2010 was a good year for the home appliances sector as a whole and an excellent one for BSH, marking an end to the negative trend of the previous year. Many countries which saw their revenue slump in 2009 returned to their former growth,” said Dr. Kurt-Ludwig Gutberlet, chief executive officer of the BSH Group opening the annual press conference in Munich.
In 2010, BSH’s revenue increased by almost 8% to over EUR 9 billion. Adjusted for currency effects, the figure represents a year-on-year increase of 4.1%. The group’s operating profit rose by EUR 170 million to over EUR 700 million. This came as a result of the Group’s involvement in the emerging markets of Eastern Europe and Asia and its leadership in new, ‘green’ technologies, product quality and design. The company claimed market leadership in the field of efficient home appliances and also in the built-in/built-under sector.
Regional performance
Although the German home appliance market grew by only 2% in the last year, BSH saw its revenue increase in its home market by 3.4%. Germany is the largest market for BSH (where the company is the sixth largest employer) and the company was helped here by its strong position in the built-in market and the growing demand for efficient home appliances. German consumers have a greater awareness than other Europeans of the resource consumption of the products they buy.
With the exception of Greece and Spain, the BSH’s West European market saw a reversal of fortunes in 2010. Sales of home appliances rose even in the UK and Scandinavia. In Switzerland and Austria, but also in Italy, Belgium and Northern Europe, the company saw high increases in revenue. Overall, BSH’s sales revenue in Western Europe, excluding Germany, increased by 2.9%. In the UK, the sales revenue rose by 4% (the Group commands a 5% share of the DA market in Britain).
In its key Eastern European markets, such as Russia, Ukraine and Turkey, BSH saw a return to growth in 2010 and its sales revenue rose by 11%. With its factories in Lodz and St. Petersburg, the company was able to significantly increase its turnover in Poland and Russia over the last year
After several recessive years, the BSH North American markets started recovering in 2010. Benefiting also from the positive exchange rate, BSH revenue rose in North America by 21.4%. Moreover, for the second time in succession, BSH was awarded the accolade ‘Energy Star Partner’ by the US government. This gave a welcome boost to the sales of BSH energy-saving home appliances.
The Asian region, and China in particular, continues to be the fastest growing market for domestic appliances and for BSH, which has had its manufacturing base in China since the mid-1990s and currently operates six factories there.
The Group also made significant gains last year in Singapore, Hong Kong, Thailand, India and Malaysia. As a result, BSH sales revenue in Asia increased by 34.1%.
Dr Gutberlet confirmed the company’s plans to boost its regional investment over the next few years. This would help BSH to capitalize on the growth opportunities of emerging markets and to develop appliances that meet the specific consumer needs in these regions.
Investing in green technologies
As a result of these developments, BSH has created over 3,000 new jobs worldwide, 300 of which were in Germany. The company also increased its spending on research and development by 6.1% to EUR 283 million, or 3.1% of revenue. In 2010, BSH began construction of its laundry technology centre in Berlin which will be employing 700 people and will work closely with Berlin’s universities and research institutes to develop laundry appliances of the future. This summer the company opened a temporary Laundry Centre in its HQ in Munich to demonstrate to its retail partners and consumers the benefits of its latest generation of super-efficient cooling appliances which use up to 60% less energy than A-rated appliances.
The “efficiency of home appliances” was defined as a strategic objective of BSH some years ago. “Time has shown this to have been a wise and important decision, as BSH has had an instrumental part to play not only in creating this trend but also in driving it forward. We have played a major role in engendering green awareness among consumers, and today we reap the benefits as the world market leader in efficient home appliances,” said Dr Gutberlet.
In 2010, BSH sold 70% more super-efficient home appliances than in the previous year. They already account for 26% of its total sales in Europe and 30% of the group’s total revenue. This year the company stopped selling A-rated appliances in Europe.
“One thing is certain – energy will become more expensive and it will become the key issue for all governments and their political agendas. Its worth remembering however that even for the German consumers the return on investment is the key argument in the decision to purchase energy efficient appliances. The new European energy labels are a very positive development from our point of view. They carry clearer messages about the energy consumption and more information about the appliance’s performance,” argued Jean Dufour, chief sales and marketing officer at BSH.
“We are investing in the products of the future. Yet, the market for A+++ appliances in the UK is currently non-existent. Therefore we are taking a gamble for the future, hoping that in the future all countries will come to accept these super-efficient appliances. Even in China and the USA energy is becoming a big issue. We are very confident that our strategy is right and we remain patient.”
The final message of the BSH Board was directed to the governments of Germany and other European counties. “It should be the task of government to appeal to the consumer rather than simply relying on the industry and the consumer to tackle energy efficiency under their own steam. In terms of both energy consumption and climate change policy, government incentive schemes to encourage the sale of energy efficient appliances would be warmly welcomed. After all: the best electricity is the kind that isn’t used!” said Dr Gutberlet.
