Q1 2026 Electrolux AB Earnings Call

Ann-Sofi Jönsson: Welcome to Electrolux Group and the presentation of our Q1 report. I'm Ann-Sofi Jönsson, Head of Investor Relations and Sustainability Reporting. I'm here with our CEO, Yannick Fierling, and Therese Friberg, our CFO. We will run through the presentation, and after that, we will open up for the Q&A. With that, I hand over to Yannick.

Speaker #3: Welcome to Electrolux Group and the presentation of our Q1 report. I'm Ann-Sofi Jnsson, Head of Investor Relations and Sustainability Reporting. I'm here with our CEO, Yannick Fierling, and Therese Friberg, our CFO.

Speaker #3: We will run through the presentation, and after that, we will open up for the Q&A. With that, I hand over to Yannick.

Speaker #4: Thank you very much, Ann-Sofi, and good morning, good day to all of you. Very glad to be with you for this Q1 2026 report.

Yannick Fierling: Thank you very much, Ann-Sofi, and good morning, good day to all of you. Very glad to be with you for this Q1 2026 report. We have been making some significant announcements last night. 2025 was the year of progress and strategic building. We are now executing this strategy. We have been announcing a series of initiatives I would like to remind you this morning. The first one is about a partnership we announced in the North American region with Midea. This partnership will be driving growth, will be driving better profit thanks to saving and share of CapEx, and certainly, it will represent a very strong platform to move forward in this region. We have been announcing as well that we'll be optimizing our footprint and gaining efficiency across our organization. We're planning to expand in terms of product and geography moving forward.

Speaker #4: We have been making some significant announcements last night. 2025 was the year of progress and strategic building. We are now executing this strategy. We have been announcing a series of initiatives I would like to remind you of this morning.

Speaker #4: The first one is about a partnership we announced in the North American region with Midea. This partnership will be driving growth. We'll be driving better profit thanks to savings and share of CapEx, and certainly it will represent a very strong platform to move forward in this region.

Speaker #4: We have been announcing as well that we'll be optimizing our footprint and gaining efficiency across our organization. We are planning to expand in terms of product and geography moving forward.

Yannick Fierling: In order to finance these major initiatives and strengthen our balance sheet, we have been announcing a fully underwritten rights issue. Let me now deep dive into Q1. We had to face two very different realities. The first one was about EMEA, APAC, and Latin America, where we have been delivering in this Q1 strong results which were significantly better than last year. On the other hand, North America has been declining significantly. The market has been down more than 10%. The food preservation business unit has been down more than 14% from a market perspective. In terms of operating margin, we have been delivering SEK 198 million, excluding non-recurring items. In the operating income, we have been including -SEK 463 million due to the closure of our factory in Chile, in Santiago.

Speaker #4: In order to finance these major initiatives, and strengthen our balance sheet, we have been announcing a fully underwritten rights issue. Let me now deep dive into Q1.

Speaker #4: We had to face two very different realities. The first one was about Europe, Middle East and Africa, APAC, and Latin America, where we have been delivering in this first quarter strong results—results which were significantly better than last year.

Speaker #4: On the other hand, North America has been declining significantly. The market has been down more than 10%. The Food Preservation business unit has been down more than 14% from a market perspective.

Speaker #4: In terms of operating margin, we have been delivering 198 million CEC, excluding non-recurring items. In the operating income, we have been including minus 463 million CEC due to the closure of our factory in Chile, in Santiago.

Speaker #4: We have been delivering, in this first quarter, 700 million CEC in terms of cost reduction, which is placing us well to deliver the year-end target, which is between 3.5 and 4 billion CEC.

Yannick Fierling: We have been delivering in this Q1 SEK 700 million in terms of cost reduction, which is placing us well to deliver the year-end target, which is SEK 3.5 to 4 million. Let me now deep dive into EMEA, and APAC. Strong quarter for this region. We have been, once again, gaining market share with our main brands, Electrolux and AEG, in a market which has been flat in this Q1. We have been growing organically by 3.6%, delivering 4.1% of EBIT. This EBIT has been supported by strong delivery in terms of cost reduction. Yes, we have been investing in marketing in order to fuel all the innovation we have been launching in this Q1. As I mentioned previously, the market was once again flat in this Q1.

Speaker #4: Let me now deep dive into Europe, Middle East and Africa, and APAC. Strong quarter for this region. We have been once again gaining market share with our main brands, Electrolux and AEG, in a market which has been flat in this first quarter.

Speaker #4: We have been growing organically by 3.6%, delivering 4.1% of EBIT. This EBIT has been supported by strong delivery in terms of cost reduction. And yes, we have been investing in marketing in order to fuel all the innovation we have been launching in this first quarter.

Speaker #4: As I mentioned previously, the market was once again flat in this first quarter. Actually, it was flat in Western Europe, which represents 80% of the volume, and it was up 1% in Eastern Europe, with 20% of the volume in the market.

Yannick Fierling: Actually, it was flat in Western Europe, which represents 80% of the volume, and it was up 1% in Eastern Europe, with 20% of the volume in the market. The market was mainly replacement-driven once again, but if you look at this curve, it has been the lowest quarter in the last 12 years. We're in a 12-year low volume figure in Europe here. If you take into account that a normal organic growth in this industry is 2% to 3%, we are down between 20% and 30% versus where we should be today. Now, as I said, we have been investing in marketing. We are dusting the Electrolux brand, and I'm very proud to show you one of our latest commercial.

Speaker #4: The market was mainly replacement-driven once again. But if you look at this curve, it has been the lowest quarter in the last 12 months.

Speaker #4: We are now at a 12-year low volume figure in Europe here. So if you take into account that normal organic growth in this industry is 2 to 3%, we are down between 20 and 30% versus where we should be today.

Speaker #4: Now, as I said, we have been investing in marketing. We are dusting the Electrolux brand, and I'm very proud to show you one of our latest commercials.

[Company Representative] (Electrolux): Good taste comes naturally to Swedes. This man is not a Swede, but he is cooking for some. Luckily, you can send the Electrolux oven a recipe, and AI Taste Assist optimizes the settings for you. Electrolux, for better living, designed in Sweden.

Speaker #1: Good taste comes naturally to Swedes. This man is not a Swede, but he is cooking for some. Luckily, you can send the Electrolux oven a recipe, and AI Taste Assist optimizes the settings for you.

Speaker #1: Electrolux. For better living, designed in Sweden.

Speaker #4: Now, moving into North America, and as I mentioned in my introduction, the market has been significantly down in this first quarter—over 10% down.

Yannick Fierling: Now moving into North America, and as I mentioned in my introduction, the market has been significantly down in this Q1, over 10% down. Food preservation has been over 14% down. It has been the weakest quarter in terms of market in the last 10 years, and that's why we are having an operating profit, which is pretty low in this Q1. The market was down, and on the top of that, we had very significant external factors, mainly driven by tariff. We had two internal issues, a change in accounting estimates for consumer rebates, and a voluntary recall of a limited number of Frigidaire gas ranges, which have been affecting the results by SEK 0.3 billion. Looking at the market, I mentioned that, minus 10% in this Q1.

Speaker #4: Food preservation has been over 14% down. It has been the weakest quarter in terms of market in the last 10 years. And that's why we are having an operating profit which is pretty low in this first quarter.

Speaker #4: The market was down, and on top of that, we had very significant external factors, mainly driven by tariffs. We had two internal issues.

Speaker #4: A change in accounting estimates for consumer rebates, and a voluntary recall of a limited number of refrigerated gas ranges. Which have been affecting the results by 0.3 billion CEC.

Speaker #4: Looking at the market, and I mentioned that, minus 10% in this first quarter. If you're looking at the volume trend over the last 10 years, you will notice that this has been the most challenging quarter over the last 10 years.

Yannick Fierling: If you're looking at the volume trend over the last 10 years, you will notice that has been the most challenging quarter over the last 10 years. The decline has been more significant than the decline we have been observing after 2022, so post-COVID. Moving into Latin America, strong quarter in Latin America. Again, we have been growing organically more than 8%, delivering an EBIT, excluding non-recurring items, of 8% again. Strong margin in a market where we have been observing a significant level of price erosion. We have been announcing the closure of a plant in Chile, and this closure has been incurring a non-recurring item of SEK 463 million in this quarter in our margin. Moving now into cost reduction. Once again, our objective at year-end is to deliver between SEK 3.5 and 4 billion. We have been delivering SEK 700 million in Q1.

Speaker #4: The decline has been more significant, but the decline we have been observing is after 2022, so post-COVID. Moving into Latin America, strong quarter in Latin America again.

Speaker #4: We have been growing organically more than 8%, delivering an EBIT excluding non-recurring items of 8% again. Strong market in a market where we have been observing a significant level of price erosion.

Speaker #4: We have been announcing the closure of a plant in Chile, and this closure has been inducing a non-recurring item of 463 million CEC in this quarter in our margin.

Speaker #4: Moving now into cost reduction—once again, I mean, our objective at your end is to deliver between 3.5 and 4 billion CEC. We have been delivering 700 million CEC in this first quarter.

Speaker #4: We value engineering best cost country sourcing and by having an additional productivity in our factory. So good results again in this first quarter, which is aligned with the ambitious objective we do have at your end to deliver between 3.5 and 4 billion CEC.

Yannick Fierling: We value engineering, best cost country sourcing, and by having an additional productivity in our factory. Good results again in this Q1, which is aligned with the ambitious objective we do have at year-end to deliver between SEK 3.5 and 4 billion. With that, I'm passing it to Therese.

Speaker #4: With that, I'm passing it to Therese.

Speaker #5: Yes, thank you, Yannick. And then, taking a look at the sales and the EBIT bridge in a little bit more detail, we had essentially flat organic growth in the quarter, where we did see volume growth, as Yannick mentioned, in Latin America, and in Europe, Middle East, Africa, and Asia Pacific.

Therese Friberg: Yes. Thank you, Yannick. Taking a look at the sales and the EBIT bridge in a little bit more detail. We had essentially a flat organic growth in the quarter, where we did see volume growth, as Yannick mentioned, in Latin America and in Europe, Middle East, Africa, and Asia Pacific. This was offset by volume decline in North America and also price pressure across the markets. If we look at the organic contribution to EBIT, this was actually then negative as the pressure on price was more than offsetting the positive volume that we had. Investments in innovation and market essentially was flat year-over-year, and we did see continued strong and stable cost efficiency coming through to the bottom line.

