Welcome to Electrolux Group and the presentation of our Q1 report. I'm Ann-Sofi Jönsson, Head of Investor Relations and Sustainability Reporting.

I'm here with our CEO, Yannick Fierling, and Therese Friberg, our CFO. We will run through the presentation, and after that, we will open up for the Q&A.

With that, I hand over to Yannick.

Thank you very much, Ann-Sofi. Good morning, good day to all of you.

Very glad to be with you for this Q1 2026 report. We have been making some significant announcements last night.

2025 was the year of progress and strategic building. We are now executing this strategy.

We have been announcing a series of initiatives I would like to remind you this morning. The first one is about a partnership we announced in the North American region with Midea.

This partnership will be driving growth, will be driving better profit thanks to saving and share of CapEx, and certainly, it will represent a very strong platform to move forward in this region. We have been announcing, as well, that we will be optimizing our footprint and gaining efficiency across our organization.

We're planning to expand in terms of product and geography moving forward. In order to finance these major initiatives and strengthen our balance sheet, we have been announcing a fully underwritten rights issue.

Let me now deep dive into Q1. We had to face two very different realities.

The first one was about Europe, Middle East and Africa, APAC, and Latin America, where we have been delivering, in this first quarter, strong results, results which were significant better than last year. On the other hand, North America has been declining significantly.

The market has been down more than 10%. The food preservation business unit has been down more than 14% from a market perspective.

In terms of operating margin, we have been delivering 198 million SEK, excluding non-recurring items. In the operating income, we have been including -463 million SEK due to the closure of our factory in Chile in Santiago.

We have been delivering in this first quarter 700 million SEK in terms of cost reduction, which is placing us well to deliver the year-end target, which is between 3.5 and 4 billion SEK. Let me now deep dive into Europe, Middle East and Africa, and APAC.

Strong quarter for this region. We have been, once again, gaining market share with our main brands, Electrolux and AEG, in a market which has been flat in this first quarter.

We have been growing organically by 3.6%, delivering 4.1% of EBIT. This EBIT has been supported by strong delivery in terms of cost reduction.

Yes, we have been investing in marketing in order to fuel all the innovation we have been launching in this first quarter. As I mentioned previously, the market was, once again, flat in this first quarter.

Actually, it was flat in Western Europe, which represents 80% of the volume, and it was up 1% in Eastern Europe with 20% of the volume in the market. The market was mainly replacement driven, once again.

If you look at this curve, it has been the lowest quarter in the 12 last year. We're in a 12-year low volume figure in Europe here.

If you take into account that a normal organic growth in this industry is 2% to 3%, we are down between 20% and 30% versus where we should be today. Now, as I said, we have been investing in marketing.

We are dusting the Electrolux brand, and I'm very proud to show you one of our latest commercial.

Good taste comes naturally to Swedes. This man is not a Swede, but he is cooking for some.

Luckily, you can send the Electrolux oven a recipe, and AI TasteAssist optimizes the settings for you. Det svenskaste.

Electrolux. For better living.

Designed in Sweden.

Now moving into North America. As I mentioned in my introduction, the market has been significantly down in this first quarter, over 10% down.

Food preservation has been over 14% down. It has been the weakest quarter in terms of market in the last 10 years.

That's why we are having an operating profit which is pretty low in this first quarter. The market was down, and on the top of that, we had very significant external factors mainly driven by tariff.

We had two internal issues: a change in accounting estimates for consumer rebates, and a voluntary recall of a limited number of Frigidaire gas ranges, which have been affecting the results by 0.3 billion SEK. Looking at the market, and I mentioned that, -10% in this first quarter.

If you're looking the volume trend over the last 10 years, you will notice that that has been the most challenging quarter over the last 10 years. The decline has been more significant than the decline we have been observing after 2022, post-COVID.

Moving into Latin America. Strong quarter in Latin America again.

We have been growing organically more than 8%, delivering an EBIT, excluding non-recurring items, of 8% again. Strong market in a market where we have been observing a significant level of price erosion.

We have been announcing the closure of a plant in Chile, and this closure has been inducing a non-recurring item of 463 million SEK in this quarter in our margin. Moving now into cost reduction.

Once again, our objective at year-end is to deliver between 3.5 and 4 billion SEK. We have been delivering 700 million SEK in this first quarter with value engineering, best-cost country sourcing, and by having an additional productivity in our factory.

Good results again in this first quarter, which is aligned with the ambitious objective we do have at year-end to deliver between 3.5 and 4 billion SEK. With that, I'm passing it to Therese.

Yes. Thank you, Yannick.

