Electrolux Professional AB (publ)

Good morning and welcome to Electrolux Professional Q2 Report Result. My name is Jakob Ruba. I'm heading up Corporate Communication and Investor Relations. We may have Paolo Schira, our new CEO, and also Fabio Sarpadon, our CFO. And I leave the floor to you, Paolo. Please go ahead.

Thank you, Jacob. Good morning, everybody. And I think probably since I started two months ago in my role, it could be good to give a few words, a little bit about my agenda. The last couple of months I've been using to travel across the different countries, meeting many of the colleagues. And I'm very happy and energized after this interaction because I saw a lot of energy, a lot of passion. and willingness from the different colleagues to move Electros Professional to the new heights. So very, very energizing. And I took the chance of this interaction with the colleagues also to share a little bit what is my agenda moving forward. Now, we are a company with a very long legacy, more than 100 years. And as every established companies, we've been expanding work in many areas. And that's why I want to bring forward what I call the Accelerate and Simplify Mantra. So the idea is fundamentally to refocus on fewer things, significantly fewer things, but then secure the magnitude, the impact and the speed that we execute on those fewer priorities are amplified. And of course, this has to come strategically from the areas where we are stronger, where we have more chances to win and where also our margins are higher. So The first element is really about defining sharp and better the core and then double down on this in this initiative. Now, having outstanding solution as we have, having a strong value proposition as we have, is not enough then if you don't reinforce the front end, if you don't work in what I call the commercial excellence and the customer proximity. We have already an advantage that we are present in many countries, close to many customers, but clearly we can make a major impact over there. Now, these things will call for investments, and I want to advocate early that we want to fund this investment, these double downs, by subtraction So fundamentally to redistribute, refocus the investment we do in these fewer bets we want to work on. And this also requires that we work in a more disciplined way in our portfolio and in our cost management overall. So that's a little bit, Jakob, the first introduction. And of course, I will show more of my vision and the next steps as we move forward. But I think it's the right time to get to the quarter two results. The picture on quarter two is a little bit mixed. So top line has been decreasing 3.8%, mainly driven by U.S. and Middle East, Africa and Asia. With different dynamics in Middle East, Africa and Asia, the main reason of the decrease of the top line has been some postponed projects. We count to invoice now in quarter three. Still on the top line projection, I think it's good to mention that we have a positive order intake overall for the group as well as an healthy order stock entering quarter three. Now, the positive part, I said mixed picture on Q2, is about the overall profitability. So, EBITDA has been slightly improving compared to prior year, Q2. In full transparency, a contributor to the profitability increase has been tariff refund in North America. But even if we were to remove this 21 million SEC of contribution, the overall underlying profitability has been robust, which is positive. This is despite the overall situation of what we call inflationary item, being the input material, being the logistic cost, have seen an increase in trend. Now, to be reported in this quarter also that the currency that in the previous quarter had a negative effect has been neutral. Since I mentioned about inflationary items or somehow inbound rising costs, I also want to mention clearly we've been very disciplined in the price increases and we expect with the price increases and with in some part of the business surcharges that we are introducing as we speak, we come to cover all this negative effect throughout the full year 2026. The other element I'm very keen to mention, and as announced previously, we have been launching last year an efficiency program impacting resources, impacting manufacturing footprint, and this is progressing according to plan. So year-to-date, we can declare saving up to $45 million, $25 million in the quarter, and the full year projection of $80 million SACs is confirmed and this is going to grow also in 2027. So also this part is contributing positively to keep the robustness of the business. Now giving a perspective on the different regions in the different businesses, you see here as well somehow a mixed picture, probably started from US, a decrease overall in the US business, probably with different driver and different dynamics. Maybe a touch of color on the part of the laundry business. Last year in Q2, we were anticipating some deliveries to U.S. in anticipation of the U.S. tariffs. So this decrease somehow is related to this effect. If you were to look on the units delivered to the market, actually it is growing. So the overall situation there is in a good place. On Asia, I think I mentioned earlier, there are somehow a couple of components contributing to the lower net sales. Part of it is the known geopolitical situation in the Middle East, but we don't have canceled orders there. For sure, there are some logistic challenges to get to the different locations. The other one is some major project in the Asian region where from the customer side there has been a request to postpone the delivery and the invoicing. So this we count to invoice in quarter three. Overall Europe, and I remind you, Europe represents 60% of the total business for Letros Professional. There's been a moderate growth driven mostly by laundry that is continuing delivering very well in the European region. Food and beverage in Europe, after several quarters of growth, we had a stabilization, but we expect then to continue in the trajectory we have seen previously. Giving then a bit more perspective, Jakob, on the different business segments. So food and beverage is the area where we saw softer growth, so with a decrease of almost 6%. I think I mentioned already the contributors being mainly U.S. and, to a smaller extent, APACMEA. What is, I believe, very important to acknowledge is here the performance of the profitability. In the case of food and beverage, there is only 3 million sacks of contribution for tariffs found in U.S., so the overall business is defending very well. despite some of the rising costs I mentioned earlier. Here to mention among the different activities done well by the team to deliver this profitability has been a normalization of R&D costs. I think this you have been hearing in the past, we reach a peak in the past, now is no more normalizing, but normalizing doesn't mean that we decelerate our agenda, the opposite. We have really exciting products coming to market beginning next year and we are really keen to see the benefits out of this introduction. Overall in the food and beverage the order stock is healthy so we start quarter three with a good amount of orders we are very keen to invoice throughout the quarter three. Last but not least is about the laundry situation, moderate growing laundry driven a lot by Europe. I mentioned about the US situation in Asia almost stable. Good profitability development. Here is where actually we see most of the contribution of the tariff refund. But overall, the underlying margin, the situation seems to be positive. And London is the area, not the only area, but the main area where introducing surcharges So on top of the price increase we introduced beginning of the year, in London we introduced now in the summer months the surcharges in the different markets. The reason why surcharges are mainly introduced in London are very simple. It's the business where most of these rising costs are impacting right now the logistic, the input cost, etc. And that's why we are implementing them. Overall, the reaction from the customer has been accepting. So it's been a fairly positive or not negative reaction

Overall, in laundry, we do see a strong order intake and order stock.