AB Electrolux (publ)

Good day to all of you. My name is Yannick Fierling and I’m happy to welcome you to my first earnings calls after I assumed the position as CEO of Electrolux on January 1st.

With me on the call I have Therese Friberg, CFO; and Oscar Stjerngren, Investor Relations. Before I continue I would like to mention that this session is recorded and will be available on our website as an on-demand version.

For a full year 2024, organic sales grew by 5.1%. The organic sales growth was driven by higher volume in all the group’s business areas, primarily in Latin America.

Price was negative, partly as a consequence of weak consumer demand in Europe and a higher share of replacement purchases. In the U.S.

price pressure was particularly evident in refrigeration, a key category for business area North America. Proportional activity increased.

Despite challenging market conditions, mix was favorable, supported by the attractive product offering and aftermarket sales increased slightly. Operating income amounted to SEK1.1 billion corresponding to a margin of 0.8%.

Operating income including a negative non-recurring item of SEK566 million related to the divestment of a water heater business in South Africa. Excluding non-recurring items, operating income amounted to SEK1.7 billion corresponding to a margin of 1.2%.

Cost reduction efforts including organizational simplification and product cost reductions contributed to a positive earning effect from cost efficiency of SEK4 billion. The negative impact from price was partly offset by higher volumes and a favorable mix.

Investments in innovation and marketing increased to support the group’s strong product portfolio and long-term profitable growth. The impact from external factor was slightly negative, driven by currency headwinds and labor cost inflation, while lower material costs contributed positively.

The Board proposed that no payment of dividend would be made for 2024. So if we then move into the fourth quarter specifically, organic sales increased by 11.5%.

The organic growth was a result of higher volumes and favorable mix in all the group’s business areas. Growth was supported by the attractive product offering under the Electrolux, AEG and Frigidaire brands and focused on growth in higher value categories.

Promotional activities was high. Although in North America, Black Friday promotions did not continue throughout December as they did the year before.

In Europe, demand was predominantly replacement-driven. Organic growth was strong in Latin America, mainly driven by Brazil, supported by increased consumer demand.

Aftermarket sales grew year-over-year. Operating income amounted to SEK1.52 billion, corresponding to a margin of 2.8%.

Operating income was negatively impacted by SEK198 million, related to the divestment of the water heater business in South Africa. Excluding non-recurring items, operating income was SEK1.249 billion, up from negative SEK724 million last year, corresponding to a margin of 3.3%.

The improvement was mainly driven by cost reduction activities with a positive effect from cost efficiency of about SEK2 billion year-over-year. The positive impact from higher sales volumes and mixed more with an offset negative price.

In addition to the underlying earnings improvement in North America, the business area’s operating profit included a positive impact of SEK185 million from a divestment of all the group’s potential legacy asbestos exposure in the U.S., which impacted cost efficiency positively. External factors had a negative effect on operating income, driven by significant currency headwinds in business areas Latin America and Europe, Asia-Pacific, Middle East and Africa, lower raw material costs more than offset labor cost inflation.

Investments in innovation and marketing increased likely to support the group’s strong product range. Therese will now walk us through the results for the quarter.

Yes. Thank you, Yannick.

We had organic sales growth in the quarter, which also generated a positive organic contribution to earnings and this was driven by a relatively neutral effect from price and mix, with a negative price in Europe as the promotional activity was high, but also as demand mainly was replacement driven. In North America, we have seen the price level stabilize throughout the year with the fourth quarter last year -- from the fourth quarter last year, where we could say that this fourth quarter was a rather normal, highly promotional fourth quarter.

Sales mix continued to be positive also in this quarter for the group as a whole, but also for all business areas and this was based on a strong product portfolio and high consumer star rating. Also, volume grew in all business areas in the quarter.

Cost efficiency was positive by SEK2 billion in the quarter and the cost reduction program has delivered according to plan, but the quarter also had a positive earnings impact of SEK185 million from divesting the legacy asbestos exposure in the U.S. External factors was negative in the fourth quarter as currency headwinds have further increased, which was more than offsetting the somewhat positive raw material.

Let’s now look at the full year bridge. For the full year, despite delivering organic sales growth, we had a negative organic contribution to earnings and this was driven by negative effects from price and mix combined of negative 2.4 percentage points for the full year and with a negative price in all business areas, with the largest decline in North America and in business area Europe, Middle East and Africa.

We had a positive mix in all business areas, as mix was also positive for the full year, despite that consumers are mixing down based on our strong product portfolio. This was supported by an increase in innovation and marketing, and volume for the year was also positive in all business areas.

