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

So welcome, everyone, to Electrolux Professional Group in our Investor Day 2024. A special welcome to all of you here in Stockholm and also welcome to all of you who watch this event online. Our online guest, you can participate also by asking questions in the field on the web browser. 4 years ago, almost at this date, Electrolux Professional Group was listed on the stock exchange as a separate company. And to say the least, a lot has happened since then. We had the pandemic. We have had geopolitical challenges, there has been war, there has been inflation. I mean, everything you can imagine has happened around the world. But we have demonstrated resilience. We are still here. We are step by step improving our performance as a company. Our event today we'll, in particular, focus on our recent acquisition to say, in Japan. But of course, there are also some other topics that we will cover. So we'll take a quick look at the agenda of today. We will kick off with Alberto Zanata, our CEO, who will talk about the strategy update. After that, we'll dive into the Laundry segment, which is our most profitable segment with a special focus on the acquisition of Tosei. Then we have coffee, of course, and after that, Richard Flynn will talk about our operations in Food & Beverage in Asia, also a deep dive into the acquisition of Tosei. And we will round off the day with Fabio Zarpellon, our CFO, speaking about -- or giving you a financial update. And now it's time for our first speaker. I welcome Alberto on stage. Please, Alberto.

Thank you, Jacob. Thanks a lot. Good morning to everybody, and welcome also from my side. Purpose of today, before even starting, what I would like you to bring home in some way after the day or the half day we are spending together is to get an update about the status of the business. This is a company that is, as Jacob said, getting stronger step by step. We are a different company compared to the company that was listed on these days 4 years ago. And we are also a different company from the ones that was a sector, a division within the Electrolux Group. The second important point is that we are delivering against -- the main reason of separation when we listed that, when we became an independent company, we are -- we said that the reason behind such a project were basically 3 were to be more focused. I would say we were already well focused on our business when we were at division, but now we have also a broader that is completely focused just on the professional business. The second reason was about becoming faster, more flexible, more agile. And okay, 1.5 years ago, somebody could say, why did you wait so much, but I would say that in the first year, you can understand that for us, it was only a matter of surviving during the pandemic, during the lockdown, during all the things that have been happening against this industry. So we changed the organization, decentralizing, getting closer to the customer, making sure that we can be fast considering that we are competing mainly with privately owned company, 90%, much more than 90% of our competitors are privately owned company. We are good or bad that there is a person that is deciding on the spot quite quickly. And the third reason was more financial to give us the possibility to accelerate the inorganic growth and that is exactly what we have been doing during these past 2 years with large acquisition that I'm not so sure we would have been able to conclude being part of the Electrolux Group. And today, we will talk also about that. So we are becoming stronger. We are delivering against the reason behind the listing. We are delivering against the strategic priority that are the ones that give us confidence to confirm the financial targets. I think this is, in some way, the takeaway that I hope you will get at the end of this morning. So but let's start from where we are. I think you already saw this picture because it's the one that is in some ways summarizing the 2023 and the past years. And this is a company that is rebalancing geographically. You will see later because this is not including Tosei, but you will see later that with the acquisition of Tosei, now basically, we have true confidence that are more or less equivalent. Americas and EMEA and half of the business is in Europe, I remember during the financial crisis that, by the way, affected Europe much more than the other part of the world. Europe was 85% of the business. So now we are rebalancing geographically, reducing the risk of possible downturns of one economy versus another one. We are also increasing the most profitable business that is Laundry. That is also important, and you will hear about the Laundry business. This doesn't mean that we are not focusing on increasing the profitability, the Food & Beverage, and we do and it is happening. But clearly, we saw also during the COVID that the Laundry business is much more resilient than any other business even during the COVID crises when we were locked at home. In any case, we had to wash items. So in any case, the Laundry appliances were used. So these are important things that are making this company stronger than what it was and improving step by step. And step by step, it is the path that is the trend that I would like to underline. Last year was the year with the historical high sales, historical high EBITA value, historical high cash generation. It is not the margin. Yes, it is not the margin. And we know that, but it's also true that also the margin improved step by step. And this is also helped by the market. The market is a healthy market. It's a good market. I love this market. I've been all my life, in this industry. It is an industry that during the COVID somebody said it will never be the same. I would say that most of the things are back to normal. That is the key important thing. Now we are in a normalized situation where we restart -- sorry, our customer, the business of our customers start growing at a steady pace. Indeed, I would say that the headlines, if you want to say, to describe the current situation is back to normal. I don't think I should repeat this one because every time I'm saying that the bad things are behind us, something new happens to destroy what we were doing. After the COVID we were thinking to be over and start growing and then the war came and then the war was not over, but at least it was absorbed and then we added the supply chain and then inflation and the other things. But reality is that if I look ahead, if I look into 2024, I see that the market is growing basically at a normalized level. I believe we have one market, China, that is still behind the pre-COVID level. I would say that the interest rate inflation, inflation is stabilized, interest rates are not growing. Everybody is expecting also a decline of that one. Let's see how it's going. Material. So material cost is positive, it's contributing positively to our results. We are still able to hold price. You know that this is an industry that typically, in any case is able to pass price to the market. And with the price we are able to compensate the inflationary items. So it's back to normal. These are the normal situations that we were used to have when dealing in this industry. And due to the fact that the market is normalizing, the geopolitical situation, even if there are still wars, we cannot neglect the fact. But the political situation is what it is. I think we can confirm our strategic priority. We can confirm what we believe is needed to reach the target, in particular, the margin target, the EBITA margin target. I want to go through this one, and I will give you also an update about the start of the achievement because it thinks is important because these have been the same strategic priority that we set when we listed. Yes, they are exactly the same. First, I strongly believe that the strategy is not something that you should change every month, every week, every day. It is something that it requires investments, it requires time to get implemented, to get executed. So it is important to be consistent. But obviously, it is important also to understand if it is the right strategy. And we still believe that it is the right strategy. It is a strategy that -- or at least these 4 pillars are important because they are interconnected. For instance, if I start from the first one that is investing in innovation, investing in new products. Yes, we are investing on new products. And we are investing in R&D innovation, 4% of our net sales, that is far above the average of the industry because it's absolutely necessary to invest to deliver also against other strategic priority. If I think about change, I cannot go to the market with a me-too product. I have to address this customer with something that is creating value and creation of value comes from new innovative solutions. And the innovation at the end I believe -- we believe that it is mainly coming from digital solutions. So we have to invest on digitalizing both of the company and the operation but also the product. Why I'm saying so because the reality is that the technology that are used in this industry, the heat pump dryer or the heat pump for drying, the induction for cooking. Microwave combined with other functions. Come on, they've been in this industry for years and years and years. Now they are becoming better, they are more affordable, more competitive and more efficient. Absolutely, yes, but they are there. What makes a difference is how we digitalize the product, how we digitalize and make use of this resources of these technologies to improve the performance of the product and at the end, the experience of our customers. So as you can see, innovations, addressing high margin product, our margin category, our margin segment and margin customers that, by the way, I can address them with this product, with this innovation because every time we come to the market, the new product has a margin above our target, not our current margin, our target margin. This is a must. We don't bring to market product with a margin that is below our target. So this means more I swap to new product, more chance I have to reach the target -- the financial target that I have. So new product to address customers that will provide higher margin, mainly thanks to the digitalization. And all the things together that can be together only if I care about our customers. If I take care about customer care. But by the way, it's not only a way to care about customer, it is a way to again improve margin because I don't have to explain to you that the margin of customer care is far ahead, far higher than the margin of selling product. But if these are the pillar of our strategy, and I hope I delivered the message that there are the ones that will help us to reach the financial target, I'm very proud to say that all these things are in some way connected by an overarching ambition to be the leading company in sustainability. And when I talk to sustainability, I'm not talking about only being green. Obviously, you know better than me that sustainability. I'm always using an example is like a table with 3 legs. So one is being green, the ecological one, one is the social impact. So being friendly with both of the workers in the factory and the people operating the product. And the third one is also the economical impact. It cannot be just something where you paint green, the leaflet that you use to sell your product. You have to have economically, you have to create advantage like savings for our customers. So if sustainability where we are leading the industry, it's important for us, in any case the most evident fact that we had in this race, it's about the reduction of the CO2. We are all talking about this, right? I'm always questioning myself as a person, as an individual but also as a member of this company, what can I do to really contribute for a better world. And this is what we are doing. We have been anticipating of 2 years the reduction of the CO2 emission, Scope 1 and 2 that are the one 100% under our control. Scope 1 and 2, I'm sure you know, they are the one the emission generated by factories, by transportation, but all the things related to the production of the product and not the usage that is scope 3. So we have been reducing already by 50%. The target was in 2 years from now. We achieved it already in 2023. So it makes me really confident that at the end, we will be able to reach the target of CO2 neutrality by 2030. And now we are also starting measuring the Scope 3 that is the by far largest part of the impact that we are having on the environment. That is the emission of our product. And how can we do it? We can do it at generating innovations, but innovations that is creating value for the customer because it's generating savings to them that are reducing the consumption of water, electricity, gas, whatever. And as a consequence, they have a lighter impact on the environment. This is what is really, let me say, making the proud work for Electrolux Professionals. In addition to the fact that we are a company encouraging diversity, encouraging inclusion, we are a social responsible company. And this is not just missing so, these are -- I believe you are familiar with this rating that are worldwide used, and these are the company, not so many, I have to say the truth, but these are the company that applied for this rating. And you see that there is a big difference between the rating we are having and the rating of whatever company you think about. These are public information. So yes, we write company 1, 2, 3, 4, or whatever. But you know these names in case you want because you can get at them. So we are the leading company on sustainability. And again, it is the reason why I'm saying I, as an individual and as a member of this company, I know that I can contribute that, I'm contributing for a better world in some way. But being said, let me step back to the strategic priority to the pillar. And the first one was innovation. And here, these are only the product that we brought to market last year, not in 2022, not 2021. These are last year new introduction. And I'm not here to sell the product to you, obviously, and I'm not here to present the product you. Don't worry about that. I just want to point out that in every product that we brought to market in 2023 will generate a margin above the target. The famous magic number, somebody told me that, that number is magic more or less in the financial industry that is the 15. So the magic number is 15, all these products are generating margin that is above this financial target. All these products, by the way, are addressing customers like the chains that by themselves is a segment that is generating higher margin or they are in the coffee industry that we know is growing much more or the espresso, sorry, not just coffee, espresso industry that is growing much more than any other product category in the hospitality. They are product that like the one on your right, the Hero Dryer, they are products that are supporting the circular economy, the possibility that we are giving to chains, again, chain customer, to reuse items, not to throw away whatever they distribute. They are products that are very efficient, providing savings to our customers. Or like the one on the left, they are products that are tailored for markets that are growing significantly. This is a clear example and I'm sure Richard will talk about that. This is a result of the new organization where in the past, we were selling a product produced in Europe all over the world. And in Asia, in particular, in China, we were addressing only a small part of the market. That was the one that could have been addressed with this product. But the Chinese market is growing and expanding the Western cooking, the Western application are going over more. That small part is increasing and there are local competitors. And now we have a product that is designed for that market with adapted specification, produced locally and indeed the sales are booming since we launched it. Much higher, much higher and not at 3%, 4%, much higher than what they were. And by the way, I'm more competitive also in terms of cost because I'm producing locally, I'm saving the transportation. I have lower labor cost. And I am able to localize also the material. And then we are working on other things. For instance, this is a great example. This is a big machine and we could have it inside probably this big like this stage more or less. It is for ironing. In this hotel, they don't ironing now. And you know why they don't do it? They don't do it because to operate this machine that is the one used to iron flat linen, they need 4 people. With this one, just one, just one person. This is money for the operators. This is money for the operator. And this person can be used, can be the same person that is used to clean the room that when they finish, they do this job because I can also operate this machine. Everything is automatic. I just got to throw the linen inside and I get it outside already folded. So this is what we talk about the innovation that is creating value for our customers. So you saw many products, many products, in particular, for chain, but then now I start to show you the result of the second pillar that is the development of the business. We changed and here in reality I would say, stable. But in reality, we have a slight step back. And this is mainly, if not only related to the U.S. What happened in the U.S. in 2023? I think I said it many times, that since summer last year, all the chains put on hold everything, put on hold the tests, put on hold the rollout, put on hold the replacement, everything was on hold in the United States, in particular, which we are very confident that we didn't lose market share. But we also know that this has an impact on the chain business. So I'm pretty confident that already this year, we will turn around this one because we see order coming. We see chains that have been unlocking the projects, they restarted the rollout in the United States. And by the way, not only there, in Asia, in particular, and in China, Richard will talk about that. We have chains that we started by, restarted opening or renovating restaurants. Customer care is the third pillar of our strategy. And also here, again, you can say, oh come on, you were higher in 2022 compared to last year. But you see that in 2022, we restated the trajectory. And that is because we included the customer care business of Unified Brand. And you clearly understand this one that the customer care business of Unified Brand was half in terms of participation in what we have in the rest of the company. So we restated, we restarted and we restarted growing. I see this one as a great opportunity, not as a negative one. Probably I'm looking at the half full glass instead of the half-empty glass. But this is an amazing opportunity because this means that there is no reason why I cannot have the same participation of customer care in the United States as I have in Europe and in the other part of the world. And by the way, I'm already anticipating to you that we will have to restate probably this number also in 2024, including Tosei because Tosei has a single-digit participation of customer care in their business. And last but not least, the digitalization. Digitalization is important. This is the year where finally, we are bringing to market. We are launching as a marketing product -- sorry, as a product with marketing activities, they digitalize functions, including also some customer care function. We will do it. We will start doing this year. Until now, we have several. We have thousands of installation that some are in test, some are working. Some are mainly following financing incentive of some countries. But this is the year where we are finally bringing to market the connected solution as a business proposition. But what is also important, look at the numbers that are on the right, the ones that are showing the number of partner, in this case, distributor that are using what we call the OnE platform, the one that is digitalizing operations that are making us becoming more productive, efficient, better, let me say, in serving out the customers, a lower cost but much better, better, better level of service. And more, more customers are using the platform, 65% of the orders, we had a target -- sorry, we had a target of 65%, but we are already 80% of the orders. 80% means 8 orders out of 10 are going through the platform. This is important. This is showing that even an industry that everybody is saying is pretty traditional, old fashion, if you want to say, it's modernizing, it's digitalizing, probably also the new generation that are getting into this industry are clearly familiar with these kind of tools. This is important that this is very, very important. With this said, I believe I cannot avoid obviously a couple of comments about the situation in the United States. I already mentioned it when we were talking about chains. I think it's due to an update, I owe you an update about the situation in the United States. I don't go through this one. You can read it, you have on paper. The summary is that the business integration is over. The one that has been affecting so heavily our performance during the second part of 2023 with the integration of the IT system, integration of the teams, merging of the back offices, all these things that have been some way focusing people inside instead of outside. Okay. There have been also the market are not working well. We have to admit, and it's not working well also in Q1 this year. But the facts remain that all these things are over. Now we are focused on the external situation. We are focusing on customers. We are back in building up all the conditions to promote our product. And our product needs to be promoted. The products are not product that you buy on catalog, on paper. They have to be promoted. And this is the reason why also if you talk about synergies, reality is that we have been probably even ahead of plan with the cost synergy. Why? What is going to come are the sales synergies. The synergies that we can generate and get in the 2 teams together. So again, integration is over. We are focused on customers. We are focused on having our network, the reps in the market demonstrating our product and if this was United States, I believe, a key subject of today is Tosei. So let me start introducing the new company we acquired in Japan. [Presentation]

