Good morning, and welcome to this update on this morning's press release about our upcoming cost reduction program and management changes. With me here today is Sophie Arnius, our Head of Investor Relations. I would also like to mention that this session is recorded and will be available on our website as an on-demand version. I will first do a short summary and then open up for questions. This morning, we announced that we are initiating a cost reduction program on the back of weaker than expected market demand, continued supply chain inefficiency, mainly in North America, and sequentially weaker earnings during the Q3. What we have seen so far in the Q3 is that market demand for core appliances in Europe and the US have decreased at a significantly accelerated pace compared with the Q2. We estimate that the year-over-year demand drop is as much as twice of what we saw in the Q2. This is driven by the impact of high inflation on consumer durables purchases and low consumer confidence. As we said in our Q2 report, we expect consumer spending to further deteriorate, but it was uncertain to what extent. Lately, we have seen consumer confidence in both North America and EU hit very low levels. In Europe, even lower than during the pandemic. High retailer inventory levels have further amplified the impact of the slowdown in consumer demand. The weak market environment, in combination with supply chain imbalances, is expected to result in Q3 group earnings to decline significantly compared to the Q2. Also excluding the one-time cost to exit the Russian market. This has been driven mainly by Europe and North America. Looking specifically at our North American business area, we expect an operating loss in the Q3 exceeding the loss in the Q2. Furthermore, market demand for 2023 is expected to further deteriorate, i.e., year-over-year be negative in both Europe and North America. Against this background, the board has this morning decided to initiate a group-wide cost reduction program, addressing both variable and structural costs, as well as a turnaround program in North America. These programs start immediately and are expected to result in a material positive earnings contribution from both cost efficiency and investment in innovation marketing in 2023. Let me start by giving you some details on actions related to variable cost. As you may be aware, our earnings have, during the last year, been significantly impacted by supply chain constraints. We will therefore give special attention to eliminating cost inefficiencies in our supply chain and production caused by the protracted supply instability, which in particular has impacted our North American operation. This means that we are now adapting sales and production plans to what can be supplied in a stable manner in order to have air freight, out of contract logistics, and spot buy costs coming back to pre-pandemic levels. These actions will also significantly improve production efficiency through less idle time in production and use of overtime, et cetera. When it comes to the structural cost reductions, we focus on four areas. Firstly, to leverage the organizational changes which took effect July 1 this year and earlier in 2019. These changes mean that we have created stronger global organizations for operations, sales, admin, R&D, and IT. Initially, the focus was to create speed and scale, and now the next step is to achieve cost efficiencies. Secondly, to optimize the R&D portfolio. This means leveraging recent global investment programs in R&D and prioritize the highest ROI opportunities in order to lower cost and CapEx. When prioritizing, we are looking at a number of KPIs, for example, payoff in terms of year and R&D productivity. Thirdly, to further optimize marketing. This includes tactical marketing expenses, which will be adjusted to current market environment. Brand building expenses will be prioritized on a global level instead of previously in each business area. We will also benefit from creating more centralized content. Finally, we focus on improving productivity in operations, not just from a variable cost perspective, but also from a structural cost perspective. Regarding business area in North America, I'm obviously very disappointed with our performance. The production transformation with two new facilities and several new product platforms, in combination with the particularly challenging supply chain conditions in the region, will require additional measures to return to stability and profitability. We remain highly confident in the consumer appeal of the new product ranges, and the main focus going forward will be on cost competitiveness in the new production facilities. A turnaround program will therefore be initiated. In addition to the measures mentioned above, key areas for this program will be reviewing the product portfolio in view of the current market demand, and significantly improve the cost efficiencies in the two new facilities, Anderson and Springfield, by adapting sales and production plans to what can be supplied in a stable manner and to right-size the workforce. The turnaround program will be conducted under the leadership of Ricardo Cons, who has been appointed new head of business area in North America. Ricardo has led business area Latin America since 2017 and has shown that he's capable of navigating in a dynamic environment and improving margins. Business area Latin America went from an EBIT margin of 2.6% in 2017 to 6.7% in 2021. He has successfully led the re-engineering program in the region by taking the investment in our Curitiba facility to its completion and is now underway with the São Carlos investment, which is going according to plan. Before joining Electrolux, Ricardo was Managing Director of Franke Brazil during a 5-year period. He also had various management positions at Electrolux in Brazil between 1997 and 2011, including President of small appliances