Electrolux Q4 2025 Electrolux AB Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Electrolux AB Earnings Call
Ann-Sofi Jönsson: Welcome to the presentation of our fourth quarter results. I'm Ann-Sofi Jönsson, Head of Investor Relations and Sustainability Reporting here at Electrolux Group. With me today, I have our CEO, Yannick, Yannick Fierling, and our CFO, Therese Friberg. We will go through the presentation, and after that, we will open up for a Q&A session, both for those on the conference call as well as for you on the webcast. Please enter your questions throughout the whole session if you're viewing on the web.
Speaker #4: Welcome to the presentation of our fourth quarter results. I'm Anne-Sophie Jansson, Head of Investor Relations and Sustainability Reporting here at Electrolux Group. With me today, I have our CEO, Yannick Fierling, and our CFO, Therese Friberg.
Speaker #4: We will go through the presentation, and after that, we will open up for a Q&A session, both for those on the conference call as well as for you on the webcast.
Speaker #4: Please enter your questions throughout the whole session if you're viewing on the...
Speaker #4: web. Midterm.
Yannick Fierling: ... midterm. The improvement operating income was the level of SEK 0.7 billion, which represents 28% on sales, which is again an improvement of 4.8 points versus last year. The 0.7 billion was by a high cost reduction, level of about billion SEK, driven mainly by procurement engineering. We had the strongest quarter ever in Electrolux in terms of cash flow, delivering SEK 0.2 billion, bringing the entire at the level of billion SEK, which is taking our financial position in terms of leverage at the level of 3.0. With that, I'd like to go into the fourth quarter. I'm sorry, the slide is not changing. Technical issue, which was working, of course, nicely this morning. It was like that. Okay, very good. Nothing, apologies for this technical issue. Very good.
Speaker #2: The improvements operating income was at a level of SEK 0.7 billion, which represents 28% on sales, which is, again, an improvement of 0.8 points versus last year.
Speaker #2: This is a SEK 7.7 million worth by a high cost reduction level of about a billion SEK, driven mainly by procurement engineering. We had the strongest quarter ever in Electrolux in terms of cash flow, delivering SEK 0.2 billion, bringing the entire year to the level of SEK 20 billion, which is taking our financial position in terms of at the level of—I'd like to go into 3.0.
Speaker #2: With that, the fourth quarter. I'm sorry, the slide is not changing. Technically, which was working, of course, nicely this morning, so it's like that.
Speaker #2: Okay, very good, knocking. Apologies for this technical issue. Very good. Let me deep dive into the fourth quarter here. First, we're glad to tell that, I mean, we have been gaining market share once again in Europe and Asia.
Yannick Fierling: Let me deep dive into the fourth quarter here. First, we're glad for Tao that, I mean, we have been gaining market share once again in Europe, Asia Pacific, East Africa, and Brazil. We have been delivering that at market share in North America. Very, very high of price. The negative news is certainly on the volume side of the equation. Can we change the next slide, please? Sorry, once again. I mean, the negative news is, of course, about the market level. The market has been losing once again, 1%. We have been down 1% in Western Europe, and we have been up 2% in Eastern Europe, with Western Europe representing more than 80% of the volume. Overall, the market has been once again, down.
Speaker #2: And Brazil. We have been delivering that market share in North America, very high of price. The negative news is certainly on the volume side of the equation.
Speaker #2: Can we change to the next slide? Once again, I mean, the negative news is, of course, about the market level. The market has been losing once again 1%.
Speaker #2: We have been down 1% in Western Europe, and we have been up 2% in Eastern Europe. But with Western Europe representing more than 80% of the volume overall, the market has been once again down.
Yannick Fierling: We're now at the level of 2016, we're 10% below the fourth quarter of 2019. 10-year low in terms of volume and the market remains subdued. Of course, we have positive signals from interest rate and the construction side of equation, but it will take time to have these positive signals materializing in volume of appliances. Moving to North America, now, I mean, the quarter has been very challenging. Of course, we knew Black Friday was highly promotional, but certainly, I mean, we did not expect the level of competitive pressure we have seen in the market. I think entering into the promotional season here, we had no choice but to reduce the price increases we had implemented throughout the year 2025. That's explaining why we're delivering a negative EBIT in the fourth quarter.
Speaker #2: We're now at the level of 2,016. We're 10% below the fourth quarter of 2019, a 10-year low in terms of volume. And the market remains subdued.
Speaker #2: Of course, we have positive signals from interest rates and the construction side of the equation, but it will take time to have these positive signals materializing in volume for appliances.
Speaker #2: Moving to North America now— I mean, the quarter has been very challenging. Of course, we knew Black Friday was highly promotional, but certainly, I mean, we did not expect the level of competitive pressure we have seen in the market.
Speaker #2: And I think, entering into the promotional season here, we had no choice but to reduce the price increases we had implemented throughout the year 2025.
Speaker #2: And that's explaining why we're delivering a negative EBIT in the fourth quarter. So, higher level of price pressure in North America, which has, for the price increase we had, been forcing us to step down implemented throughout the year.
Yannick Fierling: So high level of price pressure in North America, which has been forcing us to step down for the price increase we had implemented for all the year. The good news is that after the promotional pressure here, prices have been bouncing back to last year level. But still, significant negative external factors are driving our results down, and these factors are simply the US tariff as well as the depreciation of the US dollar. Tariffs are what they are, 15% to 20% for imported goods out of Southeast Asia, 55% to 60% out of China. So if the industry is reacting rationally here, and we will see price increase in the coming weeks and months, we should be benefiting from that being a North American producer. The market has been pretty resilient when you look at this picture here.
Speaker #2: The good news is that, after the promotional pressure here, prices have been bouncing back to last year's level. But still, significant negative external factors are driving our results down.
Speaker #2: And these factors are simply the US tariff, as well as the depreciation of the US dollar. Tariffs are what they are—15% to 20% for imported goods out of Southeast Asia, and 55% to 60% out of China.
Speaker #2: So, if the industry is reacting rationally here and we will see price increases in the coming weeks, we should be benefiting from that, being a North American producer.
Speaker #2: The market has been pretty resilient when you look at this picture here. The market has been going up in the fourth quarter by 1%, mainly driven by laundry, but it could have an impact moving forward as still consumer sentiment is pretty low and price increases could dampen demand.
Yannick Fierling: The market has been going up in Q4 by 1%, mainly driven by laundry. But still, consumer sentiment is pretty low, and price increase could have an impact moving forward on the demand. Moving now to Latin America, and I'm glad to—if my pointer is willing to change the slide, and I'm glad to say that, I mean, we had another strong quarter in Latin America. If I can just ask somebody to change the slide. Thank you very much. We had another strong quarter in Latin America, gaining value market share in Brazil. The entire regions in terms of volume has been growing. We saw Brazil slightly slowing down. Okay, sorry for that. Brazil slightly slowing down in terms of increase, but still a good quarter in the region.
Speaker #2: Moving now to Latin America, and I'm glad if my pointer is willing to change the slide, and I'm glad to say that, I mean, we had another strong quarter in Latin America—if I can just ask somebody to change the slide.
Speaker #2: Thank you very much. We had another strong quarter in Latin America, gaining value market share in Brazil. The entire region, in terms of volume, has been growing.
Speaker #2: We saw Brazil slightly slowing down—okay, sorry for that. Brazil slightly slowing down in terms of increase, but still a good quarter in the region.
Speaker #2: We had a very strong Black Friday, which is a promotional pressure, but the team has been doing pretty well. And we were held finally at the end of the quarter by a heatwave, which has been present in the region.
Yannick Fierling: We had a very strong Black Friday, which is a promotional pressure, but the team has been doing pretty well, and we were helped finally at the end of the quarter by a heat wave, which has been present in the region. Our position remains very strong in the region. I just want to underline one point, which is explaining part of the 11.5% in terms of EBIT. We were helped and supported by a one-time high level of supply rebates at the end of the quarter in this region. These rebate has not been material for the group, but certainly has been relevant for LatAm. Let me show you a short video on how we have been communicating during Black Friday in the region. A very strong results in LatAm during Black Friday.
Speaker #2: Our position remains very strong in the region. I just want to underline one point, which is explaining our part of the 11.5% in terms of EBIT.
Speaker #2: We were helped and supported by a one-time high level of supplier rebates at the end of the quarter in this region. These rebates have not been material for the Group, but certainly have been relevant for LATAM.
Speaker #2: Let me show you a short video on how we have been communicating during Black Friday in the region.
Speaker #1: Só você compra produtos Electrolux e ganha Pix na conta para comprar os ingredientes do jantar. Fazer bolinho. Arrasar em vestido novo. E até garantir o cachê de segurança.
Speaker #1: Black Friday Electrolux, a vida tem dias e dias, e hoje é dia de Pix.
Speaker #1: Aproveite. A very strong result
Speaker #2: In LATAM during Black Friday, we're also glad to report that, I mean, we have been reaching, in terms of cost reduction, and just as a reminder, 4 billion was on the upper level of the fork we have been communicating about in the last month.
Yannick Fierling: We're also glad to report that, I mean, we have been reaching in terms of cost reduction, and just as a reminder, SEK 4 billion was on the upper level of the fork we have been communicating about in the last months. We have been reaching this SEK 4 billion through value engineering, better sourcing, and higher efficiency in our factories. So we have a very strong process in place internally to deliver these type of results. With that, I have a pleasure to hand it out to Therese, hoping that the pointer will be working, Therese, in your fingers.
Speaker #2: We have been reaching these $4 billion through value engineering, better sourcing, and higher efficiency in our factories. So we have a very strong process in place internally to deliver these types of results.
Speaker #2: With that, I have the pleasure to hand it over to Therese, hoping that the pointer will be working—Therese, in your fingers.
Therese Friberg: Thank you, Yannick. And then looking at the sales and the EBIT bridge, we had 2% growth in the quarter, which was driven by volume growth and also positive mix in Europe, Middle East, and Asia Pacific. And we also had a positive volume growth in Latin America. Unfortunately, if we look at then organic contribution to earnings, it was slightly negative, and this is a result of that the volume, positive volume was then offset by a negative pricing pressure, especially in Europe, Middle East, or in Europe, Asia Pacific, Middle East and Africa. And as Yannick mentioned, we also had to back off from the previously introduced, price increases in North America in the quarter.
