Good morning, and welcome to Electrolux Professional Q2 report results. My name is Jacob Broberg.

I'm heading up Corporate Communication and Investor Relations. With me I have Paolo Schira, our new CEO, and also Fabio Zarpellon, our CFO, and I leave the floor to you, Paolo.

Please go ahead.

Thank you, Jacob, and good morning, everybody. I think, probably since I started two months ago in my role, it could be good to give a few words a little bit about my agenda.

The last couple of months have been using to travel across the different countries, meeting many of the colleagues. I'm very happy and energized after this interaction because I saw a lot of energy, a lot of passion and willingness from the different colleagues to move Electrolux Professional to the new heights.

Very, very energizing. I took the chance of this interaction with the colleagues also to share a little bit what is my agenda moving forward.

Now, we are a company with a very long legacy, more than 100 years, and as every established companies, we've been expanding working on many areas. That's why I want to bring forward what I call the accelerate and simplify mantra.

The idea is fundamentally to refocus on a fewer things, significantly fewer things, but then secure the magnitude, the impact, and the speed we execute on those fewer priorities are amplified. Of course, this has to come strategically from the areas where we are stronger, where we have more chances to win, and where also our margins are higher.

The first element is really about define and sharpen better the core, and then double down in this initiative. Now, having outstanding solution as we have, having a strong value proposition as we have, is not enough then if you don't reinforce the front end, if you don't work in what I call the commercial excellence and the customer proximity.

We have already an advantage that we are present in many countries, close to many customers, but clearly, we can make a major impact over there. Now, these things will call for investments, and I want to advocate early that we want to fund these investments, this double downs, by subtraction, fundamentally to redistribute, refocus the investment we do in these fewer bets we want to work on.

This also requires that we work in a more disciplined way in our portfolio and in our cost management overall. That's a little bit, Jacob, the first introduction.

Of course, I will show more of my vision in the next steps as we move forward. I think is the right time to get to the quarter two results.

The picture on quarter two is a little bit mixed. Top line has been decreasing 3.8%, mainly driven by US and Middle East, Africa, and Asia, with different dynamics.

In Middle East, Africa, and Asia, main reason of the decrease of the top line has been some postponed projects we count to invoice now in quarter three. Still on the top line projection, I think it's good to mention that we have a positive order intake overall for the group, as well as an healthy order stock entering in quarter three.

Now, the positive part, I said mixed picture on quarter two, is about the overall profitability. EBITA has been slightly improving compared to prior year quarter two.

In full transparency, a contributor to the profitability increase has been a tariff refund in North America. Even if we were to remove this 21 million SEK of contribution, the overall underlying profitability has been robust, which is positive.

This is despite the overall situation what we call inflationary items, being the input material, being the logistic costs, have seen an increasing trend. Now, to be reported in this quarter, also that the currency that in the previous quarter had a negative effect has been neutral.

Since I mentioned about inflationary items, somehow inbound rising costs, I also want to mention clearly we've been very disciplined in the price increases, and we expect with the price increases and with in some part of the business surcharges that we are introducing as we speak, we count to cover all these negative effects throughout the full year 2026. The other element I'm very keen to mention, and as announced previously, we've been launching last year an efficiency program, impacting resources, impacting manufacturing footprint, and this is progressing according to plan.

Year to date, we can declare saving up to 45 million, 25 in the quarter, and the full year projection of 80 million SEK is confirmed, and then this is going to grow also in 2027. Also this part is contributing positively to keep the robustness of the business.

Now, giving a perspective on the different regions in the different businesses, you see here as well a somehow mixed picture. Probably starting from US, a decrease overall in the US business.

Probably with different drive and different dynamics. Maybe a touch of color on the part of the laundry business.

Last year in quarter two, we were anticipating some deliveries to US in anticipation of the US tariffs. This decrease somehow is related to this effect.

If we were to look on the units delivered to the market, actually, it is growing. The overall situation there is in a good place.

On Asia, I think I mentioned earlier there are somehow a couple of components contributing to the lower in sales. Part of it is the known geopolitical situation in Middle East, but we don't have cancel orders there.