in Latin America. To conclude, the cost programs now initiated are expected to result in a material positive earnings contribution from both cost efficiency and investments in innovation and innovation marketing in 2023. We will in the Q3 interim report on October 28 come back with more information on cost reduction targets for 2023, as well as a potentially material restructuring cost. Finally, as you're probably aware, the share buyback program that we initiated on May 2, 2022, was completed on September 2nd. Given the current market environment, the board does not intend to initiate additional share buybacks before the AGM of 2023. However, the board's intention is to continue with the share buybacks over time. With that, let's open up for questions. I'd like to emphasize that we will limit the discussion in this Q&A session to clarifications about the announcements this morning. Sabine? Thank you. As a reminder to ask a question, you will need to press star one one on your telephone and wait for a name to be announced. Please stand by while we compile the Q&A roster. This will take a few moments. Now we're going to take our first question. The first question comes from the line of James Moore from Redburn. Your line is open, please ask your question. Yeah, good morning, everybody. I have a number of questions. I'll start with one and get back in the queue. Could you possibly scale the total new savings and provide some timing on when you'd expect them to have fully landed in the P&L? Really, that's my question, but I'm trying to understand the potential path of North American margin recovery. I mean, if North America is roughly nil this year, do you still believe you can get back to 6%, and in what timeline? Yeah. This program obviously now starts immediately. We have not had the opportunity yet to go through it in detail and size it, of course, because we had to disclose it first, get the board approval and then disclose to the market. We start with the work of detailing the specific actions and consequences of those. We expect to come back with that at the time of the Q3 earnings release, which is October 28th. I will refrain from giving specific guidance on that because frankly, we don't have enough detail on that yet. When it comes to North America, we are. We remain highly confident in our ability to get to our 6% earnings target as far as that contribution from North America to that target is concerned. You know, as I mentioned, we're very confident that the new products have the right level of consumer appeal. The fundamental cost structure of the products, if you look at material cost and so on, is competitive. However, we have been very uncompetitive so far when it comes to a supply chain and production efficiency perspective. This is because of the extreme instability that we have had in the supply chain in the North American market, which means that we have overstaffed, we have overcosted the setup to deliver the maximum amount of volume that we can. That has resulted in very significantly higher cost than what the run rate should be in order to ramp up the product. Now we with weaker market demand and line of sight to more stable supply, our emphasis now is to really get that cost productivity back. We know how to do that. It's hard work. We think it can be done in a fairly manageable timeframe. That's why we say that we expect material cost benefits to occur already in 2023. The initiatives per se are already kicked off. It's just the quantification that it will take another month or so to nail. Thank you, Jonas. You're welcome. Thanks. Thank you. We're going to take our next question. Please stand by. The next question comes to line of Andre Kukhnin from Credit Suisse. Your line is open. Please ask your question. Good morning. Thank you very much for taking my questions. Hi. Very clear that you're not gonna size the entire program this time, and completely understandable. Just to kind of get idea of kind of scope, could you remind us on the things like investment in marketing that you continued to ramp up over the two years? Mm. What is the size of the kind of buffer of that kind of tactical adjustment opportunity? Not telling us what exactly you will do. Mm. In terms of that ramp up over the last couple of years that you. Yeah. Said you will adjust according to demand. Exactly. Now that that's you know both when it comes to marketing and when it comes to innovation we have ramped up. Obviously we pulled back heavily in the depth of the COVID pandemic but since then we've been ramping up quite significantly. There is ample space to reduce that spend. We are of course trying to optimize to your point to demand and to the launches that we have. We will take material action both when it comes to sales driving to brand building a little bit less to launch support because that we still have important launches that we're executing. Also when it comes to our R&D prioritization. Obviously we very significantly increased our R&D spend last several years in order to drive these new product platform and product innovations that we have launched. A lot of that is done. We have an opportunity that was not our plan, frankly, to reduce spend there. We're more focused on driving further increased speed of innovation. In this demand environment, we have to, of course, adjust to what we see and there is opportunity to reduce that in a material way. Those two will be significant. They will not be the biggest drivers of cost reduction. The biggest drivers will be manufacturing efficiency and supply chain efficiency. That's where we've seen really dramatic excess cost over the past couple of years. Right. Thank you. If I were to try to size those excess costs in totality, I'd with the logic of taking kind of your say first half or first nine months performance of this year in Europe and U.S. and comparing that to the first nine months of 2021, it would be