Electrolux Professional AB (publ) (EPROB) Earnings Call Transcript & Summary

[Presentation] Welcome to Electrolux Professional Investor Day with focus on Laundry. We are broadcasting live from Sweden, Ljungby with our -- where we have our Laundry factory, our largest Laundry factory. We welcome all of you watching online as well as all of your guests that are here in our factory in Ljungby. My name is Jacob Broberg. I'm Head of Corporate Communications and Investor Relations. Some housekeeping rules before we start. [Operator Instructions] Finally, today's event will be made available online after the event today or later tonight. And with that, let's start the day. Today's presenters, you can see them on the slide here. It's Alberto Zanata, President and CEO of our company; it's Torsten Urban, who is Senior Vice President of Product and Marketing; Silvana Johansson, who is Global Head of Category Laundry; and of course, Fabio Zarpellon, our CEO -- CFO, it should be very important to remember. This is the agenda for today. We will kick off with Alberto who will give an overview, then Torsten and Silvana will do the deep dive into the Laundry product, which is the theme of today, and then we will end with the financials before Alberto conclude today. And for those of you who are here in Ljungby, you will also be able to take the factory tour and also see many of our products afterwards. Unfortunately, we are not able to showcase that through the online video. So let's get started, and the first presenter is Alberto Zanata. Please go ahead, Alberto.

Thank you, Jacob. And again, good morning and really welcome, again, also from my side to you that -- who are here and the ones that are following us via video. We start saying that we are open again. And I have said that it's really a pleasure to all this meeting in person, at least for the ones who had the possibility to come because at least for me, it's the first time we have a meeting with so many people in person. And it's one of the few times or the first time that I'm traveling also. But this is a sign of the business coming back, and I think we are all looking for that. Now talking about specifically Electrolux Professional, we have been going through some really challenging year because it's not only the pandemic, but 2019 was the year of the separation when we separated from the group. And there have been a lot of things that were occupying our mind or activities. And I remember, in January, when basically all the things were done, and we were ready for the listing, looking at the guys that are here in the back, we said, okay, everything is over. Now let's focus on business. And just a few days after, pandemic hit us. Then I believe you remember, March 23, that was the listing day was basically the day when the stock exchange crashed. So I don't know, somebody told me that was the luckiest thing for us or some other side that it was the worst. But the facts remain that, that was what we have been those days. And then clearly, we have been focusing on the pandemic on managing, navigating the time, and now we are back. And again, this is what was 2020 that was -- I've been in this business in this company for many, many years for my professional life. And believe me, I never say a year like that one. So it was really a challenging year with the market dropping with the business falling apart, and we had to survive. And I believe at the end, we have been able to do it, keeping the profitability at certain level, the cash. And what is important also starting doing things because it is true that we had to stop a lot of activities, but it's also true that we take this as an opportunity. Please don't get me wrong. What happened in 2020 was terrible personally, professionally, but it's also an opportunity to review processes or review organization. And this is what we did running a restructuring first in 2019. So before pandemic hit in '20. And then I think you heard that a month -- a few weeks ago, we also announced additional activities to improve the efficiency and the productivity of our company. All in all, reducing the fixed cost base of this organization. That is always giving us the possibility to be more efficient productive and at the end, more profitable. At the same time, the focus was not only cutting costs. That was probably a need during such a pandemic, but we also took opportunity to accelerate some other investments, not all of them, but the clear investments that we're targeting. The important thing on those days that are important, very important last year, but they will become even more important in the future. And particularly, I'm talking about digitalization of the organization and being a more sustainable company with more sustainable products. The thing that we did not change, we did not touch, we review it, but we did not touch, was about what we do every day when we wake up in the morning. When we wake up in the morning, we think that our mission is to make the life of our customers easier, more profitable and truly sustainable every day. This is what is driving all our activities, nothing more than this, pretty simple, I would say. And we also know how we can do it, making the life of our customers is a more profitable truly sustainable every day, but at the same time, growing the profitability of this company. And this is picking around the 4 cornerstones of our strategy that are around innovative solutions. This company is recognized as a leading company for what innovative solutions are concerned, growing the customer care that is a good way to stay in contact with the customers but also an amazing way to grow the profitability of the company. Growing the business of the chains, commercial restaurant chains in North America and not only because they're growing more outside North America than in North America. And last but not least, to continue to invest in what makes us different from everybody. That is the one -- being the one that can provide solution to our customers in every corner of their operations. And this is -- doesn't mean that we have to deliver to our customers everything they have. But this means that we have the possibility to do it. And we do it under one brand. So we are not the largest company in this industry, but we are one, if not the largest brand in this industry. And the brand is what the customers see or they have in front of them. The other important thing that I'd like to underline is people because if we have been able to navigate well these days is also because of the team. An engaged team, a passionate team, people who cares about the company, about the things that we have been doing. And this is the reason why we also reviewed our important things. We call guiding principle, how we want to act every day. And I think trust is probably the most important word about that other than obviously being customer-obsessed. So obsessed is a strong word. Somebody could also believe it's a negative perceived. But this means that whatever we do is because the customer, they have to be (happy), so to satisfy the customer. And then really also taking some risk because if we don't take risk, then probably we don't get anywhere. But doing all these things in a sustainable way. And when I talk -- you will hear many times the word sustainability. And what sustainability means it's not just being green. I'm using the example of a table, this is with 1 leg, but there are table with 3 legs. And you know that if one of the 3 legs is weaker than the other 2, then the table is falling apart. So sustainability is like a table with 3 legs, that they had to be equally strong. One is being green or ecologically friendly, if you want to say. But the second one is being economically sustainable. So they have to be -- it has to be good also for the pocket. And the third one is the social responsibility, so it has to be good also for the people who are impacted by the activities, but also the ones that are working, for instance, inside our company. The other important thing that in that case, it was impacted by the years of transformation and COVID is our activities about the inorganic growth. Whatever we will discuss today is about our possibility, capability to develop organically. This is what we do, considering our resources, considering what we can do with the investment we can put in the business. But it's also true that posing during the year of the separation, posing during the year of pandemic, we restarted during the fall of last year discounting about possible acceleration of our strategy. And the priority are there are the ones that could help us to grow faster in particular, in North America, and in particular with the chains. Why? Because our presence in North America, you saw in the previous picture, obviously, is lower or is less significant than the one we have in other parts of the world and not being present significantly in North America. This also means that our presence with the segment of the commercial restaurant chains is more limited. And the commercial restaurant chains are -- is the segment of customer segment in our industry that have been growing the most during the pandemic and in particular, after the pandemic was over. And this is important to talk about the customer. I was mentioning at the commercial restaurant chains. But the overall market, what we call hospitality, out-of-home market. Again, I've been in this industry all my professional life. So it's easy to say that I love it, but it's a great market this one because it's the market where we all enjoy life when we go outside with parents, friends, whoever, and the underlying trends are the strong one. During last year, in particular, during the spring, when COVID was hitting, there were many people talking about this industry as the most affected, clearly, but also an industry that would not have recovered after the COVID. Reality is that the underlying trends are bringing back the business pretty quickly. So we believe that this industry was steadily growing before COVID. It was hardly hit by COVID. I think it was one of the most affected industry because of the pandemic, but it also restarted to grow, and restarted pretty quickly. We have data. Again, we don't have a statistic about the equipment that is obviously our specific business, but these are data that are giving us indication. For instance, these are the search that are being done look for restaurants in Google. And then you can clearly see the pick up during the past months and years or this one is the number of flights. That is another important thing. I came on Monday flying from Frankfurt. Frankfurt was busy as it was in 2019. So clearly, there is a difference. There is a change. There is a recovery. And this is the reason why in this chart that we have been using since Q1 this year, this is based on several searches that we have been compiling in order to have a global picture. The blue line is representing the most optimistic view. So the ones that is showing a recovery of the market, recovery to the level of 2019 at the end of this year, beginning of next year. The red line is the one -- is the more pessimistic view that was basically 1 year later. I have to say that looking at the trend that we started to experience in June, we are closer to the blue line than the red one. It is a market that, again, is recovering faster. And it's recovering, following trends that were valid before, but probably, they get even more important today. I'm not here to repeat the digitalization, the sustainability. These are important things, the flexibility. I believe you heard more than once the famous dark kitchen. But basically, it is a kitchen, nothing more than a kitchen, and the only difference is that typically, there are not -- typically, there are no people going to that kitchen to get the food, but there are riders that are going there to bring the food at home. But what's the difference from a dark kitchen and a typical one is that in an Italian restaurant, you have only appliances that are serviced to cook Italian menu. I'm using Italian, but the same apply to Japanese, American or whatsoever. Dark kitchens, they have to have appliances to serve any kind of food because they are the ones where people are ordering ones, the burger; ones, the pizza; and ones, the vegetable. So by the way, they are really good for us because, again, we are the one that is providing everything that you can need inside of a kitchen. And this is the reason why I'm saying the dark kitchen is an example. The life of our customer is getting more complex. Because if you were used to have, I don't know, run an Italian restaurant, you were used only to have a pizza. Now you need to know how to cook a burger or Japanese is even worse the difference between others. That is not only, there are several things that are mixing up, bars that are serving food and not only coffee or drinks or I saw coin shops even where the owner was taking the opportunity to work customers there for 1 hour to serve also something to eat or to drink. But their skills are different from being the skills of our restaurant owners. So the complexity is increasing, and we can address this one. Being the one that can support them in the different area of the business. Again, how will we do it? Because reality is that we are bundling all the solutions that the customer is looking for in food, beverage, why not in laundry? Even if there are customer, majority of our Laundry customers are only Laundry customer. We have to say that one. We are bundling this offer altogether, and we are encircling the customer with an offer that is in particular taking care of what we call the customer care, and we don't call it after sales, we don't call it service, we call it customer care because we want to care about our customers. We are even branding this one with a name that we launched 4 years ago is a sanction is a program, and that means everything about that one. And this is really important. And this is the reason why it is one of our cornerstone, the customer care. I already mentioned innovation. I already mentioned chains the customer care and the one. What we mean with innovation. Innovation means bringing solutions to the customer that are improving their operations, their daily operations in a sustainable way, in a profitable way, making their life easier. That's what innovation means for us. It's not to be innovative, just to be innovative. It's to be innovative, bringing solutions that are making the life of our customer easier, more profitable and truly sustainable. And this is really important. And again, we are investing a 4% of our net sales. Now if you follow other industry, it could be not so much. But if you follow our industry and you look at what is spent also by other companies in this industry, this is far above the average of the industry. And thanks to this investment, 50% of the current sales are done with products we've introduced in the market 3 years ago. And again, innovation to bring value to the customer. And that is the reason why we brought also last year in November, our sustainability policy, our sustainability strategy with -- that is not only affecting the product, it's affecting our way of working with the people. Remember the 3 legs of the table about sustainability, that means also to be less impactful for the environment. So if this is about innovation, then customer care is about again, making the life of our customer easier and more profitable and truly sustainable every day. Because it's not just a matter of being reactive, but it's also a matter of being proactive and trying to approach the customer to make the product working longer and in a better way. That is really important, and we believe that this is strictly linked to the third cornerstone that is the onE. Where onE in this case means the digitalization of our offer and our company. Why I'm linking the 2 things? Because more and more every day, customers, they want to have everything under control without being in front of the product. Customers many times -- if you think about McDonald, the real owner are far away from the restaurants where things are happening, but they want to have control on the things. And not only they want also to delegate the control, for instance, the service to somebody else. So the dream I have is that sooner or later, our technicians will be the one knocking the door to the customer and say, "Hey, guys, your product will be down in 10 minutes. I'm here to make sure that your operation will not be down" because the downtime is the nightmare of our operation. If you go to a restaurant, I don't know, I'm back to the Italian restaurants and the pasta cooker is not working, you don't get pasta. And if you go to an Italian restaurant, you don't get pasta, then you probably get upset. So this is the one -- these are the things that are making a difference. And we believe we can make a difference through the digitalization of our offer because in a restaurant, you can find 60, 70 appliances. In the staff canteen of our factory, you have more than 100 appliance. You will never have 100 apps in your mobile phone. It's unforeseeable that one. It can't be. You need one, like probably at home, at least I have it, I don't know how much I'm using, but I have it, Alexa, that is controlling the things that you have at home. You have somebody that is doing, that is managing the ecosystem of your kitchen or laundry operations. But digitalization is not just that one. It's also making the process more effective. For instance, we have a target to have 65% of our transactions online with a dealer, with a distributor, with a partner, with a service in 2 years from now as well as having 50% of our products connected, not connectable. We will talk -- the colleagues will talk about also the difference between the 2, by that time. It's not only the service we provide. You know the information we can get, having the product connected, we can make the product work better. We can use this information for caring about our current customer much more than today. So this is really important and this is the reason why this is a core picture in our strategy in whatever we do every day. This is what we call OnE Connected. It doesn't mean that the customer need to have all these products. Because yes, there are cases, but not all of them. But this means that we are the one that can really manage the ecosystem of the operations of our customers. And the last cornerstone, not less important than the others is the development that we are having with the chains. And why it's important because today, we have only 10% of our business. If you look at the mix, some of our competitors is much higher than that because this is a highly profitable business. It could sound strange because, obviously, chains are really powerful company. Somebody could say, how can be that they don't get to the best price. Yes, they have the best price. But the cost to sell to a chains is lower than to other customers. And the economy you can get with the volume you generate with chains are volume that you can use to have a lower cost in the purchasing in the manufacturing, the other things. So it's a great business that we want to grow. And how we are going to grow? This is the example of a customer in the United States. So we have to enter with a champion product, in that case it was beverage. And then back again about the M&A strategy. This is a product that we acquired together with Grindmaster-Cecilware. So it is a winning product in the market. We are a leading company for beverage. And then we are proving through the service, our trustability with the customer that we are a good supplier. And then we are adding a second product and then others in the future. This is how we can develop our business with the chains. And it is a step-by-step process. You know that our ambition is to get to the 15% EBITA, it is an achievable target. It is a target that we did not change. It is still there, and we believe we can get it, executing the strategy that we have, step-by-step, continuing to bring innovative solution to the market because if you have something that is adding value, then also you can gain price. You have a price premium position in the market. Continuing to serve the customer and you circle the customer with what we call Customer Care Essentia program. Continue to focus on developing the business with the chains, it's a long shot. It's not easy because they have a long-time relation with the supplier and the only way to convince them is that to bring value to change something, forget to bring a product that is [ mid-to ] product. You really need something that is changing something in their processes. And clearly continuing to invest in the digitalization of the offer and of the company because this is the element to be different. And I'm using, again, an example, I like an examples, in the meaning that when I talk about the strategy of a company in the market, I'm used to say that it's like a dance where you're dancing with somebody, and it is an issue. I'm not a good dancer, but it's really a good one. And I cannot move because they tend not to move from this place. But it's one step towards the customer, being close to the customer and one step aside being far away from the competitor. This is what I mean being different. And in this industry, like in others, being different means that you have something to say to the customers and that is truly important. So it's a step-by-step process that will bring us to the 15% EBITA that is giving us and will give us the possibility to grow the business. And I believe an important step inside of this process is the one that today we will deep dive. Because today would be fully dedicated to the Laundry business. Probably, I also talk more about the Food & Beverage business than the Laundry one in this initial part of my presentation because normally, it is what you're talking about, but reality, the Laundry business is a beautiful business. Look at this one. This was the year of the pandemic. It was the worst ever year also this one and also for the Laundry business, but it's still a business that is already above our target. More we grow this one, closer we will be to our target and sooner we will be to our target. It is a resilient business. The decline of the sales was much, much less than what it was in Food & Beverage. It's probably a business that we couldn't expect to grow as much as the other ones. But it's surely a business where we have a leading position that is giving us the possibility and the confidence to strongly contribute to growing these sales to reach our targets. Thanks a lot to all of you. And I believe Jacob we can open to questions if you have any at this stage.

