Ann-Sofi Jönsson : Welcome to the presentation of Electrolux Group's Second Quarter Results 2026. I'm Ann-Sofi Jonsson, Head of Investor Relations and Sustainability Reporting. Today, we are running a webcast and a phone conference simultaneously, and you will hear us but not see us as you typically do, as we had to postpone the report date from the original date of the 17 until today as a result of the completion of the rights issue at the end of June. We will open up for Q&A after the presentation. With me today, I have Yannick Fierling, our CEO; and Therese Friberg, our CFO. So now I hand over to you, Yannick.
Yannick Fierling : Thank you, Ann-Sofi. And again, a very warm welcome to all of you for this second quarter presentation 2026. This quarter is marking a very important milestone for the Electrolux Group. At the beginning of December last year, we presented an overarching strategic direction for Electrolux. This included a top priority to improve our business in North America. In this quarter, we announced an important step for the transformation of the region, a strategic partnership with Midea for our Food Preservation and Fabric Care business. This partnership is introducing a new operational model for parts of the business and will be a major contributor to improved performance in the future. We also announced global organizational efficiency and footprint initiatives and successfully completed a rights issue of about SEK 9 billion. This strengthened our balance sheet and took us one step closer to our ambition to have a leverage of about twice EBITDA. Let's speak now about Q2. Organic sales grew earnings and cash flow improved. Our market position in Europe continued to strengthen and our position in Brazil remains strong. We made price increases of about 5% to 20%, depending on product category in North America to offset the cost impact from the extended Section 232 tariffs. This, we did in a market that continued to decline in the quarter. We estimate the cost pressure from tariffs will remain in North America in the coming quarters. Next slide, please. Let me turn to our development in the quarter. Organic sales growth was positive, driven by higher volume despite continued competitive market conditions across most regions. In EMEA and APAC, organic sales grew 4.5%, supported by higher volumes and a favorable product mix. While pricing remained under pressure, our Electrolux and AEG brands continued to gain both value and volume share. Strengthening our position in a market that remained broadly flat and characterized by cautious consumer demand. In Latin America, organic sales also increased by 4.5%, driven primarily by higher volumes in Brazil. This more than offset negative price development and an unfavorable mix during the quarter. In North America, organic sales declined by 2.9%, reflecting lower U.S. market demand and achieved [ to a lower ] price. At the same time, we successfully implemented price increases across product categories with pricing developing positively during the quarter. Finally, our aftermarket business continued to grow slightly, providing additional support to group sales. Overall, the quarter demonstrated our ability to drive volume growth and gain market share in key markets while continuing to navigate a challenging and highly competitive environment. EBIT, excluding nonrecurring items, improved compared to last year with stronger performance in both EMEA, APAC and Latin America. In these regions, earnings benefited primarily from higher volumes and continued progress on our cost efficiency initiatives. Across the group, cost efficiency contributed approximately SEK 1.4 billion to operating income, demonstrating that the actions we have been taking to improve competitiveness are delivering tangible results. In North America, profitability remained under pressure. Lower sales volumes and unfavorable mix and increased U.S. tariff costs negatively impacted earnings during the quarter. We implemented price increases across categories, which helped offset part of the tariff-related cost inflation, but not all of it. It is important to note that tariff costs will have a greater impact in the third quarter as Q2 only reflected a partial quarter of these costs. At the same time, second quarter results in North America benefited from approved IEEPA tariff refund claims and a positive effect from a decision to reshape the traditional retiree group health plan in the U.S. External factors negatively impacted the group during the quarter, driven primarily by tariff as well as the consequences of the conflict in the Middle East regions, which increased logistics and raw material costs. As previously communicated, operating income included negative nonrecurring items of SEK 2.2 billion, mainly related to the strategic partnership with Midea in North America and our ongoing footprint and organizational optimization initiatives. Overall, while external conditions remain challenging, we continue to improve our underlying earnings supported [Technical Difficulty] disciplined execution and sustained [Technical Difficulty]. Next slide, please. In Europe, market demand was broadly stable across both Western and Eastern Europe during the quarter. However, consumer sentiment remained weak, reflecting geopolitical uncertainty, inflationary pressures and elevated interest rates. Demand for built-in kitchen products continued at a low level and was primarily replacement driven. In Asia Pacific, consumer demand was largely unchanged year-over-year, while competitive intensity remained high across the region. We saw continued market share gains for AEG and Electrolux brands. EMEA and APAC delivered organic sales growth of 4.5% in the quarter, driven by higher volume and a slightly favorable mix. Recently launched products continue to support our market position, particularly in higher-value categories such as built-in kitchen products. While competitive pricing pressure remained intense, resulting in a negative price impact, we continue to strengthen our price position in Europe [Technical Difficulty]. We improved EBIT, excluding NRI in the quarter, where cost efficiency improvements were the main earning drivers supporting our purchasing savings and value engineering initiatives. Higher volume and slightly positive mix also contributed positively. These gains were partly offset by negative price development due to continued competitive pressure. External factors remained a headwind, primarily reflecting higher raw material, logistics and labor costs, including impacts related to the Middle East conflict. As previously announced, operating