CEO Zanata 2023 banner

CEO Comments

Step-by-step building a stronger company

During 2023 we took further steps towards our financial targets with increased sales and improved profitability in a continued challenging macroeconomic situation. With the acquisition of Tosei, which was announced in December, we are growing in attractive segments in Asia. It is also encouraging to see that our sustainability work is yielding results – we met our 50% CO2 reduction target for 2025 (compared to 2015) already in 2023 – two years ahead of plan.

The sales decline we saw during the third quarter continued during the fourth quarter but at a lower rate, leading to an organic sales decline of 3.7%. This resulted in a somewhat weaker EBITA of SEK 302m (324), and a margin of 10.1% (10.7), compared to last year.

Sales of Food & Beverage declined organically by 4% compared to last year. EBITA was on the same level as last year, resulting in an EBITA margin of 8.8% (8.5). Sales in our largest market, Europe, were unchanged, while the US declined by 12%. We see signs of recovery in the US, even if we do not expect it to materialize before the second quarter. Order intake for Food & Beverage was somewhat higher than a year ago.

Sales of Laundry declined by 3% organically compared to a sales catch-up in the corresponding quarter of last year, due to component shortages in the second quarter. The EBITA-margin ended at 15.7% (18.4). The decline in margin is mainly due to lower volumes and currency transaction effects. Order intake for Laundry was somewhat higher than a year ago.

Thanks to a better working capital development, operating cash flow after investments continued to be strong, amounting to SEK 570m (533) in the quarter. Hence, we further strengthened our balance sheet, and our net debt EBITDA ratio at the end of 2023 was 0.9x (1.5x).

The new, more decentralized organization that we launched in 2022 to faster drive strategic priorities, establish clear responsibilities and reinforce customer focus is now also visible in the yearly Employee Engagement Survey where the results demonstrate progress and higher engagement across the Group.

On January 10, 2024, we closed the acquisition of Tosei Corporation, a leading Japanese manufacturer of professional laundry equipment and vacuum packing machines for food. The acquisition of Tosei will make us a larger player in the resilient laundry market in Japan which constitutes the second largest laundry market in the world. We plan to utilize Tosei´s leading organization in Food to expand our Food product offering in Japan, as well as expanding the vacuum packing products that are used globally in the fast-growing segment of sous-vide.

I feel confident that step-by-step we are building a stronger company with clear focus on our strategic priorities. Looking into 2024, we expect to continue our improvements step-by-step. We have a healthy order stock, and the signs of lower interest rates and inflation are positive, even if we still see short-term macroeconomic uncertainty.

Alberto Zanata,

President and CEO

Somewhat weaker sales and profitability while cash generation increased

After more than two years of recovery after the pandemic, we experienced an organic sales decline of 5% during the third quarter. This resulted in a somewhat weaker EBITA of SEK 290m (317), and a margin of 10.5% (11.4), compared to last year. Currency transaction effects had a negative impact on EBITA of approximately SEK 40m. Thanks to a better working capital development, operating cash flow improved to SEK 333m (56).

Sales of Food & Beverage declined organi­cally by 8% compared to last year, resulting in an EBITA margin of 9.3% (10.5). Sales and order intake declined significantly in the US versus last year while Europe was close to flat.

Laundry had a flat organic sales develop­ment. In 2022, there was a shift of sales and production from the second quarter to the third and mainly the fourth quarter following component shortages. The EBITA margin ended at 16.1% (17.3). Sales grew in Europe but declined in the US. Order intake for Laun­dry was on the same level as last year.

Cash flow after investments was solid amounting to SEK 333m (56) in the quarter. Hence, we further reduced our debt, and our net debt EBITDA ratio is now at 1.2x. During the quarter, we also launched a commercial paper program and offered an inaugural issuance. The demand from credit investors was high.

I am very happy to report that our targets to reduce greenhouse gas emissions (scope 1 and 2) and indirect use phase emissions (scope 3) have now been validated by the Science Based Targets initiative. We have reduced our own CO2 emissions (Scope 1 and 2) by 18% during the first nine months of the year, compared to 2022. This means that we are very close to meeting our target of reducing CO2 emissions by 50% by 2025 compared to 2015, hopefully one year earlier than planned.

During October, we are organizing open houses, known as “The Hive”, at our Center of Excellence in Italy. At the events partici­pants can experience how we are a leading brand when it comes to sustainable and digital solutions. This concept has proven to be very appreciated by our customers.

To meet the needs for compact solutions that increase productivity in the kitchen, we have also launched GourmeXpress. This high-speed oven includes a combination of microwave, convection and impingement allowing rapid cooking, grilling and reheat­ing, especially well-suited for restaurant chains.

The recent more negative customer senti­ment, mainly in the US, has already prompt­ed actions to reduce cost. A healthy order stock gives us some comfort for the end of the year.

Alberto Zanata,

President and CEO

Q2, 2023 interim report

“Another positive step towards our financial targets”

During the second quarter we grew profitably taking another positive step towards our financial targets. Sales increased organically by 8.3% compared to last year, and EBITA improved significantly to SEK 385m (233) with a corresponding margin of 12.2% (8.5). The higher EBITA was driven by price, and volume growth in Laundry.

Food and Beverage grew organically by 0.5% compared to last year with an EBITA margin of 12.2% (10.0) Sales grew in Europe, but declined in Americas and in Asia-Pacific. Business in China has not taken off as expected after the postpandemic re-opening. Sales declined in the US, mainly driven by a significant drop in our distribution sales of refrigerators due to destocking among customers. Order intake for the Food & Beverage segment remained at a good level overall despite somewhat softer demand in the US.

Laundry achieved an organic sales growth of 28.5% with particular strength in Europe and the US. The EBITA margin improved to 16.4% (10.4) due to volume and price, while the corresponding quarter of last year was impacted by component shortages. Order intake for Laundry was good.

The operating cash flow after investments improved significantly and amounted to SEK 462m (88). However, inventory that had previously been increased to mitigate the shortage of components and guarantee product availability continues to be high, hence activities to optimize inventory have been initiated since the supply chain has now stabilized.

We are committed to leading and transforming our industry towards a more sustainable future. I am therefore happy to report that we have reduced our CO2 emissions by 18% during the first half year of 2023 compared to 2022. Another important step in the field of sustainability is the launch of our energy efficient dryer “HeroDry” which can quickly dry reusable packaging. Together with our ware washing solutions the dryer will facilitate the reduction of certain single-use plastics, and thus enable hospitality outlets to realize their circular ambitions faster.

Overall market demand has held up well in the quarter, and our order stock remains at a good level. Although the US is somewhat soft, we remain cautiously optimistic for the next quarter.”

Alberto Zanata, President and CEO

Q1, 2023 interim report

Continued healthy market, and improved profitability

Sales in the quarter increased organically by 12.7% compared to last year. Sales growth was strong in most countries, except in the US and China.

EBITA for the first quarter amounted to SEK 340m (236) with a corresponding margin of 11.4% (9.5). The higher EBITA was driven by price and volume, particularly in Laundry.

Operating cash flow after investments in the quarter amounted to SEK 87m (–42) which is an improvement compared to last year, but with additional potential to optimize inventory.

Food and Beverage achieved an organic sales growth of 9.1%, with an EBITA margin of 9.6% (8.1). Growth was driven by a very positive development in Europe and South-East Asia, while sales declined in the US and China. The US sales decline was primarily driven by dealer and chain customers’ inventory reductions in order to normalize stock levels. This should be seen in the perspective of customer build up of inventory levels in 2022, due to supply chain disruptions. Order intake for the Food & Beverage segment was good for the majority of the quarter, although we saw a softening towards the end of the quarter.