Thank you very much, Alberto. We'll now open up for questions. [Operator Instructions] I have one question online regarding aftermarket sales or customer care as we call it. What is our ambition? If we go to 2024, 2025, what is the ambition in aftermarket sale? And how is our 15% midterm EBITA margin depending on that we are improving our penetration with chains? So 2 questions.

Two questions.

Yes.

Okay. Again, let me answer the second one first. So the 15% EBITA margin. It is influenced by the change because it's part of our strategic plan. But at the same time, we are realistic about the time to develop business with the chains. Later on, you will see also our historical performance. We were already over 14% in 2017, 2018. And at that time, we have less business chains than what we have today. So this means that 15% EBITA margin is achievable with a limited development of the business with the chains. Second question is about customer care. Customer care currently is roughly 16% of our business. So the net sales of customer care are 16% of the total net sales of this company. We don't disclose the margin that we have with customer care, but I believe it's not needed for you to understand that, that is significantly higher than the margin we get with the product. So we need to grow also customer care. And also with customer care, the transformation is not just a matter of saying, okay, now we do more because it's a cultural transformation of our people. To move an organization that was -- that is used or was used because we started the process already 4, 5 years ago, from being reactive, reactive means I just waited the customer to call me. And by the way, it's an nightmare because this means that he has a problem, and I have to fix the problem, to be proactive. That means I go there to try to talk to the customer, to offer them a maintenance contract, for instance, to offer to them sales of consumable accessories or other things like that, is a mental shift that we have to do in our organization. And so also this one is a process that is taking some time, but we have the ambition to do it as soon as possible, clearly.

I have one more question from the web, and that's related to our 15% target. Again, do we have a time line for that target? The 15% EBITA margin?

Midterm, this is what we are saying. So that is -- we are not a fixing an year. And then internally, we have clearly our plans and our targets and our objective, but that is what we say.

I think we have a question from the phone. So please go ahead, operator.

That question comes from the line of Mattias Holmberg of DNB.

My question refers to M&A. And I think M&A was a pretty central selling point when you were spun off from Electrolux in 2019, and I have full respect for that the period since then has been challenging, not only due to COVID, but also working on that spin-off. But I think many investors and I definitely am wondering a bit about what the M&A pipeline looks like? And also if you are satisfied with the work that the organization is doing right now in terms of finding and processing potential targets or if that is something that you want to step up?

Thanks for the question, and it's a good question, obviously. Again, this is an organization that in the past was not used to run M&A. Then we started 5 years ago basically. And since then, we established a dedicated group, a dedicated team, and we've been able to perform one acquisition per year. That put us among the most acquisitive company. You know that there are one in particular that is very acquisitive. But other than that, we are there. And I believe we are involved or aware at least of not every, but most of the transactions that are coming to the table. As I said before, last year, we restarted to focus on these things. Before that, it was not the case. So first the separation and then pandemic. Then last year was challenging because the market -- the business was still down. So it was it was still something that was not easy. It is still challenging, I have to say. Also because, for instance, if one of our priorities United States and traveling to the United States. Yes, we rely on the colleagues. Here is John that is Electrolux in the United States. But for instance, for us, it's harder to travel. So the same applies to the way around. So there are still obstacles , but I would say that is that is becoming much more dynamic than what it was in the past. And I would expect that, that's something not necessarily with us, but surely, you saw the big deal that has nothing to do with the normal M&A activities that happened during the summer. But it is moving. That is what I can say. It is moving, and I'm pretty sure that we are in the right spot to eventually take the opportunities.

Okay. Thank you. Okay. Next question from the web is related to customer care. The question is service and repair, in-house or partners, strategy, different geographies. So I think a little bit of an explanation of how customer care really works in terms of partners and in-house and so on?

Okay. So the point is that there is not one answer fitting all in the meaning that in our industry, we have direct service. When I mean the direct service means we are serving the customers with our employees, technicians that are in our payroll. And this is done in some geography mainly Europe, Finland, Switzerland. These are examples where we do this with our own people. Then we have what we call mix model. So this means that, for instance, here in Sweden, where we have our own employees for some businesses and in some cities. But then in others, we look -- we work with partners that are certified, they are working for us. And then we have a majority of the service that is done through partners. Clearly, there are cases where Italy is another one where you have a very high market share, a very large installed base, and these partners are basically exclusively working with us. And there are other countries, United States, where we are working with partners that are also serving other brands, other companies. So this is the picture. Geographically speaking, I think I already said it, again, according to the model, also the geographies are different. Customer care is a combination of spare parts that is by far the majority. When we were acting as in a reactive way, we were selling parts. Then the second part is the services or labor. And obviously, this one was part of the business, the customer care business or it is part of the customer care business when we serve directly the customer, but we are enlarging this portion through the OnE trusted contract at the offering to our customer also through partners. And then the third part is the sales of accessories and consumables. The consumable is a detergent, for instance. Just to make an example, accessories are things that you don't buy when you buy the product, but you can buy a long life of the product to make the product working better. If you buy an oven, you need the trays to operate at the open, you get some when you buy the product, but you can get some special ovens or special connection to cook chicken or whatever, and you buy them later. So this third part is the one that was basically 0 some years ago, and that is the one that we can develop nicely and significantly in the future. If we stay close to the customer if we remain in contact with the customer, if we start dancing and being that step ahead and in front of the customer.