Cost efficiency was in total reduced by SEK4 billion and external factors was negative for the year, despite the positive effects from raw material, due to the negative effects from currency throughout the year, but specifically in the second half. Also for the full year, external factors including labor inflation, as well as the effects related to Argentina and Egypt.

And Yannick will now give an update on the progress of the cost reduction.

Thanks a lot, Therese. Cost reduction activities developed according to plan in 2024.

Contribution from cost efficiency in the fourth quarter reached a SEK2 billion. Full year 2024, we continue to achieve a high level of cost reductions, with a contribution from cost efficiency of SEK4 billion.

The new organization is successfully implemented. A notification of staff affected by saving program is close to be finalized.

Our headcount is now at 40,000 people globally, compared to 53,000 in the second quarter 2022, before cost efficiency measures were first initiated. By the end of the year, output from the new cooking plant in Springfield met demand without material overtime and we continue to work to improve productivity further.

We aim to have a continued high space in cost reductions and have an ambition to a target for saving in the range of SEK3.5 billion to SEK4 billion in the full year 2025. Cost reduction activities going forward are mainly focused on product cost reductions, primarily for increased material sources from best cost countries, value engineering and to continue to accelerate benefits from our global scale.

These will be supported by an increased focus from our procurement organization and R&D. Let’s have a look at our cash flow and liquidity.

Therese, please.

Yeah. Cash flow after investment in the quarter was positive SEK2.7 billion and the full year was SEK2.2 billion.

This was somewhat lower than last year, where we saw a larger than normal reduction of inventory in the fourth quarter and we are now back to cash flow reflecting what could be considered to be a normal seasonal cash flow. Operating working capital by the end of the fourth quarter is at 3.6% of annualized sales compared to 4.5% last year.

And the operating cash flow after structural changes for the full year amounted to SEK3.2 billion as we completed the divestment of South Africa in the quarter. And now looking at our liquidity and maturity profile.

From a balance sheet perspective, we have a solid liquidity of SEK34.1 billion, including revolving credit facilities as of the end of December. In the fourth quarter, a loan of US$200 million with the EIB to support development of energy efficient appliances was signed.

We have not drawn on the loan yet, so with that loan we have refinanced approximately half of the maturity for next year. We have a well-balanced maturity profile and we have no financial covenants.

The focus to maintain a solid investment rate remains. And Yannick will now go into the business area of performance in Q4, starting with Europe, Middle East and Africa.

Thanks, Therese. The business area reported an organic sales increase of 3.3%, outperforming the market, volume increased and mixed improved, mainly through a focus on prime -- premium brands and higher value product categories.

Predominantly, replacement-driven demand contributed to increased promotions and negative price year-over-year. Operating income included a negative non-recurring item of SEK198 million, related to the divestment of the water heater business in South Africa.

Operating income, excluding non-recurring items, increased significantly year-over-year to SEK0.8 billion. Cost reduction activities contributed to a positive earning effect from cost efficiency.

Volume growth and fiber-over-mix, supported by the attractive product offering, partly offset the effect from negative pricing. Material negative currency effects, along with labor cost inflation, had a negative impact on earnings, partly mitigated by lower raw material costs.

Investments increased in innovation and marketing to support the strong product portfolio. Now, let’s look at the European market.

During the quarter, market demand in Europe increased by 1% year-over-year, with an increase of 1% in both Western and Eastern Europe. Compared to a fourth quarter of 2019, demand in Europe decreased by 10%, a similar decline as seen in recent quarters compared to 2019.

Looking at the market in a longer perspective, Europe is on a low level, essentially on similar levels as 10 years ago. In Europe, consumer confidence improved in 2024, but was still at a relatively low level, negatively impacted by the cumulative effects of inflationary pressures, high interest rates and geopolitical tensions.

Subdued purchasing power continued to result in consumers shifting to lower price points and postponing purchases in disciplinary categories. Weak residential constructions and remodeling activity has had a dampening effect on demand within the European built-in kitchen category, which has flattened out and stabilized on a low level.

Promotional activity increased year-over-year across the region, as a high share of volume is replacement-driven. Let’s continue with our business area, North America.

The business area reported an organic sales increase of 17%, driven by higher volumes and compared to a significant decline in the fourth quarter 2023. Outperforming the market, volume growth was supported by the attractive product offering.

