Category Archives: Financial

SEB ACQUISITION PROCESS OF THE SOFILAC GROUP AND ITS EMBLEMATIC BRANDS LACANCHE AND CHARVET

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Groupe SEB wishes to strengthen its expertise in the high-end cooking segment and thus continue its growth in the professional and semi-professional markets.

Sofilac is a French family group majority owned by members of the Augagneur family. It designs, manufactures, and distributes high-end semi-professional (Lacanche brand) and professional (notably with the Charvet brand) cooking equipment. Lacanche, Entreprise du Patrimoine Vivant, and Charvet offer exceptional, timeless and durable products based on unique know-how. With its iconic brands, the Sofilac Group meets the requirements of professional chefs and cooking enthusiasts to allow them to best express their talent.

This acquisition would allow Groupe SEB to strengthen its presence in the cooking segment by completing its network made up of its premium brands (Krampouz, Forge Adour, WMF, All-Clad, and Lagostina). It would thereby support Groupe SEB’s ambition to become a key player in the profitable and growing professional and semi-professional equipment markets, with complementary brands, products and distribution channels.Manufactured for several centuries in a Burgundy village of the same name, whose history is closely associated with metalwork, Lacanche stoves and cookers perpetuate the French culinary tradition. A wide variety of options and finishes make each “Gastronome Piano” a unique object.

Faithful to its original values, this family business combines passion, innovation and know-how. Recognized as a “Living Heritage Company”, it pays particular attention to the nobility of the materials and components, as well as the quality of the enameled color adornments of its equipment.

Russian manufacturers of household appliances asked for help

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Russian manufacturers of household appliances are talking about record revenue, but they note problems with profits, which is due to increased production and advertising costs, competition from Chinese and Turkish companies, as well as increased commissions from marketplaces. Kommersant writes about this with reference to market participants.

A representative of the Redmond household appliance brand noted that manufacturers from friendly countries are increasing their influence, so the industry would benefit from government assistance. In particular, he asked for a ban on parallel imports of goods from vendors who left the Russian market.

Founder of the Smart Solution group (Jacky’s brand) Huseyn Imanov pointed out that his company’s revenue had doubled to 3.4 billion rubles. He expects growth of another 30 percent this year.

At the same time, on the issue of profit, the businessman believes that a number of manufacturers, especially small ones, will start to lose revenue. In his opinion, the high demand for placement on marketplaces leads to an increase in advertising prices on sites, which directly affects profits.

A representative of Weissgauf said that the brand’s revenue doubled in 2023, but expressed confidence that it would decrease in 2024 due to the increase in the cost of goods. The ruble exchange rate, inflation and other circumstances force Russian manufacturers to raise prices for goods, which is why they lose out to suppliers from China and Turkey.

He called the sanctions pressure a significant problem, which forces the use of gasket companies to organize custom production, which hits profits.

In turn, the commercial director Holodilnik.ru Alexey Pogudalov believes that a large localization of production in Russia could correct the situation. The expert stressed that the demand in the domestic market makes it possible to take such a step.

LG Financial Results

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LG announced its financial results for the year 2023, disclosing a consolidated revenue of KRW 84.2 trillion and an operating profit of KRW 3.55 trillion. This marks the third consecutive year of achieving record-breaking annual revenue. The operating profit is also solid, approaching levels seen during the prior period of pent-up demand.

Despite challenging external factors such as an economic slowdown and reduced demand, LG’s core business of home appliances and the burgeoning vehicle components business have demonstrated remarkable resilience, maintaining continuous growth for eight consecutive years. The combined revenue of these businesses exceeded KRW 40 trillion last year, a substantial increase from KRW 18 trillion in 2015. Over the same period, the proportion of these two businesses in the total revenue has risen from 32.5 percent to 47.8 percent.

The performance is attributable to LG’s strategic efforts to enhance its business portfolio. The company successfully expanded its B2B business by identifying market turning points early on and integrated new business models, including subscription services, into existing frameworks. Furthermore, LG’s innovative content and service business model, leveraging its extensive user base of hundreds of millions of products globally, has also contributed to securing robust profitability.LG Home Appliance & Air Solution Company achieved an annual revenue of KRW 30.14 trillion, marking eight consecutive years of growth and ushering in the era of KRW 30 trillion. Introducing new business models including subscription services and expanding the B2B share in areas such as HVAC, components and built-in solutions contributed to this growth. The operating profit recorded an increase of over 76 percent compared to the previous year, reaching KRW 2.08 trillion.