Laundry achieved an organic sales growth of 19.6% and an EBITA margin of 18.2% (17.4). The sales growth was particularly strong in Europe. Our energy-saving solutions, such as heat pump dryers and energy-efficient washers and dryers, contributed to the strong development.

Several important trade fairs have been held in Europe and the US during the quarter. The largest was the NAFEM show in the US where we, for the first time, showcased ten brands and over 50 Food and Beverage solutions under the umbrella of the Electrolux Professional Group brand. This illustrates our strengthened US position, which will enable us to further enlarge our customer base.

To continue to strengthen our position in the fast-growing espresso coffee market we are now launching a new range of fully-automatic, high-performing espresso machines, the TANGO® XP line. The launch underlines our ambition to become a leading player in this segment.

We have set ambitious targets of reducing our carbon emission level in operations by 50% in 2025 compared to 2015, and to be carbon neutral in operations by 2030. I am pleased to report that we are on track to meet those targets, and emissions have so far been reduced by 45%.

Market demand has held up well in the quarter, although the US was somewhat soft. Hence, but also based on our current order stock, we remain cautiously optimistic for the next quarter.”

Alberto Zanata, President and CEO

Annual and Sustainability report 2022

“A solid 2022 – despite the global turbulence”

2022 has been a good year for Electrolux Professional Group despite the uncertain geopolitical situation, high inflation, and widespread component shortages. Our post-pandemic recovery has continued, and we have significantly strengthened our position in Food in the US through the successful integration of Unified Brands. The Laundry segment has also remained strong. All in all, it has been a solid year for the Group with record high sales and a substantial increase in profit.

The hospitality industry has seen a strong recovery during the 2021-22 period, spearheaded by the US and quick-service restaurants, and the industry is now back to pre-pandemic sales levels. This demonstrates the resilience of the industry and confirms that the underlying long-term factors influencing growth are robust.

Strong in a turbulent time

Against the backdrop of macroeconomic headwinds, a challenging supply chain, increased raw material prices and a shortage of components, we have managed to grow both sales and profit significantly during 2022. Sales are now at a record high level and EBITA is back to its pre-pandemic level. Once again, this is testimony to the robustness of the company. Nevertheless, volumes in Food & Beverage have not yet fully returned to previous levels since prices have increased significantly. This also means that there is plenty of room for volume growth in the coming years.

Russia’s unlawful war against Ukraine made it impossible for us to continue our operations in Russia. Consequently, we divested our operations and had to accept ending the relationship with many highly regarded team members. To support the refugees from Ukraine, we have donated kitchen equipment to both Poland and Romania. In addition, the company and our employees have donated money to support the Red Cross’ humanitarian response in Ukraine.

Long-term favorable trends

The trends driving the growth of our business are still valid, and despite global turbulence and a potential economic down-turn, people continue to spend money on travel, eating out and take-away. In addition to the movement towards sustainability, the pandemic has underlined the importance of hygiene which has supported the growth of the Laundry market.

The significant increase in energy prices last year has made customers even more conscious of the total cost of ownership instead of the upfront investment cost of products. This suits us well given our track record as an industry benchmark in respect of energy savings.

Digitalization and connected products continue to be a major trend within the industry. It enables more effective use of products as well as higher uptime, for example through preventive remote maintenance, which supports the operation and fleet control of the appliances.

Progress within our strategic priorities

During the year we have made progress within all our strategic pillars.

We have focused on driving sales of many of the new products launched in 2021, but with a special focus on our strong sustainability offering which customers appreciate more and more. In addition, we have many new products already in the pipeline for launch during 2023, which will further support our profitable growth.

Growth in restaurant chains is one of our strategic priorities. During the year we have continued to improve our penetration in restaurant chains, driven by the acquisition of Unified Brands. Our US platform has become a lot stronger and is now a solid base from which we can grow profitably. This is important to us since the US is the single largest market for Food & Beverage and home to most of the large global food chains.

Customer care is crucial for our customers’ uptime, and at the same time is one of the most profitable parts of our business, and I am pleased to report that it continued to grow during the year. Currently, Customer care accounts for 18% of Group sales, excluding Unified Brands.

We have made significant investments in digitalization, including connected products, exemplified by the launch of “The OnE” Digital customer platform. Customers can now more easily order products and services directly via the platform. In addition, the OnE platform brings the unique advantage of encompassing all appliances in the kitchen and the launderette, giving us a “system integrator” role. It is my belief that connected appliances will significantly improve our customers’ way of operating, making their work-life easier, more profitable, and truly sustainable.

New Group Brand

To clarify Electrolux Professional’s role as both a company and a business brand, the corporate brand Electrolux Professional Group was introduced in 2022. Today, the Electrolux Professional brand name represents the majority of the sales. However, our total portfolio consists of 18 other brands which account for about 40% of Group sales. The change enables these brands to continue to build on their unique offering and identity while benefiting from their association with the strength of the Group.

New organization

Following the acquisition of Unified Brands in the US, we saw a need to focus and simplify our organization to be able to drive strategic priorities faster and stay close to our customers. The new organization came into force on July 1, 2022, and consists of five Business Areas beneath the two reportable segments of Food & Beverage and Laundry. The structure of the Business Areas is built around customer categories and geographies. It is my firm belief that this will reinforce business ownership, move decisions closer to the customer, and allow higher speed and agility.

Sustainability leader

Electrolux Professional Group is the sustainability leader in our industry. Sustainability is quite simply a part of our legacy, engrained into our culture, day-to-day operations, and strategy. This leadership was underlined when we were ranked highest among the listed companies in our industry on the climate change list, in the Carbon Disclosure Project (CDP), and on the environment, social, and corporate governance (ESG) risk rating by Sustainalytics.

Our sustainability targets center on climate, health & safety, and diversity. Electrolux Professional Group is a signatory of the UN Global Compact, and our sustainability work is based on the United Nations Sustainable Development Goals. We fully recognize the importance of taking action to mitigate climate change and we support the ambitions of the Paris Agreement.

Our overarching, and ambitious, target is to become climate neutral in our own operations by 2030. In 2022, the carbon emissions related to our industrial operations had reduced by 45% (31) compared to 2015. See more on page 61. Since product use constitutes the majority of our emissions impact, around 95%, we have developed a Science Based Target for our scope 3 emissions which is currently awaiting approval from the Science Based Target Initiative (SBTi). Our target is to continue developing products that have lower consumption of resources. In practice this means reducing impact from product-use related to energy, water, and detergents. This is good for both our customers’ running costs as well as the environment.

Stronger today

Towards the end of 2022 and during the beginning of 2023 we have noticed that supply chain challenges have eased somewhat, and order intake has remained at a good level. At the same time, the general economic uncertainty, inflation, and negative consumer sentiment still gives reason for caution and requires us to be prepared for various scenarios.

As we head into 2023 and face a potential economic downturn, it is important to remember that Electrolux Professional Group stands far stronger today than during the global financial crisis in 2009. We have a more balanced geographical exposure, a proven ability to manage cost in a downturn, and a stronger position in Food chains and Laundry, which should support us during a possible downturn.

Based on our progress over recent years and the continued general positive market conditions for our industry, we are cautiously optimistic for 2023. We are fully committed to our strategy and financial targets and have full confidence in our ability to achieve the targets over the mid-term.