Then taking a look at the sales and EBIT bridge in a little bit more detail. We had essentially a flat organic growth in the quarter, where we did see volume growth, as Yannick mentioned, in Latin America and in Europe, Middle East, Africa, and Asia-Pacific.

This was offset by volume decline in North America and also price pressure across the markets. If we look at the organic contribution to EBIT, this was actually then negative as the pressure on price was more than offsetting the positive volume we had.

Investments in innovation and marketing essentially was flat year-over-year. We did see continued strong and stable cost efficiency coming through to the bottom line.

You can also see that year-over-year, the external factors are still quite a large negative headwinds as we are having continued high tariffs in North America, mainly. Then looking at the operating cash flow.

Operating cash flow after investments for the quarter was negative 4.6 billion, and also lower than last year. This was partly related to the reduced EBIT year-over-year, and then we also have seasonal buildup in the operating working capital.

On top of that, we also have a somewhat higher buildup in inventory, specifically in North America, related to the very weak market in North America, weaker than we expected going into the quarter, and some small buildup related to the Anderson transition of production that you probably heard about yesterday. Then taking a look at our liquidity and maturity profile.

We still have high liquidity with 27.6 billion Swedish krona in liquidity, including revolving credit facilities, and we have a well-balanced maturity profile. We have no financial covenants, as and we have the ambition to have a solid investment-grade rating.

To have a solid investment-grade rating, of course, the main components will continue to be to improve our operating performance, and also to generate cash flow. Of course, you heard about yesterday the fully underwritten rights issue of 9 billion that partly will be used to drive the additional strategic initiatives Yannick mentioned earlier, but also partly to strengthen the balance sheet going forward.

The net debt/EBITDA by the end of the quarter was 3.8 times, and if we would be adjusting for the rights issue of 9 billion, this number would have been 2.8 times. With that, I hand back over to Yannick.

Thank you very much, Therese. Moving now into the market and business outlook.

Following the downturn in the US home appliance market in the first quarter, the market outlook for North America in 2026 is revised from neutral-to-negative to negative. Geopolitical uncertainty is forseen to continue in North America, but under the assumption that the current tariff structure stays, general market pricing should logically adjust to reflect associated tariff cost.

Should this materialize, it may adversely impact consumer demand and market growth. The Brazilian home appliance market developed positively in the first quarter, and although growth rates may slow somewhat throughout the year, the market outlook for Brazil in 2026 is changed from neutral to positive.

The market demand in Europe is unchanged, with geopolitical and macroeconomic uncertainty weighing on consumer sentiment. Also, consumers continued postponing discretionary purchases, and demand for built-in kitchen products remained subdued.

In a larger perspective, it is important to remember that the European market is on the 12-year low. Therefore, the market outlook for Europe remains neutral.

Moving to a business outlook. Our business outlook for 2026 remains overall unchanged, despite expected that additional cost related to extended US Section 232 import tariff on products that contain steel and aluminum applicable since April 6.

Sizable price increases with 5% to 20% have been announced in North America, and it is our ambition to increase prices in order to offset the negative impact from tariff. Volume, price, and mix is expected to be positive in 2026, driven by volume growth and a favorable product mix.

We expect investments in innovation and marketing for full year to increase. The new product launches provide us with a great platform to continue driving growth in our focus categories.

Our focus on cost saving and to improve efficiency throughout the group is critical for our competitiveness, and we anticipate between 3.5 and 4 million earnings contribution from cost efficiency in 2026. External factors are expected to significantly negatively impact the year, mainly due to higher tariff cost from extended US Section 232 import tariff.

This cost inflation is reflected in external factor in our EBIT bridge. Raw material costs are also estimated to be negative.

For the full year, capital expenditure, we're expecting to reach about 4 billion SEK. Again, I just want to summarize our Q1 performance.

As I said as an introduction, we have really two very different realities. On one side, EMEA, APAC, and Latin America, where we have been performing well, where we have been growing, 3.6% in Europe in a flat market, 8% in Latin America, in Brazil, but we have been observing as well a very notable decline in North America, over 10%, the worst and strongest decline we have seen in the last 10 years.

In terms of cost reduction, we have been reachings 0.7 billion in the first quarter, and we have a good confidence to reach the 3.5 to 4 billion by year-end. We have been making last night very big strategical announcements, a strategy we have been working on for the last months.

The partnership with Midea in North America will be key in order to structure this region, grow in this region, and add saving, improve our profit, and share our capital expenditure with Midea. We have been announcing, as well, that we will be optimizing our footprint and gain in efficiency in the rest of the organization.

We will be expanding our product offering from a geographical perspective and from a product perspective here. Big milestone for the company has been announced last night.

With that, I would be glad to answer any question we may have. Ann-Sofi?