fair to assume that you were largely offsetting raw materials there and we take out some for that excess marketing, but the rest can be accounted for by those kind of excess manufacturing costs in totality with supply chain challenges and air freight and all that stuff. Yeah. Except for there's also sort of regular ongoing inflation that's in there. Right. That will be of course. I mean that's just cost that would be hard to eliminate. You're thinking the right way about it, but you have to also you know take into account that there's underlying cost inflation that. Right Seems like it's here to stay. Got it. Thank you. Just final one, if I may. On pricing now that we are starting to see clearly negative volume environment and not even for the Q1, now several quarters in Europe, and that significant deceleration that you cite, how are you seeing pricing developing in this environment? Our list price increases are sticking. As we've guided for before, we expect more of a normalization of the promotional, let's say calendar, you know, with Black Friday promotions or Labor Day promotions and so on. We're seeing that mainly in North America, also in Latin America and a bit more also in Europe. That was already planned for. We don't see that as accelerating more than what we had already seen or planned for. Got it. I think we need to move. Thank you very much. Thank you so much. Yeah. Thank you. Thanks. Thank you. We're going to take our next question. Please stand by. The next question comes from the line of Olof Cederholm from ABG Sundal Collier. Your line is open. Please ask your question. Hello. It's Olof with ABG. Just a question on demand. It's falling off quickly now. Mm-hmm. Of course, the comparisons are still quite high. Thinking about it, you're talking about a negative development into 2023. I can see that. Given you have so much replacement in your sales, how do you think these dynamics will play out over the coming. Mm-hmm Three to six quarters? Yeah. No, I think that's a very good point that you know generally speaking well over 50% of our sales are what we call forced replacement meaning that an appliance is broken beyond repair and has to be replaced. Then we also know that unless circumstances are extreme people actually do that. That's upwards of 60% of our demand in mature markets. We have planned replacement then we have new construction. We do expect to see and we are seeing a slowdown in new construction. We're also seeing people putting off planned replacements or refurbishments. I think that for as long as we see consumer confidence at these very low levels in combination with a very high general inflation, and particularly in Europe here, energy prices, I think people will hold on to their wallets quite hard. You know, in Q2 we saw a market decline in Europe of around 10%. In the U.S. around 6%. We're seeing so far in the quarter here that pace almost double. You know, difficult to get a precise gauge, but certainly high teens in Europe and double digits in North America. Now, that is sell-in, and we don't yet have sell-out data. We know that retailer inventories are definitely high for this level of demand. Retailers are adjusting their inventories down as part of that decline. Where that levels out is hard to predict, especially in Europe, given the uncertainty around energy prices this winter, and in North America around where interest rates will settle out. That's why, you know, we're not giving specific guidance because frankly it's too uncertain, but we do see enough headwinds that we think is gonna be a negative for 2023, both in Europe and North America. Okay. Thank you. I was just wondering what your thoughts are right now on raw material cost? We're seeing steel prices continuing lower since you reported. Do you have any updated views on those trends going into Q4 and 2023? Yeah, I think obviously we'll come back with specific guidance on that in Q4 because the volatility is still very high. To your point, cold rolled steel prices and also other base metals have come down since the peak that we saw this spring. Of course we had locked in prices late last fall and were not exposed to those extreme peaks with some exceptions. But having said that, the current decline in prices for metals is of course very positive for us. Now the concern that we have and the volatility that we see is of course related to again, energy prices in Europe which impact cost levels there so for our suppliers. To give a prediction right now where the market will settle out is not easy, and we'll refrain from doing that. Of course, yeah, positive developments so far. Okay. Thank you. Mm-hmm. Thanks. Thank you. We're going to take our next question. Please stand by. The next question comes to line of Johan Eliason from Kepler Cheuvreux. Your line is open. Please ask your question. Yeah. Hi, this is Johan Eliason at Kepler Cheuvreux. Hope you can hear me through the dog barking. I remember you arrived as this new CFO to Electrolux back in 2008 and you had to issue a similar profit warning, I believe it was in December 2008. Can you sort of highlight the main differences from the situation back then and today, and any lessons learned from going through that period? One thing I remember that you eventually decided to do was cancel the dividends for 2008. Is there something that could be repeated? No, I don't think we will cancel the dividend. I think that was a fairly extreme situation in terms of the capital financial markets and funding back then, which we don't see. That's one of the differences that we don't see right now. From a financing perspective, we don't have those concerns, certainly not at this point. There are a lot of similarities in that, and that is that we saw this fairly sudden impact on consumer demand from being very bullish to the confidence dropping very rapidly. That's what we saw back in, I guess October 2008 with the Lehman crash. I