Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference...

41
Gorenje Group ING Industrials Conference Warsaw, 23 rd of June 2015

Transcript of Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference...

Page 1: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

GorenjeGroupING Industrials Conference

Warsaw, 23rd of June 2015

Page 2: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

OWN

PRODUCTION

Slovenia

Serbia

Czech Republic

CONSOLIDATED

REVENUE

EUR 1.25 bn

NUMBER OF

EMPLOYEES

10,468

EXPORT

95%

of sales

GLOBAL

PRESENCE

90 Countries

Worldwide,

mostly in Europe (92%),

also in USA, Australia,

Near and Far East

CORE BUSINESS

Products and

services for home

(MDA, SDA, HVAC,

kitchen furniture)

One of Leading European

Manufacturers of Products for Home

2

Gorenje

Group

Page 3: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Ownership Structure

More than 50% of foreign shareholders

3

KAD

16.37%

IFC

11.80%

Panasonic

9.50%

KDPW

Fiduciary

account

8.05%

Other

financial

investors

37.52%

Natural

persons

12.98%

Employees3.28%

Treasury

Shares

0.50%

Page 4: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Brands

4

GLOBAL BRANDS LOCAL BRANDS

(Benelux)PREMIUM

MID

BUDGET

(Benelux)

(Nordic) (Benelux)

(E Europe) (SE Europe)

Page 5: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Global brand

(mid and high-mid price segment, design

lines) MDA and SDA brand

70 % of MDA revenue

Majority of revenue: Germany, Russia, SEE, Scandinavia

Page 6: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Global premium brand

Sales: EUR 100 m

Main markets: USA, Australia, Scandinavia,

Russia, Asia (selected markets)

Short-term: extend product portfolio and

strengthen position on key markets

Mid-term: expand to new markets

Page 7: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Production Facilities in 3 countries

7

SloveniaVelenje

Czech Republic Mariánské údolí

Serbia Valjevo, Stara Pazova, Zaječar

• Lowest labour costs

• Favourable customs conditions

to Russia

13%

35%

52%

Page 8: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Most Important Markets:

Germany, Russia and the Netherlands

8

RUSSIA GERMANYTHE NETHERLANDS

SERBIASLOVENIACZECH REPUBLICCROATIADENMARK

AUSTRALIJAUSA

UKRAINE

BIH

AUSTRIA

POLAND

BELGIUM

HUNGARY

FINLAND

NORWAY

RUMANIA

SLOVAKIA

SWEDEN

BULGARIA

GREAT BRITAIN

FRANCE

MONTENEGRO

Page 9: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Strategic Alliance with Panasonic

9

R&D – joint development projects(new washing machines)