I will not go through this one. I believe Richard and Paolo will talk a lot about Tosei, but let me say we are quite a leading company, the leader in Laundry in Japan, that is the second largest market in the world. The leader company in the category of Food & Beverage that is vacuum, but a category that is important because it's part of the cook and chill or the [indiscernible] processes. We acquired a company that is in line today with the current financial performance of the group, but it's a company that we already know delivering the synergies or what we call value creation activities will contribute to the 15%, will be above the 15%. And we acquired a company that with the core product that truly innovations, a product that we do not have. A technology that we don't own, vacuum and the combo machine. We don't have those technology and they are in the leading seats for this kind of technology. So really happy to have this team on Board and back last week, I was there to meet with these guys. And I have to surprise -- honestly, we have to cool down them a little bit because they are so excited to be part of the group that they want to accelerate every process, every activity. So very, very exciting. There are challenges? Absolutely, yes. The first one is obviously the language. But they are challenging that with a passion, with the enthusiasts, we can surely overlap. So all in all, acquisitions are there. We have been having roughly 20% of the turnover that we have, currently have, thanks to the acquisitions. During the first year and during the COVID, there was no way to do it. But then we started with Unified Brand and then Tosei. And if you compare these things with the acquisition we did pre-listing, this large sizable acquisition, at least for our industry, are pretty sizable acquisitions that I don't know if we would have been able to do with the remaining part of the group. So if this is the past and with the cash generation, the past is also the future because we can surely continue to run acquisition in this industry. But with this said, if I look at 2024 because in some way, we have been always looking back during this first part of the discussion we are having. If I look ahead, I said it also at the beginning, without the ambition to say what is in front of us. I've been always wrong in the past years, but at least the facts are this one. We are in a normalized situation with the material that can contribute positive with price that is still holding and can cover the inflation. With a geopolitical situation that is at least the one we know. The uncertainty is the bad things in this industry because this is an industry where our -- the customer of our customers are investing their money and uncertainty is by far worth situation you can get when you are doing investments. Look at what happened in North America during the last part of the year. The uncertainty, not knowing how the interest rates were going, not knowing what is happening here, with the election, with whatever. I know that the election are not finished yet, but it doesn't matter. In any case uncertainty is something that is not helping our industry and in some way to know how things are will help the development of the market. So in summary, in some way, yes, we have -- we still have a gap versus the financial target, the magic number of 15. But I also -- and I hope I was able to deliver the message. We are working in the direction of closing this gap. Thanks to product, all the product that we are bringing to market that they have -- that generate an EBIT above the 15%. They are addressing customer segment or product categories that are typically generating a margin above the 15%. So we have this one and the past performance, the past year performance are proving that step by step, somebody could question or argue about the speed, but we are year after year trending towards that direction. We are a stronger company than what we were. So more resilient, geographically balanced, segment balance with the Laundry, larger, the chains larger with customer care larger. There are the conditions. There are the condition organization-wise to compete in an industry that is more than 90% served by privately owned company. Very quick, very fast, very agile. We design an organization and what happened in China is proving it that can give us the possibility to compete in this one. We are focused even with the Board on these days, and we continue to have the financial strength, the financial meaning to continue to invest in digitalizing operations, digitalizing products, delivering new innovations but also run acquisition. So I, we are all committed to reach the financial targets that we are confirming. And with this said, I believe Jacob can open to questions.

Thank you, Alberto. We will now open up for questions. For those of you who are here in the room, please raise your hand and the microphone will come to you. Of those of you who are online, you can just write your question in the field on the web browser, and I will see it on my pad here. The first question is to Gustav Hagéus from SEB.

I have 2 questions. Firstly, you commented on the market being largely back into the bev excluding China. But does that relate to value rather than volume? Or would you say that volume-wise we're back, excluding U.S. within Food & Bev?

Food & Bev, therefore, Laundry is already back. So you are talking about Food & Bev. U.S. is back, I would say that now even Europe, Middle East and Africa, Asia, they are roughly back to the volume. If they are not, by the end -- if they were not by the end of 2023, they are in these months, in these quarters, excluding China.

Yes. And then on the U.S. recovery, you mentioned that the integration, as I understood it, integration work was largely done and complete and you're back. But you also mentioned that Q1, if I understood it correctly, it could be a little bit weaker perhaps. If I recall correctly, you had a destocking of your major deal that started in March, is that the effect that you start to annualize that effect from March or could you give some clarity on that?

