Earnings call transcript: SEB Group sees steady growth in Q4 2025

SEB Group reported a 3.2% increase in total revenue to 2.27 billion euros in Q4 2025, driven by strong performance across product categories. The company’s operating profit rose by 10% to 800 million euros, while its operating margin improved to 9.7%. Net profit stood at 230 million euros, with an adjusted figure of 422 million euros. According to InvestingPro data, the stock’s technical indicators suggest it’s currently in overbought territory, with a remarkable 200% price return over the past six months. Despite macroeconomic uncertainties, SEB remains confident in its growth trajectory, aiming for an 11% operating margin in the medium term.

Key Takeaways

• Total (EPA:TTEF) revenue increased by 3.2% to 2.27 billion euros.
• Operating profit rose by 10%, reaching 800 million euros.
• SEB’s consumer business grew by 9%, with significant growth in EMEA and the Americas.
• The company introduced several innovative products, including silent air fryers and versatile vacuum cleaners.
• SEB is cautious about providing quantitative guidance due to macroeconomic uncertainties.

Company Performance

SEB Group demonstrated solid performance in Q4 2025, with both total and organic revenue growth. The company’s strategic focus on innovation and geographical expansion paid off, particularly in the EMEA and Americas regions, which saw growth rates of 10% and 9.4%, respectively. InvestingPro analysis reveals the company maintains strong financial health with an overall score of 2.97 (rated as "GOOD"), particularly excelling in price momentum with a score of 3.64. For deeper insights into SEB’s valuation and growth potential, subscribers can access the comprehensive Pro Research Report, which provides detailed analysis of key metrics and growth drivers. Despite challenges in the Asian market, SEB maintained its leadership position in key product categories, such as professional coffee machines and rice cookers.

Financial Highlights

• Total revenue: 2.27 billion euros (up 3.2%)
• Operating profit: 800 million euros (up 10%)
• Operating margin: 9.7% (up 60 basis points)
• Net profit: 230 million euros (422 million euros adjusted)
• Proposed dividend: 6.9% increase year-on-year

Outlook & Guidance

SEB Group is optimistic about its future prospects, expecting continued organic sales growth in 2025. The company aims to further increase its operating profit and achieve an 11% operating margin in the medium term. The company’s strong market position is reinforced by its 20-year track record of consistent dividend payments, as highlighted by InvestingPro. Additional ProTips and detailed financial metrics are available to Pro subscribers, helping investors make more informed decisions about SEB’s growth trajectory. However, SEB remains cautious in providing specific quantitative guidance due to ongoing macroeconomic uncertainties.

Executive Commentary

"We see that consumers consistently keep equipping themselves with more small domestic equipment," said Stanislas de Vromont, CEO of SEB Group. He emphasized the company’s mission to enhance consumers’ everyday lives and expressed confidence in SEB’s ability to deliver another year of growth.

Risks and Challenges

• Macroeconomic Uncertainty: Global economic conditions could impact consumer spending and SEB’s growth projections.
• Supply Chain Issues: Potential disruptions in the supply chain could affect product availability and costs.
• Market Saturation: Increased competition in key markets may challenge SEB’s market share.
• Currency Fluctuations: Exchange rate volatility could impact financial results.

Q&A

During the earnings call, analysts inquired about the potential recovery of the China market and the company’s strategies to address working capital challenges. SEB executives also clarified financial expenses related to refinancing and discussed the pipeline of professional business deals.

Full transcript - Sigdo Koppers (SK) Q4 2024:

Stanislas de Vromont, CEO, SEB Group: Good morning, ladies and gentlemen. Welcome to this conference for the presentation of Rudseb twenty twenty four Full Year Results. I’m Stanislas de Vromont. I’m the CEO of the company, and I will be doing this presentation together with Olivier Casanova, our Chief Financial Officer. I’ll pass this one.

Right. We’ll start with a review of the highlights of the key elements, the key events that happened in 2024. It has been a very rich year in terms of pursuing our strategic construction of the group with a few elements that illustrate and highlight that. We reinforced our positions in the professional culinary equipment with the acquisition of Sofilac with the Charvet and La Conge brands back in Q1 last year. We’ve announced the opening of a professional hub in China for professional coffee in Shaoxing.

We have also announced the opening of a refurbishment center in East Jotin in France to prepare for the development of the secondhand products in the future. We’ve expanded our geographical coverage in the small domestic appliance and cookware business in Saudi Arabia doing a joint venture with our historical partner. We’ve made inroads in expanding production of versatile vacuontainers in France, in Veronneau in our plants. And then on less business related topics, we’ve offered our employees an employee share ownership program that had a very high subscription of 28%. We have confirmed and shared our ESG 02/1930 strategy and roadmap back in December with the financial community.

And that strategy has been validated by SBTI on our net zero trajectory for 02/1930 and 02/2050, sorry. And last but not least, we have announced back in January in 2025 the first closed loop aluminum pans recycling program that is starting in France now. So beyond and over those events, it has been a rich year in 2024. It has been a year characterized by sustained growth in kitchen, in small domestic equipment. First, the consumer business has been buoyant, 9% growth outside of China, Six Percent growth including China.

Professional has had a pretty decent year considering the very high comps of 2023 with an underlying market of 7% growth when it comes to the recurring activities. And we have confirmed our operating results achievements with a growth over 10% of our operating profit, leading to an operating margin of 9.7%. When I look at the financial highlights and it will be one of the topics and the focus points of this presentation, we’ve already shared a 5% organic growth back in January, reaching a record high billion. We confirmed an operating profit of million, probably in line with, I think the consensus on our guidance, 10.5% increase on last year, 9.7% operating margin, I said that. As far as net profit is concerned, we have a $230,000,000 net profit as group share.

If we adjusted with the fine from the competition authorities in France, that would come out at million against million last year. Our net debt is slightly increasing at billion with a stable leverage of 1.8 times EBITDA. And we will propose at our general meeting in May to serve a dividend of per share. That is a 6.9% increase versus last year. I’ll hand over to Olivier to take us through the details of these numbers.

Olivier Casanova, Chief Financial Officer, SEB Group: Thank you, Stanislas. So let’s move to sales first, and we will proceed rapidly because we already presented the main elements back at the January. So first, our total revenue reaches $800,000,000,266,000,000, showing a reported growth of 3.2%. This is made of organic growth of 5%, very robust organic growth, a negative currency effect. I will come back to that.

