Business News

Gorenje Plans Growth for 2011

Velenje, 20 December (STA) - Slovenia's household appliances manufacturer Gorenje plans to increase net sales revenues by 14% to EUR 1.5bn in 2011. Excluding the effects of the takeover of Swedish Asko Appliances Group earlier this year, revenues will be up nearly 6% on the estimated 2010 revenues, Gorenje said Monday.

The group projects a net profit of EUR 21.1m for next year, a 9.4% increase on the EUR 19.3m estimated for this year, a figure pulled down by the acquisition of Asko and depreciation of claims to the insolvent hardware retailer Merkur.

"Excluding the impact of both extraordinary events, this year's profit is estimated at 10.4 million euros or a good 3.4% more than planned. Compared to that, Gorenje will double net profit next year," a press release from the Velenje-based company said.

The group will trump planned volume and profitability indicators this year, to focus in the coming period on a further increase in profitability, a positive free cash flow, a growth in market shares and the supply of high price market with own brands, the release said.

The key challenge will be neutralising the expected growth in the prices of raw materials. By the end of January, the management will draft a detailed plan of desinvestment, working capital management and of restructuring in the home interior division.

The business plan for 2011 was endorsed by the supervisory board at Monday's session. After the meeting Gorenje chairman Franjo Bobinac noted: "Considering the persistently high unemployment level and scarcity of quality financial resources, growth in downstream markets can be expected to remain modest in 2011."

Gorenje Group will continue to optimize its financial portfolio in 2011. Planned positive free cash flow in the amount of EUR 29.1m will be used to reduce the debt.

The group will allocate EUR 40.4m for investment. The bulk will be used to fund technological development of manufacturing facilities and processes, and development of new innovative, superiorly designed, and energy-efficient products which will reinforce the position of Gorenje's brands in 70 markets worldwide.

Gorenje+ will be added to the group's brand portfolio to reach into the upper price segment. After it is officially unveiled in January at the IMM international fair in Cologne, the brand will see its kick-off in selected markets, the company said.

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