For sure, there are some logistic challenges to get to the different location. The other one, some major project in the Asian region where from the customer side has been a request to postpone the delivery and the invoicing.

This we count to invoice in quarter three. Overall Europe, and I remind you Europe represents 60% of the total business for Electrolux Professional, there's been a moderate growth driven mostly by laundry that is continuing delivering very well in the European region.

In Food and Beverage in Europe, after several quarters of growth, we had a stabilization, but we expect then to continue in the trajectory we've seen previously. Giving then a bit more perspective, Jacob, on the different business segments.

Food and Beverage is the area where we saw softer growth, with a decrease of almost 6%. I think I mentioned already the contributors being mainly US and a smaller extent APAC-MEA.

What is, I believe, very important to acknowledge is here the performance of the profitability. In the case of Food and Beverage, there is only 3 million SEK of contribution for tariffs refund in US, the overall business is defending very well despite some of the rising costs I mentioned earlier.

Here to mention among the different activities done well by the team to deliver this profitability has been a normalization of R&D costs. I think this you have been hearing in the past.

We reached a peak in the past, now is more normalizing. Normalizing doesn't mean that we decelerate our agenda, the opposite.

We have really exciting products coming to market beginning of next year, and we are really keen to see the benefits out of this introduction. Overall in the Food and Beverage, the order stock is healthy.

We start quarter three with a good amount of orders we are very keen to invoice throughout the quarter three. Last but not least is about the laundry situation.

Moderate growth in laundry, driven a lot by Europe. I mentioned about the US situation and Asia almost stable.

Good profitability development. Here is where actually we see most of the contribution of the tariff refund.

Overall, the underlying margin, the situation seems to be positive. Laundry is the area, not the only area, but the main area where we're introducing surcharges.

On top of the price increase we introduced beginning of the year, in laundry, we introduced now in the summer months the surcharges in the different markets. The reason why surcharges were mainly introduced in laundry are very simple.

Is the business where most of these rising costs are impacting right now, the logistics, the input costs, etc. That's why we are implementing them.

Overall, the reaction from the customer has been accepting, it's been a fairly positive or not negative reaction. Overall in laundry, we do see a strong order intake and order stock, overall a positive situation.

I think with that said, it's probably the time for you, Fabio, to give us more color on the detail of the numbers.

Thank you, Paolo, and good morning to everybody. As Paolo previously mentioned, Q2 profit was negatively affected by lower volumes as the main offender, particularly in US, as well as material tariffs and higher logistic cost.

However, and I believe it is a good achievement, we were able to maintain the EBITDA margin. Now, let me elaborate around the different components that sustained the profitability in the quarter.

Currency translation was still negatively affecting our top and bottom line, but no material impact in terms of EBITDA margin. The strengthening of SEK has been somehow reduced.

If I look at it, currency translation effect in EBITDA value was reduced to roughly 10 million SEK for the quarter. Currency transaction instead finally turned positive.

We have a few million, but positive impact on the EBITDA in the quarter. Tariffs cost higher than last year, but we were able to fully compensate them in the quarter with the price increase.

Not only, as Paolo anticipated, we got this 21 million SEK of tariffs refund in the quarter. The quarter, as such, has been also positively impacted by the benefit from the execution our restructuring program.

In quarter two, the gross margin and EBITDA was positively impacted by overall 25 million SEK in cost saving. The program, as anticipated by Paolo, is proceeding according to plan, and the contribution for the overall year is confirmed in the area of 80 million SEK, or roughly 0.6 point in margin.

Going forward, moving into 2027, the guidance we have given earlier of cost saving is confirmed. The expectation is next year, we will further increase the benefit to 175 million SEK, or 1.4 points in margin.

In the quarter, we continued investing in R&D, but the spending was somehow reduced compared to the high level we have reached in quarter two in last year. Going through the remaining of the P&L, financial net was 16 million SEK, lower than last year thanks to reduce overall average borrowing and a cost-efficient funding structure.