Speaker #1: Thank you.
Speaker #3: Thanks. And then, looking at the sales and the EBIT bridge, we had a 2% growth in the quarter, which was driven by volume growth and also positive mix in Europe, Middle East, and Asia Pacific.
Speaker #3: And we also had a positive volume growth in Latin America. Unfortunately, if we look at the organic contribution to earnings, it was slightly negative.
Speaker #3: And this is a result of that the volume positive volume was then offset by a negative pricing pressure, especially in Europe, Middle East, or in Europe, Asia Pacific, Middle East, and Africa.
Speaker #3: And as Yannick mentioned, we also had to back off from the previously introduced price increases in North America in the quarter. This volume growth and positive mix was supported by increased investments in innovation and marketing.
Therese Friberg: This volume growth and positive mix was supported by increased investments in, innovation and marketing, and we also had a quite strong quarter in the Q4 in terms of cost efficiency. We can also mention here that group common cost was below the last year level, and this is a result of cost containment, during the year, but also due to part of a timing effect, where the cost in group common cost last year was at a high, level in the quarter. When looking at external factors, we had another quarter with the significant headwinds. Of course, the introduced tariffs in US continues to be at the high, high impact in the Q4.
Speaker #3: And we also had a quite strong quarter in the fourth quarter in terms of cost efficiency. And we can also mention here that group common cost was below the last year's level, and this is a result of cost containment during the year, but also due to part of the timing effect where the cost in group common cost last year was at a high level in the quarter.
Speaker #3: When looking at the quarter with significant external factors, we had another headwind. Of course, the introduced tariffs in the US continue to have a high impact in the fourth quarter.
Speaker #3: But also, we had a negative currency impact, both from a devaluation or both from a strengthening of the Swedish krona, which is then contributing to a negative translation effect for the group, but also for North America, where the weakening of the US dollar versus many or several of the important production currencies, like the Mexican peso and the Thai baht and the Chinese renminbi, is then giving a negative result on the group.
Therese Friberg: But also we had a negative currency impact, both from a strengthening of the Swedish krona, which is then contributing to a negative translation effect for the group. But also for North America, where the weakening of the US dollar versus many or several of the important production currencies, like the Mexican peso, the Thai baht, and the Chinese renminbi, is then giving a negative result on the group. The negative effect in acquisitions and divestment is related to the divestment we did last year of the water heater business in South Africa in the fourth quarter. Then taking a look at the full year, we had the sales growth of 3.9%, where we had volume growth in all our business areas, and we also had a positive mix for the group.
Speaker #3: And the negative effect in acquisitions and divestment is related to the divestment we did last year of the water heater business in South Africa in the fourth quarter.
Speaker #3: And then, taking a look at the full year, we had sales growth of 3.9%, where we had volume growth in all our business areas, and we also had a positive mix for the group.
Therese Friberg: This also contributed to a positive organic contribution to earnings, despite that during the year we did see a price pressure, mainly in the European market, that also was negative for the full year. We were boosting and supporting the volume growth and our strong product portfolio by increases in investments and marketing, in the year. And as Yannick mentioned, we managed to hit SEK 4 billion in cost efficiency. We had, for the full year, a heavy headwinds in external factors. Of course, the tariffs we have talked about a lot, and on top of the negative currency that we saw in the fourth quarter, also for the full year, we have negative currency, mainly in the Latin American markets, in Argentina and Brazil, and also in the Australian dollar.
Speaker #3: This also contributed to a positive organic contribution to earnings, despite the fact that during the year we did see price pressure, mainly in the European market, that also was negative for the full year.
Speaker #3: We were boosting and supporting the volume growth, and our strong product portfolio by increases in investments and marketing in the year. And as Yannick mentioned, we managed to hit the $4 billion in cost efficiency.
Speaker #3: We had, for the full year, heavy headwinds in external factors. Of course, the tariffs we have talked about a lot. And, on top of the negative currency that we saw in the fourth quarter, also for the full year we have negative currency, mainly in the Latin American markets—in Argentina and Brazil—and also in the Australian dollar.
Therese Friberg: And then looking at cash flow, as Yannick mentioned, we had a strong end to the year, so we had the SEK 5.2 billion operating cash flow in the quarter, which took the full year then to SEK 2 billion, which was almost in line with the last year's cash flow. The strong operating cash flow in the quarter was driven by positive working capital and mainly by large reduction in inventory. As you know, our seasonality is like this, that we always have a positive contribution from reduced inventory in the fourth quarter. But also, as we've talked about during the year, we came from a position where we, specifically in certain categories and in certain business areas, were at a high level going into the fourth quarter.
Speaker #3: And then looking at cash flow, as Yannick mentioned, we had a strong end to the year. So we had SEK 5.2 billion operating cash flow in the quarter, which took the full year then.
Speaker #3: To SEK 2 billion, which was almost in line with last year’s cash flow. The strong operating cash flow in the quarter was driven by positive working capital and mainly by a large reduction in inventory.
Speaker #3: As you know, our seasonality is like this: we always have a positive contribution from reduced inventory in the fourth quarter. But also, as we've talked about during the year, we came from a position where we, specifically in certain categories and in certain business areas, were at a high level going into the fourth quarter.
Therese Friberg: Specifically then mentioning air conditioners in Brazil, where we, at the end of the year, had a heat wave in Brazil, which also helped us to reduce inventory further. We're also keeping high containment of CapEx, and this has also been helping, and CapEx is below the last year level. Then looking at the balance sheet and the liquidity, we have a solid liquidity and a well-balanced maturity profile. In the fourth quarter, we were amortizing a long-term borrowing of around SEK 2 billion, and we also draw down on the previously announced loan with EIB of $230 million. If we look into 2026, we have a maturity upcoming in October of SEK 5.5 billion.
Speaker #3: And specifically, then mentioning air conditioners in Brazil, where, at the end of the year, we had the heat wave in Brazil, which also helped us to reduce inventory further.
Speaker #3: We are also keeping high containment of CAPEX, and this has also been helping, and CAPEX is below the last year's level. And then, looking at the balance sheet and the liquidity, we have solid liquidity and a well-balanced maturity profile.
Speaker #3: In the fourth quarter, we were amortizing a long-term borrowing of around SEK 2 billion, and we also drew down on the previously announced loan with EB of $230 million.
Speaker #3: If we look into 2026, we have a maturity upcoming in October of SEK 5.5 billion. And at the end of December, we have liquidity, including revolving credit facilities, of SEK 32.7 billion.
Therese Friberg: As at the end of December, we have a liquidity, including revolving credit facilities, of SEK 32.7 billion. We have no financial covenants, and our target is to maintain a solid investment grade rating, and our leverage improved during the quarter and the year. So we ended the net debt, EBITDA, by the end of the year at 3 times. And with that, I hand back over to Yannick.
Speaker #3: We have no financial covenants, and our target is to maintain a solid investment grade rating. Our leverage improved during the quarter and the year.
Speaker #3: debt EBITDA by the end of the year at 3 So we ended the net times. And with that, I hand back over to Yannick.
Yannick Fierling: Thank you very much, Therese. See, it worked fine in your hands, so let's hope it will be like that as well for me. So moving now to sustainability, and as you all know, I mean, sustainability is in our DNA, and we are very proud to be one of the sustainability leaders in the industry. We do have very ambitious targets moving forward. We are planning to reduce between 2021 and 2030, Scope 1 and 2 by 85%, Scope 3 by 42%. We're planning to have 35% of recycled material in our product, and in terms of coincident rate, we have a very ambitious target to be at 0.3, which is best in class in the industry here.
Speaker #2: Thank you very much, Therese. You see, it worked fine in your hands. So let's hope it will be like that as well for me.
Speaker #2: So, moving now to sustainability. And as you all know, I mean, sustainability is in our DNA, and we are very proud to be one of the sustainability leaders in the industry.
Speaker #2: We do have very ambitious targets moving forward. We are planning to reduce, between 2021 and 2030, Scope 1 and 2 emissions by 85%, and Scope 3 by 42%.
Speaker #2: We're planning to have 35% of recycled material in our product, and in terms of coincident rate, we have the very ambitious target to be at 0.3, which is best-in-class in the industry here.
Speaker #2: We made tremendous progress in 2025, and we're proud to say today that, I mean, we have been reaching out of the 85% already in 2025 year to date—45%, 33% for Scope 3, and we have 23% today of recycled material in our products.
Yannick Fierling: We made tremendous progress in 2025, and we're proud to say today that, I mean, we have been reaching out to the 85% already in 2025. Year to date, 45%, 33% for Scope 3, and we have 23% today of recycled material in our products. In terms of incident rate, we have been reaching the target of 0.33. Let me just come back. I mean, it's a little bit more than 1 year that I'm in this position today, and we have been defining very clearly these 5 strategic pillars when I started. First, it was about improving North America, and yes, we had a difficult quarter in Q4 in North America. However, let's take into consideration that we have been growing organically in this market by more than 6% in 2025.
Speaker #2: In terms of incident rate, we have been reaching the target of 0.33. Let me just come back. I mean, it's a little bit more than one year that I'm in this position today, and we have been defining very clearly these five strategical pillars when I started.
Speaker #2: First, it was about improving North America. And yes, we had a difficult quarter in Q4 in North America. However, let's take into consideration that we have been growing organically in this market by more than 6% in 2025.
Speaker #2: We have been gaining shelf flow spaces. We have been entering into channels, like the contract channels, in a very significant manner. We have been ramping up strength in Q1 to cruising altitude today.
Yannick Fierling: We have been gaining shelf flow spaces. We have been entering into channels like the contract channels in a very significant manner. We have been ramping up Springfield in Q1 to cruising altitude today. Yes, this market is extremely difficult because of tariff, but producing in North America, the vast majority of our products, we are well-placed moving forward. In terms of profitable growth, we have been declaring the target of growing by about 4%, mid- to long-term, during the Capital Market Update. We have been growing in 2025 by 3.9%, after a strong growth as well in 2024. So we are restarting to grow in Electrolux after having lost quite a lot of scale in the past years. We have been strengthening our market position. We have been launching a lot of great innovations in 2025.
