financial report and registration document 2011 - Groupe SEB

4 Commentary
Commentary on the fi nancial year
on 2011 consolidated sales
worldwide. This constant progress can be seen in the Group’s market
share, which strengthened in Europe and Turkey, for example;
� Home comfort is in sharp decline as a result of the slump in fan sales
related to highly unfavourable weather conditions in South America. This
drop is even more marked given that 2010 was a very strong year and,
thus, represents a high basis for comparison;
� Beverage preparation experienced another year of growth in 2011, driven
once again primarily by single-portion coffee, thanks to the continued
success of Nespresso and Dolce Gusto. These brands confi rmed their
growing hold over European markets through the regular launch of new
models and continued their international expansion (Brazil, Argentina,
Russia, Australia, etc.). The sale of electric kettles benefi ted from steady
demand in “traditional” markets, such as Russia and Japan (where more
than two million units were sold), but remained under pressure in many
other countries;
� Linen care ultimately experienced slight growth, worldwide, in an ironing
market that varied greatly from one country to the next (fl at in Europe,
Geographical performance
BREAKDOWN OF 2011 TRADING ACTIVITY
BY GEOGRAPHICAL ZONE
In France, the small domestic appliance market showed steady growth
during the fi rst half of the year. This trend began to taper over the summer,
before declining during the last few months. The trend remained positive
throughout the year, however, driven by innovation and by very active product
families such as robotic vacuum cleaners, single-portion coffee, kitchen
machines, etc. As for the cookware market, it owes its exceptionally robust
year (estimated growth of 25%) to a loyalty programme carried out by a
competing retailer during the fi rst half of the year. This campaign artifi cially
infl ated the market and dealt a heavy blow to Groupe SEB France’s sales,
as well as its market share during the fi rst half of the year. In general, while
demand was largely on track despite a slowdown beginning in September,
the situation became more competitive and discount-focused, fuelled by
increasingly fi erce competition among major retailers. However, despite
this tough environment and the specifi c issues encountered with a major
client-retailer, the Group posted 2011 sales that were more or less stable in
relation to 2010, demonstrating its fl exibility as well as its ability to obtain new
product listings and further diversify its client base. While sales of cookware
dropped markedly as a result of the operation mentioned above, several
fl agship products helped to boost the small domestic appliance business
in 2011. These include the Silence Force and Air Force vacuum cleaners,
the Nespresso and Dolce Gusto coffee makers, the breakfast product lines,
barbecues and planchas. Over the Christmas holidays, these star products
were joined by the Multidelices yoghurt maker, the new Soup&Co heating
blender and the large Moulinex food processors.
moderate growth in the Asia/Pacifi c region, down in the US, strong in
South America, etc.). Group sales increased slightly, against the very
strong year experienced in 2010, and were driven mainly by steam
generators;
� Cookware demonstrated mixed performance, but was strong overall
worldwide. This was not the case in France, which was hurt by a loyalty
programme implemented by a competing retailer. The Group was able to
strengthen its market presence and boost its sales by applying its policy
of broad coverage of all market segments, from entry-level to high-end,
with a targeted brand/retail distribution channel position;
� Growth in Personal care product operations was due, as in 2010, to the
strong showing by hairstyling appliances (hair dryers, hair straighteners,
hair stylers, etc.), with clear progress in certain countries such as Brazil or
Korea. It was also a positive year for hair removal products, thanks to the
success of new models. Weighing and baby-care equipment, however,
continued to decline.
In other EU countries the market for small domestic equipment remained on
track during the fi rst half of the year but the trend trailed off in the summer with
even greater contraction during the fourth quarter. This decline was the result
both of the collapse in demand in Greece, Spain, Portugal and, eventually,
Italy and of a slowdown in consumer spending in Northern Europe caused
by spillover effect. In this increasingly volatile environment, competition and
the pressure to offer discounts became more and more intense in all markets.
Despite a signifi cant drop over the last three months, the Group’s sales were
up for the year, benefi ting from the growth experienced in the fi rst half of
the year and the signifi cant contribution made by the relaunch of Moulinex,
which provided €35 million in additional sales. Regionally, business varied
greatly in Europe: in markets facing major crises, the Group saw its sales
drop off severely in Spain and Greece, while, thanks to the reintroduction
of the Moulinex brand, the situation of the Portuguese subsidiary remained
positive during the fi rst half of the year, but later deteriorated. Business in Italy
fl ourished until the summer, but then suffered a sharp change of direction
in the third quarter. It continued to decline in the fourth quarter. Northern
European countries, however, ended the year with steady or even strong
growth in sales, despite a certain slowdown over the fi nal months. This
was the case, for instance, in Germany, Austria, Scandinavia and Belgium,
thanks to the vitality of products such as Actifry, Nespresso and Dolce Gusto
coffee makers, the Silence Force vacuum cleaner line and Fresh Express.
In the United Kingdom, the Group posted strong, high-quality sales growth
throughout the year. It should be noted that, on the whole and in a volatile
economic environment, Groupe SEB was able to preserve its market share
in Western Europe.
66 GROUPE SEB Financial Report and Registration Document 2011