Production

Increased production capacity utilization

Exchange of manufcaturing know-how

Sales

Possibility of joint sales-distribution channels

CAPITAL ALLIANCE

LONG-TERM STRATEGIC ALLIANCE

BUSINESS ALLIANCE

Panasonic - a minority shareholder in Gorenje

Standstill agreement - Panasonic not to

increase its stake in share capital

above 13% till 2018

Better absorption of fixed costs

Improved capital structure

Accelerated investment and R&D activities

Better access to new financial sources

Additional annual revenues of up to EUR 80 m by 2018

Gradual improvement of EBITDA of up to EUR 20 m on a yearly basis by 2018

GORENJE BENEFITS FROM THE STRATEGIC ALLIANCE

Page 10: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

GRADUALLY

IMPROVE

EBIT

MARGIN

Strategic Goals 2014 - 2018

10

NET DEBT/

EBITDA

not more than 3.0

from 2015 onwards

To be the

WORLD’S

LEADING

design-driven

innovator and

manufacturer of

home

appliancesFOCUS

ON CORE

ACTIVITY

– Segment Home –

revenues more than

90%of all Group

revenue by

2018

INCREASE

THE SHARE

OF PREMIUM

BRANDS

SALES

to more

than 25%

GRADUAL

DIVESTMENT

of Portfolio

Companies

INCREASE

SALES

OUTSIDE

EUROPE

to close to

EUR 180 m

Page 11: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

2014 was the year of

11

1. unstable business environment• Ukrainian and Russian crisis

• exchange rates volatility

• unstable environment in Asia

2. improved profitability• revenue growth

• positive effects of manufacturing restructuring in 2012-2013

• better management of raw and processed material costs

3. greater financial strength• better working capital management

• lower net debt

• improved maturity profile

4. strategic partnership with Panasonic

5. development of new markets and business cooperation• cooperation with the company SubZero in the US

• development of the Asko brand

• development of innovative appliances for own brands

• faster growth in overseas markets

Page 12: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

2014: Core Financial Indicators

12

EURm Q4 2013 Q4 2014 Index 2013 2014 Index

Revenue 343.4 336.4 98.0 1,240.5 1,245.6 100.4

EBITDA 22.8 21.7 94.8 78.2 86.5 110.6

EBITDA margin (%) 6.6% 6.4% / 6.3% 6.9% /

EBIT 12.7 10.8 85.6 36.3 43.5 119.8

EBIT margin (%) 3.7% 3.2% / 2.9% 3.5% /

Profit or loss before tax -11.8 -2.8 24.0 -18.6 4.9 /

Profit or loss without discontinued operation -5.1 -2.8 54.6 -14.4 2.2 /

Profit or loss of discontinued operation -1.7 0.0 / -10.6 -1.0 9.4

Profit or loss for the period -6.8 -2.8 40.7 -25.0 1.2 /

Q4 2014 2014

Group's revenue: EUR 336.4m (-2.0%)

Home revenue: EUR 289.1m (-0.4%);

organic growth +5.2%

EBITDA: EUR 21.7m (-5.2%);

EBITDA margin: 6.4% (-0.2 p.p.)

EBIT: EUR10.8m (-14.4%);

EBIT margin: 3.2% (-0.5 p.p.)

Profit for the period: EUR -2.8m; Q4

2013 loss: EUR -6.8m

Group's revenue: EUR 1,245.6m (+0.4%)

Home revenue: EUR 1,065.9m (+0.1%);

organic growth +3.8%

EBITDA: EUR 86.5m (+10.6%);

EBITDA margin: 6.9% (+0.6 p.p.)

EBIT: EUR 43.5m (+19.8%);

EBIT margin: 3.5% (+0.6 p.p.)

Profit for the period: EUR 1.2m (EUR

+26.2m); 2013 loss: EUR -25.0m

Page 13: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

289.4 290.7 300.7 310.0 307.0 308.5 343.4 336.4

1,240.5 1,245.6

0

200

400

600

800

1000

1200

1400

Q1 2013 Q1 2014 Q2 2013 Q2 2014 Q3 2013 Q3 2014 Q4 2013 Q4 2014 2013 2014

EU

Rm

2014: Business Performance

Group

Revenue

13

+0.4%

+0.4% +3.1% +0.5% -2.0%

Sales growth: Germany, Austria, Slovakia, Hungary,

Slovenia, Bosnia and Herzegovina, Romania, Bulgaria,

Caucasus, Australia and North America

Drop in sales: Ukraine, Scandinavia, Greece, Belgium,

France, Kazakhstan

Growth in markets beyond Europe: +10.7%

Higher sales of premium appliances: +16.4%

Growth of SDA sales under own brands: +4.3%

Page 14: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

2014: Effects of changes in foreign exchange rates

14

HOMEEURm

Currency impact on revenue

Actual revenue 2014

Actual revenue 2014 valued at exchange rate

2013

Actual revenue

2013

Actual growth

%

Organic Growth

%

West -1.0 449.6 450.5 459.9 -2.3% -2.0%

East -36.1 507.3 543.4 506.7 +0.1% +7.2%

Other -2.5 109.0 111.5 98.5 +10.7% +13.2%

TOTAL -39.6 1,065.9 1,105.4 1,065.1 +0.1% +3.8%

While calculating the impacts of foreign currency fluctuations on the sale's organic growth, we take into account

revenue generated in the local currency in the period 2014, which are evaluated with the achieved average

exchange rates in each currency in the period 2013. The calculated revenue in EUR is thereupon compared with

the actual generated revenue in EUR recorded in the observed period.