The tax rate in the quarter, no surprise, was 25%, in line with the guidance. Let me say, lower cost of funding, lower tax cost allow us to increase the EPS to 0.8 SEK per share compared to 0.75 SEK per share despite the lower EBITDA and EBIT.

Positive cash flow generation in the quarter, somehow, but lower than last year. This comes definitely from lower EBITDA, increased inventory, and the payment related to the execution our restructuring program.

Now, let me give you more flavor, in particular when we move into the asset part. This picture shows somehow still a good asset management for the good group and a solid balance sheet.

Rolling 12-month operating working capital increased to 17% compared to 16.3% of December last year. Here, let me say, two major offender I see them definitely as a temporary one: one is inventory, and the second is AR.

A portion of inventory increase in the last two quarters due to delay in project sales deliveries. We have the goods in-house ready to be shipped.

We need the green light from the customers. What I see a temporary stock increase due to production transfer from the facility that we are closing to the existing one.

Both, let me say, are a temporary increase in working capital requirement are expected somehow to reduce and come to the end toward the end of the year. The increase of receivables is instead mainly related to country mix.

We have grew in the quarter in country with a longer payment term. I have no concern on the quality of receivable.

Overall, as you see in the ratio net debt on EBITDA, our financial position is strong. We have an increase of the net debt in the quarter two, but this is due to large specific payment we had in the quarter.

In the quarter, we have roughly 400 million SEK of cash out. 270, if you remember, are related to payment of dividend.

We have roughly 60 million related to final purchasing price payment for Olis-Grandis and similar amount for a refund of a medium-term loan. Overall, a solid company with a robust P&L and a strong balance sheet.

With that, back to you, Paolo.

Thank you, Fabio. Probably before going to the conclusion and then open up for the Q&A, just one comment on an initiative I'm very proud of that we recently introduced in the laundry segment that is called Re-live, and it is, I think, representing the essence of Electrolux Professional Group.

As you all know, Electrolux Professional is proud to be a leader in innovation, but also leader in what we call the sustainability. What it is this Re-live all about?

This is about the initiative of Electrolux Professional in laundry to remanufacture machines. The word remanufacture is taken intentionally.

It's not refurbished, it's not just cleaning and make some fix. It's really to take machine out of the market, and machines that can have more than 10 years, and to replace visual parts whenever they are damaged, as well as functional parts.

Now, why I'm proud of this initiative? First, because thanks to the modular platform introduced in laundry years back, it is possible actually to do this work, remanufacturing, in a seamless and smooth way.

It is possible to reutilize more than 60% of the weight of the machine. The overall environmental impact of our machine in terms of the components and the materials is significantly reduced.

Even more important is, by remanufacturing the machines, we are able to introduce all the energy devices, all the innovation we've been developing in the last years. In terms of greenhouse emissions, the famous Scope 3, these machines are actually as good as a completely new machine, with amazing saving for the customer and for the planet.

We just introduced this initiative starting from some markets, and the idea is to make a real business out of it. Very excited, looking forward to see it as one of the pillar for our future development.

Now, with that said, probably is the time to go on in the summary. I think I repeat myself and what Fabio said, a little bit of a mixed picture.

Decrease of top line driven by US and, to a smaller extent, to APAC-MEA. The positive part is the profitability that remain very solid, partially supported by a tariffs refund, but even without the tariffs refund, I think the underlying business is positive.

Specifically, some part of the business have been growing. We mentioned laundry.

I also am keen to mention that on our Japanese business with Tosei, we had the second quarter in a row with the growth and also bottom line development, positive. The overall looking forward, the positive situation is that the order stock is in a good level, and of course, it is our task with our teams to make sure we invoice it in quarter three.

There is no order cancellation, which is also very positive. It is a good order stock.

Having said so, Jacob, I give back the word to you.

Thank you, Paolo. Thank you, Fabio.

With that, we open up for questions. Operator, please go ahead.

Yes. Good morning, guys.

Thank you for taking my questions. Starting off with a question on the US tariff refund.