We can do nothing without our greatest asset, our people, and I would like thank all our dedicated employees for their great contributions to our results!

Alberto Zanata, President and CEO

Q4, 2022 Year-end report

“A solid fourth quarter and 2022

Sales in the quarter increased organically by 13.4% compared to last year and grew 31.7% in total, including the acquired Unified Brands business, the positive impact from currency, and excluding the divestment of the Russian business. Organic sales growth was strong in all regions and the order stock remains at a healthy level.

EBITA for the fourth quarter doubled and amounted to SEK 324m (164) with a corresponding margin of 10.7% (7.1). The higher EBITA was primarily driven by price increases that now are fully compensating raw material cost increases, the contribution from Unified Brands, and increased sales of Laundry.

Operating cash flow after investments in the quarter amounted to SEK 533m (459), supported by a decrease in inventory and trade receivables. Net debt/EBITDA improved significantly and is now at 1.5, compared to 2.3 at the end of the third quarter.

Laundry was very strong with an organic sales growth of 19.4% and an EBITA margin of 18.4% (16.5). The growth was driven by continued good demand, primarily in the US and Europe. Order intake was strong.

Food & Beverage had an organic sales growth of 9.5%, with an EBITA margin of 8.5% (3.0). Although order intake for Food & Beverage was better in the fourth quarter than in the third quarter, demand in Europe remains relatively soft.

The Unified Brands acquisition in December 2021 has delivered sales growth exceeding our expectations, with an EBITA margin being accretive to the Group margin. Further opportunities for cost as well as sales synergies remain.

Electrolux Professional Group is the sustainability leader in our industry. This was again underlined when we recently achieved the highest ranking among the listed companies in our industry on both the climate change list, Carbon Disclosure Project (CDP), and the environmental, social, and corporate governance (ESG) risk rating by Sustainalytics.

In summary, 2022 has been a good year for Electrolux Professional Group despite the uncertain geopolitical situation, high inflation and component shortages. The recovery after the pandemic has continued, and we have significantly strengthened our position in Food in the US, and the Laundry segment continue to demonstrate strength. In parallel, we have also implemented a new organization that reinforces business ownership and agility in the company.

This means that we remain cautiously optimistic heading into 2023. However, as we have previously communicated, the general economic uncertainty, inflation, and negative consumer sentiment still gives reason to be careful and prepared for various scenarios.

Alberto Zanata, President and CEO

Q3 2022 interim report

“Continued growth and higher EBITA – preparing for different scenarios”

The recovery of the hospitality industry continued during the third quarter, resulting in the sixth consecutive quarter of sales growth for us.

Sales in the quarter increased organi­cally by 15.8% compared to last year and grew 43.8% in total, including the recently acquired Unified Brands business and the positive impact from currency. Organic sales growth was strong in all regions, but particularly strong in the Americas.

EBITA for the third quarter increased almost 60% and amounted to SEK 317m (199) with a corresponding margin of 11.4% (10.3). The higher EBITA was primarily driven by price, and the contribution from Unified Brands, whereas some continued inefficien­cies and cost increases in the supply chain have burdened.

Costs for raw material are now being compensated by prior price increases and is foreseen to remain so in the fourth quarter. However, the general cost pres­sure is becoming substantial and needs to be compensated for. This means that the temporary surcharges that we implemented during the second quarter are being trans­formed into permanent price increases. In addition we are also, selectively, imple­menting additional price increases from January.

Operating cash flow after investments in the quarter amounted to SEK 56m (412). Cash flow was negatively affected by an increase in operating working capital, in particular trade receivables. Inventory also increased in the quarter, partially due to higher material cost and higher stock of components.

Sales of Food & Beverage had an organ­ic growth of 8.7%, with an EBITA margin of 10.5% (10.5). Organic growth was particular­ly strong in Americas and in Asia, with the exception of China. Unified Brands con­tinue to have a good sales growth with an underlying EBITA margin being accretive to the Group margin.

Sales of Laundry was strong with an or­ganic growth of 28.1%. The growth was driv­en by a continued good demand and, as previously mentioned, a shift of sales from the second quarter to the third quarter. The component shortages that we experienced in the second quarter are solved and should not have an impact in the coming months. Order intake for Laundry increased confirming a good order trend. The EBITA margin for Laundry was 17.3% (15.2).

During the quarter order intake was on pre-pandemic levels, but we see softening demand in Food & Beverage in Europe. Order stock is still higher than last year, in particular in Laundry and in North America which gives confidence short term. However, the general economic uncertainty and negative consumer sentiment, gives reason to be careful. We are therefore preparing for different scenarios.

Alberto Zanata, President and CEO

Q2 2022 interim report

“Strong sales growth and increased EBITA, despite negative impact from component shortage”

The second quarter was the fifth consecutive quarter of strong sales growth, which underlines the solid recovery of the hospitality industry.

Sales in the quarter increased organically by 15.1% compared to last year and grew 39.5% in total, including the recently acquired Unified Brands business and the positive impact from currency. Sales were strong in all regions, but particularly strong in the Americas.

EBITA for the second quarter was SEK 268m (197) with a corresponding margin of 9.8% (10.1), excluding items affecting comparability of SEK –35m related to the divestment of the Russian business.

The improved EBITA was primarily driven by increased sales volumes and the contribution from Unified Brands. However, we were not able to fully compensate the increased raw material and component cost increases in Laundry which had a negative net impact of approximately SEK –30m. In Food & Beverage we were able to cover the gap between price and raw material. We expect the net between price increases and raw material cost to be positive in the third quarter.

Operating cash flow after investments in the quarter amounted to SEK 88m (223). Cash flow is negatively affected by a large increase in inventory and trade receivables.

Sales of Food & Beverage was strong with an organic growth of 22.9%, reporting an EBITA margin, excluding items affecting comparability, of 10.8% (9.1). Growth was strong throughout all regions despite China experiencing a very negative development due to a new pandemic lock-down. Unified Brands, which was acquired in December 2021, saw strong sales growth with an underlying EBITA margin being accretive to the Food & Beverage segment. This development gives support to the strategy to grow in the US and in chains.

Sales of Laundry grew organically only by 2.2%, despite a continued strong customer demand and high order-stock. Component shortages, especially circuit boards from China, have caused lower deliveries generating a negative result impact. The EBITA margin, excluding items affecting comparability, for Laundry was 12.9% (15.6). On the positive side, the component situation improved towards the end of the quarter and sales are being shifted to the third quarter.

Following the assessment that business continuity in Russia, in the current situation, is not feasible, we have divested our Russian operations to local management. This incurred cost of SEK -35m, which is treated as items affecting comparability.

Despite the uncertain geopolitical situation, and the significant inflation in the world, our main customer base in the hospitality industry is currently experiencing a high activity and demand level. The high order stock, the improved component availability and a positive price impact, gives us a good foundation for the next quarter.

Alberto Zanata, President and CEO

Q1 2022 interim report

“A strong sales recovery in turbulent times”

The sales recovery that started last year has continued in the first quarter and we have now had four consecutive quarters of good sales growth. Sales in most countries are now back, or almost back, at 2019 pre-pandemic levels, with a few countries even ahead of pre-pandemic levels. However, in several countries in Asia-Pacific we are still behind in sales.

Sales in the quarter increased organically by 25.5% compared to last year and grew 49.6% including the recently acquired Unified Brands business. Sales were particularly strong in the Americas, but also Europe had very good growth, while the remaining regions had limited growth.