By the end of the year, output from the new cooking plant in Springfield met demand without material overtime. In the fourth quarter 2023, production constraints had a slight negative impact on product availability.

Mix was favorable, driven by the continued focus on growth in high value categories. Price was slightly positive compared to the severely pressured levels and extended promotional period in the fourth quarter 2023.

The business area reported an operating profit of SEK45 million. In the quarter, the Electrolux Group divested all of its potential legacy asbestos exposure in the U.S.

by selling the subsidiaries in the U.S. that hold these liabilities and related insurance assets.

The transaction generated a positive earning impact of SEK185 million. The underlying earnings improvement was mainly driven by cost saving and improved productivity.

Higher organic sales contributed positively to earnings and the impact from external factors was slightly positive. Now we’ll take a look to the U.S.

market. During the quarter, market demand for core appliances in terms of units increased by 7% year-over-year with good fraction from promotional activity.

The cumulative effects of high inflationary pressure and high interest rates continue to negatively impact consumer sentiment, with demand remaining resilient but with consumers shifting to lower price points. Black Friday promotions did not continue throughout December as they did the year before.

During 2024, market price levels were largely unchanged at the lower level established after the extended Black Friday period in 2023. The lower market prices have been enabled by input cost discrepancies in the recent years between North America and certain parts of Asia, particularly in refrigeration.

Let’s move on Latin America. During the quarter, consumer demand for core appliances is estimated to have increased in the region.

In Brazil, favorable economic conditions continue to support demand, although growth slowed slightly compared to the recent quarters. In Argentina and Chile, consumer demand is estimated to have increased.

The business area reported an organic sales increase of 21.8%, mainly driven by higher volumes and positive mix. This is primarily driven by Brazil and a strong Black Friday.

Price was slightly positive year-over-year, supported by price increases to compensate for currency-driven cost inflation. Aftermarket sales continue to develop strongly.

Operating income, excluding non-recurring items, amounted to SEK0.7 billion, with a positive earnings effect from organic sales growth and cost efficiency. This was offset by negative currency effects, with a significant adverse impact from the weakening of the Brazilian real and increased investments in brand-building activities and to support consumer direct sales.

And now let’s go over to our market outlook for 2025. In the fourth quarter, demand for home appliances in Europe continued to be predominantly replacement-driven and was relatively stable with high promotional intensity.

Housing constructions and kitchen remodeling remained subdued, and the built-in kitchen market in Europe remained weak but has stabilized at a low level. In North America, promotional activity was high, but Black Friday promotions did not continue throughout December as they did in the fourth quarter 2023.

Despite weak housing markets and with some quarterly volatility, the market in North America improved slightly in 2024, supported by the aggressive pricing environment. In Latin America, consumer demand in the main market is estimated to have increased in the quarter.

Growth rates in Brazil slowed somehow -- somewhat as consumer demand started to accelerate in the fourth quarter 2023. Price was slightly positive, supported by price increases to compensate for currency-driven cost inflation.

Looking at 2025, there is a degree of uncertainty seeming from potential impact on demand for home appliances from possible new trade policies in North America. In Europe, demand has started to stabilize, but there is a long time lag before lower interest rates and potential improvements in disposable income support an increase in discretionary purchases.

Following strong growth in Brazil during 2024, we expect market demand to stabilize in 2025. On the back of this, we expect market demand for core appliances to be relatively neutral in all regions in full year 2025 compared to 2024.

Organic contribution to EBIT from volume, price and mix combined for the group is expected to be relatively neutral in full year 2025. We anticipate that a high degree of demand will continue to be driven by replacement purchases, which are more price sensitive.

Negative price is anticipated to be offset by growth in the focus categories such as premium laundry and kitchen products under our main brands Electrolux, AEG and Frigidaire. Recent investments in new product providers with a great platform to continue driving growth in these focus categories.

Similar to 2024, investments in innovation and marketing are projected to increase in full year 2025. The intent is to capitalize on the products and service leadership supported by brand building to create value long-term for our customers.

As outlined earlier in the call, we have a high focus on reducing product costs across the value chain while maintaining consumer preferences. With this as the main driver, we anticipate a SEK3.5 billion to SEK4 billion in earnings contribution from cost efficiency in full year 2025.

We expect external factors to be negative for the year with significant headwinds from currency, mainly in Latin America. However, our ambition is to mitigate currency headwinds in Latin America with price.

The impact from raw material costs is expected to be essentially neutral. Investments to strengthen our competitiveness for innovation, automation and manufacturing efficiency will continue in 2025 and total capital expenditures are estimated to be between SEK4 billion and SEK5 billion.