More or less, yes. But the destocking, I would say, that is more or less over now. Destocking is over. You can have still situation, but typically it's over, the destocking. What is still not over, but it takes time is the recovery of the business, in particular, the chain one. When the chains are deciding to unlock a project? We have been having a long pipeline of test. When they decided to toss this over, let's start the rollout, it takes time. So basically, this decision has been taken. We saw this because we received also orders, by the way, November, roughly, something like that. So it takes time now to get these things. So this is the reason why I'm saying Q1 is probably a tale of what happened during the second part of 2023. The order intake is very good, not only in United States by the way, but it's very good. We saw this happening in the United States and the other countries, China. These are the 2 countries where we saw -- we clearly saw chain unlocking orders and we start opening new restaurants or refurbishing an existing one. I think I don't know if you saw it, but there was an article, I believe, a week ago on a U.S. magazine that was saying that was coaching the subway CEO. I'm very curious and interested on that one because they said that they are pushing the organization to refurbish all the shops around the country. You know that subway was our by far star business some years ago. So I'm really looking for that one. Hopefully, they also think about beverage when refurbishing the shops.

Have one question over there.

Yes. Karri, Handelsbanken. I wanted to ask about your 4 growth initiatives, and you gave us numbers on 3 of those. But the innovation part, so if you would estimate your innovation index, i.e., how much of your sales came from products that were launched in the last 3 years? How much would that roughly be? And how has that changed in the last 4 years?

1/3 of the sales last year were coming from products that we introduced in '21, '22, but '23, they are not affecting honestly, but that one. So it's a pretty high percentage of sales coming from new products. To be said that this is also -- this is a number that is fluctuating. For instance, there have been years when we have been also having a higher percentage because we were renovating a large product category that has been a year when we have been renovating the Laundry, washer and dryer and then is driving a much higher percentage of new product in the sales. But what happened during the past years, I think that is the number we are getting.

Okay. Then quickly going back to the normalization in Food & Beverage. There are still some regions and countries where you have spending down from pre-pandemic levels like Germany. So do you think is that purely because of the economy and will normalize when the economies rebound? Or are your customers saying anything about any changes in consumer behavior now versus before the pandemic?

Germany is one of the European country that is not doing extremely well. We see the Mediterranean area. So, yes. Mediterranean, all the countries that are on the Mediterranean area, they are doing extremely well, probably driven also by the tourist investments that are pretty high. I believe you all experience that touristic place are pretty fully booked during the summer, during the winter whenever, the cities, big cities, now there are Olympic games in Paris that is driving a lot of tourists over there. While we see a slightly lower growth, lower excitement, if you want to say, in the Central Nordic countries. I'm talking about Europe, obviously.

Johan Eliason, Kepler Cheuvreux.

I was wondering a little bit about acquisitions. You've already -- we will learn more about Tosei, and you talked about Unified Brands. But you've been in charge of this business now for 15 years, and you also did a number of acquisitions before. Can you give some examples, what have been successes, what have not maybe delivered according to expectations? And why? I mean, Schneidereit, Grindmaster, you have this Chinese acquisition as well and then a few more, I can't remember.

We can talk a little bit quite a lot about this one, but there have been a lot of learning in the meaning that the first acquisition that we've been running when we were still a division of the group, was in China. I have no idea why we choose China to start because it's like to start -- to try to drive a car and to start with a Ferrari. Meaning the most difficult one. And the big things there was the cultural aspect. And that is the reason why we are so focused on the cultural -- sorry, aspect in the acquisition of Tosei because we have -- I said that we are a company pushing diversity and inclusion, but we cannot neglect that there are differences in terms of culture besides the language barrier. So for instance, Veetsan was small. It was a privately owned company and there were big, big cultural differences. So small, doesn't matter if it is small or large. The complexity of integrated company is exactly the same. So for this reason, Unified Brand and Tosei are good because they are much larger than what Veetsan was 10x larger than what Veetsan was. The complexity to integrate this company is exactly the same. The second one is a privately owned. I said it, most of the target, no way, if we want to run acquisition, we have to acquire a privately owned company because otherwise, we are excluding 95% of the possible target, but to acquire a privately owned company is quite challenging. It's quite challenging because typically, they are not used to work in a corporate environment. Many times, the entrepreneur is not willing to stay so we have to make sure that there is a succession in place. So and in this case, in the acquisition that we had most of them they were privately owned. We are -- we had some success. Now we learn. We make sure that there is always somebody sitting close to the founder, typically. We have to find agreement that is keeping this founder engaged. Again, unified Brand and Tosei there were in some way, corporations. So they had a managerial culture above that. So these are, in some way, the big things. So larger it is, obviously, a reasonable size, in some way better it is because complexity is exactly the same, make sure that you never underestimate the cultural differences and make sure that people are well evaluated. I know that we don't buy people, but when you buy a company, one of the most important asset that you acquired is about people. So it's super important that -- and one of the key work stream in due diligence is people.

We take your final question from Hanna Lindbo, DNB.

So my question, you talked about all new product launches have EBITA margin above 15%. So my question is how long has this been the case? Was it from 2023? You started this with new or before?

Okay. Let's say that now we have a process in place where we look back if we don't have this target achieved. That was not always the case. We have also Tosei that 2021, we basically didn't launch any product because sorry if I repeat it, but surviving was the mantra of the company because we were only thinking to survive for the product that we launched recently, 2023 were the example, but also the product that we have been introducing earlier and we will introduce this year and in the following one, that is a must. If there are exceptions now, I can't exclude the other exception for products that for some reason, they are strategically important for us. We will do it, but that is what we want to do. We will put money only on the product where we have a leading position, cooking, for instance, where horizontal cooking, most probably we are the leading company in Europe and the leading company in Western cooking in Asia. That is the area where we invest and these are products that are already above the 16% -- 15%.

Thank you, Alberto. That's all the time we have for questions. There will be more chances to ask Alberto questions later on.

Our next presentation will focus on our most profitable part of the business, the Laundry business. I welcome Paolo Schira on stage. Paolo has been with the company since 2006 in several positions in Laundry and Food. So the floor is yours, please.