Okay. Thank you. We have a question related to chains. What matters most in getting business with the chains? Is it scale, relationships, breadth or offering, what do you miss that others have?

Okay. The first thing is relation in the meaning that most of our American competitors, they've been working with the chains since ever, since the chains started. That is the reason why an acquisition can be an accelerator of our growth with the chains. Then the second one to be successful with the chains -- sorry, and this one we are building. I mean we have been acquiring Grindmaster-Cecilware that has a successful and well distributed offer of beverage appliances that most of the chains are using. So it is something. The example that I showed with you is starting from a beverage product, a bubbler that Subway or other customers are using and they are buying from us. The second element is -- I think, is the offering, meaning that I think I mentioned earlier, it cannot be a [ mid-to ] product. So if I go to McDonald's and I tell them, now I have a fryer for you. And so what? They have a so long relation with the current supplier that it will be harder to replace them with a product that is not offering something different. So you have to come there to tell them that you have something that is making things completely different in their working flow. The example and it's probably the best seller prouder that we have to chains. And I'm talking about large American chains buying it from us is, for instance, the Thawing Cabinet. Most of the chains are using frozen food. Frozen food means that you have to defrost the food. And to do this, you need 24 hours. You have to put the food in a fridge for 24 hours. They don't put under the hot water like sometimes happen, that's bad. So you have to put the food in a fridge, 24 hour ahead of serving it our customer. So this means that today is, what, now it's very early in the morning, but 9:00, you have to decide today what to prepare tomorrow for lunch. But tomorrow could be raining, could be a sunny day, could be -- there is a demonstration. So I can have more or less customers. And the day I defrost food, then I have to use it. Otherwise, you throw away. Now we brought to them the Thawing Cabinet. Thawing Cabinet is -- it seems to be a fridge cabinet. And in 2 hours, you are defreezeing the food. So this means today, I'm deciding what I will serve today, not tomorrow. So this is -- I see that there are more customers coming, great. I start another process in an hour from now. So I don't lose customers, and I don't throw away food in case I defrost too many or too much.

Okay. Thank you, Alberto. We take a final question related to M&A again. Would it be in your strategy to acquire your distributors as well, for example, in North America?

Again, I can only say once that when I was in the state, I spent 5 years in the United States, 2004, 2009 when we started up the operation. And at that time, Electrolux Group owned a distributor over there. So we own a dealer company that was acting, who was already operating, a sizable company in the United States. But then owning the distributors was like to compete with the others. So this ended up after 5 years to sell that distributor, that dealer. That is what happened and what I'm saying. Obviously, buying distribution means to change the distribution model. It is a strategy. It is something that we are always monitoring, but I would say that it is not among the 3 priorities that we have there.

Okay. Thank you, Alberto. That was all the time we have for questions for now. So now let's move on to the next presentation, looking at the Laundry market and the industry. And it's Torsten Urban who will tell you a little bit more about that. Please, Torsten.

Thanks, Jacob. So the next 15 minutes, I will give you a short overview about the market, the market size, the players in the market and also about the segments and our customers. And then after, Silvana will give an overview about the mission, how do we deliver to our mission to make the work life of our customers more easy, more profitable and every day, more sustainable. But now let's start with the market. The market for Professional Laundry is around USD 2.2 billion. It was used to be around USD 2.5 billion. So it was also impacted by the crisis -- by the COVID crisis, but the market of laundry is much more resilient and much more robust than the market of the food service and beverage equipment. This was also already proven during the financial crisis in 2008, also there, the market was less impacted, the laundry market was less impacted than the food service or the beverage market there. Historically, it's a market which is growing in the area of 2% to 3%. The next 1, 2 years, we expect that the growth is a little bit higher because of the recovery there. So we expect a little bit higher growth there. The biggest part of the market is in Europe with more than 40%, followed by North America with around 30% and then followed by Asia Pacific with around 22%. But from this area -- from this region, we expect in the future, the biggest growth coming and what are the growth drivers. So looking to that, what are the growth drivers for the Professional Laundry market. And this is mainly the population. We're having a growing population. So we expect to have 2 billion people more by 2050 on our planet. But it's also the growing middle class, and this is mainly happening in Asia where the middle class is growing much faster, and the have -- can spend the money to travel, to go out there and also to -- yes, to spend there. But also, we are getting older. Luckily, we are getting older. But we also have to take care about our people. So there's a big market, especially in the elderly homes and the care homes, but also in the hospitals there. So this is also a growing market, and we expect that this is growing also a little bit faster this segment than the average of the market. This is also driven, for sure, by higher hygiene standards. And this happened already before the pandemic, but it's accelerating really during the pandemic. So we have seen that really hospitals, elderly homes invested into laundry there. And this, we expect it's continue also after the crisis. We can split the market more or less in 3 different big areas. What is the heavy-duty segment? The second is the professional segment and the third is the semi-professional segment. The heavy-duty segment, they use completely different equipment. It's really heavy industrial and technical equipment with tunnel washers and processing tons of laundry every day. It's around 25% of the total laundry market, and the global players are Jensen and Kannegiessers in this industry area. And in the professional area, which is the biggest part and where we have our main turnover and net sales in this area is around 55% of the market, the machines and the equipment is much more similar to what you have at home, how it looks at home, but much bigger. So for example, with our biggest washer, you could process up to 120 kilograms of linen in 1 hour. So it's completely different to the household machines. That brings me to the third big part of the market, and this is the semi-professional market, which is more dedicated to smaller businesses. And these are mainly reinforced household appliances, and we were able to enter this market around 6 years ago very successfully with our semi-professional machines, myPRO. When we look then into the market share, these are internal estimations based on public available data. We don't want to disclose the market share of our competitors because only us and Jensen are public listed. This is the reason there, but probably you can have the best guess there. We took market share last year because our business, and you will see later on Fabio's presentation, was much less impacted than the total market. So our business last year decreased by around 9%, while the market decreased by 16%. But what I would really like to highlight is that we have a high concentration rate in this market, in this industry. When you take the top 5 players, you reach a concentration rate of around 70%. And when you look only into the core market where we are acting, the professional area, the concentration rate is even higher. But have a look at our customers. What are our customers? We can provide them in 2 main areas and 2 main segments. One is the profit center laundry that means it is their core business to clean and to wash linen, to cross and in to process line. This is the revenue stream. This is where they make the money from. And then we have the cost center laundry that means they have a different business like I mentioned already before, elderly homes or hair dresses, beauty salons. And you can name so many there, and you can split these 2 areas. And where are we strong? In which areas we are really strong. This is the consumer operated machines. This is -- on one side, it's the coin laundry. But also here in Sweden, we are in Sweden, it's a very strong the apartment house laundry. So the consumer-operated laundry. And during the crisis, the people had to still wash their clothes, even many people wash them more often. So the business was still going on. And this is also the reason why our business performed much better last year than the average of the business. The other important segment for us is the care segment where we have even a dedicated factory in Troyes where we produce barrier washer machines, where we load the machines from one side and unload the machine from the other side to avoid cross contamination. And this is really an area where hospitals, elderly homes invested the last years and the investment is still going on, and we expect also here a higher growth than the average in this segment. And this is the reason why our business declined less than the average of the market, and we had a very good performance in 2020, as highlighted by Alberto. But it's not only about the products. And as I mentioned before, Silvana will really give a deep dive on our innovative and sustainable solutions we provide to the market. It's also how we go to the market and where we add value to our customers. We acquired a couple of years, Schneidereit, and we are really strong in Germany, Austria and Switzerland with rental solutions, especially when laundry is not your core business. You don't want to care about your laundry, how it's running, how it is. You just want to have that is running and that makes the job, and we take care about this. And also, you have the possibility, and we transfer fixed cost for our customers into variable cost. And you'd be flexible, how your business develops and you can adjust quickly. And you have seen all the different segments. And you can imagine, that's a big difference between processing some garments for a hairdresser or washing a firefighter uniform. So we have a competent center with the presales who can size also the laundry, especially to your needs, but also the segment manager who are specialists and know what is important for the segment and how to process the garment, the linen and what are the standards we need there. So we have a competent center and special segments -- special segment manager. And then highlighted also already by Alberto, our global customer care offer with Essentia maintenance contract, consumable spare parts and also here the connectivity will accelerate everything because we will be closer in the contact with our customers every day because we can monitor the connected installations. And what are the challenges of our customers? Where can we help them? It is with the digitalization. It's not their core business, the digitalization. They don't know how to do this. But with our connected solutions, we help them easily connect their appliances and to monitor the performance because at the end, it is like in our factories. If something is going down, it's -- you don't have business. You cannot process. And you can imagine when you're a 5-star hotel, what happens there when the iron lane is not working. It's about the green revolution. Our customers, especially international customers, they have targets on sustainability, and Silvana will show you how we help them to achieve the targets on sustainability. When it comes to productivity, for example, there's always not enough capacity there. But then with the monitoring, we can see that the machines are either not loaded -- not fully loaded or they're waiting to be unloaded. And also with the connectivity, and we will have a demonstration for the people who are here later on, you can see how we are able to advise our customers to increase their productivity and to have a more efficient laundry. And last not but least -- last but not least, also the hygiene and safety. With the connectivity, you have really the possibility to monitor also if the linen is processed in the right way, if you reach the temperature, if it's washed the right time and if there -- something happens, you can immediately access there and to take actions. And this picture Alberto shared already before, but it's really the core of our strategy. It's a OnE Connected solution where the laundry is embedded completely in our solution with the connected appliances. But it's also open, and with API, we can also connect third-party products, for example, so really to play the role also of the integrator of our industry. Just to sum up. We have innovative great solutions to reduce the running cost of our customers and to make the work life more easy, more profitable and everyday sustainable. We have a global customer care. We have a strong digital agenda with OnE Connected solutions. And we grew in the last years and outperformed the market with a continuous annual growth of 4.7%. Thank you.

