Strengthening our innovation and efficiency platform
In 2019, we intensified our work to make our business even more consumer focused and streamlined, as well as executed on our re-engineering program. These measures – along with the proposed separation of our professional products business – are key to creating even more shareholder value going forward.
Strengthening our position in key categories
This year, we continued to have favorable sales and earnings impact from product-mix improvements, which means that we are selling more of our innovative and premium products that have higher margins. Our U.S. manufacturing consolidation however, had a negative impact on sales and earnings. Net sales for 2019 was SEK 119bn and operating margin excluding non-recurring items was 3.8%.
Strong focus on consumer experience innovation
Important competitive assets for Electrolux are our strong focus on innovation to improve the consumer experience, and our track record of successfully driving cost efficiency and flexibility. A solid balance sheet is facilitating profitable growth.
2019 was a launch intensive year and our new products were very well received. For example, our new built-in kitchen range in Europe was rated 4.9 out of 5 stars in consumer online reviews at launch. We were also the first to bring built-in Air Fry technology to the North American cooker market which has also been a great success with strong growth and a 4.6 consumer star rating.
A clear roadmap to strengthen our positions
Our well-established brands with a strong innovation heritage, together with being a leader in sustainability, differentiate Electrolux and are key to drive profitable growth.
Looking forward, emerging markets represent huge business opportunities, and we have a clear roadmap to strengthen our position in these markets. We also aim to strengthen our position in the aftermarket business by doubling aftermarket sales by 2025.
Creating value through a more efficient and streamlined business
Our SEK 8bn re-engineering investment program in automation, digitalization and innovation continued during 2019. We consolidated our U.S. refrigeration and freezer production, and started up production in our new Anderson facility, the biggest step we have ever taken in terms of automation. We also continued our investments in production facilities in Latin America. This means, all initiatives under this investment program have now been announced.
During the year we also identified additional opportunities to improve efficiency and create an even more streamlined setup for our consumer business by creating four regionally focused business areas and reorganizing key global functions. We anticipate that the total annual cost savings from these streamlining initiatives, and the re-engineering investment program will amount to approximately SEK 3.5bn, with full effect from 2024.
A century of better living
We celebrated our 100th anniversary in 2019 by launching the Better Living Program, a bold sustainability initiative. The program includes a broad range of actions and targets by 2030 and marks our commitment to a more sustainable lifestyle for the next 100 years.
To further rise to the challenge of climate change, in 2019 we made a commitment to net zero emissions throughout our value chain by 2050 at the Global Climate action Summit.
Well-positioned in a changing world
Our journey towards profitable growth continues in 2020. As we now have an even more consumer-focused organization with key global capabilities to accelerate product innovation and efficiency, I am confident that we are better positioned than ever to deliver long-term shareholder value.
Stockholm, February 2020
President and CEO