would say that this energy price spike in Europe and the very high pace of interest rate increases in the U.S. both have a sort of similar impact on consumer purchasing decisions in that they're saying they're holding back and they're waiting to see what's happening, and that has a fairly big and quick impact. I think that's. There are many similarities with that. We also back then had a situation where maybe less general inflation, but certainly very high input cost inflation for us for an extended period of time before that pullback. That's actually quite similar also to what we're seeing right now. What happened back then, you probably recall, is that already, let's say by mid-2009, we saw a very sharp drop in input costs, which then had a favorable impact on our results. Will that happen again? I have no idea. Certainly that's not the indication. You know, we talked about steel that's come down, but other things like oil and of course general inflation is at this point remaining very high. We'll see how that develops. Jonas, please be advised our participant's line has been dropped. Oh, nobody can hear us? Everybody else can hear. I think Oh, okay. Johan has dropped, so, but everybody could hear your answer. Now we'll proceed to the next question. Thank you. Thank you. Now we're going to take our next question. Please stand by. The next question comes from the line of Will Turner from Goldman Sachs. Your line is open, please ask your question. Hi, Jonas. I mean, I guess the slowdown in market demand won't come as too much of a surprise to most of us. One thing that I feel still a little bit surprising is the U.S. has been markedly more weaker for Electrolux relative to peers compared to the other three regions. I was wondering, could you just go into more detail on what is actually required to improve the manufacturing and supply chain efficiency of this business? Is there anything a bit more structural in that business area, given maybe it's the kind of like market segment it plays in and its market share relative to the other regions? Because, yeah, when we look back at the last five years, this has been really the one I think that has probably underperformed, especially given how strong those markets have been, the market's been over that time. Yeah, I mean, I would say that's a fair assessment. I think we. If you go back in time, we had a situation where we had under invested significantly in our product and our manufacturing footprint for an extended period of time. You know, back in 2018, we then decided to launch a significant investment program in North America, both from a product innovation perspective and product architecture, as well as manufacturing footprint. Now, the challenge is twofold there. One is that, you know, because we had an extended period where we had not invested, we were in a situation where the step up needed was very high, you know, both from a capability perspective, automation, digitalization, product architecture and so on. That was a big challenge to start with. Then right when we were ready to ramp up those, the new Anderson facility in that case, but also some new products in other facilities, COVID hit. Initially that meant that we were not able to provide the level of support, neither from the group, let's say, expertise areas, nor from suppliers of equipment that usually came from overseas. That meant that we were very inefficient in ramping up these new products. On top of that came then the supply chain disruptions and supply disruptions that hit North America particularly hard, also because of overseas content, port congestion, trucking issues and so on. There's been a, let's say, compounding series of challenges in terms of ramping up and getting the efficiency in these new production facilities. That has compounded to a point where we're right now running the new facilities very inefficiently, to be honest. We need to take a step back and redouble our efforts to improve the productivity. So far, the focus has been, I would say, almost exclusively on getting the output up at any cost, more or less, given the supply constraints and volatility. Now we have to flip into much more of a cost productivity perspective, both in the supply chain side and in our own manufacturing. That requires a different approach. It requires more discipline, frankly, stronger processes, stronger process adherence. Here we will provide a lot of support to North America, including with new leadership. That's the kind of tough news, if you will, that we need to really change there. The good news is that the new products are very, very good. The quality is good. The consumer star ratings of the new products are very, very high. It's a step, a real step change compared to the products that we're replacing. The material cost and the product architecture designs are competitive. We revalidated that and are confident that they are. The new product architectures, new modular architectures per se, are cost competitive. The way we assemble them and the way we supply them is extremely inefficient right now, and that's what we need to address. Okay. Yeah. That makes sense. I guess you'll have the most recent challenges despite if they kind of will unwind on their own, and now it's kind of resizing the business. Mm. That you've got a little bit more capacity. Yeah. Exactly. It's, you know, stability. That's what we talk about, stability and focus and leverage what we have and get that productivity up. That's the focus, and that requires just a different approach than what we've had. Great. Thanks. Yeah. Sure. Thank you. Now we're going to take our next question. Please stand by. The next question comes from the line of Akash Gupta from JP Morgan. Your line is open. Please ask your question. Yes. Hi, good morning, everybody, and thanks for your time. My first one is on mix and market share, particularly in Europe. In last few weeks, we are getting