And a slight scope effect, which is mostly due to the acquisition of Sofilac. Here, you can see the details of the revenue of the currency effect. First element, it’s million for the full year, which is half of the impact in 2023. It’s been reducing, as you can see in the box, let’s say, quarter over quarter. The vast majority of this impact, of course, is in some emerging markets for, in particular, in Turkey, in Russia, in Argentina, and in Egypt.

And you know that for in these countries, we have the ability to pass price increases to compensate for the devaluation of these currencies. And then the last, let’s say, major impact comes from China with a small decrease of the CNY against the euro of only 1.7%. But of course, it’s applied on a large turnover and this explains the scale of the impact. So by division, by business activity, you can see that we had robust sales growth of 6.3% like for like in consumer and a year of consolidation at high levels on professional as pointed out by Stanislas. So let’s start with Professional.

A year of consolidation on high level, I recall that we grew by 27% in 2023. So we are clearly above, let’s say, the long term trend line. The slight decrease is due principally to a lower level of deliveries on two very large contract. And the recurring business was up by 7%. So in line with, let’s say, the long term trend that we pointed out somewhere between 510%.

It was also a year of strategic advances. Two important news pointed out by Stanislas. The first one is we announced the start of the construction of a new hub in China, which is both a plant, but also an R and D center, a procurement center and a marketing center. And also two important developments in professional culinary, the first one in 2024, the acquisition of Sofilac and more recently, the acquisition of La Breguet du Beers. So moving on to consumer, as I pointed out, we operated we achieved 6.3% despite the fact that we operate in a very complex geopolitical and macroeconomic environment.

I think everyone is aware of that. Within that general context, it’s worth pointing out that the small domestic equipment market remains well oriented, remains buoyant overall. And this is driven by innovation, and we’ll come back to this in more details. So overall, strong organic growth of 6% and even 9% excluding China. You can see that this was the let’s say, the fourth quarter of last year was the seventh consecutive quarter of organic growth exceeding 5% in the Consumer division.

Let’s look now at the three main geographic regions. So starting with EMEA, we had a return to dynamic growth in Western Europe with organic growth of 4.8%. This is widespread with particular strong growth in France, in Southern Europe, in Belgium and The Netherlands and in the Nordic countries. This good growth momentum is due in particular to cookware, the cookware division, but also the rollout of innovation in small domestic appliances. We’re talking electrical cooking, floor care and also full auto.

This was complemented by strong organic growth exceeding 20%, twenty two point five % to be precise in Central And Eastern Europe. In these regions, the markets remain buoyant and we had also the benefit of successful product innovations, again, in versatile vacuum cleaners, in OLS fryers, garment steamers, full auto cookware, etcetera. And in this region, we had also an important strategic development. We acquired the majority of our distributor in Saudi Arabia, and we think there are, let’s say, very promising prospects in this country in the years to come. Maybe one, let’s say, point of detail on this growth to the first element on the left hand side.

As you can see, our top 20 markets are in fact growing last year and percent of them are growing at more than 108% are growing at more than 5%. So it shows that the growth was strong and the growth was also widespread in terms of geography. And then on the right hand side, we’re pointing out that 50% of that growth is due to innovations and you see the pictures of some of these products that grew particularly strongly last year. But also the other, let’s say, important point to note is that 50% actually came from the core business. And this is due to, let’s say, the continuous stream of new product that we are introducing and which is supporting, let’s say, the growth in our core business.

In The Americas, we had a solid performance in North America. The market itself is slow, but we consolidated our leadership position in Cookware Ware and we renewed we had renewed growth in Linnan Care, thanks in particular to the innovation which is leading to trade up. We had also new customer listings and a range extension. In Mexico, the market remains very well oriented and we had continued market share gains in cookware, full auto and fans in particular. And we extended also our ranges in new areas in particular in the field of electrical cooking and floor care.

And then in South America, we had very strong performance in Colombia with double digit growth excluding fans and a positive performance in Brazil, particularly driven by fan sales in H1 with the El Nino impact. Moving on to Asia now. So overall, we had flat performance in Asia. We have renewed with growth in Asia, excluding China, up 2% for the year. This is due in particular to good performance in Australia, Vietnam and Malaysia.

And as we pointed out, let’s say, situation remains challenging in Japan and South Korea, which are suffering both from weak consumer confidence and also weak currency. In China, support confirmed its leadership. We are outperforming the market. The market remains, let’s say, relatively weak with weak consumer confidence and a relatively promotional market. But in that market, we continue to outperform.

And on the next slide, we are pointing out, in fact, the two main reasons for this outperformance. On the left hand side, it’s the strength of our innovation pipeline. As you can see, we are introducing exciting new product in existing categories, such as wok with the titanium wok, the infrared rice cooker in the middle or blenders. But we are also continuing to expand into new categories. You have a water dispenser on the right hand side and also on the left products which are addressing the new, let’s say, nomadic needs.

On the right hand side, the second reason for this outperformance is the excellence in online marketing, especially with the new channels of social commerce. And you can see here that we had in 2024 more than 2,000 live streams per week. And we are using over 3,000 influencers to support, let’s say, our marketing activation. So these are the two main reasons which explain the very good performance of support in this market. So overall, if I summarize, we achieved a very solid 10% growth in EMEA in 2024 and nine point four percent in The Americas and a stable performance in Asia.

So let’s look now at the financials. So as you heard, $8.00 2,000,000 of ROPA, which is up 10% on last year, margin of 9.7%, up 60 basis points on last year. And this is due in particular to a very strong fourth quarter. We were up against a very tough comparison last year with a very high margin, but we managed to surpass that last year’s level at 14.1% operating margin in Q4. So let’s take a look now at the Ofa bridge starting with the first, let’s say, few elements.

The first big contributor to the increase in profit is, of course, volumes in consumer. You can see here that we had 169,000,000 coming from increased volumes in many categories, cookware, of course, but also electrical cooking, floor care, linen care, food prep, to name but a few. I will then comment on the million, which is the reduction in our cost of goods sold. This is coming from several factors. The first one is the carryover from the 2023 reductions, which and we had the benefit of this for the full year, but also further cost reductions in ’twenty four in raw material and finished goods sourcing.