Speaker #2: Yes, these markets are extremely difficult because of tariffs, but producing in North America the vast majority of our products, we are well placed moving forward.
Speaker #2: In terms of profitable growth, we have been declaring the target of growing by about 4% mid- to long-term during the capital market update.
Speaker #2: We have been growing in 2025 by 3.9% after a strong growth as well in 2024. So we are restarting to grow in aircraft after having lost quite a lot of scale in the past years.
Speaker #2: We have been strengthening our market position. We have been launching a lot of great innovations in 2025. I would just mention some of them.
Yannick Fierling: I would just mention some of them. I mean, we have been presenting the pizza features. I mean, we have been launching this feature in North America very successfully in Europe. We had new kitchen lines, in Europe as well on the AEG and Electrolux. We have been launching our new dishwasher in 2025 as well. Lots of innovations here. Innovations, we have been fueling once again, with, marketing spending. Cost reduction, we're proud to say that, I mean, we have been reaching the SEK 4 billion. It was a challenging target we put in front of ourselves here. We communicated a goal between SEK 3.5 and 4 billion in the last month. We have been reaching the upper spectrum here, but more importantly, we have a very solid in place in the company to keep on delivering cost savings moving forward.
Speaker #2: I mean, we have been presenting the pizza features. I mean, we have been launching this feature in North America very successfully. In Europe, we had new kitchen lines in Europe as well under AEG and Electrolux.
Speaker #2: We have been launching our new dishwasher in 2025 as well. Lots of innovation is here—innovations we have been fueling once again with marketing spending.
Speaker #2: Cost reduction—we're proud to say that, I mean, we have been reaching the $4 billion. It was a challenging target we put in front of ourselves here.
Speaker #2: We communicated a 4 between 3.5 and 4 billion in the last quarter. We have been reaching the upper spectrum here. But more importantly, we have a very solid plan in place in the company to keep on delivering cost savings moving forward.
Yannick Fierling: Last but not least, it is about culture. It is about leadership. And I always said, my objective is to combine 120 years of history of Electrolux with all the changes we see in the market right now in order to drive more speed and agility. And that's the perfect bridge to the next slide. We have four very clearly defined strategic drivers, which are, first, our bread and butter, customer preferences. The second one is about lifetime value creation, sitting next to our customers along the consumer journey, from the purchase to the disposal of the appliances. It is about cost leadership and certainly about cash. But all of that will only be possible if we have key enablers on the right-hand side, and one of them is about culture.
Speaker #2: Last but not least, it is about culture. It is about leadership. And I always said my objective is to combine 120 years of history of electronics with all the changes we see in the market right now in order to drive more speed and agility.
Speaker #2: And that's the perfect bridge to the next slide. We have four very clearly defined strategic drivers, which are, first, our bread and butter—customer preferences. The second one is about life value creation, sitting next to our customers along the consumer journey, from the purchase to the disposal of the appliances.
Speaker #2: It is about cost leadership, and certainly about cash. But all of that will only be possible if we have key enablers on the right-hand side.
Speaker #2: And one of them is about culture. And that's why we're happy to announce today a second wave of organizational changes, and the aim of these organizational changes is to get us closer to the end consumers in order to be able to listen to them and innovate more and more, and bring progress in their homes.
Yannick Fierling: That's why we're happy to announce today a second wave of organizational changes. The aim of these organizational changes is to get us closer to the end consumers, you know, to be able to listen to them and innovate more and more and bring progress in their homes. These new wave of organizational changes clarify role, reducing duplication of responsibilities moving forward. We will be faster, we will be more agile, having end-to-end clear accountability in the organization. I'm moving now to the market and business outlook. During Q4, market demand in Europe decreased, with geopolitical and macroeconomic uncertainty weighing on consumer sentiment. Consumers continued postponing discretionary purchases, and demand for built-in kitchen products remained subdued. In a longer perspective, it is important to remember that the European market is on a 10-year low.
Speaker #2: These new waves of organizational changes clarify the role, reducing duplication of responsibilities moving forward. We will be faster; we will be more agile, having end-to-end clear accountability in the organization.
Speaker #2: I'm moving now to the market and business outlook. During the fourth quarter, market demand in Europe decreased, with geopolitical and macroeconomic uncertainty weighing on consumer sentiment.
Speaker #2: Consumers continued postponing discretionary purchases, and demand for built-in kitchen products remained subdued. In a longer perspective, it is important to remember that the European market is at a 10-year low.
Speaker #2: Again, we have been losing 1% in the fourth quarter 2025. Looking at 2026, we expect market
Yannick Fierling: Again, we have been losing 1% in Q4 2025. Looking at 2026, we expect market demand to be neutral. There are signs of recovery as a consequence of lower inflation and interest rates. However, market demand is expected to remain subdued due to continued geopolitical uncertainty. Now, moving to North America. In North America, market demand remained resilient in the fourth quarter with a +1%. The industry market price adjustments did not reflect the implemented US tariff structure, and competitive pressure and promotional activity remained high, and we decreased prices in the quarter. In 2026, we expect market demand to be neutral to neutral negative. Geoeconomic uncertainty is forcing to remain in North America, and under the current tariff structure, general market pricing should adjust to reflect associated tariff costs. This may adversely impact consumer demand and market growth.
Speaker #1: Demand to be neutral . There are signs of recovery as a consequence of a low inflation and interest rates . However , market demand is expected to remain subdued due to continued geopolitical uncertainty .
Speaker #1: Now moving . However , market demand is expected to remain subdued due to continued geopolitical uncertainty . Now moving to North America , North America .
Speaker #1: Market demand remains resilient in the fourth quarter , with a market plus adjustments did 1% . The not industry reflect the implemented US tariff structure and competitive promotional pressure and activity remained high , and we prices in decreased the quarter .
Speaker #1: In 2026, we expect market demand to be neutral to neutral-negative. Geoeconomic uncertainty is foreseen to remain in North America, and with the recurrent tariff structure, general market pricing should adjust accordingly.
Speaker #1: Reflect associated tariff costs. This may adversely impact consumer demand and market growth. Consumer demand is estimated to have increased in Latin America in the fourth quarter.
Yannick Fierling: Consumer demand is estimated to have increased in Latin America in Q4. Competitive pressure increased in the region, most notably in Argentina, where the strong growth was driven mainly by imported goods. Consumer demand grew in Brazil, although at a slower pace than in Q4 2024, mainly due to inflationary pressure and high interest rates affecting consumer spending. Brazil will have elections in 2026, which might elevate uncertainties, and we expect market demand to be neutral, with a stabilizing consumer demand following growth in 2024 and in 2025. Let me turn to the business outlook, 2026. Volume, price, and mix is expected to be positive in 2026, driven by volume growth and growth in the focus categories. This is expected to be partly offset by a negative price development.
Speaker #1: Competitive pressure increased in the region . Most notably in Argentina , where the strong growth was driven mainly by imported goods . Consumer demand grew in Brazil , although at a slower pace than in the fourth quarter of 2024 , mainly due to inflationary pressure and higher interest rates affecting consumer spending .
Speaker #1: Brazil will have elections in 2026, which might elevate uncertainties, and we expect market demand to be neutral, with the stabilization of consumer demand following growth in 2024 and 2025.
Speaker #1: Let me turn to the business outlook. 2026 volume, price, and mix is expected to be positive in 2026, driven by volume growth and growth in the focus categories.
Yannick Fierling: We anticipate that the high degree of demand will continue to be driven by replacement purchases. We expect investments, innovation, and marketing to increase in 2026, again, to fuel our new products. New product launches provide us with a great platform to continue driving growth in our focus categories. Our focus on cost saving and improved efficiency throughout the group is critical for our competitiveness, and we anticipate, again, SEK 3.5 to 4 billion earning contributions from cost efficiency in 2026. External factors are expected to be significantly negative for the year, driven mainly by increased tariff costs. The impact from currency and raw material is expected to be relatively neutral. The full year capital expenditure is expected to increase to approximately SEK 4 billion. With that, I close, and I hand it out to you, Ann-Sofi.
Speaker #1: This is expected to be partly offset by a negative price development. We anticipate that the high degree of demand will continue to be driven by replacement purchases.
Speaker #1: We expect investments in innovation and marketing to increase in 2026. Again, to fuel our new products, new product launches provide us with a great platform to continue driving growth in our focus categories.
Speaker #1: Our focus on cost savings and improved efficiency throughout the group is critical for our competitiveness, and we anticipate again contributions from €3.5 to €4 billion in earnings cost efficiency in 2026.
Speaker #1: External factors are expected to be significantly negative for the year, driven mainly by increased tariff costs. The impact from currency and raw material is expected to be relatively neutral.
Speaker #1: The full capital expenditure is expected to increase to approximately SEK 4 billion. With that, I close and I hand it over to you and Sophie.
Therese Friberg: Thank you. So we will open up for Q&A, and we will start by opening up for questions on the telephone conference.
Speaker #2: Thank you. So we will open up for Q&A, and we will start by opening up for questions on the telephone conference.
Operator: Thank you. If you would like to ask a question via the telephone, please press star one and one on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star one and one again. Alternatively, if you wish to ask questions via the webcast, please type it into the box and click submit. One moment for our first question. We will now take our first question from the line of Fredrik Ivarsson from ABG Sundal Collier. Please go ahead.
Speaker #3: Thank you. If you would like to ask a question via the telephone, please press star one and one on your telephone keypad and wait for your name to be announced.
Speaker #3: To withdraw your question, please press star one and then one again. Alternatively, if you wish to ask questions via the webcast, please type them into the box and click Submit.
Speaker #3: A moment for our first question. We will now take our first question from the line of Frederick Everson from ABG Sandell College.
Fredrik Ivarsson: Thank you. Good morning. Thanks for the presentation. First, on North America, if you could help us out a little bit with the bridge in Q4, as the losses increased by almost SEK 200 million in the quarter. I presume tariffs and FX played a significant role, as you alluded to, but if you could help us out with that, that would be helpful. Also if you have any view on the inventory situation in the US market today, with some focus on the non-domestic players.
Speaker #3: Please go ahead .