To sum up the quarter and the strategic drivers we have delivered on, we had higher volume and a favorable mix in all business areas during the quarter, contributing to a good organic growth. Our products are well received by the consumers and volume growth outperformed the market in several regions.

We had good execution in our cost reduction activities, which along with benefits from the simplified organization contributed to cost efficiency of SEK2 billion in the quarter. We delivered on our targets for 2024 and have high ambitions to continue reducing costs in 2025.

And with that, please, Oscar.

Thank you, Yannick and Therese for that introduction. We’ll now start the Q&A session.

Please limit yourself to one question and if you have additional questions, please dial back into the Q&A queue. So, Sharon, can you please facilitate the Q&A session for us?

Yes. Hi.

Good morning. Thanks for your time.

My one question is on the business outlook for 2025. So, on one side, you guide for a volume price mix as neutral and on the other side, you’re guiding for negative headwinds from currencies.

In the past, when we had currency headwinds, you were raising prices to offset that. So, just wondering what has changed this time around and why if we add both currencies and volume price mix, then basically it reads like more negative than neutral?

Thank you.

Thank you very much for your question. As we said, we’re expecting currency headwinds, mainly in Latin America and we will be compensating for these currency headwinds with price increases.

We’re also expecting price erosions in the other regions, however, not above the levels we have seen in the previous years. So, we will be reacting with launching better products, new launches in order to compensate, basically, these headwinds.

And again, we have a very ambitious cost reduction program, which will be helping us in order to deliver the bottomline.

Oh! Apologies.

I was on mute. Sorry.

Yeah. It’s Martin from Citi.

The question I had was on your cost footprint in North America. So, it looks like a lot of overtime to deliver the demand strength in Q4.

How should we think about that as we go into next year when that plant perhaps gets more efficient in terms of the shift patterns and new capacity and so forth? And just to clarify, is the benefit from that included in your cost-saving number or would that be incremental when we think about that normalizing?

Thank you.

Martin, thank you very much for the question. I think the good news is that we have been stabilizing, basically, the level of overtime in the Springfield factory.

I mean, beginning of December, we didn’t need any overtime in order to deliver the market demand in terms of volume. So, the factory is not needing overtime any longer today.

Of course, I mean, we still have pockets of inefficiency in the factory that we’ll be removing with time. I have been visiting this factory, I mean, a few months ago.

It’s one of the most automatized factories I’ve seen in my entire career here. So, we have not been taking yet the full potential of this investment, but that’s what we will be getting in the coming months.

So, again, the good news is we are delivering on demand. The second good news is that we don’t need overtime to deliver on demand any longer and we will be experiencing or benefiting from additional level of efficiency in the coming months.

And yes, these efficiencies are basically included in our outlooks.

Great. Thank you very much.

Yeah. Bonjour, Yannick.

Hello, Therese, Oscar. It’s Johan at Kepler Cheuvreux.

Hi.

I was wondering a little bit about the dealer situation in your different geographies. Would you say that the inventories are at a high, low or average level in, yeah, the three regions, basically?

Yeah. Thank you.

Bonjour. I mean, thank you very much for the question.

I would say right now, I mean, we are getting back to a certain level of normality in the market for the first time in several years, which I mean, when you’re getting back to normality, despite there is a lot of uncertainty, I mean, you’re able to manage your stock level with more precision and accuracy, I would say. So I would qualify the level we do have right now at retailer places and at our places as normal levels exiting basically 2024.

In all geographies, you would say?

I would say yes.

Okay. Excellent.

Thank you.

You’re welcome.

Thank you, Operator. Thanks for taking my question.

I’m a bit curious on, I appreciate that you’re rather new to your position, but would be very interesting to get some color on if you already now have identified any strategic agenda that you’re looking to tweak compared to the previous, your predecessor? I note that in your comment, you write that you look forward to leveraging global scale and innovation and mix.

Is that still your -- is that your belief that Electrolux is benefiting from this global scale? There also has been some debate historically that maybe the U.S.

has not been big enough or Electrolux has not been big enough in U.S. to be profitable longer term there.

So I’d be curious on your initial thoughts on the structure of the company and strategy and so forth?

Okay. Thank you very much for your questions.

I think, again, I mean, the company is very solid and the strategy is clear. We have amazing brands, strong brands here, innovative products and sustainable products here, which are very much appreciated by our customers.