Negative effect especially from depreciation of Eastern European and non-

European currencies

Effect on organic revenue growth in key markets (excluding other categories –

adjustment of prices to the market, product structure etc.):

Page 15: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

2014: Sales by geographical segments

15

EURmQ4

2013%

Q4 2014

%Change

(%)2013 % 2014 %

Change(%)

Western Europe 120.0 34.9 117.6 34.9 -2.0% 465.9 37.6 459.1 36.9 -1.5%

Eastern Europe 196.4 57.2 191.9 57.1 -2.3% 676.1 54.5 677.5 54.4 +0.2%

Eastern Europe

(w.o. Russia and

Ukraine

139.0 40.5 137.9 41.0 -0.8% 491.3 39.6 515.2 41.4 +4.9%

Other 27.0 7.9 26.9 8.0 -0.4% 98.5 7.9 109.0 8.7 +10.7%

Total Group 343.4 100 336.4 100 -2.0% 1,240.5 100 1,245.6 100 +0.4%

Western Europe 118.0 40.6 114.4 39.6 -3.1% 459.9 43.2 449.6 42.2 -2.3%

Eastern Europe 145.4 50.1 147.8 51.1 +1.7% 506.7 47.6 507.3 47.6 +0.1%

Eastern Europe

(w.o. Russia and

Ukraine

88.0 30.3 93.8 32.4 +6.6% 321.9 30.2 345.0 32.4 +7.2%

Other 26.9 9.3 26.9 9.3 -0.4% 98.5 9.2 109.0 10.2 +10.7%

Total Home 290.3 100 289.1 100 -0.4% 1,065.1 100 1,065.9 100 +0.1%

Page 16: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Q12013

Q12014

Q22013

Q22014

Q32013

Q32014

Q42013

Q42014

2013 2014

Home 239.8 242.4 262.7 263.1 272.3 271.3 290.3 289.1 1,065.1 1,065.9

Portfolio 49.6 48.3 38.0 46.9 34.7 37.2 53.1 47.3 175.4 179.7

0.0

200.0

400.0

600.0

800.0

1000.0

1200.0

1400.0

EU

Rm

2014: Revenue by business segment

16

%

-0.4%

-10.9%

%

+0.1%

+2.5%

15.4% 14.1% 14.1% 14.4%

84.6% 85.9% 85.9% 85.6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q4 2013 Q4 2014 2013 2014

Home

Portfolio

Higher sales:

medical equipment,

metallurgic products,

machine and tool

manufacturing and

Ecology.

Page 17: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Q12013

Q12014

Q22013

Q22014

Q32013

Q32014

Q42013

Q42014

2013 2014

Home 9,373 9,037 9,355 9,144 9,187 9,102 9,133 8,888 9,296 9,041

Portfolio 1,333 1,425 1,344 1,440 1,341 1,447 1,347 1,436 1,343 1,427

0

2,000

4,000

6,000

8,000

10,000

12,000

2014: Average number of employees

%

-2.7%

+6.6%

2014: 10,468 employees (-171) :

Asko Appliances AB Sweden (production relocation from Sweden to Slovenia) and

partly also Gorenje, d.d.;

The number grew at the facility in Valjevo, Serbia (as a result of higher volume of

production since the freestanding refrigerator production was relocated)

The sales network restructuring activities in reducing the number of employees in the

sales network (Turkey, France, Slovakia, Czech Republic, Scandinavia, USA).