Speaker #5: But this was offset by volume decline in North America and also price pressure across the markets. So, if we look at the organic contribution to EBIT, this was actually negative, as the pressure on price was more than offsetting the positive volume we had.

Speaker #5: Investments in innovation and market essentially were flat year over year, and we did see continued strong and stable cost efficiency coming through to the bottom line. You can also see that, year over year, the external factors are still quite a large negative headwind, as we are having continued high tariffs in North America, mainly.

Therese Friberg: You can also see that year over year, the external factors are still quite large negative headwinds, as we are having continued high tariffs in North America mainly. Looking at the operating cash flow. Operating cash flow after investments for the quarter was SEK -4.6 billion, and also lower than last year. This was partly related to the reduced EBIT year over year. We also have a seasonal buildup in the operating working capital. On top of that, we also have a somewhat higher buildup in inventory, specifically in North America, related to the very weak market in North America, weaker than we expected going into the quarter, and some small buildup related to the Anderson transition of production that you probably heard about yesterday. Taking a look at our liquidity and maturity profile.

Speaker #5: And then looking at the operating cash flow. So, operating cash flow after investments for the quarter was negative $4.6 billion, and also lower than last year.

Speaker #5: And this was partly related to the reduced EBIT year over year, and then we also have a seasonal buildup in the operating working capital.

Speaker #5: But on top of that, we also have a somewhat higher buildup in inventory, specifically in North America, related to the very weak market in North America—weaker than we expected going into the quarter.

Speaker #5: And some small buildup related to the Anderson transition of production that you probably heard about yesterday. And then, taking a look at our liquidity and maturity profile, we still have high liquidity with SEK 27.6 billion in liquidity, including revolving credit facilities.

Therese Friberg: We still have a high liquidity with SEK 27.6 billion in liquidity, including revolving credit facilities, and we have a well-balanced maturity profile. We have no financial covenants, as you know, and we have the ambition to have a solid investment grade rating. To have a solid investment grade rating, of course, the main component will continue to be to improve our operating performance and also to generate cash flow. Of course, you heard about yesterday, the announced fully underwritten rights issue of SEK 9 billion, that partly will be used to drive the additional strategic initiatives Yannick mentioned earlier, but also partly to strengthen the balance sheet going forward. The net debt to EBITDA by the end of the quarter was 3.8 times, and if we would be adjusting for the rights issue of SEK 9 billion, this number would have been 2.8 times.

Speaker #5: And we have a well-balanced maturity profile. We have no financial covenants, as you know, and we have the ambition to have a solid investment grade rating.

Speaker #5: And to get to have a solid investment grade rating, of course, the main components will continue to be to improve our operating performance and also to generate cash flow.

Speaker #5: But of course, you heard about yesterday the announced, fully underwritten rights issue of SEK 9 billion. That will be used partly to drive the additional strategic initiatives Yannick mentioned earlier, but also partly to strengthen the balance sheet going forward.

Speaker #5: And the net FDBDA by the end of the quarter was 3.8 times, and if we would be adjusting for the rights issue of SEK 9 billion, this number would have been 2.8 times.

Speaker #5: And with that, I hand back over to Yannick.

Therese Friberg: With that, I hand back over to Yannick.

Yannick Fierling: Thank you very much, Therese. Moving now into the market and business outlook. Following the downturn in the US home appliance market in Q1, the market outlook for North America in 2026 is revised from neutral to negative. Geopolitical uncertainty is forecast to continue in North America, but under the assumption that the current tariff structure stays, general market pricing should logically adjust to reflect associated tariff costs. Should these materialize, it may adversely impact consumer demand and market growth. The Brazilian home appliance market developed positively in Q1, and although growth rates may slow somewhat throughout the year, the market outlook for Brazil in 2026 has changed from neutral to positive. The market demand in Europe is unchanged, with geopolitical and macroeconomic uncertainty weighing on consumer sentiment. Consumers continued postponing discretionary purchases, and demand for built-in kitchen products remains subdued.

Speaker #1: Thank you very much, Therese.

Speaker #4: Moving now into the market and business outlook. Following the downturn in the U.S. home appliance market in the first quarter, the market outlook for North America in 2026 is revised from neutral to negative.

Speaker #4: Geopolitical uncertainties are forcing us to continue in North America, but under the assumption that the current tariff structure stays, general market pricing should logically adjust to reflect associated tariff costs.

Speaker #4: If these materialize, it may adversely impact consumer demand and market growth. The Brazilian home appliance market developed positively in the first quarter and, although growth rates may slow somewhat throughout the year, the market outlook for Brazil in 2026 is changed from neutral to positive.

Speaker #4: The market demand in Europe is unchanged, with geopolitical and macroeconomic uncertainty weighing on consumer sentiment. Also, consumers continued postponing discretionary purchases, and demand for built-in kitchen products remains subdued.

Speaker #4: In a larger perspective, it is important to remember that the European market is at a 12-year low. Therefore, the market outlook for Europe remains neutral.

Yannick Fierling: In a larger perspective, it is important to remember that the European market is at a 12-year low. Therefore, the market outlook for Europe remains neutral. Moving to a business outlook. Our business outlook for 2026 remains overall unchanged, despite expecting the additional cost related to extended US Section 232 import tariff on products that contain steel and aluminum, applicable since 6 April. Sizable price increases with 5% to 20% have been announced in North America, and it is our ambition to increase prices in order to offset the negative impact from tariffs. Volume, price, and mix is expected to be positive in 2026, driven by volume growth and a favorable product mix. We expect investments in innovation and marketing for a full year to increase. The new product launches provide us with a great platform to continue driving growth in our focus categories.

Speaker #4: Moving to a business outlook. Our business outlook for 2026 remains overall unchanged, despite expecting additional costs related to the extended US Section 232 import tariff on products that contain steel and aluminum, applicable since April 6.

Speaker #4: Sizable price increases of 5% to 20% have been announced in North America, and it is our ambition to increase prices in order to offset the negative impact from tariffs.

Speaker #4: Volume, price, and mix are expected to be positive in 2026, driven by volume growth and a favorable product mix. We expect investments in innovation and marketing for a full year to increase.

Speaker #4: The new product launches provide us with a great platform to continue driving growth in our focus categories. Our focus on cost saving and improving efficiency throughout the group is critical for our competitiveness, and we anticipate between 3.5 and 4 million earnings contribution from cost efficiency in 2026.

Yannick Fierling: Our focus on cost saving and to improve efficiency throughout the group is critical for our competitiveness, and we anticipate between SEK 3.5 and 4 million earnings contribution from cost efficiency in 2026. External factors are expected to significantly negatively impact the year, mainly due to higher tariff costs from extended US Section 232 import tariffs. This cost inflation is reflected in external factor in our EBIT bridge. Raw material costs are also estimated to be negative. For the full year capital expenditure, we're expecting to reach about SEK 4 billion. Again, I just want to summarize our Q1 performance. As I said as an introduction, we have really two very different realities. On one side, EMEA, APAC, and Latin America, where we have been performing well, where we have been growing 3.6% in Europe in a flat market, 8% in Latin America and Brazil.

Speaker #4: External factors are expected to significantly negatively impact the year, mainly due to higher tariff costs from the extended US Section 232 import tariff. This cost inflation is reflected in external factors in our EBIT bridge.

Speaker #4: Raw material costs are also estimated to be negative. For the full-year capital expenditure, we're expecting to reach about SEK 4 billion. Again, I just want to summarize our Q1 performance.

Speaker #4: And as I said, as an introduction, we have really two very different realities. On one side, EMEA, APAC, and Latin America, where we have been performing well, where we have been growing 3.6% in Europe in a flat market, 8% in Latin America and Brazil, but we have been observing as well a very notable decline in North America—over 10%.

Yannick Fierling: We have been observing as well a very notable decline in North America, over 10%. The worst and strongest decline we have seen in the last 10 years. In terms of cost reduction, we have been reaching SEK 0.7 billion in Q1, and we have good confidence to reach SEK 3.5 to 4 billion by year-end. We have been making last night very big strategic announcements, a strategy we have been working on for the last month. The partnership with Midea in North America will be key in order to structure this region, grow in this region, and add savings, improve our profit, and share our capital expenditure with Midea.

Speaker #4: The worst and strongest decline we have seen in the last 10 years. In terms of cost reduction, we have been reaching $0.7 billion in the first quarter, and we have good confidence to reach the $3.5 to $4 billion by year-end.

Speaker #4: We have been making, last night, very big strategical announcements—a strategy we have been working on for the last months. The partnership with media in North America will be key in order to structure this region, grow in this region, and add saving, improve our profit, and share our capital expenditure with media.

Yannick Fierling: We have been announcing as well that we'll be optimizing our footprint and gaining efficiency in the rest of the organization, and we will be expanding our product offering from a geographical perspective and from a product perspective here. Big milestone for the company has been announced last night. With that, I would be glad to answer any question we may have. Ann-Sofi?

Speaker #4: We have been announcing as well that we'll be optimizing our footprint and gaining efficiency in the rest of the organization and we will be expanding our product offering geopolitic from a geographical perspective and from a product perspective here.

Speaker #4: So, a big milestone for the company has been announced last night. With that, I would be glad to answer any questions we may have. Ann-Sofi?

Ann-Sofi Jönsson: Yes. Thank you, Yannick. Now we will turn over to the conference call first to take questions from the conference call.

Speaker #5: Yes, thank you, Yannick. So now we will turn over to the conference call, first to take questions from the conference call.

Speaker #6: Thank you. To ask a question, you will need to press *11 on your telephone and wait for your name to be announced.

Operator: Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. If you wish to ask a question via the webcast, please type it into the box and click submit. We will now go to our first question. One moment, please. Our first question comes from the line of Ope Olaniyi from Goldman Sachs. Please go ahead. Ope, is your line on mute?

Speaker #6: To withdraw your question, please press star one and then one again. If you wish to ask a question via the webcast, please type it into the box and click submit.

Speaker #6: We will now go to our first question. One moment, please. And our first question comes from the line of Olanio from Goldman Sachs. Please go ahead.

Speaker #6: Ope, is your line on mute?

Ope Olaniyi: Hi. Good morning. Could you hear me?

Speaker #7: Hi, good morning. Could you hear me?

Speaker #8: Yes.

Ann-Sofi Jönsson: Yes.

Yannick Fierling: Yes, sir.

Speaker #6: Yes, sir.

Ope Olaniyi: Hi. Good morning, Therese, Yannick, and Ann-Sofi. Maybe just starting with the US, could you sort of break down what you're seeing, sort of what's changed in terms of organic growth? I think sort of maybe through last year, we've seen some market share gains, and so how much of sort of the -10 is the market versus what's happening in terms of things on a competitive basis?