income included a restructuring charge of about SEK 0.6 billion related to the planned closure of the refrigeration factory in Hungary. Also note that in the second quarter 2025, operating income excluding NRI, included a positive effect from the divestment of Kelvinator trademark portfolio in India of about SEK 180 million. Next slide, please. Coming back to the European market. Market demand was broadly unchanged in the second quarter. Western Europe, representing about 80% of the market, increased [Technical Difficulty] while Eastern Europe remain unchanged. Consumer demand continues to be largely replacement driven, reflecting a market environment where spending remains cautious. It is also worth noting that today's market remains below historical level. Compared to the second quarter of 2016, so 10 years ago, the European demand is still about 5.5% lower. Next slide, please. Moving now to North America. The market demand declined by approximately 3% in the quarter with weakness across the major product categories. While market price levels increased year-over-year, they have not yet fully offset the cost impact of the recently implemented U.S. Section 232 that includes Mexico. Consumer demand remained predominantly replacement driven with economic uncertainty and inflation concerns weighing on confidence and supporting a continued preference for lower price points. The region reporting an organic sales decline of 2.9%, mainly reflecting lower U.S. market demand and an unfavorable mix. They continue to face a challenging demand environment, while pricing actions we've increased -- pricing actions we've increased between 5% to 20% depending on product categories helped partly to offset pressure from lower volumes and mix. EBIT, excluding NRIs, was negatively impacted by lower sales and negative mix and higher U.S. tariff cost pressure impacting earnings in the second half of the quarter. While implemented price increases helped offset part of the tariff-related cost pressure, the net impact remained negative. We expect tariff headwinds from the extended U.S. Section 232 tariffs, including Mexico, to increase in the third quarter as it will reflect a full quarter of tariffs. Also, the cost pressure will remain in the coming quarters. Cost efficiency improvement contributed positively, driven by finished goods sourcing, value engineering and purchasing savings. External factors remained a headwind, reflecting increased tariff costs, currency headwinds and consequences from the Middle East conflict with increased raw material and logistic costs. Earnings also benefited from a positive SEK 174 million impact related to a decision to reshape its traditional retiree group health plan in the U.S. and the recognition of previously submitted U.S. tariff refund claim of SEK 310 million. Next slide, please. Looking at the U.S., market demand declined by approximately 3% in the quarter with weakness across the major product categories. While market pricing increased year-over-year, it has not yet fully offset the cost impact of the recently implemented U.S. tariffs. This continues to create a challenging industry backdrop and reinforces the importance of disciplined pricing actions, cost efficiency initiatives and operational execution. Next slide, please. Now that's a very important page. Certainly. It's about, I mean, the Midea execution. The strategic partnership we announced with Midea is progressing according to plan. What you see here is a very high-level milestone plan for the coming quarters. During the second quarter, we set a governance in place. In Juarez, in Mexico, we have been making progress in the food preservation transition, and we are preparing to handle this factory to hand over this factory to Midea. Here, we will have a 35% stake going forward. In Anderson, production will close at the end of this month, meaning in 2 days. Then we will start to repurposing of the plant into a Fabric Care plant. Here, we will keep a 55% share. For the Sales JV, where we will have 50% of stake, the CEO and Board of Directors have been appointed and the start of all the JVs are planned in this quarter. Going forward, one of the major milestones after the start of the JVs will be when we start to rehire personnel in Anderson and start the Fabric Care production next year. The first quarter where we will be reporting according to the new operating model in North America is in Q3, it is in this quarter. Next slide, please. Now moving to Latin America. Market conditions remained relatively resilient during the quarter, supported by positive demand development in Brazil and solid demand in Argentina and Chile. Competition remained intense across most categories, continuing to put pressure on pricing. At the same time, interest rate that kept us at a high level affected consumer spending and reinforced the focus on affordability across the market. Against this backdrop, demand held up well, and the region continues to offer attractive growth opportunities over the longer term. Organic sales growth was positive in the quarter, supported by higher volume in Brazil and Chile. Small domestic appliances continued to perform well, benefiting from an expanded product portfolio, while aftermarket sales also developed positively. The market remained competitive, however, and continued price pressure resulted in a negative price and mix effect. Despite this backdrop, the region delivered growth, supported by volume expansion and continued category development. EBIT and margin improved year-over-year, excluding nonrecurring items, driven by higher volumes and strong execution of cost efficiency measures. Product cost reductions and sourcing initiatives contributed positively, helping to offset continued pricing pressure and a slightly unfavorable mix. External factors were slightly negative overall as favorable currency effects were offset by inflation. We also continue to invest in our brand-building activities and direct-to-consumer capabilities, which are certainly our strength in this region. Reported operations income included negative SEK 101 million nonrecurring items related to downsizing optimization measures in Argentina. In the quarter, we also ceased production in Santiago, Chile. We will remain in Chile, but with an operating model where we source products from other countries. Next slide, please. I'm very happy today to be able to speak to you about the SDA progress we have been making in Brazil. Let me illustrate how we're executing this product category, which is once again small domestic appliances. It is one of our key growth items. A central part