Growing profitabilty in premium brands
Major Appliances EMEA
Position and Strengths
- Top three position in most geographies with overall leadership in Nordics (36% market share). Second largest player in Western Europe with a market share in Core Appliances of 16% and the third largest player in Eastern Europe with a 15% market share.
- Strong positions in the targeted segments built-in kitchen, cooking and laundry. Well-established relationships with kitchen retailers, together with a full offering, have been vital to successfully grow in the attractive built-in kitchen segment.
- Gained market share under premium brand during the last five years. Mainly driven by product innovation in combination with sharpened brand proposition targeting specific consumer segments and needs.
- Lean and efficient manufacturing base with a high degree of automation compared to the industry as a whole. More than 60% of the production capabilities are in low cost regions.
- Strong product pipeline centered around consumer experience innovation, as indicated by a number of launches at IFA in 2018, such as a new range of induction hobs that provides precise and automated assistance. This includes the SenseProbe induction hob with a world first wireless and battery-less food probe, that automatically controls the hob in order to achieve perfect results. A range of new Electrolux cooking products will be launched in the spring of 2019.
- Well-established portfolio management approach focusing on the most profitable products is a main driver to the margin increase during the last few years. More than 80% of the business area’s sales are in the higher margin categories; Grow and Grow profitably.
1 Stability & Focus
- Continue to grow in areas of strength, built-in kitchen, cooking and laundry, through focused innovation based on consumer insight.
- Lift brand position through sharpening of the AEG and Electrolux brands with a clear focus on which consumer group to target.
- Create outstanding consumer experience by simplifying and improving the usage of products through connectivity that strengthens communication with the consumer after the purchase. Connectivity also opens opportunities to increase aftermarket sales.
- Employ new technologies and ecosystems including voice control, as for example in assisted cooking. The majority of new products launched should be connectivity-ready.
Net sales and operating margin
share of net sales
1) Excl. non-recurring items
- Organic sales growth of 5.3%. Operating income excluding non-recurring items improved. Higher volumes, mix improvements and increased cost efficiencies offset headwinds from raw material costs and currency. Non-recurring items amounted to SEK -747m, whereof SEK -493m related to an investigation by the French Competition Authority and SEK -254m to an unfavorable court ruling in France (see Note 7 in the Annual Report).
- Gained market shares driven by the premium brands Electrolux and AEG.
- Continued category execution focusing on premium segments resulting in higher sales. Particular success in built-in kitchen and laundry products under the AEG and Electrolux brands.
- A relaunch of the Electrolux brand was introduced to retailers during the year with products being launched during 2019. A similar relaunch of the AEG brand in 2016/2017 had a positive impact on 2018 net sales and EBIT.
- In March 2018, Electrolux launched a connected steam oven with an integrated camera. This is an example of how Electrolux is investing in connected appliances that enhance the experience for consumers and create new business opportunities.
- During the year the acquisitions in 2017, of Kwikot, South Africa’s leading manufacturer of water heaters, and Best, a European manufacturer of innovative kitchen hoods, were integrated in operations to reinforce Electrolux profitable growth capabilities.