Speaker #7: Hi, hi, good morning, Therese, Yannick, and Ann-Sofi. Maybe just starting with the US, could you sort of break down what you're seeing, sort of what's changed in terms of organic growth? And I think sort of maybe through last year we've seen some market share gains, so how much of the minus 10% is the market versus what's happening in terms of things on a competitive basis?

Speaker #6: Yeah, thank you very much for the question. So, as we said, I mean, and of course we're referring to sell-in data and volume. We have seen the biggest drop in terms of volume in the first quarter over the last 10 years.

Yannick Fierling: Yeah. Thank you very much for the question. As we said, and of course, we're referring to sell-in data and volume. We have seen the biggest drop in terms of volume in Q1 over the last 10 years. Of course, the geopolitical environment has not been helping in North America. From a mixed perspective as well, we were hit from the fact that the biggest drop we have seen in the North American market is coming from our biggest product category, which is food preservation. Certainly, we did not lose a significant level of market share in the quarter. We have been losing a little bit of market share due to the recall we made at the beginning of the quarter, and we're always placing the safety of our customers first.

Speaker #6: And of course, I mean, the geopolitical environment has not been helping in North America. From a mixed perspective as well, we were hit from the fact that, I mean, the biggest drop we have seen in the North American market is coming from our biggest product category, which is food preservation.

Speaker #6: Certainly, I mean, we did not lose a significant level of market share in the quarter. We have been losing a little bit of market share due to the recall we made at the beginning of the quarter, and we're always placing the safety of our customers first.

Yannick Fierling: Certainly, it will be very interesting to observe how the North American market will be evolving in terms of demand in the coming months. The big announcement we're making today is certainly in terms of price increase. We are facing very significant external factors in North America, and that has been a big part of the profit decline we had in Q1. On 6 April, there was the announcement about the Section 232 tariff. We have been announcing to our customers that we'll be increasing prices between 5% and 20% by the end of April. Most of our competitors are producing appliances as well in Mexico. We have a good confidence level that we will see price increases in North America overall as an industry, in the coming weeks.

Speaker #6: Certainly, it would be very interesting to observe how the North American market will be evolving in terms of demand in the coming months. The big announcement we're making today is certainly in terms of price increase.

Speaker #6: We are facing very significant external factors in North America, and that has been a big part of the profit decline we had in the first quarter.

Speaker #6: On April 6th, there was the announcement about the 232 tariff. So we have been announcing to our customers that we would be increasing prices between 5% and 20% by the end of April.

Speaker #6: Most of our competitors are producing appliances as well in Mexico, so we have a good confidence level that we will see price increases in North America overall as an industry in the coming weeks.

Therese Friberg: The 10%, just to be specific, that is the market decline. Pure market. We were declining, as you saw, somewhat more than that, but-

Speaker #8: But the 10%—just to be specific—that is the market decline, so pure market. And we were declining, as you saw, somewhat more than that.

Speaker #8: But only slightly.

Yannick Fierling: Yeah.

Therese Friberg: Only slightly.

Speaker #7: Yeah. Great, thanks. And maybe just on sort of section 232, I don't know if you're comfortable giving out a number, but do you have sort of an estimate on sort of external factors for sort of 2026 and as the year goes on?

Ope Olaniyi: Great. Thanks. Maybe just on Section 232, because I don't know if you're comfortable giving out a number, but do you have an estimate on external factors for 2026 and then as the year goes on?

Therese Friberg: No, we don't have an updated number. Of course, as you see, we are already guiding for significantly negative, and I think it's fair to say that if the current 232 tariff stays in place as it is today, it will be even more significantly negative than, of course, we had going into the year. On the other hand, as Yannick mentioned, I think this is really now leveling the playing field with lower debate, if these tariffs are legally valid and so forth. The confidence to actually increase prices and have them stick in the market is higher than ever before, I would say.

Speaker #5: No, we don't have an updated number. Of course, as you see, we are already guiding for significantly negative, and I think it's fair to say that if the current 232 tariff stays in place as it is today, it will be even more significantly negative than, of course, we had going into the year.

Speaker #5: But on the other hand, as Yannick mentioned, I think this is really now leveling the playing field with lower debate if these tariffs are legally valid and so forth.

Speaker #5: So the confidence to actually increase prices and have them stick in the market is higher than ever before, I would say.

Speaker #7: Great. And maybe just the last one for me, could you just maybe comment on sort of what you're seeing on cost from a commodity perspective given what's going on and just remind us of how sort of hedging works from your perspective and therefore how we should think of things assuming sort of spot prices remain where they are?

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

Speaker #6: Yeah, in terms of—of course, I mean, the geopolitical war in Iran is influencing all material. As we mentioned previously, I mean, we're hedging.

Yannick Fierling: Yeah. In terms of course, the geopolitical war in Iran is influencing raw material. As we mentioned previously, we're hedging plastic over three months, usually one quarter. The impact we have seen in Q1 is limited. Very limited. The main impact we see is much more on transportation costs than fuel costs. The bunker costs we have on sea freight, for example. We are largely protected in this quarter, in the Q1 quarter, thanks to the hedging we do have on raw material and plastic.

Speaker #6: Plastic over three months is usually one quarter. So the impact we have seen in Q1 is limited, very limited. I mean, the main impact we see is much more on transportation costs and fuel costs.

Speaker #6: So the bunker costs we have on sea freight, for example, but I mean, we are largely protected in this quarter, in the Q1 quarter, thanks to the hedging we do have on raw material and plastic.

Therese Friberg: This is also included in the forecast that we have now. Of course, as you all know, it's extremely volatile, but we do see a somewhat increase now in Q2, partly related to logistics and partly related to plastics, that we have then had to lock at slightly higher prices for Q2. It's already included, let's say, in our business outlook with our current understanding.

Speaker #5: We are, but this is also included in the forecast that we have now. Of course, as you all know, it's extremely volatile, but we do see a somewhat increase now in the second quarter, partly related to logistics and partly related to plastics, that we have then had to lock at slightly higher prices for the second quarter.

Speaker #5: But it's already included, let's say, in our business outlook with our current understanding.

Ope Olaniyi: Great. Thanks very much for taking my question.

Speaker #7: Great, thanks very much for taking my question.

Speaker #6: Thank you.

Yannick Fierling: Thank you.

Speaker #3: Thank you. Your next question today comes from the line of John Kim from Deutsche Bank. Please go ahead.

Operator: Thank you. Your next question today comes from the line of John Kim from Deutsche Bank. Please go ahead.

John Kim: Hi. Good morning. Thanks for the opportunity. Could we get a little bit of a steer unpacking the external factors? Any sense on Forex versus tariffs versus underlying cost inflation?

Speaker #9: Hi, good morning. Thanks for the opportunity. Could we get a little bit of a steer in unpacking the external factors? Any sense on forex versus tariffs versus underlying cost inflation?

Speaker #5: Yeah, I mean, really, the majority—you have a little bit of inflation and a little bit of currency, I would say, if we talk about Q1—but the vast majority of the number is really tariffs.

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

John Kim: Understood. Can you help characterize kind of price and dynamics from your competitors in Q1?

Speaker #9: Understood. And can you help us—can you help characterize kind of present dynamics from your competitors in Q1?

Speaker #6: I think in North America, we have seen a very in Q1 in North America, we have seen a very light price increase in North America.

Yannick Fierling: I think in North America, we have seen in Q1 a very light price increase in North America. What we're expecting is to see larger movements in Q2 and moving forward due to the additional pressure we're experiencing from 232, and this pressure will be experienced as well by our competitors moving forward. In the other regions, if I may, in Europe and in Latin America, of course, we see price pressure and we see price erosion, which is higher than what we were originally expecting. However, again, we are performing really well in these markets. In Europe, we are improving our mix, as well, moving more into kitchen and built-ins. I think we have all the measures in place in this region to counteract against this price erosion we're experiencing.

Speaker #6: What we're expecting is to see larger movements in the second quarter and moving forward due to the additional pressure we're experiencing from 232. And this pressure will be experienced as well by our competitors moving forward.

Speaker #6: In the other regions, if I may, in Europe and in Latin America, of course, we see price pressure, and we see price erosion, which is higher than what we were originally expecting.

Speaker #6: However, again, we are performing really well in these markets. I mean, in Europe, we are improving our mix as well, moving more into kitchen and built-in.

Speaker #6: So I think we have all the measures in place in this region to counteract against these price erosions we're experiencing.

Speaker #9: Okay, thanks very much.

John Kim: Okay. Thanks very much.

Operator: Thank you. Your next question today comes from the line of David MacGregor from Longbow Research. Please go ahead.

Speaker #3: Thank you. Your next question today comes from the line of David S. McGregor from Longbow Research. Please go ahead.

David MacGregor: Yes. Good morning, everyone, and thanks for taking my questions. Just with regard to the North American market, you've discussed pricing of 5% to 20%. That's a pretty large range, obviously. Can you just discuss that range? What constitutes the lower end? What would constitute the upper end? Thank you.

Speaker #10: Yes, good morning, everyone. Thanks for taking my questions. Just with regard to the North American market, you've discussed pricing of 5% to 20%. That's a pretty large range, obviously.

Speaker #10: Can you just discuss that range and what constitutes the lower end, what would constitute the upper end? Thank you.

Speaker #6: Of course. I mean, you're absolutely right. It is a low range. However, we will not be butter-spreading the price increase. We have products which are more impacted than others.

Yannick Fierling: Of course. I mean, you're absolutely right. It is a low range. However, we will not be broadly spreading the price increase. We have products which are more impacted than others, and we have product categories which are more under, I would say, competitive pressure than others. Food preservation, for instance, is a product which is far more a commodity, I would say, in the market and under price pressure. That's exactly, by the way, why we're putting in place all the strategy we do have with Midea moving forward. We'll be reinforcing food preservation significantly in the future. But in terms of price increase, it will very much depend on the impact we do see from tariffs. We will filter and have a price increase by product category, which is needed in the market to overcome the tariff impact.

Speaker #6: And we have product categories which are more under, I would say, competitive pressure than others. Food preservation, for instance, is a product which is far more a commodity, I would say, in the market and under price pressure.

Speaker #6: That's exactly, by the way, why we are putting in place all the strategy we do have. We immediately are moving forward. We'll be reinforcing food preservation significantly in the future.