Thank you, Torsten. We will now take a closer look at our product offering in laundry. This will be done by Silvana Johansson, who is Global Head of Category Laundry. So the floor is yours, Silvana. Please go ahead.

Thank you very much. So today, I will have the pleasure of sharing with you how our innovative solutions with low environmental impact generate customer value and profitable growth for Electrolux Professional. And the customer value is all about understanding the customer needs and being able to respond to the customer needs with the right solutions. At our customer base -- we are a global company, so our customer base is very wide, both geographically but also from a business perspective. You've already heard Torsten talk about it. So we have many different businesses that we have to cater to, and they have different needs for sure. If we take a business-to-business that can very well be a commercial laundry, they have a huge need for productivity. A business-to-consumer has the need to wash the most delicate garments: leather, silk, et cetera. Coin-operated and multi-housing, which are consumer operated, they need speed for sure and speed of processing. Care facility management, they have a huge need for hygienic solutions. Special OPL needs to wash heavy-soiled garments from industries. Hotels, restaurant, catering. Hotels -- imagine a 5-star hotel, they need an amazing finishing result, white linen and flat linen. You should be able to bounce a penny off it. And small businesses need solutions that are affordable because they cannot make huge investments. So you understand, in our business, every laundry is different and there is a difference in their needs. Of course, the solution has to satisfy that need. And I'm proud to say that we are a full solution provider, we're a global solution provider and that we are able to offer the full range. We are able to offer the right product mix to respond to the needs. And we always have the right product configuration to the customers. And not only are we able to do it, but we are able to do it with speed and with cost efficiency. And the reason why we are able to do it with speed and cost efficiency is mainly 2 things. The first one is the intelligence that we have built up in our equipment throughout the years and the second thing is the modularization that we have built up in the products actually more than 20 years ago. And by being close to our customers, by understanding their needs, it's also much easier for us then to anticipate and also adjust the product configuration based on those needs by, I'm saying simply, combining a standard product together with a couple of modules that we have on the shelf. And this is basically, you can imagine, is the principle of a LEGO or a puzzle, you just have different elements that you combine. This gives us a huge flexibility in terms of functionality of products. So to all these different segments, we can take the standard products and add various functionality. Consumer-operated would need, for instance, a booking system or payment system; facility management, mainly the special type of drum. Business-to-consumer needs a process that enables washing leathers, suede, silk and all the delicate garments, wool. A firefighter needs a sort of impregnation in order to create -- to make the garments water repellent and fire repellant and so on. So with the different -- with all these different elements, adding a front-loaded detergent box or connected the machines to an external dosing system, offering multiple options either built in the products or also in the field, which also reduces complexity a lot, we are able to cater to those needs. Apart from being able to provide completely to the customer needs, this modularization has also helped us tremendously when it came -- when it comes to tenders because tenders are a very important part of our business, and winning a tender is obviously very important. The tender -- the window of opportunity to provide the right product from the tender release to the actual application is quite short, and we have always been able to offer the right solution. And we have also a very good track record for tenders. It also enables us to create a certain differentiation versus -- for special big customers or brands. And also the modularization, last but not least, it helps us to create different solutions. Yes, we are priced premium, as Alberto said. But within the different tiers of pricing, we are able to adjust the product configuration so we can also capture the more price-sensitive customers we have. So all in all, we have a market-driven modular design that helps us to provide a very fast response to the market requirements. And from our perspective, from the factory, from the manufacturing, R&D development there is no complexity attached to it. And you will also have a chance to see more during the manufacturing process. Now I'm category manager, so I'm very keen to talk about customers, about their needs and I love our mission that was already mentioned so many times by my colleagues. So we are all about making the work lives of our customers easier and more profitable and truly sustainable. And I would like to deep dive a little bit more what this would mean in particular to laundry. And if we're to split it into 2, I would say that, first, let's have a look at how we are making the work lives of our customers more profitable because, at the end of the day, profitability -- our customers are business people. All are businesses, regardless if you are a cost center or profits about center, you are a business. So they all are looking for profitability. And the way to achieve profitability, like in any other business would be to reduce the costs and increase the revenue. And in laundry -- in any given laundry, in fact, the biggest share of the costs of the laundry are the OpEx of water, energy and detergent. And they are the very same thing that actually fuel the laundry process. Without using water, energy and detergent, you don't have a laundry right? This is actually the biggest share of the cost. And we have a huge -- a fantastic track record, I think, and a lot of -- there is so much of this thinking in our DNA. We have worked a lot in reducing the consumption of water, energy, detergent and hereby also reducing the costs. And I even would like to say that with the latest generations of products, addressing our customers, it's difficult not to save water, detergent, energy because we have created solutions that are so much plug and play. It's very effortless. It's not up to the operator. The machines are taking all the responsibility in order to supply this. So there is a lot of intelligence behind. You will see much more of this later. Now the other side of profitability is, for sure, revenue. And here, regardless whether you're a profit center or a cost center, you want at least productivity. Now productivity means, obviously, being able to process as much as possible in the shortest possible amount of time. If you're a consumer operator, if you're a coin operator or a laundromat, for sure, you want high productivities or short cycles so that you're able to have as many customers as possible in that period of time because every customer means money. If you're a commercial laundry and charge for the linen from other companies, if you're a commercial laundry washing for a hospital, et cetera, then you want to get as much linen done in the shortest possible amount of time, also to control the staff costs. And also here, we have a lot of intelligence built in our equipment. But I would like to say that furthermore, what is even more important than intelligence built in the equipment is what has been mentioned several times already, and that's the connectivity. Because in reality, connecting appliances, which from start are very intelligent and they provide all the data they have to a computer or to a cloud, and you have the visibility of the entire process, then you are really able to see where there are bottlenecks in the productivity process. You see other washers and the dryers loaded optimally. Are the operators may be forgetting to unload the washer once it's done? And then if you're able to have that bird's eye view, either from 1 machine or from thousands, if all your laundries are connected, then you're really able to pinpoint areas of improvement. And then you can improve the process. So data analytics for productivity are extremely important. So this is one side, the profitable business. The other side, which we have worked a lot lately, is the peace of mind. That is connected to making the work lives of our customers easier. And here, we have 2 parts. The first one is what we call effortless use, and this is very much related to the customer experience. Because no matter if you're a customer in a multi-housing and you've never used the machine, you need a super intuitive machine to be able to do the laundry. If you are in commercial laundry -- going back to a commercial laundry or a hotel laundry and you're an operator who literally day by day -- day after day, week after week, year by year, you load/unload hundreds and thousands of kilograms of linen per day, then you need equipment that is taking care of your body, of your shoulders so you're not worn out. And then there is everything in between, for sure. So ergonomics has played an important part of our product development in the past years, and I'm happy to say in 2018 we were granted ErgoCert, which is the third-party ergonomic certification, which proves that we have a human-centered ergonomic design. And today, we launched it on a limited product range. Today, we have it on our full range because, of course, you need to cover the full range in laundry. Then the other side is peace of mind and it's about trustable safety. When it comes to trustable safety, we've pioneered this area decades ago in all the applications where hygiene is an important factor, and that would be the obvious parts. You have hospitals, you have nursing homes, also facility management. And here, it's not just about the product, it's very much about the process. We have a broader process knowledge, dimensioning, laundry flow, et cetera. But what has happened now in the past 1.5 years, we all know, COVID has forced us to rethink because we understood -- again, being close to our customers, understanding their needs, we understood that hotel owners were very keen, the little business they had, to provide and guarantee their customers -- just as they provided guarantees in terms of food and waiters wearing mask, they wanted to assure their customers that their linen is washed accordingly. That the towels are watched accordingly, that they can trust it from a hygiene point of view they are not infected. In multi-housing, our customers were basically afraid. What happens if the person who washed before me was contaminated or had COVID and my linen will be contaminated. And even if the risk would be minimal, for sure, but we worked very, very fast, very agile and developed in a couple of months a complete program of equipment that caters to all these customers that are more in the periphery of what you would call traditionally hygiene customers. So now we have equipment where all the customers, multi-housing, business-to-consumer, hotels, et cetera, they can trust that their linen will be processed accordingly. There is no need for contamination. And more than that, if the linen has been contaminated, it will be inactive -- the virus will be inactivated. And we worked on this not just by ourselves. We have a lot of specialists, obviously, but we also worked with our trusted partner in Sweden, Research Institutes of Sweden AB, with their own virologists and experts in order to be able to come to this. And you see all of these value propositions, to me, are very, very dear. They are also interdependent, for sure, and they do live in a very symbiotic relationship. And all of them are -- have the -- are related to sustainability. But as time is limited now and we only have a couple of -- maybe 20 more minutes to go, of all this, I would like to highlight the one that is related to low consumption and low running costs because that's the one that generates a profitable business to our customers, for sure. But because it is related to saving water, energy, detergent, and not just saving costs, it also generates the lowest environmental impact. So while the customers have a profitable business because they will save money, it will also generate a sustainable business. And in the past years, the need for sustainable businesses have become so evident from all our customers from a pull effect also point of view because so many of our customers -- we are serving big multi-housing companies, we are serving big hotels, big hospitals. All of them today, being businesses, they have own environmental targets to achieve, right? And those are very -- they are very determined to do it for sure. And they -- many times, they are turning to us for help. So by innovating and reducing water, energy and detergent, on one side, you're generating a profitable business; and on the other side, a sustainable business for the customer. So it's a win-win. And not only that, but what is even better is the fact that this is all -- sustainable business and the profitable business, they -- that means value to our customers, and we will come to this. We will quantify it very soon. But quantifiable value means also that you retain existing customers, means that you are attracting new ones. And not only that, but you're able to also justify a premium price. And this is how we are able to grow profitably. So we are providing value. Our customers understand the value and we are able to grow profitably because we increase sales at premium price. And also, I'm happy to say that from that profitability, a lot -- we do a lot of further development, further innovation that we again reloop and invest in sustainable solutions. So really, there is a full circle around it and this is a continuous loop. And I said that I would like to quantify things. So let's start then with the sustainability of the business. Before doing that, I also want to say that one of the reason -- I've been in Electrolux Professional, for Laundry at least, for 25 years. And I'm extremely proud to work for this company because I remember already when I started, I was told about innovation that was making the work lives of the customers better and more -- that was very environmental friendly. You imagine 40 years ago, this company, this very company in the middle of the Swedish forest, developed the first dryer that saved 60% energy. We're talking about 40 years ago. 30 years ago, while there was a huge dry cleaning business in the world with hazardous substances, this very company developed a way to wash garments that are normally not washed in water, but in very hazardous substances, garments like suede, leather, wool, silk, velvet and other garments, by pure water, okay, completely eliminating solvents. This very company is a company that's found 20 -- 30 years ago, a solution to reduce water at less than full load when everybody was using -- nobody was thinking about water resources. And this very company already 20 years ago, developed a solution to save also detergent when it was all about lots of detergents in the linen. And this was many decades ago, obviously. But I have to say that even though these are great step changes, the true step change maybe happened actually when we introduced the modularization 20 years ago because that enabled us not only to provide all the benefits in terms of operational excellence and customer benefits, but also environmental benefits because that allowed us to continue the development. So we reduced CO2 emissions even further by 45% since then; detergent, 25%; water, 40%; energy, 40% and still going strong. And what is enabling us to do it? It is exactly what I said earlier. It is the intelligence we built in the equipment. It is the innovation. So you see a lot of things that are signature features that are rather difficult to read but all of them are either by themselves or in combination contributing to this. And it's about everything that happens in a washer, reducing water, reducing energy; in dryers reducing energy