The Electrolux share

There are five main trends impacting the industry; shift in consumer power, digitalization, sustainability, growing global middle class and industry consolidation. Electrolux is well positioned to capitalize on the opportunities that those industry changes create. Consumers are becoming increasingly more knowledgeable about their options when purchasing appliances by using on-line information, via social media and through mobile access. Electrolux focuses on offering outstanding consumer experience innovation that is specifically tailored to appeal to the needs of targeted consumers and segments. 

The European appliance market in terms of industry shipments showed market growth of around 2% in 2019 year-over-year, driven mainly by Eastern Europe. Electrolux continued to gain value market share in the focus area built-in kitchen products in Europe. In North America, trade tariffs triggered price increases resulting in uncertainty and industry shipments of core appliances were down by 2% compared to 2018. In Latin America and Southeast Asia, demand is estimated to have been slightly positive, while the Australian market was slightly down year-over-year.

Profitable growth is driven through two key areas; the first is sustainable consumer experience innovation, and the second increased efficiency through digitalization, automation and modularization. In addition, these two areas are supported by a solid financial position enabling Electrolux to grow its business further.

In 2019, price increases fully offset the headwinds from higher raw material prices, trade tariffs and currency. The negative year-over-year impact from raw material prices, trade tariffs and currency was SEK 1.5bn in 2019.

We are consolidating our U.S. production footprint and investing in modularized products in automated production. We are doing this in our two largest product categories, refrigeration/freezers and cooking, accounting for ~2/3 of North America’s sales. Through best-in-class automation level and modularization in our two new facilities in Anderson and Springfield, we expect significant cost-efficiencies and increased speed of innovation. The new Anderson facility was started up in 2019, while the new Springfield facility is still under construction. These investments are part of the re-engineering program that started in 2018. We are also simplifying operations by reducing the number of product models. .

A strong focus on innovation to improve consumer experiences is our guiding compass and a key driver for profitable growth. In 2019, we continued to have a favorable impact on earnings from improved mix by selling more high-margin products. Electrolux 100^th year has been product launch intensive, including significant kitchen range launches in Europe and Asia-Pacific. We believe our innovation power will continue to strengthen our competiveness.