Presentation of the Gorenje Group for Investors...Gorenje, d.d., becomes a public company, listed on the Ljubljana Stock Exchange Fast Development in the Last Decade 4 2006 New refrigerator

www.gorenjegroup.com

Presentation

of the Gorenje

Group for InvestorsInterim Report

January-September 2016

Investor ConferenceAustria Trend Hotel,

Thursday, the 24th of November, 2016

www.gorenjegroup.com2

OWN

PRODUCTION

Slovenia

Serbia

Czech RepublicCONSOLIDATED

REVENUE

EUR 1.225 billion

NUMBER OF

EMPLOYEES

10,617

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 White Goods

Gorenje

Group

EXPORT

95%

of sales

R&D COMPETENCE

CENTRES

Slovenia

Czech Republic

Sweden

Netherlands

MDA (major domestic appliances)

SDA (small domestic appliances)

HVAC (heating, ventilation, air conditioning)


1950

Founded in the

village Gorenje

More than 60 Years of Tradition

3

1960

Production in

Velenje begins

1961-1970

Production of

washing machines

and refrigerators

1964

Production in Velenje,

New plant for

cooking appliances

1971

First sales subsidiary

abroad (Munich)

1991

Slovenia becomes

independent, loss of

the former domestic

market

1958

Manufacturing

of stoves

1961

First export

(to Western

Germany)

1961-1970

Acquisitions of

companies bringing

synergies to the core

Business “Everything

for Home“

Setting-up own

distribution network

in Western Europe

1991-1996

Strong expansion

abroad


1998

Gorenje, d.d.,

becomes a

public company, listed

on the

Ljubljana Stock

Exchange

Fast Development in the Last Decade

4

2006

New refrigerator

& freezer plant

in Valjevo,

Serbia

2010

Acquisition of the

company ASKO,

Sweden

2013

Strategic

Alliance with

Panasonic

Listing on WSE

2005

Acquisition of

the Czech cooking

appliances

manufacturer Mora Moravia

2010

IFC, a member of

the World Bank,

enters the ownership

structure

(…)

2008

Acquisition of the

company ATAG,

the Netherlands

2014

Positive effects of

restructuring2012

Reorganisation

of production

facilities and sales

organization begins,

disposal of furniture

manufacturing

business

2015

Strengthening Strategic

Alliance with

Panasonic

New Strategy 2020


New design line

in 2015

Gorenje by Starck line was created in cooperation with the globally renowned designer

Philippe Starck.


Ownership Structure

More than 60% of foreign shareholders

6

Kapitalska družba, d. d.

16.37%

IFC 11.80%

Panasonic10.74%

KDPW -Fiduciary account7.79%

Other financial investors 38.25%

Individuals11.49%

Employees3.06%

Treasury shares0.50%

Ten major shareholdersNo. of shares

(30 Sep 2016)

Share in

%

KAPITALSKA DRUŽBA, D.D. 3,998,653 16.37%

IFC 2,881,896 11.80%

PANASONIC CORPORATION 2,623,664 10.74%

KDPW – FIDUCIARY ACCOUNT 1,903,703 7.79%

HOME PRODUCTS EUROPE B.V. 1,221,231 5.00%

RAIFFEISEN BANK AUSTRIA D.D. –

FIDUCIARY ACCOUNT912,568 3.74%

Alpen.SI, Mixed flexible sub-fund 816,188 3.34%

ZAGREBAČKA BANKA D.D. –

FIDUCIARY ACCOUNT753,626 3.09%

AUERBACH GRAYSON & COMPANY

LLC647,165 2.65%

BNP PARIBAS SECURITIES

SERVICES S.C.A.620,000 2.54%

Total major shareholders 16,378,694 67.06%

Other shareholders 8,045,919 32.94%

Total 24,424,613 100%

Ownership structure as at 30 September 2016


Strategic Alliance with Panasonic

7

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

Production: Increased production capacity utilization;

Exchange of manufacturing know-how

Sales: Possibility of joint sales-distribution channels

Strategic cooperation expanded to new business

segments: (a) procurement of materials &

components, (b) manufacturing innovation, (c)

consumer (aftersales) services, (d) logistics, (e)

quality assurance, (f) distribution of major and small

domestic appliances on selected markets

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

Can be increased with Management Board and

Supervisory board consent

After the due diligence period, Panasonic conducted the valuation and assessment process, taking all related matters

into consideration such as current market conditions, current composition of Gorenje shareholders, the analysis of

due diligence results and so on.

