Electrolux 1996 Annual Report Download - page 16

Household Appliances
Operations in Europe
The market for core appliances in Western
Europe fell by about 2% in volume. The
decline refers mainly to the last two quar-
ters of the year. Virtually all countries
showed a downturn, the largest being in
Italy, France, Sweden and Denmark. The
German market also declined in volume in
the built-in appliances segment, which is
important for the Group.
The total European market for core
appliances in 1996 is estimated at 44.0
(44.9) million units.
Operating income for the Group’s
European operation declined as a result of
lower sales volume and a less favorable
product mix.
Continued organizational changes
The process of changing the European
organization to achieve higher internal
efficiency and improved customer service
continued during the year. A number of
pan-European functions were established in
such areas as logistics, IT, product planning
and brand positioning. Goals include creat-
ing a framework for more efficient, more
market-driven product development, and
strengthening the profiles of the pan-Euro-
pean brands in relation to local and regional
brands.
Operations in the US
The American white-goods market grew by
3.5% in volume in 1996. All product areas
except freezers and gas cookers showed
growth, with the largest increases being in
dishwashers and electric cookers.
The market for core appliances in the
US, i.e. deliveries from domestic producers
plus imports, amounted to 32.3 (31.2) mil-
lion units in 1996.
The Frigidaire brand increased its
market share somewhat from the previous
year. The Group’s total market share
decreased slightly, however, mainly due to
lower deliveries to private brands. Operat-
ing income for the American operation
showed a marked improvement on the
basis of increased sales of new high-end
products with better margins, and lower
production costs.
Frigidaire Home Products
As of 1997, the operation in the Frigidaire
Company has been merged with the US
outdoor-product subsidiaries American
Yard Products and Poulan/Weed Eater in a
single company, Frigidaire Home Products.
Like the changes in the European operation,
the merger will enable improved customer
service and lower costs in such areas as
administration, logistics, purchasing and IT.
Acquisition of Refripar in Brazil
In recent years the Group has devoted large
investments to creation of a white-goods
operation in new growth markets outside
Western Europe and North America. A
number of acquisitions and joint ventures
have been implemented in Eastern Europe,
China and India. Substantial market invest-
ments have also been made in the ASEAN
countries, i.e. The Philippines, Indonesia,
Malaysia, Singapore and Thailand.
The largest acquisition in 1996 com-
prised a majority stake in Refripar, the sec-
ond largest white-goods company in Brazil,
with sales of BRL 800 million (approxi-
mately SEK 5,300m) in 1996 and about
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Electrolux Annual Report 1996
An AEG hob based on the induction-heating
principle. Benefits include shorter heating-time
and more precise temperature control than in
conventional products.
The new Frigidaire Gallery Tumble Action Washer
features extra large capacity and better washing
performance. It consumes substantially less water
and energy than conventional American models.
In 1996 Electrolux acquired a majority stake in
Refripar, the second largest white-goods company
in Brazil, with annual sales of approximately
SEK 5,300m. The company has strong market
positions for refrigerators and freezers.