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Events Impacting Interim Comparability

|The comparability of individual categories of profitability, the financial position and cash flow in 2011 was affected by integration of the Asko Group and sale of the participating interest in the company Istrabenz Gorenje.

Effect of the sale of the company Istrabenz Gorenje of the Ecology, Energy and Services Division

The agreement on the sale of the 46.55 percent interest held by Gorenje, d.d., in the company Istrabenz Gorenje, d.o.o. became effective on 29 July 2011. Based on this sale, the Gorenje Group entirely eliminated the Energy business segment from its activities.

The proportional elimination of the company and its subsidiaries from the Gorenje Group had a positive impact on (1) the operating result of the Gorenje Group in the amount of EUR 2.9 mio, and on (2) lowering the indebtedness by EUR 29.6 mio based on the purchase price and the elimination of financial debt of the excluded company and its subsidiaries.

Comparability of information on the performance

The comparability of individual categories of profitability, the financial position and cash flow in 2011 was affected by two materially significant events that occurred in 2010 and 2011:

  1. integration of the Asko Group, the Swedish producer of home appliances, into the Gorenje Group in August 2010, and
  2. sale of the participating interest in the company Istrabenz Gorenje of the Ecology, Energy and Services Divisions, in July 2011 (and thus the winding-up of the Energy business segment).

The report below outlines (1) a tabular review / comparison of both information i.e. the actual achieved values of individual categories and their comparable figures, (2) a graphical review of only actually recorded values of individual categories in financial statements.

The performance analysis in the management report focuses on actual reasons for current balances and movements prior to accounting of effects of the Asko Group's integration and the sale of the company Istrabenz Gorenje, thus always based on comparable information.

Accordingly, comparable information are of key significance and vital to a proper definition of reasons and consequences for movements and balances in individual financial-economic categories and not the final information presented in the consolidated financial statements of the Gorenje Group. Comparable information is therefore always separately marked within disclosures of stated categories.

Comparability of information from the view of profitability of Gorenje Group's operations and its divisions (Income Statement, Table 1) was implemented on the basis of

  1. a full elimination of the Asko Group effects in 2010 and 2011, whereas
  2. effects of operations by the company Istrabenz Gorenje and its subsidiaries was taken into account in both years but only up to the first half-year (equalling the time of the company's operation in 2011 up until the month in which it was eliminated or excluded).
Impact of the elimination of the Asko Group and the sale of Istrabenz Gorenje on the Gorenje Group's profitability
     Comparable
in MEUR20112010Q4 2011Q4 201020112010Q4 2011Q4 2010
Revenue 1.422,2 1.382,2 362,1 416,4 1.288,1 1.221,8 331,9 323,2
= Contribution margin (CM1) / gross margin 534,2 525,4 133,3 144,0 464,7 491,1 118,2 122,9
   CM 1 37,6% 38,0% 36,8% 34,6% 36,1% 40,2% 35,6% 38,0%
= Added value / AV 352,6 353,1 92,8 94,4 309,8 316,8 85,9 80,3
   AV in revenue 24,8% 25,5% 25,6% 22,7% 24,1% 25,9% 25,9% 24,8%
= EBITDA 86,7 108,7 24,6 25,3 85,4 91,4 28,1 22,5
   EBITDA margin 6,1% 7,9% 6,8% 6,1% 6,6% 7,5% 8,5% 7,0%
= EBIT 36,5 56,4 13,1 12,0 41,1 41,9 18,0 10,9
   EBIT margin 2,6% 4,1% 3,6% 2,9% 3,2% 3,4% 5,4% 3,4%
= Net income 9,1 20,0 1,3 3,2 11,3 4,9 3,1 1,5
   ROS 0,6% 1,4% 0,4% 0,8% 0,9% 0,4% 0,9% 0,5%
Source: Data from Gorenje Group

Comparability of information from the view of the financial position of Gorenje Group and its divisions was implemented based on the elimination of the company Istrabenz Gorenje and its subsidiaries in the second half-year of 2010. The data presented in the statement of financial position as at 31 December 2011 and 2010 is already inclusive of the Asko Group (integration in August 2010) and thus fully comparable.

Impact of the sale of Istrabenz Gorenje on the financial position of the Gorenje Group
   Comparable
in MEUR201120102010
NET ASSETS 735,0 740,0 718,4
Net current assets 470,5 463,0 451,6
Net working capital 264,5 277,0 266,8
Working capital 551,4 623,6 590,8
- Current liabilities -286,9 -346,6 -324,0
NET EQUITY INVESTED 735,0 740,0 718,4
Equity 397,8 392,1 385,1
Net debt equity 337,2 347,9 333,3
Source: Data from Gorenje Group

Details on formation of comparable financial information in view of Gorenje Group’s profitability and its financial position are disclosed within individual disclosures of the management report hereof.