Market trends Influencing factors Demand for stove products is determined primarily by the economy, which affects disposable household income. Rising prices for energy sources such as oil, gas and electricity are another factor that drives demand as it may then become more cost-efficient to install an additional heat source. Construction of new single-family houses also exerts a positive influence on demand. However, regional restrictions on the use of wood-burning products and some energy policy decisions have a negative influence. The weather also exerts some influence on demand, particularly during the autumn and winter. Globalisation and interior decoration Historically speaking, different countries or regions have wanted very different things in terms of product appearance and features, and the major domestic manufacturers in each country designed their own products accordingly. With increased globalisation and growing interest in interior design, consumers have begun to prefer new types of products. We are seeing a general trend towards greater demand for products with a more modern appearance, clean lines and a timeless design. Channels and exposure Our products reach our end customers
via a well established network of distributors, who showcase the products in home settings and offer a high level of customer service. DIY stores are another important channel. They focus primarily on simpler products at a lower price. How well we succeed in standing out among the wide range of products in the market depends greatly on how we expose and distribute our products.
In Europe, we experienced a generally weak economic situation, low construction of new single-family houses and warm weather during the peak season. The consequence was unchanged low demand in Germany and France. Our single biggest market, the UK, has continued stable demand. Low prices for gas support the interest in our products in this segment. On the Scandinavian market and in particular in Sweden, demand increased as the Market consolidation construction of single-family houses took Since the European stove market is veryNordic countries off again. fragmented, with a large number of smallRest of Europe and medium-sized operators, the indus-Other markets try is still in need of consolidation. We see Sales by opportunities to continue to participate geographical region actively in this process and strengthen our market position. 1% In North America, this consolidation process has been ongoing for some time, with the result that the market has fewer 34% very large operators and generally better profitability. An acquisition in North Amer65% ica would also be a natural step for the Stoves business area to take, to achieve even better geographical distribution.
Market situation The market declined slightly overall in 2015. We retained a strong position in our main markets and achieved a market-leading position in Scandinavia and the UK by means of organic growth and a number of acquisitions.
Nordic countries Rest of Europe Other markets
OPPORTUNITIES
Sales potential in new product segments
Huge market potential
Strong product development
Strong brands
Broad range of products
Great interest in renewable energy
New political decisions relating to energy and the environment
Rational production
Expansion through acquisitions
RISKS
New government energy policies allow insufficient time to implement product adaptations
Local authority restrictions on the use of wood-burning products
Low-price range
General weak economic climate Gas-fired product groups The UK, Ireland and the Netherlands have a long tradition of using gas as an energy source, and the systems for gas distribution are very well established. Gazco has a wide range of products in this segment.
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NIBE INDUSTRIER AB · ANNUAL REPORT · 2015