Super. Thank you, Jacob. Good morning, good afternoon, everybody. I'm very, very pleased to be with you today. And as Jacob introduced, we are going to spend 20 minutes talking about the Electrolux Professional Laundry business. My objective today is to give you -- actually to cover 3 topics. The first one is to give you some color on the laundry professional industry and the other underlying forces that make this industry as an attractive industry and resilient for the years to come. The second point I want to give you is about the unique position we have as Electrolux Professional that will help us to deliver profitable growth for the several years to come. And obviously, the third point that is the highlight of today is we will talk about the Tosei acquisition and how we are going to create value. As you understood, a big part, a big portion of Tosei business is in Laundry, so makes sense to cover it. And then afterwards, with Richard, we cover the remaining part. So that's a little bit the agenda of today, and then we will have Q&A as we just did. So let's move before getting the color on the market, let me give you a bit of an idea, chart of Electrolux Professional Laundry. What you see here in this picture is the globe picture, and I think well represents our laundry business. We are really a global company. We are selling more or less everywhere. Over the years, we established our own operations more or less in every sizable and strategic market to have a local presence and to reach with the different channels, the final customers. And with the acquisition of Tosei, we have now 4 manufacturing plants, so an additional one just came in Japan. What has been the footprint, industrial logic for us in the manufacturing set up over the years? The overall idea has been to build factories, focus on specific core products and core technologies. So to give you some illustration. The biggest factor we have is in Sweden where we produce the washing machines as well as core technologies on sustainability like heat pumps. The second biggest factory is in Thailand, in Rayong, where we produce our tumble dryers as well as the small chassis machines where we need to have a different price point. The third factory is in France and is the factory we use for smaller batches of production. You saw with Alberto earlier the production of this high automation ironer. Also, we produce the specific machines for the hospital business, as an example. Now comes the new member of the family with Tosei. Here, there is a clear technology, a clear concept that it will illustrate just after that is the combination of washing and dryer. So machine doing both the washing and the drying. That is a very intriguing concept that we are very keen to deploy further that's the overall setup. But I told you at the introduction. I'm very keen to tell you a little bit more about the industry and why it is a resilient and attractive industry. Well, there are some strong underlying forces in the professional laundry industry that makes it interesting. And many of them are related to the demographics. As you all know, the population in the plant is growing. The projections are that we will have 1/3 more people living in the planet by 2050. So a big number, 2 billion more people. Obviously, people wear clothes and the basic need to have a clean clothes stays and will remain. So that's a major driver, of course. Similarly, also the aging of population has some positive impact on our professional in the industry. The projection is that by 2050, we will have double number of people older than 65 years. Now why this is relevant to the professional laundry industry. This is relevant because in several countries, all people are staying in elderly care institution in nursing homes. And very often, these institutions, they have professional laundry on-premise. Obviously, the more older population we have, the more institutions will be and the more need for professional laundry on site. Let's move then on other trends, somehow linked to the previous one. And clearly, what we see in the planet every day is there is a bigger need of energy. The projection is that by 2050, the overall planet will require 46% more energy than what it is used today. And the same goes for freshwater. The projection is to have a 56%, so even more than 50% of freshwater needs, and this is clearly linked to the demographics driver I earlier described. Now why this is relevant to our professional laundry industry. It is a fact, it is proven that managing the laundry needs in professional environment instead of having individual machines at home is a much more effective way to mitigate the use of utilities as well as the freshwater. So it has a major impact on the planet by using the professional environment. Last but not least, and I don't want to scare you with this one. But clearly, all of us in every -- after the pandemic way, we became more sensitive on hygiene. And it depends on the country where you live. But on average, there are in the countries between 7% and 15% of what we call hospital-acquired infection. These are meaning, you're visiting a hospital or in a clinic with something, but then you get inside the premises, you get an infection through bacteria or viruses. And even worse, 10% of these people getting the infection are dying also. So there is very impactful negative effect coming from these clothes infections. Now what is the hook with Laundry here? Well, also here, it is proven that poor management to linen is a major vehicle for hospital infection. So you have a disease, your linen, you clothes, get infected, then in the process, if it's not done well, you actually use the linen as a vehicle to have this infection. Now again, what is the hook with our Laundry business? We are leading in this application, and there are technologies that we have been developing for over 30 years that are making sure this linen clothes infection is not happening. So our technology can help actually to save lives in this context. So very powerful long-term drivers. That's why we also engaged about the professional laundry business. What about the overall market? So let me give you a few numbers. Our estimation is that the market is a bit shy of USD 3 billion. We typically say that 1/3, 1/3, 1/3 of the market is splitted by Europe, America and Asia. Europe, a little bit bigger but overall, broadly, this is the picture. The good thing of this industry is that even through the different crisis, economic or political, hygiene crisis, overall, every market managed to have a kind of stable or steady single-digit growth. So it's a pretty strong resilient market. Obviously, we see because it follows the demographics that Asia is growing a little bit faster than the rest of the business. Somehow you got earlier with Alberto the picture on what is the share of business for Electrolux Professional that follows pretty well also the specific Laundry share of business. The beauty of the Tosei acquisition, which we will develop shortly after, is that we are increasing our weight in Asia. So historically, Electrolux Professional Laundry, they have been very strong in Europe. Now with the acquisition of Tosei, 30% of our business is in Asia. The rest being Europe and America. So we are getting a much more spread resilient business coming from, which is a positive thing. Now is the market totally homogeneous? We typically represent the market showing different clusters, different buckets. What you see in the picture here is in the lower part, the application we call semicommercial semi-professional. These are typically products that are small chassis machine, very close to the consumer business, but with bigger performance. Then we have what we have, the bread and butter of our business, being the professional space where a big part of our focus is and then the upper part with very, very big machines, big like probably this room. That is what we call heavy duty. Electrolux Professional, we focus a lot on the core professional, the middle part, a little bit on the semiprofessional and another a little bit on the lower part of the heavy duty. The market, and you see it on the right-hand side of this picture, is roughly more than half for the market is the professional. And then the remaining 25% are split. The remaining 50% is split between the 2 upper, the upper and the lower parts. Another attribute of this industry, and you see it on the left-hand side is about the concentration rate. It's an industry rather consolidated. As you can see from the picture after the acquisition of Tosei, Electrolux Professional, Laundry reached 15% of market share. That is a pretty good market share. But also what you can see here is there are other relatively fewer players that are covering the market. And if you focus just on the pure professional areas, so you exclude the heavy duty that are even fewer. So there is a certain level of consolidation. As you see as well in this picture, there is one competitor that is bigger than Electrolux Professional but the main reason is that they are very active in the semi-commercial area, whereas we are only partially active in this area because otherwise, we are fairly comparable, at least we are in the same range of the magnitude of business. So that's a little bit the overall picture. So this is competition. This is macro-level market. Let me give you the same perspective from the customer standpoint. So this is the segmentation of the market by customer typology. One side, you have the total market, the [ SEK 3 billion ] we said earlier. On the other side, you have Electrolux Professional Laundry share of business. We typically represent the market using 2 buckets from the customer dimension. One is the, what you call, profit center laundry. So these are laundries where the owner of the laundry is making money with the laundry. So imagining a coin of laundry, where I get money from the user machine. And the other big bucket is about what we call the cost center laundries. So where the laundry is actually a cost, but you need to operate your business, a hotel. You need to have clean linen. I need the laundry to process the 30 towels and these kinds of things. Now what is the business for Electrolux Professional? I think we are well spreaded between the profit center and the cost center. You clearly see a big part of our business in coin-ops and multi-housing. Another big segment we have is about the nursing homes. And again, this hooks on the major trend I told you earlier on the overall aging of population. The application we do though are very diverse. So we do as I just mentioned, sometimes easy applications like would be in apartment house laundries, common here in Sweden as an example. But we go also to very high sophistication. So to give you an illustration, an application where we are a market leader, is on clean room laundry. So whenever you have a very high-tech industry, it could be pharmaceutical or electronics production, you see the picture often you have the operators, in those industries wearing white clothes, white workwear. These are polyester workwear where actually for the operation in the facility, you don't need to remove stains as typically in laundry, but you need to remove particles because particles are dangerous for the production. We have developed unique technology. We are a market leader to make sure that we are able even to remove particles from those clothes. So I'm happy to sometimes see some high-tech products and thinking that behind potentially there is Electrolux Professional Laundry technology to enable this to be happening. So all of this was about the market. So I think I gave you some indication on how the market is behaving. Let me tell you a little bit more now why we, as Electrolux Professional have a unique position that is helping us to grow faster than the market. We are proudly celebrated recently 120 years of history of our laundry operation. I'm sometimes saying when Wright brothers were doing the first trials of flying, we in Sweden were producing the first professional washing machines. So we have a bit of a legacy. And in this 120 years, clearly, we had a strong hook about the sustainability. So if there is one attribute that I'm very keen to highlight and Alberto was doing it also in the introduction, is really sustainability. So sustainability for us is in the dimension of people, impact on people, impact on the planet and profit because if you buy a sustainable solution at the end also your bottom line will benefit. And clearly, we saw with the overall energy crisis that our solutions have been very much appreciated by the market. And as I told you, in the last few years, and you will see it later with Fabio, we have been growing significantly more than the market in Laundry. Another example here, you understood the lag in the storytelling. We introduced a core technology, we are controlling the market is about heat pump technology that is manufactured in our factory in Sweden. We introduced the first machine on heat pump in 1984. The closest competitor was -- a heat pump tumble dryer. The closest competitor came 25 years later. So to give an idea how it is important for us is sustainability and innovation. That is not only about the products. We've been doing well also in other activities. Somehow earlier with the question we cover the name is Schneidereit. So we've been looking also in different business model. And Schneidereit is about what we call functional sales that is you don't sell CapEx, you don't sell an asset, but actually you sell a function, the renting and we got a good traction on this business, and we believe this could be also a way forward also for CapEx-sensitive customers. So pretty intriguing. Then also many other things. We've been pioneering the use of connectivity, IoT and technology in this industry. In early 2000, we had 1,000 of machines connected. Those years were with the wire. And obviously, in a business-to-business environment, that is the one we are representing. Obviously, if you can trace and track your assets remotely, you have a lot of value out of it. Imagine if you are coin-op owner you can see your revenues in your tablet. So it's pretty, pretty engaging. The use case is you can have all of technology. Then as well, again, we are in business to business. We have operators using our machines. Imagine that our big machines are 120-kilo load machines. Imagine to load with your muscles 120 kilo, it's a big effort. So we have been investing and we've been certified to design solutions that are able the ergonomic -- enabling ergonomics, lowering the risk of musculoskeletal diseases for operators. So a lot of attention on the people, again, part of our sustainability focus. I think you got as well why we are so convinced about our position in the Laundry business in an attractive industry being Laundry professional. I think now it's really the time to give you some color about Tosei, the acquisition and a little bit also the Japanese market. So what about the Japanese market? And Alberto already gave you some hints on this one. Japan, for laundry is the second biggest market, roughly USD 400 million, second only to U.S. The part of the market we call professional. You remember the representation we had before, it's roughly half of it, so [ USD 200 million ]. And we bought a company Tosei that is a leader in this space. Japan in laundry as in many other industries, is typically a country where local players are covering the market. It is the same for laundry. So 6 of the local players are covering 85% of the market. So it is pretty managed locally. And that's why we were so keen to buy the leading company in this space. Now how was the market evolving a little bit over time? Right now, I would say the Japanese coin-op in OPL market. So the overall laundry market is stabilizing with a single-digit growth. But we have been seeing in the last 20 years, and this is the picture on the right-hand side, pretty good growth, especially in the coin-op market. So what you have in the picture is a number of the outlets, the coin-op stores, they've been developing in 20 years. So you see the number doubled. So the market has been expanding pretty nicely. But as I said, the Japan is not only a market where you have coin ops. We have all the other market application we described earlier, for sure a relevant one is the elderly care. The old people owns laundries is pretty sizable over there. So what is Tosei in this picture. Market leader, we said. 70% roughly of their business is laundry. On this 70%, a significant part is the coin ops business, and then they do a bit of other application in other segments. They have a master brand Tosei, but also they've been using some tactical brands like Tosclean. And as we said earlier, competition is typically local with local manufacturing. It is a market that had its own dynamics for several decades as we see forward. So how can we blend together now that we started with general with the closing of this transaction? clearly, we started with a good level of complementarity. So I think we add the well together as a company. So you see Electrolux and Tosei -- Electrolux Professional and Tosei position. So Electrolux with this strong legacy of sustainability and innovation with a wide breadth of products. And historically, in Japan, we had a very strong focus about elderly care. Tosei on the other side, a key success factor for Japan, outstanding level on quality and support. Japanese culture and for sure in laundries and forgiving on problems and other things. So you need to be there very quick and solid and they've been amazing, remarkable. They grew market share year after year because of this superior position in the market. Then strong focus on coin ops as I mentioned. And then the champion products they've been developing, which I'm describing right now briefly is this combo machine that has been growing and developing in Japan. And you can see a picture of this combo on the left-hand side of the screen. And you can see as well the other production and some of them -- the other products, some of them are overlapping with Electrolux Professional. So there is a certain level of synergies that we are working on. But as I said, the key champion product for Tosei in laundry is this combo machine. So what it is? The combo machine is a machine one chassis, one box, where you do the washing and drying in the same machine. Very common and probably some of you have it at all, very common in a consumer environment. Now what is the problem -- what has been historically the problem in a professional environment? Is output, throughput, productivity. So as you experience at home, washing, drying is a machine taking hours to process. In a professional environment, forget it, you cannot take 4 hours to take a process. And Tosei did it right, so they manage, develop a concept where in one hour, you do the full washing and drying with obviously the super convenience you have by not having to load and unload the machine twice as you do with a washer and the dryer. So they've got it right and they became market leader, thanks to many reasons, but one of them being this specific product. So closing with an envelope a little bit, the synergy activities that we are working on with the team. So clearly, overall, the value comes. We are growing our share of business in Asia. You heard earlier the 30% weight of Asia now for Electrolux Professional Laundry. You also heard the previous slide about the complementary products that we have between that. So we are going to look a little bit on the manufacturing footprint. Obviously, there are solutions that Tosei developed over the years that we are very engaged with. So the combo machine, we see already traction in Southeast Asia. So we are going to expand this product sales outside the territory of Japan. Then also, they've been super advanced in developing connectivity for coin ops being their core business. So also this one, we are keen to expand. And then overall, by putting together the organization, for sure, we can create savings with the office spaces, with the organization, et cetera. So overall, the strategic fit of the acquisition has been clear to add something attractive in an attractive market but also helping us to create more resilience overall for [indiscernible] and overall for the group. So last slide, just to recap what we said. So I think I gave you some color about the overall attractiveness of the industry. I hope I gave you the clear indication that we are -- we feel very powerful, very strong in this market in the Laundry space. We have a standing, we have a position. We are recognized as a sustainability leader. And clearly, Japan as a market is strategic, and Tosei fits extremely well as you've seen also the movies with our culture, the way of working. So overall, I think with the plans that we have on the synergies, we are very convinced that will be value accretive, and we are going to be even bigger and stronger with the overall professional business. So having said so, I think with the help of Jacob, we open up for some Q&A.

