Gorenje Group Performance
As a result of very severe conditions that prevailed throughout the year, but mostly in the last quarter of 2011, Gorenje Group was forced to cope with lowering the sales volume and changing its geographical and product structure which had a negative impact on all levels of profitability.
In addition to volume and structure of sales, the Gorenje Group's profitability was heavily influenced by the price increase of raw materials and material. The increase that started in the second half of 2010 intensified until August 2011, but stabilised during the year on high levels as at the start of September 2011.
Comparability of annual and quarterly information on the performance with 2010 is curtailed due to the integration of the Asko Group in August 2010 and the exclusion of the company Istrabenz Gorenje in July 2011. For the purpose of achieving comparability, the stated information is always presented without the effects of the integration of the Asko Group and the exclusion of the company Istrabenz Gorenje.
Asko Group was challenged by the same circumstances, considering the historically low sales volume in the first quarter of the year and activities relating to the business integration into the Gorenje Group at the beginning of the year. As a result the Asko Group recorded a net loss in 2011, which shall however achieve a positive level in 2012.
With the disinvestment of the Energy segment of the Ecology, Energy and Services Division (i.e. the company Istrabenz Gorenje and its subsidiaries), the Gorenje Group succeeded in achieving a significant positive effect on cash flows and lowered the level of indebtedness.
The Home Interior Division concluded in 2011 preparation activities for the business restructuring that started at the beginning of 2012. The production of kitchen furnishings was accordingly transferred to the principal activity of the Home Appliances segment (in 2011 still referred to as the Home Appliances Division), whereas the production of ceramic tiles and other furnishings (including bathroom furnishings) was organised as an independent business segment.
In 2011, Gorenje Group achieved positive free cash flow which is recorded at EUR 35.8 mio, whereas EUR 67.6 was generated in the last quarter of the year. Free cash flow for 2011 significantly exceeded the 2010 level, as well as planned and projected levels for 2011.