We had also the benefit from the volume effect in increased cost absorption, fixed cost absorption. And this both of these elements more than compensated the two negatives, one which higher freight cost, shipping cost and the second one, of course, salary inflation. And this enabled us this cost reduction enabled us to reinvest in price reduction to drive the volume. This is a natural cycle. You remember that in 2022, we pushed through price increases to compensate for the cost increase.

And naturally, when costs are coming down, we are reinvesting part of this cost decrease into price reduction for customers to drive volume. And we saw this negative impact in the price mix, which is negative $20,000,000 It’s partly offset, of course, by a positive mix effect. Now, let’s look at the other line the other elements of the bridge. You can see that we had a slight increase in our growth drivers. This is, of course, to sustain the volume development through enhanced innovation and product development, but also activation.

We had also slightly higher commercial expenses and in fact, stable year on year G and A, which is showing, in fact, the cost discipline that we continue to apply to the business. And then finally, million of negative currency effect, which is in fact largely almost 90% is in the emerging markets that I talked about earlier. And as you remember, we have an ability to compensate through price increases the majority of this impact. A quick, let’s say, comment on our growth drivers. You can see that we moved from 10.7% of sales in 2023 to 10.9%, so a slight increase to support both our product innovation pipeline and also an increased activation, in particular to support our online sales and our D2C online sales.

So to conclude on the profit and loss account, you can see here that we delivered net profit of $232,000,000. This, of course, includes the impact of the decision that we took to provision the entire amount of the fine from the French competition authorities. You are aware, I think, that we have filed an appeal in the French court to request, in fact, the cancellation of this fine, but we have decided to provision for the time being the entire amount. If you restate for this exceptional, let’s say, element, we delivered net profit of $422,000,000, which was up on the $386,000,000 of last year. Let’s take a look now at our working capital.

So the working capital, as we explained, I think, during our H1 results call, we are in the upper end of the 15% to 17% range. This is explained largely by the impact of the Red Sea crisis, which is increasing the amount of stock on water. This represents approximately 80,000,000 of impact, so one percentage point of sales. And we had also, of course, a strong Q4, and this is leading to slightly higher receivables than the year before. If you adjust for these two elements, we are well below, let’s say, the 16% average of the last few years.

You can see here the range that we’re talking about, and this is a graphic illustration of the evolution over the last few years. Let’s take a look now at cash flow free cash flow generation. So, the first element is what we delivered over billion of EBITDA. We had, of course, the negative impact from working capital variation. This working capital impact is, let’s say, heightened by the fact that the position at the end of twenty twenty three was below, in fact, our target range.

CapEx is in line more or less with last year. It reflects the start of the Shaoxing investment on professional coffee and also the finalization of the investment in our new logistics platform for Cucua in Europe. You can see also a slight increase in cost of financial debt. This is due to the impact of the refinancing that we have done at the end of twenty twenty three and in 2024. And this leads to free cash flow generation of $260,000,000.

If you, let’s say, adjust for the working capital variation, excluding the working capital variation, we are around 500,000,000 and above, in fact, the average of the last five years. So this translates into this bridge of net debt. So I commented, of course, on the free cash flow generation. You can see here the impact of the dividend distribution, the 150,000,000 of SEB SE shareholder distribution, but also the impact of the distribution to the minority shareholders of Super. The acquisition, let’s say, amount of 139,000,000 is largely, of course, the acquisition of Sofilac and to a lower extent, the acquisition of our distribution partner in Saudi Arabia.

And then finally, you have the impact of the buyback of shares that we carried out at the beginning of twenty twenty four to take advantage of the exit of Peugeot (OTC:PUGOY) Avest. And this leads to a net debt of 1,926,000,000, which represents a stable net debt to EBITDA ratio of 1.8, in line with last year and totally, let’s say, within our comfort zone below two times. One final comment on our balance sheet structure. So we have a very strong balance sheet with a lot of liquidity. You can see here that we have in excess of $1,000,000,000 of cash on balance sheet.

We have continued to strengthen our financing structure, in particular with two new refinancing, one banking facility of nearly 500,000,000 and a twelve year private placement of 150,000,000, which was the longest financing ever realized by group Zeb and demonstrating, of course, the confidence of lenders in the group. So if we take into account the cash on balance sheet plus the billion of undrawn but committed credit lines, we have available liquidity of billion. Finally, you can see here, we are proposing a dividend distribution of per share, which is up 6.9% on last year. And over the last fifteen years, this translates into around 7.5% compounded annual growth rate in our dividends. Now, I will hand over to back to Stanislas to cover our major operational achievements.

Stanislas de Vromont, CEO, SEB Group: Thank you. Sorry, my voice is a bit cut off because of a call, I quote. But anyway, I’ll take you in the next fifteen, twenty minutes through what has made this year 2024 successful and what’s ahead of us for 2025 in particular in terms of new products innovation. I’ll start with the consumer business and I’ll start with our mission. Our mission is to make consumers’ everyday lives easier and more enjoyable and contribute to a better living all around the world.

And that mission, I think, defines the categories we operate in and that mission defines what we do in those categories we operate in. And as a matter of fact, you see here that this year, 2024, we’ve been growing across all categories driven by innovation and of course, with a star, which is the home cleaning, home care category. But even the more stable or more categories like cookware are growing. You see that categories that we used to say were a bit tired. Linen Care are also very dynamic.

And what I’d like to do in the next fifteen minutes is to share with you the rationale and what’s behind this growth in all those product categories. And I’ll start with product families or categories around Linen Care, Personal Care and Home Care, where we have a three pronged strategy. The first part is to make sure that the performance of our current products is secured and is secured through an improvement of the performance of the products, renovations of the product. I’m talking about, of course, irons, steam irons, steam generators. I’m talking about the base vacuuming equipment like canister vacuum cleaners.

Then beyond that, we want to support new usages and focus on promoting multi equipment. And that is in Linen Care around garment steamers. In vacuum cleaners, it’s around versatile vacuum cleaners. We’ll see some examples of that. And last, we are investing in new territories.

And the main focus of this year is around washers and it’s around spot cleaners. Now let’s see some illustrations of that. And I’ll start with the Linen Care. Linen Care, it’s a low category and we used to hear, yes, but people don’t wear shorts in longer and linen fabrics are much less wrinkling than they used to. Therefore, there’s less need for linen care or in fact that’s not exactly true.