Yes, thank you, Yannick. Now we will turn over to the conference call first to take questions from the conference call.

Hi, good morning. Could you hear me?

Yes.

Hi, good morning, Therese, Yannick, and Ann-Sofi. Maybe just starting with the US, could you sort of break down what you're seeing, sort of what's changed in terms of organic growth?

I think sort of maybe through last year, you've seen some market share gains. How much of sort of the -10% is the market versus what's happening in terms of things on a competitive basis?

Thank you very much for the question. As we said, and of course, we're referring to sell-in data and volume.

We have seen the biggest drop in terms of volume in the first quarter over the last 10 years. Of course, the geopolitical environment has not been helping in North America.

From mix perspective, as well, we were hit from the fact that the biggest drop we have seen in the North American market is coming from our biggest product category, which is food preservation. Certainly, we did not lose a significant level of market share in the quarter.

We have been losing a little bit of market share due to a recall we made at the beginning of the quarter, and we're always placing the safety of our customers first. Certainly, it will be very interesting to observe how the North American market will be evolving in terms of demand in the coming months.

The big announcement we're making today, certainly in terms of price increase. We are facing very significant external factors in North America, and that has been a big part of the profit decline we had in the first quarter.

On April 6, there was the announcement about the 232 tariff, we have been announcing to our customers that we will be increasing prices between 5% and 20% by the end of April. Most of our competitors are producing appliances as well in Mexico, we have a good confidence level that we will see price increases in North America overall as an industry in the coming weeks.

The 10%, just to be specific, that is the market decline,

pure

market. We were declining, as you saw, somewhat more than that,

but

only slightly.

Yeah.

Great, thanks. Maybe just on sort of Section 232, cuz I don't know if you're comfortable giving out a number, but do you have sort of an estimate on sort of external factors for sort of 2026 in and as the year goes on?

No, we don't have an updated number. Of course, as you see, we are already guiding for significantly negative.

I think it's fair to say that if the current 232 tariff stays in place as it is today, it will be even more significantly negative than, of course, we had going into the year. On the other hand, as Yannick mentioned, I think this is really now leveling the playing field with lower debate if these tariffs are legally valid and so forth.

The confidence to actually increase prices and have them stick in the market is higher than ever before, I would say.

Great. Maybe just a last one for me.

Could you just maybe comment on sort of what you're seeing on costs from a commodity perspective, given what's going on, and just remind us of how sort of hedging works from your perspective, and therefore, how we should think of things, assuming sort of spot prices remain where they are?

In terms of, of course, the geopolitical war in Iran is influencing raw material. As we mentioned previously, we're hedging plastic over 3 months, usually 1 quarter, the impact we have seen in Q1 is limited, very limited.

The main impact we see is much more on transportation costs and fuel costs, the bunker cost we have on sea freight, for example. We are largely protected in this quarter, in the Q1 quarter, thanks to the hedging we do have on raw material and plastic.

It's also included in the forecast that we have now. Of course, it's, as you all know, it's extremely volatile, but we do see a somewhat increase in now in the second quarter, partly related to logistics and partly related to plastics that we have then had to lock at slightly higher prices for the second quarter.

It's already included, let's say, in our business outlook with our current understanding.

Great. Thanks very much for taking my question.

Thank you.

Hi, good morning. Thanks for the opportunity.

Could we get a little bit of a steer in packing the external factors? Any sense on forex versus tariffs versus underlying cost inflation?

You have a little bit of inflation and a little bit of currency, I would say, if we talk about Q1, but the vast majority of the number is really tariffs.

Understood. Can you help us can you help characterize kind of pricing dynamics from your competitors in Q1?

In Q1, in North America, we have seen a very light price increase in North America. What we're expecting is to see larger movements in the second quarter and moving forward due to the additional pressure we're experiencing from 232, and this pressure will be experienced as well by our competitors moving forward.

In the other regions, if I may, in Europe and in Latin America, of course, we see price pressure and we see price erosion, which is higher than what we were originally expecting. However, again, we're performing really well in these markets.

In Europe, we are improving our mix as well, moving more into kitchen and built-in, I think we have all the measures in place in this region to counteract against this price erosion we're experiencing.

Thanks very much.

Yes, good morning, everyone. Thanks for taking my questions.

Just with regard to the North American market, you've discussed pricing of 5% to 20%. That's a pretty large range, obviously.

Can you just discuss that range, what constitutes the lower end, what would constitute the upper end? Thank you.

Of course, you're absolutely right, it is a low range. However, we will not be butter spreading the price increase.

We have products which are more impacted than others, and we have product categories which are more under, I would say, competitive pressure than others. Food preservation, for instance, is a product which is far more a commodity, I would say, in the market and under price pressure.