Speaker #6: But I mean, in terms of price increase, it would very much depend on the impact we do see from tariffs. So we will filter and have a price increase by product category, which is needed in the market to overcome the tariff impact.

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

Speaker #10: And do you foresee, just as a follow-up question, do you foresee the potential for further price increases as the year goes on? Is this the first in a sequence of multiple increases you would consider?

Yannick Fierling: I think it's a very good question, but the North American market has been extremely dynamic in the last months. The tariff structure has been changing several times in the last 12 months. The weight has been really big in terms of external factors. We are certainly convinced that there will be now a significant price movement because simply, 232 is putting a significant level of pressure on the entire competitive landscape. It's very difficult to predict how these external factors will be evolving in the coming months, and as a consequence, our prices will be evolving in the coming months. Certainly, I mean-

Speaker #6: I think it's a very good question, but I mean, the North American market has been extremely dynamic in the last months. I mean, the tariff structure has been changing several times in the last 12 months.

Speaker #6: And the way it has been really big in terms of external factors, we are absolutely convinced that there will now be a significant price movement because simply, I mean, 232 is putting a significant level of pressure on the entire competitive landscape.

Speaker #6: But it's very difficult to predict how, I mean, these external factors will be evolving in the coming months. And as a consequence, how our prices would be evolving in the coming months.

Speaker #6: But certainly, I mean, our ambition and our want to repeat it is to compensate for the vast majority of the impact we are facing in terms of tariff through price increase.

David MacGregor: Right

Yannick Fierling: Our ambition, and I won't repeat it, is to compensate for the vast majority of the impact we are facing in terms of tariff through price increase.

Speaker #10: So, this 5% to 20% series of price increases would be sufficient to fully offset the tariff expenses on 232 that you're incurring now?

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

Speaker #6: Yeah, I think that's our intent for sure. The intent is to compensate for the vast majority of the impact we are inducing through the tariff.

Yannick Fierling: Yeah, I think that's our intent for sure. The intent is

David MacGregor: Okay

Yannick Fierling: To compensate for the vast majority of the impact we are inducing through a tariff.

Speaker #10: Thank you very much.

David MacGregor: Thank you very much.

Speaker #6: You're welcome.

Yannick Fierling: You're welcome.

Speaker #3: Thank you. Your next question comes from the line of Akash Gupta from JP Morgan. Please go ahead.

Operator: Thank you. Your next question comes from the line of Akash Gupta from J.P. Morgan. Please go ahead.

Speaker #11: Yeah, hi, good morning. I got a couple as well. The first one is on Europe. So maybe if you can talk about—what's your—I mean, you left your market for Europe unchanged, but given the war in the Middle East and higher interest rates, how do you see the prospect of recovery in the European market?

Akash Gupta: Yeah. Hi, good morning. I got a couple as well. The first one is on Europe. Maybe if you can talk about, you left your outlook for Europe unchanged, but given the war in the Middle East and higher interest rates, how do you see a prospect of recovery in the European market? You have quantified price increases in North America because of tariffs, but I guess prices need to go up in Europe as well when your hedges especially run out. Can you quantify what sort of magnitude we will be looking at price increases in Europe in rest of the year? That's number one. Number two is on free cash flow. Again, if you look at the North American business and your outlook, clearly that will be a drag for this year.

Speaker #11: And you have quantified price increases in North America because of tariffs, but I guess prices need to go up in Europe as well when your hedges, especially, run out.

Speaker #11: So, can you quantify what sort of magnitude we will be looking at for price increases in Europe for the rest of the year? So, that's number one.

Speaker #11: And number two is on free cash flow. So again, I mean, if you look at the North American business and your outlook, clearly that will be a drag for this year.

Speaker #11: We also have some cash outflow from restructuring and actions that you are taking to drive efficiency. So maybe if you can give us a high-level view of how we should think about free cash flow for this year, and if it will be negative, then how big a negative it might be.

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

Speaker #11: Thank you.

Speaker #6: I would take the first, and I will leave the second one to Therese. On the European market, I think the good news really is that, I mean, in a market which is still very much subdued in Europe—again, I have been mentioning, I mean, we're missing 20% to 30% of volume versus what could have been expected prior to COVID.

Yannick Fierling: I will take the first, and I will leave the second one to Therese. On the European market, I think the good news really is that, in a market which is still very much subdued in Europe, again, I have been mentioning, we're missing 20% to 30% of volume versus what could have been expected prior to COVID. We are truly winning and gaining market share. We're not only gaining market share with Electrolux and AEG, but we're also reinforcing our price positioning in the market. We're gaining market share in the product category, where we are really strong, like in cooking for example, in some markets. It is really a winning equation today, and we are investing in marketing in order to nurse and promote the brands we do have in Europe.

Speaker #6: I mean, we are truly winning. And gaining market share—we're not only gaining market share with Electrolux and AEG, but we're also reinforcing our price positioning in the market.

Speaker #6: We're gaining market share in the product category. Where we are really strong, like in cooking for example, in certain markets. So it is really a winning equation today.

Speaker #6: And we are investing in marketing in order to just promote the brands we do have in Europe. So it is right now a positive dynamic we see in these markets.

Yannick Fierling: It is right now a positive dynamic we see in this market, thanks to all the work the team has been putting in place in a market which is very difficult. Right now, we don't see price increase in Europe. It's rather the opposite. As I have been mentioning when I covered the region, we see a level of price erosion which is more or higher than what we have been expecting probably at the beginning of the year. Of course, I mentioned it, in Q1, the impact we do have due to raw material and the war in the Middle East is very limited. This impact, as Therese said, will be growing throughout the quarters here. But at this point of time, we don't see any price movements in these regions. In all fairness, we're not expecting any significant price movement moving forward.

Speaker #6: Thanks to all the work the team has been putting in place in a market which is very difficult. Right now, we don't see price increase in Europe.

Speaker #6: I mean, it's rather the opposite. As I have been mentioning, when I covered the region, we see a level of price erosion, which is more or higher than what we had been expecting probably at the beginning of the year.

Speaker #6: Of course, I mean, I mentioned it in Q1: the impact we do have due to raw material and the war in the Middle East.

Speaker #6: I mean, it's very limited. I mean, these impacts, as Therese said, would be growing throughout the quarters here. But at this point in time, we don't see any price movement in these regions, and in all fairness, I mean, we're not expecting any significant price movement moving forward.

Yannick Fierling: Maybe one comment on the market as such. As you're saying, we do see some increases in interest rates and so forth in Europe. The market was flat, essentially, in Q1. Of course, we have been expecting the market to start to grow for the last two to three years at least, and it hasn't started to grow yet.

Speaker #3: And maybe one comment on the market.

Speaker #1: Get us a . Such as you're saying . We do see some increases in in interest rates and so forth in in Europe , the market was flat essentially in the first quarter Of course , we have been expecting the market to start to grow for the last 2 to 3 years at least .

Speaker #1: And it hasn't started to grow yet, and the reason for that is that, I mean, it's only driven by replacement today.

Therese Friberg: The reason for that is that it's only driven by replacement today. Even with an elevated interest rate or even with increased uncertainty related to Middle East conflict and so forth, it's really hard to see that the European market could go even more south from here. On price, we did see, as Yannick said, quite high price pressure in Europe. To see price increases in Europe is very unusual. Of course, what could happen is more that the price pressure downwards could ease a little bit, but to see price increases in Europe, I think is very rare. Then on the cash flow, you are absolutely right. We're not guiding on cash flow. We're keeping our CapEx for the year at SEK 4 billion. We don't see an additional pressure from these initiatives on CapEx as such.

Speaker #1: So, even with an elevated interest rate or even with increased uncertainty related to Middle East conflict and so forth, it's really hard to see that the European market could go even more south.

Therese Friberg: You are right that with the announcements we are having, both related to Chile and Hungary that we have announced in the last few days and weeks, and also related now to the cash NRI in North America that we will have in Q2 of SEK 0.9 billion, all of that will be paid out pretty much this year. Yeah, that will be an additional drag to our net cash flow for the year.

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

Speaker #2: Capital, because you'll be closing down production in Anderson. So how should we think about the working capital swing, and from a cash point of view in 2026?

Speaker #3: Yeah. Working capital. And I think in North America, in the first quarter, it was pretty negative because the market was simply down very much.

Yannick Fierling: Yeah. Working capital, I think, in North America was in Q1 pretty negative because the market was simply down very much. Of course, on the Anderson side of equation, as you can understand, you're not making these type of decisions and building a strategy as the one we have been building with this partnership with Midea in few weeks. We have been planning for that long in advance. We have been planning for ramp down in Anderson for quite some time here. We don't see a significant impact. We have been planning for this impact, if there is any, in Q3. We're ramping down Anderson in Q3. That's all basically taken into account.

Speaker #3: Of course, on the Anderson side of the equation, as you can understand, you're not making these types of decisions and building a strategy like the one we have been building with this partnership in media in a few weeks.

Speaker #3: We have been planning for that, long in advance. So we have been planning for ramp down in Anderson for quite some time here.

Speaker #3: So we don't see a significant impact. And we have been planning for this impact, if there is any, in the third quarter.

Speaker #3: So we're ramping down Anderson in the third quarter. But that's all basically taken into account.

Speaker #2: And maybe a follow up on tariff . I mean , we saw that US Supreme Court ruled against reciprocal tariff and the administration is has started issuing refunds in , I think , this week or maybe last week from last week .

Akash Gupta: Maybe a follow-up on tariff. We saw that US Supreme Court ruled against reciprocal tariff, and the administration has started issuing refunds in, I think, this week or maybe from last week. Can you quantify when it comes to tariff, especially what you paid last year? Is there any potential for refunds if you have paid significant reciprocal tariff? Thank you.

Speaker #2: Can you quantify, when it comes to tariff, especially what you paid last year? Is there any potential for refunds if you have paid significant reciprocal tariff?

Speaker #2: Thank you .

Therese Friberg: Yes. We have not disclosed the amount, but we can say that it is a material amount as you can imagine. You know that we had a very large external factors during last year, and we can say that a large portion of this was related to the reciprocal tariffs. When it comes to the process, depending on the type of claim you will have, it's divided in two different process flows. What is starting to, and has been clarified from a process perspective now is what is the easier claims. Which is in this first flow, so to say. Our claims will be in the second process flow, which has not yet been clarified how it will happen and when it will happen.

Speaker #1: Yes . So we have not disclosed the amount , but we can say that it is a material amount . As you as you can imagine .

Speaker #1: And you know that we had very large external factors during last year. And we can say that a large portion of this was related to the reciprocal tariff.