Portfolio investments: The number increased as business activities of ecology and tool

manufacture were expanded to new markets (Serbia)

17

%

-2.7%

+6.3%

Total: 10,706 10,462 10,699 10,584 10,528 10,549 10,480 10,324 -1.5% 10,639 10,468 -1.6%

Page 18: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

2014: EBIT / EUR 7.2m or +19.8%

EBIT

Margin

(%)

EBIT

(EURm)

Contribution margin at the level of

cost of goods and material

Cost of services

Employee benefits expense

Amortisation and depreciation

expense

Other operating expenses

Other operating income

36.3

-0.9

11.1

10.3

-1.1

0.8

-13.0

43.5

2013

2014

18

5.710.2 9.8 11.7

8.110.8 12.7 10.8

36.3

43.5

2.0%

3.5% 3.3%3.8%

2.6%

3.5% 3.7%3.2% 2.9%

3.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

0.05.0

10.015.020.025.030.035.040.045.050.0

Q12013

Q12014

Q22013

Q22014

Q32013

Q32014

Q42013

Q42014

2013 2014

EU

Rm

Costs of services: -5.1% (EUR -

11.1m) systematic

implementation and monitoring of

preventive and curative measures

to achieve cost-efficiency

Labour costs: -4.3% (EUR -

10.3m) successfully completed

production relocation in 2013 and

the sales network restructuring

process also in 2014

Page 19: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

2014: EBITDA / EUR 8.3m or +10.6%

EBITDA

Margin

(%)

EBITDA

(EURm)

2014: Net Profit Performance

ROS

(%)

PAT

(EURm)

19

16.1 20.8 20.7 22.3 18.6 21.7 22.8 21.7

78.286.5

5.6%

7.2% 6.9% 7.2%

6.1%7.0% 6.6% 6.4% 6.3%

6.9%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

Q12013

Q12014

Q22013

Q22014

Q32013

Q32014

Q42013

Q42014

2013 2014

EU

Rm

-4.2

1.0

-3.6

2.1

-10.4

0.9

-6.8

-2.8

-25.0

1.2

-1.5%

0.3%

-1.2%

0.7%

-3.4%

0.3%

-2.0%

-0.8%

-2.0%

0.1%

-4.0%

-3.5%

-3.0%

-2.5%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

-30.0

-25.0

-20.0

-15.0

-10.0

-5.0

0.0

5.0

Q12013

Q12014

Q22013

Q22014

Q32013

Q32014

Q42013

Q42014

2013 2014

EU

Rm

Page 20: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

2014: Financial Performance / Indebtedness

Development of total and net financial liabilities over the period of 2011-2014 in EURm

and debt maturity profile

20

* Accounting aspect

484.1432.7

397.4367.6382.5 379.2 358.8 331.8

0

100

200

300

400

500

600

31.12.2011 31.12.2012 31.12.2013 31.12.2014

Total financial liabilities Net financial liabilities

62.5% 64.0%50.0%

73.5%

37.5% 36.0%50.0%

26.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

31.12.2011 31.12.2012 31.12.2013 31.12.2014

LT financial liabilities ST financial liabilities

Gross debt: EUR 367.6m (EUR -29.8m) improved cash flows from operating

activities, lower volume of investments, and the lower level of working capital

Net financial debt: EUR 331.8m (EUR -27.1m)

Net financial debt / EBITDA: 3.8 (improvement by 0.8)

Cash flows from operating and investing activities: EUR +29.4m; EUR 26.6m in

Q4 2014

Successfully completed share capital increases (Sep. 2013-Aug. 2014): EUR

36.7m

The last phase of the capital increase in form of debt-to-equity conversion (in Q3

2014): EUR 10.0m (equals the amount allowed pursuant to the resolution adopted by

the AGM on 23 August 2013)

Page 21: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

2014: New products & Development

New generation of high-end built-in

ovens (Gorenje, Asko)

Asko line of kitchen appliances

Asko washing machine (11-kg

capacity)

Gorenje laundry dryer, energy class

A+++

Free standing fridge freezers, width

600 mm and height 2000 mm

Extended line of Retro refrigerators

Updated oven Gorenje by Karim

Rashid

New collection of premium Atag

cooking appliances (Magna series)

New generation of refurbished range

of cookers 600 mm, and a new

range of induction and hi-light built-in

hobs

In accordance with the set strategic

goals we have increased investments in

R&D Home: 2.9% (+0.4 p.p.)