knowing -- building in the intelligence knowing when the dryer should stop drying and not continue when the garments are already dry and so on. And now that I have spoken about it, finally, let's go to the quantification part, and I will start slow. I will start very simple with the washer and dryer. And what you see here in front of you is an industry snapshot of 20-kilogram washer and dryer. And this would be -- 20-kilogram is quite typical in our business. You will see also in the Center of Excellence we have these machines. This could be very well hotel laundry terry towel concept, where a hotel would wash terry towels all the time. And of course, these products, we are not your average domestic products. These products don't last 2,000 cycles. We are making products to last 30,000 cycles. These products would run from morning until evening, 5, 7 days a week. And just to give you an idea, by the end of its lifetime, a washer and a dryer like this, they would have processed about 600 tons of linen just so you understand the proportions. So it's also obvious that if they would process a lot of linen, they would also consume a lot of water, energy and detergent. And here, you see it's about 3,700 cubic meters of water, 300,000 cubic meters -- sorry, kilowatt hour of energy and 9 tonnes of detergent. So it's quite a lot. But with our innovation -- this will be the -- an industry snapshot. But with our innovation, and I'm being very conservative now, we are able to save 25% water, 40% energy and 25% detergent. And you may think, okay, that's nice, but how does it help in the bigger picture? But don't forget that small streams make big rivers. So if we -- and we definitely do not sell 1 pair of washer and dryer per year. So we sell thousands -- tens of thousands of equipment. So if we add all those sales from 1 year, and this is each year, with the savings generated by us if you accumulate them -- obviously, we sell this globally. But with the savings that are accumulated, this is what you would sell. You would sell a lot -- you would save a lot of water, detergent, energy and CO2. And because we are in Sweden, I took the liberty of aggregating all these savings and translate them into something that may be more digestible. So the water that is saved yearly for -- on the basis of our equipment is saving -- is corresponding to the consumption of Sweden of 14 days. The detergent corresponds to whole Swedish consumption of 120 days. When it comes to energy, it's 4 days and emissions is 2 days. So you see, it does really make a difference, and it is also very easy to quantify. Now of course, as I said earlier, water, energy, detergent savings are -- you have basically 2 sides of this coin. One is the sustainability of the business and one is the profitability of the business and I'm very keen to show you also the value in terms of money. And I will use it with an example that I think is quite familiar to you in the financial markets, which is called the iceberg illusion. And basically, the iceberg illustrates a deception in which only a very small perceptible part of a problem is visible with the naked eye, whereas more of that lies hidden under the surface. And this is very, very applicable to laundry. We have used this analogy for years. And the -- how we would apply it, I will show you with an example of a washer this time. So in any given washer, the investment of the equipment, which is basically what you see with the naked eye, you see the equipment and you see the price tag attached to it. That is only 15% of the total cost of ownership of the product over lifetime, whereas the main part of the cost are the OpEx in terms of chemicals, energy and water. So this is where the deception is in laundry. And of course, for somebody who is not aware of this, this can be quite tricky. And it can be quite compelling to just look at the investment cost. So using now this thinking, of course, this proportion can vary between different countries, between different sizes of machine. But they always are between 10% and 20% in terms of investment. Now looking at the same combination, if we go back to the washer and dryer I was talking about earlier, 20-kilo washer and dryer, and thinking about icebergs again, of course, just in nature, not all icebergs are the same, the same goes for laundry. The tips and the bottoms are very different. And one thing is for sure, though, that we are generally premium priced compared to the industry snapshot. In this case, we are at EUR 3,000 premium priced. So for any uneducated customer, it will be extremely compelling to select the cheaper solution because they would say, a washer is a washer, a dryer is a dryer. They do the job. I don't care about -- I will take the -- they look the same, so I will take the easy way out. But then if you think about the operational expenditure. In reality, thanks to our innovation, our operational expenditure is much lower than the competition. In fact, it is much, much lower than the industry snapshot. And then when you add the CapEx and OpEx together and look at the total cost of ownership, then you will see the difference. So at the end of the day -- and this is what matters at the end of the day. It doesn't matter -- It's not about the CapEx. At the end of the day, it matters what the cost of ownership will be at the end of the product lifetime. In this case, you already get the return on investment in 1.5 years. This is the return on investment on the price difference. And then the rest of the time from the -- from 1.5 year up to 10 or more, the rest is just pure savings in the customer pockets. This is also why we are -- while delivering value, we are very seldom talking about the price of the equipment. We are always talking about the value it brings to our customers, we talk about cost of ownership. And this is our philosophy. So there are many quantifiable benefits. So we've looked now into the sustainability of the business, measuring it, quantifying it. We've looked at the profitability of the business, measuring it again. And then -- I'm talking about the customers, obviously. Then I said that it does contribute to our profitable growth. And it does for sure because if you're able to justify value, if you're able to quantify value, the customer will understand it. And this is also enabling us to capture a lot of opportunities out there, and we have so many examples. It was very difficult to choose. I selected just a couple to give you a little bit of a flavor. And then in the Center of Excellence, you will see definitely much more. So I will start with the U.S. business, which is a very important business for us, and I will start with laundromat business. Now laundromat business is very big. There is a lot of -- there are a lot of laundromats out there and there are many, many investors interested in expanding and also investing in laundromats. The laundromat business is old in the U.S., very old, very established and is actually also very conservative. And at the same time, it is also highly competitive. There are many different laundromats within a visible area. It's around -- it's enough sometimes to stand on the road and then you can see around several of them. So the competition is quite fierce between these laundry operators. But the products they are offering to their customers have rather limited differentiation or sometimes even no differentiation. It's just a matter of having the right location and probably it could be a little bit around price, but no more. But this is starting to change now because also the kind of owners understand, especially the large business, they understand that they need to offer more customer experience to attract the customers. A success of the laundromat is depending on the customer turnover, obviously. So in order to do that, you also need to provide the customer experience. And it's just done just as we do: understanding the customer pain points and trying to solve them. And one large investor understood that customer pain points are about time you spend in laundry. People don't really want to spend 2 hours in a coin shop. I love washers and dryers, but probably not even I would think it's that much fun. People don't like to bring with them a lot of quarters in their bag because it's -- sometimes we have bags of quarters with you, also customers carrying literally 5, 6 liters of detergent with them in addition to all the garments they have. And also people are not really happy with the user experience in the laundry. So a large investor opened up an opportunity. They had done a very good research and then they had very specific demands in terms of how they would like to be a game changer in this industry. And they approached our long-term partner, Laundrylux, in the U.S. We have worked together for 6 decades. They approached us. And then, together, we worked on a solution. And it turned out, this is actually very interesting because at the same time as they had a lot of ideas on the other side of Atlantic, we were just developing the right product range that was perfectly -- would turn out to perfectly correspond to their needs. And then when we met, we felt it was a great opportunity to test. Their concept is In & Out, so very quick customer turnover, 35 minutes. In 35 minutes, you are done with the washing and the drying. And for all of us who have domestic washing machines, we know how long that could take. So it's a huge step changer. Also touchless payments. So you should be able to not just use coins, but also to pay by phone. And what is really, I think, disruptive, if I may use that word, is the fact that customers do no longer have to bring their own detergent with them. But instead, the detergents are provided by -- automatically by the laundromat. And because it is so disruptive, it was -- we just wanted to do a test to see if it would work. So the first test story is what you see there. It was installed in December last year. And of course, we have monitored the savings, the customer value. I would like to say that the reviews on Google are amazing. They have an average of 4.8 out of 5. That is very, very nice. Customers love the experience. We have offered the latest technology, touchless payment, touchscreen control panel on the washers. And already now, it turns out to be a very good business. So we will definitely continue now in the years to come. So we already have a second installation going and a couple of more next year, and then we will scale up. So this is a great, I think, example of preparation -- our preparation meeting the opportunity, but we could not have done it without our innovation and without understanding the customers. And also, if I may add for this example, can you imagine the environmental benefits? Because a laundromat like this, we're talking about 50 washers, sometimes more, the amount of detergent bottles that the customers who bring the detergents leave there it is amazing. A lot of -- thousands of bottles that you are saving basically. So it is really a win-win for us, for the customers, for the environment, for the business owners. We have so many examples from other laundromats. This is an example just from the French part of the Caribbean with -- again, where the focus and the reason why we were selected was the sustainability aspect, the effortless use of our equipment, the productivity. Even here, they start understanding they want to do a wash and dry in 60 minutes or less. And even the environmental aspect is reflected in the name of the laundromat. So this is expanding now with more and more laundromats. Laundromats can take different shapes, colors and different places. Alberto was mentioning about having coffee shops also in laundromats. This is another example with a combined laundromat in Italy. So a combination of laundromat, a laundromat for pets where you would wash fur coats -- blankets with a lot of fur, but also a pickup and delivery stop for delicate garments so -- with our lagoon Advanced Care. So here, it's an overall business, shows creativity, shows flexibility. We were able to deliver everything that the customer requested. Another example that is very representative for us is the multi-housing business. Now there is a huge installed base in the Nordic countries, Sweden included. And in this installed base, you have machines. Even though we talk about 10 years, but sometimes you have machines that are 20 years because our machines are very long lasting. And what happens with elder equipment, elder equipment is very seldom as efficient as new equipment. So here, this is an example from Söderköping where our salespeople approached a customer who had an environmental target of 10% reduction in energy. They had to apply this. They had to find some way to get it. We explained that even though, yes, your old equipment is working and it's fine, but if you replace that equipment with new efficient equipment, heat pump drying technology, which saves 60% energy; more efficient washers, et cetera, we will achieve this target very soon. So the customer accepted the offer. We sold 19 fully equipped laundries. We also sold full service agreement, 10 years, Essentia, again. The savings generated by this replacement were staggering: 60% energy, 50% water, 50% detergent, 66% reducing the CO2 footprint. Customer is very happy. They managed actually -- instead of the 10%, those 10% turned into 35% of the household energy that they saved. And even the investment was almost fully covered by the savings, which is remarkable, isn't it? And last but not least, I've selected the example of Oxwash, which is collect-and-deliver laundry in the U.K. Now collect-and-deliver laundries all about the jackets, coats, leathers, suede, everything -- normal garments that you don't want to do -- process at home or in a laundromat you will leave to somebody else to launder. And traditionally, this business has been run everywhere by mom-and-pop shops, small shops, mom-and-pop shops trying more or less to make ends meet unless you're a big commercial laundry, obviously. But this landscape is changing very fast because the second, the third generation is not really interested in taking on their parents' or grandparents' business. So this is dying out. But of course, the need for laundering these types of garments is still here. So therefore, now there are new up-and-coming investors that are looking into ways of generating these types of businesses. And they are not mom-and-pop shops, they are business people. They have business plans, they have very clear business targets to achieve and they are very environmental friendly. And this is the typical example of Oxwash in the U.K. They had all this up-and-coming investors willing to change the industry. Literally, not just talking the sustainability talk but also walking the walk. Even their pickup and delivery is done on an electric fleet of cargo bikes. No solvent cleaning, only water-based cleaning. And this is again where our innovation preparation met completely their demands. And we were able to supply, with our lagoon Advanced Care concept, a full laundry -- we equipped full laundries, 100% environmental cleaning, this is the reason why they chose us. And then the side benefits were the savings that they noticed immediately in terms of water, energy, detergent. And also because the machines are connected, they were able to pinpoint areas of improvement in terms of productivity. So they understood, I can improve the profitability, I can release some time. And they also added even more business from other laundries, not just private people. So all in all, increased their turnover and reduced costs and more expansion plans in the future. And that brings me to my final slide. Again, I am very proud to work for Electrolux Professional. For us, it's all about making the work life of our customers easier, more profitable and truly sustainable. We're a global full solution provider. We provide whatever the customer needs with speed and cost efficiency. We have a lot of smart innovation. We focus on sustainability. We are able to show our customers how we provide value and quantify it. And we have the agility to capture any business opportunities that comes our way to generate further profitable growth for the company and to reinvest it in sustainable innovation. Thank you.