In the coming year, the Company will accelerate a shift in its business model towards future readiness, including Direct-to-Consumer initiatives. It aims to expand the deployment of home appliance operating systems and extend subscription services to international markets. Additionally, there will be a swift progression in building smart home solutions that reflect the value of “Zero Labor Home.” In terms of products, the Company will seek to maintain its strategic approach of solidifying the premium leadership of key products, such as washing machines and refrigerators, while swiftly expanding region-specific lineups. To sustain continuous growth in the B2B sector, especially in areas like HVAC, the Company plans to strengthen its capabilities by establishing a complete, local business operation that encompasses product development, production and sales, with a focus on the evident electrification trends in regions such as North America and Europe.

Currys: JD.com considers takeover bid

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Currys could soon find itself the centre of a bidding war as Chinese online shopping giant JD.com considers making a takeover offer and Waterstones owner Elliott reviews its bid.

The Chinese ecommerce giant said on Monday that “it is in the very preliminary stages of evaluating a possible transaction that may include a cash offer for the entire issued share capital of Currys”. Elliott is understood to considering making a new cash bid for the electricals retailer after its initial £700m offer was rejected on Friday.

Frasers ups stake in AO

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Frasers Group has increased its stake in electricals retailer AO World as it launches an £80m share repurchase programme.

The retail group said on Monday that it intends to buy back up to 10 million shares, worth 2% of the company, over the next 11 weeks to 28 April with support from investment banking group Deutsche Numis

Frasers continues its acquisition spree with the group increasing its holding in AO from 23.07% to 24.7% on Tuesday.

The retail empire first snapped up a 19% stake, worth £75m, in the Bolton-based online retailer back in June.

Frasers also holds shares in AO rival Currys, which it said was part of a “strategic investment” as it looks to increase its “foothold in the electricals industry”

Ultimate products revenue down

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Ultimate Products has said Brits are buying fewer airfryers than before, leading revenues to drop four per cent in the second half of the year.

Ultimate Products, which owns Britain’s oldest houseware brand Salter founded in 1760, reported revenues of £84m, down from £87.6m in the first half of 2023, which it said was due to waning sales of the machinesThe group, which sells Russell Hobbs cookware and laundry products under licence as well as owning the Beldray brands, floated on the London Stock Exchange in an IPO worth more than £100m in 2017.

Haier recognized as the No.1 Global Major Appliances

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Haier has set an industry benchmark by earning the prestigious title of Global No. 1 major appliances for the 15th consecutive year by Euromonitor International. The brand has achieved this milestone with the help of its remarkable sales of refrigerators, washing machines, freezers, and electric wine coolers. Haier has continued with its mission to establish itself as a world-leading ecosystem brand,According to the data released by Euromonitor in 2023, Haier is the:

No.1 brand of refrigeration appliances in the world in volume sales for 16 consecutive years No.1 brand of home laundry appliances in the world in volume sales for 15 consecutive years No.1 brand of wine coolers in the world in volume sales for 14 consecutive years No.1 brand of freezers in the world in volume sales for 13 consecutive years

Miele launches worldwide efficiency program

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Miele Group is now also feeling the impact of a worldwide slump in demand for domestic appliances and drastic cost-side price increases. In terms of long-term countermeasures, a comprehensive program to further improve structures, processes and costs has been launched. As the Executive Board today announced to the workforce, additional financial room to manoeuvre in the order of € 500 m is to be freed up by 2026. By more than two-thirds, this will be achieved through improvements in turnover or through reductions in material and associated costs. Nevertheless, a substantial reduction in personnel costs is also unavoidable. This means that up to 2,700 jobs could be cut worldwide or be affected by relocation. The process will be conducted as socially compatibly as possible.

After three years of strong turnover growth in succession, the entire domestic appliance branch recorded a decline in business across the globe in 2023. Along with the end of the extraordinary economic cycle as a result of Covid, it is also the economic consequences of the war in Ukraine which have impacted the situation. And, unlike in earlier economic cooldowns in the markets, this is particularly noticeable in the premium segment. Against this backdrop, the preliminary turnover of the Miele Group dropped by around 9%; in terms of unit sales, the decline year-on-year was around double this percentage. There are no indications of market recovery in sight any time soon. At the same time, high inflation is resulting in significantly higher costs in procurement, for example for materials and energy, but also regarding wage tariffs.

‘What we are currently experiencing is not just a blip in the economic cycle but rather a sustainable shift in the framework conditions which are relevant to us and to which we must adjust’, the Executive Board of the Miele Group announced today to employees in an internal address. That is why prompt and decisive action will be taken in order to come out of this challenging situation with renewed strength. The framework for this is provided by a companywide cost and efficiency initiative under the title ‘Miele Performance Program’ which addresses the structures, processes and costs in all areas. With the aim of sustainably securing economic viability, additional financial room to manoeuvre in the order of € 500 m is to be created by 2026, whereby more than two-thirds of this will come from improvements in turnover and a reduction in material and associated costs.

