Path to profitable growth
To achieve sustainable profitable growth, Electrolux applies a three-step model for each of its business areas. This begins by ensuring each business operates with stability and predictability in all key processes together with a clear focus based on active choices to increase profitability.
The second step is about delivering this with sustainable profitability. This means that the focused business model is resilient to external factors and has clear competitive advantages that ensure long-term profitability.
In the third step, the business area can accelerate growth in a targeted way by leveraging its strength through selective investments with a clear return.
- 1Stability &
In 2019, the Electrolux Group continued to execute its path to profitable growth model. Electrolux strengthened its platform for future growth by launching several important new products, initiating additional efficiency measures and investing in modularized products in automated manufacturing.
The two business areas Europe as well as Asia-Pacific and Middle East and Africa are in the third stage focusing on growing their business. The business areas North America and Latin America are in an earlier stage of the journey. In North America, the market transformation and consolidation of manufacturing affected short-term financial performance. Latin America was facing significant headwinds related to economic instability, increased raw material costs and currency headwinds.
Key activities in 2019 have been to continue to drive portfolio management targeting the most profitable product categories and products. One example is the profitable segments for steam ovens in Europe, where Electrolux continued to strengthen its position.
Other focus areas during the year have been:
- The creation of a more focused and innovative product portfolio with strong consumer benefits. In 2019, a comprehensive new range of appliances was launched under a sharpened Electrolux brand. The new range strengthens the company's position in several global markets, such as Europe and Australia.
- An efficient and flexible cost structure through re-engineering investments. Extensive re-engineering investments were executed at the Andersson facility for refrigerators/freezers in North America and at manufacturing facilities in Latin America.
- Well-established brands in line with consumer trends. In 2019, a new visual identity was introduced to sharpen the Electrolux brand, similar to what was done for Frigidaire in 2018 and AEG in 2017.
- Work to promote better and more sustainable living for people around the world. In 2019, Electrolux launched the Better Living Program, with bold targets for 2030 focusing on better eating, better garment care and a better home environment.