Speaker #1: When it comes to the process, it's divided depending on the type of claim you will have. It's divided into two different process flows.

Speaker #1: So what is starting to and has been clarified from a process perspective. Now is what is the easier claims. So which is in the.

Speaker #1: This is the first flow, so to say. And our claims will be in the second process flow, which has not yet been clarified.

Speaker #1: How it will happen and when it will happen . So of course , as we would know more about this process going forward , and also potential timing of a refund , we will come out with additional information .

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

Speaker #2: Thank you .

Akash Gupta: Thank you.

Speaker #4: Thank you . We will now take the next question . And the question comes from the line of hi , Juan from UBS .

Operator: Thank you. We will now take the next question. The question comes from the line of Hai Huang from UBS. Please go ahead.

Speaker #4: Please go ahead .

Speaker #5: Good morning . It's thank you for taking my questions . I have three , if you don't mind , is the first one is on the cost efficiency .

Hai Huang: Good morning. It's Hai Huang here from UBS. Thank you for taking my questions. I have three, if you don't mind. The first one is on the cost efficiency. So you delivered SEK 700-ish million now and reiterated the SEK 3.5 to 4 billion. How should we think about the phasing of this to the rest of the year? The 2 billion savings by year three from your partnership initiatives, does it already get included at all in FY26 target? Do you expect anything to flow through that SEK 3.5 to 4 billion this year? That's the first one.

Speaker #5: So you delivered 700 ish million now . And reiterated the 3.5 to 4 billion . How should we think about the phasing of of this to the rest of the year ?

Speaker #5: And , you know , the 2 billion savings by year three , from your partnership initiatives ? Does it already get included at all in FY 26 target ?

Speaker #5: Do you expect anything to flow through that? 3.5 to 12 billion this year? That's the first one.

Yannick Fierling: Thank you very much for the question. It's a very important question. As we said, the cost saving piece in the environment we are in today is extremely important for us to deliver the year-end target. That's why we have been putting in front of ourselves a very ambitious target, once again, for 2026, which is between SEK 3.5 and 4 billion. To your point, we have been delivering SEK 0.7 billion, which is basically meeting our expectation for Q1. Usually in terms of cost saving, especially when you're looking at value engineering, best cost country sourcing, or conversion costs, you have basically an increase quarter by quarter, because of course, you are having and adding projects throughout the different years.

Speaker #3: Thank you very much for your question . It's a very important question . And as we said , I mean , the cost saving piece in the environment we are in today is extremely important for us to deliver .

Speaker #3: This year . End target . And that's why we we have been putting in front of ourselves a very ambitious target . Once again for 26 , which is between 3.5 and 4 billion , to your point , we have been delivering 0.7 billion , which is basically meeting our expectations for the first quarter , usually in terms of cost saving , especially when you're looking at value engineering .

Speaker #3: I mean , best cost country sourcing or conversion cost , you have basically an increase quarter by quarter because of course , I mean , you are having and adding projects throughout the different years .

Speaker #3: That's why the 0.7 is aligned with what we have been expecting for the first quarter. And we are repeating and reiterating our ambition to reach SEK 3.5 to 4 billion at year end.

Yannick Fierling: That's why the SEK 0.7 billion is aligned with what we have been expecting for Q1, and we are repeating and reiterating our ambition to reach SEK 3.5 to 4 billion at year-end. Now, thanks for your question about the additional cost saving or what we're announcing here in terms of strategic cost saving moving forward. What we have been announcing is that we'll be saving $600 million in year three with a partnership of Midea, and that we'll be saving an additional $1.4 billion in year three, thanks to the optimized footprint and the efficiency we'll be gaining through the organizational efficiency. This saving will be growing year after year, and you can see it in the graph I showed it last night. We'll have a saving year one, year two, and we'll have a $2 billion saving in year three.

Speaker #3: Now , thanks for your question about the additional cost saving or what we're announcing here in in in terms of strategical cost saving , moving forward , we have been announcing is that we will be saving 600 million in year three with a partnership of media , and that will be saving an additional 1.4 billion in year three .

Speaker #3: Thanks to the optimized footprint and the efficiency will be gaining Through the organization , efficiency . That's of course , I mean , this saving will be growing year after year .

Speaker #3: And you can see it in the graph . I showed it last night . We'll have a saving year , one , year two , and we'll have a 2 billion saving in year three .

Speaker #3: What I want to insist on is that, in the partnership for media, it is a long-term partnership. It is a long-term partnership where we'll be growing.

Yannick Fierling: What I want to insist on is that the partnership for Midea is a long-term partnership. It is a long-term partnership where we'll be growing, we'll be saving more money, and we will be sharing capital. Saving more money is pretty important because of the scale we do have, the access of a supply base we do have, moving forward. I think it will be progressively increasing, and I think the amount we'll be reaching and the amount we'll be disclosing is $2 billion in year three.

Speaker #3: We'll be saving more money, and we will be sharing capital, and saving more is pretty important because of the scale. We do have the access of a supply base.

Speaker #3: We do have, moving forward. So I think it will be progressively increasing. And I think the amount will be reaching, and the amount we will be disclosing is, the $2 billion in year three.

Speaker #1: And of course, this is progressing. So, year two already will be quite a bit of a step up. But for the first year now, it's really about getting everything up and running.

Therese Friberg: Of course, this is progressing. Year two already will be quite a bit of a step up. For the first year now, it's really about getting everything up and running, and we are in a squeezed timing, so there will be a limited amount in 2026. It is included in our business outlook, essentially, you could say.

Speaker #1: And we are in a squeezed timing. So there will be a limited amount in 2026, and it is included in our business outlook.

Speaker #1: Essentially , you could say

Speaker #5: Understood . Thank you . My second question is on the media partnership . So I understand the perspective of the cost base outsourcing story .

Hai Huang: Understood. Thank you. My second question is on the Midea partnership. I understand the perspective of the cost base, outsourcing story. What about the market share dynamics? You mentioned you are 2% or below on the top-load washers, and you're trying to get more penetration there. Can you give us a bit of an idea of what is Midea market share on those categories? I'm trying to get to what is the additional revenue that you may get from this kind of initiative.

Speaker #5: What about the market share dynamics? So, you mentioned you're at 2% or below on the top load washers, and you're trying to get more penetration there.

Speaker #5: So, can you give us a bit of an idea of what is media market share on those categories? And I'm trying to get to what is the additional revenue that you may get from this, this kind of initiative?

Yannick Fierling: Unfortunately, I cannot disclose the market share or the turnover of Midea in North America. However, what I can tell you, and you mentioned it, we have 18% market share in food preservation. We have over 10% market share in food preparation in Springfield, and Springfield will belong 100%, of course, to Electrolux. We have more than 10% market share in dishwashing out of Kingston, and that will be 100% of Electrolux. Where we see a big potential moving forward is in the two categories, where we will be partnering with them. First, fabric care. You mentioned 7% market share in front loader, less than 2% market share in top loader, which is again, the biggest platform sold in North America in washing and in drying. We have a significant potential to grow in fabric care moving forward.

Speaker #3: I cannot unfortunately , I cannot disclose the market share or the turnover of media in North America . However , what I can tell you , and you mentioned it , we have 18% market share in food preservation .

Speaker #3: We have over 10% market share in food preparation in Springfield . And Springfield will belong 100% . Of course , to Electrolux . So we have more than 10% market share in dishwashing out of Kingston , and that will be 100% of Electrolux , where we see a big potential moving forward is in the two categories where we will be partnering with them first .

Speaker #3: I mean , Fabrica , you mentioned 7% market share in front loader , less than 2% market share in top loader , which is again , we biggest platform sold in North America in washing and in in drying .

Speaker #3: So we have a significant potential to grow in Fabrica moving forward . If you're reaching , I mentioned it last night . If we're reaching only 10% , which is half of the market share we have in food preservation for reaching 10% in Fabrica in the future , that would be 1 million additional pieces for Electrolux .

Yannick Fierling: I mentioned it last night, if we're reaching only 10%, which is half of the market share we have in food preservation. If we're reaching 10% in fabric care, in the future, that would be 1 million additional pieces for Electrolux. A significant source of growth moving forward. That's for fabric care. Even if we have 18% market share in food preservation, there is still space for growth, and we will be able to access new platforms, thanks to the broad range of products Midea is having today. We will be able to lower our cost, thanks to the vertical integration and the scale this partner does have today. Significant level of potential in terms of growth. I've been mentioning that, thanks to these new products.

Speaker #3: So, a significant source of growth moving forward. That's for Fabrica. But even if we have 18% market share in food preservation, there is still space for growth.

Speaker #3: And we will be able to access new platforms, thanks to the broad range of products media is having today. And we will be able to lower our cost, thanks to the vertical integration and the scale.

Speaker #3: This partner does have today . So significant level of potential in terms of growth . I've been mentioning that thanks to these new products , significant level of potential in terms of savings , and it will be an increasing saving .

Yannick Fierling: Significant level of potential in terms of saving, and it will be an increasing saving, as you mentioned it previously as well. We will be sharing CapEx here, which would be a positive item in terms of cash flow.

Speaker #3: As you mentioned it previously as well, we will be sharing CapEx here, which would be a positive item in terms of cash flow.

Speaker #5: Understood. Thank you. And then my final question: of the SEK 0.3 billion headwind from both rebate provisions and the Frigidaire recall, how much is it, and should we expect any further impact beyond this quarter?

Hai Huang: Understood. Thank you. My final question, of the SEK 0.3 billion headwind from both prepaid provisions and the Frigidaire recall, how much is it and should we expect any further impact beyond disclosure?

Speaker #1: Yeah, we don't separate out the two items of the 0.3. We thought that in combination, they are a relevant amount to mention.

Therese Friberg: Yeah, we don't separate up the two items of the SEK 0.3 billion. We thought that in combination, they are a relevant amount to mention, and that's why we highlight it. Also why we highlight it is because we believe that this is behind us. You should not be including that in your forward-looking expectation. Of course, it will still stay in our result for the full year, but we should not incur additional similar costs going in the quarters to come.

Speaker #1: And that's why we highlight it. And also, why we highlighted this is because we believe that this is behind us. So you should not be including that in your forward-looking expectation.

Speaker #1: Of course, it will still stay in our result for the full year, but we should not incur additional similar cost going in the quarters to come.

Speaker #5: Very clear. Thank you.

Hai Huang: Very clear. Thank you.

Speaker #4: Thank you. Our next question comes from the line of Timothy Lee from Barclays. Please go ahead.