EBITA for the first quarter was SEK 236m (103) with a corresponding margin of 9.5% (6.2). EBITA includes integration-related costs for Unified Brands of SEK –15m. Hence, the underlying EBITA margin corresponds to 10.1%. This improvement was primarily driven by the increased sales volume.

Despite decisive actions, the price increases have not fully compensated for the increased component, raw material and logistic costs and had a negative net impact of approximately SEK –70m in the quarter. Given further cost increases, we will implement additional price increases or surcharges during the second quarter. Operating cash flow after investments in the quarter amounted to SEK –42m (23). The negative cash flow is mainly related to an increase in receivables and inventory.

Sales of Food & Beverage continued its strong recovery with an organic growth of 34.1%, reporting an EBITA margin of 8.2% (2.3). The EBITA margin excluding the Unified Brands integration-related costs was 9.0%. Growth was very strong throughout Europe and the US, while sales only improved marginally in Asia-Pacific, Middle East & Africa. Unified Brands, which was acquired on December 1, 2021, saw strong sales growth with an underlying EBITA margin of 11% in the quarter.

Sales of Laundry grew organically by 15.0% and are now above 2019 levels in all regions, except in Asia-Pacific, Middle East & Africa. Sales in the US were particularly strong. The EBITA margin for Laundry was 17.4% (14.7).

Sales of Customer Care had a strong quarter, contributing positively to the result. Sales to chains in the US are also developing well with several new medium-sized roll-outs ongoing.

In order to faster execute on our strategic priorities, we have decided to simplify our organization. This means that we will have Business Areas that are more focused on categories and geographies.

Since February, we have witnessed a humanitarian crisis following Russia’s invasion of Ukraine. As a company, we have a strong will to support the people and communities in Ukraine that are in need. So far, we have provided kitchen equipment to support refugees crossing the borders to the EU, and we are donating funds to the International Red Cross, matching our employees’ donations.

Despite the uncertain geopolitical situation, the strong order intake trend has continued. Combined with the solid order stock, this gives us confidence for the second quarter, although we expect raw material and component supply challenges to persist.

Alberto Zanata, President and CEO

Annual- and sustainability report 2021

“Sales recovery and significantly stronger position in the US”

Despite the pandemic, we have been able to strengthen Electrolux Professional during 2021. The recovery of the hospitality industry has been faster than anticipated with our sales growing by 10% and our profit by 50%. We also became a larger and more relevant player in the US Food market through the acquisition of Unified Brands, and we introduced our new guiding principles that will support us in the delivery of our strategy.


The new normality

In 2020, we learned to adapt to a new reality and in 2021 the new reality became the new normality. We are now used to work both remotely and in the work-place, as well as being more flexible as new pandemic outbreaks come and go. Although it is still very challenging, we have also learnt to deal with the current shortage of components and reduced transportation capacity.

In the beginning of the year, we were still heavily affected by the pandemic but between March and April we saw a sales recovery, spearheaded by the US, that has continued throughout the year.

Long-term favorable trends

The trends driving the growth of our business are still valid and have in some cases even been reinforced by the pandemic. Alongside the fast-growing takeaway and home delivery segments, as restrictions have eased we have seen how quickly people have returned to restaurants and increased their spending on dining.

However, one aspect of the pandemic that has structurally changed our industry, at least in the medium term, is the decline in international business travel which affects our customers in business restaurants, hotels, and travel catering.

In addition to the already prominent sustainability trend, the pandemic has underlined the importance of hygiene. Customers are becoming more focused on the total cost of ownership instead of the upfront investment cost, and they are also looking more closely at the safe use of appliances and production output. Digitalization is driving the demand for technologically advanced equipment that enables greater uptime through preventive remote maintenance. All this supports the operation and fleet control of the appliances, which also reduces their environmental impact.

Delivering on our strategic priorities

Our business strategy consists of four pillars, built on a foundation of operational excellence to improve sales productivity and cost efficiency within the supply chain.

  • Grow the business by developing sustainable, innovative solutions that have a low running cost.
  • Expand in food service chains, especially in North America, grow in beverage and expand in emerging markets, with selective M&A acting as a further accelerator.
  • Boost Customer Care (aftermarket) sales by further developing the global service network and competence as a full-service provider.
  • Leverage The OnE approach which is our global product and service offering, with both single and full solutions and services across Food & Beverage and Laundry – under one brand – allowing customers to manage their operations through connectivity and a digital ecosystem.

During the year, we have made significant progress on our strategic priorities. These are in line with the trends in our industry, which were reinforced by the pandemic.

The restructuring program that was announced in 2020 has been implemented, creating substantial yearly savings. Further savings will be generated from the relocation of the production in Louisville, USA, to Thailand and Italy. The new state-of-the art Beverage and Laundry factory in Thailand provides higher business competitiveness, advanced logistics, and the ability to scale up for future expansion.

In order to sharpen our focus on, and profitability of, beverage and food preparation, a separate division has been created within the Food & Beverage segment. It reflects the specific differences in the business model exemplified by different channel partners, lower sales values, and a faster-moving product cycle.

Several important new products have been launched during the year, such as the new food preparation mixer and the new free-standing mobile work-station Libero Pro, that meet the market trends. I would also like to mention that the major product launches of 2020, Line 6000 washer and dryers and Skyline ovens and blast chillers, have all been further enhanced with improved functionality and connectivity.

The acquisition of Unified Brands significantly strengthens our presence in the US. Unified Brands has a very attractive portfolio of products and brands, as well as strong local market recognition, customer relations, and presence in chains, which supports our strategy to grow in food service chains.

After being hit harder by the pandemic than product sales were, our Customer Care business has now started to grow faster than product sales thanks to a more focused sales approach. A new eco-certified range of cleaning solutions and detergents has been launched, completing our portfolio of accessories and consumables.

The newly launched The OnE Digital Platform is a seamless, one-stop, self-service way for customers to interact with us, enabling them to place or track an order in real time, search for product documentation, or see the status of connected appliances. The platform allows us to interact with our customers innovatively – not only with a single product but covering the entire laundry and kitchen ecosystems.

Sustainability creates value

Sustainability is a key part of our culture, day-to-day operations, and strategy. Our sustainability targets center on climate, health & safety, and diversity.

Electrolux Professional is a signatory of the UN Global Compact, and our sustainability work is based on the United Nations Sustainable Development Goals. Electrolux Professional is committed to continuing its support of the UN Global Compact and its ten principles. We recognize the importance of taking action to mitigate climate change and we support the ambitions of the Paris Agreement. Consequently, we have an ambitious overarching target to become climate neutral in our own operations by 2030. In 2021, carbon emissions related to our industrial operations were reduced by 31% (36) compared to 2015. See more on page 67 (in the report).

Clarity and transparency regarding our climate impact and our actions is a priority. We have therefore started to disclose our climate impact through the Carbon Disclosure Project (CDP) where we received a B rating, which is just below the highest rating.

Since product use represents the majority of our emissions impact, around 95%, we are determined to continue developing products with lower consumption of resources. In practice this means reducing the impact from product-use in respect of energy, water, and detergents. This is good for both our customers’ running costs as well as the environment.

During 2021 we have also signed a sustainability-related loan agreement with the Nordic Investment Bank related to the reduction of CO2 emissions, product water efficiency, and the use of HFC gases.