of that strategy is the Gralha Azul factory that we inaugurated in 2025. It was our largest investment in Latin America last year. The investment increases regional production capacity and strengthens our local-for-local manufacturing model, allowing us to respond faster to consumer needs while improving competitiveness. A good example is our blended platform launched in September 2025 and produced locally in Brazil. Since we launched it, more than 500,000 units have been sold, and we expect the volume to approach 1 million units in 2026. This has contributed to our strengthened brand positioning and demonstrated the value of combining local product development with local manufacturing. At the same time, we're expanding into attractive growth categories. During the quarter, we entered the espresso coffee machine segment, one of the fastest-growing categories in the market, supported by increasing consumer interest in premium at-home coffee experiences. We also launched a sparkling water machine, extending our presence into a category supported by sustainability and health-conscious consumer trends while creating opportunities for recurring revenue through consumables. These initiatives are supported by the strength of the Electrolux brand. Today, Electrolux stands as one of the leading small domestic appliances brand in Brazil, reflecting strong consumer relevance, differentiated products and consistent execution. Together, this gives us confidence in our ability to continue growing profitably and strengthening our market position over time. The combination of local manufacturing, innovation and a strong brand continues to support profitable growth in Brazil. Our latest air fryer campaign is a good example of this practice. Let's have a look at a small video. [Presentation] Very good. Moving now into the cost reduction slide. Delivering cost efficiency remains a key strategic priority for the group. For the full year, we continue to expect a saving of SEK 3.5 billion to SEK 4 billion of earnings. In the quarter, cost efficiency contributed at a level of SEK 1.4 billion, driven primarily by product cost reductions, sourcing actions and improved operational efficiency. Our focus remains on accelerating product cost reductions, increasing sourcing from best cost countries and leveraging our global scale more effectively, across the organization. These actions are important not only to offset external cost pressures, but also to strengthen our competitiveness over time. With that, I hand it out to Therese. Therese?
Therese Friberg : Thank you, Yannick. Net sales increased in the quarter with organic growth of 2% and reported growth of 0.9%. As Yannick has presented, it was driven by EMEA and APAC and Latin America, whereas North America saw a decline. EBIT, excluding nonrecurring items, improved to SEK 1.2 billion, corresponding to a margin of 3.8% compared with 2.5% last year. The key driver was improvement from cost efficiency measures contributing by SEK 1.4 billion in the quarter. This more than offset the negative impact from volume, price and mix combined, negative external factors and the effect from the divestment profit from last year. External factors remained a headwind driven by increased tariff costs and the consequences of the Middle East conflict, mainly through increased raw material and logistic costs. In summary, the bridge shows clear benefits from our cost actions, while the weak demand situation and external cost pressures continue to weigh on earnings. Next slide, please. As previously announced, operating income in the second quarter, including nonrecurring items related to the Midea partnership in North America of SEK 1.9 billion, group organization and footprint optimization of SEK 0.7 billion as well as the claims for refunds of IEEPA tariffs related to 2025 of $49 million equal to SEK 450 million, totaling SEK 2.2 billion. The difference between the estimated nonrecurring item for the second quarter that was announced on April 23 and the actual reported NRI is related to timing differences between quarters. The IEEPA tariff refund claims have been validated and approved for payout by the CBP and the amounts have, therefore, been slightly revised compared to the estimated figures announced on the 29th of June. It should also be noted that the NRI is not related to refund claims for 2026, but still, of course, the costs we have taken in the last 15 months. Remaining IEEPA tariff claims will be handled in a separate process, but we don't deem these to be material. Related to when the cash will come for this process, based on what the time has been in other cases, we estimate the cash could come within 60 to 90 days from the day of validation. As I stated earlier, the claims have been validated as of the beginning of July. Next slide, please. Turning to cash flow. Cash flow after investments improved to SEK 1.6 billion in the quarter compared with a negative SEK 0.7 billion a year ago. The operating cash flow after investments in the second quarter was driven by a positive operating income, excluding nonrecurring items and the majority of the nonrecurring items that was booked also has had no cash outflow yet. We also had a more favorable development of operating assets and liabilities and investments continued to be at a low level. The operating cash flow compared to the same period of last year was better as a result of lower increase in net operating working capital with a smaller increase in inventory than what we saw in the second quarter of last year. Overall, the quarter reflects improved cash generation supported by disciplined working capital management and continued focus on capital efficiency. Next slide, please. Turning to our balance sheet and liquidity. In the second quarter, we successfully completed a rights issue of SEK 9 billion, which combined with a positive cash flow strengthened the balance sheet. We thereby have a solid liquidity position and a well-balanced debt maturity profile. At the end of June, the available liquidity, including revolving credit facilities amounted to SEK 37.7 billion. Importantly, our financing structure contains no financial covenants. We have an S&P Global rating with BBB- with a stable outlook and maintaining a solid investment-grade credit rating remains a key priority. To further strengthen the balance sheet, we continue to focus on improving earnings and delivering solid cash generation. At the end of the quarter, the net debt-to-EBITDA was 2.6x. Over time, we are aiming at the leverage not exceeding 2x. With that, I will hand over to Yannick for the market and business outlook.