First, we see that our core ranges of steam runs and steam generators still carry some growth, modest but still growing. This is what we call our core business. We’re gaining leadership in popularizing the second equipment, garment steamers, which are an easy portable solution to handle less fragile or less demanding linen. And we see that within garment steamers, there is room for innovation. We’re launching this product, Aerostim, which is a revolution in the garment steamer category.

It has 88 combines a garment steamer, but it also has a vacuum system that placates the linen that sticks the linen on the sole plate, so that you can take care of your garment with one hand only. It’s a revolutionary product. It has been launched in Q4 and we have great expectations from this product. And last, we see some new categories emerging in a bit broader sense than just Linen Care as close with this Spot Cleaner. Spot Cleaner is a device that you see on the screen here that allows to clean deeply your carpets, your sofas, your and we’ll see a bit more in a second.

Net net, in this deal and care category, we’ve posted in 2024 a growth of 10% and that was after an already strong increase in 2024 of in 2023 of the same 10%. Now let’s look at this spot cleaner, and I suggest we go straight to the video. How do we do the video? A great product, a product that has been launched in the back end of twenty twenty four and that’s going to be a good contributor to the development of the business in 2025. Now, second category is around vacuum cleaners.

In vacuum cleaners, you see that we have a large range of versatile vacuum cleaners. And what’s interesting is not to have only a blockbuster product. What’s interesting is to cover a large range of power and autonomy to serve various consumer needs. So this is what we’ve been doing in versatile vacuum cleaners with the range that you see on the screen. We have, as I said in my introduction, expanded the production of some of these vacuum cleaners back in France.

This is the fourteen eighty X Force Flex (NASDAQ:FLEX), Rowenta range, very powerful, very, very successful. And this range management, this innovation, these insights, this performance has brought in 2024 a pretty strong growth of 30% outside of China. That is very impressive, but that’s not the end of it. That will continue in 2025 because we see that there is continuous progress in this sector. And what’s ahead of us in 2025 is the development of this new category of washers.

Washers is a brand new territory and where can washers can become just as big as robot vacuum cleaners have become in the years to come. Now, washers, we already start with a range of two products, F10 IV and XFIN10 that have been launched at the back end of 2024. And again, very high performing products that will be contributors to our success in 2025.

Olivier Casanova, Chief Financial Officer, SEB Group: We have a video on Versatiles.

Stanislas de Vromont, CEO, SEB Group: We have a video on Versatiles. You’re right. So let’s see the video on Versatiles. Sorry, I skipped the video on Versatiles. Thank you.

Let’s look at it. You’re right.

Fraser Tonluwen, Analyst, Berenberg: Okay. Okay.

Stanislas de Vromont, CEO, SEB Group: Okay. So very exciting news on versatile vacuum cleaners, very exciting prospects on washers and we look forward to a great 2025 in this category as we did in 2024. Moving on to another core category of the group, which is cookware. In cookware, we aim at driving market growth through product innovation, through trading up, through partnerships. We have a long standing historical partnership with Jamie Oliver in many Anglo Saxon countries, generating over million in sales recurring every year.

We’ve signed a new partnership with Paul Bocuse, the group Bocuse during the CERA professional fair in January to create a co branded Ranges Tifel Bocuse. We are developing a leadership in multi materials, in coatings first, of course, coated aluminum, but also ceramic coatings, but also stainless steels, coated and non coated. And we are accelerating our geographic expansion with key innovations like the international rollouts of Ingenio. If you illustrate that with a few pictures, pardon. We work on materials on our main brands, core brands, Stifel, Super, coated aluminum, ceramic, stainless steel.

We also work on the development of our premium Cucure range with the VMF brand, with the Regostina brand, with Orklaad. And we have an expansion of Ingenio that has been continues that is still growing double digit year on year with a strong performance in our historical markets, Japan, France, South Korea, but also acceleration of the international rollout. Net net, and that’s also something really worth noting, what we call mature categories, stable categories. In fact, cookware has grown 10% year on year in 2024, and we see that as a great area for business development in the future. One of the biggest category in small domestic appliance is kitchen electrics.

And in kitchen electrics, there’s a lot of potential for innovation, drawing on local expertise to bring them to a global scale, looking at diversifying cooking methods for healthy drinking. There’s been a time of steam, there’s been a time of infrared, there’s need for pressure cooking, and we work on all those opportunities and also adapting and adjusting to evolving lifestyles, things that we all know, homemade, healthy food, time, space and energy savings, our premium, outdoor and outdoor consumption are at a premium. And if we start with the stock category of Electrical Cooking in the last eighteen months or two years or less four years, we’ve seen a good growth of over 50% in Continental Europe in 2024, covering two sides or two parts of the market. The first one is what we call the core business, that business that is established and that is the main bulk of the volumes of the market today, single drawer air fryers, dual drawer air fryers, multifunctional air fryer ovens. But we see some areas of development in the world of silence.

Air fryers tend to be very noisy. And as consumers use them more and more often, they tend to be really a burden in the kitchen. So, we are developing a range of more silent air fryers. We also see some opportunity for infrared cooking, and that is something that is bringing better regularity, better performance of the cooking. And we also have a new baby on our range, which is the surface air fryer, which allows to cook a large quantity of food, which offers a wide and deep tray that allows to cook stuff that other fryers cannot help cook with a dual cooking from double heaters from bottom and top.

I suggest we look at the video to discover the product. A great product in market now in most of European markets. Beyond electrical cooking in kitchen metrics, we have blenders, which is one of the top three categories worldwide. And blenders, we start from a very different base in usage in Colombia, in Europe, in Mexico, in China. But we see that across all those countries, we see that there are two fast growing trends in blenders.

One is around speed and performance and versatility. That’s what we call high speed blenders, which can be heating blenders as well as cold blenders. And nomadic on the go blenders where we create a device with detachable bowls that can be carried and can be used as a glass, easy to use, easy to clean, healthy cooking. In these lenders category, in EMEA and Americas, we’ve seen an organic growth over 10% in 2024 in what is for us a very established business line. And again, let’s have a look at the newborn in the blender category, which is blender deservido there, I think.

