• Organic Sales Growth: 7.9% driven by North America and Latin America.
• Operating Margin: 1.4% with a year-over-year improvement of SEK1.2 billion.
• Cost Efficiency Savings: SEK1.4 billion in the first quarter, targeting SEK3.5 billion to SEK4 billion for 2025.
• Cash Flow After Investments: Negative SEK3.1 billion due to higher seasonal outflow in operating working capital.
• Net Debt to EBITDA: Stabilized at 3.4 times, same as the end of 2024.
• Liquidity: SEK29.5 billion with revolving credit facilities.
• North America Organic Growth: 12.2% driven by major launches in the premium segment.
• Latin America Organic Growth: 16.3%, though growth rate slowing due to inflationary pressures.
• Europe Organic Growth: 1.2%, with market largely unchanged and replacement driven.
• Investment in Innovation and Marketing: Expected to increase in full-year 2025 compared to 2024.

• Warning! GuruFocus has detected 7 Warning Signs with ELRXF.

Release Date: April 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Electrolux AB (ELRXF) reported a solid organic growth of 7.9%, primarily driven by strong performance in North America and Latin America.
• The company achieved an operating margin improvement of SEK1.2 billion year-over-year, reaching 1.4%.
• Cost efficiency measures resulted in savings of SEK1.4 billion in Q1, contributing positively to the operating margin.
• Electrolux AB (ELRXF) is recognized as a leader in sustainability, with significant reductions in Scope I, II, and III emissions.
• The company has launched innovative products, including AI-assisted cooking appliances, enhancing its competitive edge in the market.

Negative Points

• The European market remains largely replacement-driven with subdued demand, impacting pricing negatively.
• Electrolux AB (ELRXF) faces headwinds from the devaluation of the Brazilian real, affecting its Latin American operations.
• North American consumer confidence has deteriorated, posing a risk to future demand.
• The company anticipates significant negative impacts from tariffs, particularly affecting North American operations.
• Cash flow after investments was negative SEK3.1 billion in the quarter, with a higher seasonal outflow in operating working capital.

Q & A Highlights

Q: Can you explain the impact of external factors on pricing and tariffs, and how Electrolux plans to address these challenges? A: Yannick Fierling, CEO, explained that Electrolux has been proactive in responding to currency devaluation and tariffs by implementing price increases, particularly in Brazil and North America. The company aims to offset the negative impacts of tariffs through these price adjustments, ensuring they remain competitive despite the 170% tariff on imports from China.

Q: How is Electrolux managing its supply chain and sourcing in response to tariffs, particularly from China? A: Yannick Fierling, CEO, stated that Electrolux is exploring best cost country sourcing outside of China to mitigate the impact of tariffs. The company is leveraging its global scale to find alternative sourcing options and is also considering production in regions like Southeast Asia and Africa to reduce dependency on China.

Q: What is Electrolux's strategy for maintaining market share in North America amid tariff challenges? A: Yannick Fierling, CEO, emphasized that Electrolux's strong local manufacturing footprint in North America, with factories in the US and Mexico, positions it well to handle tariff impacts. The company is focusing on product innovation and marketing to support price increases and maintain competitiveness.

Q: How does Electrolux view the competitive landscape in Europe, especially with potential increased competition from Asian imports? A: Yannick Fierling, CEO, noted that Electrolux's strong brand presence in the core plus and premium segments in Europe provides a buffer against potential competition from Asian imports. The company is focusing on consumer-relevant innovations and leveraging its brand strength to maintain market share.

Q: What is Electrolux's outlook for Latin America, considering the current economic conditions? A: Yannick Fierling, CEO, mentioned that while growth in Latin America has slowed, Electrolux remains focused on the premium segment, which is less impacted by competitive pressures. The company is committed to maintaining its leadership position in the region through strategic investments and product launches.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.