Thank you, Paolo. If you have questions, Gustav Hagéus SEB, please?

Thanks. I was a bit curious on that pie chart with the competitors because you do have a growth agenda inorganically, but you're also getting quite big in many markets. There's been some rumblings on I guess it's company one here that's been for sale, which I assume would be not possible given the size that you would combine. But how big do you think you can get in these Northern Hemisphere markets? Are any of these top 7 players potential from a legal perspective? Is that even possible for you to add?

So as you understood, Alberto was very clear. We have a very clear agenda on organic and inorganic growth. So we are actively looking for acquisition also in Laundry. There are some companies in the market, and we are assessing what we could do. So it is part of our agenda. Regardless of the M&A part that is always not certain, let me say, I think the track record we've been showing with double-digit growth in the last few years, I think, gives us confidence to continue becoming a bigger player in the industry.

But there are no legal hinders for you to add acquisitions in the Northern Hemisphere?

The industry is rather consolidated. And obviously, we are always looking on antitrust implications and other things. So it is part of our process when we assess opportunities. In some cases, it is easy, in other less easy, but obviously it's part of our due diligence to make sure there are no legal implication with antitrust and these kind of things.

And if I might ask another question also on volume. Alberto earlier said that obviously, volumes are well above where they were pre-pandemic in your business, right? And could you give us a rough indication how much are they up versus a 2019 level, do you think? And secondly, how much it relates to market growth and how much relates to market shares.

So we believe now key trade and probably have not developed so much on this one. A key trade of the profession in the industry is that there are not so many data viable. It's a pretty -- yes. That's so clear, so open. So there are a lot of management estimations. So I think it was also written in the slides that a part of it is association, a part of it is our estimation. We believe that growth of the market has been low single digit as an average through the years, including the pandemic. And we've been growing high single-digit volumes over this year. So our belief is that we have been managing to grow market share, both in value that in -- volumes and value, sorry, for the twist in the language. And when I look at the opportunity in the business, the channels we've been working on I think we have a confirmation from it because we got our value proposition very much appreciated in more markets. And the other positive thing is we see a pretty diverse. So it's not a specific region or area where this has been extremely good, broadly from Americas to Europe to Asia with some exception as in every industry, but we had to broadly increase everywhere. So that's gives us confidence that I believe we are on the right pathway.

Thank you. We have one question here.

Björn Enarson, Danske Bank. Question on profitability and looking at your product categories, are the big difference on profitability between the categories or and also on by geographies, if there are big differences. Is that more an important driver?

So we don't disclose the details by product and geography, but to give you a directional indication on this one. there are, for sure, some products more profitable than other. Washers, as an example, or the products with higher technology content, you saw with Alberto, the iron earlier or the heat pump machines. So there are some differences, but broadly, the different categories of Laundry are in a good level. In terms of geography, that's another, I believe, strength of our Laundry business is that we have -- again, there are exceptions. So there are some markets that are below the average and some markets are. But overall, on a regional level, every region is in a very good situation.

And on your aftermarket sales, how much are you doing, you sell or through partners? Or how does that work?

So you heard from Alberto the overall weight that is similar for Laundry -- of customer care. And we have a concept that is called hybrid go-to-market in customer care. So typically, the approach we have is in high-density business places like in Stockholm, and [indiscernible] here in London. We typically have our own direct technicians. And the rest of the planet, we cover with a site of several thousand external technicians. We believe over the years that this is a good blend to ensure coverage, good development of the business as well as a sustainable SG&A approach because hiring too many technicians when you don't have a density of business typically doesn't have profitability. So we have this kind of sound approach to assess when we should invest with direct people, when not.

Thank you. And with that, we have one more question from Johan Eliason at Kepler Cheuvreux, please.

Yes. Just following up here on the M&A. You mentioned you want to do more, but will it still be sort of in your core professional segment? Are you considering sort of moving into this heavy duty or more into the semi-professional?

So I think some indication was given already early by Alberto. For us, clearly, there must be a fit. The fit is for sure culture where we saw that could be a derailer if we don't do the good assessment on culture and obviously, it must be strategic in business, directionally. On heavy duty, as a company, we used to be there 30 years ago. In general, it's not so easy to be profit accretive on that part of the market and it's a little bit more less resilient, if you wish, though they are a very successful company in this space. So not saying we will have a look at it, but probably isn't anywhere has a lower priority. And then the other part of the market, clearly, there are -- whenever there will be opportunities, we will be open. So if we have all the boxes checked, I think it's a good thing. The fact that we've been acquiring some companies also in Laundry, you mentioned Schneidereit earlier, now Tosei, I think also gives us, as a company, a little bit more credibility as a company who is interested in buying. In the old days, since we were not buying, not all the companies on sale were offered to us. Now both we are looking, but also there are people approaching us, which is, I think, is a good healthy setup for moving forward.

Thank you for that. Thank you, Paolo. With that, we will conclude the first part of this day, and we will now take a break for coffee and see you back again at 10:45. [Break]

Welcome back to the second part of the program. Our next subject is about Food & Beverage in APAC-MEA, and we have Richard Flynn. I welcome up on stage. Richard is based in Singapore, and he's been running our Food & Beverage business in APAC-MEA, the last 3 years I think, but you have more than 10 years of experience from our company. So now the stage is yours, Richard. Thanks.