Speaker #4: Thank you . Good morning . Thanks for the presentation . First on North America , if you could help us out a little bit with the bridge in in Q4 as the losses increased by almost 200 million in the quarter .
Speaker #4: I presume tariffs and FX played a significant role, as you alluded to. But if you could help us out with that, that would be helpful.
Speaker #4: And also, if you have any view on the inventory situation in the US market today, with some focus on the non-domestic players.
Yannick Fierling: I can start with that, Fred. Thanks for your question and good morning. I think the main impact, as we said previously, here, is the fact that we have been reducing our prices. In all fairness, as we said, we were able to compensate for the vast majority of the tariff impact in Q2 and Q3. That was due to the competitive pressure we have been observing in Q4, unfortunately not possible. We had, during the quarter, to take the difficult decision to reduce our prices. That's the first aspect. The second one, as you said, is certainly tariff. Tariff and the devaluation of the US dollar, which has been weighing pretty significantly in the negative external factors we had to face in the fourth quarter. So that's it.
Speaker #1: I can start with that . Frederick , thanks for your question and good morning . I think the main impact , as we said previously here , is the fact that we have been reducing our prices .
Speaker #1: In all fairness, as we said, we were able to compensate for the vast majority of the tariff impact in Q2 and Q3.
Speaker #1: That was due to the competitive pressure we have been observing in Q4 , and unfortunately , not possible . And we had during the quarter , we had to take the difficult decision to reduce our prices .
Speaker #1: That's the first aspect . The second one , as you said , is certainly tariff , tariff . And the deviation of the US dollar , which has been waiting pretty significantly in the negative external factors we face fourth quarter .
Yannick Fierling: I mean, as I said previously, I mean, prices have been bouncing back pretty quickly post Black Friday in North America, to last year level. Our last year level is not enough to compensate for tariff. Now, I mean, it's very important to just repeat and remind everybody about the basics. Imported duty goods out of Southeast Asia are taxed today between 15% and 20%. Out of China, it's between 55% and 60%. We have competitors which are massively importing out of these regions. So if the industry is reacting rationally, what we should be seeing, what we should be expecting in the coming quarters is certainly a price increase. Now, to your last question about inventory, I mean, we have been mentioning it very clear as well in the last report.
Speaker #1: the had to in So that's it . I mean , as I said mean , previously , I prices have been bouncing back pretty quickly .
Speaker #1: Post Black Friday in North America to last year level. Our last year level is not enough to compensate for tariff. Now.
Speaker #1: I mean, it's very important to just repeat and remind everybody about the basics. Imported duty goods out of Southeast Asia are taxed today, between 15% and 20%. Out of China.
Speaker #1: It's between 55 and 60% . We have competitors which are massively importing out of these regions . So if the industry is reacting rationally , what we should be seeing , what we should be expecting in the coming quarters is certainly a price increase .
Yannick Fierling: I mean, we expect the last goods to be arrived without the full tariff impact, to have arrived in North America, beginning of October. I think it is wise to see or think that most of these goods have been consumed during the promotional season on Black Friday. So I think most probably what will be remaining today in the North American market are goods which are fully impacted by the tariff level I mentioned previously.
Speaker #1: Now, to your last question about inventory. I mean, we have been mentioning it very clearly as well in the last report.
Speaker #1: I mean, we expect the last goods to have arrived without the full tariff impact, to have arrived in North America at the beginning of October.
Speaker #1: I think it is wise to see or think that most of these goods have been consumed during the promotional season on Black Friday, so I think most probably what will be remaining today in the North American market are goods which are fully impacted by the tariff level.
Therese Friberg: And maybe we can just add that the vast majority of the headwinds we had for the group in external factors is related to North America. So that's the, let's say, that's the magnitude of the headwinds we saw that we were then again not able to offset with price increases. But the underlying performance then in from the business was strong.
Speaker #1: I mentioned previously .
Speaker #5: And maybe we can just add that the vast majority of the headwinds we had for the group in external factors is related to North America.
Speaker #5: So that's the let's say that's the magnitude of the headwinds . We we saw that we were then again , not able to offset with with price increases .
Speaker #5: But the underlying performance then from the business was positive.
Fredrik Ivarsson: ... Yeah, that, that's very clear. I think I, I lost you a little bit, in the end, but that, that's a super clear answer. Thank you. And, and then second one on LATAM, quick, if, if you could just talk about that one time, high level of, of supplier rebates, in, in the quarter. How much did that sort of add to the margin, which was obviously very high?
Speaker #4: So that that's very clear . I think I , I lost you a little bit in the end . But that that's a super clear answer .
Speaker #4: Thank you . And then second one on Latam quick . If you could just talk about that one time , high level of supplier rebates in the quarter , how much did that of add to sort the margin , which was obviously very high ?
Yannick Fierling: First of all, we're very proud about the earnings we do have in LATAM. I think again, I mean, LATAM is delivering very strong results in 2025, and believe me, it is thanks to our strategy, and it's not a short-term strategy, a long-term strategy we have been putting in place in the region here in terms of product leadership, I mean, go-to market. So that's the first point, and we should be underlining that. Certainly, we are stressing the fact that, I mean, we had a one-time supplier rebate at the end of the quarter. I mean, this supplier rebate is not material for the group. It is relevant for the region, and that's why we have been mentioning it, but I want to underline that it's not material for the group.
Speaker #1: First of all , we are very proud about the earnings . We in Latam . I think , again , I mean , Latam is delivering very strong results in 2025 and believe me , it is thanks to our strategy and it's not a short term strategy , a long term strategy .
Speaker #1: We have been putting in place in in the region here in terms of product leadership , I mean , go to market . So that's the first point .
Speaker #1: And we should be underlining that we . Certainly are we are stressing the fact that , I mean , we had a one timer supply rebate at the end of the quarter .
Speaker #1: I mean, these supply rebates are not material for the IT IS group. They are relevant for the region, and that's why we have been mentioning it.
Fredrik Ivarsson: Okay, thanks. And just one last housekeeping before I jump back into the queue. If you have any guidance on the group costs for 2026, since they were fairly low last year. I guess you mentioned a timing impact there, Therese, but if you could help us out with some expectations for 2026, that would be helpful.
Speaker #1: But I want to underline that it's not material for the Group.
Speaker #4: Okay, thanks. And then just one last housekeeping item before I jump back into the queue. If you have any guidance on the costs group for 2026, since they were fairly low.
Speaker #4: Last year , I guess you mentioned a timing impact there , but if you could help us out with some expectations for 26 , that that would be helpful .
Therese Friberg: Yeah, I would say for the full year, I could say that it is a little bit on the, on the low side. Of course, we will try to really keep very high cost containment in the, in the group common cost, but also for the full year, I would say it is a little bit on the, on the low side, as an indication.
Speaker #5: Yeah , I would say for the full year I would say that it is a little bit on the on the low side , of course , we will try to really keep very high cost containment in the in the group common costs , but also for the full year , I would say it is a little bit on the on the low side as an indication .
Fredrik Ivarsson: You mean 2025 was on the low side?
Therese Friberg: Yeah, exactly.
Fredrik Ivarsson: So high, high in 2026. Okay, good. Thank you.
Yannick Fierling: Bye.
Speaker #4: You mean 2025 was on the low side?
Operator: Thank you. We will now take our next question from the line of Johan Eliason from SB1 Markets. Please go ahead.
Speaker #5: Yeah , exactly .
Speaker #4: So, hi. High in 26, okay. Good. Thank you.
Speaker #1: Thank .
Speaker #3: Thank you. We will now take our next question from the line of Johan Ellison from SB1 Markets. Please go ahead.
Johan Eliason: Good morning, Yannick, Therese, and Ann-Sofi. Thanks for taking my questions. Also, sort of relating to the pricing component, you also mentioned pricing negative in Europe and restoration, I guess. It's mainly Europe. Is that the sort of... You talked about the trade-down, but I think it sounded like you have a lot of new products coming in, in AEG and Electrolux brand. Is it so that you also sort of discounted out some of the older products still remaining, and then the pricing should somehow then be a little bit of a temporary issue, or is that wrong on me to think like that?
Speaker #6: Good morning Yannick Terrace and and Sophie thanks for taking my questions . Also sort of relating to the pricing . You component also mentioned pricing negative in Europe and the rest of Asia .
Speaker #6: I guess it's mainly Europe . Is that sort of you talked about the trade down , but but I think it sounded like you have a lot of new products coming in in G .
Speaker #6: And Electrolux brand. Is it so that you also sort of discounted out some of the older products still remaining? And the pricing should somehow then be a little bit of a temporary issue, or is that wrong of me to think like that?
Yannick Fierling: Good morning, Johan. Thanks for the question. It's an important question, it's here. First of all, I mean, mix and volume have been positive in Europe, in the fourth quarter. And I think, I don't know how familiar you are with the concept of price index, but price index being basically at 100 would be the average of the prices here. What is very important for us, and we have been fighting for that, is to keep the price index we had throughout the year for both Electrolux and AEG. So we absolutely have been, very directive on keeping the brand positioning, in the regions. And actually, our price index has been even going slightly up.
Speaker #1: Good morning . Thanks for the question . It's an important question here . First of all , I mean mix and volume have been positive in Europe in the fourth quarter , and I think , I don't know how familiar you are with the concept of price index , but price index being basically at 100 would be the average of the prices here .
Speaker #1: What is very important for us, and we have been fighting for that, is to have throughout the year for both Electrolux, keep the index we use to price, and AG.
Speaker #1: So we absolutely have been very directive on keeping the brand positioning in the regions. And actually, our price index has been even going slightly up.
Yannick Fierling: So the decision we took now, a couple of years ago, to exit the entry price point and really focus on the core plus and premium segment, has been the right decision. And we are occupying today and growing into these two segments, which are core plus and premium segments. Where the big price war is going on, even in a more fierce manner, is certainly in the entry price point segments, where we have more new entrants putting pressure on the price level. And that's taking a little bit down the entire European market.
Speaker #1: So, the decision we took now a couple of years ago to exit the entry price point and really focus on the core plus and premium segment has been the right decision.