•

Increase of shareholding stake in Gorenje is not consistent with the current investment strategy of Panasonic.

•

Panasonic is currently not in position to continue its activities to increase its shareholding stake in Gorenje and will

not proceed with a Takeover Procedure, while it will remain a minority shareholder in Gorenje.

•

Panasonic very much appreciate business collaboration with Gorenje and look forward to the continuation of

business partnership.

INFORMATION ABOUT PROCEDURE CONCLUSION, 10 November 2016


Q32015

Q32016

9M2015

9M2016

Home 89.2% 88.4% 86.4% 86.8%

Non-core activities 10.8% 11.6% 13.6% 13.2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

CORE BUSINESS

Business Activities

8

Products andservices for

Home:

MDA

•SDA

•

HVAC

Ecology•

Tool making•

Engineering•

Hotel and catering•

Trade

NON-CORE


Cooperation with international

institutions, knowledge and

excellence centres.

R&D Competence Centres

Firm Foundations for

Future Development of

the Gorenje Group

Mariánské údolí


Production Facilities for MDA in 3

Countries

10

SloveniaVelenje

Czech Republic Mariánské údolí

Serbia Valjevo, Stara Pazova, Zaječar


Gorenje Group Macro-organization and

Locations

Thoughtfully constructed sales network,

which will be expanding outside Europe.

CURRENT MACRO ORGANIZATION (HOME)*

PARENT COMPANY Gorenje, d.d.

HOLDING COMPANIES 2

SALES BUSINESS UNITS 44 (incl.representative offices)

PRODUCTION COMPANIES 5


Most Important Sales Markets:

Germany, Russia and the Netherlands

12

GERMANYRUSSIA THE NETHERLANDS

SERBIASLOVENIACZECH REPUBLICCROATIADENMARK

AUSTRALIJAUSA

UKRAINE

BIH

AUSTRIA

POLAND

BELGIUM

HUNGARY

FINLAND

NORWAY

RUMANIA

SLOVAKIA

SWEDEN

BULGARIA

GREAT BRITAIN

FRANCE

MONTENEGRO

Year 2015


Implementing a multi-brand strategy with attention on the upper-mid and premium

price segment.

Gorenje Group Brand Portfolio

Benelux


2015the year of

14

1. unstable business environment• Ukrainian and Russian crisis

• exchange rates volatility

2. greater financial strength• better working capital management

• lower net debt

• improved maturity profile

3. enhancing the strategic partnership with Panasonic

4. development of new markets and business cooperation• development of the Asko brand

• development of innovative appliances

• growth in overseas markets

5. new strategic plan 2016-2020


2016-2020we focus on

15

Growth• improved sales structure

• overseas countries

• premium brands

Deleveraging• improved working capital management

R&D• new products development & innovation

Risk Management


• Profitable growth

• Global presence

16

Two Key Strategic Directions


Business Model and the Importance of

Corporate Culture

We are responsible to the people,

customers, partners, employees,

shareholders, society and the

environment. We respect the

commitment to efficiency and goal

orientation.

We operate in a spirit of continuous

improvement. Therefore, we support

innovation, bringing up new ideas in

all fields, open-mindedness and

encourage entrepreneurial thinking.

We remain loyal to the key goal of our

corporation: creation of value for the

shareholders, employees, business

partners, and the environment.


Vision, Mission, Corporate Values


Strategic Pillars 2020

< 2.5


Corporate goal 2020: REVENUE OF EUR 1.56 BILLION

Gorenje Group net sales revenue (excluding Ecology companies which were in

divestment process in year 2016) in EUR billion

1,175 1,155 1,1941,285

1,3691,462

1,562

0

200

400

600

800

1,000

1,200

1,400

1,600

2014 2015 2016 2017 2018 2019 2020

Corporate Goals of Gorenje Group 2020


Corporate goal 2020: REVENUE OF EUR 196 MILLION

GENERATED OUTSIDE EUROPE

Revenue from sales outside Europe (EUR million)

107.2 111.0121.4

143.9153.7

173.4

196.0

2014 2015 2016 2017 2018 2019 2020



Corporate goal 2020: ASKO REVENUE OF EUR 206 MILLION

Net revenue from Asko sales (EUR million) and

share in total core activity (Home) sales, in %

96.6 99.1109.7

130.9152.1

173.2

205.69.0% 9.5%

10.1%11.1%

12.1%12.9%

14.3%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

0

50

100

150

200

250

2014 2015 2016 2017 2018 2019 2020



Asko appliances represent 10% in our revenues in 2015, in 2020 will represent 14.2% in

value due to extension of product portfolio and expansion on new markets and strengthening

the position on the existing markets.