Great activities, great initiatives in the world of consumers. I could have expanded that for much longer on all the categories and product families we operate in. But this was to give you a flavor and a touch on what we’ve done and what has driven our performance in 2024 and what’s ahead of us for 2025 in terms of product initiatives in the pipeline. Second key part of the group development is the professional business. You remember that we’ve embarked in this adventure of professional business of equipment back in 2017 with the acquisition of WMF and Scherrer.

We started with beverages. We’ve expanded with the acquisition of Wilbur Cartis in The U. S, La San Marco in Italy Eighteen Months ago, Zumo in Spain, and we have this beverage division where we are covering full auto coffee machines, we are covering traditional and filter coffee machines, we are covering cold beverages, and we are leaders in the full auto business. And that’s the first pillar of our professional strategy. Then a few years ago, we’ve decided to expand in professional culinary with the acquisition.

Of course, we had some historical brands, which are, I was going to say by default present in professional kitchens, TIFA, Orkla, WMF, HEP. Then we acquired Compose, the Capeco. We acquired Pacojet a couple of years ago, which is a professional emulsifier, Embassade du Bourgogne Charvet first quarter last year and most recently, Le Vergas de Bea. So this professional strategy is expanding now in professional culinary and in beverage. And if I start with beverage, the two main drivers of our growth starting from our world leadership position in Fulloto is to expand geographically and extend our range of professional beverages offering through product launches, new product launches, innovations and coverage of a broad customer base.

And to that extent in that way, 2024 has been a remarkable year. As I said, as we said with Olivier, we have a good performance in our core markets. We’re making strong progress on our new territories with relying on both our long standing customers like seven Eleven or Lacking Coffee, but also exploring and developing new clients. For those familiar with Central Europe, Sapka is the biggest convenience store chain in Poland and Central Europe, but also Bako, but also Costa in Germany, Tim Hortons in Saudi Arabia or OXXO in Mexico or even seven Eleven in Taiwan, Zoos in Philippines, etcetera. So we have a strategy that is expanding.

Yes, our numbers can be affected on a quarter on quarter basis by the size of the big deals, but that’s the nature of the professional business. Yet, the roads to expansion through new categories sorry, new customers, new channels and new countries is well underway in the professional business. And as a testimony of that, we have opened and I think we’re the first European manufacturer or Western manufacturer to open a full blown professional equipment hub in China. It’s not going to be only production, it’s going to be R and D, it’s going to be purchasing. It’s a big site, it’s a million investment to secure a better product coverage and to strengthen primary opposition in the Chinese market.

This is going very fast. We announced it middle of last year. We’ll deliver the factory in Q3 this year and start production in Q1 twenty twenty six. In professional culinary, so this is the history of our acquisitions. The most recent one is the acquisition of La Vriere du Bea.

Wier. Extremely excited by this acquisition. We are extremely excited by this acquisition. Why? Because Wier is a great cookware brand.

It is French and international. It is a strong position it has strong positions in the professional cannery and the premium consumers. It’s a sizable business, million, two nineteen employees and three production sites in France. But it has that unique particularity and specificity to be the closest to the chefs during their training years, during their training experiences in these big schools like Institue Life, Foshon, Ecole Ducasse, etcetera. WA as a multi material expertise, very, very close relationship with all these schools and an expert knowledge of the chef’s culinary journey.

And they have a very complementary offer product offering with the group on both the professional and semi professional market. So, a great acquisition that I suggest we propose you to discover in video. As you see, a very rich year in terms of achievements and initiatives and some pretty interesting prospects as for what’s ahead of us in 2025. ’20 ’20 ’4 has also been the year of the update or reveal of our new ESG strategy and roadmap that we shared with this community of investors and analysts back in the December. So, we’ll remind you of the key highlights and share with you the performance.

So, we’ve set a strategy for the 2024, ’2 thousand and ’30 period, focusing on four pillars, act for nature, act as a leader in circular economy, act for all, and act responsibly and ethically. We’ve set ourselves KPIs, which are public, which will be found in our short term and long term incentives for all the key managements key managers of the company. And when it comes to 2024 results, We are proud to say that we’ve achieved most or all our most of our targets. Starting with the CO2 emissions, CO2 is based on a split between scope one and two, which is our own emissions and scope three, which is what happens in our suppliers and what happens during the consumption phase of our products. For scope one and two, we’ve set ourselves an ambition to reduce our emissions by 42% between twenty one percent and thirty percent.

At the end of 2024, we’ve already made 18%. So, we are well underway, well on track to achieve that. When it comes to scope three emissions, we set ourselves a target of minus 25%. We’ve done minus 13%, so halfway in three years versus six years, seven nine years trajectory. So again, we are well on track.

The great news also of 2024 for this carbon emissions is that we’ve received an approval by the SBTI science based target initiatives that our new net zero trajectory for 02/1950 is approved. That means we can claim that this strategy, this roadmap is in line with the expectation of the experts in this world. And that has been confirmed by the CDP rating at A minus, which is the same as last year, which is a great achievement when the criteria are every year becoming more demanding. We had also a great year in circular economy with a recycle rate of recycled materials in our products moving from 34% to 48%. Target (NYSE:TGT) is 60% in 02/1930.

We are on track on our safety and health at work trajectory even though ’24 is a slight setback versus 2023, but the trajectory one point zero point eight zero point five is there. And last but not least, on diversity, we start from 20% of women in the top 200 positions in the group. We’ve set ourselves an omission of 32% and we’ve achieved 27% in 2024. Now beyond numbers, I think these numbers are the results of actions. Those actions are around new injection molding machines in France, in Colombia, in China, solar panels in high carbon intensity countries like China or Vietnam.

As I mentioned in my introduction, we have opened this refurbishment center in Istio T that will allow us that will give us an equipment tool to be able to refurbish repair products in our plans. We’re opening our first plan closed loop recycling program in France and that proves to be very, very attractive and popular for the few first weeks that we’ve run this program. And of course, this comes with a lot of equipment and tools in energy management and stuff that we deploy to be able to drive and measure the progress we make in these areas. Last but not least, we rarely talk about it, but SEB is also a group that is very engaged and involved in the communities we operate in. Every year, we have a Charity Week that involves a lot of our employees.