Page 22: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

In 2015 we focus on

22

Sales• growth

• improved sales structure

Cost cutting• services

• labour

• material

Deleveraging• divestments

• improved working capital

management

R&D• new products development &

innovation

Processes• SCM

• Complexity

Projects• Lean, TQM, forecasting

Asko premium brand development

Strategic partnership with

Panasonic

Risk Management

Organizational structure and

corporate governance

Strategy 2020

Responsibility• towards all shareholders

• personal responsibility

• for the future of Gorenje Group

Page 23: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

*

23

EUR million 2013 2014Plan

2015Change

Consolidated revenue 1,240.5 1,245.6 1,216.1 -2.4%

EBITDA 78.2 86.5 92.9 +7.4%

EBITDA Margin (%) 6.3% 6.9% 7.6% +0.7 p.p.

EBIT 36.3 43.5 43.1 -0.9%

EBIT Margin (%) 2.9% 3.5% 3.5% /

Profit before taxes -18.6 4.9 10.8 +120.4%

Results w/o discontinued operations -14.4 2.2 7.6 /

Results from discontinued operations -10.6 -1.0 -1.5 /

Profit for the period -25.0 1.2 6.1 /

ROS (%) -2.0% 0.1% 0.5% +0.4 p.p.

Net financial debt 358.8 331.8 321.2 -3.2%

Net financial debt / EBITDA 4.6 3.8 3.5 /

Plan 2015: Highlights

Page 24: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Revenue: -2.4% (lower especially due to uncertain

conditions in Russia where lower revenue is

expected after a decade of growth)

Intensified adjustment of the business model for

higher competitiveness (lower complexity, better

efficiency)

Improved efficiency and performance of support

processes

Further working capital optimization and net

deleveraging

Increasing our business volume with our strategic

partner Panasonic

24

Plan 2015: Highlights

Page 25: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

25

New launches: • New generation of Gorenje cooking appliances

• New Asko dishwashers

• New line of Asko cooking appliances

• New line of Magna cooking appliances by Atag

• New Matrix cooking hobs by Atag

Development of new premium and innovative products to

support the growth of sales in upmarket segments

Page 26: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Challenging the best designer

in the world

New design line

in 2015

Page 27: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

EBITDA

Margin

(%)

EBITDA

(EURm

78.2 86.5 92.9

6.3%6.9%

7.6%

00%

01%

02%

03%

04%

05%

06%

07%

08%

0

10

20

30

40

50

60

70

80

90

100

2013 2014 Plan 2015

*

Higher planned

contribution margin,

especially in the

Home segment

10.6%

EUR 8.3m

7.4%

EUR 6.4m

27

Plan 2015: Improved EBITDA Performance

Page 28: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

28

Plan 2015: Goal - Deleveraging and maintaining

a stable debt maturity profile

Further net deleveraging (improved

working capital management,

divestment)

Improvement of net financial debt /

EBITDA indicator to 3.46

Maintaining a stable debt maturity

profile

ST fin liab

101.7 mio EUR

29.7%

LT fin liab241.2

mio EUR70.3%

2015 Plan

ST fin liab97.4

mio EUR26.5%

LT fin liab270.2

mio EUR73.5%

2014

ST fin liab

198.7 mio EUR

50.0%

LT fin liab

198.7mio EUR

50.0%

2013

Page 29: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Q1 2015 was the quarter of