Thank you very much, Jacob. Good morning, good afternoon, and I will say good evening because it's 10 to 6 in Singapore. So that's my body clock. I wanted to take this opportunity just to share with you 2 things. First of all, we'll look at the food service equipment market in APAC and MEA. We'll look at the way it was structured, the way that we serve our customers in the region, and we'll look at the opportunity areas that we've identified to help us expand the business within the region. Secondly, we will also look at Tosei, but we will look at Tosei vacuum. We will look at the Japanese foodservice market, and then we will look at the areas that we've identified to create value with Tosei. So those are the 2 areas that we'll cover. First of all, let's look at how we're structured in the region. Firstly, we have the head office or the headquarter in Singapore, which is a sales office for Southeast Asia, the dealers in Southeast Asia. Then we have the factory in Thailand, which is producing both beverage and laundry equipment. As a consequence of the acquisition of Tosei, we now have the factory in Japan producing vacuum equipment. And then in Shanghai, we manufactured dishwashing equipment. And we're currently also introducing the localization of modular cooking, and I'll explain more about that as we progress. We support that further by further sales organizations in Dubai, in India, in Australia and New Zealand. But because of the dynamic of the region that we have and the complexity that we have, we also have a distribution model. So we have strong distribution relationships in many countries, in particular, in North Africa, in Morocco and Egypt. We also have strong relationships and partnerships in Asia as an example in Indonesia. So we always continue to evolve the business model, the go-to-market in the region to make sure that we're set to grow with the right conditions. So what do we actually sell. 70% of the products that we sell in the region are produced in Europe. Of those sales, 60% are driven from projects, so a full turnkey solution and 40% coming from the replacement business. Why do we see this mix? And this is because of the market dynamic of Asia. Asia is an emerging economy and therefore, the number of new openings, the number of new outlets is much bigger than what we see in the rest of the world, so in Europe or America. This is confirmed by the data. This data shows us that the market of Asia, as Paolo confirmed for Laundry, for food service is the same. 1/3, 1/3, 1/3 so Asia represents roughly 1/3 of the global market. However, it's a complex market, which I'll explain shortly, but it's growing quickest because of the trends that I just discussed. This is driven by, for example, the number of new outlets of hotel openings -- of hotel chains, QSR chains and restaurants. So we see a high growth. But let's take the time to look at the market because there are some complexities that we need to explain. If you look at the chart on the left-hand side. Here, we see the size of the Food & Beverage market in APAC-MEA. First of all, it is a large market, but we need to understand the dynamics. If we look at the bottom category, refrigeration, which makes up 1/3 of the total market. This is typically lower profitability category. It's dominated by predominantly local Chinese manufacturers. We then see the second biggest category is being cooking. So the combination of modular cooking and combination ovens, and this is typically the highest profitability category. We then also see sizable categories in dishwash and beverage. What's important to point out in modular cooking? It's a big category, but this modular cooking percentage includes Eastern cooking and Eastern cooking equipment is not something that we manufacture. So the western part of modular cooking is much smaller. Then let's look at the chart on the right-hand side. On the right-hand side is our sales in 2023, excluding Tosei, okay? And what we can see here is, yes, we do supply dish washing -- sorry, refrigeration, but this refrigeration is supplied as a complementary product to the projects, particularly in Middle East, Africa and Southeast Asia. What's encouraging for us is that over 40% of what we sell is in cooking, the most profitable category. And of that, over 30% coming from Western modular cooking. Alberto mentioned earlier, as a consequence, we are the leading player in Western cooking in Asia Pacific and Middle East, Africa. We also have the advantage, as I explained, of having the local specialism of a Chinese dishwashing company, giving us a relevant share of dishwashing and the same for the Thai factory in the Thai range for beverages. So what we see, a large market that's growing with lots of complexity and categories that are large but hard for us to target, meaning the target market is smaller by default. As a consequence, we need to be very focused in what we do to deliver growth. And let's look at our key focus areas to expand the business within the region. First of all, China, China as we mentioned a couple of times this morning. Alberto mentioned the successful launch of the hood-type dishwasher in 2023. I think this is one of the best examples of the new organization with that product we were able to bring forward the product road map. So the time it took us to launch the product to execute sales in 2023. And one of the learnings is we acquired a company in 2015, Veetsan that is a Chinese dishwashing company. And with the new organization, we're able to think that like a Chinese dishwashing company. We will continue to do that, and we're launching new products to the core dealer network this year. We're also seeing a return of the chain activity and the chain activity in China is important, historically has been important to our numbers and it's coming back. An example of that last year is that -- at the end of last year, we won back the Hai Di Lao business. Hai Di Lao is a large hot pot chain in China. We won back a significant amount of business for the very large flight-type machines. This is a good signal because in the beginning of the year, we were not getting these opportunities, and now they're coming back, and we have a strong pipeline moving forward. So we're confident in the recovery of the business in China, particularly through the chain business. I just explained how important modular cooking is and the fact that we're a leader in Western modular cooking, and it's the most profitable category. Last year, we decided to invest in the localization of the production of modular cooking, and we're currently working through that process. We live in production, and we continue that process through the rest of the year. So China remains a strong pillar for us to deliver growth. Also India, I explained our business model at the start of the presentation. We've evolved and we understand when do we need to invest to grow the business in the right way. India, we've seen strong growth year-on-year since the pandemic. We're now choosing to invest in a new business model. Meaning that we scale up the presence through investing in our sales and customer care network. And then in Southeast Asia, I explained our mix of projects, so 60% of the business coming from projects. This is particularly true in Southeast Asia. We've been a leading player in Southeast Asia project business for many years, meaning this opening a replacement business. To target incremental sales in the replacement business, we needed to invest, and we've done that again. So last year, we invested in a logistics hub and [indiscernible] Logistics Hub was aimed to localized stock holding, localized credit management and localized sales order processing, so being more relevant for the region. And this is enabling us to target replacement sales and drive the mix instead of 70-30, 60-40 in Southeast Asia to 50-50, giving us a much more balanced business within the region. And then we come to Japan. I think Paolo already shared that for Tosei vacuum, laundry is 70%, the vacuum business is the remaining 30%. Tosei in Japan, vacuum are a leading player with a very, very strong brand reputation. And we see a way to create value together to grow the business even further. So let's spend some time to look at what we're going to do in Japan. First of all, the market in Japan is large. The food service equipment market is large. It's the third biggest globally. You see here on the left-hand side, the product categories. We've highlighted the food and vacuum -- sorry, the food prep and vacuum, which is a sizable category, and where Tosei are a market leader. What's encouraging for us is that cooking equipment here. So cooking equipment for the whole of APAC-MEA is a big category. In Japan, it's even bigger, over 40% of the market being cooking equipment. And the benefit of that for us is that cooking equipment is more Western, so more addressable for us, so a bigger market to target as we move forward. And then when we look at the customer segments on the right-hand side, you see here what we're encouraged by what we see is that the big parts of the market are the same as the markets that we serve in the rest of the APAC-MEA region. So hotels, restaurants and institutions. So we have a larger addressable market to go after in Japan. But first, let's look at the vacuum business of Tosei. Tosei is a leading player in vacuum category in Japan. 60% of the sales come from the table top range, a table top range being the smaller range that is sold to restaurants, hotels and canteens. So we're addressing the right parts of the market. The remaining part being in the larger stationary items, which are for food processing and industrial applications. The interesting part with Tosei vacuum is we have 2 brands. We have Tospack used for the packing equipment, the vacuum packing range. And interestingly, we have Toscook because Tosei realized to complete the process of cooking, you need to have some cooking -- sorry, a vacuum, you need to have some cooking equipment. Toscook is a small table top range of equipment that reheat product and in a way, completes the vacuum cycle, vacuum process. We have another interesting dynamic in vacuum in Japan. We have customers and competitors and sometimes they're the same. So we're working with these companies to supply product into the market. So we have a very solid and stable position in Japan with vacuum, and we see vacuum as growing. Why do we see it as growing because there's trends that are happening globally that mean that the vacuum category will continue to expand in Japan but also around the world? We look at the reduction in food waste as a trend. Vacuum is an enabler to cook and preserve food for a longer period of time, meaning that you, by default, reduce food wastage. We also see that labor costs are rising and operators, restaurants are looking to reduce the amount of work that needs to be done on a daily basis. Vacuum enables batch production meaning that the tasks that were being done daily can be done once or twice a week. So we're saving labor. And then we're also seeing emerging sectors, and this is quite interesting with laundry. So we see, in Paolo explained the scale of the coin-op laundry as an example, in Japan and how many locations there are. We're also seeing vacuum entering into laundry. And this is because space is becoming a premium. And if space is a premium, and if you take Japan as an example, and here, when you have a change in seasons, your customers are looking to go to a coin-op shop, wash their heavy clothes, wash their heavy bedding and then subsequently vacuum them to save space when they store them at home. Vacuum saves around 70% of the space with a futon, as an example. So we see emerging categories for vacuum. This gives us the confidence that the market for vacuum is large as a category globally, but it's also growing at a very high rate. So we're confident that we can continue to expand the sales of vacuum. When we look more in detail about Japan itself, what we will do, we will make vacuum integral to the system. So we will complete the cook and chill system including vacuum, meaning the process will be. We prepare, we cook, we vacuum -- sorry, we prepare, we cook, we chill, sorry, we vacuum, we chill, we reheat. So it's a complete process and vacuum will be integral to that. The reason that we're confident is Cook & Chill is part of the biggest category that I mentioned in Japan. So over 40% of the market in Japan is modular cooking and Cook & Chill, but we have an established range that we need to now get ready and launch in Japan, along with the preparation equipment. So vacuum become an integral part of a complete system of Cook & Chill. We will also look to take the vacuum sales outside of Japan, and we do this in 2 ways -- sorry, 3 ways. The first way. As I mentioned, we have a strong project business. We currently sell vacuum that -- sorry, historically, we've sold vacuum as a complementary product. It's a boarding product. So we don't proactively push. Now we will push. So we will use the existing sales channels to make sure that vacuum is specified as part of a project. Then when we look at Tospack itself, the range is wide, and it goes deep into the category. They also have a technology called Tospack HOT, which is the only offer on the market that is unique in the market where we can vacuum a product when it's still hot. The benefit being it improves food safety because there's less handling, and it also reduces time in the process, which I already explained, restaurants are looking to save time because of high labor cost. We will expand the Tospack sales around APAC. And then the last piece for vacuum expansion is we already sell products in Europe, and we will look to identify models from the range made of Tospack to sell in either Europe or the U.S. So in summary, we believe it's -- we're in a large market that's growing at a quick rate. We have the right structure in terms of the go-to-market. We have the right presence of local manufacturing, supported by an international brand. We've also identified clear ways with Tosei in particular, where we can create value and expand the net sales of the business. And this gives us the confidence to expand business in total of food service in APAC-MEA. So with that, I think Jacob we open for questions. Thank you.

Thank you, Richard. We will now open for questions. So please raise your hand. Gustav Hagéus, please?

Thanks. Could you elaborate a bit on the service offering that you have in Asia to -- to what extent do you have your own organization now purely dedicated to Electrolux? And to what extent do you use subcontractors that would also serve other competitive brands? What's the ratio there?

Okay. As Paolo explained the model for Laundry and Food in this case, is similar. So we use a hybrid model. We normally have in-house technical support to help decile or star technicians, if you like. And then we use a fully trained outsourced network of service engineers within the region for food. So the majority of the technical work is done by a third-party company but fully trained and supported by us directly with direct employees.

And in terms of competition in Asia, to what extent are you competing with local pure local actors? And to what extent are the usual suspects, your primary competitors?

This is an interesting trend for the region because we are -- and if we take modular cooking as an example, it's a big -- the Western modular cooking is a growing category, and we see that because the mix of the kitchen is changing. So an Asian kitchen is having now where it was purely Eastern equipment, it's now having a mix of Eastern and Western, means that the Western modular cooking in Asia is growing. As a consequence, we're seeing local manufacturers starting to produce versions of Western cooking equipment. We are the market leader in modular cooking. So we feel we're well placed to take advantage of that. We, of course, have international manufacturers that are like us are looking to localize. So we have a similar dynamic with international manufacturers that are localizing and the emergence of strong credible local manufacturers.

And final for me, I guess, with the IPO, a bit of the discussion was that you would have great synergies or some synergies, at least between laundry and cooking when approaching a potential client that you would be able to offer both of the products, but it doesn't seem like that often that, that is a full service or even the same people?

No, no. And that's -- the reason is the buying behavior is different. So the buyer for laundry is normally different to the buy of a food. It's a different team, different department. So there's no real benefit to go and approach them as an Electrolux Professionals one. Clearly, if there's an opportunity, the sales teams are working to collaborate to share. But the sales model and the target -- the route to market for Food is very different to the route to market for Laundry.

Okay. So I was wondering about this vacuum business. I think you have highlighted that you have sold it as a third-party product earlier before. Could you size this roughly vis-a-vis the turnover of the business you're acquiring?

Yes. I mean at the moment, because it's a bolt-on product, it's immaterial in the total number. So a very small amount in terms of value and volume.

So it wouldn't give you sort of a direct replacement margin opportunity. It's rather that now you have a product that you will market?

Exactly. At the moment, the sales team because it's a bolt-on product, they use it in a complementary way when we need to complete a full turnkey solution. Now because it's a directly manufactured product, we have the market already to address. So we will push and add focus on to vacuum is part of the sales process.

Hanna Lindbo, DNB, please?

Yes. Thank you. There seems to be some growth opportunities within TOSEI on the food side. So my question is, what is a reasonable growth rate to expect within this area coming year?

Okay. I mean we're at the early stages of exploring the synergies. We've identified directionally the synergies that we can -- or the value creation that we have between the 2 companies. First of all, I think Alberto already explained, the learnings from previous acquisitions is; we're very focused on stabilizing and keeping a very solid, stable performance of the vacuum business. That's our first priority. We can see clearly the ways where we can add and where we can add value to the TOSEI customer network. But at this stage, I would say it's too early to say exactly the size of that at this point in time. But we see significant opportunities to add the product categories that I shared.

