Strong position in a challenging market environment
Latin America
Position and Strengths
- Electrolux in Latin America holds about 32% combined value market share in Brazil, Chile and Argentina, with Electrolux brand leadership in the refrigeration/freezer segments. There are good opportunities for long-term growth driven by a growing middle class.
- 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, primarily in Brazil, and an extensive distribution network.
To achieve profitable growth, Electrolux applies a three-step model.
The business area Latin America is in the second step, Sustainable Profitability.
Strategic focus
- Sustain strong market positions in Brazil, Chile and Argentina.
- Continue to drive brand and product portfolio management in a volatile market environment. This is especially key in the main markets of Brazil, Chile and Argentina.
- Improve productivity and increase the speed of innovation through the re-engineering of manufacturing, including digitalization, automation and new product architectures.
- Achieve profitable positions in regions outside the three main markets by reducing cost and complexity.
Net sales and operating margin
share of net sales
16%
Operating margin1)
3.7%
1) Excl. non-recurring items
2019 Execution
- Organic sales growth of 10.9% mainly driven by Brazil but also by Argentina. Both price increases and mix improvement contributed, as well as higher sales volumes in Brazil.
- Increased operating income and margin as a result of positive mix contribution, higher volumes and good execution on cost-efficiency measures. Increased prices offset higher raw material costs but could not fully compensate for significant currency headwinds. Non-recurring items of SEK 1,101 (0)m included in operating income mainly related to the recovery of overpaid sales tax in Brazil, see note 7 in the annual report.
- Investments in manufacturing re-engineering and new product architectures to drive profitable growth continued at the refrigerator facility in Curitiba and the cooking facility in Sao Carlos. These investments in Brazil will reduce costs and complexity, while improving the product offering.
- Product portfolio management continued, resulting in a more focused and sharpened product offering in the most profitable categories, with successes in multidoor refrigerators and high capacity washers. This contributed to mix improvements, particularly in Brazil.
Explore our case stories from Latin America
Electrolux
Electrolux is a leading global appliance company that has shaped living for the better for more than 100 years. We reinvent taste, care and wellbeing experiences for millions of people around the world, always striving to be at the forefront of sustainability in society through our solutions and operations. Under our brands, including Electrolux, AEG and Frigidaire, we sell approximately 60 million household products in approximately 120 markets every year. In 2019 Electrolux had sales of SEK 119 billion and employed 49,000 people around the world.
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