Sustainability is not only about the environment, it also encompasses our social impact. We therefore seek to earn the trust of everyone affected by our operations, globally demonstrating our commitment to ethics and human rights. By managing the total impact of our business on people and the planet, we can create the conditions to exceed our customers’ expectations and remain an attractive employer, thereby delivering long-term value creation.

A new cultural journey

Our mission is to make our customers’ work-life easier, more profitable – and truly sustainable every day. This can only be accomplished by our greatest asset, our people.

An important part of our cultural development journey as a stand-alone company has been the introduction of our new guiding principles. They are an important part of our identity and express who we are and aim to be, what we stand for, and how we do things.

Back to pre-pandemic levels

As we enter 2022, our business in the hospitality industry is back or almost back to pre-pandemic levels in several countries, with the US being ahead. Underlying market trends remain supportive, and we have experienced several months of sales recovery and strong order intake, despite still dealing with global supply disturbances.

Fundamentally, we have the building blocks in place to continue to grow our business. We are at the forefront of our industry in innovation, sustainability, and connectivity and we have one of the largest single brands in our industry. This, combined with being a solid and profitable company with dedicated employees and high-performing customer solutions, makes me confident that we have all the right ingredients for the next phase of our company development.

Alberto Zanata, President and CEO

Year-end report Q4 2021

Continued strong sales recovery

Alberto Zanata, President and CEO

The sales recovery continued also in the fourth quarter, and sales are now back or almost back to pre-pandemic levels in some countries. Order intake continues to be strong and our order stock is on a new record-high level. We expect the market to be back to 2019 levels in the beginning of 2022.

Sales in the quarter increased organically by 14.2% compared to last year. Both in Europe and the US we saw strong sales growth, while other regions were nearly flat.

EBITA for the fourth quarter was SEK 164m (142) with a corresponding margin of 7.1% (7.3). EBITA includes acquisition and integration related costs for Unified Brands of SEK –56m, meaning that the underlying EBITA-margin corresponds to 9.5%. The result improvement was driven by the increased sales volume and benefits from the 2020 restructuring program. Due to timing, price increases have not compensated for the rapidly increased component, raw material and logistic costs. The negative net impact was approximately SEK –35m in the quarter.

As of January 1, 2022, we have increased prices to mitigate the cost increase. However, we will only partially mitigate the cost increase in the first quarter of 2022 since part of the sales will be from products ordered in 2021. This means that the negative net impact in the first quarter of 2022 will be larger than in the fourth quarter of 2021.

Operating cash flow after investments in the fourth quarter amounted to SEK 459m (460).

Sales of Food & Beverage once again saw a strong sales recovery with an organic growth of 21.6%, reporting an EBITA-margin of 3.0% (1.0). EBITA-margin excluding acquisition and integration related costs was 7.0%. The growth was strong throughout Europe and the US, while sales declined somewhat in Asia-Pacific, Middle East & Africa.

Sales of Laundry grew organically by 5.4% and are now above 2019 levels, driven both by Europe and the US. The EBITA-margin landed at 16.5% (16.9).

Unified Brands, which was acquired December 1, 2021, is included in the quarter with sales of SEK 99m. In 2021 Unified Brands had sales of SEK 1,134m. The underlying EBITA-margin of Unified Brands was 9% in 2021. With a strong order stock and offering, Unified Brands is well-positioned to grow and further strengthen our position in the US.

We are known as a sustainability leader in our industry, and it is therefore very satisfying that we have received a B-rating, just below the highest rating, in the world’s leading environmental disclosure platform, Carbon Disclosure Project (CDP). The response is a true acknowledgement of our climate achievements.

Despite the pandemic, we have been able to strengthen Electrolux Professional during 2021. The recovery of the hospitality industry has been faster than anticipated with our organic sales growing by 10% and our profit by 50%. We also became a larger and more relevant player in the US Food market through the acquisition of Unified Brands. This will allow us to continue to profitably grow our business.

Q3 2021 interim report

Continued sales recovery

The market recovery that started six months ago has continued during the third quarter. In some countries the market is now back to pre-pandemic levels, spear-headed by the US.

Sales in the quarter increased organically by 12.8% compared to last year driven by increased demand, especially in the US. Europe also showed good growth while Asia-Pacific, Middle East and Africa only had moderate growth. China continued to have strong growth while South East Asia was weaker.

Order intake continue to be strong and our order stock is on a record high level. Sales have not followed as fast as order intake, partly due to shortage of craftsmen among our customers, which leads to their projects and refurbishment plans being delayed.

EBITA for the third quarter was SEK 199m (96) with a corresponding margin of 10.3% (5.5). The result improvement was driven by increased sales volumes and last year’s re­structuring charges of SEK –77m. Operating costs have increased since our investments in marketing, IT and R&D have increased as well as provisions for variable pay.

Operating cash flow after investments im­proved substantially and amounted to SEK 412m (63).

Sales of Food & Beverage continued to demonstrate a strong sales recovery with an organic growth of 15.7%, reporting an EBITA-margin of 10.5%. Sales of Laundry grew organically by 8.2% and is now almost back to 2019 levels. The EBITA-margin land­ed at 15.2%.

The global pressure on component and container availability continues. So far, we have been able to secure components, but at a higher cost. The higher raw material prices this year are partially being offset by the price increase in July. Most of the raw material for the first half of 2022 has been secured but at a higher cost than this year’s average. Therefore, we have announced additional price increases from January 2022.

On October 12, we announced that we have signed an agreement to acquire Unified Brands, a leading US based man­ufacturer of food service equipment. This is an important step in our strategy to grow in food service chains and will significantly strengthen our position in the US.

We have now experienced several months of sales recovery and strong order intake. This in combination with our announced acquisition of Unified Brands makes me confident about our next phase develop­ment. However, new setbacks from the pan­demic, the shortage of components and raw material prices still constitute a risk.

Alberto Zanata, President and CEO

Q2 2021 interim report

Strong sales recovery

The market recovery that started towards the end of the first quarter has continued and broadened geographically throughout the second quarter. The recovery was particularly strong in Europe and the US.

Sales in the quarter increased organically by 38.4% (–39.9) compared to last year driven by increased demand, especially in southern Europe. Despite the strong sales recovery year-over year, the level was still approximately 15% below 2019, however, the difference diminishing towards the end of the quarter.

EBITA for the second quarter was SEK 197m (–4) with a corresponding margin of 10.1% (–0.2). The result improvement was primarily driven by the sales volume and benefits from the restructuring plan announced in September 2020. Operating costs have also increased in order to meet the increase in demand. Operating cash flow after invest­ments amounted to SEK 223m (31).

Sales of Food & Beverage demonstrated a strong sales recovery with an organic growth of 53.9%, reporting an EBITA-margin of 9.1% (–7.7). The growth was particularly strong in southern Europe, the US and China while South East Asia was burdened by pandemic restrictions. Sales of Laundry grew by 19.1% (–21.9) driven by all regions, with the US having the highest growth rate. The EBITA-margin landed at 15.7% (13.5).

Our new state-of-the-art factory in Rayong, Thailand, is fully operational since June producing both Laundry and Beverage products. It offers higher efficiency, a sustainable approach and provides the ability to further scale-up for future expansion.

We have managed to handle the global pressure on component and container availability well and with limited customer impact. However, this area currently demands a lot of attention and the pres­sure is expected to continue during the fall. To compensate for the raw material price pressure, we have executed price increases across all product segments effective from July 1.

