Volume of Business Activities of Gorenje Group

With revenue amounting to EUR 1,288.1 mio in 2011, Gorenje Group exceeded the previous year's results by EUR 66.2 mio or achieved a higher comparable level by 5.4 percent over 2010.  If compared to the comparable quarter of 2010, the sales volume generated in the last quarter of 2011 grew by EUR 8.7 mio or +2.7 percent, showing an improvement in growth dynamics from the third quarter of 2011.

The achieved geographical and divisional structure of sales indicates that:

• with the integration of the Asko Group, Gorenje Group increased its share of sales in West Europe and the rest of the world (USA, Australia) mostly in sales of higher price segments,
• the Gorenje Group had reduced sales volume in geographic areas with higher returns (South-Eastern Europe and East Europe), which was also affected by the elimination of transactions of the Energy segment, and
• by lowering the share of sales of the Ecology, Energy and Services Division (again with the elimination of the Energy segment), the Gorenje Group relatively strengthened its sales profitability (due to the nature of the division's activities the level of the gross margin is lower from the one achieved with activities of the Home Appliances Division).

Compared to the previous year's results and prior to the Asko Group effect (comparable) the Home Appliances Divisions generated EUR 8.2 mio or 0.9 percent more revenue than in 2010. Total sales growth, including the Asko Group effect, amounted to EUR 76.0 mio or 7.8 percent. Poor comparable sales growth is the result of reductions in the scope of activities due to significantly low demand in the third and fourth quarters of 2011, and a declining geographical and product sales structure in particular in South-Eastern Europe, East Europe and the Near East. As for other markets, the Gorenje Group achieved at least the same or higher sales growth compared to 2010, which neutralised the negative effects of the sales volume decline in previously stated markets.

The sales volume recorded in 2011 by the Home Interior Division was again lower than the previous period's result. It should be emphasised that the growth achieved in the third quarter of 2011 was positive for the first time in two and a half years, and the sales volume of the last quarter was at practically the same level of the comparable period in 2010. Such movement in annual sales is yet the result of recession-hit business in the production and sales of furnishings, production shortfall in the bathroom segment during its move to Serbia, lower production in the Czech Republic and Ukraine, and the result of planned supply cuts to certain high credit risk consumers. Considering the forecasts and planned reorganisation in 2012, the division is expected to show its first significant improvements in activities and profitability already in the first year of restructuring.

The highest comparable sales growth in 2011, with EUR 59.5 mio or 21.7 percent, was recorded by the Ecology, Energy and Services Division based on increased operations by the Ecology segment and the sale of coal relating to the parent company.