That's exactly, by the way, why we're putting in place all the strategy we do have with Midea moving forward. We'll be reinforcing food preservation significantly in the future.

In terms of price increase, it will very much depend on the impact we do see from tariff. We will filter and have a price increase by product category, which is needed in the market in order to overcome the tariff impact.

Do you foresee, just as a follow-up question, do you foresee the potential for further price increases as the year goes on? Is this kind of the first of a sequence of multiple increases you would consider?

I think it's a very good question, but the North American market has been extremely dynamic in the last months. The tariff structure has been changing several times in the last 12 months, and the weight has been really big in terms of external factors.

We're absolutely convinced that there will be now a significant price movement because simply, 232 is putting a significant level of pressure on the entire competitive landscape. It's very difficult to predict how these external factors will be evolving in the coming months, and as a consequence, our prices will be evolving in the coming months.

Certainly, our ambition,

and

I want to repeat it, is to compensate for the vast majority of the impact we are facing in terms of tariff through price increase.

This 5% to 20% series of price increases would be sufficient to fully offset the tariff expenses on 232 that you're incurring now?

I think that's our intent, for sure. The intent is to compensate for the vast majority of the impact we are inducing through tariff.

Thank you very much.

You're welcome.

We also have some cash outflow from restructuring and actions that you are taking to drive efficiency. Maybe if you can give us a high-level view of how shall we think about free cash flow for this year, and if it will be negative, then how big negative it might be?

Thank you.

I will take the first, and I will leave the second one to Therese. On the European market, I think the good news really is that in a market which is still very much subdued in Europe, again, I have been mentioning, we're missing 20% to 30% of volume versus what could have been expected prior to COVID, we are truly winning and gaining market share.

We're not only gaining market share with Electrolux and AEG, but we're also reinforcing our price positioning in the market. We're gaining market share in the product category where we are really strong, like in cooking, for example, in several markets.

It is really a winning equation today, and we are investing in marketing in order to dust and promote the brands we do have in Europe. It is right now a positive dynamic we see in this market thanks to all the work that the team has been putting in place in a market which is very difficult.

Right now, we don't see price increase in Europe. It's rather the opposite.

As I have been mentioning when I covered the region, we see a level of price erosion which is more or higher than what we have been expecting probably at the beginning of the year. Of course, I mentioned it in Q1, the impact we do have due to raw material and the war in Middle East is very limited.

This impact, as Therese said, will be growing throughout the quarters here. At this point of time, we don't see any price movements in this region, and in all fairness, we're not expecting any significant price movement moving forward.

Maybe one comment on the market as such. As you're saying, we do see some increases in interest rates and so forth in Europe.

The market was flat essentially in the first quarter. Of course, we have been expecting the market to start to grow for the last 2 to 3 years at least, and it hasn't started to grow yet.

The reason for that is that it's only driven by replacement today. Even with an elevated interest rate, or even with increased uncertainty related to Middle East conflict and so forth, it's really hard to see that the European market could go even more south from here.

On price, we did see, as Yannick said, quite high price pressure in Europe. To see price increases in Europe is very, very unusual.

Of course, what could happen is more that the price pressure downwards could ease a little bit, but to see price increases in Europe, I think is very rare. Then on the cash flow, you are absolutely right.

We're not guiding on cash flow. We're keeping our CapEx for the year at 4 billion, we don't see an additional pressure from these initiatives on CapEx as such.

You are right that with the announcements we're having both related to Chile and Hungary that we have announced in the last few days and weeks, and also related now to the cash NRI in North America that we will have in the second quarter of 0.9 billion, all of that will be paid out pretty much this year. That will be an additional drag to our net cash flow for the year.

Maybe on working capital, because you'll be closing down production in Anderson, how shall we think about working capital swing from cash point of view in 2026?

Working capital in, I think, North America was in the first quarter pretty negative because the market was simply down very much. Of course, on the Anderson side of the equation, as you can understand, you're not making this type of decisions and building a strategy as the one we have been building with this partnership in Midea in few weeks.

We have been planning for that long in advance, we have been planning for ramp-down in Anderson for quite some time here. We don't see a significant impact, and we have been planning for this impact if there is any in the third quarter.

We're ramping down Anderson in the third quarter, but that's all basically taken into account.

Maybe a follow-up on tariff. We saw that US Supreme Court ruled against reciprocal tariff, and the administration has started issuing refunds in I think this week, or maybe last week, from last week.

Can you quantify when it comes to tariff, especially what you paid last year, is there any potential for refunds if you have paid significant reciprocal tariff? Thank you.

Yes. We have not disclosed the amount, but we can say that it is a material amount, as you can imagine.