Yannick Fierling : Thank you very much, Therese. Let's move to our market outlook for the full year 2026. Looking ahead, the market environment remains characterized by geopolitical uncertainty and macroeconomic volatility, which may continue to weigh on consumer demand throughout the year. We maintain a neutral market outlook for Europe. During the quarter, demand for our core appliances was unchanged in Europe. Consumer sentiment remained weak, reflecting geopolitical tensions, energy-driven inflation, higher interest rates and continued economic uncertainty. As a result, consumers continue to postpone discretionary purchases and demand for built-in kitchen products remained stable at a low level. We also maintained a negative market outlook for North America. Market demand for core appliances declined by approximately 3% during the quarter with lower demand across most major product categories. Market price levels were higher year-over-year, although they did not fully reflect the impact of the U.S. tariff implemented during the period. Economic uncertainty and inflation concerns continue to weigh on consumer confidence. Demand remained primarily replacement driven with consumers continuing to favor products at lower price points. In Brazil, our positive full year market outlook remains unchanged. Market and consumer demand remained resilient during the quarter, supported by continued positive development in Brazil. At the same time, competitive intensity remained elevated across most product categories, resulting in continued price pressure. This, combined with continued elevated interest rates led to greater focus on access to consumer financing, affordability and promotional activity. Next slide, please. Our business outlook for the full year has been partially revised. Combined, this is expected to be positive in 2026. When looking at volume, price and mix combined, this is expected to be positive in 2026. We are, of course, working with all these 3 levers to achieve a positive organic contribution for the group. We expect investments in innovation and marketing for the full year 2026 to increase to support continued growth in our focus categories. Our focus on cost reductions and improving efficiency throughout the group remains critical to strengthening competitiveness. We anticipate earnings contribution from cost efficiency of SEK 3.5 billion to SEK 4 billion in 2026. External factors are expected to have a significant negative impact in the year, mainly due to higher tariff costs from expanded U.S. Section 232 import tariffs. This cost inflation is reflected in external factors in our EBIT bridge. Also, cost increases resulting from the Middle East crisis is estimated to have a negative impact with increased raw material and logistic costs. In the business outlook, we have revised the capital expenditure outlook to approximately SEK 3 billion to SEK 3.5 billion. This is partly resulting from us being more efficient on sourcing and procurement, for example. Next slide, please. To sum up the second quarter, our strategic execution is on track. Step by step, we take actions to deliver both on short-term and long-term priorities. The actions announced in the second quarter are improving future earnings power. We fundamentally changed our operating model and accelerating the transformation in North America business through a strategic partnership with Midea. Organic sales was above our midterm target of 4% in EMEA, APAC and LatAm. We improved market and price position in EMEA despite weak markets and continue to demonstrate strong earnings capability in Latin America. At the same time, we announced and executed on global organization footprint initiatives. We announced the closure -- the closedown of Jaszbereny, the Hungary factory and ceased production in Santiago, Chile. We are downsizing Argentina, and we initiated process to optimize organization and manufacturing presence in Italy. We have been delivering on cost efficiency at the level of SEK 1.4 billion, while we also successfully completed a rights issue of SEK 9.1 billion that strengthened our balance sheet and supports the execution of our transformation plan. Our short-term priorities are clear: execute the transformation of North America, accelerate efficiency improvements across the organization, optimize the global manufacturing footprint and increase agility and performance focus throughout the organization. We are truly reshaping Electrolux Group to become a more competitive, resilient and consumer-centric company. Thank you for your attention. Now I'll turn it over to Ann-Sofi for the Q&A.
Ann-Sofi Jönsson : Thank you very much, Yannick. So with that, we will open up for the Q&A, and we will start with the conference call, and I will hand over to the conference call moderator to introduce this.