We have one more question.

I have a follow-up. I'm not sure who should be most fit to answer this. But in terms of the management that was in place with TOSEI and sort of their background being a PE-owned company and now in your hands, are you intend to keep the entire staff? Or are they motivated to stay in place? How do you work with that? And if you can give some background, was there a management PE buyout at the time 3, 4 years ago? Or how did it come in the hands of private equity to begin with?

I think, first of all, again, Alberto made the point with the learning of previous acquisitions. The people, although you don't buy the people, the culture of TOSEI, in this case, it's important that we retain. So there are key people that are important for us to work with and we're moving forward to keep within the organization. As part of stabilizing the current performance and continuing a solid performance. In terms of the previous ownership, they had various different forms of ownership, mainly being financial backers.

But the entire management team is still in place and intend to be so?

Correct.

Thank you. I think that was it. No other questions, and we don't have any questions from the online audience. So thank you very much, Richard. Next one on stage is Fabio Zarpellon, our CFO, who will give us a financial update. Welcome, Fabio.

Thank you. Jacob, and good morning and good afternoon to everybody. During the next 20 minutes, I will give you an update how we are progressively moving towards the financial targets. So let me start saying that the financial targets are confirmed. They are the ones we announced 4 years back at the time of listing. And it is about profitably growing the business, it's about managing this business with an asset-light approach, keeping a low leverage balance sheet and secure with the combination of these ingredients, strong payout in terms of dividend equal to roughly 30% of the net income. We will go through the coming slides how we deliver on it, but let me anticipate that we are progressively delivering on 4 out of the 5 targets. We are missing the last 2 years, the ones related to operating working capital, but we have a clear and actionable plan to deliver on it. This is our recent development. After the COVID time, 2020, as was anticipated earlier also by my colleagues was a tough year. Our customer stopped the operation, and we suffer extensively in terms of net sales. But you saw that progressively after the COVID 2021, 2022 and 2023, we have been organically growing the business. But not only we have mix up, it was explained earlier. We have been growing the contribution from new products with higher margin. We have been increasing the weight of customer care. We have been increasing the weight of chains, meaning not only we have grew the business, but we have somehow mixing up. And the mix up is also bringing higher margin. You see the development of the profit and the profitability of this company since the listing is really remarkable. Last year, we have delivered SEK 1.3 billion in EBITDA and a margin over 11%. And what matters is that this development of and progression of EBITDA has been consistent in Food and Beverage, where last year, we reached SEK 766 million in EBITDA generation over 10%, but also in Laundry, strong profitable business. Over SEK 700 million in EBITDA, 16.6% margin, 50% more than what we delivered in 2018 pre-COVID, 50% more. So clearly, this has a huge impact in mixing up, let me say, overall the profitability of the group. And the combination of strong EBITDA performance with a cost-efficient management of the net debt has allowed us to consistently increase the net income since the listing and also have a strong payout in terms of dividend to our shareholders. Our Board of Director has been proposing to the shareholder a dividend payout of SEK 0.8 per share that you see also here, it is a provision of 60% compared to the first payout that we have related to the year 2021. So I would say remarkable progress along this area. Moving into 2024. What are somehow the trends that I'm seeing and are also reflected into the performance now in January, February and part of March that we are somehow ending soon. From a direct material perspective, already in the second part of the year, we saw some decreasing of the raw material cost. And this is continuing in the first part of this year. Transportation cost and transportation cost pressure have been released also in the second part of last year. And now somehow we see the transportation cost stabilizing year-over-year. We are monitoring carefully the situation of the Red Sea. It has some implication for us clearly. But in terms of service level, but I would say we are taking action to secure that this is not going to affect our customers. And when it comes to implication in terms of logistic cost, I would say they have not a material effect on our performance. At the same time, and it was very stressed by my colleagues is that we are continuing to invest. We are continuing to invest to bring innovation to the customer, to the market at creating value to the customer and thus securing higher than average profitability. And this is related to R&D, but also on digitalization, digitalization on the products and digitalization of the processes of our company. And the combination of this clear is continuing to strengthen our performance in the marketplace. Difficult time to somehow to have a more forward-looking picture what will happen in the second part of the year and so forth. But what I'd say -- I would like to stress with you is when we look back what happened in the last 3 years is that whatever happens in the marketplace. This group has showed capabilities to adapt to the market environment. If you think about 2020, when the market dropped, our customers were closed, we took actions immediately to resize our capacity. We put on all the investment. We put on all the spending, and we delivered a solid EBITDA and cash flow performance also in that time. In the sequential year, we face disruption in the supply chain. We face increase of raw material costs, and we have been able to transfer this cost increase to the customer. I believe that this is matter. These are the trends that we see today. There could be more, but what I believe is important to share with you is that this group showed capabilities to proactively adapt to market trends and transform the market [ treating ] opportunities. I was talking about 1 target that we missed. One financial target to miss, that is the operating working capital. First, we have been delivered on the target. In 2021, we were below 15%. What happened afterwards? Afterwards, we have been deteriorating this ratio in terms of weight, operating working capital state, not because of receivable because the quality of receivables and duration of receivable is good. But we deteriorate because of the development of the inventory. During 2022 and the first part of 2023, we face disruption in the supply chain, not only us, but also our competitors and many other industry. And as management, we took the cautious decision to increase the inventory level. And this decision was adding the purpose that whatever happens, we were going to secure a right level of service to our customers. Now with the stabilization of the supply chain, we have -- we are bringing back the inventory to a normal level. In the second part of last year, we activated the program, that we call operative working capital reduction program. And we start already to see the fact. Here, you see on the right part of the chart the development of the inventory December last year compared to the year before, and we have had a remarkable reduction. The index is a rolling 12-month index. So it will come also in terms of ratio along this year back towards our financial target. With a strong improvement in operating working capital. It will come also strong continued perform of cash flow, that by the way, last year, we were back to normal. You see in 2023, we delivered close to SEK 1.5 billion in operating cash flow. We are back to the historical good performance of this group. You see pre-COVID time says that this group is able on top of the investment to deliver an operating cash flow in line with EBITDA and over SEK 1 billion year-over-year. Even the year of COVID 2020, the cash operating cash flow generation was close to SEK 600 million. And strong cash flow means also ability to fund the company, to fund the organic and inorganic development of the company together with the deleverage. Last year, we end up the fiscal year with less than SEK 1.4 billion in terms of net debt and a ratio, net-debt to EBITDA below 1. We did also the exercise to create a sort of pro forma leverage, including the acquisition and the impact of acquisition of TOSEI based on 2023 number. And you see that the ratio is still below 2x, so well below our financial targets. So confirm that also from a leverage perspective, we have a pretty strong group. When it comes to the structure of borrowing, let me say we have, I would say, overall a pretty sound maturity profile. On top of the 2 terms loan that we activated at the time of listing we have put in place 2 additional program. One commercial paper program last year that helped us to, let me say, manage short-term liquidity needs and as we announced early this week we have launched a medium-term loan program, that we are going to present tomorrow to the financial community. The purpose of this medium-term loan program is to refinance the bridge finance that we have activated in January this year for the acquisition of TOSEI. So I would say, a pretty strong and sound maturity profile that brings us in the situation to manage the organic and inorganic development of this group, I would say in the year to come. Also important to stress that we are operating with no covenant. And on top of it, we still have around EUR 200 million revolving credit facility to face the needs of the group going forward. My colleagues gave you a pretty good overview of the market and the business of TOSEI. And now I will try to wrap up some important financial around this company. TOSEI last year delivered roughly SEK 900 million in terms of sales and SEK 100 million. 2/3 of business is laundry, 1/3 is vacuum. Profitability last year was around 11%, so in line of what we deliver as a group. Vacuum profitability somehow was above this average whilst laundry is somehow below this average of 11%. Historically, the TOSEI company that deliver stronger profitability was pretty close and, I would say, around our financial target. But what happened last year, in particular, the company faced a weakening of the market in Japan as well as a significant increase of the imported component. But when I look into the future, what I clearly see looking at the historical performance of the company, but also the possibility of value creation through the synergies, more on the cost side on laundry, more on the sales side on vacuum to be in condition really to bring the company at the financial target that we have as a group in terms of profitability. Short term, this year, what will be the impact and the contribution of TOSEI? We expect the company to grow, to improve the underlying profitability. Clearly, short term, we will have a impact, impact related to the integration cost we anticipated at the time of announcement of the acquisition, integration cost in a range to SEK 40 million to SEK 60 million during the year 2024, 2025. We are working on it, is a work in progress. Probably we are in the low range, low part of the range. We are going to have roughly SEK 15 million of cost for integration this year and the remaining one in 2025. On top of it, in the first quarter, we are going to report also the inventory revaluation, the inventory step up of roughly SEK 30 million. So overall, very remarkable acquisition that, as you understood, will be contributing to the profitable growth of this group overall, but also in the 2 large segments in the Food & Beverage and Laundry one. Acquisition that as Alberto was anticipating are really an important contributor, not only from a strategic perspective, super, super important, but to increase the size and the profit and the profitability of this group. In the last 3 years, with these 2 acquisitions, we increased 20% turnover. We increased more than 20% the EBITDA generated, with an accretive historical but also potential development of the margin. So really a remarkable contribution. Acquisition that also are helping us to rebalance the opportunities profile, and I will say, the risk profile of this group. We are living in an environment that is continue to change. Alberto was anticipating that when we listed the company, was the time of COVID, very, very difficult environment. When COVID was over, we said, now it's time to focus back to business and new disruption came. We don't know about the future, but probably all the disruption we come. Recently, and more and more, there are geopolitical change a geopolitical indication. But I would say that after this acquisition, we have been better balanced the risk profile of this group. We are stronger in Asia. We are strong in a resilient market that is Japan. We are stronger, larger in laundry that have been proven also during pandemic to be more resilient than the other businesses. And we are less dependent on Europe. When I start to work in this company was many years ago, we were a European company. Now the dependence of the contribution of Europe is close to 50%. So we are a different, more balanced group. We have a different global group. Now a few words about our goals, our financial goal in terms of profitability. The pillars to deliver to the 15% are the same -- are the same that we announced at the time of the acquisition. And I believe I've been showing during this presentation, we are delivering on them. Let me start with the pricing execution. Price is important. And this company has been showing that every year in the past and also during tough time like 2022 and 2023, being able to transfer to customer any cost increase related to raw materials, transportation, salary, so strong pricing execution. It is about growing the volumes taking market share. What we have heard in terms of investment of innovation are really a key enabler on this part. But we are not only investing genetically A larger portion of the investment, a focused part of the investment is dedicated to grow the high-margin businesses, the innovative products, changes customer care. To support this investment and improve also the margin, we have activated together also what we call a cost-out initiative. So meaning that we have a clear action plan in the factories, in the sourcing area, in the distribution to take out cost. One example is coming from the digitalization. Alberto was explaining earlier about how large is already today the oldest that are managed digitally. So we are moving manpower into digitalization. And clearly, this is an example how we can generate more business with less SG&A. So I will say a pretty balanced journey with a combination of 3 factors: pricing, growth mixing up and cost out. And progressively step by step, we are moving towards the target. So my conclusion out of this presentation. I believe that after the listing, we have been proving that we are a group that is delivering solid EBITDA and cash flow performance every year. We have a solid balance sheet even after the acquisition of TOSEI, the leverage is below 2x, so absolutely very solid company. We have been delivering on the organic growth and accelerated organic growth with significant accretive acquisition. We have a laundry business, a superb laundry business, growing faster than the other business at least recently with high margin and now getting stronger with the acquisition of TOSEI. Last but not least, we have a clear plan to improve margin. This plan on which we are executing and the development of the profitability in the last 3 years is proving that we are not only planning but also executing on it. And last but not least, I believe when you look into the leverage of the group and the tools that we activated to finance the growth, we have also the means not only to grow organically but to further enlarge this group through M&A. So thank you for your attention, and I open for questions.