The Beverage and Food Preparation businesses, which constitute smaller parts of the larger Food and Beverage segment, are often operating with different dynamic and in other customer segments and channels than our Food and Laundry businesses. In order to increase focus and drive this part of our business, it will as of October 1, be managed as a separate division within the Food and Beverage segment.

As more and more people are vaccinated and restrictions are lifted, we can see that people start to socialize again which supports the comeback of the hospitality industry. This gives reason for optimism. Whereas we cannot ignore the risk for new pandemic setbacks, we remain confident given that we have demonstrated that our company is strong and able to navigate also in turbulent times.

Alberto Zanata, President and CEO

Interim Report Q1 2021

Still strongly impacted by the pandemic, but signs of recovery

The slowdown of the market recovery we saw towards the end of the fourth quarter last year continued into the first quarter of 2021. On a positive note, we see signs of market recovery. In the month of March, sales grew year-over-year for the first time in more than 12 months, but still behind 2019 levels as several countries are still affected by the pandemic measures.

Sales in the quarter declined organically by 15.3%. Sales of Laundry continued to be less affected while sales of Food & Bev¬erage was more affected with a decline on the same level as the end of last year, primarily driven by a weak development in Europe.

Short-term savings, organic sales growth in March, a relatively good performance in Laundry together with the restructuring plan announced in September 2020, partially mitigated the effect from the sales decline. EBITA for the first quarter was SEK 103m (221) with a corresponding margin of 6.2% (10.6). Currency transactions burdened the result with approximately SEK 20m. Operat¬ing cash flow after investments amounted to SEK 23m (16).

From a segment view, sales of Food & Bev¬erage declined organically by 21.1% in the quarter, reporting an EBITA margin of 2.3% (7.9). However, sales of Food & Beverage grew in Asia-Pacific, Middle East and Africa. Sales of Laundry declined organically by 7.1%, reporting an EBITA margin of 14.7% (17.7). The sales decline in Laundry was mostly related to a strong reference quarter last year including a larger stock built-up in the US. Sales of Laundry grew in the Nordics, UK, Japan and China.

Sales of Customer Care is declining in line with product sales.

Product innovation in the period include an upgrade on the Line 6000 range of washers and dryers as well as the launch of the new SP Ultra Frozen Beverage Dispenser with its UV lighting for improved sanitization.

During the quarter, the new factory building in Thailand and the transfer of the produc¬tion of Laundry has been completed. The transfer of Beverage products is ongoing and is expected to be finalized in June.

Although it is too early to say that the effects from the pandemic are over – especially as some of our largest markets in Europe are still strongly affected by government measures – there are signs of business recovery. This is not only visible in the countries where the pandemic is under control and where vaccinations are progressing well. The recovery is also being demonstrated by traditional Hospitality and Foodservice trade shows that again took place physically, such as Gulfood in Dubai and Hotelex in Shanghai. I believe these to be strong examples of a comeback for the hospitality industry as soon as restrictions are lifted and confidence among people to socialize again returns.

Alberto Zanata, President and CEO

Interim Report Q1 2021

Still strongly impacted by the pandemic, but signs of recovery

The slowdown of the market recovery we saw towards the end of the fourth quarter last year continued into the first quarter of 2021. On a positive note, we see signs of market recovery. In the month of March, sales grew year-over-year for the first time in more than 12 months, but still behind 2019 levels as several countries are still affected by the pandemic measures.

Sales in the quarter declined organically by 15.3%. Sales of Laundry continued to be less affected while sales of Food & Bev¬erage was more affected with a decline on the same level as the end of last year, primarily driven by a weak development in Europe.

Short-term savings, organic sales growth in March, a relatively good performance in Laundry together with the restructuring plan announced in September 2020, partially mitigated the effect from the sales decline. EBITA for the first quarter was SEK 103m (221) with a corresponding margin of 6.2% (10.6). Currency transactions burdened the result with approximately SEK 20m. Operat¬ing cash flow after investments amounted to SEK 23m (16).

From a segment view, sales of Food & Bev¬erage declined organically by 21.1% in the quarter, reporting an EBITA margin of 2.3% (7.9). However, sales of Food & Beverage grew in Asia-Pacific, Middle East and Africa. Sales of Laundry declined organically by 7.1%, reporting an EBITA margin of 14.7% (17.7). The sales decline in Laundry was mostly related to a strong reference quarter last year including a larger stock built-up in the US. Sales of Laundry grew in the Nordics, UK, Japan and China.

Sales of Customer Care is declining in line with product sales.

Product innovation in the period include an upgrade on the Line 6000 range of washers and dryers as well as the launch of the new SP Ultra Frozen Beverage Dispenser with its UV lighting for improved sanitization.

During the quarter, the new factory building in Thailand and the transfer of the produc¬tion of Laundry has been completed. The transfer of Beverage products is ongoing and is expected to be finalized in June.

Although it is too early to say that the effects from the pandemic are over – especially as some of our largest markets in Europe are still strongly affected by government measures – there are signs of business recovery. This is not only visible in the countries where the pandemic is under control and where vaccinations are progressing well. The recovery is also being demonstrated by traditional Hospitality and Foodservice trade shows that again took place physically, such as Gulfood in Dubai and Hotelex in Shanghai. I believe these to be strong examples of a comeback for the hospitality industry as soon as restrictions are lifted and confidence among people to socialize again returns.

Alberto Zanata, President and CEO

Annual Report 2020

“Strong and well positioned for the future”

2020 was set to be the year when we once again could focus on strengthening and growing the company after the process of separation from Electrolux in 2019 and the listing on Nasdaq Stockholm in March. Instead, the listing occurred at an unprecedented time when the global coronavirus pandemic affected every part of society, with the hospitality industry, where we have many customers, being one of the most heavily impacted industries. This forced us to change our focus in the short term.

Adapting to a new reality

The pandemic has affected us all, in both our professional and personal lives – but difficult times can lead to adaptation and improvement, and that is what we have been able to do during the last year.

Despite all the challenges that came with the pandemic, we managed to avoid both major interruptions in production and customer delivery disturbances. This is no small achievement given that a new plant was also being built in Thailand and investments in the digital transformation of our company were accelerated. At the same time, we were able to ensure a successful transition from office to remote working for almost all office staff during the lock-downs that affected most countries and that forced many to work from home.

It was not only our internal meetings that went digital. Our training (for our people, our customers, and technicians) went online, as did our product launches of new solutions that we had designed specifically to address the challenges our customers were facing.

Electrolux Professional is a leading global provider of food service, beverage, and laundry solutions, uniquely positioned with a strong single brand, serving a wide range of customers globally, from restaurants and hotels to healthcare, education, and other service facilities.

Our position, combined with both short-term and structural cost-saving measures, together with the strong performance of the less-affected Laundry segment, all helped us to remain reasonably profitable in 2020. To build for the future we also decided to continue to invest in the new plant in Thailand and the digitalization of our products and organization.

Long-term favourable underlying trends

Looking beyond the pandemic, several global trends favor the growth of our business. The increase in out-of-home spending, especially in emerging markets, means people are spending more money on dining out and less time on household chores such as cleaning. Many businesses are broadening their offerings and are becoming multi-function assets, for example, coffee shops offering food and laundromats offering coffee and food.

We are also seeing a change in consumer and customer behavior, accelerated by the pandemic.