Operator: Thank you. Our next question comes from the line of Timothy Lee from Barclays. Please go ahead.

Speaker #6: Hi . Can you hear me ? Yes . All right . Cool . Thank you so much for taking my question . So my first question is about the price increase in North America market .

Timothy Lee: Hi. Can you hear me?

Operator: Yes.

Timothy Lee: All right, cool. Thank you very much for taking my question. My first question is about the price increase in North America market again. If the market decline for Q1 is probably due to, let's say, economy or inflation, then how are you confident that the price increase will not affect your product demand going forward?

Speaker #6: Again . So if the market decline for the for for the first quarter is probably due to , let's say , economy or inflation , then how are you be confident that the price increase will not would not affect your profit going forward

Yannick Fierling: I'm not sure I got the tail end of the question. The connection is not really good. In terms of price increase, once again, we are pretty confident that this price increase will stick in the coming months because we really truly believe that the industry will be moving towards price increases due to the latest tariff structure we see in North America. Of course, the big question mark is the one you have been mentioning, and is how much demand will be impacted by this price increase. We certainly have been putting quite a lot of flexibility in our industrial assets in order to cope with a potential demand decrease in North America. Absolutely, it is a price increase which is needed.

Speaker #3: I got to tell you the question . I mean , the connection is not really good . But in terms of price increase once again , I mean we are pretty confident that this price increase will stick in the coming months because we really , truly believe that the industry will be moving towards price increases due to the latest tariff structure .

Speaker #3: We see in North America. So, of course, I mean, the big question mark is the one you have been mentioning, and it is how much demand will be impacted by these price increases.

Speaker #3: We certainly have been putting quite a lot of flexibility in our industrial assets in order to cope with a potential demand decrease in North America.

Speaker #3: But I mean , it is absolutely it is a price increase which is needed . It's a price increase . We have been announcing to our customers , and we are we are personally pretty confident that I mean , competition will be following in the same direction

Yannick Fierling: It's a price increase we have been announcing to our customers. Personally, I'm pretty confident that competition will be following in the same direction.

Speaker #6: Okay. Got it. And then my second question is about the expenses related to the recall. So we have a couple of expenses related to that.

Timothy Lee: Okay, got it. My second question is about the expenses related to the recall. We have a couple of expenses related to that in Q1. Would there be some more expenses in Q2 or going forward as well?

Speaker #6: In the first quarter. Would that mean some more expenses in the second quarter or going forward as well?

Yannick Fierling: Therese mentioned it, and I want just to be very clear. First of all, I think it is a voluntary recall. We're putting safety as an absolute priority for our customers, and I want to underline that. This recall is behind us. The entire expenses which are linked to this recall were basically spent in Q1, and that's the impact we have basically in the profit we have in North America as well. It is behind us, and we'll not see any additional expenses in the coming quarters due to this limited recall we had in North America.

Speaker #3: As mentioned it . And I want just to be very clear , I mean , first of all , I think it is a voluntary recall .

Speaker #3: I mean , we're putting safety as an absolute priority for our customers . And I want to underline that . I mean , but this record is behind us .

Speaker #3: I mean , the entire expenses , which are linked to this recall were basically spent in the first quarter . And that's what we have in that's the impact we have basically in the profit we we have in North America as well .

Speaker #3: So it is behind us, and we will not see any additional expenses in the coming quarters due to these limited recalls we had in North America.

Speaker #6: Understood . Very helpful . And then my last question is about Latin America . So obviously it was very strong in the first quarter , but you also mentioned the growth rate may slow somewhat from the year .

Timothy Lee: That is good. Very helpful. Then my last question is about Latin America. Brazil, obviously, it was very strong in Q1. You also mentioned the growth rate may slow somewhat throughout the year. What would be the reason to result in the slowdown of growth? Last quarter, I think, we also had the supplier rebates to help on the margin in Latin America. I'm just wondering whether there will be any, that kind of increased rebate from suppliers in Q1 as well.

Speaker #6: So, what would be the reason to restart the slowdown in terms of growth? And last quarter, I think we also had the supplier rebate to help on the margin in Latin America.

Speaker #6: So I just wondering whether there will be any that kind of , you know , increased rebate from suppliers in the first quarter as well

Speaker #3: I would first , I think we're very proud of our results in Latin America . We have been organically growing again , by 8% in this first quarter .

Yannick Fierling: First, I think we're very proud of our results in Latin America. We have been organically growing again by 8% in this Q1. We are gaining market share in the upper price segments. We have been having a very strong result in this Q1 in small domestic appliances as well, which I want to underline. In all fairness, as I said previously many times, the strategy is sound. The product pipeline we do have is sound. We have been investing in the market here. The Electrolux brand is extremely strong in the market. We don't see why we would be slowing down in terms of dynamics in this market. In terms of supplier rebates, in all fairness, I don't know what you're referring to. To my knowledge, we didn't declare any supplier rebate in Latin America. Therese, do you have anything in mind?

Speaker #3: I mean , we are gaining market share in the upper price segment . We have been having a very strong results in this first quarter in small domestic appliances as well , which I want to underline .

Speaker #3: And in all fairness , I mean , as I said previously , many times , the strategy is sound . The product pipeline we do have is sound .

Speaker #3: We have been investing in the market here. The Electrolux brand is extremely strong in the market. We don't see why we would be slowing down in terms of dynamics in this market, in terms of supplier rebates.

Speaker #3: In all fairness , I don't know what you're referring to . I mean , to my knowledge , we didn't declare any supply rebate in Latin America .

Speaker #3: I mean, do you have anything in mind?

Therese Friberg: Yeah. You're right.

Speaker #1: Yeah , yeah you're right . Thank you . We we yeah . We talked about an amount related to supply rebate . This quarter was was not including any additional supplier .

Yannick Fierling: Okay.

Therese Friberg: In Q4, we talked about an amount related to supplier rebate. This quarter was not including any additional supplier rebate.

Speaker #3: Rebates. I apologize for that. I.

Yannick Fierling: Okay. My apologies for that. I forgot about that.

Speaker #1: There was really underlying strong performance by our team in Latin America.

Therese Friberg: This was a really underlying strong performance by our team in Latin America.

Yannick Fierling: We are not expecting that anymore.

Speaker #3: We are not expecting that any longer.

Therese Friberg: No, we're not expecting the, let's say, the supplier rebate. Of course, we're always working with our cost efficiency. As you know, it's included in the SEK 3.5 billion.

Speaker #1: No . And we're not expecting . Yeah . The let's say the supplier rebate . I mean , of course , we're always working with our cost efficiency .

Speaker #1: As you know , it's included in the 3.55 to 4 billion . But there was a higher amount than usual , I would say , in the fourth quarter .

Yannick Fierling: I see now.

Therese Friberg: to SEK 4 billion. There was a higher amount than usual, I would say, in Q4. This is something we're continuously working with our suppliers for sure.

Speaker #1: But this is something we're continuously working with our suppliers on, for sure.

Speaker #3: Absolutely .

Yannick Fierling: Absolutely.

Speaker #6: Okay. Got it. Very clear. Thank you very much.

Timothy Lee: Okay, got it. Very clear. Thank you very much.

Speaker #4: Thank you. We will now go to our next question. And the next question comes from the line of James Moore from Rothschild & Co.

Operator: Thank you. We will now go to our next question. The next question comes from the line of James Moore from Rothschild & Co. Please go ahead.

Speaker #4: Please go ahead .

Speaker #7: Yes . Good morning everybody , and thank you for the time . I've got some questions on North America and external factors . Maybe we could go one at a time on North America .

James Moore: Yes. Good morning, everybody, and thank you for the time. I've got some questions on North America and external factors. Maybe we could go one at a time. On North America, if I take out your recall, it looks like your clean margin's about -6.5%. I just wondered if you could talk about how you expect that to develop into Q2. Normally, historically, you've done a sort of 200 basis point increase quarter-on-quarter, which would give you -4.5%. I guess what I'm thinking about is, does Section 232 take it worse with prices taking longer to cycle through floor retail? Do we get worse on price cost before we get better, I guess is the question. Any other topics for margin next quarter to consider?

Speaker #7: If I take out your recall, it looks like your clean margin is about 6.5% negative. I just wondered if you could talk about how you expect that to develop into the second quarter.

Speaker #7: I mean , normally historically , you've done sort of 200 basis point increase quarter on quarter , which would give you minus four and a half .

Speaker #7: But I guess what I'm thinking about is, does Section 232 take it worse with prices taking longer to cycle through floor retail?

Speaker #7: Do we get worse on price costs before we get better? I guess that's the question, or are there any other topics for margin next quarter to consider?

Yannick Fierling: As we said, certainly we're not happy about the results we do have in North America in Q1. The main lever we'll be executing now in Q2 is the price increase we have been mentioning, which will be between 5% and 20%. As I said previously, our ambition is to compensate for the tariff increase through the price increase. I think we have absolutely no doubt that we'll have a positive development in terms of prices, starting end of April.

Speaker #3: As we said, I mean, certainly we're not happy about the results we do have in North America in the first quarter.

Speaker #3: But I mean, the main lever we would be executing now in the second quarter is the price increase we have been mentioning, which would be between 5% and 20%.

Speaker #3: And as I said previously, I mean, our ambition is to compensate for the tariff increase through the price increase. So I think we have absolutely no doubt that we'll have a positive development in terms of prices.

Speaker #3: I mean, starting end of April.

Therese Friberg: How it practically work, of course, we started to pay the additional tariffs from 6 April, but it also takes some time before the negative impact is flowing through the P&L, as the cost is flowing through the P&L as you sell the products. As we mentioned earlier, the price increase will go live in the market really here in one week's time. We believe that we are well in terms of timing of being able to match the negative cost we will incur because of the increased tariff cost and the price increases in terms of timing when it will be in the market.

Speaker #1: And how it practically works . Of course . I mean , we started to pay the additional tariffs from the six of of April , but it also takes some time before the negative impact is flowing through the the PNL as it's flowing through the cost is flowing through the PNL .

Speaker #1: As you sell the products and , and as we mentioned earlier , the price increase will go live in the market . Really here in in one week's time .

Speaker #1: So we believe that we are . Well , in terms of timing of being able to match the negative cost , we will incur because of the increased tariff cost and the price increases in terms of timing , when it will be in the market .

James Moore: Thanks, Therese. Very helpful. Just on margin mix in the North American business, are my assumptions that cold and laundry are your two biggest negative margin businesses by quite some way, and I see you being quite clever about how you de-risk the business, but would it be fair to assume that the rest of the US, which I guess is hot, dish, small, aftermarket, collectively is a profitable business at the moment?

