Electrolux is one of the world’s largest vacuum-cleaner manufacturers and the only global company in the industry. During the year, a strong focus was applied to reduce complexity and concentrate operations on the most profitable product categories.
Henrik Bergström, Head of Small Appliances
In the vacuum-cleaner segment, the Group holds leading positions in the largest markets, and has a strong presence in the premium vacuum-cleaner and rechargeable, handheld vacuum-cleaner segments. Its global market share is about 10%.
Product development is focused on innovative and energy-efficient vacuum cleaners in the upper-price segments. In recent years, a comprehensive transition of Electrolux vacuum cleaners has been made to comply with new energy-labeling requirements in Europe. A global range of premium small domestic appliances products has been developed and launched and product development is focused on innovative kitchen appliances with great performance.
In Europe, most products are sold under the Electrolux brand, which is complemented with the AEG brand. In North America, the Eureka brand is the main brand in the vacuum-cleaner segment, complemented by the Electrolux brand in the more premium segments. Sales in Latin America and Asia are predominantly under the Electrolux brand.
In 2015, sales declined slightly for the business area. Vacuumcleaner sales volumes increased in Europe and declined in the U.S. and Brazil. Sales of small domestic appliances declined in China and Brazil.
During the year, a strong focus was applied to further reduce complexity and concentrate operations on the most profitable vacuum cleaners and small domestic appliances product categories. Marketing initiatives were primarily focused on twelve prioritized product platforms. The prioritized product platforms are recent launches and accounted for almost 40% of sales in 2015.
A few examples of the products launched during the year include the Silent Performer and Silent Performer Cyclonic vacuum cleaners launched throughout Europe. The new products are contributing strongly to increased profitability and reduced portfolio complexity by cutting six product platforms down to two.
Other examples are the GourmetPro, which is the AEG version of the Masterpiece Collection, a range of exclusive small domestic appliances launched at the end of 2014 and which was spread to several markets, such as North America, in 2015.
The Eureka Brushroll Clean vacuum cleaner was launched in North -America at he top of the Eureka range.
During the year, operations continued to be negatively impacted by unfavorable currency movements and reduced volumes in several key markets. To improve profitability, measures were initiated to structurally reduce costs. These measures include staff reductions and downsizing of certain activities, mainly in the U.S., Sweden and China. These actions are expected to reach full effect from end of 2016, with estimated annual cost savings of SEK 120m. Costs related to the program of SEK 190m impacted operating income.
As part of reducing exposure to changes in currency rates, the Group’s own production in EMEA and Latin America has been increased and now accounts for about 50% of Electrolux vacuum cleaner products.
Electrolux organic sales declined by 3.8% due to lower sales volumes of vacuum cleaners in Latin America, Asia/Pacific and North America. This was, to some extent, mitigated by increased sales in Europe.
Operating income declined year-over-year. Restructuring costs, lower sales volumes and a continued negative currency trend impacted earnings negatively.
The bagless Electrolux vacuum-cleaner Silent Performer Cyclonic was launched in September 2015. This bagless vacuum cleaner is silent thanks to the Silence Pro System and also has special filters for clean-air filtration to create a cleaner home for allergy-sensitive people. Bagless vacuum cleaners is a growing market segment.
The Electrolux vacuum cleaner PowerForceGreen is made of 65% recycled plastics. Green Range products, the most energy-efficient products, posted a strong sales trend in Europe, particularly in Germany.
Small Domestic Appliances, such as coffee makers, espresso machines, blenders, irons, toasters, kettles, food processors, is a growing global market segment. Electrolux continues to develop products in these categories, for example, the Electrolux Expressionist range launched in several markets globally.