Electrolux (ELUX) Status update summary

Strategic partnership and transformation initiatives

• Announced a major North American partnership with Midea Group to accelerate growth and profitability, focusing on food preservation and fabric care, leveraging Midea’s scale and Electrolux’s brands and distribution.

• Three joint ventures will be created: a sales JV for food preservation, a manufacturing JV for food preservation in Juárez, and a manufacturing JV for fabric care in Anderson, with Electrolux retaining 50%, 35%, and 55% ownership respectively.

• The partnership will enable cost-efficient manufacturing, product expansion, and access to Midea’s R&D and supply chain, with new product launches planned for 2027.

• Manufacturing JV will lead to a net reduction of 1,500 employees in 2026, with 1,200 new hires at Anderson by 2028.

• Asset sale in Juárez to the JV expected to generate SEK 1.0 billion positive cash flow in Q3 2026.

Financial strategy and rights issue

• Announced a fully underwritten SEK 9 billion rights issue, with half allocated to strategic initiatives and half to strengthen the balance sheet.

• Investor AB will subscribe to 37.56% of the rights issue, with the remainder underwritten by Morgan Stanley and SEB.

• Rights issue proceeds will reduce net debt/EBITDA from 3.8x to 2.8x, targeting 2.0x after transformation, and fund the Midea partnership, efficiency improvements, and long-term growth initiatives.

• Record date for participation is May 29, 2026; subscription period June 2–16, 2026; prospectus publication May 28, 2026; EGM approval expected May 27, 2026.

• SEK 1.6 billion planned investment over three years to implement initiatives.

Operational and organizational changes

• SEK 2.0–2.5 billion allocated to global efficiency improvements, including manufacturing footprint optimization and staff reductions, targeting 3,000 fewer employees globally.

• Factory closures in Santiago, Chile (impacting 400 employees) and Jászberény, Hungary (impacting 600 employees) as part of restructuring.

• Will cease refrigerator production in Anderson in Q3 2026, transitioning to fabric care production in 2027, with a SEK 2.4 billion non-recurring item for asset write-off and restructuring.

• Total negative non-recurring items from these initiatives estimated at SEK 4.6 billion, with SEK 2.4 billion cash-related.

• Organization restructured into four regions and a centralized product organization to enhance efficiency and consumer focus.