Speaker #1: are And we occupying today and growing into these two segments , which are core plus and premium segments . We have a big price war is going on even in a more fierce manner , is certainly in the entry price point segments where we have more new entrants putting pressure on the price level .
Yannick Fierling: I think what is very important for us is, again, to leverage our brand, to leverage the strength of our brand, leverage innovation we are putting here in the market, and actually occupy and grow where we belong, which are the core plus and premium segments, in the market.
Speaker #1: And that's taking a little bit down the entire European market . I think what is very important for us is , again , to leverage our brand to leverage the strength of our brand , leverage the innovation putting we are here in the market and actually occupy grow where and we belong , which are the core plus and premium segment in in the market .
Johan Eliason: Good. Then just on your pricing outlook again. You say price mix and volume to be positive in 2026, and then you focus on volume and the mix, sounding like prices could be negative for full year on the group level. Then your comments on US prices have to adapt to the tariff level leaves me with the thinking that pricing should then be negative in sort of Europe, Asia, and Brazil. Apart from Europe, where we discussed the stuff in the entry level, what about Brazil? It seems like you were more comfortable with the Q4 development than Whirlpool were in their outlook statement.
Speaker #6: Good . And then just on on your pricing outlook , again , you say price mix and volume to be positive in 26 and then you focus on on volume and the mix .
Speaker #6: Something like prices could could be be negative for for full year on the group level . Then your comments on on US prices have to adapt to the tariff level .
Speaker #6: Leaves me with the thinking that that pricing should then be negative in sort of Europe , Asia and Brazil , apart Europe , where we from discussed in the as tough level , what what about Brazil ?
Speaker #6: It's it's you entry like were more at more comfortable with the Q4 development than , than whirlpool were in their outlook statement .
Yannick Fierling: No, I think, I think you're absolutely right, first of all, to divide this question per region, because the answer will be slightly different region by region. First, I think, if you look at Europe and Asia, we're absolutely expecting the price pressure to continue moving forward. I mean, we will have more and more pressure, as I said, especially on the low-end segment and entry price point segment, and we need to defend basically the value on the core plus and premium segment. In Latin America as well, you are absolutely right. I mean, to mention Brazil and Latin America, we have price pressures in Latin America as well. We have new entrants coming out of Asia, as well in Latin America and as well in Brazil. However, once again, I mean, our position is pretty clear.
Speaker #1: No , I think I think you're absolutely right . First of all , to divide this question per region , because the answer different will be slightly region by region .
Speaker #1: First, I think if you look at Europe and Asia, we are absolutely expecting the price pressure to continue moving forward. I mean, we will have more and more pressure.
Speaker #1: As I said, especially on the low-end segment and entry price point segment. And we need to defend, basically, the value on the core plus and premium segment in Latin America as well.
Speaker #1: You're absolutely right . I mean , to mention Brazil and Latin America . We have price pressures in Latin America as well , with new entrants coming out of Asia as well in Latin America , and as well in Brazil .
Yannick Fierling: We are playing in Latin America as well, in core plus and premium, and the new entrants are mainly playing in the low-end segments, and that's why we are gaining and we keep on gaining value market share in this region. And in all fairness, I mean, we're the biggest - the battle is getting played in the entry price points here. So we're redefining our go-to market, we're redefining our innovation in Latin America, the strength of our brand. The brand is very strong in Latin America, and we're executing here. The last one is, of course, North America. Here in North America, it would very much depend if the industry would be reacting rationally now to the tariff structure.
Speaker #1: However , once again , I mean , our position is pretty clear . We are playing in Latin America as well in corporates and premium .
Speaker #1: And the new entrants are mainly playing in the low-end segments. And that's why we are gaining, and we keep on gaining value.
Speaker #1: Market share in this region. And in all fairness, I mean, where the biggest battle is getting played is in the price points here.
Speaker #1: So we're really defending our go to market , where redefining our innovation in Latin America , the strength of our brand , the brand is very strong in Latin America .
Speaker #1: And we're executing here. The last one is, of course, North America. Here in North America, it would very much depend if the industry would be reacting rationally.
Yannick Fierling: As we said many, many times, but I think it's worth repeating, the current tariff structure is benefiting the local producers, and we're only three major local producers in North America, under the condition, of course, that I mean, prices will be moving up. Otherwise, you just need to absorb the tariff structure in the negative external factors. So I think it will be very interesting to observe moving forward, what the price evolution will be in North America. I would just finish by one point, which is extremely critical here, is that, I mean, we certainly are expecting higher pressure moving forward on prices. And it's making cost reduction and cost efficiency even more important moving forward.
Speaker #1: Now to tariff structure . As we said , many , many times . But I think it's worth repeating . Vikrant tariff structure is benefiting the local producers and we're only three major local producers in North America under the condition , of course , that prices would be moving up .
Speaker #1: Otherwise, you just need to absorb the tariff structure in the negative external factors. So I think it would be very interesting to observe, moving forward, what the price evolution will be in North America.
Speaker #1: I would just finish by one point, which is extremely critical here, and that is, I mean, we certainly are expecting higher pressure moving forward on prices, and it's making cost reduction and cost efficiency even more important moving forward.
Yannick Fierling: That's why we're putting, as well, so much emphasis on getting more efficient, preserving, of course, the quality of our products, preserving consumer preference for our products here, but getting more efficient as a company such that we can mitigate the price pressure we'll be encountering in the free markets.
Speaker #1: And that's why we are putting as well , so much emphasis on getting more efficient preserving . Of course , the quality of our products , preserving consumer preference for our products here , but getting more efficient as a company such that we can mitigate the price pressure will be encountering in the free markets .
Operator: Okay, excellent. Thank you very much.
Yannick Fierling: Thank you, Johan.
Ann-Sofi Jönsson: Thank you. We will now take our next question from the line of Uma Samlin from Bank of America. Please go ahead.
Speaker #6: Okay, excellent. Thank you very much.
Speaker #1: Thank you . Johan .
Speaker #3: Thank you. We will now take our next question from the line of Wilma Semlin from Bank of America. Please go ahead.
Uma Samlin: Hi, good morning, everyone. Thank you so much for taking my question. My question is on the raw material front. I mean, given a lot of the raw material used, as steel, for example, has, you know, the price has increased quite a lot over the past, past few months. I was wondering that, how do you think about that going forward? It seems like you think it will be neutral, when it comes to raw material impact in 2026, in your, slides. Just wondering how does that work, and how should we think about that? That's my first question.
Speaker #7: Hi . Good morning everyone . Thank you so much for taking my question . My question is on the raw material front . I mean , given a lot of the roadmap that you and still , for example , has , you know , the price has increased quite a lot over the past past few months .
Speaker #7: I was wondering, how do you think about that going forward? It seems like you think it will be neutral when it comes to raw material impact.
Speaker #7: In 2026... In your slides, just wondering, how does that work and how should we think about that? That's my first question.
Yannick Fierling: Good morning. Absolutely. Good morning. What we said, and just to be very precise, is that, I mean, the impact from currency and raw material is expected to be relatively neutral. But then let me put a little bit of flavor on that. As you know very well, we are hedging. We're hedging our plastic material, and we're hedging even on a longer time period, I mean, steel. So I think we have been hedging part of plastic, and we have been hedging part of steel. What we see right now, of course, is a potential increase in steel in North America because of tariff. So that's what we're expecting here. So I think we see pressure on the steel side of equation on North America.
Speaker #1: Absolutely . Good morning . What we said , just to be very precise , is that , I the impact from currency and raw material is expected to be relatively neutral .
Speaker #1: But let me put a little bit of flavor on that. As you know very well, we are hedging. We're hedging our plastic material, and we're hedging even on a longer time period.
Speaker #1: I mean , still . So I think we have been hedging part of plastic and we have been hedging part of steel . What we see right now , of course , is a potential increase in steel in North America because of tariff .
Yannick Fierling: However, if you balance, I mean, currency together with raw material, we see that to be relatively neutral moving forward. Therese, you want to add anything on that? No, it's very good.
Speaker #1: So that's what we're expecting here . So I think we see pressure on the steel side of equation on on North America . However , you balance I mean currency together with raw material , we see that to be relatively neutral moving forward , you want to add anything on that .
Uma Samlin: Okay, thank you very much. Just a follow-up on North America. I was wondering, like, what are the dynamics you're currently seeing in Q1 post the Black Friday period? I mean, obviously, I guess, you know, you can understand that a lot of the inventory has been perhaps still there for the Black Friday promotion period. But after that, I guess, you know, previously you've said that you expect pricing to normalize, stabilize going forward, because it wouldn't make sense for the, especially, you know, the Asian competitors, not to compensate for the tariffs. So just wondering, you know, what are you seeing today on the market? Are you seeing the similar dynamics so far in January as in Q4, or are you seeing any improvement there?
Speaker #1: Very good .
Speaker #7: Okay . Thank you very much . And just a follow up on North America . I was wondering like what are you what are the dynamics your currently seeing in Q1 post the Black Friday period ?
Speaker #7: I mean, obviously, I guess you can understand that a lot of the inventory has been, perhaps, still there for the Black Friday promotion period.
Speaker #7: But after that , I guess , you know , previously you've said that you expect pricing to normalize , stabilize going forward because it wouldn't make sense for the especially , you know , the Asian competitors not to compensate for the tariffs .
Speaker #7: So just wondering , you know , what are you seeing today on the market . Are you seeing the similar dynamics so far in January as in Q4 , or are you seeing any improvement there ?
Yannick Fierling: I think, of course, I mean, we're not be discussing in detail about Q1. What I can tell you is that, as I said, I mean, prices have been bouncing back in December to last year level post Black Friday, and they have been bouncing back quicker, I would say, compared to 2024 post Black Friday. I think I'm stating the obvious to all of you here, but, I mean, there has been quite a lot of discussions around tariff as well with the Supreme Court. And I think this discussion probably has been inducing doubts on how a sustainable tariff would be moving forward or if there will be changes. So I think now it's pretty clear that, I mean, a decision will not be, has not been happening in the first weeks.
Speaker #1: I think . Of course , I mean , we're not be discussing in detail about Q1 . What I can tell you is that , as I said , I mean , prices have been bouncing back in December to last year level post Black Friday , and they have been bouncing back quicker .
