GORENJE, d.d., Velenje

Gorenje business performance in the first three months 2007, successful and in line with the plan; very strong growth of sales, but at the same time extremely high growth of raw materials. About the business performance discussed also the Supervisory Board at the 10th Supervisory Board Meeting, held on 24 May 2007.

Summary of the Financial report of Gorenje, d.d., and Gorenje Group for period January-March 2007

Gorenje Group:
Consolidated revenue amounted to EUR 313.3 million, implying a strong 35.7% increase over 1st Qtr. 2006 and 26.1% of the 2007 plan.
The revenues are not entirely comparable with the figures from the 2006 due to the inclusion of companies Istrabenz Gorenje energetski sistemi and Surovina, d.d., into the Group. Considering only the comparable figures, the extent of sales for the Group is increased by EUR 36.2 million, or 15.7%.

EBITDA rose to EUR 23.9 million, up by 28.6% and reached 24.6% of the annual plan 2007.
EBIT amounted to EUR 10.7 million, and a very strong growth of 65.7% and with 3.2 % EBIT Margin (as % of Gross operating yield) and reached 24.1% of 2007 plan.
PBT - Profit before tax amounted to EUR 6.2 million, showing 15.4% increase in comparison with the 1st Qtr. 2006 and realised 21% of the 2007 plan.
Net profit rose by 1% to EUR 4.4 million and reached 19% of the annual plan 2007.

Parent company Gorenje, d.d.:
Revenue from sales amounted to EUR 205.8 million, implying a strong 32% increase over 1st Qtr. 2006 and 24.4% of the 2007 annual plan.
EBITDA rose to EUR 14.5 million, up by 4% and reached 24.7% of the 2007 plan.
EBIT showing 7.3% increase and 24.8% of the plan 2007.
PBT amounted to EUR 3.96 million, showing 20% decrease in comparison with the 1st Qtr. 2006, as the impact of negative financial results.
Net profit amounted to EUR 3.6 million and showing 17.7% decrease in comparison with last year 1st Qtr.; and reached annual plan for the year 2007 by 23.3%.

According to analysts, it is unlikely that we will see a significant improvement in business conditions in 2007. The prices of commodities remain the biggest uncertainty, because the prices are still increasing, in particular of sheet metal and other metals, plastics, and components made of these materials. The other major factor affecting the achievability of planned business performance in 2007 is the application of the WEEE Directive, which entered into force in Slovenia in August 2005.

The negative impacts of expected business performance will have to be neutralized as much as possible during the year 2007 above all by the optimization and search for cheaper alternative supply sources, selective price increases of household appliances and enhancement of their sales structure, and rationalization of costs in all segments of operations. Particular emphasis will have to be earmarked for effective launching of the new products and full inclusion of a new Refrigerators and Freezers Factory in Serbia, which started on the production in the October last year. The Management Board will continue to carry out all business operations which are expected to contribute to the final achievement of forecast business objectives for the year 2007.

Please, see the attached file, regarding Financial report Summary of Gorenje, d.d., and of the Gorenje Group, for the period January - March 2007!

The attached report will be also available on the www.gorenje.com web-site.

Date: 24. 5. 2007