29

1. further unstable business environment• political instability and the exceptionally deteriorating

macroeconomic situation in markets of Russia and Ukraine

• exchange rates volatility

• decline in revenue on markets of Russia and Ukraine and due to

adjusted sales price policy in individual markets of Western and

Eastern Europe for the purpose of price repositioning

• foreign currency fluctuations significantly affected sales (mostly in

the markets of Eastern Europe)

• strengthening of the USD against EUR (a negative impact on SDA

profitability and a negative impact on the input prices of material and raw

materials)

2. cost and process optimization• lower cost of services and partial employee benefits expense

• Projects related to the adjustments of business processes

Page 30: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Q1 2015 was the quarter of

30

3. higher but seasonally dependent indebtedness• working capital management (higher inventories of finished

products and merchandise due to the sudden recall of orders by

customers in Russia, Ukraine and the markets of Caucasus)

• planned growth of indebtedness

• improved maturity profile

4. development of strategic partnership with

Panasonic Corporation

5. development of new markets and business

partnerships• cooperation with the company SubZero in the US

• development of the Asko brand

• development of innovative appliances for own brands

Page 31: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Q1 2015: Core Financial Indicators

31

Group's revenue: EUR 266.4m (-8.4%)

Home revenue: EUR 222.5m (-8.2%); organic growth -5.3%

EBITDA: EUR 16.2m (-22%); EBITDA margin: 6.1% (-1.1 p.p.)

EBIT: EUR 4.9m (-51.9%); EBIT margin: 1.8% (-1.7 p.p.)

Loss for the period: EUR -2.1m

Negative cash flows from operating and investing activities: EUR 55.2m

(worsened by EUR 23.4m)

Increase of net debt by EUR 10.4m

Net financial debt / EBITDA: 4.9 (4.7)

EURm Q1 2014 Q1 2015 IndexPlan 2015

Plan track

Revenue 290.7 266.4 91.6 1,216.1 21.9

EBITDA 20.8 16.2 78.0 92.9 17.5

EBITDA margin (%) 7.2% 6.1% / 7.6% /

EBIT 10.2 4.9 48.1 43.1 11.4

EBIT margin (%) 3.5% 1.8% / 3.5% /

Profit or loss before tax 2.5 -0.3 / 10.8 /

Profit or loss without discontinued operation 1.4 -1.6 / 7.6 /

Profit or loss of discontinued operation -0.4 -0.5 105.6 -1.5 30.0

Profit or loss for the period 1.0 -2.1 / 6.1 /

ROS (%) 0.3% -0.8% / 0.5% /

Net financial debt 392.6 403.0 102.6 321.2 125.5

Net financial debt / EBITDA 4.7 4.9 / 3.5 /

Page 32: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

290.7266.4

310.0 308.5336.4

0.0

100.0

200.0

300.0

400.0

Q1 2014 Q1 2015 Q2 2014 Q3 2014 Q4 2014

mio

EU

R

Q1 2015: Business Performance

Group

revenue

32

-8.4%

Sales growth: Czech Republic, Slovakia, Poland, Hungary, Slovenia, Bosnia

and Herzegovina, Bulgaria, Romania, Australia, and the Netherlands

Downward sales: Russia, Ukraine, Germany, Austria, Scandinavia, Greece,

France, Great Britain, North America

Decline in markets beyond Europe: -18.2%

Growth of innovative appliances in the sales structure to: 8.2% (+0.8 p.p.)

Same share of premium appliances in the sales structure to: 16.0%

Decline of SDA sales: -1.9%

Page 33: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Q1 2015: Effects of Foreign Exchange Rate Fluctuations

33

Homein EURm

Currency impact on revenue

Actual revenue Q1 2015

Actual revenue Q1 2015 valued at

exchange rate Q1 2014

Actual revenue Q1 2014

Actual growth

(%)

Organic Growth

(%)

West -0.3 108.1 108.4 114.4 -5.6% -5.3%

East -7.6 93.9 101.5 102.8 -8.7% -1.3%

Other 0.8 20.5 19.7 25.2 -18.4% -21.6%

TOTAL -7.1 222.5 229.6 242.4 -8.2% -5.3%

► Foreign currency fluctuations significantly affected sales mostly in the markets of

Eastern Europe.

