Product and Service
Companies included in large household appliance sector in household equipment industry primarily are appliance manufacturers.
Demand for Product and Service
As indicated by typical sales data, the growth in demand for large household appliance of US companies has been declining in North America in the past several years while sale/product mix shifting to higher price products. It seems that sales performance of companies have been related to economy, consumers’ spending and housing market.
The Sector
Sector’s current, trend, causes behind trend, and future
Current and Trend
- Generally, the growth in demand for large household appliance of US companies in North America and Europe has been declining in the past three years while offset by increasing selling price resulted from product/mix shifting to higher price products.
- Growth in e-commerce sales seems to have offset the impact of unfavourable retail environment.
- Market seems to be able to accept increased costs/price resulted from products’ innovation or upgrading.
Causes behind the trend
Economy situation/consumers spending/new housing development is the major factor influencing demand for large household appliance. Sales or distribution channels seem also play important role in companies’ performance in sales.
Industry Future
Supported by faster economy recovery, upward trend in demand in this sector may continue while declining in 2018.
Numbers
General Financial Performance of Companies In the Sector
Demand for US companies’ products seems to be declining after entering 2018 as indicated by the declining sales units of those companies (more than 5% decrease in sales units in 2Q 2018) while products mix keeps shifting to higher price products. In fact, there has been a downward trend in growth in sale units in North America and Europe regions in the past several years while it has been offset by increase in volume from Asia market and by product/mix’ shifting to higher price products. Based on typical company’s data, the product mix has been shifting to higher price products since 2015.
The decreased sales in 2018 have not impacted companies’ gross margin, which has basically no changes and has been at around 17% with a SG&A as percentage of sales of about 10%. The typical operating margin is at around 5% in 2018.
The typical average enterprise price/EBI ratio is: 27(interest/EBI ratio of 38%) and enterprise price/sales ratio is 0.7.