I think one of the main strengths, without any doubt, of Electrolux is that, I mean, we have globally the best consumer ratings. I mean, consumers love our product.

I would say as well that, I mean, the industry has been passing through incredible years. In the last three years to four years, Electrolux has been taking very courageous decisions here to adapt to a weak market here, including cost take-outs, downsizing, simplification of the organization.

And I think despite, I mean, I would say, difficult financial times overall in the industry, I mean, it is a company which kept on investing in new products, innovation, factory automation throughout the globe and that’s why I think we see some of the growth we’re experiencing in the last quarters, because we’re benefiting from basically the strong product portfolio we have been investing in in the last years. Certainly, I mean, today, with the level of volatility and uncertainty we have, I mean, changes are needed, changes are needed in any company, including Electrolux.

So I think we’re working together with a team here. My three first months I’ve been spending listening, understanding, working with a team.

I’m absolutely convinced that, I mean, we need to gain in speed and agility as well moving forward. The team is convinced about that as well and that’s what we’re working on right now.

We’re working on building the future all together here, building a strategy, a winning strategy moving forward in every single region for the company.

And are we looking -- should we look forward to sort of a more in-depth view of your strategy or will you call the market for introducing sort of the way forward under your leadership going forward at some stage or what -- sort of what’s the outlook?

I think, first of all, we will not be waiting until a full-blown strategy will be developed to drive changes. I mean, we will be driving changes on a daily basis and monthly basis.

I think the strategy is, sorry, today we’ll be adapting it to the needs we encounter on a daily basis. We’re building that with a team.

We will be communicating that internally. For regions like North America, I think what is very important is for us to focus because, I mean, again, the strategy is sound.

There is no magic stick. It’s the richest market on the globe.

We need to focus on delivering what we have in the pipeline right now. And I’m absolutely positive that we will see basically the improvement we have seen quarter-after-quarter so far.

Thank you.

And when it comes to a possible capital market update or Capital Market Day, we have not set a date for such an event at this point in time, but we will come back in due course to tell you more about that when we have set the date.

Thank you, Therese.

You’re welcome.

Thanks.

Yes. Good morning, everyone.

Yannick, nice to meet you. Good luck with the role.

I wondered if I could ask one overarching question and then just a clarification as a follow-up. Over the last 25 years, if we strip out professional from the old days, the business used to be a 4% or 5% adjusted EBIT margin business for a long time, broadly.

As you say, the industry has been through quite a lot recently and we’ve been closer to sort of break even for a period with challenges in the U.S. Do you, after everything you’ve seen in the first few months, see that the path to getting above 4% is credible with some line of sight?

And would you care to put a timeframe as to whether it’s a one-year, two-year, three-year or four-year event to get there? And my clarification question is just really on the price comment and the negative comment when your large U.S.

peer is guiding to nearly a point of positive price. Channel checks in the U.S.

suggest that you guys and others are putting less price rises through and you talk about a positive price in Latin America to deal with the significant currency. Is there a chance that you’re being conservative on that or is there some other aspect that I’m not factoring in on the price guidance?

I think 4%. I mean -- first of all, thank you very much for the question.

I mean, 4% or even the 6% that we have been basically publishing in past releases is a competitive target that we need to achieve to remain competitive in the market and deliver value to our shareholders. There is no doubt about that.

We need to find ways. We need to create value beyond the product for the entire customer journey here.

We need certainly to improve our profitability in North America and there is space there. I mean, let’s not forget that it is the richest market globally here.

We need to further leverage the strong brands we do have, because I mean, we -- I think we made absolutely the right decision to move away from entry price points in Europe where the level of competitiveness is fierce and leveraging on Electrolux and AEG. So we need to keep on mixing up with the three main brands we do have Electrolux, AEG and Frigidaire.

Yeah, we need to keep on having a high pace and cost reduction. I think that’s not that will not be going away moving forward.

But I’m absolutely convinced that, I mean, if we stay focused and if we just hold basically the cap and this North Star with changes we have in front of us we should be reaching a competitive profit level which will be creating value for our shareholders moving forward.

And just a comment on the price that you’re referring to. And even though we usually don’t comment on competitors, but I think the number you are referring to is including price and mix.

And as we talked about or as Yannick talked about earlier, I mean, we are seeing price pressure continuing. I think we still see the cost discrepancy between Europe and Asia and North America.

So we still have a global context, of course. Of course, to your point, when we have cost or currency headwinds, we will always do what we can to offset that.