Operator : [Operator Instructions] We will take our first question and the question comes from the line of Hai Huynh from UBS.
Hai Huynh : My first one is on North America underlying earnings. Can you clarify -- so the tariffs, I understand on the refunds. Could you clarify the health fund benefit? Why is it included in NRI? And are you expecting to have benefits ongoing? Or is this just a one-off for Q2? What I'm trying to get is to get the clean exit rate for Q2.
Therese Friberg : Yes, I can take that. Normally, we classify nonrecurring items at an amount above SEK 200 million. Since this was, yes, below SEK 200 million, we did not reclassify it as a nonrecurring item, but we still believe that it's a relevant amount for you to be aware of. That's why we are explicit about the amount. Of course, also importantly to say these type of medical expenses, which is mainly related to, we are taking on an ongoing basis in our P&L. Of course, this cost has previously also been flowing through the P&L on different lines, you could say, both in cost of goods sold and also in SG&A. That is why. Then when it comes to, if this was a true one-off in the quarter or if there is anything more to come, it's too early to judge at this point of time. Of course, as you've seen previously, we worked on our asbestos portfolio. Of course, as you understand, we always look for opportunities to, yes, become more efficient on our cost on all lines of the P&L.
Hai Huynh : On my second question, could you give me some color on the kind of proportion of the Section 232 tariff costs now covered by realized pricing? When do you expect to fully offset it? Do you think there will be further pricing actions needed on top of this to fully offset, which is your plan to fully offset?
Yannick Fierling : Yes, I can take this one. I think, as you said, I mean, one of our priorities is to have a very disciplined pricing actions, not only in North America, but mainly North America moving forward. We have been leading price increase as we have been announcing it in the last quarterly report, we have been leading price increase in North America by increasing prices between 5% and 20% in most of the categories. We have been implementing price increase starting at beginning of May. In all fairness, I mean, we have been only few home appliance manufacturer to increase prices in the second quarter. When I say a few, I mean, it is really a couple. I mean, more recently, in the last weeks, what we have seen is we have seen more manufacturers increasing prices as well. We see today a picture in terms of price environment, which is more consistent here. But I mean, we will certainly, I mean, remain very agile. As you can imagine, I mean, watching prices and moving on prices is something we're doing on a weekly base, not to say on a daily base here. We will -- one of our priority would be to remain agile moving forward in terms of price development.
Hai Huynh : And then my final question is on the pricing elasticity and the kind of volume trade-off. So you made large price increases, 5% to 20% last quarter. What have you observed in order intake and also retailer sell-through, promotional intensity?
Yannick Fierling : As I said, I mean, we have been increasing prices beginning of May in North America, and we have been holding basically on the price increase. Certainly, as you could see out of the numbers, we have been slightly losing market share during the quarter, very slightly. I mean we are down 2.9%. The market has been down a little bit less than that. We are adjusting certainly, we need to find a balance and the right balance between volume and prices. As I said, I mean, we're happy to see that, I mean, the market is becoming more consistent and the competitive environment is becoming more consistent in the last weeks.
Operator : We will move to our next question. Your next question comes from the line of David MacGregor from Longbow Research.
David S. MacGregor : I guess I wanted to start by just asking about the weaker North American demand and whether this is the retailer destocking to some extent in reaction to the softer consumer behavior or whether this is at the retail POS.
Yannick Fierling : I'm not sure I understood entirely your question here. If your question is about, I mean, prices, we have been, again, increasing prices across all our customers in North America, and we have been holding on that. I mean I don't know exactly what's your question in terms of POS is.
Therese Friberg : I guess the question was we see retailers destocking and if they want to carry lower stock levels, let's say, with a weaker demand situation. I think we have not seen any or heard any of that type of feedback. I mean not that they generally want to keep a lower stock level. But of course, we do see that the demand has been slower. That's a reality.
David S. MacGregor : Got it. Yes. I appreciate that. Then secondly, I guess the price increases that you're seeing, the 5% to 20%, you talked about the fact that you're gradually seeing competitive behavior coming along with those pricing initiatives. Are those pricing initiatives being realized as a consequence of lower promotional pricing? Or are you seeing traction on list price increases?
Yannick Fierling : I guess it's a mix of both. Even it's mainly at the beginning on the promotional side of the equation. But I mean, we have seen some movements as well on the listed side of the equation. But we are again following price increases on a weekly basis in every single product category. As I said, I mean, we led price increase in the second quarter. But I mean, in the last weeks, we saw basically most of our competitors getting to a level which is, I mean, pretty consistent across the markets. But I guess it's both in terms of promotion and listed.