Is there any remaining refund to be recognized in H2 as well, or was this solely a Q2 refund?

We have submitted request for additional refund. This will go through the scrutiny of the US governing authorities, but the expectation is that there will be some more positive refund also in the second part of the year.

Okay. Got it.

In terms of magnitude, is the level you recognized 21 million here in Q2, is this in line with what you expect for sort of if we see it in Q2 or Q3 or Q4 as well, yeah, how should we think about the magnitude?

Okay. What I can say is that we have submitted additional request.

Far, our requests have been positively scrutinized, but we are not going to give order of magnitude for the remaining part of the year.

Got it. The second question on the sales decline in APAC and MEA.

This was, as I interpreted, attributed to postponed project deliveries. Could you give any more color on the size of this backlog and the time of delivery?

You mentioned Q3. Is that sort of confirmed, or is that your best estimate currently?

Yes. I think I'm alluded to it earlier.

There are two somehow components to this slippage to quarter three. One of it is the known Middle East situation.

The other one is some major project we had. Roughly, we estimate in the surrounding of the 30 million SEK the amount of orders we have not been able to invoice and ship during the quarter, and we count to ship them and invoice them in the coming months.

The positive, as I mentioned earlier, is we don't have any relevant sign about order cancellation, other things. It is as it is now a good order stock, and we count to invoice it now in quarter three mostly.

Got it. Thank you.

Very clear. If I may continue.

The US Food and Beverage business has been weak since essentially last summer. What specifically is driving the prolonged weakness here?

Is it end market demand, competitive dynamics, inventory, or something else? What are some of the leading indicators that you are watching for a recovery here?

Sure. I think, Johan, what you're reporting is factual, and we've already started seeing it last year with a kind of two two gears, two steps, two-speed pattern: first half rather strong, then second half weak.

This weakness has been prolonging now in the first half of '26. Now, no wonder that I've been in one of my first trips in the new role visiting US, working with the team, and I see there a lot of good activities happening.

A bit of weakness on our side. We believe the market probably is not a booming market, but it is a positive market.

I think in the both the kind of market segments we identify that are called the chains and the general market, I think we have opportunity to capture better growth than what we have been doing. I think it's up to us, to your question, to revert this trend.

I think we have the means to do it. It is a lot about hard work.

It's a lot about execution and the like. Specifically on your question on the leading indicators, now, they vary depending on the part of the market, as I described, general or chains.

If I were to pick one for illustration purposes, the chain market is typically based on rollouts. It's about delivering units in test for some of the big chains, the American chains.

Then once you are approved, then you can move on to the next phase that is about so delivering many units. First test and then rollout.

Here the leading indicator is we have to win several tests with several of the big groups. Probably in the first half, we've seen some of the big groups on the test they were doing with us because of the instability, geopolitical, etc., to probably wait a little longer.

That's the kind of work we're doing. Continuing feeding this funnel, this pipeline.

There are several tests ongoing, and I count that some of them will be converted into sales in the second half.

Got it. Very clear.

Thank you. A final one maybe from my side here.

Again, on Food and Bev. Order intake, you describe as decreased somewhat, while the order stock is higher.

Could you give a more precise indication of the order intake sort of growth/decline year-on-year here in Food and Bev? That is my final question.

Thank you.

The overall order intake has even within the Food and Beverage a kind of a mixed picture. In some areas improving, some areas a little bit lower, but it's not materially very negative.

The positive thing is it has been higher than our invoicing. The reason of our significantly higher order stock entering the quarter three is the fact that, actually, we got more orders than what we've been able to ship and invoice.

Despite the nuanced picture between territories and other things, broadly across the different businesses, the order stock is in an healthy situation. Order stock, again, very basically, is the orders we have in-house qualified that are not yet been shipped and invoiced.

I think the start for quarter three has this significant order stock that we are keen now to invoice in the coming months.

Got it. Very clear.

Maybe if I can squeeze in one final, maybe just clarifying question. You stated, of course, price increases and surcharges are expected to offset currency, tariff, and sort of logistics headwind into H2.