Sustainability and hygiene are becoming even more important. Customers are more focused on: the total cost of ownership instead of the upfront investment cost; safe use of appliances; and the potential production output. Digitalization is increasing the demand for technologically advanced equipment that enables greater uptime through preventive remote maintenance. All this supports the operation and fleet control of the appliances, reducing the environmental impact, and enables more frequent changes in menus and ways of serving, such as take-away or in-house eating, which are a must nowadays.

Strategic direction remains valid

Although both sales and profitability declined substantially during 2020 due to the pandemic, for several years we have demonstrated that under normal circumstances we can grow the business with a healthy margin. Between 2013 and 2018 our business grew by approximately 50%, driven by both acquisitions and organic growth. During 2017-2019 profitability doubled to an average EBITA margin of 13%.

During 2019 and 2020 Electrolux Professional was clearly impacted by preparations for the listing and then the pandemic. Despite this, the strategic direction presented a year ago remains valid, although there is more emphasis on cost efficiency now. As such, our business strategy still consists of the four pillars below, built on a foundation of operational excellence to improve sales productivity and cost efficiency within the supply chain;

  • Grow the business by developing sustainable, innovative solutions that have a low running cost.
  • Expand in food service chains, especially in North America, grow in beverage and expand in emerging markets, with selective M&A acting as a further accelerator.
  • Boost Customer care (aftermarket) sales by further developing the global service network and competence as a full-service provider.
  • Leverage the OnE approach which is our global product and service offering, with both single and full solutions and services across Food & Beverage and Laundry – under one brand – allowing customers to manage their operations through connectivity and a digital ecosystem.

Build sustainability for the future

Sustainability is a key part of our strategy, culture and day-to-day operations. Our sustainability legacy provides a strong foundation for our operations and our sustainable customer offering. Electrolux Professional is a signatory of the UN Global Compact and our sustainability work is based on the United Nations Sustainability Development Goals.

We recognize the importance of taking action to mitigate climate change and we support the ambitions of the Paris Agreement. Consequently, we have an ambitious overarching target to become climate neutral in our own operations by 2030.

At a more operational level, the strategy aims to develop sustainable, more energy-efficient solutions, sustainable operations, and reduce our environmental impact. In terms of social impact, we seek to earn the trust of everyone affected by our operations, and demonstrate commitment to the environment, ethics, and human rights.

Electrolux Professional’s sustainability targets center on climate, health & safety, and diversity.

In parallel to the climate neutral target for our own operations, we are determined to continue developing low-resource consuming products so as to reduce the impact from the product-use phase as products consume energy, water, and detergents. This is good for both our customers’ running costs as well as for our planet.

It is only by understanding and managing the total impact of our business on people and the planet, that we can create the conditions to exceed our customers’ expectations and remain an attractive employer, thereby delivering long-term value creation.

Right foundation to stand strong

In the near term the pandemic will still affect us, but once the majority of the global population is vaccinated against the coronavirus, I am confident that over time, the business in the hospitality industry will return to pre-corona levels.

Our strategy and our mission will enable us to make our customers’ work-life easier, more profitable, and truly sustainable every day. We are proud to have been able to demonstrate resilience during the pandemic, and thanks to the dedication and flexibility of our employees as well as the cost-saving measures adopted, we have laid the foundation for our future.

If I take a moment to reflect on our company, I see that we have all the right ingredients to remain at the forefront of our industry. We are stable and profitable with a strong balance sheet. Our solutions live up to the tough demands required of high-performing, reliable machinery and include an exceptional Customer care offering. Electrolux Professional is a respected brand. We are working with continuous improvement through innovation and investments. We do all we can to contribute to our customers’ success. This is a strong platform for the future.

Alberto Zanata, President and CEO

Year-end report Q4 2020

Strong cash flow in a turbulent time

After the sales recovery in the third quarter, the second wave of the coronavirus pandemic has halted the recovery. However, the negative impact is more contained now compared to the first wave, as customers have learned to adapt to the new situation.

Sales in the quarter declined organ­ically by 13.2%. Sales of Laundry was almost flat compared to the same quarter last year which shows both the resilience of the laundry market and our strong position. Sales of Food & Beverage declined compared to the same quarter last year, to a large extent driven by the weak development in Southern Europe.

Thanks to short-term savings, improve­ments from the structural cost saving programs and the stable development in Laundry, we have been able to deliver a margin in line with the same quarter last year. EBITA for the quarter was SEK 142m (181) with a correspond­ing margin of 7.3% (7.8). Operating cash flow after investments improved and amounted to SEK 460m (355) in the quarter.

Sales of Food & Beverage declined organically by 20.8% in the quarter, reporting an EBITA-margin of 1.0%. Laundry continued on a comparable sales level with an organic decline of 1.9%, but an improved EBITA-margin of 16.9%.

The restructuring plan announced in September is progressing in line with plan and is expected to generate annu­al savings of SEK 110m from the second quarter of 2021 and additional SEK 20m from the second quarter of 2022.

Product innovations play a key role in our business, but further investments have also been made to enhance efficiency. Hence, we have started a multi-year project to roll out a new common IT infrastructure to all factories in the Group. In addition, the consol­idation of our beverage and laundry operations in Thailand into one factory is nearing completion.

We recently launched our sustainabil­ity commitments and targets focusing on climate, health & safety, as well as diversity. The overarching target is to become climate neutral within our industrial operations by 2030. We are fully committed to take further action to mitigate climate change and support the ambitions of the Paris Agreement.

After 2019 with its intense preparations for the separation from AB Electrolux, 2020 was positioned for strengthen­ing and growing the business after the listing efforts being completed in March. However, the coronavirus pandemic forced us to radically change our focus since the hospitality industry has been one of the most affected industries.

We are proud to have demonstrated resilience during the pandemic turbu­lence in 2020. Thanks to the flexibility of our employees and the cost saving measures adopted, we have laid the foundation for the future. Short term the pandemic creates challenges, but when larger parts of the population world-wide are vaccinated against the coronavirus, I am confident that the business in restaurants, hotels and bars will come back – and when this hap­pens, we will have the products, the service and dedicated people in place to support our customers.

Alberto Zanata, President and CEO

Q3 2020 interim report

Sales recovery and continued cost actions improved profit compared to Q2

During the third quarter we have seen a recovery after the significant negative impact the pandemic had on commercial restaurants, hotels, pubs and staff canteens during the second quarter. The Laundry market has shown more resilience, driven by the increased need for cleaning and disinfection.

Sales in the quarter declined organically by 16.1%. The decline in sales in July and August were in line with the levels reached in June, when the recovery began. In September, as well as in October, we have seen an improvement compared to the previous months.

After a challenging second quarter with its break-even results, I am pleased that the sales recovery and continued cost actions improved the profit in the quarter compared to the second quarter. EBITA for the quarter, excluding items affecting comparability, was SEK 173m with a corresponding margin of 9.9% (12.1%). Sales of Food & Beverage declined organically by 19.6% in the quarter, reporting an EBITA-margin, excluding items affecting comparability, of 9.1%. Laundry continued to be more resilient with an organic sales decline of 9.8% and an improved EBITA-margin, excluding items affecting comparability, of 14.9%.

Short-term savings and improvements from the 2019 and 2020 structural restructuring programs contributed positively. With sales gradually improving, temporary cost actions have, however, started to phase down versus the previous quarter. In total, cost-saving measures amounted to approximately SEK 75m in the quarter.

Several customer segments, in particular within the hospitality industry, will likely continue to be strongly affected by the pandemic. As digitalization, online sales and working from home change our everyday work, we have started to adapt our organization to this new reality in an effort to become leaner and more flexible. In support of these changes, structural measures generating yearly cost savings of SEK 130m have been launched. These savings are in addition to the SEK 100m saving measures announced in 2019, which have now been fully implemented.