Speaker #7: Thanks . It's very helpful . And on I'm just on margin mix in the North American business . I mean , on my assumptions that cold and laundry are your two biggest negative margin businesses by quite some way .

Speaker #7: And I see you being quite clever about how you de-risk the business . But would it be fair to assume that the rest of the US , which I guess is hot dish , small aftermarket , collectively is a profitable business at the moment .

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

Speaker #3: That would just be repeating the answer I gave last night to the same question is that I mean , there is absolutely no doubt that food preservation worldwide , globally in in the home appliance industry is the category , which is the most on the price pressure overall , because , I mean , it is becoming a commodity for many platforms .

Speaker #3: So that's exactly why we're putting in place the actions we're putting in place with the partnership from media. But I mean, food preservation is a key category with the highest level of price pressure.

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

Speaker #7: Thanks. Could you help us understand the actions that Anderson took, specifically? I just don't really understand why you would lay off 1,500 people in Fridge Freezer before rehiring 1,300.

Speaker #7: Obviously, it's going to laundry. Maybe it requires different skills, but are there any other reasons why you're doing it that way and not transferring the employees?

Yannick Fierling: Yeah, let me just repeat what we'll be doing in Anderson, and thank you very much for asking the question. What we have in front of us is a factory transformation. We will be stopping manufacturing cooling products because we have the manufacturing joint venture in Juarez for cooling, and we will be leveraging the entire footprint we do have in cooling and Midea has in cooling as well. We'll be transforming this factory from cooling into fabric care, so washing and drying top loaders in H1 2027. What will be happening is that we'll be stopping production. We need, of course, to dismantle the entire equipment we do have in the Anderson factory. That's why you will see a write-off of SEK 1.5 billion in Q2 due to this dismantling.

Speaker #3: Yeah, let me just—let me just repeat what we'll be doing in Anderson. And thank you very much for asking the question.

Speaker #3: What we have in front of us is a factory transformation. I mean, we will be stopping manufacturing cooling products because we have the manufacturing joint venture in Juarez for cooling.

Speaker #3: And we will be leveraging the entire footprint. We do have in cooling, and Media has in cooling as well. And we'll be transforming this factory from cooling into fabric.

Speaker #3: So, washing and drying top loaders in the first half of 2027. So, what will be happening is that we'll be stopping production.

Speaker #3: We need of course , to dismantle the entire equipment . We do have in the Anderson factory . That's why you will see a write off of 1.5 billion US in the second quarter , due to this dismantling , and we will be reinstalling equipment in the Anderson factory .

Yannick Fierling: We will be reinstalling equipment in the Anderson factory in H2 and in H1 of 2027 to start production on the laundry side of equation. I think, again, as I said previously, gigantic potential on the laundry side, and we need to underline as well the fact that most of our competitors are producing laundry in North America today, in the US today. I think having a footprint for laundry in Anderson is making absolute sense here.

Speaker #3: In the second half . And in the first half of the first second half of 26 , first half of 27 to start production on the laundry side of the equation , I think , again , as I said previously , gigantic potential on the laundry side .

Speaker #3: And we need to underline as well the fact that most of our competitors are producing laundry in North America today, in the US today.

Speaker #3: So, I think having a footprint for laundry in Anderson is making absolute sense here.

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

Speaker #1: So it's a pure timing impact that we will not be producing in the facility for almost one year. So we can keep the employees without working for one year.

Speaker #1: So that's the practical timing issue.

Yannick Fierling: We'll be reemploying 1,200 people.

Speaker #3: But we'll be really 1,200 people between '27 and '28.

Therese Friberg: Yeah

Yannick Fierling: between 2027 and 2028.

James Moore: That makes a lot of sense. Thanks. Just lastly, if I could, I understand you don't want to put a hard number on your new internal forecast for external factors, but is there any way you could quantify the change of your internal expectation compared to what you expected sort of three months ago at the last set of results? Could you just qualify the increase? I understand that you're going to pass it on, and that's your ambition. I'm just talking about the gross cost side. Did you say earlier that all of the change is basically Section 232? Is there any way you could say whether the increase in your assumptions are SEK half a billion, two billion? Just trying to understand rough orders of magnitudes.

Speaker #7: That makes a lot of sense . Thanks . And just lastly , if I could , I mean , I understand you don't want to put a hard number on your new internal Forecast for external factors , but is there any way you could quantify the change of your internal expectation compared to what you expected ?

Speaker #7: Sort of three months ago at the last set of results ? And could you just quantify that ? The increase . I understand you're going to pass it on and that's your ambition .

Speaker #7: I'm just talking about the gross cost side is the change . Did you say earlier that all of the changes basically section 232 and is there any way you could say whether the increase in your assumptions are half a billion , 2 billion , just trying to understand rough orders of magnitude .

Therese Friberg: Yeah, all of the increases are essentially 232. Of course, it's a little bit more complex than that because originally we, of course, had the reciprocal and the IEEPA tariffs that we actually still flowing through the P&L in Q1. We then had the Section 122 for a period of time that we're also right now then have been paying also in Q1. When we now have the new 232, the 122 is not stacking upon the 232, but replacing. It's a lot of dynamics and a lot of mathematics.

Speaker #1: Yeah . I mean , all of the increases are essentially 232 then , of course , it's a little bit more complex than than that because originally we , of course , had the reciprocal and the tariffs that we actually still flowing through the P and L in the first quarter .

Speaker #1: We then had the section one , 21 , 22 for a period of , of time that we're also right now then have been paying also in the first quarter .

Speaker #1: And then when we now have the , the new . 232 then the 122 is not stacking up on the . 232 but , but replacing .

Speaker #1: So it's a lot of dynamics and a lot of , of mathematics . I mean , what we can say we won't go into exact numbers , but what we can say is if the current tariff structure stays the way it is right now , also fully impacting the flow from , from Mexico to the US , of course , we're also know that it's in the middle of negotiation of the new agreement for Usmca .

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

Speaker #1: So I mean , we don't know exactly where where this will develop . And we're not speculating about that . But what we can say is that it is a material increase .

Speaker #1: If the current structure stays in place, the way it is today,

James Moore: Thank you very much.

Operator: Thank you. Your next question today comes from the line of Johan Eliason from SpareBank 1 Markets. Please go ahead.

Speaker #7: Thank you very much .

Speaker #4: Thank you. Your next question today comes from the line of Johann Eliassen from SB1 Markets. Please go ahead.

Johan Eliason: Yeah. Hi again, Yannick, Therese, and Ann-Sofi. Just coming back to your JV setup, I noticed you are keeping 50% to 55% ownership in the US JVs. You're setting up the sales JV on cold products and the Anderson manufacturing for laundry. Was that a requirement from CFIUS to approve the deal? Or why are you keeping these shares?

Speaker #8: Yeah. Hi again, Yannick and Ann-Sofi, just coming back to your setup. I noticed you are keeping 50 to 55% ownership in the US JV.

Speaker #8: You're setting up the sales JV on cold products and the Anderson manufacturing for laundry, and was that the requirement from CFIUS to approve the deal, or why are you keeping these shares?

Yannick Fierling: No, absolutely not. It was not a requirement from CFIUS. That was absolutely our choice, through discussions as well with our partner, Midea. I think that has not been at all a requirement from CFIUS.

Speaker #3: No. Absolutely not. It was not a requirement from CFAs. That was absolutely our choice, through discussions as well with our partner media.

Speaker #3: So I think that has not been at all a requirement from Cepheus.

Johan Eliason: Okay. Excellent. Thank you very much.

Speaker #8: Okay. Excellent. Thank you very much.

Operator: Thank you. We will now take the next question. Your next question today comes from the line of Martin Wilkie from Citi. Please go ahead.

Speaker #4: Thank you. We will now take the next question, and your next question today comes from the line of Martin Wilkie from Citi.

Martin Wilkie: Yeah, good morning. Thank you. It's Martin from Citi. Just a couple of questions coming back to the transaction announced last night, and I understand that you can't give details on the Midea revenue that's coming in as part of the transaction. One question we've certainly had this morning from investors is, obviously, you've got a $600 million uplift in profit coming from that Mexican joint ventures. There's obviously an element of that that is consolidating Midea revenue, and there's an element of it that's pure upside to you. Can you give us some sort of sense as to what portion of that sort of belongs to Electrolux, if you like? I mean, is it safe to assume that the vast majority of that $600 million effectively accrues economically to Electrolux?

Speaker #4: Please go ahead .

Speaker #9: Yeah . Good morning . Thank you . It's Martin from city . Just just a couple of questions . Coming back to the transaction announced last night .

Speaker #9: And I understand that you can't give details on the media revenue . That's coming in as part of the transaction . But one question we've certainly had this morning from investors is obviously , you've got a 600 million uplift in profit coming from that Mexican joint ventures There's obviously an element of that that is consolidating media revenue , and there's an element of it that's , you know , pure upside to you .

Speaker #9: Can you give us sort of some sort of sense as to what portion of that sort of belongs to Electrolux , if you like ?

Speaker #9: Is it safe to assume that the vast majority of that 600 million is effectively a cruise economically to to Electrolux ?

Therese Friberg: Yeah, that's what we have tried to portray with the $600 million. How we see it is that the $600 million will be the additional profit in the Electrolux P&L. Yeah, what additional profit potentially Midea will make on this partnership, we have not been including in what we have communicated yesterday. That's also why we try to keep it clean, let's say, with the revenue and the profit. We think that the important number for you to include and to encompass is the $600 million that we believe will be an additional profit in our bottom line.

Speaker #1: Yeah , that's what we have tried to to portray with the 600 million . So how we see it is that the 600 million will be the additional profit in the Electrolux PNL .

Speaker #1: So, yeah, what additional profit could Medea potentially make on this partnership? We have not been including that in what we communicated yesterday.

Speaker #1: And that's also why we try to keep it clean . Let's say , with the yeah . With the revenue and and the profit .

Speaker #1: And we think that the important number for you to include and to encompass is the 600 million that we believe will be an additional profit in our bottom line.

Yannick Fierling: Again, I want to repeat what I said several times. It is a long-term partnership, so we have been giving figures for the next three years, and you see them basically evolving. The partnership with Midea is a long-term partnership for the region.

Speaker #3: Again , I want to repeat what I said several times . It is a long term partnership . So we have been giving figures for the next three years .

Speaker #3: And you see them basically evolving. But I mean, the partnership with media is a long-term partnership for the region.