I interpret this as it predominantly relating to laundry. Are you implementing similar surcharges in Food and Bev as well?

The biggest part of surcharges is going to be in laundry, though there are some part of surcharges in also some areas in Food and Bev, but not in a broader scale as it is in laundry. Somehow the reason is what we discussed earlier.

Laundry is somehow the most impacted by the tariffs and some of the logistic and inbound cost. On the other side, in the Food and Bev, this has been managed, it is possible also there to mitigate this rising cost because the price increase we did the beginning of the year, which is now fully rolling out as we speak, is creating the result to compensate.

Different dynamics between the reported business segment, but the net effect is the same on both. The good price and overall also cost management is helping then to mitigate or to compensate these headwinds.

Perfect. Very clear.

Those were all my questions for now. Thank you so much for taking the time.

Thank you, Johan.

Thank you, Johan. Johan here.

I have one before going back to the operator, I have one question or two questions from the web. That's from Stefan Stjernholm at Handelsbanken.

The first question is, "R&D costs are lower year-over-year in Q2. Can we expect a further year-over-year decrease in the second half?"

The second question is, "Given your positive comments on order stock, is it fair to assume at least flat organic sales growth in the second half?" We start with the question on R&D.

Okay. As we have discussed also during the previous call, during 2025, we have reached somehow an historical peak for what goes on the R&D cost in absolute term, but also in percentage on sale to support some major product launches, one in laundry and the other one in food in particular in the cooking area.

We were anticipating a resize of the R&D spending in the second part of this year. As I anticipated earlier, we start to see already the positive impact in quarter two, and this is related to the Food and Beverage segment, whilst in the laundry one, we are still on par with last year in preparation of the product launch that will be finalized and executed at the end of the summer.

When I look into the second part of the year, I can confirm the previous given guidance of a resize of the R&D spending both in absolute term and in percentage for both segments.

Thank you, Fabio. Paolo, the question on if we should assume flat organic sales growth in H2 or not?

Stefano, as you well know, we don't provide forward-looking statement on the quarter. I will probably try to stick a little bit more on where we sit.

We start the quarter with strong organic order stock, and I think it is in our hands now to secure that we convert into sales. I add on this one that, clearly, it is my priority as new CEO really to work with the different teams to work on the top line development.

I think is an area where we can make an impact. I think we have amazing solution that we can market to the different customer groups.

I think that we have all the elements to work and improve, and the starting point of this quarter is in the right foot, if you may allow me to say that.

Thank you. Please, I move back to you, operator, if there are further questions.

Questions from my side as well, and I hope you can hear me. Regarding sales growth in the quarter, could you perhaps also give us some colors on the sales momentum that you experienced during the quarter?

Do you see an acceleration or deacceleration throughout the quarter? I.e., stronger in the beginning or vice versa or stronger at the end of the quarter?

Thank you, Emanuel. If I got right your question about what is the short-term trend we see now in beginning of quarter three.

What we

I think sorry, I think it was more during the quarter, during the quarter. Sorry.

Okay. Sorry, sorry.

I missed that. Somehow we saw an incremental improvement during quarter quarter two.

Probably the quarter started a little bit weaker, and then we had a pattern towards the end in June with a stronger strong end pattern, and that's why we we ended the quarter with with a good order stock. Now, we July is a bit of a peculiar month and other things, but somehow the trend we ended quarter two, we see it also in the first few weeks of July.

Obviously, very early to comment and and say anything else, but at least on this part, we do see a positive.

Perfect. Thank you.

That's very clear. Could you also perhaps give us some colors on where is that improvement mainly coming from?

Is it APAC, MEA, Europe, or the US?

The overall I would call it sequential improvement of the business as well as the order stock development has been, I would say, a common pattern across the reported business segment and across the different geographies. Of course, there are areas where it is more clear, more visible, but overall is a broader pattern we've been seeing.

Great.

Thank you very much. On perhaps price versus volume in the quarter, you say the price contribution was positive in quarter two.

Is it possible to quantify that?

