Measures to improve profitability continued and operating income increased significantly. Products such as the Anova Precision Cooker and the new robotic vacuum cleaner Electrolux PURE i9 were launched.
Ola Nilsson, Head of Home Care & Small Domestic Appliances
Home Care & SDA has reached the Sustainable Profitability phase on the path to profitable growth. This entails a firm focus on active product portfolio management and exiting unprofitable product categories and markets. After the divestment of the Eureka brand in North America 2016, activities to reposition the operations and leaving unprofitable product categories continued in other regions.
The business focus is to grow products in Home Care and Small Domestic Appliances in the areas of Wellbeing, Taste and Care. New product launches for vacuum cleaners are primarily focused on growth in cordless and robotics. Electrolux is also building a wellbeing ecosystem with the ranges EASE, WELL and PURE. The combination of floor care and air care offerings opens up opportunities to deliver enhanced consumer experiences.
Initiatives continued to focus on improving the customer offering, reducing complexity and concentrating operations on the most profitable product categories.
Active product portfolio management and exiting unprofitable product categories have improved the product mix during the year. Another important focus has been to improve the quality of products. The service call rate has improved significantly and warranty costs has declined almost by half.
Tight cost control and reorganization of operations in several regions has improved the cost efficiency significantly.
Electrolux acquired Anova, a U.S. based provider of the Anova Precision Cooker, an innovative connected device for sous vide cooking that enables restaurant-quality results in the home. The acquisition provides a significant opportunity for profitable growth in this emerging product category. Anova’s direct-to-consumer business model and digital focus are of strong strategic interest to Electrolux. Anova had a positive contribution of 4.7% on sales in 2017.
The business area has the global responsibility to develop the Electrolux offering around healthy wellbeing in the home to create Best-in-class consumer experiences in wellbeing, and grow the Electrolux presence in floor care, air care and water care.
In the vacuum-cleaner segment, the Group holds leading positions in the largest markets, and has a strong presence in the premium segment of both corded and cordless vacuum cleaners. The overall market for vacuum cleaners increased in 2017, driven mainly by cordless handsticks, which grew across most regions. Product development is focused on innovative and energy-efficient vacuum cleaners in the upper-price segments. For small domestic appliances, product development is focused on innovative, high performance kitchen and laundry appliances.
In Europe, most products are sold under the Electrolux brand, which is complemented with the AEG brand. In North America Electrolux has a smaller position through the acquisition of the Anova brand which brings exciting new possibilities for sales and connectivity together with a new innovation hub. Sales in Latin America and Asia are predominantly under the Electrolux brand.
6%
5.5%
The program to restore profitability continued during the year and operating income and margin improved significantly. Strategic decision to focus the business on the strongest categories improved the mix, which in combination with increased cost efficiencies contributed to earnings.
Exiting unprofitable product categories had a negative impact on sales in 2017.
| 13 | 14 | 15 | 16 | 17 | |
| Net sales | 8952 | 8678 | 8958 | 8183 | 7808 |
| Operating margin | 3.5 | 2.3 | -0.7 | 2.9 | 5.5 |
Drive aggressive product launch plan to grow in cordless and robotics vacuum-cleaners
Build wellbeing ecosystem with the EASE, WELL and PURE ranges
Use Anova as a growth driver in the U.S. with B2C and digital marketing, as well as connected appliances
The new robotic vacuum cleaner Electrolux PURE i9 (also called AEG RX9).
The successful launch of the new robotic vacuum cleaner Electrolux PURE i9 (also called AEG RX9) was an important step in the further improvement of the wellbeing offering. The PURE i9 can be controlled via a smartphone and, unlike other robotic vacuum cleaners, it can detect obstacles and manoeuvre around them. It received recognition as being best-in-test in a popular tech magazine in Sweden, and initial consumer feedback was very good.
The Anova Precision Cooker connects to a user’s smartphone and offers thousands of recipes to make it easy to cook sous vide – a cooking technique that is well established in gourmet restaurants and growing among consumers. Food is placed in a sealable bag and brought to a precisely controlled temperature in a water bath. The precision cooker is an immersion circulator that heats and maintains the water at an exact temperature, ensuring great results.