That we had a very large external factors during last year, and we can say that a large portion of this was related to the reciprocal tariffs. When it comes to the process, depending on the type of claim you'll have, it's divided into two different process flows.

What has been clarified from a process perspective now is the easier claims, which is in these first flow, to say. Our claims will be in the second process flow, which has not yet been clarified how it will happen and when it will happen.

Of course, as we would know more about this process going forward, and also potential timing of a refund, we will come out with additional information.

Thank you.

Good morning, it's Hai here from UBS. Thank you for taking my questions.

I have three, if you don't mind. The first one is on the cost efficiency.

You delivered 700-ish million now and reiterated the 3.5 to 4 billion. How should we think about the phasing to the rest of the year?

The 2 billion savings by year 3 from your partnership initiatives, does it already get included at all in FY '26 target? Do you expect anything to flow through that 3.5 to 4 billion this year?

That's the first one.

Thank you very much for your question. It's a very important question, and as we said, the cost saving piece in the environment we are in today is extremely important for us to deliver the year-end target.

That's why we have been putting in front of ourselves a very ambitious target, once again, for '26, which is between 3.5 and 4 billion. To your point, we have been delivering 0.7 billion, which is basically meeting our expectation for the first quarter, usually in terms of cost saving, especially when you're looking at value engineering, best-cost country sourcing or conversion cost here, you have basically an increase quarter-by-quarter because, of course, you are having and adding projects throughout the different years.

That's why the 0.7 billion is aligned with what we have been expecting for the first quarter, and we are repeating and reiterating our ambition to reach 3.5 to 4 billion at year-end. Now, thanks for your question about the additional cost saving or what we're announcing here in terms of strategical cost saving moving forward.

What we have been announcing is that we will be saving 600 million in year 3 with a partnership of Midea, and that we will be saving an additional 1.4 billion in year 3 thanks to the optimized footprint and the efficiency we will be gaining through the organization efficiency. Of course, these savings would be growing year after year, and you can see it in the graph.

I showed it last night. We'll have a saving year 1, year 2, and we'll have a 2 billion saving in year 3.

What I want to insist on is that the partnership for Midea is a long-term partnership. It is a long-term partnership where we'll be growing, we'll be saving more money, and we will be sharing capital.

Saving more money is pretty important because of the scale they do have, the access of a supply base they do have moving forward. I think it will be progressively increasing, and I think the amount we'll be reaching and the amount we'll be disclosing is the 2 billion in year 3.

Of course, this is progressing, year 2 already will be quite a bit of a step-up. For the first year now, it's really about getting everything up and running, and we are in a squeezed timing, there will be a limited amount in 2026.

It is included in our business outlook essentially, you could say.

Understood. Thank you.

My second question is on the Midea partnership. I understand the perspective of the cost base outsourcing story.

What about the market share dynamics? You mentioned you are 2% or below on the top-load washers, and you're trying to get more penetration there.

Can you give us a bit of an idea of what is Midea's market share on those categories? I'm trying to get to what is the additional revenue that you may get from this kind of initiatives.

Unfortunately, I cannot disclose the market share or the turnover of Midea in North America. However, what I can tell you, and you mentioned it, we have 18% market share in food preservation.

We have over 10% market share in food preparation in Springfield, and Springfield will belong 100%, of course, to Electrolux. We have more than 10% market share in dishwashing out of Kinston, and that will be 100% of Electrolux.

Where we see a big potential moving forward is in the two categories where we will be partnering with them. First, fabric care, you mentioned it, 7% market share in front-loader, less than 2% market share in top-loader, which is, again, the biggest platform sold in North America in washing and in drying.

We have a significant potential to grow in fabric care moving forward. I mentioned it last night, if we're reaching only 10%, which is half of the market share we have in food preservation, if we're reaching 10% in fabric care in the future, that would be 1 million additional pieces for Electrolux, a significant source of growth moving forward.

That's for fabric care. Even if we have 18% market share in food preservation, there is still space for growth, and we will be able to access new platforms thanks to the broad range of product Midea is having today, and we will be able to lower our cost thanks to the vertical integration and the scale this partner does have today.

Significant level of potential in terms of growth, I have been mentioning that, thanks to these new products, significant level of potential in terms of saving, and it will be an increasing saving as you mentioned it previously as well, and we will be sharing CapEx here, which would be a positive item in terms of cash flow.

Understood. Thank you.

Then my final question. Of the 0.3 billion SEK headwind from both rebate provisions and the Frigidaire recall, how much is it and should we expect any further impact beyond this quarter?

We don't separate up the two items of the 0.3. We thought that in combination, they are a relevant amount to mention, and that's why we highlight it.