Yes. The price contribution was positive, and thanks to the price contribution, as we anticipated, we were able to compensate the tariffs and the inflationary items we faced in the quarter, in particular, the increase of transportation cost, one the major offender in term of inflationary item.

Clear, in the picture, when we do the bridge between quarter two last year and quarter two this year, the volumes had the largest impact in term of absolute value and, let me say, decreation effect on the EBITDA of the group.

Thank you very much. Looking at the gross margin, it looks like a quite good improvement.

Is that primarily driven by the price increase and the cost-saving program, or is it anything else that we missed?

Is exactly the area that you mentioned, meaning price management being able to compensate tariffs, inflationary items. Is about cost benefit that we have in our operation because part of the 24 million benefit are into the operation and hit on the gross margin.

I would add also a positive mix-up that we have seen in both segment, grow on the high-margin machine in laundry as well as in the Food and Beverage. The focus of the organization in towards the high-margin product categories and segment starts to pay off even in a situation where we decline sales volumes.

Very much. The last questions from my side.

On the product side, could you give us an update on the new platform and product launches more broadly? Are you seeing any early customer response or order intake contribution?

Is there basically any new data that you can share with us on the new product developments?

Sure, Emanuel. I can give you some updates on the subject.

Behind the significant investment we did in R&D in the last several quarters, there are some exciting product introduction that we're planning to make. We will start after summer with the first part of the range of the Line 7000, the line of laundry machines.

We start with the small chassis, and then follow in '27 by the bigger capacity. Now it's not yet started the production, there is obviously not yet sales data on it.

The overall early signal from customer who got exposed in the internal launches, etc., and the testing phase is positive. We have a leading position in laundry in terms of technology, and we want to further reinforce it and deploy it further.

I think the early signs are positive. Then as soon as we will have data from financials, I will be very keen to share with all of you.

That's on part on the laundry. Then also on Food and Bev, we have a very exciting pipeline.

We did some introduction this year, but there are exciting introduction starting from beginning of next year, in the food side. As well there, the work is progressing well.

Also here, the feedback we're getting from the commercial teams and external customer are encouraging. We will start seeing the impact with a bit of impact in laundry end of this year, and then in food next year, and the early signs are encouraging.

Perfect. Thank you very much, Paolo, for that.

I think that was all of my questions for now, thank you very much.

Thank you. Thank you.

I just have a couple of more questions. I maybe missed this, but should we expect further price increases going forward as well, the coming quarters, or

Igor, what we are planning to do is to introduce, and we already did it in reality, some surcharges. This has a broader extent in laundry, main reason because laundry is the most impacted by what we call the inflationary items, but also selectively in some areas in the Food and Beverage where we've introduced them.

The answer is yes, additional price impact expected to come on top of the compounded effect from the price increase introduced on beginning of the year. The expectation is to have this to offset the headwinds we have coming from the different dimension we described.

Okay. Are your competitors doing the same, or are you the leaders, to say, with those surcharges?

The feeling is that overall also the rest of the market is going to do it because factual is logistic costs are increasing, plastic costs are increasing, steel costs are increasing. I would expect some of them announced them, and I would expect many others to follow given the macroeconomical situation.

Regardless of what the other are doing, I think we are very analytical and thorough in the work on pricing. We do our assessment, and I can give you a feedback specifically from the laundry part with the surcharges, the overall reaction of the market has not been negative.

I think people see what's happening, and they are somehow expecting this to happen.

That's clear. Thank you.

Just a final one. On the back of these surcharges, have you experienced that you have lost any market share due to that if you are yeah, the first mover, to say?

I don't think so. At least my experience is not in this way.

Also, we do it in a good way, in a commercially sound way. We don't expect this overall price dynamic approach to have an impact on volume.

In parallel, as I mentioned, I think we have a duty as an organization to accelerate on our top-line work in our commercial activities, this is a clear priority in my agenda.

Perfect. Thank you very much.

I would say thank you, everyone, for having listened in. Thank you to Paolo and Fabio, and I wish you all a great summer.

Thank you, and goodbye.