And last year, we’ve run our tenth Charity Week. And that has happened in 98 sites around the world. So Seb (EPA:SEBF) is a company that is making business, but Seb is also a company that is part of their communities and that takes care of their communities, be it a town, a city or a region or a country. That was great. Now off with 2024, let’s have a chat on the outlook for 2025.

Well, the starting point is that we have a solid 2024. We have regular and steady growth on our consumer business. We have a good level of core business in professional beyond the calendar effect resulted to large contracts. Our offer margin and offer is showing a marked increase, 10% growth year on year. So we are confident in our ability to deliver another year of growth.

Yes, we have an uncertain macroeconomic and geopolitical context. You know that our business is very much skewed towards the back end of the year, but we see and therefore, it’s difficult for us to give a quantified or quantitative guidance. And in fact, vast majority of the last years, we haven’t given a quantitative guidance for the current year in February. But we see that overall we have buoyant end markets and the catalysts of those markets are linked to good product dynamics, good innovations and we see that our pipeline, not of products that make up products that are already in the market is rich and that allows us to say confidently that we see another year of organic sales growth and a further increase of our ARFA in 2025. Thank you very much for your attention.

Now Olivier and I will be ready to take all your questions.

Conference Operator: Thank you. We will take the first question from line Christophe Chappell from ODDO. The line is open now. Please go ahead.

Christophe Chappell, Analyst, ODDO: Yes. Thank you very much for taking my question. I’ve got two, please. The first one is on the 2024 results. So you mentioned minus million impact on price mix.

I know that it is very difficult, but could you give us an order of magnitude of the price impact? I mean, is it minus million price and mix or the situation is much more balanced. So any rough figure, let’s say, would be great. And the second one is regarding your guidance for 2025. So you mentioned the growth of the yourself, but obviously, probably difficult to commit at this moment of the year on an improvement of the margin in percentage of the sale.

But is there some specific headwind or tailwind that would be that we should be aware of that could impact the ORFA, I mean, on raw material, on freight, on currency or price mix? Thank you so much.

Stanislas de Vromont, CEO, SEB Group: As usual, very sharp questions. You take the first one, I’ll take the second one, Olivier. Okay. Let’s try.

Olivier Casanova, Chief Financial Officer, SEB Group: So, we are not, let’s say, giving precise breakdown. But as usual, we have a positive mix effect, which is, let’s say, of a similar nature as usual. We had a slightly higher price effect than, let’s say, historically for the reasons that I explained earlier, which is that we had the strong decrease in our cost of goods sold. And we reinvested, let’s say, a portion of those benefits for customers. And this helped us to drive sales growth.

We are not going to see exactly the same dynamic in 2025 because in 2025, we are not expecting, let’s say, the same decrease in cost of goods sold. We have seen, let’s say, the vast majority of the correction in 2023 and in 2024. And so, there should be, let’s say, a stronger proportion of mix effect, positive mix effect in 2025. Fully agree. I think the years

Stanislas de Vromont, CEO, SEB Group: of cost deflation is now behind us. We see rather stable cost base, to answer your second question, in 2025. But the OFA margin, I think, is early to guide on. I think you will have some what we say is that we will grow sales, we will grow profit. Currencies will have potentially strong impact on the margin itself because when you have a strong dollar as a strong yuan, that tends to increase your sales and that tends to put pressure on your costs.

So you may land with an operating profit, which is in line of what you expect by the margin that is affected by those effects. That said, we don’t see we don’t expect massive impact on the Ofa margin. And the trajectory that we mentioned in our Capital Market Day two years ago of a growth in organic sales and the growth in operating margin is still valid. So I will not say much more on that on the guidance other than we don’t see any reason to say that what we said 18 ago or two years ago doesn’t apply any longer.

Olivier Casanova, Chief Financial Officer, SEB Group: Maybe one compliment on the currencies. As you know, we have a strategy to hedge well in advance our exposures, in particular, our two main short currencies, which is dollar and the Chinese yuan. And in fact, we are extremely well protected at very healthy levels for 2025. So, we expect, in fact, minimum, let’s say, impact from those currencies, thanks to our very strong hedging. We are seeing some slight, let’s say, increase in aluminum prices.

But on the other hand, we are probably expecting, on the whole, lower shipping cost than we had in 2024. If you remember, we had there was a spike in the SEFI in 2024 because of the Red Sea crisis and the disturbances. And we are seeing, of course, let’s say, a fallback of shipping cost, which are leading us to, let’s say, expect a slight positive improvement, positive contribution in our margin in 2025. So on the whole, just to summarize, we are expecting a further increase in our operating profit in 2025, as Stanislaus said, in line with our trajectory to grow our margin towards 11% in the medium term.

Stanislas de Vromont, CEO, SEB Group: Merci, I think my comment on currencies was to say that, yes, we’re hedged on the profit side, but that may have a mechanical impact on the sales side, the increase of the reported sales and therefore mechanical impact on the margin percentage. That was my point. Absolutely. Absolutely. Josep Christian Christophe, did you answer your questions?

Christophe Chappell, Analyst, ODDO: That’s very great. Thank you for the 11%. So the 10% threshold, let’s say, in The Netherlands extend the kind of cautiousness from your part at the very beginning of the year.

Stanislas de Vromont, CEO, SEB Group: We said that the trajectory we shared is in December 2023 was towards 11%. And we have no reason to say that this is out of the picture.

Olivier Casanova, Chief Financial Officer, SEB Group: We are completely in line with our trajectory. Exactly. Yes.

Conference Operator: Thank you. We will take the next question from Linzhou Figueleuan from BNP Paribas (OTC:BNPQY). Please go ahead.

Geoff Frederic Helien, Analyst, BNP Paribas: Yes. Good morning, gentlemen. Geoff Frederic Helien from BNP Paribas. I will have three questions, please. The first one is related to the financial expenses.

We’ve seen a pick up in 2024 compared to last year. You mentioned refinancing impact. So just wondering how do we need to think about financial expenses for 2025? My second question is related to working capital. You suffered in 2024 from a few impacts.

You mentioned the Red Sea descriptions. You mentioned higher inventories. Just wanted to know if we can expect a kind of reversal effect into 2025 and basically what’s your thoughts in terms of working capital change into 2025? And my last question is related to China. I guess you mentioned end of Jan, no change in terms of trading trends compared to what you see in 2024.