And as Yannick mentioned, we will still continue to benefit our strong product portfolio to drive mix under our premium brand as well.

Thank you both of you.

Hi. Thanks for taking my question.

My one question will go to the Latin American market, basically Brazil. So we still have a very strong development or organized growth numbers in the past four quarters.

But for your outlook statement, you’re kind of seeing neutral for the overall market. So does that mean we will start to see the organized growth to normalize over the next couple of quarters, given that we have already got a high base since the fourth quarter of 2023?

How do you see developments in the region will look like and given that we are seeing some more competitors going into the market, especially the Chinese players are building new factories here, how do you see the market developments in terms of competitive landscape? Thank you.

Yes. Thank you very much.

Very good question and certainly it may sound surprising when you have been growing more than 20% in the last quarter to get neutral. However, if you observe the evolution of the growth during the last quarter, I mean, we have been slightly slowing down first in the fourth quarter in terms of growth.

That’s point number one. The second point is really that, I mean, currency has been basically depreciating significantly in the last week here, which would be inducing certain price increases now in the coming months, not only in our industry, but across the industries in Brazil here.

And I think with the additional level of inflation, I mean, that may have an impact on demand. That’s what we’re expecting here moving forward.

Let’s not forget as well that 2024 was a pretty strong year as well, which has been helped by as well the environment. I mean, we had a very hot year here, which has been driving as well additional sales in terms of air conditioning and refrigerators.

So I think we need to be a conclusions looking at 2024, we see a slowdown. I mean, during the year, I mean, the currency is really adverse at this point of time, and it will be driving, I think, it’s a certainty, a high level of inflation beginning of 2025.

And certainly, I mean, 2024 was a very strong year for several external factors. So we need to put all of that into perspective and we will be very glad to change that if we’re wrong moving forward.

All right. That’s helpful.

Thank you.

Hi. Good morning, Yannick.

Good morning, Therese. Thank you so much for taking my question.

So my question is a follow-up actually from James’ question earlier on your margin. So if we perhaps zoom in a bit into North America.

In Q4, we have already seen some improvement in volumes. It seems like your production efficiency has moved back to a more normalized level.

But then, if we look at the margins, still at, I would say, the lower end of what we have seen the past five years, six years. So what are your paths in North America to increase your margins to sort of the target that you have like around 6% and is there any sort of more color you can give us on that, that’ll be really helpful.

Thank you.

Thank you very much, Uma, for your question. I think, again, I mean, the good news is that we have been reaching in North America in Q4 breakeven, including, of course, the asbestos still here.

The market environment is still challenging in North America, we are -- and we’re making progress. I mean, quarter after quarter after quarter, because, I mean, the team is focusing on delivering a higher level of efficiency in our operations and we’re also extracting the highest potential value in terms of the new launches we’re making out of this factory.

So I think products are received very well. We see already our main retailers and customers increasing our floor space.

Yes, I think we have a lot of positive signals, but the market remains very difficult. I mean, price levels are low in North America.

We have not been taking off truly after the promotional period we have been experiencing in 2023 here. So that’s one point.

The second point moving forward, looking into 2025, is certainly, I mean, very still the uncertainty around tariff and trade policy which will be implemented in North America. So I think we need to focus on what we can control.

I’m absolutely very positive on basically the fact that, I mean, we are getting to a good level of stability out of our operation and all the investments we have been making in North America. Again, products are extremely well received in the market here today.

We will be taking any advantage we can to extract value out of these new products moving forward. However, I mean, price levels remain very difficult.

We see new entrants in North America being more and more aggressive as well on the market. So I think we raise a high level of uncertainty on this market.

We will be driving through cost reduction, through new product launches, through additional marketing investment in gallery and professional in North America, we will be improving mix. So there is a clear path to improve profitability moving forward.

However, the market or the environment remains pretty hostile.

Thank you very much. Just because you mentioned tariffs, it would be great if you could elaborate a bit on the impact that you expect the tariffs would have on you and the market in general?

I wish I could, but I mean, not knowing the structure which will be hitting us, I mean, it’s very difficult for us to make any comment. What I can tell you, of course, is that we’re all working in order to face different scenarios on the market here.

So we’re preparing for that. But right now it’s really -- I’m sure you understand that it’s impossible for me to comment on something which is not known.

Well, thank you very much.

Yes. Hi.

Thanks for the follow-up. So I have a few housekeeping questions.

The first one is on North America, where you had SEK185 million positive earning impact from divestment of legacy asbestos exposure. Does this mean that the underlying operating income excluding this positive impact was SEK140 million negative?