Speaker #1: say would , compared I to 2020 for post Black Friday , I think I'm the obvious to all of stating you here , but I mean , there has been quite a lot of discussions around tariff as well with the Supreme Court , and I think these discussions probably has been inducing doubts on how sustainable tariff would be moving forward , or if it would be changes .
Yannick Fierling: So again, with the level of tariff we're having out of Southeast Asia and China, rationally, I mean, we should see movements, at least, in the market.
Speaker #1: So I think now it's pretty clear that a decision will not be has not been happening in the first weeks . So again , with the level of tariff we're having out of Southeast Asia and China , rationally , I mean , we should see movements at least in the market .
Uma Samlin: Okay, thank you very much.
Therese Friberg: We have seen prices sequentially, we have seen prices then, then improving post Black Friday, but it's, we're not really seeing price increases to offset the current tariff structure.
Speaker #7: Okay . Thank you .
Speaker #5: We have seen prices sequentially . We have seen prices . Then then improving . Post Black Friday . But it's we're not really seeing price increases to offset the current tariff structure .
Uma Samlin: Okay, thank you very much. Really, really helpful.
Ann-Sofi Jönsson: We have a few questions from the web, as well. Here is one that is a little bit repetitive to what we have been speaking about. But are 2026 savings enough to offset external headwinds and color on where external headwinds will have the main impact?
Speaker #7: Okay. Thank you very much. Really, really helpful.
Speaker #2: We have a few questions from the web as well. And here is one that is a little bit repetitive to what we have been speaking about.
Speaker #2: But are our 2026 savings enough to offset external headwinds? And could you give some color on where external headwinds will have the main impact?
Yannick Fierling: Yes. I think, again, we, it's very difficult to say. I mean, we don't know exactly all how currency will be moving on, very difficult to predict, here on the matter. What we say is that, I mean, we're setting, again, very ambitious targets in terms of cost reduction, which is between SEK 3.5 and 4 billion in 2026 here. And I think it will be of prime importance to deliver on this target to face any type of headwinds we will see on terms of price pressure, tariff, and others moving forward. But again, as I said, I mean, tariff, we were not able to compensate, at least in Q4, via full tariff impact, through our pricing strategy.
Speaker #6: Yes .
Speaker #1: I think I think again , we it's very difficult to say . I mean , we don't know exactly all how currency will be moving on .
Speaker #1: Very difficult to predict here on on the matter what what we say is that , I mean , we're setting again very ambitious targets in terms of cost reduction , which is between 3.5 and 4 billion in 2026 here .
Speaker #1: And I think it will be of prime importance to deliver on this target to face any type of headwinds. We will see in terms of price pressure, tariff, and others moving forward.
Speaker #1: But again , as I said , I mean tariff , we were not able to compensate , at least in Q4 via full tariff impact through our pricing strategy .
Therese Friberg: ... And on external factors, of course, as we've talked about, we expect currency and raw material with the current levels and the, let's say, current hedging to be essentially flat right now. But then, of course, we have significant headwind still year over year in tariffs, and then we are still having some inflation. So we're still having, of course, some high inflation countries that will also be a negative impact, a little bit then, yeah, broader across the regions.
Speaker #5: And on external course , as we've factors . Of talked about , we expect currency and raw material with the current levels and the current hedging to be essentially flat right now .
Speaker #5: But and then , of course , we have significant headwinds still year over year in , in , in tariffs . And then we are still having some inflation .
Speaker #5: So we're still having, of course, some high-inflation countries that will also be a negative impact a little bit, then, on the broader across the regions.
Yannick Fierling: Thanks, Therese.
Ann-Sofi Jönsson: Thank you very much, Therese. Now we go back to the conference call again.
Operator: Thank you. We will now take our next phone question from the line of Akash Gupta from JP Morgan. Please ask your question.
Speaker #1: Thanks .
Speaker #8: Tess .
Speaker #2: Thank you very much. Now we go back to the conference call again.
Speaker #3: Thank you. We will now take our next question from the line of Aakash Gupta from JP Morgan. Please ask your question.
Akash Gupta: Yes. Hi, good morning, Yannick and Therese. I have a couple of questions as well. The first one is on external factors. I think you said you're expecting significant, but I was wondering if you can help us quantify a bit. So if you look at in second half last year, on average, you had SEK 700 million-ish external factor, with SEK 1.5 billion in second half, primarily coming from tariffs. So is it fair to say that when we look at 2026, probably we should expect similar SEK 1.5 billion external headwind in first half, before it might goes down a bit in second half because you have the same base as year before, and therefore overall external factors, based on how it looks today, could be somewhere below SEK 2 billion.
Speaker #9: Yes . Hi . Good morning , Yannick and Therese . I have a couple of questions as well . And the first one is on external factors .
Speaker #9: I think you said you were expecting significant , but I was wondering if you can help us quantify a bit . So if we look at in second half last year , on average , you had 700 million ish external factor with 1.5 billion in second half , primarily coming from tariffs .
Speaker #9: So, is it fair to say that when we look at 2026, we should probably expect a similar SEK 1.5 billion external headwind in the first half, before it might go down a bit in the second half, because you have the same base as the year before? And therefore, overall, external factors—based on how it looks today—could be somewhere below SEK 2 billion.
Akash Gupta: Would that be a good estimate?
Therese Friberg: Yeah, of course, we are not that specific, but your overall rationale seems like a reasonable logic.
Speaker #9: Would that be a good estimate?
Yannick Fierling: I would just remind everybody that in the fourth quarter, at least in the external factors, we're split between tariff and currency, and the depreciation of the US dollar.
Speaker #5: Yeah, of course we are. Not that specific, but your overall rationale seems like a reasonable logic.
Speaker #1: I would just remind everybody that in the fourth quarter, at least in the external factors, were split between tariff and currency, and the depreciation of the dollar.
Akash Gupta: Thank you. And my second question is on your cost efficiency. Again, the number you guided for 2026, coming in ahead of what people were expecting. Maybe can you tell us about where is it coming from, which geographies, which product lines, and will there be any cost to get this cost efficiency that might lead to some one-off below the line? And also, when we look at the phasing of these cost efficiency, I mean, can you give an indication? Last year we had a very big Q4. How should, how shall we think about, you know, the spread between first half, second half, this year? Thank you.
Speaker #9: Thank you. And my second question is on your cost efficiency. Again, the number you guided for 2026 is coming in ahead of what people were expecting.
Speaker #9: But maybe, can you tell us about where it is coming from, with geographies, which product lines, and will there be any cost to get this cost efficiency that might lead to some one-off below the line?
Speaker #9: And also when we look at the phasing of these cost efficiency , I mean , can you give any indication last year we had a very big Q4 , how should how should we think about , you know , the spread between first half , second half this year ?
Yannick Fierling: Thanks, thanks a lot for the question. I think it's an important question. I mean, as mentioned previously, we have been putting in place, end of 2023, actually, we started to put in place a cost excellence program in the company, which is a very well-structured program, a cross-functional program, heavily focused on engineering for design changes, procurement in terms of sourcing, and of course, conversion in our factory. I mean, we took some time to ramp up in 2024, and in 2025, I mean, this program has been delivering to the level we have been describing here on the SEK 4 million. It is, again, very much process-oriented. The program is the same across product categories, so I think there is no significant differences in terms of product categories here.
Speaker #9: Thank you .
Speaker #1: Thanks . Thanks a lot for for the question . I think it's an important question . I mean , as mentioned previously , we have been putting in place end of Actually we in place a cost to put 2023 .
Speaker #1: Thanks . Thanks a lot for for the question . I think it's an important question . I mean , as mentioned previously , we have been putting in place end of Actually we in place a cost to put excellence in the started company , which is a program structured program cross-functional heavily focused on on engineering for design changes , procurement in terms of sourcing and of course , conversion in our factory .
Speaker #1: I mean, we took some time to ramp up in 2024 and in 2025. I mean, this program has been delivering to the level we have been describing here on the 4 million.
Speaker #1: It is , again , very much process oriented . The program is the same across product categories . So I think there is no significant differences in terms of product categories here .
Yannick Fierling: It is as well, I mean, very well distributed across the different regions. So no major differences from product line to product line or from region to region. I think the important matter is really the systematic approach we have to address cost reduction and efficiency. And I think, of course, we'll be leveraging that moving forward.
Speaker #1: And it is as well. I mean, very well distributed across the different regions. So, no differences from product line to product line, or from region to region.
Speaker #1: I think the important matter is really the systematic approach we have to address cost reduction and efficiency. And I think, of course, we'll be leveraging that moving forward.
Akash Gupta: Thank you.
Operator: Thank you. We will now take our next question from the line of Timothy Lee from Barclays. Please go ahead.
Speaker #9: Thank you .
Speaker #3: Thank you. We will now take our next question from the line of Timothy Lee from Barclays. Please go ahead.
Timothy Lee: Hi, thanks for taking my questions. So, the first question, I would like to follow up a little bit on the Latin America, the supplier rebates. What's the nature of this, given it is one time, why it is not recurring? And, if you think about the margin, going forward, what level of margin should we expect, for the Latin American market, if we are not considering this, this supplier rebate to continue?
Speaker #10: Hi . Thanks for taking my questions . So the first question I would like to follow up a little bit on the Latin America , the supplier rebates .
Speaker #10: What's the nature of this, given this one time? Why is it not recurring? And if you think about the margin going forward, what level of margin should we expect for the Latin American market if we are not considering this supplier to continue?
Yannick Fierling: I want to repeat what I said previously. First of all, I mean, it's not exceptional. I mean, we have year-end rebates on the supplier side of the equation, and Michelle, our procurement lead, with the entire team, I mean, globally and in Latin America, have been doing an outstanding job in 2025 here, which have been driving to a one-timer significant rebate at year-end. But I want to repeat, I mean, and I think it's very important in terms of verbiage, I mean, this one-timer is not material for the group. It's only relevant for LatAm, and that's why I think it was very fair to mention it.
Speaker #1: I want to repeat what I said previously . First of all , I mean , it's not exceptional . I mean , we have year end rebates on the supplier side of the procurement lead with the equation team entire and , Michel , our , I mean , globally and in Latin America , have been doing an outstanding job in in 2025 here , been which have driving to a one timer significant rebate at year end .
