Macroeconomic conditions in Latin America improved in 2017 and Electrolux continued to focus on cost efficiency and product portfolio management and as result operating income improved significantly.
Ricardo Cons, Head of Major Appliances Latin America
Major appliances Latin America has reached the second phase on the path to profitable growth; Sustainable Profitability. This entails a strong focus on cost efficiency and product portfolio management. The aim is to widen the product offering and create Best-in-class consumer experiences and to capitalize on the macroeconomic recovery. Electrolux is the market leader in a large number of product categories, with high product quality and local production. Focus is on increasing profitability particularly in Electrolux major markets.
Optimization of the product portfolio to the most profitable categories and products with distinct consumer benefits continued to be a top priority. During the year sales volumes increased significantly.
A cost-efficiency program continued to be effective across all units. This included increased automation, reduced use of resources, improved product quality, inventory optimization, occupational health and environmental policies improvement.
Efforts to better utilize the installed base and level of waste materials were successful as the plants in Rosario, Argentina and Santiago, Chile reached 100% of planned production volume and reduced the level of waste materials.
During the year, Electrolux acquired the Continental brand in Brazil. The acquisition will enable Electrolux to further expand market coverage in the region and support profitable growth.
The Electrolux brand occupies a strong position in Latin America through its innovative products and close collaboration with market-leading retail chains.
Brazil is the Group’s largest market in the region. In major Latin American countries such as Brazil, Chile and Argentina, Electrolux is the market leader in a large number of product categories in appliances. The Group holds a strong portfolio of brands, including Electrolux, Frigidaire, Fensa, Mademsa, Gafa and Continental. Key competitors comprise Whirlpool, LG Electronics, Samsung and Mabe.
In 2017, market demand for core appliances in Brazil showed growth, following several years with a negative trend. Brazil accounts for about 50% of the total market. Demand in Argentina and Chile also increased.
The Latin American market offers excellent opportunities for long-term growth in pace with an expanding middle class. The market is also characterized by a high degree of consolidation. These factors contribute to strengthening the potential of established manufacturers in the region.
14%
2.5%
The favorable market trend and product portfolio management in major markets such as Brazil and Argentina contributed to sales growth across categories in the region.
Operating income and operating margin continued to recover and improved significantly as a result of higher volumes and improved cost-efficiency.
| 13 | 14 | 15 | 16 | 17 | |
| Net sales | 20695 | 20041 | 18546 | 15419 | 17302 |
| Operating margin | 4.7 | 5.3 | 2.5 | -0.4 | 2.5 |
Continued cost-efficiency focus
Focus on product-portfolio management
Deliver Best-in-class products to promote effortless consumer experience
Electrolux microwave oven with Air Cook.
Electrolux introduced innovative products in several markets. These include the new top load washing machine with impeller technology and stainless steel drum designed for consumers who are looking for a high capacity product that deliver better fabric care. Electrolux has also developed Jet& Clean technology, in which consumers need not worry about cleaning the dispenser at the end of each washing process, and Perfect Dilution, preventing detergent staining of clothes. It is all about thinking of consumers’ needs and aspirations.
Electrolux is changing the way we cook with microwave ovens. The new microwave oven with Air Cook is the first product to include a system that enables the powerful circulation of hot air, allowing consumers to fry food without oil, using only hot air during the preparation process.