Product innovation plays a crucial role in our business and as a result, several new products have been released, such as the NitroChrome3 High Productivity fry top, the new Espresso Coffee Machine range and the new line of ironers for Laundry.

Virtually every employee at Electrolux Professional has been affected by the pandemic. At the same time, our employees have continued to show commitment and flexibility in front of the challenges that this new reality brings forth. Combined with our measures, this brings confidence that we have a stronger organization that is well equipped to handle the continued uncertainty in the market going forward.

Alberto Zanata, President and CEO

Q2 2020 interim report

Swift actions contributed to break-even EBITA, despite significant sales decline

The global COVID-19 pandemic has had a substantial negative impact on commercial restaurants, hotels and pubs, representing approximately 50% of our sales. Sales to institutions as well as sales in Laundry have also been affected, but to a lesser extent.

Sales in the quarter declined by 40%, however improving throughout the quarter. In June, sales recovered and had a 20% organic decline after the significant 50% drop in April and May. Sales in the beginning of July are in line with the percentage decline registered in June. We interpret this as a sign of recovery.

Sales of Food & Beverage declined by 48% in the quarter, reporting a negative EBITA, while Laundry was more resilient with a sales decline of 22% and a good EBITA-margin of 13.5%.

EBITA for the period came in at break-even. The decline in EBITA is predom­inantly impacted by the large decline in sales volumes, but also a strong positive one-time-effect from a pension plan settlement in the second quarter of 2019. Short-term savings and improve­ments from the 2019 restructuring pro­gram contributed positively. I am proud of the swift actions taken by the team in this unprecedented time to keep EBITA at break-even and even have a small positive cash flow given the severity of the market decline.

Several actions have been put in place to reduce costs short-term, which only partially compensated for the rapid drop in sales. The cost-saving meas­ures, including some structural savings and government support, have reduced our cost in the quarter by approximate­ly SEK 200m.

In order to be more flexible and to adapt our cost structure, we are review­ing structural cost-saving initiatives. In addition, structural cost-reduction ac­tivities have already been implemented in the US and Industrial Operations. The ambition is to define and start to implement new measures during the second half of 2020 that together with the already implemented activities will generate yearly cost savings of SEK 100–150m. The structural measures under review will imply one-off costs which will be communicated later.

Many countries have gradually begun to reopen after the pandemic restric­tions. This had a positive effect on our customers, although it is too early to say how fast the continued recovery will be, as the general market uncertainty is still significant. We continue to stay flexible, to rapidly adapt our ways of working and our organization to the changing market dynamics.

The flexibility of our organization has been demonstrated by the release of several new product and service initi­atives, for example “Two pairs of eyes” which makes it possible for service technicians to provide remote support with augmented reality, but also new products within hygiene and clean.

I am particularly proud of how our employees have continued to show commitment, perseverance and flexibil­ity during this unprecedented crisis. This is a demonstration that we will continue to stand strong also in the future.

Alberto Zanata, President and CEO

Q1 2020 interim report

Stock-listing in a challenging time but with the right foundations to stand strong also after the crisis

The listing of Electrolux Professional on March 23 occurred at an unprecedented time, with the global COVID-19 pandemic heavily affecting not just individuals, but communities and companies alike. Safety is our top priority during this time and several important measures have been taken to secure the health and safety of our employees, as well as that of our customers.

The coronavirus has already heavily affected the hospitality industry, such as hotels, restaurants and pubs, an area representing approximately 50% of our sales. Sales to institutions as well as sales in Laundry have, however, so far been less affected thanks to the installations in coin-operated and in institutional and multi-housing laundries. In total, sales for the quarter declined organically by 13.7%.

Consequently, several measures have been implemented to reduce cost and to apply stricter cash management. Actions have been put in place to secure the operational cash flow, with focus on accounts receivables and cash collection. All investments have been re-evaluated and product and purchasing plans have been adjusted.

EBITA for the period amounted to SEK 221m (316), representing a margin of 10.6% (13.7). The decline in EBITA is primarily impacted by lower volumes in Food & Beverage and higher cost for corporate functions related to operating as a stand-alone company. Savings and efficiency improvements contributed positively.

In January and February, sales and EBITA were only partly impacted by the coronavirus, driven by the development in China and, to some extent, Italy. From March, the impact due to the coronavirus became more evident in most markets. Sales in March declined organically by approximately 25%.

Currently, all factories are operational, but with reduced production. Warehouses have increased stock to ensure quick delivery of parts and products, but also to handle potential supply chain disruptions.

The general market uncertainty is significant. Since the extent of the pandemic cannot be predicted, it is also not possible to make a forecast for the financial development.

We have a strong balance sheet and access to credit lines which makes us resilient and well equipped to handle a longer period of downturn.

The strategic direction presented in March remains valid. However, the short-term focus is on mitigating the sharp decline in demand. At the same time, it is important to emphasize that Laundry, the most profitable segment, so far has been less affected.

Many of us are currently living in what probably is the most challenging period of our lives, both professionally and personally. This said, once the crisis will end, companies with solid financials, committed employees and the right strategy will have an advantage. I am confident that we have the right foundations to stand strong, also after the crisis.

Alberto Zanata, President and CEO

On March 23, 2020 Electrolux Professional was separated from AB Electrolux and listed as a separate company on NASDAQ Stockholm. Having spent most of my professional career in AB Electrolux, I am proud and happy to have been given the opportunity to represent Electrolux Professional in its new role as a stand-alone company.  Without doubt, the long-standing heritage and experience we bring with us from the AB Electrolux will be of great benefit to us.

Electrolux Professional is one of the leading global providers of food service, beverage and laundry solutions, serving a wide range of customers globally, from restaurants and hotels to healthcare, education and other service facilities. Our solutions meet the need for high-performing, reliable equipment, with significant aftermarket requirements over the equipment’ lifecycle and for customers focused on productivity and total cost of ownership. The Electrolux Professional brand will continue to be our main brand. We aim to stay at the forefront, offering unique, innovative solutions that help our customers to be successful.

Several global trends favor the growth of our business. The increase in out-of-home spending, especially in emerging markets, means people are spending more money on dining out and less time a on household chores such as laundry. Many businesses are broadening their offerings and are becoming multi-function assets, for example, coffee shops offering food and laundromats offering coffee and food.

At the same time, the importance of sustainability is growing significantly. In addition to general awareness of the climate and our environment, ergonomic and sustainable solutions save money for our customers. This is an area where we can be truly valuable to our customers. Our new, innovative products are efficient and ergonomic, saving time, waste, energy, detergent and decreasing sick leave. The foundations for Electrolux Professional’s future growth are in place and we are ready to seize the opportunities!

The spin-off will enable Electrolux Professional to successfully realize our strategies under the leadership of a separate management team, with our own Board of Directors and independent access to capital. Electrolux Professional and the Electrolux Group have different end markets, customers and drivers for success and, as separate companies, both are better positioned to meet the varied drivers and challenges in our respective end markets.

Although we are experiencing challenging times with the global impact of the coronavirus, it is with a lot of energy and passion that we are starting the exciting journey to develop Electrolux Professional’s business as an independent company.

A warmly welcome to Electrolux Professional!

Alberto Zanata

President and CEO

CEO Comments 2019-10-16T07:20:14+00:00 Electrolux Professional