Thank you, Fabio. As always, we open up for questions. Gustav is one again.

Thanks. On TOSEI, if I recall correctly, when you issued the press release that you're acquiring it, it was 22nd of December, I think you said that it was -- the revenues were SEK 1 billion, but they turned out to be SEK 930 million. Did they have a poor finish to the year? Or is that a general comment what they have been doing over a few years? Or is there an FX component?

They have had somehow a poor end of the year. That is somehow behind the net sales performance of the company. At the same time, I have to say that this poor performance was more related to the laundry business because somehow the market was softening in the last part of 2023. At the same time, management did put in place actions to review the cost base. So I will say that somehow was missed the, let me say, the target in terms of sales, but definitely was met the target in terms of EBITDA performance. And now discussing also with management, we see somehow positive trends in the marketplace. And we have a clear action and synergies, as explained by our colleagues that somehow regardless of market development, we have the opportunity to restart the growth of the business, improving the profitability.

And following up on that, could you confirm if the -- did the company shrink in 2023? Was there still growth but less so? And secondly, you're right here that you -- the margin suffered a bit related to pricing or you didn't raise prices. Have you been able to raise prices and have competitors followed?

So one by one, in 2023, TOSEI decreased sales. The decrease was mainly related to the Laundry business, whilst the vacuum was somehow flat or slightly positive when I look overall the year. The company did face increase of direct material cost. Part of the component, the use are imported from outside Japan. Japanese yen weakened. So they suffer significantly in terms of increase of our sourcing cost. Management latest towards the end of the year, put in place pricing action, then now we expect we'll have the effect in latest part of this quarter, but mainly in quarter 2 of this year. So I'm pretty confident that we will see both of them, we see the top line to come back with real start of the laundry market. But for sure, the bottom line to continue to improve, thanks to pricing from one side, volume recovery. And let me say last part of this year and mainly in 2025, thanks to the action that we have put in place on the synergy side. For example, our colleagues in purchasing have already started to work with the colleagues of TOSEI to review the sourcing. So with the purchasing power of Electrolux Professional, with a diversified sourcing of Electrolux Professional, we can offer good alternative to the just acquired TOSEI in terms of differentiation sourcing at lower cost.

Yes. Karri Rinta. I think you made a comment during your presentation about the outlook. And if I didn't misunderstand it was first half look good, but who knows what will happen in the second half. So was that a correct reading of what you said?

Okay. First, market, we see market back to normal. Alberto was anticipating that both in Laundry and Food & Beverage we see the market normalizes somehow to the pre-COVID time. It's not yet everywhere China is not yet back to what it was pre-COVID time. We have some economies in Europe, Germany, somehow Central Europe that are suffering more than others. When commenting the trend is somehow how we see the trend coming into the first part of the year. And if nothing has happened, I will say that this is somehow the trend we expect to leave for, let me say, the quarters to come. My overview was to say, we are so used to see changing market condition that at least this is the perspective we see in the first part of the year. I have no reason to say it will not continue, but I have not any condition to say the opposite. So overall, market back to normal. The pressure in terms of inflation as moving out, what we see is more inflationary item remaining on the salary, positive contribution from direct material neutral on transportation. So I would say, overall, good ingredients to see 2024 being growing business both in terms of top line but also bottom line.

And then a quick follow-up, if -- when you say market back to normal because in laundry, you could argue that you have benefited both from the increased hygiene focus as well as from higher energy prices, which we have had in the last 2 to 3 years and maybe one could also argue that what you saw in Japan is a normalization back to pre-pandemic levels, i.e., that these teams will not be as supportive going forward. So specifically on laundry, is the outlook as solid as it is for the Food & Beverage business?

I would say, absolutely, yes, because the underlying market conditions are good. Our execution of the strategic priority is proceeding according to plan. In terms of product innovation, in terms of mixing up with the development of customer care. And from a sourcing perspective, the raw material as well as the action in terms of cost out are going to contribute in Laundry as well as in the Food & Beverage. So I see the development of Laundry to continue in the quarters to come. Short term, we will see when we look into the -- when it looks into quarter 1, the start of the year has been positive January and February. To be said when it comes to March, we need to consider that last year, we had a pretty strong March. I will say, an outstanding March but in a few weeks, we will have the future picture. But beyond -- going beyond some of the performance of quarter 1, I continue to see both the segment profitable development.

I was wondering about the CapEx and R&D. Can you sort of say anything about the trend going forward? Will it stay at the share of sales or in absolute terms? And will the TOSEI acquisition have any sort of impact? Will you see some extra CapEx or R&D because of this acquisition? And thirdly, are you capitalizing R&D? Or is it just pure CapEx that we are seeing here?

Overall, in the recent year, we have been investing R&D above the industry average. We have -- Alberto anticipate we have an investment of R&D around 4% that I expect somehow to stay also for the years to come. This is because we strongly believe in the need to continue to bring to the market innovative products that are creating customer benefit. But at the same time, they allow us to mix up. Because bringing product to the market that have a higher than the older product profitability, you have clearly a positive mix up. TOSEI has a level of investment pretty close to the ones of Electrolux Professional in terms of R&D spending. Normally, Time as a group we don't capitalize the R&D cost, but very, very few exception when we have very, very large projects. So -- but I will say that in this 4%, there are marginal contribution from the capitalization. The R&D spending is the spending. So cash is equal to cost, I would say, in terms of perspective. When it comes to the CapEx side, we have given historical guidance that CapEx is over the business cycle around a couple of points in terms of net sales. Historically, we have been below that threshold, but a couple of years, if I remember correctly, 2021 that was related to the building up of the factory in Thailand. And then we end up last year below -- well below 2%. When I look into the picture going forward, probably for some quarter end of this year and next year, it will be somehow above 2% because we are going to do important investment in terms of products, both in laundry and in food and beverage. But I will say over time, I would say that the guidelines of 2% is good enough, including also TOSEI.

I have one question from the web here. It's about the MTN program. Is that a signal that you will accelerate the M&A agenda?

So we announced the MTN program early this week. The program is a SEK 5 billion program. That's somehow you understand is higher than what we have invested in the acquisition of TOSEI. Here, as a company, M&A is part of our agenda. It's part of our agenda to grow the business profitability, addressing our strategic priorities. This is the reason why we created this program in order to be proactively in condition also from a funding perspective to finance potential M&A that are coming on our way. Clearly, this is an enable, but what is important is the strategy execution also on this part.

Thank you, Fabio. We have no further questions. So thank you very much. I'll take that one. We'll now ask Alberto to come on stage again to conclude the day. So please, Alberto.

Thank you, Jacob, and thanks all. Thanks to everybody for having spent the time together and very few words. I'm reusing slides that were part of the previous section. You remember the things that I was looking for having you bringing home in some way was to understand that, we are making this company stronger year after year, a company that is already in the historical high in term of sales, in term of EBITDA value in terms of cash generation that has still room for improvement for what concern the EBITDA margin. We are making this company stronger and as a consequence in the condition to deliver against the strategic targets. The other thing is that we are also delivering on the commitment we had when we listed. We are delivering and having a focused business, a focused organization, an agile organization, an organization that is designed to meet and to fight with the competitors in this market. We are also working and delivering against the commitment to accelerate the growth inorganically, having the financial meanings to support this inorganic growth. And the recent acquisition and obviously proving that we can do it in a market that is still fragmented beside the concentration that we showed in some part of it. It is still a market where there is a pretty high fragmentation the food and beverage market, half of it is still fragmented with thousands of companies slightly less for laundry but surely it is a market that is offering the possibility to accelerate the inorganic growth. And with all these things together in some way, it's really a matter of saying the company is different from the one that we brought to market in 2020, 4 years ago, these days, basically a completely different environment because on that time, the main concern was surviving and thinking about if this industry would have been the same in years to come. We have been taking some commitment. We are making progress against our target. At least we believe there are all the conditions to continue to keep the commitment to deliver against the financial target. And with this said, I really thank you all for having spent the time here and the ones that have been following via video. So thanks to everybody, and we are here eventually to answer additional questions during the break. Thank you. Thank you, Jacob.

Thank you, Alberto, and thank you to the audience here in Stockholm, and thank you to the presenters, too. And thank you also for all of those viewers online. This recording will also be available on our website later today. Thank you, and goodbye.