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Arçelik to form new home appliance business with Whirlpool T
wo of Europe’s biggest home appliance companies – Whirlpool and Arçelik
– have announced plans to launch a new standalone European home appliance business. The agreement will see both Whirlpool and
Arçelik’s subsidiary Ardutch, transfer their European subsidiaries to the newly formed entity. With the combined forces of both brands’ manufacturing, supply chain, distribution and sales network, the new company will arguably become the biggest appliance supplier in Europe and will likely hold a lion’s share of the market in terms of volume. The new company, which is yet to be named,
will have exclusive manufacturing and distribution of the majority of Whirlpool and Arçelik’s leading brands including Hotpoint, Indesit, Beko and Whirlpool (under licence). Arçelik will own 75% of the new entity while
Whirlpool will own 25%. The deal is not expected to close until the second half of 2023 and according to a Whirlpool spokesperson, “for now it’s a regulatory and
The new company will have production
authorization process first, so it’s business as usual as two separate companies until the transaction closes”. The full list of brands that will be involved in the
new company will include Arçelik’s Grundig, Arctic, Elektrabregenz, Flavel, and Leisure brands, plus Whirlpool’s existing brands of Indesit, Hotpoint, Ignis, Privileg, and Bauknecht. Although not owned, the new entity will have
regional rights over Arçelik’s Beko, Blomberg and Altus as well as the Whirlpool brand for 40 years. Whirlpool Corporation will retain full ownership
of its SDA business KitchenAid, which will not be part of the new business.
Currys on track for profit target despite reduced sales
C
urrys posted a drop in festive sales in the UK and internationally, but
said it is confident of delivering full year profits in line with guidance. In the UK and Ireland, like-for-like sales declined by 5% year-on-year and by 4% on three years ago. The retailer said sales were strong in the domestic appliance and mobile categories in the 10 weeks to January 7, but weaker in consumer
electronics and computing. In addition, stores outperformed online. Meanwhile, profits in the UK and Ireland came in better than expected
through gross margin increases and continued cost savings. Currys’ international business also recorded a decline in sales with a
7% drop compared to the prior year, although sales were up 6% on pre- pandemic levels. Sales fell in all categories except small appliances. Alex Baldock, Currys group chief executive, said: “We’ve delivered a
strong peak performance in the UK and Ireland, growing profits again through resilient sales, increasing gross margins (not least through record services adoption) and strong cost discipline. Our transformation is visibly succeeding. “Internationally, it remains tough and we continue to face into intense,
but temporary, market pressures. We’re not simply waiting for the external environment to improve, of course. We’ve already reduced stock levels and stepped up our measures to increase margins and reduce costs.”
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capacity of approximately 24 million white goods products per year. It will include Whirlpool’s 38 European subsidiaries and nine production sites located in Italy, Poland, Slovakia, and the UK, as well as Arçelik’s two production facilities in Romania and 25 European subsidiaries. The new entity is expected to have combined sales of over €6 billion (£5.3bn) and will be well- positioned to deliver value to consumers through attractive brands, sustainable manufacturing, product innovation, and consumer services. The combined businesses are expected to
generate cost synergies of over €200 million (£175m). “The announcement marks yet another major and important milestone in our ongoing portfolio transformation,” said Marc Bitzer, chairman and chief executive of Whirlpool Corporation. Hakan Bulgurlu, chief executive of Arçelik, said:
“This is a unique opportunity for two exceptional companies to come together with a focus on synergies, combined innovation, retail distribution and sustainability.”
AO World raises full year profit guidance
O
nline appliance retailer AO World has raised its full year guidance as actions to reduce costs and improve margins take
effect. As a result, its board now expects adjusted EBITDA to be in a range of £30 million to £40 million for the year to March, which is ahead of a previous guidance of the top end of a £20 million to £30 million range. AO has been prioritising more profitable cash generative sales and
reducing costs in its current financial year. While UK sales continued to be in line with expectations in the three months to December 31, with a year- on-year decrease of 17.2%, AO said initiatives to reduce costs and improve margins are gaining traction, and profitability is now running ahead of its prior forecasts. AO said: “We remain cautiously optimistic and yet mindful of the continuing macroeconomic uncertainty and tough consumer environment, whilst also taking into account both the extent to which these and inflationary pressures can impact our contract assets.”
January 2023
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