Speaker #1: But I won't to repeat . I mean , and I think it's very important in terms of herbages . I mean , these one timer is not material for the group .
Yannick Fierling: On the other hand, I mean, if you look at, I mean, the three first quarters, and the last quarter is always the strongest one, in the year from a seasonality perspective, we have been delivering very well in Latin America for the three first quarters. And I think we had a great Black Friday, again, based on an outstanding work from the team, especially in Brazil, but as well in Latin America, which have been driving to these results. That's what I would be saying. For sure, I think it was worth mentioning with a one-timer, I mean, that's very fair, here, but I mean, that should not be undermining a really good ongoing results for non-Latin America.
Speaker #1: It's only relevant for Latam . And that's why I think it was very fair to mention it . On the other hand , I mean , if you look at , I mean , the three first quarters and the last quarter is always the strongest one in the year from a seasonality perspective , we have been delivering very well in Latin America for the three first quarters .
Speaker #1: And I think we had a great Black Friday , again , based on an outstanding work from the team , especially in Brazil .
Speaker #1: But as well in Latin America , which have been driving to these results . That's what I would be saying for sure . I think it was worth mentioning this one timer .
Speaker #1: I mean, that's a very fair mean here, but I think that should not be undermining a really good ongoing results for Latin America.
Therese Friberg: ... And while we wanted to mention it, it's not a one-timer if you look at it in the full year perspective. It is a one-timer in the sense that the full effect is happening in the fourth quarter, so that is what is then boosting a bit, additionally, let's say, the results, specifically in the fourth quarter for Latin America.
Speaker #11: And why we .
Speaker #5: Wanted to mention it . It's not a one timer . If you look at it in a full year perspective , it is a one timer in the sense that the full effect is happening in the in the fourth quarter .
Speaker #5: So that is what is then boosting a bit. Additionally, let's say the result specifically in the fourth quarter for Latin America.
Timothy Lee: It's fair to say that, you know, obviously, we have the seasonal factor. We have the seasonal stronger quarter in the fourth quarter, but this year is definitely much stronger. So, can I assume, you know, if we are not seeing these higher rebates than normal, it is probably the margin in the quarter is somewhat similar to what we had in the past quarters or in the previous year in terms of seasonality?
Speaker #10: It's fair to say that , you know , obviously we have the seasonal factor . We have the seasonal stronger quarter in the fourth quarter , but this year is definitely much stronger .
Speaker #10: So can I assume, you know, if we are not seeing these higher rates than normal, it is probably that the margin in the quarter is somewhat similar to what we had in the past quarter or in the previous year in terms of seasonality.
Yannick Fierling: And again, I want to, I want to repeat, I mean, there is always a seasonal effect. I mean, in our industry here, fourth quarter being the strongest quarter here, I mean, we cannot go much more into detail here dividing that, but I think the explanation we gave is the one. It is a strong quarter in Latin America. I mean, with the one-time rebate should not undermining the performance level in Latin America right now. And again, it is something which is not material for the group, but relevant for Latin America.
Speaker #1: Again , I want to I want to repeat I mean , there is always a effect . I mean , in our here , industry seasonal fourth quarter being the strongest quarter here .
Speaker #1: I mean , we don't we cannot go much more into detail here . Dividing that . But I think the explanation we gave is the one it is a strong quarter in Latin America .
Speaker #1: I mean , these one time rebate should not undermine the performance level in Latin America right now . And again , it is something which is not material for the group , but relevant for Latin America .
Therese Friberg: What we want to say is that Latin America has not reached a completely different profitability level. So I guess your conclusion of that, it is continuing to perform at a high underlying level, boosted by additional seasonality in the fourth quarter, and by this additional supplier rebate.
Speaker #5: And what we want to say is that Latin America has not reached a completely different profitability level . So I guess your conclusion of that , it is continuing to perform at the at a high underlying level , boosted by additional seasonality in the fourth quarter and by this additional supplier rebates .
Timothy Lee: Okay, understood. Thank you. My second question is on Europe. I think you also mentioned there was some positive effect on earnings due to the phasing of the innovation and marketing expenses between quarters. Can you elaborate a bit more on that? Does that mean there was some marketing expenses which probably deferred from Q4 to, let's say, Q1?
Speaker #10: Okay . Understood . Thank you . And my second question is on Europe , I think you also mentioned there was some positive effect on earnings due to the phasing of the innovation and market expenses between quarters .
Speaker #10: Can you bit more elaborate a on that ? The stack mean there was some marketing expenses , which probably differed from Q4 to , let's say , Q1 ?
Therese Friberg: No, not related to Q1, I would say, but it's more the phasing as well during the year, where specifically for Europe, we have had some additional marketing earlier in the year compared to last year. So it's only a phasing, I would say, within the year of 2025.
Speaker #5: No , not related to Q1 . I would say , but it's more the phasing as well . During the year where specifically for Europe , we have had some additional marketing earlier in the year compared to to last year .
Speaker #5: So, it's only phasing. I would say within the year of 2025.
Timothy Lee: Understood. And, my final question would be on your cash flow statement. I think, there was a provision that you released in Q4, SEK 476 million. Can you explain what's the item for this release?
Speaker #10: Understood. And my final question would be on your cash flow statement. I think there was a provision that you released in Q4, SEK 476 million.
Therese Friberg: No, that we don't recognize a large provision that was released. The main impact that we mentioned is the reduction of inventory of SEK 3 billion in working capital.
Speaker #10: Can you explain what's the item for this release?
Speaker #5: Now that we recognize don't a large provision that was that was released , the main impact that we mentioned is the reduction of of inventory of 3 billion in working capital .
Yannick Fierling: Yeah, and that's what we said. I mean, there was a very significant effort in Q4 to reduce our inventory in the three regions, and that's what we have been delivering.
Speaker #1: Yeah. And that's what we said. I mean, there was a very significant effort in the fourth quarter to reduce our inventory in the three regions.
Timothy Lee: All right, understood. Thank you.
Therese Friberg: Okay, thank you. And we have more questions from the web. So, the next question is, the leverage improved in the fourth quarter, but still the net debt remained rather high. So could you or do you have concerns about the debt, net debt level? Could you elaborate around that?
Speaker #1: And that's what we have been delivering.
Speaker #10: All right. Thank you.
Speaker #2: Okay. Thank you. And we have more questions from the web. So, the next question is: the leverage improved in the fourth quarter.
Speaker #2: But still the net debt remained rather high . So could you or do you have concerns about the net debt level . Could you elaborate around that ?
Yannick Fierling: Yeah. Listen, I mean, we have been delivering SEK 3.7 billion in EBIT in 2020-2025, 2.8%, which is 0.8% better than last year. We have been getting our leverage to a 3.0, but I mean, it's a fact. I mean, our debt level is pretty high. And I would say that like any other companies in the same situation, we are constantly evaluating the capital structure we do have today in order to deliver the strategy, the profit, and the growth we have in front of us.
Speaker #1: Yeah . Listen , I mean , we have been delivering 3.7 billion in Ebit in 2025 here , 2.8% , which is 0.8% better than last year .
Speaker #1: We have been getting our leverage to a 3.0 , but I mean , it's a fact . I mean , our debt level is pretty high .
Speaker #1: And I would say that, like any other companies in the same situation, we are constantly evaluating the capital structure. We do have today, in order to deliver the strategy.
Therese Friberg: Okay, great. Now we turn over to the telephone conference.
Speaker #1: The profit and the growth we have in front of us.
Operator: Thank you. We will now take our next question from James Moore from Rothschild & Co Redburn. Please, go ahead.
Speaker #2: Okay, great. Now we turn over to the telephone conference.
Speaker #3: Thank you. We will now take our next question from James Moore from Rothschild & Co. Ribbon, please go ahead.
James Moore: Yeah, thanks for taking my questions. It's James from Rothschild. I've got a few. I'll go one at a time if I could. Just on cost efficiency, great to see the SEK 3.5 to 4 billion again in 2026. And I know you're doing an ongoing best cost country procurement sourcing action, and you're trying to be more sustainable in the ability of savings to get every year. I'm just wondering, is this level for 2026 indicative of the sustainable potential in the outer years of, say, 2027 to 2030, or is the run rate this year still elevated? Is there any sort of way you can quantify what your new procurement savings machine looks like in the outer years?
Speaker #12: Ahead . Go ahead .
Speaker #13: Yeah . Thanks for taking my questions . It's James from Rothschild . I've got a few . I'll go one at a time .
Speaker #13: If I could just on cost efficiency . Great to see the three and a half . 4 billion again in 26 . And I know you're doing an ongoing best cost country procurement sourcing action .
Speaker #13: And you're trying to be more sustainable in the ability of savings to get year . every I'm just wondering , is this level for 26 indicative of the sustainable potential in the outer years of , say , 2027 to 2030 ?
Speaker #13: Or is the run rate this year still elevated? Is there any sort of waiting to quantify what your new procurement savings machine looks like in the outer years?
Yannick Fierling: I think, first of all, thank you very much for pointing that out. I mean, good day to you. I mean, because, yeah, best cost country sourcing is absolutely something we are focusing on in the procurement organization. Big focus in 2025 with the arrival of Michelle. Michelle is located in Asia today, and I think we have been focusing throughout the year to understand where best cost countries sourcing was for the different regions. Because as you can understand, maybe, I mean, China is not the best cost country sourcing region any longer for North America, at least for all the components we do have today.
Speaker #1: I think , first of all , thank you very much for pointing that out . I mean , and good day to you .
Speaker #1: I mean , because , yeah , best cost country sourcing is absolutely something we we are focusing on in the procurement organization . A big focus in 2025 with the arrival of Michel Michelle is located .
Speaker #1: In Asia today. And I think we have been focusing throughout the year to understand where best cost countries sourcing was for the different regions, because as you can understand.
Yannick Fierling: So we have been really doing, I think, a good job on the procurement side of the equation to expand the supply base we do have, be faster as well in releasing these components here without endangering the quality we do have. And that has been a source of a saving you see right now. But I mean, whatever we have been implementing in 2025, of course, will remain in our products in 2026 moving forward. And we have this clear process in taking additional actions in procurement in order to investigate what are the other components we may be going and source from better suppliers.
