Currency exposure

The Group’s global presence, with manufacturing and sales in many countries, creates currency exposure but also offsets exchange rate effects to a certain degree.

The principal exchange rate effect arises from transaction flows, when purchasing and/or production is carried out in one currency and sales occur in another currency. Every month Group Treasury collects forecasts of the transaction flows for the coming 12 months from the operating units and hedges the invoiced flows. To some extent, the Group also utilizes currency derivatives to hedge forecasted flows with both committed price and volumes. The results from the currency hedges are transferred to the operating units. It is the business areas’ responsibility to manage the FX risk of the forecasted flows through immediate price adjustments and cost reductions.

Electrolux is also affected by translation effects when the Group’s sales and costs are translated into SEK. The translation exposure is primarily related to currencies in those regions where the Group’s most substantial operations exist.

Main transaction flows

The main transaction flows and currency pairs are presented in the map together with an explanation of how they impact the Group.

Sensitivity analysis of currencies

The major currencies for the Electrolux Group are the USD, CAD, EUR, CHF, GBP, BRL, MXN, AUD, PLN, CLP and THB. In general, income for Electrolux benefits from a weak USD, EUR and PLN and from a strong CAD, CHF, GBP, BRL, MXN, AUD, CLP and THB. In countries with large manufacturing and logistics centers, effects over time will to a large extent balance out due to natural hedging.

 ^{1) Including transaction effects but not translation effects.}

^{2) At year-end 2023.}

^{3) Assuming the Swedish krona appreciates/depreciates against all other currencies.}