Electrolux 2007 Annual Report Download - page 16

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18%
14%
core appliances
floor-care products
Market shares
Electrolux has strong positions throughout Europe for appliances and vacuum cleaners.
The share of sales in Eastern Europe and through kitchen specialists is growing rapidly.
High growth rate in Eastern Europe
The European market for appliances amounts to approximately
SEK 246 billion annually, of which Eastern Europe accounts for
approximately one fourth. Growth in Western Europe is driven by
innovation and design as well as an increase in the number of
households due to demographic changes. Growth in Eastern
Europe, which has been vigorous in recent years, is driven primar-
ily by an improving standard of living. For Europe as a whole,
demand in 2007 for core appliances and vacuum cleaners grew
by 1.3% and 2.6%, respectively.
Virtually all households in Europe have access to refrigerators
and cookers, and many to washing machines. The share of
households with freezers, dishwashers and tumble dryers is con-
siderably lower in Eastern than in Western Europe. Since the
European market comprises many countries and language areas,
there are still many different producers and brands. Large varia-
tions in consumer behavior as well as a low level of consolidation
among retailers have led to price pressure, despite rising costs for
raw materials.
Increasing share for kitchen specialists
The European market is dominated by many small, local and inde-
pendent retail chains that focus on electrical and electronic prod-
ucts as well as kitchen fi xtures. Consolidation of retailers for
household appliances is ongoing.
The share of sales by kitchen specialists in Western Europe has
grown over the past ten years and is now approximately 25% of
the market in value. In Germany and Italy, the corresponding fi g-
ure is approximately 40%. Sales over the Internet also show rapid
growth. Most retail chains offer Internet service to their custom-
ers, while new players who sell only on the web are entering the
market. Electrolux products are sold largely through retail chains
and kitchen manufacturers, but the share sold by kitchen special-
ists is increasing.
Strong positions throughout Europe
Electrolux has strong positions for appliances and vacuum clean-
ers throughout Europe, with the Italian, UK and German markets
showing the highest levels of sales. Approximately 23% of the
Group’s sales of major appliances and approximately 30% of
sales of vacuum cleaners are in Eastern Europe. These shares are
increasing on the basis of rapid market growth as well as the
Group’s strong positions in production and distribution within this
region. For additional information about Electrolux growth in East-
ern Europe, see page 31.
Group sales of appliances in Europe rose during the year, on the basis
of an improved product mix and higher volumes. Extra costs for new
products adversely affected income and operating income declined
compared to 2006.
Consumer Durables Europe
Share of operating income
43%
Share of sales
42%
90
Million units
70
50
30
0
98 99 00 01 02 03 04 05 06 07
Growth of shipments of core appliances
in Europe, excl. Turkey
Net sales
Operating margin
10
8
6
4
2
0
05 0706
%
50,000
40,000
30,000
20,000
10,000
0
SEKm
Industry shipments of core
appliances in Europe
increased by 1% in 2007 in
comparison with the previ-
ous year. Demand in East-
ern Europe rised by 8%,
while demand in Western
Europe declined by 1%.
Group sales of appliances
in Europe rose during the
year, on the basis of an
improved product mix and
higher volumes.
FactsNet sales and operating margin
Consumer Durables Europe’s share of sales
and operating income 2007
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business areas | consumer durables | europe
CORE APPLIANCES
Major markets
• Germany
• UK
• Italy
Major competitors
• Bosch-Siemens
• Indesit
• Whirlpool
VACUUM CLEANERS
Major markets
• Germany
• UK
• France
Major competitors
• Bosch-Siemens
• Dyson
• Miele
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