Martin Wilkie: No, I know that, and I think that number can grow over time as well. When you say the $600 million accrues to Electrolux, and obviously, if that's an operating profit level, there will be a minority. In terms of how we think about the earnings number, just to get some sort of sense as to the net income benefit of that, because you are going to get some, if I understand it correctly, some offset of a minority to Midea.

Speaker #9: I think I know that, and I think that number can grow over time as well. But when you say it's the 600 million accrues to Electrolux...

Speaker #9: And obviously if that's an operating profit level , there will be a minority . So so in terms of how we think about the the the earnings number , just to get some sort of sense as to the net income benefit of that , because you are going to get some , if I understand it correctly , some some offset of a minority to , to media .

Therese Friberg: Yeah, that offset will actually go below net income. What we're trying to portray here is our improvement to EBIT and to net income.

Speaker #1: Yeah . That offset will actually go below net income . So what we're trying to portray here is , is our in improvement to Ebit and to , and to net income

Martin Wilkie: Okay. Thank you. If I could have a follow-up just on cash, because obviously you talked about delevering down to about 2x net debt to EBITDA. There's a lot of moving parts this year, obviously the equity raise and so forth. Just to get an understanding of the timing, and you go in some detail on this, on the timing of the various investments that you're making. Will any of those be significantly cash effective in 2026? In terms of the outflows for the investments and for some of this other restructuring? I know it's over three years, but should we assume those largely come in 2027, 2028, or could some of those come in 2026 as well?

Speaker #9: Okay . Okay . Thank you . And then if I can have a follow up just on cash , because obviously you've talked about delivering down to about two times net debt to EBITDA , there's a lot of moving parts this year .

Speaker #9: Obviously , the , the equity raise and so forth . But just to get an understanding of the timing and you've given some detail on this , on the timing of the various investments that you're making , will any of those be significantly cash effective in 2026 in terms of the outflows for for the investment and for some of this other restructuring ?

Speaker #9: I know , I know it's over three years , but should we assume those largely come in 27 , 28 ? Or could some of those come in 26 as well ?

Therese Friberg: Yes, Ann-Sofi, correct me, but I think we have one slide in the appendix from the presentation yesterday, which is actually breaking up the Q1 and the Q2 NRIs that we right now have announced. If we then talk about the Chile that we announced a few weeks ago and then Hungary that we announced earlier this week, and then of course, the North American transaction that we did announce yesterday, that will come into the Q2. I think from an NRI perspective, you have it quite detailed there on how much is cash and how much is non-cash.

Speaker #1: Yes . And Ann-sofi correct me , but I think we have one slide in the appendix from the presentation yesterday , which is actually breaking up the the Q1 and the and the Q2 noise that we right now have have announced .

Speaker #1: So if we then talk about the Chile that we announced a few weeks ago , and then a Hungary that we announced earlier this week , and then , of course , the North American transaction that we are did announce yesterday that will come into the second quarter .

Speaker #1: And so I think from an NRI perspective, you have it quite detailed there on how much is cash and how much is non-cash, and what we can say is what we are announcing now in Q1 and Q2 essentially will flow out this year, because the Anderson factory will close in the third quarter.

Therese Friberg: What we can say is what we are announcing now in Q1 and Q2 essentially will flow out this year because the Anderson factory will close in Q3, and Chile will close now as we speak in Q2, and Hungary will close by the end of the year. Potentially for Hungary, you will pay out partly then exactly at the end of 2026 and then a small part maybe at the beginning of 2027. Essentially, the large part will come this year from what we have announced.

Speaker #1: And Chile will close, now, as we speak, in the second quarter, and Hungary will close by the end of the year.

Speaker #1: So potentially for Hungary, you will pay out partly, then exactly at the end of '26, and then part—a small part maybe at the beginning of '27.

Speaker #1: But essentially, the large part will come this year from what we have announced.

Yannick Fierling: Exactly. Just for North America, as we have been saying it's SEK 2.4 billion in Q2, SEK 1.5 billion being non-cash, and SEK 900 million being dedicated mostly to restructuring.

Speaker #3: That can just be for North America. As we have been saying, it's SEK 2.4 billion in the second quarter—SEK 1.5 billion being non-cash and SEK 900 million being dedicated mostly to restructuring.

Martin Wilkie: Great. Thank you very much.

Speaker #9: Great. Thank you very much.

Ann-Sofi Jönsson: Thank you very much. We still have a few questions on the conference call. We will take the next question from John at Deutsche Bank. John, if we could ask you please only one question, that would be great. Thank you very much.

Speaker #10: Thank you very much. We still have a few questions on the conference call. We will take the next question from John at Deutsche Bank.

Speaker #10: And , John , if we could ask you , please , only one question . That would be great . Thank you very much .

John Kim: Yeah. Thank you. Just wanted to clarify the accounting treatment on the fabric care JV. 55% ownership. Will you consolidate this, or does it go below the line because you're deemed not to have operational control?

Speaker #11: Yeah . Thank you . I just wanted to clarify the accounting treatment on the Fabric Care JV . So 55% ownership . Will you consolidate this or does it go below the line because you're deemed not to have operational control

Yannick Fierling: Anne-Sophie.

Therese Friberg: Yeah. We will have operational control.

John Kim: Okay.

Therese Friberg: With the manufacturing JV in Anderson, we will fully consolidate.

Speaker #1: Yeah , we we will have operational control . So we will fully so with the manufacturing JV in Anderson , we will fully consolidate

John Kim: Okay. Thank you.

Therese Friberg: Line by line. Yeah.

Speaker #11: Okay . Thank you .

Operator: Thank you. Your next question today comes from the line of Akash Gupta from J.P. Morgan. Please go ahead.

Speaker #1: Line by line .

Speaker #4: Thank you. Your next question today comes from the line of Akash Gupta from J.P. Morgan. Please go ahead.

Akash Gupta: Yeah. Hi. I had a follow-up on this 5% to 20% price increase in North America. Does it cover all of your sales in the region or part of it? Thank you.

Speaker #2: Yeah . Hi . I had a follow up on this 5 to 20% price increase in North America . Does it cover all of your sales in the region or part of it ?

Yannick Fierling: No, it's all our sales in the region.

Speaker #2: Thank you .

Speaker #3: All. It's all our sales in the region.

Akash Gupta: Thank you.

Speaker #2: Thank you

Operator: Thank you. Your next question, one moment please, comes from the line of David MacGregor from Longbow Research. Please go ahead.

Speaker #4: Thank you . Your next question . One moment please . Comes from the line of David S . MacGregor from Longbow Research . Please go ahead .

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

Speaker #12: Yeah . Thank you for taking the follow up question . Yannick , have you spoken to your big box retail customers in North America and secured their support for this ?

Yannick Fierling: Yeah, absolutely. Of course, customer first, and I think we have been calling all our main customers yesterday afternoon about the strategy we're deploying over there. Let me tell you that, the feedback was overly positive about what we're putting in place in the region. I've been exchanging myself with the North American team late last night and this morning, and it has been positive. Absolutely, yes, of course, we have been reaching out to each one.

Speaker #3: Yeah , absolutely . Of course . I mean , customer first . And I think we have been calling all our main customers yesterday afternoon about the about the strategy .

Speaker #3: We're deploying over there. And let me tell you that, I mean, the feedback was overly positive about what we are putting in place in the region.

Speaker #3: I've been exchanging myself with a North American team late last night and this morning , and it has been positive . So absolutely , yes , of course we have been reaching out to each of them .

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

Speaker #12: And then just very quickly, do you give up any flooring space in order to accommodate the media brand on those sales floors?

Yannick Fierling: Didn't get the question.

Yannick Fierling: No, for sure not. Our sales forces, as Yannick went into yesterday, they will still be working separately with our customers. No, for sure not. We rather expect that we will have a broader product portfolio, and it's something we would have the ambition to gain additional floor spots.

Speaker #3: And get the questions ?

Speaker #1: No , no , for sure not . I mean , our sales force is , as Yannick went into yesterday , they will still be be working separately with our customers and know for sure not we rather expect that we will have a broader product portfolio .

Speaker #1: And if anything, we would have the ambition to gain additional floor spots.

Yannick Fierling: Yeah, sorry, I didn't get the question, but absolutely. Thanks, Therese. It is very important to underline that we will keep our identity in North America in terms of design, in terms of features, in terms of go-to-market. Here in the Sales Venture, what the Sales Venture will be doing is to define the optimal range lineup in North America in food preservation for both Midea and ourselves. We'll be working together, we'll be leveraging the R&D resources here. But our sales force, as I mentioned yesterday, will be separate, and there will be an Electrolux sales force facing VN customers in North America.

Speaker #3: Yeah , sorry I didn't get the question , but absolutely . I mean , it is very important to underline that we will keep our identity in North America in terms of design , in terms of features , in terms of go to market here in the sales and venture , what the sales joint venture will be doing is to define the optimal range line up in North America in food preservation for both media and ourselves .

Speaker #3: We'll be working together . We'll be leveraging the R&D resources here . But I mean , our sales force , as I mentioned yesterday , will be separate and there will be an electric sales force facing the customers in North America .

Operator: Okay. Thank you very much. Thank you. I will now hand the call back to Ann-Sofi Jönsson, Head of Investor Relations.

Speaker #12: Okay . Thank you very much .

Speaker #4: Thank you . I will now hand the call back to Ann-Sofi Jnsson , Head of Investor Relations .

Ann-Sofi Jönsson: Thank you very much. With that, we are going to conclude the Q&A session and this call. I hand over to you for some closing remarks, Yannick.

Speaker #10: Thank you very much. So with that, we are going to conclude the Q&A session and this call. I hand over to you for some closing remarks.

Yannick Fierling: Yeah. Thank you very much. Again, difficult Q1 in North America. Strong results in the other regions. More importantly, we have been announcing a series of initiatives which are building the future of Electrolux, which have a footprint of a well-thought strategy we have been developing in the last month. We're absolutely convinced that with this new platform, we will be accelerating our growth, improving our profit, and reaching the target we have been communicating in the MCU long term, which is midterm, which is 6%. Thank you very much.

Speaker #10: Yannick .

Speaker #3: Thank you very much . Again , difficult first quarter in North America , strong results in the other regions , but more importantly , we have been announcing a series of initiatives which are building the future of electrics , which have fruit of a well thought strategy .

Speaker #3: We have been developing in the last month , and we absolutely convinced that with these new platform , we will be accelerating our growth , improving our profit and reaching the target we have been communicating in the MCU long term , which is mid-term , which is 6% .