Electrolux 2015 Annual Report Download - page 60

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Small Appliances
Electrolux is one of the world’s largest vacuum-cleaner manufacturers
and the only global company in the industry. During the year, a strong
focus was applied to reduce complexity and concentrate operations
on the most profitable product categories.
Henrik Bergström, Head of Small Appliances
In the vacuum-cleaner segment, the
Group holds leading positions in the
largest markets, and has a strong pres-
ence in the premium vacuum-cleaner
and rechargeable, handheld vac-
uum-cleaner segments. Its global
market share is about %.
Product development is focused
on innovative and energy-efficient
vacuum cleaners in the upper-price
segments. In recent years, a compre-
hensive transition of Electrolux vacuum
cleaners has been made to comply
with new energy-labeling requirements
in Europe. A global range of premium
small domestic appliances products
has been developed and launched
and product development is focused
on innovative kitchen appliances with
great performance.
In Europe, most products are sold
under the Electrolux brand, which is
complemented with the AEG brand.
In North America, the Eureka brand is
the main brand in the vacuum-cleaner
segment, complemented by the
Electrolux brand in the more premium
segments. Sales in Latin America and
Asia are predominantly under the
Electrolux brand.
Growth and innovation
In , sales declined slightly for the
business area. Vacuum-cleaner sales
volumes increased in Europe and
declined in the U.S. and Brazil. Sales of
small domestic appliances declined in
China and Brazil.
During the year, a strong focus was
applied to further reduce complexity
and concentrate operations on the
most profitable vacuum cleaners and
small domestic appliances product
categories. Marketing initiatives were
primarily focused on twelve prioritized
product platforms. The prioritized
product platforms are recent launches
and accounted for almost % of sales
in .
A few examples of the products
launched during the year include the
Silent Performer and Silent Performer
Cyclonic vacuum cleaners launched
throughout Europe. The new products
are contributing strongly to increased
profitability and reduced portfolio
complexity by cutting six product plat-
forms down to two.
Other examples are the Gourmet-
Pro, which is the AEG version of the
Masterpiece Collection, a range of
exclusive small domestic appliances
launched at the end of  and which
was spread to several markets, such as
North America, in .
The Eureka Brushroll Clean vac-
uum cleaner was launched in North
America at he top of the Eureka range.
Operational excellence
During the year, operations contin-
ued to be negatively impacted by
unfavorable currency movements
and reduced volumes in several key
markets. To improve profitability,
measures were initiated to structurally
reduce costs. These measures include
staff reductions and downsizing of
certain activities, mainly in the U.S.,
Sweden and China. These actions are
expected to reach full effect from end
of , with estimated annual cost
savings of SEK m. Costs related to
the program of SEK m impacted
operating income.
As part of reducing exposure to
changes in currency rates, the Group’s
own production in EMEA and Latin
America has been increased and now
accounts for about % of Electrolux
vacuum-cleaner products.
PRIORITIES
MOVING FORWARD
• Focus strongly on improving profitability
• Concentrate on prioritized product-
platforms to improve mix and reduce
complexity.
• Reduce costs through more focused
operations and increased manufactur-
ing efficiencies.
• Continue to launch innovative products.
COMMENTS
ON PERFORMANCE
Electrolux organic sales declined by .%
due to lower sales volumes of vacuum
cleaners in Latin America, Asia/Pacific
and North America. This was, to some
extent, mitigated by increased sales in
Europe.
Operating income declined year-over-
year. Restructuring costs, lower sales vol-
umes and a continued negative currency
trend impacted earnings negatively.
NET SALES AND
OPERATING MARGIN
MARKET POSITION
• Leading positions in EMEA, Latin
America, North America and parts
of Asia/Pacific.
ORGANIC GROWTH
-3.8%
SHARE OF NET SALES
7%
SEKm
-2,000
0
2,000
4,000
6,000
8,000
10,000
1514131211
Net sales Operating margin
%
-3
0
3
6
9
12
15
 UX AL 
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 