Strong position in a challenging market environment
Major Appliances Latin America
Position and Strengths
- Leading market positions. Electrolux holds about 25% combined market share in Brazil, Chile and Argentina, with leadership in the cold segments and laundry. Good opportunities for long-term growth as the middle class is expected to grow rapidly in Latin America.
- Well-established brands including Electrolux in Brazil, Fensa and Mademsa in Chile, Electrolux and Gafa in Argentina, and Frigidaire in the northern part of the region.
- Strong design and consumer preference capabilities resulting in a relevant product portfolio tailored to the specific consumer demands in the region. The business area has an extensive track record of ensuring a high degree of consumer preference tests before a new product is launched.
- Local manufacturing is a competitive advantage as several of the main markets such as Brazil and Argentina are protected by customs tariffs.
- Fast-growing channel for direct sales to consumers, and an extensive distribution network. In Brazil, the largest market in the region, sales through customers’ on-line channel accounted for 9% of Electrolux sales in the country in 2018, up from 3% in 2015.
1 Stability & Focus
- Continue to drive portfolio management to restore profitability in a changing demand situation. This is especially key in the main markets Brazil, Chile and Argentina where the business area has strong market positions.
- Execute re-engineering of manufacturing, including digitalization, automation and new product architectures.
- Reduce costs and complexity to achieve profitable niche positions in regions outside the three main markets.
Net sales and operating margin
share of net sales
- Organic sales growth of 9.8%, driven by price increases and product mix improvement. Cost-based price increases were implemented to mitigate impact from higher raw material costs and negative currency effects due to macroeconomic volatility. Operating income and margin improved.
- Clear focus on cost-efficiency, with the ongoing cost-efficiency program continuing to be effective. An important phase of the re-engineering of the plant in Curitiba, Brazil, was concluded.
- Investments in manufacturing re-engineering and new product architectures to drive profitable growth.
- Product portfolio management continued, resulting in a more focused and sharpened product offering in the most profitable categories. This contributed to mix improvements, particularly in Brazil.
- Reorganized operations in Colombia, Peru and Ecuador under one managerial and operational team, resulting in lower costs and more efficient channel and product portfolio management.