Financial Report and Registration Document 2010 - Groupe Seb

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GROUPE SEB IN 2010
BUSINESS SECTORS
SEPARATE AND COMPLEMENTARY BUSINESS MODELS
To respond to broad demand ranging from first utility products to
sophisticated solutions, a combination of three complementary approaches
is used:
an offering of basic, plain, low-priced products comprised almost entirely
of finished articles procured in countries with low-cost production factors
and which are used for rapid renewal of product ranges or promotional
offers. The research process is then non-existent, development is short and
simplified, marketing and sales budgets are cut to a minimum (promotions
for example). These entry-level products are mostly sold without being
branded or under a retailer brand. In moderate growth, they represent a
still modest portion of the small electrical appliance market because they
concern a limited portion of the existing product offer;
the development of good-quality mid-range products. The idea is
to propose a full range for consumers to differentiate and renew their
equipment: breakthrough products, innovative functions and unique
benefits, resulting from a robust innovation approach, advanced high-tech
performance, easy to use and clean, user friendly, time saving, design,
handy storage, and many more tangible features for consumers. For retail
distribution, the approach translates into point-of-sale promotions and
store shelf layouts with the support of a steady marketing and advertising
policy and an established customer service. This segment still represents
the strongest part of the market, and the shrinkage factor in favour of
higher-end and entry level products (hour-glass effect) has now stabilised;
focus on the high-end market segment with carefully designed products
which meet strict criteria of quality, results or appearance. These articles,
leveraged by premium brands, are aimed at demanding consumers
and/or experts, looking for status symbols or high-value service. Thanks
to a recent boom, these ranges are now marketed by dedicated sales
teams who build genuine partnerships with selective distributors in order
to exploit and optimise the huge development potential of these products
in the long term. The segment is still sensitive to the economic situation,
as demonstrated by the 2008-2009 crisis.
These three market approach models are used together in nearly all mature
markets and are beginning to appear in certain emerging markets.
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MULTIPLE FORMS OF COMPETITION
The Small Household Equipment market is very fragmented globally, both
in small electrical appliances and in cookware. In practice, changes in the
sector over the last ten years – with in particular, the increased relocation of
production to countries with low production costs – have greatly changed
the deal in the approach to markets, more local today than really global.
For small electrical appliances, the industry’s ten biggest operators account
for between €1 to €3.6 billion in sales and represent over 40% of the global
market. Therefore, the Group has numerous and various competitors
worldwide, but few of them have a global spectrum:
Philips is certainly the fi rst rival through its small electrical appliances
and its worldwide presence; other industry giants with extensive
offering and global coverage include DeLonghi (DeLonghi, Kenwood…),
Procter & Gamble (Braun, Oral-B), Bosch-Siemens, and Conair (Babyliss,
Cuisinart…);
other players are primarily present in their domestic market or a few
reference markets: Magimix, Taurus, Imetec or Severin, specifi cally in
various European countries; Spectrum Brands (Black & Decker, George
Foreman, Russell Hobbs, Remington…) and Jarden (Sunbeam, Mr Coffee,
Oster…) in North America for example; Mallory, Mondial or again
Britania, amongst others in South America; Zelmer in central Europe;
Panasonic (also including the National brand) or Tiger in Japan; Midea,
Joyoung or Airmate in China…;
numerous high-end specialists concentrating on one or two product
segments: Dyson, Vorwerk, Jura, Laurastar, etc.
At the same time, another form of competition with “non-branded”
products and retailer brands proposes a predominantly entry-level range,
which is aggressively priced as a result of one-off contracts with Chinese
subcontractors.
The market dynamism remains basically driven by large European groups
such as Groupe SEB: Philips, Bosch Siemens or DeLonghi who develop new
products and concepts, open new categories and set up in new territories.
By doing this, they are winning market share, enjoying economies of scale
and improving their competitiveness in terms of production, R&D and
retail distribution. Meanwhile, national players have grown stronger in the
last years, boosting specifi c targeted offerings tailored to the markets.
Furthermore, we observe the development of local competitors in booming
Asian emerging markets.
For certain cookware articles, the situation is even more fragmented since
Groupe SEB is the only really global player. Some competitors deploy
an international strategy but which is more limited geographically, or
more restricted in terms of product offer. Significant international players
include the US group Meyer (Silverstone, Farberware, Prestige, Anolon,
Circulon brands, etc.), the German brands WMF (WMF, Silit, Kaiser…)
and Fissler and the French Le Creuset. In addition to this structured
competition, there is still a host of local players such as Staub/Zwilling in
Europe, Tramontina in Brazil, ASD in China, Maspion in Indonesia, etc. plus
retailer brands which in many countries represent the Group’s only direct
competition.
GROUPE SEB
FINANCIAL REPORT AND REGISTRATION DOCUMENT 2010
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