Thank you, Silvana. We now will take a couple of questions. So for those of you who have a question in the room, [Operator Instructions]. And also we can take questions from the web.

So please, the first question is in the room here. So we have a microphone coming behind you, just give it 5 seconds and you will have it there. So please?

You mentioned the replacement cycles and mentioning that your equipment doesn't really need to be replaced for technical reasons. But how has the replacement cycle for various customer categories looked like historically? And what opportunities do you see with technology to shorten those replacement cycles?

That is a very good question. So the first question, if I understood correctly, was what the replacement cycles are between different customers, right? Okay. So let me start with that one. So the replacement cycles vary a lot geographically and also from the customer type. If you take a commercial laundry hotel in Asia, that commercial laundry would very likely run 20 hours out of 24 hours, okay -- or that hotel. So obviously, those replacement cycles are shorter. It's not about 10 years, but it's still 30,000 cycles or more. In multi-housing maybe where the equipment is not used 20 times a day or in other applications, then the times are longer. But in terms of equipment length, the interesting thing is that what we are working on now is do the opposite. So for us, it's not just about selling equipment and making a quick buck. Definitely not. For us, it's actually now -- and this is very much related to sustainability. What we want to do, we want to extend actually the lifetime of the equipment. And I think also connectivity is helping us a lot. We are able to read data from our equipment. We understand where the pain points are. We know how to extend the lifetime. And we are starting also several programs on -- with the help of Essentia and the customer care to offer upgrade programs. So you're actually -- upgrade repair kits, et cetera, which we are doing for our customers, to extend the product lifetime from a sustainability perspective. So I think we are definitely replacing equipment that cannot -- that doesn't do the job anymore, but we are also looking into the future to do that, to extend the lifetime. And I think also, again, connectivity is giving us a great opportunity to do that. So we are starting the programs now, yes.

Maybe to -- sorry, to jump in. Our customer, and it's normal that during the lifetime of washer and the dryer, there are normal maintenance there. So when we extend the lifetime of our washers and dryers, that means we have also possibility to grow our customer care sales there. So it's a good opportunity, especially also related to the connectivity because they are closer to the customer.

Thank you very much. I have a couple of questions from the web. One is about growth prospects given the fact that middle class increases and more and more people have laundry appliances at home. Is that a risk?

Yes. I do not see it as a risk. I would say the opposite because we have seen -- now, again, I've been here for 25 years or so. And one of the first things I heard when I came, you will see multi-housing will decrease in the future. We'll see coin op will decrease in the future. That has not turned out to happen. And if I may say, I almost see an opposite effect now and this is because of the fact that -- especially the young generation, they are so interested in sustainability and shared economy that they understand there's not really any point in owning a washer and a dryer when they can easily access a commercial type of equipment. And to give you an example, in the Swedish multi-housing, there are 2 alternatives, either you have -- let's say, an example of 35 apartments, just to -- for the sake of the argument. You can either have a professional laundry of 4 machines, so washer, dryer and drying cabinet. The alternative is to have 35 sets, so 70 all together of home appliances, right? Those home appliances will very likely have to be replaced within 5, 6 years. So during the lifetime of the professional equipment of 10 years, you will have to use 140 domestic appliances. This is 4 versus 140. Now imagine the consumption the 140 have. Imagine the material that is used in the 140. If you use our solutions or any -- the professional solution, you would save 90% pure material, okay, plastic, steel, everything that is part of the material. And also people now understand that convenience is not just having a washing and drive at home, but convenience is actually speed right? Instead of spending 8 hours doing your laundry at home, you spend 2 hours and do everything at once.

Okay. Thank you. Another question is around how big part of our business, Laundry business, is specialized versus standardized products. And if we see the market evolving towards more standardization.

Yes. So We have a modular platform, it was underlined by Silvana. So even if you see that we have many different segments with many different needs, the product is very, very similar. So it's really very, very similar. But the programs, they are completely different or the chemicals can be different. But the machine or the 20-kilogram you were highlighting can be also used in a hotel, but also many other applications. And thanks to the modularization, it is really standardized there.

And just to give an example to what you said. For instance, the latest technology of washers we developed with a touchscreen, super intelligent inside. One of the same equipment you can place in a laundromat in Asia, in a commercial laundry in the U.S., in a multi-housing in Sweden. It is the same equipment. And just as on a phone, you just change settings. You change the language, you change -- completely change the segment where you operate, and automatically, you get intelligently all the programs. So three clicks of a button and everything is changed. The configuration changes. And this is what I meant with the intelligence we're building in our equipment. So you can also have -- you can have both. Both standardization and modularization is helping on the intelligence, for sure.

Thank you. We have a question related to the laundromat in Chicago that you explained. And the question is what premium price, if any, can you get for the laundromat in Chicago?

I'm not able to disclose the figures, but I can disclose that there is a premium price, for sure, compared to any other laundromat even compared to the fact that -- even taking into consideration that you have automatic those, which, by default, you have to charge a little bit more. And I would just like to add that in spite of the premium price, customers are super happy, again, very nice Google reviews. And the customer return rate is sky-high compared to any other traditional laundry, which goes to show that this solution is the right one.

Okay. Then there is a question again from the web. I appreciate the existing laundromat and some multi-family housing need washers, dryers to be upgraded. But do you have any data on which percentage of new residential settings do not come with a personal laundry outlet?

Personal -- so which -- how -- yes, yes.

I think this really depends from country to country. So it's completely, completely different from country to country. Here, the Nordics is really normal that you have a laundry in your basement. I think, Silvana, it's even mandatory there for public housing there. There's a big -- also in Switzerland, there's a big apartment house laundry market. But we see this also with the urbanization, strong urbanization there because at the end, the rent for the apartment is very, very high. It's getting more and more higher. Do you want really to waste the space for your washing machine in your apartment? Or isn't it better than to use the apartment house laundry or if it's not provided also to go to a coin shop with the new services customers are offering? It's not the traditional coin shop you maybe know from the '60s-'70s something like this. So it's really very convenient with pickup services, delivery services and also, in many cases, also lock us. So that means also when the shop is even not open, you put it in the locker, you take it out, so there are new solutions there also enabled by the connectivity.

Thank you. We have a question in the room.

Yes. Thank you. Regarding the recovery, you mentioned in the start above the 4.7% CAGR. Given the strength of the recovery, do you see a chance of a prolonged period of strong growth due to replacements, due to what we saw after COVID? Or is the market fairly stable, as you see it?

We see now a very fast recovery. So first, it was -- it is like this, and you will see some figures later on where we show also the rolling 12 months, but until June, by Fabio. You will see at that time that the recovery for laundry started a little bit later because also the impact for laundry was less than for the food service. But we recently see now, when we look into the order books, is really that is skyrocketing, and we have a very good order book, and it's now coming back very quickly, very fast, the business what we see. And we believe that in some segments, as I highlighted, the Care segment, for example, that this will be also the elderly home a longer cycle of higher growth.