We are now in the Feb and just wondering if you see some change in terms of change in the last few weeks, especially in the back of the incentive measures for high schoolers announced by the government? Thank you.

Stanislas de Vromont, CEO, SEB Group: The third one, you take the first one.

Olivier Casanova, Chief Financial Officer, SEB Group: Okay. Okay.

Stanislas de Vromont, CEO, SEB Group: On China, it’s very early to quote changing trends. We can say that we have probably more favorable comps in 2025 than we had in 2024. We see that there are some measures from the government. So there is nothing material yet, but probably the sentiment is a bit more positive than it was six weeks ago or three months ago. Very early to quote a number or to put a number, but that’s where we are today.

And then of course, these initiatives from the Chinese government to help the consumption of rice cookers could benefit a company like Seb, which is the leader in rice cookers in China. What do you have financial expenses?

Olivier Casanova, Chief Financial Officer, SEB Group: Okay. So, yes, I highlighted that financial expenses are increasing. This is due to the increased cost of the new financing, which, let’s say, the difference between the historic rate that we had on the, let’s say, old financing and the new one is around 2.5%. And that’s, let’s say, explaining the increase. We’ve seen, let’s say, the bulk of our refinancing.

We still have 500,000,000 of bond maturing in June. So, we’ll see how we address that refinancing. But we can expect probably a slight further increase in 2025 as we carry out this refinancing. Regarding working capital, I think it’s too early to, let’s say, predict a reversal. All.

We don’t know when supply chains will indeed normalize and how easy it will be to, let’s say, go back to the old route through the Suez Canal. So I think for the time being, you should not expect, let’s say, a strong benefit from a reversal. We will see if and when it happens.

Stanislas de Vromont, CEO, SEB Group: Thank you.

Conference Operator: We will take the next question from the line Alessandro Kokkini from Acutech Sturm. Please go ahead. Hello, everybody, and thank you for taking my questions. The first one, actually, it’s on your, I mean, seasonality in 2025. So we know that last year in the first quarter, we had still professional business very strong and then the LatAm business that was very strong due to the El Nino effect.

So I would like to know what is your opinion with these two trends. So if you could, I mean, maybe quantify the potential impact, the one off, of course, negative impact that you will face in the first quarter twenty twenty five due to this kind of adjustments from last year? This is my first question. Instead about still sorry about incentives in China. It’s my opinion right that the new incentives are still, I would say, to be defined to be, I would say, structured?

And then my final question, it’s about ForEx on overall top line, because maybe I am wrong, but if I put, yes, of course, dollar, RMB, but then we have devaluation of something emerging markets, etcetera. So I still see, maybe I am wrong, at current rates a sort of stability or slightly negative or under stability in term of ForEx impact for 2025 as a whole for the group. So I was just wondering if this kind of my interpretation is correct.

Stanislas de Vromont, CEO, SEB Group: I’ll take the first two. Liege will take the third one. On the Q1 and S1, your assumption on the phasing on professional and LatAm are completely right. I will not give you a number because that’s your job to put a number, but I think you’re right. I mean, we are still facing high historical numbers, and we are not too concerned about what’s going to happen in Q1 just because we know what’s behind that.

Equally, on incentives in China, your assumption is absolutely right. There’s a lot of talks. There’s not yet anything concrete or material. And this is probably what explains my relatively optimistic yet prudent comment because when I see the signs, the signs are positive. When I see the facts, the facts are not there yet.

So I think we are really ready to take and seize any opportunity or occasion that will come to support rice cookers or any other product that you’re operating. We haven’t seen yet anything concrete in that matter. Okay.

Olivier Casanova, Chief Financial Officer, SEB Group: So on ForEx, I think I saw it’s extremely difficult, of course, to predict currencies. I think we all know that. But what we can say is you’re right. Based on, let’s say, the levels today, we have, of course, continued headwinds in certain markets with, let’s say, weak emerging market currencies. But at the same time, you are right, we have a positive effect, which will help to offset a portion of the negative effect.

So, we can expect today probably a lower impact than we had in 2024. But of course, this remains to be confirmed, and it’s too early to I think we have we are operating in a volatile environment and it’s, I think, going to be difficult to predict the evolution of currencies this year based on, let’s say, geopolitical developments.

Conference Operator: Okay. And my last, if I understood correctly, in term of financial charges, we needed to account for 2025 as slightly higher both in term of P and L and cash flow because P and L was around 80,000,000, if I am not wrong, and cash flow was 100 something. So this is a starting point that we needed to account as slightly more financial expenses. It’s correct, my understanding?

Olivier Casanova, Chief Financial Officer, SEB Group: Yes, slight increase.

Stanislas de Vromont, CEO, SEB Group: I see a question on the line, so I will take it From Pascal Lowe, are the current positive trends in the SD small domestic equipment market sustainable given the overall macro and geopolitical context? The answer is definitely yes. The answer is definitely yes because we’ve seen through very, very challenging years in most regions. I’m referring to 2020, ’20 ’20 ’1, ’20 ’20 ’2, ’20 ’20 ’3. We’ve seen years of super inflation.

We’ve seen years of lockdowns. And through those years, if you put aside the hiccups of the supply chain disruptions and stuff, we’ve seen that consumers consistently keep equipping themselves with more small domestic equipment. And we understand why that is because our product categories serve a very daily usage for consumers. Consumers see a high value to those daily usages and the cost to acquire those equipments remains relatively accessible even though consumers keep trading up. So for us, there is no alarming sign on the geopolitical or economic context that makes it that would make us believe that this growth would be undermined by this context.

Now, I read that Pascal has another question on the phone. Maybe you want to could we take the questions on the phone now?

Conference Operator: Sure. We will take the next question from Marylin Ford (NYSE:F) from Bernstein. The line is open now. Please go ahead.

Marylin Ford, Analyst, Bernstein: Good morning. I’ve got two questions concerning the coffee machine, the pro division. I would like to know if you’ve got any visibility on the recovery of pit deals at this stage and at what horizon? And the second question is about the last acquisition you made. Do you expect they will have a dilutive impact on 2025 earnings?

So any comments on profitability would be welcome. Thanks.

