Electrolux AB

Good morning, and a warm welcome to the third quarter 2024 results presentation. With me today, I have Therese Ryberg, our CFO, and Oskar Skjerngren from Investor Relations. Before I continue, I'd like to mention that this session is recorded and will be available on our website as an on-demand version. Organic sales increased by 6.2%, driven by higher volumes in all the group's business areas. Organic growth was strong in Latin America, especially in Brazil, which continues on the trajectory started in the fourth quarter of 2023. In Europe, market demand declined slightly, with continued weakness in the important built-in kitchen category. Despite challenging market conditions, volume and mix were favorable, supported by the attractive product offer in the mass premium segment. Price was negative, partly as a consequence of weak consumer demand in Europe, however, less negative than the market as a whole. In the US, promotional activity increased year over year, although continued to stabilize consequentially. Aftermarket sales decreased slightly year over year, mainly as a consequence of weather impacts on shipments in the US. Excluding non-recurring items, operating income amounted to $717 million sec, up from $314 last year, corresponding to a margin of 2.2%. Operating income improved in Europe, Asia, to 610 million SEC from 434. In Latin America, operating margin increased to 6.5% from 5.6% prior year. And the gradual improvement in North America continued with a reduction in operating losses to 249 million SEC from 440 million in the prior year. Cost reduction activities contributed to a positive earnings effect from cost efficiency of approximately 1.2 billion SEC year over year. although negatively impacted by higher logistics costs. A negative effect on earnings from lower price year over year was partly offset by higher volumes. Investments increased in innovation marketing to support the group's strong product range. Lower raw material costs partly offset negative currency effects and labor cost inflation. Our strategic divestment initiatives on non-core assets are progressing at different speeds. with the pace being adapted to the geopolitical situation and market environment. We have, during the preparation phase, assessed that the value of the Zanussi brand would be better monetized as part of the group's licensing business, and is therefore presently not being divested. The total potential divestment value is consequently currently expected to be below the previously communicated 10 billion SEK. Closing of the divestment of the water heater business in South Africa is anticipated during the fourth quarter of 2024. Therese will now walk us through the results for the quarter.

Despite having an organic sales growth in the quarter, we had a negative organic contribution to earnings. This was driven by a negative effect from price and mix combined of 2.7 percentage points in the quarter, with negative price mainly in Europe and in North America. We have seen the price levels in North America stabilize throughout the year and also in the third quarter, while there has been a higher promotional activity in Europe with a larger share of the market volume sold as replacement sales. Sales mix continued to be positive overall for the group, based on a strong product portfolio and high consumer star ratings. This was also supported by an increase in marketing investments in the quarter. Volume grew in the quarter in all business areas, but mainly on the back of strong growth in Latin America. Cost efficiency was positive by 1.2 billion Swedish krona. The cost reduction program is on track, and Jonas will go into some more details on the next page. External factors turned negative in the third quarter as currency headwinds increased, which was more than offsetting positive raw materials. As last quarter external factors also including labor inflation as well as the effects related to Argentina and Egypt. And Jonas will now give an update on the progress of the cost reduction.

Cost reduction activities are developing more or less according to plan despite the negative impact from logistics. We're continuing to reduce our headcount and are now at 40,000 employees globally compared to 53,000 in second quarter of 2022 when cost efficiency measures were first initiated. The Springfield ramp-up is continuing, and we are now in the beginning of the fourth quarter producing according to plan, although still working to improve productivity further. Year-to-date, cost efficiencies amount to 2 billion SEK, and we are on track to reach around 4 billion SEK for the full year. The new organization is fully implemented, and staff-related savings are developing as planned. Cost reduction activities are now and going forward mainly focused on product costs through low-cost country sourcing, value engineering, and supply-based consolidation in all of our factories globally. As we look forward, we plan to continue to drive product cost reduction activity at similar levels as in 2023 and 2024 in the coming years through further acceleration of these activities. Let's have a look at our cash flow and liquidity today.