Electrolux AB

Just like the beautiful, scratch-resistant sapphire mats, it's the Electrolux HOB for better living, designed in Sweden.

Very welcome to the presentation of our second quarter result today. I'm Ann-Sofie Jönsson, Head of Investor Relations. And with me today, I have our CEO, Jannic Fyrling, and our CFO, Therese Friberg. We will run through the presentation and then we will open up for a Q&A session. For those of you who are viewing on the web, Please feel free to put your questions in the chat throughout the whole presentation and we pick it up after in the Q&A session. So with that, very welcome again and over to you, Yannick.

Thank you very much, Anne-Sophie. Good morning to all of you. I'm very happy to be with you for these second quarter results. I will start with a few highlights. The first positive news we have to share with you is that we have been outperforming the markets with our three major brands, Electrolux, AEG and Frigidaire. The second point is about our operating margin. We have been improving our operating margin from 1.2% to 2.5% with a highlight, which is a positive operating margin in North America. And we have been delivering these results in an environment which has been pretty challenging with a very volatile geopolitical environment. So good progress on the short term side of the equation, but we have been making as well pretty good progress together with a team on the ambitions we want to develop mid and long term. Let me deep dive into the numbers. First, we are reporting an organic growth of 1.8%, mainly driven by North America and Latin America and partly offset by a slight decline in Europe, Asia, Pacific, Middle East and Africa here. The price was overall positive, mainly driven by price increases in the North American market and in LATAM, with a slight negative development in Europe, Asia-Pacific, Middle East and Africa again. I mean, the market in Europe, as you will hear it in a second, was especially depressed and difficult. From an operating margin perspective here, again, positive margin in North America for quite some quarters. We're also glad to report that we're making good progress in our cost-efficient objective by delivering an additional 0.6 billion SEC year over year. The organic sales contribution was mainly due to North America and LATAM once again. We have been increasing prices in North America to compensate for tariff impact exactly as we have been announcing it in the first quarter. We had some headwinds. We had some headwinds in terms of currencies in Brazil, some headwinds in terms of currencies in Argentina with pesos. But again, we have been compensating these headwinds by price increases. I also want to report the sale of our trade brand Kelvinator in India for an amount of 180 million SEC. With that, let me deep dive into Europe, Asia, Pacific, Middle East and Africa. So we had a slight organic size decrease. I mean, on the other hand, the good news, on the good side of the equation, the Electrox and the AEG brand have been outperforming The European market, the market was extremely depressed. I mean, lower than in 2024 here. The market was predominantly replacement driven with a high level of promotion. So big pressure on the prices. We're also making good progress in phasing out the Sanusi brand, which, again, was an entry price band brand in the past. So positive earnings across positive contribution from cost savings in the region, pretty strong here. We had negative price development. The market was extremely competitive here. We have been drawn down in terms of prices by competition. However, we kept the marketing investment level at a pretty strong level because we want to make sure that we will be passing the right message in terms of products. And just before we have been opening this call, you could see one of the main campaigns we're launching. And again, I just want to repeat the fact that we have been divesting from the trade brand Kelvinator for an amount of 180 million SEC. Once again, we're used to show this slide here. The market has been declining by 1% across Europe. I mean, it has been flat in Eastern Europe and it has been declining by 1%, a little bit more than 1% in Western Europe. So, I mean, absolutely no improvement versus 2024, which was already a very depressed market. We are 11% lower than 2019 in terms of volume in the second quarter here. So once again, 11% lower than 2019 takes it back to 2014 in terms of volume. I've been repeating that the European market is used on organic growth 2% to 3%. If you look at the 10 or 11 years between 2014 and 2025, we are missing about 20 to 30 percent of the volume we have been forecasting pre-COVID. So very depressed market still in Europe, subdued market. We did not see any movement in terms of kitchen and new constructions, which is, again, one of the strongholds we do have as Electrolux. Despite all of that, we kept our path. We kept on investing on the marketing side of the equation. We have been launching successfully the product, which is a new induction hob, which is anti-scratch and anti-fingerprint. Very successful launch in the market, which is completing basically the kitchen launches we have been announcing in Germany and in Europe. We're also very proud to say that we have been awarded 16 awards in terms of design. Design remains a very strong trait for Electrolux. It is a trait we want to differentiate ourselves from competition moving forward. I'm also very glad to underline that many of these awards went to vacuum cleaner. Vacuum cleaner, a product we have been inventing as Electrolux, and it is a product certainly we will be revamping moving forward. in the coming months and in the coming years. So very big success and achievement from a design side of the equation. Moving into North America, I mean, North America definitely has been outperforming the market. I mean, the market is down 1%. The organic growth we had in North America is at the level of 4.1%. It is, again, testifying about the good reception we're having from the new products we're launching out of the Springfield and Anderson factories. So very good momentum from a product launch we do have. in North America. We have a positive price movement. We have been announcing price increase at the beginning of first quarter. We have been executing this price increase. We were not followed by all our competitors, but I mean, this strategy paid back. And that's explaining why we are able to basically report out a positive EBIT for the second quarter. Good progress as well in terms of efficiency. We're glad to say that. I mean, we have been achieving our targets in terms of cost saving and efficiencies in our factory here. Price lists have been increased and we will be keeping on increasing this price list as long as we will be impacted by tariffs. So our ambition is truly to fully compensate tariff impact through price increases. We had some negative impact from the currency, which were compensated by a positive impact on the raw material side of the equation. Just looking at the market evolution here once again, minus 1%. The picture is very different from Europe because, I mean, North America was hit by a high level of inflation due to the trade war here. And the North American market has been pretty resilient in the first quarter 2025 and in the second quarter here with only a decrease of 1%. I am very happy to announce today a major launch of an innovation we have been actually putting on the market last Monday. It is pizza. I mean, a few years ago, North America has been launching the air fried cooking, which was extremely successful here. And here we're announcing probably innovation, which is at the same level. But rather than a lot of words, let me show you a short video.