Speaker #1: Maybe China is not the best cost country sourcing region any longer for North America, at least for all the components we do have today.
Speaker #1: So we have been really doing good, I think, a job on the procurement side of the equation to expand the supply base.
Speaker #1: We do have, we are fast as well in releasing these components here without endangering the quality. We do have. And that has been a source of savings.
Speaker #1: You see , right now . But I mean , whatever we have in implementing in 2025 , of course will remain in our products in 2026 moving forward .
Speaker #1: And we have this clear process in taking additional actions in procurement in order to investigate what are the other components we may be going and source from better suppliers.
James Moore: But you can't say whether the rate in 2026 is elevated versus the out years, or whether that-
Yannick Fierling: I think again, in all fairness, I mean, we-- I don't want to, and I'm never somebody who is pleased to start with, so it's difficult to satisfy, to be fully satisfied about that. But in all fairness, I mean, the delivery we had in 2025 was a strong delivery, and that's why I think we were able, I mean, procurement has been a major contributor in delivering part of the cost saving here. So I'm expecting them not to slow down in 2026.
Speaker #13: But you can't say whether the rate in '26 is elevated versus the outer years or not.
Speaker #6: I think .
Speaker #1: I think again , in all fairness , I mean , we I don't want I'm never somebody who is pleased to start with .
Speaker #1: So it's difficult to satisfy , to be fully satisfied about in all fairness , I mean , the delivery we had in 2025 was a strong delivery .
Speaker #1: And that's why I think we were able—I mean, procurement has been a major contributor in delivering part of the cost savings here.
James Moore: Okay, thanks. And, and just on price, I hear everything you say, the negative US, sorry, Europe, Asia, more than offsetting positive US. I would have hoped for a sort of, yeah, like a mid-single digit price hike, all in net after promotion in 2025. And obviously, it depends on the behavior of rational or not rational agents. But is it fair to assume that you're assuming materially less than 5% behind your, your comment? And I'm trying to gauge your degree of conservatism. Do you think that it is possible to achieve that in the situation that the Chinese and Korean manufacturers hike their prices? And talking of that, tied to that, have you seen the Chinese or Korean manufacturers hike their prices in the first month of the year? I can't see any channel indications that they have yet.
Speaker #1: So, expecting them not to slow down in 2026.
Speaker #13: Okay, thanks. And just on price, I hear everything you say—that negative US, sorry, Europe and Asia are more than offsetting positive US.
Speaker #13: I would have hoped for a sort of a mid-single digit price hike all in net after promotion in 25 . And obviously it depends on the behavior of rational or not rational agents , but is it fair to assume that you're assuming materially less than 5% behind your comment ?
Speaker #13: And I'm trying to get your degree of conservatism ? Do you think that it is possible to achieve that in the situation that the Chinese and Korean manufacturers hike their prices and talking of that , tied to that , have you seen the Chinese or Korean manufacturers hike their prices in the the year ?
Yannick Fierling: I think, first of all, I mean, I think we should not be forgetting about what has been achieved in the first quarters of 2025, in terms of price increase. And I need to recognize my North American team for the agility they have been showing, because the picture has been changing several times, I mean, throughout the months in 2025. And we have been taking and grabbing any opportunity we had to increase prices, and we have been leading price increase in Q2, Q3, and we have been compensating the vast majority of the tariff impact in Q2, Q3. I mean, this situation was simply not sustainable any longer in Q4, especially in the light of a promotional period we had.
Speaker #13: First month of Q1, any channel, I can't see indications that they have yet.
Speaker #1: think , I first of all , I mean , I think we we should not be forgetting about what has been achieved in the first quarter of 2025 , in terms of price increase .
Speaker #1: And I need to recognize my North American team for the agility they have been showing, because the picture has been changing several times.
Speaker #1: I mean , throughout the month in 2025 , and we have been taking and grabbing any opportunity we had to increase prices and we have been leading price increases in Q2 , Q3 , and we have been compensating the vast majority of the tariff impact in Q2 , Q3 .
Yannick Fierling: We had to face reality, especially looking at, I mean, potential volume impact, that we had to step down on prices. Let me tell you, that promotional level in 2025 was at least at the same level as in 2024. Which is pretty incredible when you think about the tariff level imported finished goods are facing today, 15 to 20%, 55 to 60%. So I cannot, I mean, as Therese said, we have not seen... We have seen basically prices bouncing back in December quicker than last year. But in all fairness, I mean, we have not seen tariff being reflected in the price level in North America. Now, the big question is, I mean, we have, we are benefiting from producing in North America.
Speaker #1: I mean, this situation was simply not sustainable any longer in Q4, especially in light of the promotional period we had.
Speaker #1: And we had to face reality, especially looking at— I mean, potential volume impact— that we had to step down on prices.
Speaker #1: And let me tell you that promotional level in 2025 was at least at the same level as in 2024, which is pretty incredible when you think about the tariff level imported finished goods are facing today.
Speaker #1: 15 to 20% , 55 to 60% . So I cannot I mean , I , I said , we have not seen we have seen basically prices bouncing back in December quicker than last year .
Speaker #1: But in all fairness , I mean we have not seen tariff being reflected in the price level in North America . Now , the big question is , I mean , we have we are benefiting from producing in North America .
Yannick Fierling: The big question is this situation sustainable with a 15 to 20%, 55 to 60% tariff for people and for competitors, which are sourcing most of their products today for the North American market?
Speaker #1: We question , is this situation sustainable with 15 to 20% , 50% , 60% tariff for people and for competitors , which are sourcing most of their products today for the North American market ?
James Moore: Great. I've got a couple more technical ones, if I could. Just in terms of your external factors, I think, Therese, you mentioned the majority of the 739 group impact was in North America. There's obviously some dollar impact, and there might be some stuff in Asia and Europe, but would it be fair to say roughly $500 million was the impact of pure tariff in the quarter? And would it be possible to say whether your FY 2026 tariff assumption is closer to a billion or 2 billion SEK, just trying to gauge the tariff?
Speaker #13: Great . I got a couple more technical ones . If I could just in terms of your external factors , I think to raise you mentioned the majority of the 739 group impact was in North America .
Speaker #13: There's impact , and obviously some dollar there might be some stuff in Asia and Europe , but would it be fair to say roughly half a billion ?
Speaker #13: What was the impact of pure tariff in the quarter, and would it be possible to say whether your FY26 tariff assumption is closer to SEK 1 billion or SEK 2 billion?
Therese Friberg: Yeah, we don't give that statistics, but yeah, I would say a relevant portion of the external factors was related to currency in the fourth quarter, and the rest was tariff. So there was a significant impact of tariff.
Speaker #13: Just trying to gauge .
Speaker #14: Yeah , we don't .
Speaker #5: Yeah , we don't give that that specifics , but yeah , I would say a relevant portion of the external factors was related to currency in the fourth quarter .
Yannick Fierling: The majority was tariff.
Therese Friberg: Yeah. And this is, of course, the level that we are expecting to continue for the first half. And then, to your point, it will then for the second half, with the current tariff structure still being in place, it will sort of even out from a year-over-year perspective.
Speaker #5: And the rest was tariffs. So there was a significant impact of tariffs.
Speaker #1: The majority was tariff .
Speaker #5: Yeah . And this is of course the level that we are expecting to continue for the for the first half . And then to your point , it will then for the second half with the current tariff structure still being in place , it will sort of even out from a year over year perspective .
James Moore: Okay, so we compound easier in the second half. You couldn't remind us, was the Q3 a similar magnitude to the Q4, or was that sort of like half?
Speaker #13: Okay . So we come out easier in the second half . You couldn't remind us was the third quarter a similar magnitude to the fourth , or was that sort of like half ?
Therese Friberg: It was similar, I would say.
James Moore: Okay. It's really a first half outstanding impact that we have yet to address.
Therese Friberg: When it comes to the tariff impact, yes, the majority in the first half.
Speaker #5: Was similar, I would say, okay.
Speaker #13: So, it's really a first-half outstanding impact that we have yet to address.
James Moore: That's great. And just the final one, just going back to that other point, has there been any indication of Asian suppliers raising prices in the US market in the last 30 days?
Speaker #5: When it comes to the tariff impact, yes, the majority is in the first half.
Speaker #13: That's great. And just the final one, just going back to that other point, has there been any indication of Asian rising price in the U.S. market in the last 30 days?
Therese Friberg: No, not apart from what we mentioned, that sequentially, the promo-heavy promotions from Black Friday has been, of course, lifted, so to say. So sequentially, we have seen pricing coming up-
Speaker #5: No , not apart from what we mentioned that sequentially , the heavy promotions from Black Friday has been , of course , lifted , so to say .
James Moore: Mm.
Therese Friberg: but we're not really seeing price increases to offset the tariff structure that is in place on top of that.
Speaker #5: So sequentially we have seen pricing coming up, but we're not really seeing price increases to offset the tariff structure that is in place.
James Moore: Very helpful. Thank you so much.
Yannick Fierling: Thank you.
Therese Friberg: Okay, thank you very much. We are now running out of time. I know we have more questions. We will make sure that we will get back to you from the IR team. I would like to thank everyone who has listened in, but I would also like to hand over to Yannick for a few closing words before we end this session.
Speaker #5: On top of that...
Speaker #13: Very helpful. Thank you so much.
Speaker #1: Thank you .
Speaker #11: Okay. Thank you very much.
Speaker #2: We are now running out of time. I know we have more questions. We will make sure that we get back to you from the IR team.
Speaker #2: I would like to thank everyone who has listened in, but I would also like to hand over to Yannick for a few closing words before we end this session.
Yannick Fierling: Again, we have been making progress in 2025, and we have been delivering according to strategic drivers we defined early on. I mean, we're very much looking to do the same in 2026, and delivering basically in the coming quarters. Thank you very much for attending today.
Speaker #1: Again, we have been making progress in 2025, and we have been delivering according to a strategy we defined early on. I mean, we're very much looking to do the same in 2026 and delivering, basically, in the coming quarters.
Therese Friberg: Thank you very much.
Speaker #1: Thank you very much for attending today.
