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Latin America

Major Appliances

Electrolux is growing rapidly in Latin America and the Group holds considerable market shares in the region. The Electrolux brand occupies a strong ­position through its innovative products and close collaboration with market-leading retail chains.

Ruy Hirschheimer

Head of Major Appliances Latin America

Share of net sales 2013	Share of operating income
19%	24%

Electrolux operations in Latin America are continuing to grow. The Group’s market shares were further expanded in 2013 due to the rapid pace of product development and extensive launches of new, innovative products. Brazil is the Group’s largest market and accounted for about 70% of Electrolux sales during the year. The significance and contributions of other Latin American markets are on the rise, reinforced by the 2011 acquisition of Chilean CTI.

Growth and innovation

The Latin American market is relatively consolidated. In Brazil, the three largest manufacturers – Electrolux, Whirlpool and Mabe – account for more than 70% of appliances sales. As a result of high import duties and logistical costs, the bulk of products sold are produced domestically. Consolidation is also strong among retailers in the region. These factors reinforce the strength and potential of established, nimble competitors in the region. During the year, most Latin ­American currencies weakened against the US dollar, resulting in increased costs for the import of semi-finished and ­finished goods and thus a need for price hikes. Brazil accounts for about 50% of the total market. Other major markets include Mexico and Argentina.

The Latin American market for appliances has grown in recent years. The reason for this is the rising purchasing power of households, which primarily demand more basic cookers, refrigerators and washing machines. Demand for products in the upper-price segments is also increasing among the rapidly emerging middle class. Despite the slowdown in the Brazilian economy over the past two years, demand for appliances in Brazil has risen as a result of the government’s tax-reduction program for the purchase of domestically manufactured appliances. This program was gradually reduced during 2013, which was one of the ­factors behind the decline in demand in the latter part of the year.

The strong position of Electrolux in several Latin American countries, long-established relationships with the major retailers and a far-reaching distribution network provide a solid platform for profitable growth in the region.

Electrolux can continue its expansion in Latin America in parallel with a growing middle class through its substantial investments in consumer-driven product development, production capacity and distribution. A large number of new products was launched in several markets in 2013, achieving highly favorable results in customer satisfaction surveys. The new Electrolux Bottom Freezer was developed in Brazil, and a full 88% of surveyed consumers stated a preference for the product over the closest competitor. Other examples of new launches were the Silent Washer washing machine under the Electrolux brand and The Blossom Refrigerator under the Frigidaire brand.

Operational excellence

During the year, the Latin American operations continued toward the objective of operating to a single standard of performance excellence. Programs were carried out throughout the region to empower the workforce, reduce costs and increase productivity. For example, the Electrolux Manufacturing System (EMS) was implemented at the plant in Santiago, Chile, In São Carlos, Brazil, an automated process was introduced for the production of washing machines.

Net sales and operating margin 2013

Sales for Electrolux in Latin America continued to increase during the year as a result of price increases and an improved product mix. However, operating income for the year declined, primarily due to negative exchange rate effects. During the year, most Latin American currencies weakened against the US dollar, resulting in increased costs for the import of semi-finished and finished goods. This was to some extent mitigated by price increases.

Market demand for 2013 compared to 2012

Electrolux markets and average number of employees 2013

Product highlights

Electrolux Bottom Freezer – One refrigerator – Many possibilities

In order for a new product to be launched, at least 70% in a test group must have addressed preference for it above similar alternatives in the market. The new Electrolux Bottom Freezer was developed in Brazil in 2013, and allows over 7,000 ways to organize and customize the product. The consumer has a different refrigerator for every occasion.

Mini Silent washing machine

Electrolux New Mini Silent 3 kg is an innovative, wall- mounted washing machine and a new option for urban consumers with a lack of space, that need a complete, compact, silent and high-performance product, which washes small loads and delicate clothes.

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CEO Statement

In 2013 we continued to deliver above our growth target and delivered 4.5% in organic sales growth.

CEO Statement

I'm convinced that raising product efficiency for the growing middle class is where long-term shareholder value creation lies.

Our products

Electrolux is the only appliance manufacturer in the industry to offer complete solutions for both consumers and professionals. The focus is on innovative and energy-efficient products in the premium segments.

Sustainability

Achieving the Group's vision of sustainability leadership is crucial to realizing the business strategy. The objective is to develop smarter, more accessible, resource-efficient solutions that meet people's needs and improve their lives. Read the comprehensive sustainability performance review.

Awards & recognition

Financial Reporting

Net sales for the Electrolux Group in 2013 amounted to SEK 109,151m, as against SEK 109,994m in the previous year. The organic sales growth was 4.5%, while currencies had an impact of -5.3%.