Correct.

And the second one. Okay.

Thank you. And the second one I have is on investments in consumer experience, innovation and marketing.

So last year, I think we had roughly €600 million -- SEK600 million investment in total. When we look at 2025, shall we expect these investments to increase or stay at this level or like any indication on where the investments will land?

Yes. We don’t give a number on that.

But of course, we state to your point that it will continue to grow in 2025. Why we don’t want to give a number is, of course, that we need to watch as well the external environment and see where we go and since this spend is not committed, this is also a number that we will tailor going forward.

But of course, I mean, we know that we have the best product lineup that we have ever had and we really believe that it’s time to support us with increased marketing, which is the intention going forward.

That’s a great answer, Therese. And absolutely, I mean, we need to support the brands, the Frigidaire brands and these new launches with additional marketing spending as well.

So but we will adapt moving forward.

Thank you, Akash, for your follow-up.

Yeah.

Thank you.

Thank you. I’ll talk a little bit about the stability and you mentioned stability earlier also.

I mean, last many years, we’ve seen a very high volatility quarter-to-quarter. Is it a possibility to talk a little about are we returning to normal kind of seasonality in 2025 or are there anything we should think about when looking at the different quarters for 2025?

Thank you.

Thank you very much, Björn, for this question. I think it’s a key question in all fairness in the environment, because we have been missing normality for the last years.

And if you’re looking at basically the seasonality you have, I mean, starting at COVID and post-COVID here, there was nothing really normal. And the sensation impression we have is that we are getting closer to normality in the last quarter into fourth year with some trend.

There is a seasonality. Our business is seasonal.

And usually, I mean, the first quarter is lower than the following quarter and we have a progression during the year. If you want to go back to normality, which we hope we will be encountering moving forward in 2025, you probably need to get back to 2018, 2019 here to look at the season level.

But I mean, hopefully, I mean, we see the market some signs of recovery and we hope that we will be getting back to a more seasonal trend towards 2025. But again, seasonality means pretty low first quarter and improving throughout the entire year and the last reference year would be 2018.

Therese, do you want to add on that?

Yeah. The only thing you talked about earlier is, of course, that we know that the external environment as we speak is volatile.

So, as Yannick mentioned, we are working on different scenarios to counteract whatever impact that we will have and that could, of course, impact the seasonality and volatility going forward. But underlying, we’re planning for a more normal seasonal.

Okay. Thank you.

Good morning and thank you for taking my question. The question is regarding your market share expectations for next year, given that you have a neutral outlook on the overall market demand and also your volume price mix.

It would be interesting to hear per geographical region what your expectations are and also what you see in terms of the competitive landscape. Is that increasing in terms of intensification?

Thank you.

Thank you very much for the question. First, I would differentiate volume market share from value market share.

And certainly, what we are looking at as Electrolux is to improve our mix, I mean, a brand mix, but also a product mix going forward. So, the first thing I’d like to underline is that our focus will be on value market share moving forward in order to generate more for the company.

I mean, we’re proud to say that, I mean, we have been winning market share in most of the region, especially towards the year end. However, I think with the level of uncertainty we see coming in 2025 here, we’re pretty prudent in saying how much market share we would be getting.

Our aim, again, will be to focus on the value side of the equation and keep on having the positive trend we have seen at the end of Q4 in the three regions.

Great. Thank you.

Yes. Hello.

Thank you for taking a follow-up here. I was curious, I mean, we will see what’s said and written about Trump’s tariffs left and right.

But I also understand you’ve had some successes with your own anti-dumping petition on refrigerators into North America, which sort of is taking effect as we speak. Don’t you see anything positive specifically for you coming out of this specific product category or will the sort of price competition remain on that specific product?

Thank you.

Thank you very much. The first thing I would like to say, if you allow me, is that, I mean, of course, I mean, coming out of COVID, we have been experiencing an increased difference in terms of production costs between Asia and the rest of the world.

And I think the reasons are pretty obvious to you. I mean, the level of inflation we have been experiencing in North America or in Europe in terms of material energy has been pretty high.

While, I mean, this inflation was kept at a much lower level in Asia and in China. So, I think, we’ll have some production costs difference have been increasing throughout the year.

So, we are all for, I mean, free trade and fair trade in our company and I would like to insist free and fair. And indeed, I mean, we have been winning an anti-dumping case in North America on the top order coming out of Thailand here.

