Presentation of the Gorenje Group Business Performance 9M 2017 - PowerPoint PPT Presentation

Presentation of the Gorenje Group Business Performance 9M 2017 Investor Conference Austria Trend Hotel, Thursday, the 23 rd of November, 2017

CO CONTENTS NTENTS: 1. 1. HIGHLIGHTS HIGHLIGHTS 2. 2. BUSINESS USINESS REPOR EPORT 2.1. GROUP PERFO 2.1. RFORM RMAN ANCE CE 2.2. 2.2. PERFO RFORM RMAN ANCE CE OUTLOOK 3. 3. FINANCIA FI NCIAL L REPOR EPORT 3.1. 3.1. FI FINAN ANCI CIAL AL MAN ANAGEMENT 3.2. 3.2. GROUP FI FINAN ANCI CIAL AL STATEMENTS 4. 4. EX EXEC ECUTI UTIVE E SUM SUMMARY AND ND KEY KEY MANAGERIA GERIAL L ACTIVITIES TIVITIES 2

I. HIGHLI . HIGHLIGHTS GHTS 3

I. I. HIGHL HIGHLIGHTS IGHTS 9M 9M 20 2017 17 HIGHL HIGHLIGHTS IGHTS Gorenje Group sales revenue: EUR 943.9m  4.8% more than in 9M 2016 Revenue from Domestic appliances sales: EUR 779.8m  1.2% more than in 9M 2016  3.3% lag behind the planned dynamics for 9M 2017  Stable market share also in 9M 2017 (2.6% in value and 3.0% in units)  Price index increased in 9M2017 (+1.0 p.p.) reached 89 in 28 EU Countries)  Premium products accounted for 28.7% in 9M 2017 (+1.5 p.p.)  Innovative products accounted for 20.9% in 9M 2017 (+1.9 p.p.) Sales revenue in Other businesses: EUR 164.1m  26.0% more than in 9M 2016 We generated net profit of EUR 4.6m.  EUR 0.2m more than in 9M 2016 (+12.1%) 4

II. B II. BUSIN USINESS ESS R REPO EPORT IN 9M 201 IN 9M 2017 5

2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE KEY BUSINE KEY USINESS SS ACTI CTIVI VITIE TIES  Focus to sales growth supported by :  launch of several new generations (freestanding cookers, premium washing machines and driers, premium dishwashers, cooker hobs) and new or refreshed product lines (Bulli refrigerators, dishwashers for OEM customers and Ora Ito2 line),  new build-in cooling appliances and connected appliances are in a final development phase. Connected appliances under ATAG brand will be available already until the end of 2017,  selective investments into marketing (digital marketing, marketing campaigns and fairs…) and R&D (connected appliances, activities for in-house development of electronics…).  Start of serial production and sale of new generation of free standing cookers, premium washing machine and dryers, cooker hobs and premium dishwashers. New generation of connected appliances will be launched until year end under premium brand ATAG.  Cost management activities , neutralizing the negative effects in the raw and processed material markets (Q2) and labour cost pressures (signed agreements with social partners in Slovenia and Serbia);  We have secured the required refinancing for our financial liabilities due in 6 6 2017, and cut interest costs by 15.5%.

2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE REVENUE REV ENUES S BY BY QU QUAR ARTERS TERS Period Q3 PYRP ACTP PYRQ ACTQ 900.9 943.9 319.6 320.0 4.8% 0.1%  4.8% increase in comparison to 9M 2016.  Growth mainly in the markets outside Europe and in Eastern Europe.  Growth with premium brands ASKO and ATAG.  Disproportional growth of sales revenues in Other Businesses (+26.0% more than in 9M 2016). 7 7

2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE REVENUE REV ENUE ST STRUCTUR UCTURE E BY BY BUSINE USINESS SS  Budgeted share of DA for 9M 2017 was 85.5%, and the achieved share was actually lower due to disproportional growth of sales revenues in Other Businesses. 8 8

2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE DOMEST DOME STIC IC APP APPLIANCES LIANCES REV REVENUE ENUES S BY BY QU QUAR ARTE TERS Q1 Q2 Q3 Q4 PYRP ACTP PYRP ACTP PYRP ACTP PYRP ACTP 240 247 252 261 279 272 306 3.0% 3.3% -2.3%  1.2% increase in comparison to 9M 2016  Growth mainly in the markets outside Europe, Eastern Europe and Benelux and with premium brands ASKO and ATAG 9 9

2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE DOME DOMEST STIC IC APP APPLIANCE LIANCES REV REVENUE ENUE ST STRUCTUR UCTURE BY BY BRAND BRANDS  Growth of share of premium brands ASKO (1.1 p.p.) and ATAG (0.4 p.p.).  Share of Others dropped for 1.1 p.p. due to Panasonic. 10 10