Stanislas de Vromont, CEO, SEB Group: I’ll take the first one and Olivier will take the second one. Merci, Paul Agastion. We have a regular flow of big deals in professional coffee machine. At this stage, there is nothing there’s a lot of things in the boiling, of course, like as usual, but there is nothing specific or particular that we can share with you. It’s too early.

What we can say on professional coffee sales is that the underlying business is growing and has been growing even in this difficult year last year at around 7% rate. We know that we have to go through the phasing of a high S1 last year driven by deals. We know that this will fade out in S2, of course. So this is the equation we are in. We cannot share at this stage any big deal that would change the nature of the equation for 2025.

Olivier Casanova, Chief Financial Officer, SEB Group: So just one word on, let’s say, profitability in professional. We indicated that by nature, by structure, let’s say, the professional activity tends to have higher margin than consumer. We have said that consumer, let’s say, can aim for 10% margin. That’s the standard that has been achieved in the past and that typically professional activity should deliver more than 15% profit. And that’s exactly what we are, let’s say, achieving year after year.

So, there is no difference. And of course, we are buying new businesses, which are contributing to grow the pie, but they will also contribute to growth and profit generation over time as we structure those businesses to expand more rapidly. We’re talking about geography expansion and also, let’s say, expansion of the product range. But these developments take, of course, a bit of time. And we are actively working to, let’s say, deliver the growth potential of those businesses.

Stanislas de Vromont, CEO, SEB Group: Let’s say the size of the year is, what is it, 5% of the professional business. So it’s not it wouldn’t be a material impact anyway.

Marylin Ford, Analyst, Bernstein: Okay. Thank you.

Conference Operator: Thank you. We will take the next question from line Fraser Tonluwen from Berenberg. The line is open now. Please go ahead.

Fraser Tonluwen, Analyst, Berenberg: Good morning, Stennis Luz and Olivier. So I’ve got three or four questions. So the first was just about China in 2024. Could you maybe talk about what was price versus volume effect for Group seven? Also you mentioned that you outperformed your market there.

So I just wondered what from the data you have, what was the decline in the market in China in 2024? The second question is about growth drivers. How do you kind of see your innovation cost and marketing cost trending in 2025? And then the third question was on the provision. So I was in the cash flow, it looks like you kind of have this add back of €172,000,000 and I know the fine in France is €190,000,000.

So I wonder what explain the what’s the counter amount basically there? Thank you very much.

Stanislas de Vromont, CEO, SEB Group: I’ll take the first one and the second one. And then Olivier will take the third one. Thanks, Fraser, for your question. I think the market’s been declining last year in China, low to mid single digits depending on the categories. And I think we’ve been doing better.

I mean, we are minus 1% organic year on year, which is somewhat better. We I mean, I don’t like to comment on the first two months of the year. And I had the question earlier on that we see the first two months are positive in China. I mean, we don’t come out and say we’re out of the wood. But I think, I mean, there’s some evidence that, yes, the market was bad, our performance was better, and we see that it is getting a bit better and it is improving quarter on quarter.

Your question on our growth drivers spend or investments this year is a very valid one. You’re right, we have a lot of bullets in terms of new product initiatives and we expect to keep strengthening our growth drivers investments, both in product development and in product activation, advertising and others to make the best and to make the most of these growth opportunities. As I said, I mean, this stems from the conviction that this industry is a great growth industry. This stems from the conviction that consumers can take better products at higher prices and new products at higher prices, but also take some investments to engage consumers into buying those innovations. So, your underlying assumption behind your question is a valid one.

Olivier?

Olivier Casanova, Chief Financial Officer, SEB Group: So, on the provision, so as we said, we are strongly, let’s say, opposing the decision and we have lodged an appeal in the French court. But this will take, let’s say, a couple of years to reach a conclusion from the courts. In the meantime, we have, let’s say, the fine has been issued. And therefore, we will have to pay the corresponding amount sometime in the second quarter of twenty twenty five. So in P and L terms, it impacts 2024.

And in cash terms, it will impact 2025.

Stanislas de Vromont, CEO, SEB Group: Did we answer your questions?

Fraser Tonluwen, Analyst, Berenberg: Yes, on the first one. On the third one, less so, just because, yes, the question was more that I think the amount in the cash flow is $172,000,000 and the fine is $190,000,000 So I just wondered what explained the difference more than where it came from.

Olivier Casanova, Chief Financial Officer, SEB Group: Sorry, the $172,000,000, you’re referring to which number? The change

Fraser Tonluwen, Analyst, Berenberg: in Vision, million.

Olivier Casanova, Chief Financial Officer, SEB Group: Sorry. We’ll take this question off line because I’m not sure which number you’re referring to, but on the cash flow in 2024, that’s for sure on the provision side. We are taking the provision, but we have no cash disbursement related to this.

Stanislas de Vromont, CEO, SEB Group: Is that clear? Sorry, let’s clear that. Fraser, is that clear for you?

Olivier Casanova, Chief Financial Officer, SEB Group: Fraser doesn’t have the make anymore.

Stanislas de Vromont, CEO, SEB Group: Fraser, we can’t hear

Conference Operator: you. Fraser, you can hear us.

Fraser Tonluwen, Analyst, Berenberg: Yes, yes, that’s fine. Thank you, guys. Sorry, I would have disconnected, I think.

Stanislas de Vromont, CEO, SEB Group: Okay. I have a question on the in rating. What is the part of the own retail networks and direct sales in consolidated sales? It’s around 10% in the consumer business, as the answer between on and offline sales. That was an easy one.

Do we have any do you have other questions online? And over the emails or in writing. I don’t see any other question. So I think we can close this conference here if there is no further question. Our next meeting will help me Olivier will be for the

Olivier Casanova, Chief Financial Officer, SEB Group: Q1 results. Yes.

Stanislas de Vromont, CEO, SEB Group: And the date is in the deck. Yes, it should be in the deck. Next (LON:NXT) meeting, where is it? April 24 after market close, we will publish our Q1 twenty twenty five sales and financial data. In the meanwhile, I thank you all for following this conference.

I thank you all for your support and your interest in our business. And we’ll see a few of you in the next forthcoming few days in Paris and London for more specific questions in roadshows. Thank you very much. Have a great day and a great result season. Thank you.

Olivier Casanova, Chief Financial Officer, SEB Group: Bye bye. Thank you.

Conference Operator: You may now disconnect.

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