We would have wished that, I mean, the percentage would have been a little bit higher. We have a percentage of between 13% and 38% from the products, which would be taxed coming out of Thailand on top order over there.

But that’s certainly a number as well, we may argue with moving forward and in the future. But that’s basically where we stand today.

And it’s a first step because it’s a strong signal for fair trade in these markets coming from basically the authorities in North America.

And how do you think that will impact the pricing in the market?

For sure, I think, what -- the positive impact on that, I mean, again, we would have wished for a higher percentage, but the positive impact is that, I mean, pricing would be watched for this product category moving forward by the authorities and damages would be evaluated as well from the ITC. So, I think, it is a very positive signal for -- from this year the North American authorities.

Okay. Thank you very much.

Yes. Thanks for the follow-up.

I’ve got a couple if I could. I understand that we don’t know what the tariffs will look like and I’m just trying to think of sensitivity for different scenarios.

And I think you have said that China represents about 20% of your U.S. COGS or North American cost of goods sold.

And I wondered if you could just help with Mexico. I struggle there because if I look at your FX transaction flow, it looks to be of the magnitude of 7%.

But when I look at the headcount where you’ve got something like 4,000 people, maybe versus six or seven in the U.S., you could argue for it being as high as 40%. Obviously, there’s a cost differential.

I understand that. But would it be fair to say that the Mexico cost space is of a similar magnitude as a share of U.S.

COGS to that of China? That’s really the first question.

Maybe I can come back on the second.

I think on the Mexico flow; we don’t go into numbers on that flow. I think as we know, we are producing washing machines for the U.S.

market in Mexico, as well as certain categories for refrigeration. That is the production we have in Mexico for the U.S.

market.

And it remains a competitive production location. But, yeah, we will be, of course, looking, we cannot, it’s very difficult for us to comment.

We wish we would be able to tell you more, but we really don’t know what the structure we will have to face basically moving forward in the future. We are producing great products over there.

We just need to understand and act whenever the structure of the tariff would be defined.

Okay. Maybe in terms of Europe where we saw a terrible collapse in starts and construction activity in Scandinavia, which I think from history that was often quite a profitable market in the built-in segment.

Do you think there is a scenario in which we see the built-in market, which is a higher margin category, coming back now that starts arising above 50% at the moment?

I think first of all, the kitchen retail segment is a very important segment for because we are one of the leading brands and companies for built-in overall, I would say, worldwide. Right now, I think the market is a replacement-driven market, and I think, as you know, I mean, the kitchen and the built-in segment has been extremely depressed for the last years and remains very depressed.

Moreover, I think we saw some time of stabilization at the end of 2024, but in all fairness, at a very low level. We are hoping that the low interest rates will have a positive impact on new construction and remodeling moving forward, but even then, there is a time lag between the time you are investing into a new house or remodeling a new house and when you are buying kitchen appliances.

As much as we wish to see a recovery coming soon right now, I think, it is not really what we are expecting.

I appreciate it. Thanks very much.

Hi. Just a quick follow-up question.

Can I have an update on your disposal plan, your divestment plan for your non-core assets and so what will be your targets right now in terms of divestment? Thank you.

Yeah. The divestments -- yes, they are progressing, and yeah, we do not have any updates compared to previous communications.

All right. Thank you.

Hi. Thank you so much for taking my follow-up.

So, my follow-up is on your divestment plan. I guess over the past year, your cash generation has improved and the net debt to EBITDA ratio has also improved.

So, what will be your sort of conditions or criteria to perhaps resume dividends payout going forward?

Yes. This is of course the decision by the Board to recommend to the AGM and to the shareholders.

As you know, our dividend policy is 50% of net income and since we did not generate a positive net income in 2024, no dividend was proposed. I mean, the year when we will get into a situation with a positive net income, of course, that will be the discussion and decision by the Board going forward.

All right. Thank you very much.

You’re welcome.

Thank you very much, Sharon. Summarizing 2024, we made good progress in a challenging environment with higher volumes in all the group business areas, primarily in Latin America.

Our new simplified organization was implemented during 2024. Staff-related savings have developed as planned and we are successfully driving product cost reduction initiatives.

We delivered cost savings of SEK4 billion in 2024 in line with our target. Latin America shown a record year in spite of headwinds from currency with a good operational performance.

We continue to reduce carbon emissions towards our ambitions, science-based targets. And last but certainly not the least, we have had a strong traction of our products reflected by high online consumer rating.

Thank you for listening in and for all your questions. Have a continued good day.

Bye to everybody.