David S. MacGregor : Okay. And then last question for me is just the extent to which you're getting feedback from retailers on the Midea arrangements. You mentioned there was a slight market share loss. I'm guessing that's a consequence of the pricing. But do you think retailers are fully on board with you here and supporting what you're doing?
Yannick Fierling : No, I think, David, that's an important point. I mean we -- as you can imagine, they were the first ones we have been reaching out when we made the announcement. As I said previously, their reaction has been overly positive about. I want to underline once again that we will be keeping the entire intellectual property of Electrolux. We'll be keeping our design. We'll be keeping our signatures, all our features. I mean we're working together with Midea to develop the right food preservation products, but they will remain Electrolux products. I mean we are just taking advantage of the supply chain they do have today and the capabilities they have in terms of manufacturing. But we are working together with Midea to make sure that we are keeping our identity and that we'll be offering better and even more product moving forward in the different -- in food preservation and certainly moving forward in top loaders.
Operator : We will now take our next question. Our next question comes from the line of Akash Gupta from JPMorgan.
Jeremy Caspar : It's actually Jeremy on Akash's line. I've got 2, if I may. First, I would like to zoom in on the European business. I'm wondering how big is aircon for you today as a category in Europe? And does it play any role in the Q2 performance? And also, we know that you do sell aircon in other regions, but are there any plans to leverage your existing distribution network to enter in this category in the wider European market? Perhaps can you address the European aircon organically? Or would you need any support from a partner like you had with Midea in North America?
Yannick Fierling : Jeremy, thanks for the question. Certainly, I mean, we have been experiencing pretty significant heat waves in many markets in Europe and very high level of demand in terms of air conditioning. I mean, fact is for Europe today, we are not manufacturing products ourselves. We are sourcing mainly portable air conditioner for the European regions. We are not right now offering residential or commercial air conditioning in the region yet. So I mean, we -- I would say that the contribution of the heat waves we had in Europe and the sales of portable air conditioner is probably not -- is not significant in the results we have been delivering in the second quarter for Europe.
Jeremy Caspar : Okay. I understand. And then also in the EMEA, APAC region, you've delivered about 4% margins in Q2 despite those low volumes. Should we think of those 4% as the new floor going forward? Or can you improve those margins further in the second half of the year as you get those restructuring measure benefits, which could help achieve higher margins sequentially on similar volumes than the ones you had in the first half?
Yannick Fierling : Thanks again for your question. I mean we're very proud about what we have been delivering in the second quarter in Europe because we have been, again, winning market share in both volume and value, which is very important. We have been improving our price positioning, our price index in this market once again. We keep on executing a strategy which has been very consistent through the last quarters on the brand based on the product innovations we have been launching mainly on, again, high-value segments like the kitchen segment. I think the market is very much subdued. We don't see any rebounds. Kitchen remained at very low level. But I mean, the strategy and the product introduction we have been putting in place in the last month and the brand investment we put in place in the last months are paying back. That's what is explaining basically the growth we do have in terms of earnings. Our commitment remains what we have been announcing previously midterm. I mean, we will be above 6% EBIT in this region as well.
Therese Friberg : Maybe what we can as well add with the additional, let's say, reorganization and manufacturing footprint optimization initiatives, we are not expecting to see any impact really from this in this year when it comes to this region. Then, of course, with the normal seasonality and specifically, if we would see a stronger, let's say, built-in market in the second half of the year that we used to see a long time ago now, that would normally generate a slightly higher margin than in the first half.
Operator : We will now take our next question. The next question comes from the line of Johan Eliason from SB1 Markets.
Johan Eliason : Just coming back to the pricing in North America, you mentioned you hike prices as of May, but you didn't fully cover the tariff costs you mentioned in the quarter. But were the price increases you did from May sort of offsetting these costs? Or how was the balance when you had introduced these price hikes?
Yannick Fierling : I think you're raising an important point here. I think we need to look back a little bit, and we should not forget that tariff is made out of different layers, which have been introduced in the last month, not to say, 2 years. As a reminder, in 2025, we have been trying to increase prices in the second and third quarter, and we had to back off in the fourth quarter because, I mean, the industry was not following, and we had to basically preserve volume. Now I think on April 6, we had this new tariff 232 sections, which was including Mexico, which was adding again a second layer. What we have been doing is we have been reacting right away on May 1, and we have been increasing prices between 5% and 20%. What we hope is that, I mean, the price increase we have increasing is should be covering. That's our intent, at least the last layer we saw, so the one coming from the 232 introduction in the month of April. We will not be able to cover the full tariff structure we have seen in the last years through this 5% to 20% price increase. That's pretty sure.
Operator : We will now take our next question. Our next question comes from the line of Timothy Lee from Barclays.
Timothy Lee : Can you hear me?
Yannick Fierling : Yes, we can.
