Electrolux Professional AB (publ)

Good morning and welcome to Electrax Professional Group, the result presentation of the third quarter of this year. My name is Jakob Ruba. I'm heading up Investor Relations. With me, as always, I have Fabio Saperland, the CFO, and Alberto Zanatta, CEO. And as always, also Alberto starts. Please go ahead, Alberto.

Thank you, Jakob. Morning to everybody. I would describe the third quarter of 2025 as a good quarter considering the contest. The contest is a contest where the market conditions are still not stabilised. There is still the uncertainty, in particular in the United States, and in particular after the tariff announcement in July. The market in the United States has... full of uncertainty and the decision, in particular, if we talk about chains rollout, a big project has been put on hold or postponed. It is an environment that is clearly marked by tariffs and currency that have been negatively impacting our business. Despite all these things, and that is the reason why I consider it a positive quarter, We perform delivering organic growth, delivering improved margin, delivering improved EBITDA. Currency impacted for 0.5 percentage point, so quite significant in the quarter. It is a quarter where we deliver solid cash flow, operating cash flow. Also in this case, continuing to invest. I mentioned more than once, perform while transforming. And these are the quarters where this company is going through a big transformation in terms of new product that we will finally start to bring to market from January 2026. But it's a transformation that is not only considering the investments and the new product, but it's considering also the organization. Beginning of the year, beginning of September, we launched a program that has the objective to streamline the operation, reducing the operating cost. but also has the objective to change the skills of the company. We launched this program that has an impact of roughly 85 million in terms of cost reduction already next year. It's a program that is impacting a quite significant number of employees, 350 employees. even if the net, as you can see, is not the total number of affected employees. And why is that? Because an objective of the program is also to transform our organization. Next year, we want to move on more resources after having invested so much in R&D, in developing product, in investing in the automatization of our factory, in the digitalization of our operation. Next year, we want also to invest to make use of these investments and to focus on the front end on the sales. The program, by the way, is progressing pretty well, is according to our expectations and we believe we will be able to deliver what we have been promising. If we move about the market, I think I already commented the US where you see that we are basically flat tissue on food and beverage with the food still growing, particularly the chains. Chain business is still growing and I believe it's a seven eight nine quarters in a row that we are growing chains they are not the big chains they are the mid small size chains they are not big rollouts but it is the replacement business new openings or as i said small chains but it's growing one comment is to laundry you see laundry here down But I'm repeating things that I said also in the past. Here you should read these numbers considering that in the US we have a large importer that is stocking the product and the fluctuation of the inventory and the shipment to this importer are clearly affecting the number that you see. The thing that I can say is that the external sales, because we have visibility on the external sales, of our distributor of our partner in the united states are healthy we have an order stock or our distributor has an order stock in the united states that is at the historical peak so there is good business and indeed the order intake during the month of october is basically on the double level of last year that was expected considering this number for q3 What is good and I'd like to underline is the trend in Europe. At the beginning of this year, we've been talking about Europe saying that we would have expected a slowdown after years of growth in particular in the South European markets in the Mediterranean region. Reality is that Europe is still holding very well. Both laundry and food are holding well. And we see also not only the Mediterranean region contributing, but also the Central and Nordic region doing positive. And I think this is important because despite the fact that we have a clearly global business, Europe still remains a very important part of our business with roughly 50% of the sales executed in this part of the world. A few words also about the two segments, food and beverage. So food and beverage delivered organic growth. Food and beverage delivered improved profitability and improved margin. Food and beverage is also partially affected by tariffs and currency, in particular for what the beverage business is concerned, that is produced in Thailand, most of the product in Thailand and Italy, and the main market is the United States. Nevertheless, despite these things, I repeat, organic growth improves earnings, EBITDA and improved margin. With Europe being the main market delivering the positive results, US food in particular, while we had a decline in Asia and Middle East and Africa, But these are regions with many projects and it is similar to the discussion we had even if not affecting the inventory but the fluctuation of the order that can change the number quite well. In that area we are sitting on a good order stock so we should be able to have the result done. Positive notice about this segment is that the order intake was positive for food and beverage. If we move to the laundry, That is the segment that is more impacted by tariffs and currency because a large portion of this laundry business is in the United States. Organic sales are unchanged. So we have basically a flat development with the order intake that was down, but Remember the comment I made earlier is mainly because of this fluctuation. We already see this in the month of October. We are close to the end of the month and the order intake is very good in laundry, in particular in the United States. Despite the significant impact close to one point of EBIT due to the currency, the margin in laundry in the quarter improved. EBITDA in absolute values was more or less flat, but the margin improved. And this is significant in relation to how healthy is the underlying business of this segment. With this said, I believe we can get a little bit more into the details, Fabio.

Thank you, Alberto, and good morning to everybody. As Alberto mentioned, in the quarter, we made an additional step in our profitable growth journey. Sales grew organically, we improved profitability before the provision for the structure and cost. Despite the headwinds we had to face, both from currency tariffs and, by the way, wise to continue to invest in product innovation and digitalization of our group. From a geographical perspective, we continue to have a pretty well balanced situation with the Americas contributing roughly 26% of the total sales, APAC 16% and now Europe below the 16%. When it looks to the margin development, in the quarter, we got a positive contribution from price, lower material costs, and the operational costs were more or less in line with last year, with a different mix, meaning we continue to increase the investment for innovation and digitalization of the group.