► Without considering other categories (i.e. exchange rate hedging, adjusting prices to

markets, product structure, etc.), the impact of foreign currency fluctuations on the

Group's organic growth in revenue in key markets was as follows:

While calculating the impacts of foreign currency fluctuations on the sale's organic growth, we take into account revenue

generated in the local currency in Q1 2015, which are evaluated with the average exchange rates achieved in each

currency in Q1 2014. The calculated revenue in EUR is thereupon compared with the actual generated revenue in EUR

recorded in the observed period

Page 34: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Q1 2015: Sales by geographical segments

34

EURm Q1 2014 % Q1 2015 %Change

(%)

Western Europe 116.3 40.0 110.2 41.4 -5.2%

Eastern Europe 149.2 51.3 135.7 50.9 -9.1%

Other 25.2 8.7 20.5 7.7 -18.4%

Total Group 290.7 100.0 266.4 100.0 -8.4%

Western Europe 114.4 47.2 108.1 48.6 -5.6%

Eastern Europe 102.8 42.4 93.9 42.2 -8.7%

Other 25.2 10.4 20.5 9.2 -18.4%

Total Home 242.4 100.0 222.5 100.0 -8.2%

Geographical sales structure of the Business Segment Home shows that:

our sales in Western Europe decreased by 5.6%, whereby lower revenue was planned.

our sales in Eastern Europe generated 8.7% less revenue. The said decline is the result of lower sales in the markets of Russia and Ukraine. If the impact of exchange rate fluctuations is not taken into account, our organic decline in revenue in Eastern Europe amounts to 1.3%.

Page 35: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Key innovations:

a new generation of

built-in ovens under

the Gorenje

trademark that were

launched on most of

the markets,

the new Essential

washing machine,

preparation for

launching the new

Magna premium

collection of cooking

appliances.

Increased investments

in R&D, which account

for 3.0% in the Group’s

revenue structure (+0.6

p.p.).

35

Q1 2015: Development & New products

Page 36: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

• According to the approved 2015 business plan, Gorenje Group investments for

the Q1 2015 were planned at EUR 19.5m; actual investments amounted to

EUR 9.350m, which is good EUR 2m less than in the equivalent period in 2014.

• Investment implementation was consistent with the agreement that the

CAPEX would be adjusted to actual sales.

36

Q1 2015: Investment-related activities

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

Home 9.3 10.6 9.1 24.8 7.7

Portfolio 2.1 1.0 2.3 2.4 1.6

CAPEX margin, % 3.9% 3.7% 3.7% 8.1% 3.5%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

0.0

5.0

10.0

15.0

20.0

25.0

30.0

EU

Rm

Page 37: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Q1 2014 Q1 2015 Q2 2014 Q3 2014 Q4 2014

Home 9,037 8,830 9,144 9,102 8,888

Portfolio 1,425 1,423 1,440 1,447 1,436

0

2,000

4,000

6,000

8,000

10,000

12,000

Q1 2015: Average number of employees

Q1 2015: 10.253 employees (-209) :

The number of employees was partly adjusted to the lower sales

volume in production companies (in the parent company and in

Valjevo, Serbia) and also in individual companies within the Home

segment (Scandinavia, Russia, Croatia, and Ukraine).

