Electrolux: Pressure cooker

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Electrolux: Pressure cooker

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Electrolux

Pressure cooker

Initial Opinion - Credit

Buy Protection 5-year CDS, Underweight €30s 08 July 2026

We initiate on Electrolux with a Buy Protection on 5Y CDS, with potential for 30-40bps High Grade Credit

widening over the next 6 months, catalysed by the earnings trajectory. We initiate at UW Sweden

the €30s, which are tight to BBB-s. We are MW the €28s as they trade wide to peers. Consumer Products

We build two scenarios: ratings look weak in either Table of Contents

Our mid case relies on S&P looking through leverage breaching the downgrade threshold

Recommendations and relative value 2

in FY26E before it recovers in FY27E. Our low case projects that leverage remains above

Forecast: ratings weak in either scenario 5

the threshold into FY27E, likely resulting in negative rating action. Based on our analysis,

EBITDA to come under more pressure 6

we feel the lower end of our mid-to-low output range is probably more reflective of

what the business will achieve. Risks are skewed to the downside. Our conclusion is we Rights issue buys some time 8

think the credit should be priced like a weakly placed BBB- with reasonably high HY risk. Restructuring brings pain before gain 9

Too much supply, not enough demand 11

EBITDA under more pressure NWC and capex risks skew to downside 12

Following the surprise -15% plunge in EBITDA in Q1-26, leading demand indicators LatAm: more growth, more risks 14

further weakened and cost pressures intensified. We believe Electrolux will struggle to Model Output Summary 15

pass on simultaneously higher raw material, logistics and tariff costs given the consumer Capital Structure and Covenant Summary 17

backdrop, putting margins under pressure.