GORENJE, d.d., Velenje
Non-audited Financial Statements of Gorenje Group and of Gorenje, d.d., for the year 2009
Last quarter of 2009 above expectations
Positive free cash flow in the amount of EUR 33 million surpass the estimation
Based on the regulations of the Ljubljana Stock Exchange and the legislation in force, the company Gorenje, d. d., is publishing the following announcement:
Velenje, Slovenia, 11 March 2010 – The Supervisory Board was informed on non-audited Financial Statements regarding the business performance of Gorenje, d.d., and Gorenje Group for the year 2009. The consolidated revenue in the amount of the EUR 1.2 billion decreased by app. 11 percent compared with the year 2008. To neutralize the negative impacts of crisis were all activities focused on three objectives: generating free cash flow, strengthening market shares and keeping productive working places, which were achieved.
It was estimated by the Supervisory Board that in the time of crisis, the Management Board responded to changeable and unpredictable conditions in a fast and efficient manner, which enabled Gorenje to successfully resist the negative effects and to exceed the planned free cash flow. Last year, the net profit or loss was negative after almost two decades, but Gorenje managed to retain market shares in the majority of markets and preserve productive workplaces, thus fulfilling the key goals of the year 2009.
With the clear strategy against the crisis, was the Management of Gorenje able to achieved all the planed objectives and to ended the year in the better shape, as it was indicated in the first months. The consolidated revenue in the amount of the EUR 1.2 billion decreased by app. 11 percent compared with the year 2008, and without in the year 2008 acquired Dutch company ATAG, by which we ensured a strong presence in the Benelux countries, we would faced with a more increased drop.
Operating profit in the second half came to a positive figure. To such a development in profitability, in addition to restructuring and optimizing the sales so far contributed the most the drastic reduction of costs of materials and all kinds of services, and improved productivity. EBITDA decreased considerably in the first half of the year compared to the previous year; however, already in the third quarter of the year, its level approached the level of the year 2008 and even exceeded it in the last quarter.
One of our main key goals in the year 2009 was the attainment of free cash flow representing one of the most important elements in restructuring the finance resources for business activities of the Gorenje Group. Despite negative net operating profitability, we focused our investments on necessary development segments of business operations, lowered the financial burden of these operations, and with a significant reduction of net current assets, we attained EUR 33 million positive free cash flow representing an improvement in the amount of EUR 78.1 million compared to that attained in the year 2008 and at the same time we have strongly surpassed the estimated one.
Gorenje is focused on the end consumer, therefore, reputation and brand recognition, which was evaluated by the independent European Brand Institute for the year 2009 to the brand value of EUR 458 million, are of key importance for our performance. In a mature industry where growth is moderate at best and reaping the economies of scale is a vital source of competitiveness, innovation is a must, as are distinctiveness, uniqueness, and a constantly evolving brand.
Gorenje is activity-oriented towards the end consumer. Its reputation and power are therefore of key importance for successful business operations. This helped us retain or even strengthen our market shares in the majority of markets. By the signing an important contract with the biggest distribution company for white goods, consumer electronics and mobile phones in the Middle East, Gorenje made an important step towards boosting Gorenje's presence and sales in this perspective region.
Mr. Franjo Bobinac, CEO and President of the Gorenje Management Board: » With the results of the last year, which was marked by the global financial and economic crisis, we have to be satisfied. It was very demanding, but we were able with a clear anti-crisis strategy to achieve our objectives. This year, the crisis is not over yet, though we recorded in the first months a slight increase in orders compared to last year's first months. However, we can not talk about the real recovery, due to the fact that the rising unemployment in the European countries is maintaining a low volume of orders.«
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The information of this announcement will be available on the official web site of the company Gorenje, d. d., Velenje, Slovenia, gorenje.com, at least 5 years from the date of the announcement.
The Management Board