Okay. Thank you. Another question from the web. Who doesn't want to wash and dry cycle of 30 minutes or less? Are your products much better than competition in this aspect? And is there a premium -- is the price premium dramatic compared to competitors?

So I would say, given the value, the price premium is not dramatic at all. So the price premium, I think, is modest compared to the value we deliver. That has to be clear, and that is very easily shown. Return on investment on the difference is very small. But yes, I have to admit, again, this is the truth. We have invested a lot of innovation. We are able to understand in which areas to invest. We are close to our customers. We understand what matters to them and then we focus on those areas. And for sure, productivity is one of them -- the areas where we focus on because we know how important it is for the overall profitability of the business.

Okay. Thank you. One more question. How much of the laundry business is replacement versus new-build projects?

Yes, we can say that the unit sales is around maybe 60% of the unit sales replacement and 40% is project business. But the project business is not always a completely new building. It is also, as highlighted by Silvana, also really a project where we really renew the complete laundry and not just replace one dryer or one washer. So this is more or less -- but for sure, it's also different by region to region. In Asia, for sure, it is a little bit different because there, the project business is a little bit higher because they don't have the big installed base.

Thank you very much. That concludes the question-and-answer session for now, and we'll take a break and we start again at 10:15 sharp. Thank you for now. [Break]

Welcome back to Electrolux Professional. It's now time to hear Fabio Zarpellon, our CFO, that will update us on our financials. Please go ahead, Fabio.

Thank you, Jacob, and good morning to everybody. Let me start the financial update with an important message. Our overall financial targets are confirmed. It is about profitable growth, meaning growing the business going forward 4% per year, reaching the 15% EBITA margin, but also keeping a stronger balance sheet. We are operating with an asset-efficient business. And our goal is to reach the 15% in terms of operating working capital and sales. Part of keeping a strong balance sheet is also to keep a ratio in terms of EBITDA -- net sales -- sorry, net debt on EBITDA below 2.5x. So to keep really the strength going forward. The combination of profitable growth and a strong balance sheet is creating the opportunity and the condition to deliver to our shareholder going forward an average of 30% of the net income in terms of dividend. And now let's dig into how we did perform in the past compared to this important KPI. First of all, if you take a long period since 2013 up to the time of the pandemic, we have been consistently growing this business. We reached SEK 9.3 billion in sales in 2019 pre-COVID time. And you see that our profitability in the period pre-COVID and pre-'19 where our activity was somehow influenced by all the activities and costs linked to separation was ranging around 14% in terms of EBITA or SEK 1.1 billion per year. And now when we move out from 2020 and we enter into 2021, with the market recovery that we started to see already from March this year, we started to improve sales and profitability. In quarter 2, we reported a growth of 14%, but also our EBITA margin was already at 10%. And this positive trend recovery of the market that we have seen since is now continuing also along the summer up to these days. And my colleagues were commenting about it. So we started the profitable growth journey. It is about profitability, but it's also about the fact that we are operating with an asset-light business. You see back in 2017 before the large acquisition, we were running this business with a level of operating working capital on sales below 14%. It grew because we acquired business with higher weight of operating working capital on sales. But then we started to work on it. And already since September last year, we reverted the trend significantly. And now at the end of June this year, the rolling 12 is around 17%. One important part within the operating working capital that I do remember, we were discussing during the call in 2020, in particular, the beginning was what is happening on account receivable? I have to say that it has been a difficult year to manage the financial situation of our customer. But we put in place immediate actions to protect the quality of our receivable. We scrutinize the customer. We dedicate team and efforts. We cover with credit insurance. And I'm happy to report that currently the situation of receivable on sales and the situation in the past, now we are back to the pre-COVID time. And this is part of the improvement that you see here in the recent improvement of the asset in terms of operating working capital on sales. And with this, strong profitability, solid profitability, good management of the balance sheet, you see that historically, we have been able to deliver strong cash flow every year. Before COVID, the cash flow generation was over SEK 1.1 billion per year, even in 2019. So we have been able to manage properly and proactively the balance sheet of the company, whilst continue to invest. And we have delivered this, continue to invest. And I mentioned 2 important investments we did perform in the last couple of years. The digitalization that Alberto and my colleagues were referring to, but also a large investment that we did in a factory in Thailand. We have opened up in June this year, new factory in Thailand, where we consolidated the operation in beverage and laundry and with an overall large investment over SEK 200 million. And we have delivered this whilst granted strong cash flow consistently quarter after quarter. The rolling 12 months cash flow, meaning taking the first 2 quarters of this year and the last 2 quarters of 2020 was close to SEK 800 million. And with a strong cash flow, we make our balance sheet even stronger. Our net debt at the end of June was SEK 400 million, meaning less than 40% that was at the time of the acquisition. And our ratio, net debt on EBITDA is at 0.5. And this is giving confidence to us. It's giving a confidence to us that not only we have a clear plan to grow profitability in the business, but we have also the means to finance this growth. Strong cash flow, good management of the balance sheet, and we have also in place a revolving credit facility for EUR 175 million to finance the organic growth as well as acquisition opportunity that may come on our way. And this is how we did perform in term of stock market performance. Yes, that were mentioned, we became a public company in the middle of the pandemic. So unlikely, but it is what it is. But what I would like to underline to you is the trend. We have been consistently growing the value of the share over time, overperforming the reference market index. Now I believe it's time, I dig into one important aspect. That is how we get to the 15%? This is a question that myself and Alberto did receive many times during the quarterly call or the dedicated call that we had with all of you. How do you get to the 15%? Here, we have 2 important legs of our journey to the 15%, 2 legs that are equally important, is cost-out initiative and grow the business with a high margin. Let me dig into them one by one. Starting from the cost reduction initiative. First pillar, you see here that is ranging roughly 1.5 points in term of profit on sales is coming from the cost reduction initiative. Alberto mentioned, we launched a restructuring plan in 2019, that was a plan aiming to fully compensate the emerging costs from the separation that was ranging around SEK 100 million plan. That plan was executed already later 2019, beginning of 2020, and we delivered on the results. Due to the development of the market, we took also proactively the decision to add the second plan in September last year, aiming to reduce our underlying cost base as well as reviewing the way we work. This plan execution is proceeding according to plan. We have already in place, since quarter 2 this year, yearly saving for SEK 110 million, an additional SEK 20 million are expected to be adding on in this area since quarter 2 2022. The second pillar of the cost reduction is the optimization of our factory and logistics setup. One initiative that I would like to remind you that is already started in this area is what we announced at the end of August, that is the decision to move the beverage production from United States. The beverage production, we were manufactured then to Thailand and to Italy. This is a plan that already started in terms of execution and is aiming to be completed by quarter 2 2022, and we expect additional SEK 30 million yearly cost reduction, yearly product cost reduction. So it's part of the journey to improve the gross margin and the EBITA margin of our group. It is also about continuous improvement. And here, I would like to refer to one example that Alberto gave us. Our goal is to digitalize 65% of the transaction with dealers, with distributors, with the service partners. So from -- moving from manual work activities to digitalize activities. So with a clear benefit, both in terms of efficiency as well as speed and service level to our customers. That was about the cost, but as much important will be the volumes expansion. Volume expansion that will come overall, but with a clear focus on 3 areas: innovative products, customer care and change. Innovative products, I believe, Silvana was really giving us really insight how much we can improve not only the service level, the retention of the customer, but also the pricing, the margin, thanks to innovation and bringing value to the customer. It is about the customer care. I don't have to tell you that not only in the industry, but globally, customer care is the most profitable area in many of our companies. And last, but not least, about change. Change, that as Alberto was explaining, is the segment that in food and beverage, we are expecting to grow faster, but also is the ones that in our experience in professional as well as in our industry, the ones offering the better overall margin. And now I believe it's time to move our focus from the overall group and have a deep dive into the laundry business. It is a business of roughly SEK 3 billion, business that has been growing consistently along the years, and it is offering a very attractive profitability. 16% was the profitability in 2020. It represents roughly 42%. This was a picture of 2020, was slightly smaller in the previous year and 90% of the EBITA of the group in 2020. I would just underline that the contribution from -- in terms of profitability of laundry in 2020 was particularly strong on the overall picture because, as you know, the food and beverage business suffer a lot. So we declined significantly the business and therefore, the profitability of the segment did suffer. If I take a picture back, let me say, pre-COVID time, the contribution of -- historical contribution in terms of EBITA of laundry was around the 50%. We talk about then the global business as is the overall group. Our presence is roughly close to 70% in Europe, close to 20% is our presence in Asia Pac and 14% in Americas, mainly in United States. If I move the attention from a geographical perspective more into a country perspective, I would list 4 countries or 4, let me say, regions: Nordic, France, Japan and United States. This, let me say, 4 countries or if I call Nordic countries isn't appropriate, but just to give you the picture, they represent close to 50% of our overall net sales. How did you perform in laundry? Torsten mentioned that historically, this business has been structurally growing every year. We took the period 2010-2018 pre-COVID time, the average growth was close to 5%, 4.7% was the data reported. But also, it was to mention that even 2020, when overall, the market significantly dropped, our laundry business show a strong resilience, but performing even better than the market. Overall, we declined the sales by 21%. Laundry was minus 9%, with the market growing -- sorry, declining at 16%. So resilience and taking market share also during difficult time. It is also a pretty profitable business. Here, you see in the chart, the development of our profitability that has been structurally around the 16%. On the right side of the chart, you see the last 12 months rolling, that includes the last 2 quarters of 2020 and the first 2 quarters of this year. Three out of 4 of this quarter, we were still in the pandemic time. But despite it, the profitability was close to 15%. Not only if I exclude from -- in this picture, the impact from the currency as much as the onetime cost that we had to build up the factory in Thailand, we are back at least to the 2020 level in term of underlying performance. As I said, it's a global business -- is a global business that also enjoy a global footprint. Our source is coming from 3 factories -- 3 global factories. The main site that we have that is hosting here today, Ljungby; the second is a Thailand state-of-art plant just opened a few weeks ago. And Troyes that is specialized on barrier washer and ironers. These are dedicated factories that also enjoy the group infrastructure in terms of quality, logistics, purchasing and engineering. So dedicated focus in terms of manufacturing, but leveraging the capacity and the capabilities of a larger organization. And here, today, we are here in Ljungby. And I would like really to give you some data point to understand the importance of this site for Electrolux Professional and laundry. Here, we produced roughly 65% of the sales of laundry, roughly 30,000 units. It is a very competitive plant. For the ones that later who will have the opportunity to visit the factory, you will see a state-of-the-art plant with a strong automatization. And this is creating the condition that the products that coming out of this plant are having even a higher-than-average profitability. Last, but not least, it is our main or the competence center for product development in laundry. With that, I believe it's time for my conclusion and takeaway. We are a solid group with a large potential. We have seen that along the years, we have a track record of delivering solid EBITA also during difficult times like 2020 and strong cash flow. Since March this year, we restarted the profitable growth journey. Profit margin in quarter 2 was over 10%. We have an attractive laundry business profitably growing and with already a strong profitability today and a clear and focused plan to achieve the 15% EBITA margin. Thank you very much for your attention.