Also, why we highlight it is because we believe that this is behind us. You should not be including that in your forward-looking expectation.

Of course, it will still stay in our result for the full year, but we should not incur additional similar cost going in the quarters to come.

Very clear. Thank you.

Hi, can you hear me?

Yes.

Oh,

cool. Thank you very much for taking my question.

My first question is about the price increase in North America market again. If the market decline for the first quarter is probably due to, let's say, economy or inflation, then how are you confident that the price increase will not affect your product demand going forward?

I'm

not sure I got entirely the question, the connection is not really good. In terms of price increase, once again, we are pretty confident that this price increase will stick in the coming months because we really truly believe that the industry will be moving towards price increases due to the latest tariff structure we see in North America.

Of course, the big question mark is the one you have been mentioning, and is how much demand will be impacted by this price increase. We certainly have been putting quite a lot of flexibility in our industrial assets in order to cope with a potential demand decrease in North America.

It is a price increase which is needed. It's a price increase we have been announcing to our customers, and we are personally pretty confident that competition will be following in the same direction.

Got it. Then my second question is about the expenses related to the recall.

We have a couple of expenses related to that in the first quarter. Would that be some more expenses in the second quarter or going forward as well?

Therese mentioned it, and I want just to be very clear. I think it is a voluntary recall.

We're putting safety as an absolute priority for our customers, and I want to underline that. This recall is behind us.

The entire expenses which are linked to this recall, we're basically spending the first quarter, and that's the impact we have basically in the profit we have in North America as well. It is behind us, and we will not see any additional expenses in the coming quarters due to this limited recall we had in North America.

Understood, that's very helpful. Then my last question is about Latin America.

Brazil, obviously, it was very strong in the first quarter, but you also mentioned the growth rate may slow somewhat throughout the year. What would be the reason to we start to see a slow down in terms of growth?

Last quarter, I think we also had the supplier rebates to help on the margin in Latin America. I'm just wondering whether there will be any that kind of increased rebate from suppliers in the first quarter as well.

I think, we're very proud for results in Latin America. We have been organically growing again by 8% here in this first quarter.

We are gaining market share in the upper price segment. We have been having a very strong results in this first quarter in small domestic appliances as well, which I want to underline.

In all fairness, as I said previously many times, the strategy is sound, the product pipeline we do have is sound, we have been investing in the market here, the Electrolux brand is extremely strong in the market. We don't see why we would be slowing down in terms of dynamic in this market.

In terms of supply rebate, in all fairness, I don't know what you are referring to. To my knowledge, we didn't declare any supply rebate in Latin America.

Therese, do you have anything in mind?

You're right. In Q4, we talked about an amount related to supply rebate.

This quarter was not including any additional supply rebate, this was really underlying strong performance by our team in Latin America.

My apologies for that. I forgot about that.

We're not expecting that any longer.

No, and we're not expecting, let's say, the supplier rebate. Of course, we're always working with our cost efficiency.

As it's included in the 3.5 5 to 4 billion. There was a higher amount than usual, I would say, in the fourth quarter.

This is something we're continuously working with our suppliers, for sure. No,

absolutely. Got it.

Very clear. Thank you very much.

Yes, good morning, everybody, and thank you for the time. I've got some questions on North America and external factors.

Maybe we could go one at a time. On North America, if I take out your recall, it looks like your clean margins are about 6.5% negative.

I just wondered if you could talk about how you expect that to develop into the second quarter. Normally, historically, you've done a sort of 200 basis point increase quarter-on-quarter, which would give you -4.5%, but I guess what I'm thinking about is does Section 232 take it worse with prices taking longer to cycle through flow retail?

Do we get worse on price cost before we get better, I guess, is the question, or any other topics for margin next quarter to consider?

As we said, certainly, we're not happy about the results we do have in North America in the first quarter. The main lever we'll be executing now in the second quarter is the price increase we have been mentioning, which will be between 5% and 20%.

As I said previously, our ambition is to compensate for the tariff increase through the price increase. I think we are absolutely no doubt that we'll have a positive development in terms of prices starting end of April.

How it practically work, of course, we started to pay the additional tariffs from the 6th of April, but it also takes some time before that negative impact is flowing through the P&L. The cost is flowing through the P&L as you sell the products.

As we mentioned earlier, the price increase will go live in the market really here in 1 week's time. We believe that we are well in terms of timing of being able to match the negative cost we will incur because of the increased tariff cost and the price increases in terms of timing when it will be in the market.

Thanks, Therese, very helpful. I'm just on margin mix in the North American business.