Share Structure of Sales by Brands in

Value – 2015 & 2020

Doubled sales in

innovative and

premium segment

which will amount

to 30% of total

sales in 2020


• First year of the new 2016-2020 strategic period, consistently with the key

strategic goals.

• Further growth of sales revenue (excluding Ecology companies which were

in divestment process in year 2016) planned for:

• Gorenje Group (+4.0%)

• Home segment (+4.6%)

• Increase in Gorenje Group profitability

• EBITDA: + 11.6%

• EBIT: + 14.9%

• Net profit: EUR 7.6 million

• Improvement projects at all levels of operations.

• Further working capital optimization and positive cash flow.

• Focus on the core activity.

• Relative deleveraging (net financial debt to EBITDA ratio). 24

Business Plan 2016


EUR million 2015**Budget*

2016

Index

B16/15

Consolidated revenue 1,154.8 1,201.0 104.0

EBITDA 76.0 84.9 111.6

EBITDA Margin (%) 6.6% 7.1% /

EBIT 32.8 37.6 114.9

EBIT Margin (%) 2.8% 3.1% /

Profit before taxes -4.7 11.2 /

Profit or loss for the period -8.6 7.6 /

ROS (%) -0.7% 0.6% /

Business Plan 2016 (*excluding the companies from the Ecology

which were in divestment process in year 2016)

**For comparability between the years 2015 and 2016, the 2015 is provided in comparable terms, excluding the

companies from the Ecology segment, which were not included at the time of preparation of the 2016 plan, due to

the process of divestment (Gorenje Surovina d.o.o., Maribor, Kemis-BH, d.o.o., BiH, Kemis Valjevo d.o.o., Serbia,

Cleaning System S, d.o.o., Serbia, PUBLICUS, d.o.o., Ljubljana, EKOGOR, d.o.o., Jesenice).


Interim ReportJanuary-September 2016


9M 2016: Key financial indicators

27

*Business Plan 2016 is exclusive of the companies of the Ecology segment, which were

subject to divestment (Gorenje Surovina d.o.o., Maribor, Kemis-BH, d.o.o., BiH, Kemis

Valjevo d.o.o., Serbia, Cleaning System S, d.o.o., Serbia, PUBLICUS, d.o.o., Ljubljana,

EKOGOR, d.o.o., Jesenice).

EURmQ3

2015Q3

2016Index

9M2015

9M2016

IndexPlan

2016*Plan

track

Revenue 317.4 319.6 100.7 875.2 900.9 102.9 1.201.0 75.0

EBITDA 17.1 20.3 118.5 50.8 60.5 119.2 84.9 71.3

EBITDA Margin (%) 5.4% 6.4% / 5.8% 6.7% / 7.1% /

EBIT 5.6 8.5 152.0 16.3 25.2 154.5 37.6 67.0

EBIT margin (%) 1.8% 2.7% / 1.9% 2.8% / 3.1% /

Profit before taxes -1.9 3.4 / -7.3 8.1 / 11.2 71.6

Profit or loss for theperiod

-2.5 2.0 / -9.4 4.1 / 7.6 54.4

ROS (%) -0.8% 0.6% / -1.1% 0.5% / 0.6% /


9M 2016: Key financial indicators

28

EURmQ3

2015Q3

2016Index

Plan2016*

Gross financial debt 424.5 426.7 100.5 333.4

Net financial debt 401.4 405.1 100.9 319.0

Net financial debt / EBITDA 5.5 4.5 / 3.8

Gross debt: EUR 426.7m (EUR +2.2m).

Net financial debt: EUR 405.1m (EUR +3.7m).

Net financial debt / EBITDA ratio: 4.5 (1.0 better than last year).


Q3 2016: ONE OF THE BEST QUARTER /

THE 4th POSITIVE QUARTER IN A ROW

29

Solid performance from H1 of 2016 has continued in Q3 2016.