Necessary response to changes in market conditions

But considerable savings must also be achieved in terms of personnel costs as the company considerably increased its expertise and capacities during the years since 2019 which were marked by strong growth. As a consequence of changes in the market situation, adjustments are now unavoidable. As plans currently stand, up to 2,000 jobs are potentially affected worldwide, chiefly in so-called indirect areas, i.e. persons not operating production machinery or on assembly lines.

Furthermore, considerable effort is necessary to put Laundry Care at Miele, currently hit by fierce and strong price-driven competition, back on an economically sound footing once again. To this end, the team in the Laundry Business Unit is working on a customer-centric product strategy, more compelling marketing and on a reduction in complexity. In addition to this, the current planning status means that, for reasons of costs, a relocation of further parts of washing machine production in Gütersloh and associated areas to the Miele plant in the Polish town of Ksawerów is inevitable.

Subject to the outcome of negotiations with employee representatives, it is also planned to relocate the assembly of almost all domestic washing machine to Ksawerów in stages through to 2027. In total, this would result in staggered cuts to around 700 jobs at the Gütersloh plant. The remaining parts of appliance production there, such as the press-shop, the foundry and the machining of castings, would not be affected and would remain in Gütersloh until further notice. This also applies to the assembly of washer-dryers and small commercial machines.

Cutbacks as socially compatible as possible

Taking the measures described together, potentially 2,700 of the current 23,000 or so jobs would be affected. ‘These are grave measures, and we are fully aware that this will hit many colleagues hard’, the Executive Board continues. Only this way will it be possible to put Miele back on track towards a successful future – as a strong and independent family company with a clear focus on premium and with the necessary earning power in all areas.

Which areas will be affected by staff cutbacks and to what extent has not yet been decided as details are to be further fleshed out over the coming months and will be the subject of negotiations with social partners. Potential downsizing to the extent described does not, though, mean that anywhere near the same number of redundancy notices are to be expected. The Executive Board also stressed a further point: ‘Miele would not be Miele if the pending transformation were not to be conducted as socially compatibly as possible and in close collaboration with employee representatives’. As announced, hopes will be pinned on a constructive dialogue with the IG Metall trade union.

Strategic investments in innovation and growth

In the year which marks 125 years of company history, a further avowed goal is to set the signals for growth once again. In this respect, Miele can build on its strong brand, on a unique claim to premium and quality within its branch, on delightful products and committed and creative teams in 50 countries. ‘Besides that, we are a family company which thinks in generations and not in terms of quarterly reports’, the Executive Board reiterated as it mapped out the prospects for the coming years. As a consequence, Miele is continuing to invest consistently in its strategically important projects. Current examples are the development of new product generations, the construction of an additional production plant in the USA, the complete takeover of the outdoor cooking specialist Otto Wilde – and the intended joint venture with Metall Zug AG to strengthen medical technology at Miele.

World leader in small household appliances

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Groupe SEB End-of-year 2023 sales confirmed the good performance of the results of the world leader in small household appliances, as confirmed by Stanislas de Gramont, Managing Director: “Groupe SEB returned to good organic growth momentum in its sales in 2023, and returns to the 8 billion turnover mark for this financial year.” A figure up slightly, by 0.6%, achieved in a difficult economic context.Groupe SEB achieved sales of €8,006 million in 2023, up 0.6% (i.e. +€46 million) in published data. Organic growth stands at a good level of 5.3%, or +€420 million. It is offset by a negative currency impact of the same magnitude coming from the depreciation of several currencies compared to the euro (notably the Chinese yuan). Finally, the turnover includes a limited scope effect linked to the integration of the acquisitions of Zummo, La San Marco and Pacojet.The Group’s Professional activity continued its excellent trajectory, posting organic sales growth of 16.2% in the 4th quarter, on a more demanding base effect. This activity brings together Professional Coffee, which constitutes nearly 90% of sales, hotel equipment, Krampouz, Zummo and Pacojet.
In 2023, the turnover of the Professional activity stood at €962 million, up 26.5% like-for-like compared to last year.
This remarkable performance is mainly due to record sales in Professional Coffee driven by the Group’s main markets (China, the United States, Germany and the United Kingdom), both in machine sales and supply. Services. Machine sales were supported by an increasingly extensive and diversified customer portfolio, supporting the recurrence of turnover, as well as the deployment of major contracts with key customers such as Luckin Coffee in China, Greggs in the United Kingdom. or QuikTrip in the United States. Furthermore, the continued development of services and their digital component reinforces the attractiveness of the Group’s offering and contributes to strong growth in turnover.
Furthermore, the Group made significant developments in 2023 to support its strategic ambition in Professional. The acquisition of La San Marco allows the Group to extend its product offering to traditional coffee machines, and that of Pacojet strengthens the Group’s presence in professional kitchens.

Groupe SEB also announced the construction of its first Professional Equipment Hub in Shaoxing, China