a lot of headlines that consumers are trading down, and on the back of it, I wanted to ask, if you see any risk to market share from weaker mix that consumers might be trading from mid-market or high-end to more like low-end products. Maybe if you can say something that could there be any additional risk? On top of market decline from mix and market share. No, I definitely think there is risk to mix, certainly market mix, we do see trading down in Europe, less so in North America. There we have more of a situation where, let's say, either consumer buys or not that they trade down necessarily. It's a slightly different type of dynamic, whereas in Europe, we see trading down. In Europe I'm not concerned about market share. We have a product offering that covers most of the price points in the market. We have been struggling with supply heavily for an extended period of time, more so than our Asian competitors. If anything, our ambition is to recover market share as we go forward in Europe and as well as in North America. Thank you. A quick follow-up on covenants. Are there any covenants that we need to be aware of? Thank you. No. No. Thank you. Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone keypad and wait for a name to be announced. Now we're going to take our last question. Please stand by. The last question comes from the line of Uma Samlin from Bank of America. Your line is open. Please ask your question. Hi. Good morning, Jonas. Thank you for taking my question. I guess my first question is on North America. I guess the cost saving plans is coming right at the point when you're ramping up the factories and launching new product and to potentially improve the market share in North America, which you have lost quite significantly in the past few years. How do you plan to balance the, you know, the right sizing and the cost reduction of the North America operations, especially in terms of production and potentially also marketing and regaining the market share? No, I mean, this is the exact trade-off that we've been challenged with for the last nine months or more. I would say that so far, we've addressed that mainly by producing output more or less at, let's say, at any cost, right? We've been spending a lot of money on express logistics. We have been planning production that we have not been able to execute because of lack of specific components and so on. That has really driven a lot of costs. We really have no choice but to take a step back now and stabilize. That means more, let's say, more planned production in a stable way based on the supply that we have visibility on. Of course, reducing costs in conjunction with that significantly and then rebuild from there. We have tried the other way in anticipation of better supply for a period of time. Again, the cost penalties of doing it that way have been too high. We need to get to stability, we need to get to predictability, and then we can grow from there on. That's the plan. Thank you very much. I guess another one from me is about your European sort of cost reduction. Can you talk a little bit more about that? Yeah. You just mentioned that in Q3, you're expecting somewhere around teens market decline. Your cost reduction seems to mostly focus on the U.S. Just wondering, you know, how do you think about the fixed and variable cost reduction in Europe? Are you optimizing your manufacturing footprint, especially Eastern Europe, given the high energy costs and you know, the potential cost increases there? Right. In Europe it's a little bit more straightforward. There we have, I would say, a well-running operation. We have great products, we have good, you know, distribution and all that. It's just the demand is lower, to your point, and hence we have to reduce our cost footprint. We're doing that aggressively here. It's more straightforward, just cost reductions. We will look at, of course, the production allocation, given energy cost, input cost, all those things. That's the work we're doing now to figure out exactly where to drive our cost efficiencies. You know, as mentioned in the beginning here, we're talking a lot about really leveraging the new organization setup we have with more scale and leverage, more prioritization, globally. That's of course benefiting our biggest business areas, both Europe and North America. We'll do both sort of more tactical cost reductions and these structural benefits from the new organization setup impacting Europe. I guess my last question is that how long do you think this will take to see an impact in terms of earnings? Do you expect us to see that at the beginning of 2023? Or, you know, what's the sort of timeline you're thinking about? Some of the more sort of short-term actions like hiring freeze that we've taken, like, reducing discretionary spending and so on, has immediate impact. We're doing that right now, so that will have an impact already towards the end of Q3 and in Q4. When it comes to the more structural changes, that of course takes a little bit more time 'cause we want to do it right. We want to prioritize the right things. That will mainly be in 2023. Okay. Thank you very much. That's all from me. You're welcome. Thank you. Thank you. That rounds up the questions, and I would like to hand the call back over to our speaker, to Jonas Samuelson for closing remarks. Thank you, Nadia. The cost programs that we have now initiated are, as I've said, expected to result in a material positive earnings contribution, both from cost efficiency and from reductions in investments in innovation and marketing in 2023. Just to confirm, we will come back in the Q3 interim report on the 28th of October with more information on the specific cost reduction targets for 2023, as well as an estimate of a potential and potentially material restructuring cost. With that, I look forward to talking to you again on October 28th, and I wish you a good day. Thank you.