Our sales revenue totalled at EUR 319.6m or 0.7% more than in Q3 2015.

Sales revenue amount and growth are consistent with the Gorenje Group

sales plans for Q3 2016.

Sales revenue from core activity Home: EUR 282.7m and comparable to

the planned revenue dynamics.

EBITDA amounted to EUR 20.3m (+18.5% more than last year).

EBITDA margin was at 6.4% (up +1.0 p.p. from Q3 2015).

EBIT amounted to EUR 8.5m (+52.0% more than last year).

EBIT margin at 2.7%, (+0.9 p.p. more than in the comparable period of 2015).

Our Q3 bottom line is a profit of EUR 2.0m, which is by EUR 4.5m better than

in Q3 2015, that was wrapped up with a loss of EUR 2.5m. The Group

generates and records profit for the past four consecutive quarters. Also

the Home Core activity generated profit.


9M 2016:

QUALITY SALES = PROFITABILITY

30

Our sales revenue totalled at EUR 900.9m or +2.9% more than in 9M 2015.

Sales revenue amount and growth are consistent with the Gorenje Group sales

plans for 9M 2016.

Sales revenue from core activity Home: EUR 782.2m (+3.4%) and comparable to

the planned revenue dynamics.

Without the impact of exchange rate fluctuations, the Home’s organic growth in

revenue amounted to 5.3%.

EBITDA amounted to EUR 60.5m (+19.2% more than last year).

EBITDA margin was at 6.7% (up +0.9 p.p. from 9M 2015).

EBIT amounted to EUR 25.2m (+54.5% more than last year).

EBIT margin at 2.8%, (+0.9 p.p. more than in the comparable period of 2015).

Our bottom line is a profit of EUR 4.1m, which is better than in 9M 2015, that was

wrapped up with a loss of EUR 9.4m.


9M 2016: BETTER SALES STRUCTURE

= BETTER PROFIT

31

9M 2016 performance fuelled by successful performance in the Home

activity, owing to:

Sales growth (+3.4% or EUR + 26.0m).

favourable regional structure of sales with growing sales in the

following markets:

East Europe (+4.6%),

CIS (+14.2%),

Benelux (+4.3%).

favourable brand structure of sales with growing sales of the

following brands:

Asko (+7.9%),

Atag, Pelgrim and Etna (+4.3%).


9M 2016 performance fuelled by successful performance in the Home

segment, owing to:

Favourable product structure of sales with growing sales of the

following segments:

premium appliances (6,7-percent volume growth; 16.8% share in

total MDA sales by volume and 27.5% share in MDA revenue

structure; increase by 0.4 p.p.).

innovative appliances (16.8-percent volume growth; 10.3% share in

total MDA sales by volume and 16.8% share in MDA revenue

structure, increase by 1.2 p.p.).

cooking appliances (+5.0% volume growth; 43.8% share in MDA

revenue structure).

dishwashers (+14.5% volume growth; 11.1% share in MDA revenue

structure).

small household appliances (+36.3% revenue growth).

32

9M 2016: GOOD PRODUCT STRUCTURE

= ADDITIONAL PROFIT


9M 2016: LONG TERM COST SAVINGS

NOW SHOWING

33

Cost efficiency

Production

Solid management of costs of raw and processed materials

(lower purchase price as in 9M 2015):

by renegotiation with suppliers in 9M 2016,

prior favourable forward purchases of certain strategic

raw materials (e.g. sheet metal, plastics, etc.),

activities related to optimising the use of material in

direct production,

supply with components from the best competitive

countries.


Cost efficiency

Optimization of logistic cost

Logistical activities are aimed at optimizing the logistics routes and

developing a new logistics model,

Lower share of logistics costs.

Labour costs

Labour costs growth in period 9M 2016 by +2,7%; compared to +2,9%

increase in Net sales revenues.

Quality costs

• Lower share of quality costs as a result of improved quality of

appliances.

9M 2016: LONG TERM COST SAVINGS

NOW SHOWING


9M 2016: FOCUSED INVESTMENT IN

MARKETING and R&D

35

Increased investment into marketing and development (by

EUR 3.4m compared to 9M 2015):

Investment into development EUR 23.9m (2.7% of the

Group revenue; increase by 0.18p.p. or EUR 2.2m).

