Growing profitabilty in premium brands
Position and Strengths
- Top three position in most geographies with overall leadership in the Nordics with 39% market share. Second largest player in Western Europe with a market share in Core Appliances of 17% and the third largest player in Eastern Europe with a 15% market share.
- Leading position in Floor Care with a strong presence in the premium segment. Electrolux has been at the forefront of vacuum cleaning innovation for 100 years and has a strong brand recognition in vacuum cleaners.
- 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 within premium brands over 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.
- Well-established portfolio management approach focusing on the most profitable products is a main driver to the margin increase in recent years. Approximately 80% of the business area's sales are in the higher margin categories.
- 1Stability &
To achieve profitable growth, Electrolux applies a three-step model.
The business area Europe is in the third step, Targeted Growth.
- Continue to grow in areas of strength - built-in kitchen, cooking and laundry - through focused innovation based on consumer insight including consumer star ratings and reviews.
- Lift brand position through the sharpening of the AEG and Electrolux brands with a clear focus on which consumer groups to target.
- Create outstanding consumer experience by simplifying and improving the usage of products to solve consumer pain points and make their lives easier and more enjoyable.
- Develop the highly profitable area of aftermarket sales through offering attractive consumables and accessories as well as through services such as extended warranties and fixed price repair services.
- Employ new connected technologies and ecosystems within the smart home including voice control for assisted cooking. The majority of new products launched should be connectivity-ready. Connectivity also creates opportunities to increase aftermarket sales.
Net sales and operating margin
share of net sales
1) Excl. non-recurring items
- Organic sales growth of 1.7% driven by improved brand and product mix as well as price increases.
- Improved operating income and margin driven by strong organic contribution from price and mix that more than compensated for higher raw material costs, increased marketing investments to support important product launches as well as higher cost related to product architecture projects. Non-recurring items of SEK -752 (-747)m included in operating income related in 2019 to restructuring charges for efficiency measures and outsourcing projects, see note 7 in the 2019 Annual Report.
- Electrolux continued to gain market share in the focus area built-in kitchen products in Europe.
- In 2019, a new kitchen range under the Electrolux brand was launched. Combining technology with human-centric Scandinavian design, it takes cooking experience to a whole new level for the consumer. From meal inspiration, all the way through cooking and cleaning up, the range offers appliances that help the consumer at every stage of the cooking journey.
- Continued category execution focusing on premium segments. Particular success in built-in kitchen and laundry products under the AEG and Electrolux brands. Highlights include:
- The Electrolux 900 SensePro® hob is the most advanced induction hob to date. The hob has the world’s first wireless and battery-less food probe that enables perfect results by letting the user simply tell the hob what is cooking and how they would like it done. The probe can also control water temperature so accurately it allows users to cook sous vide on the hob.
- The multi-functional Electrolux 900 SteamPro oven has a Steamify® feature that automatically combines the right amount of steam and traditional heat for best-in-class baking, roasting and steaming results. The oven is connected and works with the Innit recipe app and can be voice controlled through Google Home for even more intuitive cooking assistance.
- The AEG 9000 Premium Edition washer and dryer pair offer matching programs. This means that washing and drying cycles are synchronized automatically when starting the laundry, making the entire process easier as clothes then don't need to be sorted before drying. Through the connectivity feature, users can remotely check the progress of their laundry on their mobile devices.