Are my assumptions that cold and laundry are your two biggest negative-margin businesses by quite some way, and I see you've been quite clever about how you de-risk the business, but would it be fair to assume that the rest of the US, which I guess is hot, dish, small, aftermarket, collectively is a profitable business at the moment?

That would just be repeating the answer I gave last night to the same question is that there is absolutely no doubt that food preservation worldwide, globally, in the home appliance industry, is the category which is the most under price pressure overall because it is becoming a commodity for many platforms. That's exactly why we're putting in place the action we're putting in place with the partnership from Midea.

Food preservation is the category with the highest level of price pressure.

Thanks. Could you help us understand the actions at Anderson?

Specifically, I just don't really understand why you would lay off 1,500 people in fridge-freezer before rehiring 1,300. Obviously, it's going to laundry, maybe requires different skills, but are there any other reasons why you're doing it that way and not transferring the employees?

Let me just repeat what we'll be doing in Anderson, and thank you very much for asking the question. What we have in front of us is a factory transformation.

We will be stopping manufacturing cooling products because we have the manufacturing joint venture in Juárez for cooling, and we will be leveraging the entire footprint we do have in cooling and Midea has in cooling as well. We'll be transforming this factory from cooling into fabric care, washing and drying, top-loaders in the first half of 2027.

What will be happening is that we'll be stopping production. We need, of course, to dismantle the entire equipment we do have in the Anderson factory.

That's why you will see a right-off of 1.5 billion in the second quarter due to this dismantling. We will be reinstalling equipment in the Anderson factory in the second half and in the first half of 20 in the second half of '26, first half of '27 to start production on the laundry side of the equation.

I think, again, as I said previously, gigantic potential on the laundry side. We need to underline as well the fact that most of our competitors are producing laundry in North America today, in the US today.

I think having a footprint for laundry in Anderson is making absolute sense here.

It's a pure timing impact that we will not be producing in the facility for almost 1 year. We cannot keep the employees without working for 1 year, so that's the practical timing issue.

We'll be re-employing 1,200 people between '27 and '28. Yeah.

That makes a lot of sense. Thanks.

Just lastly, if I could. I understand you don't want to put a hard number on your new internal forecast for external factors, but is there any way you could quantify the change of your internal expectation compared to what you expected sort of 3 months ago at the last set of results?

Could you just qualify that the increase I understand you're going to pass it on, and that's your ambition. I'm just talking about the gross cost side.

Did you say earlier that all of the change is basically Section 232? Is there any way you could say whether the increase in your own assumptions is 0.5 billion, 2 billion, just trying to understand rough orders of magnitude?

All of the increases are essentially 232. Then, of course, it's a little bit more complex than that, because originally, we, of course, had the reciprocal and the IEEPA tariffs that were actually still flowing through the P&L in the first quarter.

We then had the Section 120 122 for a period of time that we're also right now then have been paying also in the first quarter. Then when we now have the new 232, then the 122 is not stacking upon the 232, but replacing.

It's a lot of dynamics and a lot of mathematics. We won't go into exact numbers, but what we can say is if the current tariff structure stays the way it is right now, also fully impacting the flow from Mexico to the US Of course, we also know that it's in the middle of negotiation of the new agreement for USMCA, we don't know exactly where this will develop, and we're not speculating about that.

What we can say is that it is a material increase if the current structure stays in place the way it is today.

Thank you very much.

Hi, again, Yannick, Therese, and Ann-Sofi. Just coming back to your JV setup.

I noticed you are keeping 50% to 55% ownership in the US JVs. You're setting up the sales JV on cold products and the Anderson manufacturing for laundry.

Was that a requirement from CFIUS to approve the deal, or why are we keeping these shares?

No, absolutely not. It was not a requirement from CFIUS.

That was absolutely our choice through discussions as well with our partner, Midea. I think that has not been at all a requirement from CFIUS.

Excellent. Thank you very much.

Good morning. Thank you.

It's Martin from Citi. Just a couple of questions coming back to the transaction announced last night.

I understand that you can't give details on the Midea revenue that's coming in as part of the transaction. One question we've certainly had this morning from investors is obviously, you've got a 600 million uplift in profit coming from that Mexican joint ventures.

There's obviously an element of that that is consolidating Midea revenue, and there's an element of it that's pure upside to you. Can you give us some sort of sense as to what portion of that sort of belongs to Electrolux, if you like?

Is it safe to assume that the vast majority of that 600 million is effectively accrues economically to Electrolux?

That's what we have tried to portray with the 600 million. How we see it is that the 600 million will be the additional profit in the Electrolux P&L.

What additional profit potentially Midea will make on this partnership, we have not been including in what we have communicated yesterday. That's also why we try to keep it clean, let's say, with the revenue and the profit.