2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE DOME DOMEST STIC IC APP APPLIANCE LIANCES REV REVENUE ENUE ST STRUCTUR UCTURE BY BY PR PROGRA OGRAMS  Favourable product structure of DA sales with growing sales in dishwashers (+17.9%), cooking appliances (+0.1%) and SDA (+18.3%).  Growth of the share of dishwashing programme (1.8 p.p.) and small domestic appliance programme (0.6 p.p.). 11 11

2.1. GR 2.1. GROUP OUP PE PERFORMA RFORMANC NCE DOME DOMEST STIC IC APP APPLIANCES LIANCES REV REVENUE ENUE FR FROM OM PRE PREMIUM MIUM PRODUCT PR ODUCTS  Share of premium products in revenue in 9M 2017 was 28.7% compared to 27.2% in 9M 2016.  Premium appliances: Asko and Atag branded products, appliances from the Gorenje design lines. 12 12

2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE DOME DOMEST STIC IC APP APPLIANCES LIANCES REV REVENUE ENUE FR FROM OM INNO INNOVATIVE TIVE PR PRODUCT ODUCTS  Share of Innovative products in revenue in 9M 2017 was 20.9% compared to 19.0% in 9M 2016%.  Innovative appliances: appliances within individual group of products with the so- called »innovative functionalities« are more energy efficient (efficient storage, lower energy and water consumption) based on the Gfk 13 13 methodology.

2.1. GR 2.1. GROUP OUP PE PERFORMA RFORMANC NCE COMPAR COMP ARABLE LE ADDE ADDED VAL ALUE UE Period Q3 PYRP ACTP PYRQ ACTQ 231.7 242.5 80.4 81.0 4.7% 0.7%  Value added was by 4.7% higher then the comparable value added in 9M 2016.  Comparability adjustment in 9M 2016 data relates to transfer of trade receivables impairment from financial to operating part of P&L (EUR 4.7m). 14 14

2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE COMPAR COMP ARABLE LE EBI EBITD TDA Period Q3 PYRP ACTP PYRQ ACTQ 55.9 58.8 19.7 18.2 5.2% -7.4%  EBITDA was by 5.2% higher then comparable EBITDA in 2016.  Comparability adjustment in 9M 2016 data relates to transfer of trade receivables impairment from financial to operating part of P&L (EUR 4.7m) 15 15

2.1. GR 2.1. GROUP OUP PE PERFORMA RFORMANC NCE COMPAR COMP ARABLE LE EBI EBIT Period Q3 PYRP ACTP PYRQ ACTQ 20.5 18.0 7.8 3.5 -12.1% -55.4%  EBIT was for 12.1% lower then comparable EBIT in 2016  This pertains to the effect of growing depreciation cost (EUR 5.4m more depreciation than in 9M 2016) as a result of accelerated investment cycle and capitalisation of development costs (EUR 1.6m more amortization than in 9M 2016).  Comparability adjustment in 9M 2016 data relates to transfer of trade receivables 16 16 impairment from financial to operating part of P&L (EUR 4.7m)

2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE NET NET PR PROFIT OFIT Period Q3 PYRP ACTP PYRQ ACTQ 4.1 4.6 2.1 0.2 12.1% -89.3%  12.1% increase of net profit compared to 9M 2016.  Net financial result EUR 1.6m better than 9M 2016 mainly due to lower interest expenses  Income tax expenses EUR 1.9m lower than 9M 2016 as a result of a favourable and final decision in a tax audit. 17 17

2.2. PE 2.2. PERFORMA RFORMANC NCE E OUTL OUTLOOK OOK KEY PE KEY PERFORMA RFORMANC NCE E FACT CTORS ORS IN IN Q4 Q4 20 2017 17  Consistently with the dynamics of the 2017 business plan, we expect the highest revenue from DA in Q4 2017, it is estimated, that revenues in Q4 will reach approximately 30% of the yearly budget .  Additional revenue and improved sales structure should result in improved integral net margin.  Effective manufacturing cost management, considering the higher production volume planned for the last quarter of the year.  Higher marketing investments supporting the sales growth in Q4, yet adjusted due to the pressure from the raw and processed material markets and labour costs.  Adjustment of the production volume and supplementary program purchases to the required decrease in finished product and merchandise inventories.  Effective cost management measures, including measures in the segment of white collar employees, to partly neutralize the effects of labour cost increase due to agreements reached with social partners. 18 18

2.2. PE 2.2. PERFORMA RFORMANC NCE E OUTL OUTLOOK OOK KEY KEY RIS RISKS KS  Ensuring the planned sales volume , in particular on the very competitive Western European markets,  Accomplishing the planned profitable sales growth due to further concentration of distribution channels on key markets.  Efficient serial production of new generations of key product groups.  Delivering cost efficiency , especially on account of:  Growing costs of key raw materials and components; and  Pressures on labour costs in Slovenia, Serbia, and the Czech Republic (signed agreements with social partners in Slovenia and Serbia).  Improvement of working capital management to support our deleveraging efforts until the end of the fiscal year. 19 19