Thank you, Fabio. We will now open up for questions. [Operator Instructions] I have a couple of questions. I will start with here from the web. The first one is what is the share of sales or customer care business in laundry?

Overall, we have not disclosed the information. But I can say and confirm that overall within the group, the weight of customer current total net sales is around 15%. And the part related to -- if we take the focus on laundry, it's not much -- there is slightly arrear, but not significantly different.

Thank you. We have a question from the phone. Please go ahead, operator.

That comes from the line of Johan Eliason of Kepler Cheuvreux.

I was just a bit curious, maybe it's for Alberto. But you mentioned here that -- or your colleagues have mentioned that you see the market overall being back to the 2019 level sort of early 2022. Is there a difference between the laundry market and the food and the beverage markets you see there?

Yes. First of all, let me talk about what has happened in 2020. In 2020, we saw overall a decline of the market around 20% to 25%. The decline was slightly less in laundry, around 16%, but much stronger for what concern food service. And this is linked to the customer segment served by food service and beverage compared to laundry. Laundry was much more resilient, thanks to the exposure of a segment like the apartment house laundry, the coin and the care that was holding the volumes. As a consequence, business declined close to 30% in food and 9% in laundry. When it comes to this year and the recovery, it's happening exactly the opposite, meaning that we have -- with the opening up of the activities, we have seen a much faster recovery of the business in food and beverage compared to laundry. And you see this also in the reported figures in the first part of the year, where the growth -- if the overall growth of the group was around 7%, the ones of food and beverage was much larger than that.

Thank you. Another -- okay, please go ahead.

Yes. But sort of that does imply that you think the laundry market will be back at the 2019 level later or earlier?

It's difficult to predict this one. As Alberto was mentioning, there are no statistics on the market in terms of so detail. But what we expect is a faster recovery in food and beverage compared to laundry that, by the way, declined much less than food and beverage in 2020.

Thank you. Next question is regarding to the EBITA bridge that you presented. And the one asking the question, understands that it's hard to time the 4% from volume expansion, but can you help us understand when each of the 3 other buckets will be fully completed and annualized?

This is -- what we present is the structure of our plan to deliver on the 15%. Internally, we have a granular plan to deliver on the cost bucket as much as on the sales growth bucket, but we are not going to disclose the time on it. But as we did for what concern the Louisville decision, we will inform you in due time when there is an important decision coming on our way.

Thank you. Another question from the web. Considering your global footprint with 3 plants in laundry, can you help us understand how your business is now facing in terms of logistic costs? Any comments on that for food and beverage? And how do you offset these inflammatory pressure in 2021 and also 2022?

Okay. Let me start saying that overall, yes, we are facing more difficulties to the manage logistics, in particular, on the flows from Asia to Europe and United States. This is a fact, and this is also implying some additional cost. But I'm also happy to report that our logistic team has properly faced the situation. And so far, I will say that from a service level perspective, we are pretty well handling the situation. Then there is the second part of the question that is referring to the increased logistic cost as much as the increase of the material cost. I have to say that these 2 ingredients have been impacting our P&L in the first part of this year, quarter 1 and quarter 2, but the impact was not really material and fully compensated by price. What we expect instead is that in the coming months and quarters, there will be additional cost increase coming our way on direct material. And here, there is 2 side. From one side, we have secured the supply with contracts -- with longer-term contract, the availability of the components and the price. From the other side, we took also here proactively decision. And we announced a price -- a second price increase this year for older deliver from the 1st of July. This second price increase is expected to fully compensate already from quarter 2, the overall increase from logistics and direct material cost for the remaining part of the year. And I'm pretty confident that we will be on time and on target also for this area.

Thank you. We have a question in the room.

Yes. I also had a follow-up on the margin bridge, the 4% contribution from volume. How much of that is leverage and sales returning to prepandemic levels? And how much would you say is related to mix improvements?

First of all, within the 4% contribution in terms of margin, this is mainly related to volumes and mixing up, meaning, it's not about growing the sales and having operating leverage, but it's also within the growth of sales, having a larger contribution than average coming from customer care, innovative solution and change that we know by experience, and it is also the practice in the history, having average -- better than average profitability, stronger, better than average profitability.

Thank you. I do not have any further -- no further questions. So with that, I would like to thank you, Fabio, and I welcome Alberto back on stage again, time for you to give us some final remarks and the summary. Please, Alberto.

Thank you, Jacob, and thanks, obviously, to all of you to have spent the time here in Ljungby and the ones that are on video, obviously, following up our broadcasted production. So what I would like you to remember after these days and for the ones who have the possibility after the visit of the factory and the center of excellence or the place where we show our product are basically 3 things. The first one is somewhat generic applying to our industry, the hospitality industry, the automobile industry. It's a good industry. The recovery that we experienced during the summer is proving that it is an industry with strong base, strong underlying trend. I have to say also, honestly, that I was surprised about how fast the market picked up during the February-March in the United States and June, I would say, here in Europe. So it is a good industry because the underlying trends are there. They are our way of living, our way of working, our way of socializing. And so the reopening that we are experiencing these days in many countries are the ones that are helping us to be more optimistic toward a faster recovery of the overall market. And when I mean overall market, I'm talking about the food, beverage and laundry than what was initially expected when the pandemic hit this industry, so good industry. The second one, and you cannot expect anything different than that. A good company, a company that have been able to perform during bad days because, as I said, in my professional life, I never experienced a year like last year, but a company that has been able to navigate these things sticking to the strategic priorities and not because we didn't think about changing, but because we understood that these are the things that can make this company better. I think this is important. It's not just, okay, let's do what we were used to do. On the opposite, I would say, during pandemic, we changed a lot. We changed our cost structure and Fabio was explaining what we did, what we are still doing, are reviewing the footprint, moving production, trying to be more competitive, more cost efficient. We also reviewed our way of working, investing, not just cutting cost, investing. There is always a limit to reduce the cost. Investing for the best, and that means building the factory. We have been building the Thai factory just in the middle of the pandemic. That was a pretty challenging exercise, and we opened at June 1 of this year. And we merged 2 factory into 1. And now what we announced at the end of August, beginning of September, is moving additional production to that factory that is very competitive. It's a state-of-the-art factory, in a very competitive market, with a very competitive infrastructure around that. We invested a lot in digitalizing our offer, and I believe you heard about that when we have been talking about laundry, but the same apply to the other product that we have in our portfolio. But not only the product, also the organization with ambitious target because this is the future. We all have been used to manage meeting virtually. And this is coming also because the new generation are the ones that are coming to our business always. And they are more used to manage things digitally than what I have to say also myself, I was used. So we did a lot. We've changed a lot during this year. I believe more than what we did probably many years before, and that is typically what is happening when a crisis hit an industry in a market. It is bad. But the strong company are the ones that are not just crying, but are the ones that are reworking inside, trying to reinvent what they are used to do in one way and they start to do in a different one. So that is the reason why I'm confident that we have been working on the company, sticking to the strategy. And today, we explained to you that we have a beautiful business inside of this one. And this is -- remember, I said it's important to be different sometimes. To have a so large and profitable business is something unique of Electrolux Professional. There are commonalities with the food and beverage. You saw the pie describing the customer, and there are many customers that they have both laundry and food -- sorry, food and beverage and laundry, hospitals, hotels, but not only. There are customers that have only laundry. But the facts remain that was greater to have laundry, in particular, during a year like 2020. 90% of the profit came from laundry in that year. And we have a laundry that is a leading business or Electrolux Professional is a leading player in the laundry business. Following, by the way, the strategic line innovation, sustainability, digitalization, and what is even important is that they are not just words. There is a track record that is proving these things. So good market, a company with this characteristic, let's put it this way. And the third one, and I believe Fabio was pretty clear on this, financial strength to continue to invest, to support both the organic and inorganic growth. These are important things. These are the 3 things, honestly, that I believe you should take away and bring back after the day we spent together here. So concluding, and before thanking the guys that have been on video and obviously inviting you to follow us and visiting the factory and the product one is being here all together, this also means that we all see the lights at the end of the tunnel. In a way and in other, we see the things getting better. Hopefully, it is not an illusion. Clearly, it is something that the coming weeks or months will confirm being the new reality, and it is new because it is different. The market is recovering. It is much more positive, the feeling than what we had a year ago, 6 months ago, even this spring, I have to say. All the situation, the trending, how we went through the crisis is just giving us confidence to be able to confirm the financial target that we have that we presented the one or before we separated. Remember that we presented this financial target when nobody was even knowing the meaning of the word COVID. Now we are here with deep knowledge about the meaning of what it is, and now these things change our lives, and we are able to confirm this target, and we are also able to confirm that we have been able to restart the scouting to explore the market and to see if there are elements to accelerate our organic growth with inorganic activities, operations, M&A activities. All these things together, they've been well structured in the what we call building block to reach the 15% EBITA because this is our target. Behind our desk, we have a big number in the back. That is what we want to say what you see happening and going from the back to the front. But to do this, we need to do this step-by-step. And last but not the least, I hope you really understood. I don't hope -- I'm sure you've got a clear picture of how to have this laundry business as part of this company is a creative element to help past to reach this target. So again, Jacob, back to you for the conclusion. But from my side, thanks really to all of you in presence and the ones that have been following us on video.

Thank you, Alberto. That concludes the presentation part of our program. We would like to thank our online viewers for joining, and I hope you enjoyed the program. Thank you, and goodbye.