We think that the important number for you to include and to encompass is the 600 million that we believe will be an additional profit in our bottom line.

Again, I want to repeat what I said several times. It is a long-term partnership, we have been giving figures for the next 3 years, and you see them basically evolving.

The partnership with Midea is a long-term partnership for the region.

No, no, I know that, and I think that that number can grow over time as well. When you say it's the 600 million accrues to Electrolux, and obviously, if that's at operating profit level, there will be a minority.

In terms of how we think about the earnings number, just to get some sort of sense as to the net income benefit of that, because you are going to get some, if I understand it correctly, some offset of a minority to Midea.

That offset will actually go below net income, what we're trying to portray here is our improvement to EBIT and to net income.

Thank you. Then if I could have a follow-up just on cash, because obviously you talked about delevering down to about 2 times net debt to EBITDA.

There's a lot of moving parts this year, obviously the equity raise, and so forth, but just to get an understanding of the timing. You've given some detail on the timing of the various investments that you're making.

Will any of those be significantly cash-effective in 2026 in terms of the outflows for the investment and for some of this other restructuring? I know it's over 3 years, but should we assume those largely come in in '27, '28, or could some of those come in '26 as well?

Yes, and Ann-Sofi, correct me, but I think we have one slide in the appendix from the presentation yesterday, which is actually breaking up the Q1 and the Q2 NRIs that we right now have announced. If we then talk about the Chile that we announced a few weeks ago, and then Hungary that we announced earlier this week, and then, of course, the North American transaction that we did announce yesterday that will come into the second quarter.

I think from a NRI perspective, you have it quite detailed there on how much is cash and how much is non-cash. What we can say is what we are announcing now in Q1 and Q2 essentially will flow out this year, because the Anderson factory will close in the third quarter, and Chile will close now, as we speak, in the second quarter, and Hungary will close by the end of the year.

Potentially, for Hungary, you will pay out partly then exactly at the end of '26, and then a small part maybe at the beginning of '27. Essentially, the large part will come this year from what we have announced.

Exactly. Just for North America, as we have been saying it, it's 2.4 billion SEK in the second quarter, 1.5 billion being non-cash, and 900 million being dedicated mostly to restructuring.

Great, thank you very much.

Thank you very much. We still have a few questions on the conference call.

We will take the next question from John at Deutsche Bank. John, if we could ask you, please, only one question, that would be great.

Thank you very much.

Thank you. Just wanted to clarify the accounting treatment on the fabric care JV, 55% ownership.

Will you consolidate this, or does it go below the line because you're deemed not to have operational control?

That's 100%.

We will have operational control. With the manufacturing JV in Anderson, we will fully consolidate.

Thank you. Line by line,

yep.

Hi. I had a follow-up on this 5% to 20% price increase in North America.

Does it cover all of your sales in the region, or part of it? Thank you.

It's all our sales in the region.

Thank you.

Thank you for taking a follow-up question. Yannick, have you spoken to your big-box retail customers in North America and secured their support for this?

Absolutely. Of course, customer first, and I think we have been calling all our main customers yesterday afternoon about the strategy we're deploying over there.

Let me tell you that the feedback was overly positive about what we're putting in place in the region. I have been exchanging myself with a North American team late last night and this morning, and it has been positive.

Absolutely yes, of course, we have been reaching out to each of them. Then

just very quickly, do you give up any flooring space in order to accommodate the Midea brand on those sales floors?

I didn't get the question. No,

no, for sure not. Our sales forces, as Yannick went into yesterday, they will still be working separately with our customers, and no, for sure not.

We rather expect that we will have a broader product portfolio, and if something, we would have the ambition to gain additional floor spots.

Sorry, I didn't get the question, but absolutely. Thanks, Therese.

It is very important to underline that we will keep our identity in North America in terms of design, in terms of features, in terms of go-to-market here in the sales joint venture. What the sales joint venture will be doing is to define the optimal range line-up in North America in food preservation for both Midea and ourselves.

We'll be working together. We'll be leveraging the R&D resources here.

Our sales force, as I mentioned yesterday, will be separate, and there will be an Electrolux sales force facing the end customers in North America.

Thank you very much.

Thank you very much. With that, we are going to conclude the Q&A session and this call.

I hand over to you for some closing remarks, Yannick.

Thank you very much. Again, difficult first quarter in North America, strong results in the other regions, but more importantly, we have been announcing a series of initiatives which are building the future of Electrolux, which are the fruit of a well-thought strategy we have been developing in the last month.

We are absolutely convinced that with these new platform, we would be accelerating our growth, improving our profit, and reaching the target we have been communicating in the MCU mid-term, which is 6%. Thank you very much.