Timothy Lee : So my first question is again on the North America. So you mentioned about the competition is kind of consistent in the past weeks. But at the same time, we also noticed some rebound in terms of the imports of appliances from China or Asia in the past 1 or 2 months, maybe because of the low base, but there's some rebound in terms of the imports. How do you see the overall market supply or condition in the North America market from here?
Yannick Fierling : I cannot comment on the rebounds of imports out of China. What is the certainty is that, I mean, again, I mean, the tariff structure as it is today should be giving an advantage to local producers, which are North American producers. You have 3 main North American producers, and we are the second one there. I mean China, you still have the 301 tariff structure. You have 232 out of Southeast Asia. Again, I mean, producing in North America, what we are doing for the majority of our appliances should be an advantage moving forward.
Timothy Lee : Understood. And then my second question is about the costs going forward. So you mentioned the tariff cost is probably going to factor in further in the coming quarters. But how about raw material prices or inflation in general? How do you see the development? And have you already experienced some cost of raw material price increase in the second quarter? And how do you see the cost will develop in the coming quarters?
Yannick Fierling : Thanks for the question. Of course, it's a very important one. I think as we said previously, I mean, in terms of impact, we had almost an immediate impact from the Middle East conflict on logistic costs, especially on fuel cost as well on the sea freight cost, on the bunker cost, we had almost an immediate type of impact as soon as the conflict has been initiated. I mean, now a few months back. On the raw material side of the equation, however, especially if you look at chemicals, I mean, we are hedged. We are hedged for a little bit more than 3 months. We had a significant impact in the second quarter. Certainly, we will have even a bigger impact in the third quarter.
Timothy Lee : Understood. And then my last question is on your restructuring plan. So I think for Italy, the restructuring plan earlier this year is a little bit on hold given the pushback from the union and also some government intervention. Is there any update on the plan or the latest timetable for that Italy restructuring, given it is one of the global manufacturing footprint optimization plans that you communicated during the rights issue?
Yannick Fierling : I think, first of all, I want to correct you. I think I don't know where you got the information that this plan is on hold because that's not at all our understanding. We, of course, are keeping on having constructive exchanges and discussions with the different stakeholders, starting with our social partners, but also the Italian government. But I would -- even rather than saying that the plan is on hold, I would say the plan is absolutely progressing according to plan. I think we will keep on exchanging as we did in the past weeks and months with our stake partners. From our side of the equation, I mean, we are following exactly the plan we have been describing in the last months.
Operator : We will now take our next question. Our next question comes from the line of Igor Tubic from DNB Carnegie.
Igor Tubic : I just have 2 additional questions. If we start with the cost savings initiatives that you have, you managed to cut cost by SEK 1.4 billion in Q2. Was that a surprise to you, would you say? And can you elaborate a little bit more around, yes, how did you manage to cut cost that much?
Yannick Fierling : Thanks, Igor. I think it's important because, as I said during the presentation, I mean, cost saving and cost efficiency remains one of the major factor and contributor in the EBIT improvement we have. I mean, just as a reminder now, I mean, a couple of years ago, we have been putting in place a very structured program in order to improve efficiency through value engineering, better sourcing and better conversion costs in our factories. We have been delivering last year according to plan. Our aim is to deliver once again in 2026 between SEK 3.5 billion and SEK 4 billion in cost efficiency. I want just again to repeat, that's purely, I mean, through value engineering, sourcing, conversion, quality and others. What is very important is that, I mean, we have been announcing within -- I mean, a few weeks ago now in the second quarter through the Midea initiative and the restructuring initiative, we are planning to deliver an additional SEK 2 billion in year 3 in terms of cost savings. We will be delivering SEK 600 million in cost saving in year 3 with the Midea initiative, and we will be delivering SEK 1.4 billion in year 3 through the restructuring initiative here we have. I think, again, I mean, I just want to -- the reason why I'm mentioning that, I just want to underline once again that efficiency and cost initiative remains one of our main priorities here. We are keeping on delivering through our program, the program we have been developing now a couple of years ago. But on the top of that, we also have been launching major initiatives, strategic initiatives with the Midea partnership in North America and the organizational efficiency optimization, which would be adding an additional savings in the coming years.
Therese Friberg : Maybe one thing to add. Of course, with the announcement of the organizational efficiency initiatives, we have been very careful, as you can understand, on hiring and so forth. I think we got off to quite a good start of being careful with our employee hiring and so forth. Then, of course, you as well noticed then that we have this effect of the change in the medical plan of the SEK 170 million. It is included in cost efficiency. I mean, this was also no surprise, but it's a project, of course, that we have been working on for some time.
Igor Tubic : Okay. That was clear. And then I just have a question around the U.S. tariffs. I mean, as I understood, you haven't received any cash yet, but do you see any risk that you will have to compensate the customers? And yes, basically, there will be a cash in and cash out from the 2025 years tariffs.
