Tennessee, with 550 employees during 2013, and the possibility of hiring an additional 1,200 by 2018.

The L'Assomption, Quebec facility has begun the formal transition of operations to the Group factory in Memphis. Agreements have been established between the union and the company to support employees during this transitional phase. The majority of employees will depart in 2014 as production migrates to the new facility while a limited number of staff will remain for a period of time after production has ceased to support traditional plant closure activity.

Offices

Changes in staff size in offices in Europe and North America were also completed and announced:

• 810 employees are to be added to the North American headquarters workforce in Charlotte, nearly doubling the size of its operation in the next three years
• A restructuring program, announced in 2012 was ongoing in 2013 that impacts European operations, including Major Appliances and Group staff functions. A new plan was announced at the end of 2013 and an additional 800 will be affected in 2014 and 2015, distributed across all countries and all functions.

Management approach: Society provides further information on the Group’s approach to mitigating impacts during restructuring.

Supporting initiatives

At Group level, Electrolux has an ongoing partnership with AIESEC, the world’s largest student-run organization. This win-win cooperation helps Electrolux acquire talent, contributes to Group diversity goals and offers students internships within the Group’s worldwide organization. In addition to a yearly remuneration, approximately 50 internship positions were filled this year.

The following are examples of local initiatives supported by local Electrolux organizations.

Philippines - Clothes for Hope

Working in partnership with the local advocacy organization Sagip Kapamilya, Electrolux created Clothes for hope, previously known as Clothes and Hugs, investing SEK 234 720 (USD 36,000) in the initiative so far. During 2013 the campaign was active in supporting victims of the Haiyan Typhoon. In 2013 similar programs were launched in Thailand, Indonesia and Singapore.

Thailand - Seed of Hope

Launched to assist flood victims and underprivileged children across Thailand, Electrolux participated in the "Seed of Hope – Rehabilitation" charity project organized by the World Vision Foundation of Thailand.

United States

Donations to science and technology education, critical needs, women's health causes and the arts amounted to SEK 2.5m (US $387,000). Electrolux employees volunteered close to 2,500 hours at food banks and community furniture banks. In addition, Electrolux supplied products to charities at a value of over SEK 3.9m (US $600,000). Electrolux North America contributed more than SEK 652,000 (US $100,000) to the United Way, matching employee donations.

Sweden - Livslust

The Foundation Livslust (Joy of life), an initiative Electrolux co-founded in 1994, provides housing and vocational training for disadvantaged young people in Latvia. Electrolux has provided appliances for its residential facilities and economic support. Electrolux and its employees contributed a total of SEK 223,000 as well as product donations.

Mexico - Employee dependents receive scholarships.

At the Electrolux Juarez campus in Mexico, Electrolux has a scholarship program for the children of production employees. Through an agreement with vendors working at the Juarez campus, 10% of the income from sales is directed towards books and uniforms of employee dependents at the start of every semester.

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CEO Statement

In 2013 we continued to deliver above our growth target and delivered 4.5% in organic sales growth.

CEO Statement

I'm convinced that raising product efficiency for the growing middle class is where long-term shareholder value creation lies.

Our products

Electrolux is the only appliance manufacturer in the industry to offer complete solutions for both consumers and professionals. The focus is on innovative and energy-efficient products in the premium segments.

Sustainability

Achieving the Group's vision of sustainability leadership is crucial to realizing the business strategy. The objective is to develop smarter, more accessible, resource-efficient solutions that meet people's needs and improve their lives. Read the comprehensive sustainability performance review.

Awards & recognition

Financial Reporting

Net sales for the Electrolux Group in 2013 amounted to SEK 109,151m, as against SEK 109,994m in the previous year. The organic sales growth was 4.5%, while currencies had an impact of -5.3%.