Portfolio investments: The number of employees was kept on the same

level.37

%

-2.3%

0%

Total: 10,462 10,253 -2.0% 10,584 10,549 10,324

Page 38: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Q1 2015: Financial Performance / Indebtedness

Movement of total and net financial liabilities in Q1 for the period 2012-2015 * (EURm)

and maturity structure of financial liabilities

38

* Accounting aspect

467.3 473.2418.2 422.5425.5

451.9

392.6 403.0

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

500.0

31.3.2012 31.3.2013 31.3.2014 31.3.2015

Total financial liabilities Net financial liabilities

62.4% 57.2%46.4%

60.2%

37.6% 42.8%53.6%

39.8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

31.3.2012 31.3.2013 31.3.2014 31.3.2015

LT financial liabilities ST financial liabilities

Gross debt: EUR 422.5m (+EUR 4.3m) result complies with interim seasonal

dynamics as the Group generates most of negative cash flows from operating and

investing activities; result comprises also liabilities under the fair value of forward

contracts used for hedging against interest rate and currency fluctuations.

Net financial debt: EUR 403.0m (+EUR 10.3m)

Net financial debt / EBITDA: 4.9 (decline by 0.2)

Cash flows from operating and investing activities: -EUR 55.2m; -EUR 31.9m

in Q1 2014

Page 39: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Thank you

for your attention.

Page 40: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Mrs. Bojana Rojc

Head of IR

T +386 3 899 1345

M +386 51 351 706

E [email protected]

Gorenje, d.d.

Partizanska cesta 12, SI-3320 Velenje, Slovenia

Slovenia

www.gorenjegoup.com

Mrs. Jožica Turk

Executive Director Risk Management & Assistant

to Board Member

T +386 3 899 2352

M +386 41 607 329

E [email protected]

Gorenje, d.d.

Partizanska cesta 12, SI-3320 Velenje, Slovenia

Slovenia

www.gorenjegroup.com

Gorenje Representatives

40

Page 41: Gorenje Groupstatic14.gorenje.com/files/default/corporate... · Group ING Industrials Conference Warsaw, 23rd of June 2015. OWN PRODUCTION Slovenia Serbia Czech Republic CONSOLIDATED

Forward-looking statements

This presentation includes forward-looking information and forecasts – i.e. statements regarding the future, rather

than the past, and statements regarding events within the framework and in relation to the currently effective

legislation on publicly traded companies and securities and pursuant to the Rules and Regulations of the Ljubljana

Stock Exchange. These statements can be identified by the words such as "expected", "anticipated", "forecast",

"intended", "planned or budgeted", "probable or likely", "strive/invest effort to", "estimated", "will", "projected", or

similar expressions. These statements include, among others, financial goals and targets of the parent company

Gorenje, d.d., and the Gorenje Group for the upcoming periods, planned or budgeted operations, and financial plans.

These statements are based on current expectations and forecasts and are subject to risk and uncertainty which may

affect the actual results which may in turn differ from the information stated herein for various reasons. Various

factors, many of which are beyond reasonable control by Gorenje, affect the operations, performance, business

strategy, and results of Gorenje. As a result of these factors, actual results, performance, or achievements of Gorenje

may differ materially from the expected results, performance, or achievements as stated in these forward-looking

statements. These factors include, without prejudice to any not mentioned herein, the following: Consumer demand

and market conditions in geographical segments or regions and in the industries in which Gorenje Group is

conducting its operating activities; effects of changes in exchange rates; competitive downward pressure on

downstream prices; major loss of business with a major account/customer; the possibility of overdue or late payment

on the part of the customers; decrease in prices as a result of persistently harsh market conditions, in an extent much

higher than currently expected by the Gorenje Management Board; success of development of new products and

implementation in the market; development of manufacturer's liability for the product; progress of attainment of

operative and strategic goals regarding efficiency; successful identification of opportunities for growth and mergers

and acquisitions, and integration of such opportunities into the existing operations; further volatility and aggravation of

circumstances in capital markets; progress in attainment of goals regarding structural reorganization and

reorganization in purchasing. If one or more risks or uncertainties are in fact materialized or if the said assumptions

are proven wrong, actual results may deviate materially from those stated as expected, hoped for, forecast, projected,

planned, probable, estimated, or anticipated in this announcement. Gorenje does not intend to assume and will not

allow for any liability to update or revise these forecasts in light of development differing from the expected events.

41