Therese Friberg : I guess it's clear that we have never done any price increases that are sort of surcharge price increases. Then, of course, I mean, we keep our customers and customer relationships, very close. I mean we are as well right now, as you've seen in an additional price increase mode. Of course, with that, we have very tight connections with our customers. But yes, we aim to keep this money.
Ann-Sofi Jönsson : With that, we will take one question that we have from the web before turning back to the conference call. We have a question from Mads Lindegaard Rosendal, who is asking if the cash that we recently received in the rights issue could be used to redeem outstanding near-term bond debt or if we are prioritizing access to bond market through a curve extension? So I think this is a question for you, Therese.
Therese Friberg : Yes. If the question is related to the maturity that we have upcoming during this fall, of course, there was a large EUR 500 million transaction that we did some time back. This one, we don't expect to renew, but we will -- if we would need, let's say, some smaller bonds or something like that, we will do that separately in the market and not redo the big Euro bond.
Ann-Sofi Jönsson : Thank you. Then we turn over to the conference call again for one final question.
Operator : [Operator Instructions] We will take our next question. Our next question comes from the line of Opeyemi Otaniyi from GS.
Opeyemi Otaniyi : Two questions from my end. Could you just maybe go through Europe? The growth there was quite strong versus sort of comment about a subdued market driven by replacement. So could you just maybe square the circle in terms of what's driving outperformance there and sort of how you see the coming quarters?
Yannick Fierling : Yes, absolutely. Thanks for the question. On the European side of the equation, again, I mean, what we have been doing pretty well is, first, I mean, the product launches we made in the last months are performing well in the market, and they are supported by a very strong brand positioning on the Electrolux side and on the AEG side. I think that has been allowing us to grow in terms of market share, as I said previously, not only in terms of volume market share, but also and more importantly, in terms of value market share. We are evolving right now in Europe with Electrolux and AEG in a price segment and in the product category, which is driving value. That's one point. The second point is really about cost. I mean Europe is a region where we're executing well in terms of efficiency and cost reduction. On the product side of the equation, on the sourcing side of the equation, on the manufacturing side of the equation here we have a very disciplined execution. So we were able to drive an improvement in terms of volume and improvement in terms of mix, and we were able to overcome basically the price erosion and the level of competitiveness we have in Europe. It is really about a very disciplined execution of a strategy we have been putting in place, which right now is proving to work, at least has been working so far in 2026.
Opeyemi Otaniyi : Great. And just on cash, sort of several things driving positive free cash flow this quarter. How are you thinking about that for the rest of the year in terms of sort of inventories but also -- largely inventories.
Therese Friberg : Yes. Of course, I mean, we're coming from a position in Q1 where we had a quite weak cash flow that I think -- I mean, to some extent, we have now corrected in the second quarter, mainly with inventory not increasing as much as last year. Of course, we should remember though in the cash flow we had in this quarter, we also had no outflow really from the nonrecurring items initiatives. Of course, in the back half of the year, we will continue to have -- I think usually, we have a stronger cash flow in the second half than in the first half from pure operations. That's what we're expecting as well this year. But of course, we will also start to see -- and we will also then have most likely the additional cash from the IEEPA tariff that we've also mentioned in the amounts in the report. But then we will also start to see outflows, I mean, mainly then related to the Midea collaboration in North America and also related in the back half of the year related to Hungary closing. We will start to see some outflows on those restructuring initiatives.
Opeyemi Otaniyi : Okay. And maybe just 2 clarifications, just on external costs. On tariffs, expectations that sort of in Q3, do you expect any more refunds or it's kind of done for now?
Therese Friberg : Yes. As we mentioned, and as you saw, we do have a small difference in what we announced in the press release about a month ago compared to what we now announced in the report. We don't deem that amount to be material. But as we see it, it will be in a separate process that most likely will open up at a later point, but we don't have any information about when that will happen. But as we said, we don't see that money as being material for the group.
Opeyemi Otaniyi : Okay. And maybe just lastly on commodities and external costs. Are you able to guide in terms of just a range of expectations of how much you expect that to impact earnings in H2?
Yannick Fierling : We're not giving a specific amount here. As you see, we're watching that every single day the situation is changing so quickly in Middle East. I think every single change has an impact in 3 months from now, so in Q4 as well. So very difficult to say right now. What we can say certainly is that the impact will have in the third quarter is higher than what we have been experiencing in the second quarter.
Operator : There are no further questions. I'd like to hand back Ann-Sofi Jonsson for closing remarks. Thank you.
Ann-Sofi Jönsson : Thank you very much for listening into this call. All the material will be available or is available on our web page, and the IR team is, of course, available if you have any questions, just reach out. Thank you very much, and we wish you a continued good day.