Investment into marketing EUR 18.2m, (2.0% of the

Group revenue; increase by 0.17 p.p. or EUR 2.0m).


Improved EBITDA profitability

EUR 60.5m (EUR +9.7m compared to 9M 2015)

We cut our interest expense by 14.9% (EUR 2.0m lower than last

year).

We reported a positive result of foreign exchange rate differences of

EUR 1.0m (EUR 7.6m better than last year).

Improved Net profit/loss profitability

Net Profit in 9M 2016 of EUR 4.1m (EUR +13.5m compared to last

year).

The net financial debt at EUR 405.1m remained at the comparable level

of 2015.

We improved our net financial debt/EBITDA ratio from 5.5 in 9M 2015 to

4.5 in 9M 2016 (by 1.0 relative to PY 2015).

9M 2016: CONTINUED GOOD FINANCIAL

MANAGEMENT


Q4 2016: BUSINESS FORECAST

Expected highest quarterly sales in the year 2016.

Gorenje Group revenue in Q4 2016 is estimated to range between EUR 340m and

350m:

sales growth if compared to this year's all previous quarters.

Revenue of Home segment will in Q4 2016 range between EUR 300m and 310m:

compared to the revenue generated in Q3 2016 an additional 6 to 7% growth,

compared to the average revenue generated in Q1 and Q2 more than 20%

growth,

the latter signifies a sales growth also with respect to the Q4 2015.

Expected favourable sales structure of brands

Asko (more than 10% sales growth),

Atag, Pelgrim and Etna (range between 4 and 5% sales growth).

Expected favourable sales structure of products

further growth of cooking and dishwashing appliances,

further growth of premium and innovative products.

37


Expected highest quarterly sales in the year 2016.

Group's revenue in Q4 2016 between EUR 340m and 350m:

268290

317

350

285296

320340

279,4

307,4325,0

341,0

0,0

50,0

100,0

150,0

200,0

250,0

300,0

350,0

400,0

Q1 Q2 Q3 EST Q4

EUR

m

2015 2016 Dyn BUD 16

350

Q4 2016: BUSINESS FORECAST


Q4 2016:

ANNUAL TARGETS IN OUR SIGHT

Expected the highest utilisation of production capacities.

A positive impact on further growth of Group's profitability

(EBITDA/EBIT).

In compliance with the last business assessment for Q4

2016, we expect the Group to record for 2016 a profit of EUR

7m to EUR 8m (Plan is EUR 7.6m).

39


Q4 2016 BUSINESS FORECAST

Estimated net profit of Gorenje Group in Q4 2016 (between EUR

3m and EUR 4m).

Estimated net profit of Gorenje Group in 2016 to EUR 7m and EUR

8m.

40

-2,2

-4,9

-2,4

1,40,61,6 2,0

3,0

-5,0

-3,0

-1,0

1,0

3,0

5,0

Q1 Q2 Q3 EST Q4

EUR

m

2015 2016

4,0


Markets of the Core activity Home 9M 2016

World premiere at IFA 2016: a fridge that was inspired by the legendary and iconic

look of a VW Bulli van – ultimate and exclusive piece: Volkswagen BULLI refrigerator


EURmQ3

2015%

Q32016

%Change

(%)

9M2015

%9M

2016%

Change

(%)

Western Europe

110.6 39.0 110.0 38.9 -0.5% 330.1 43.7 335.5 42.9 +1.6%

Eastern Europe 141.3 49.9 144.0 50.9 +1.9% 342.9 45.3 367.1 46.9 +7.0%

Other 31.4 11.1 28.7 10.2 -8.8% 83.1 11.0 79.6 10.2 -4.3%

Total Home 283.3 100.0 282.7 100.0 -0.2% 756.1 100.0 782.2 100.0 +3.4

9M 2016: Markets of the Core activity Home

42

By increasing the sales we improve our sales structure (increasing the share of

premium appliances, premium brands).

Favourable sales structure of brands, where we have increased primarily the sale

of brands Asko (7.9% growth); 10.3% in sales structure (+0.4 p.p. relative to 9M

2015) and Atag, Pelgrim and Etna brands (+4.3% growth); growth was also

recorded by the sale of Gorenje brand.

As for sales of small household appliances, the sales recorded 36.3% growth

revenue.

*

* Lower sales volumes in the MENA region: Saudi Arabia, Iraq, Iran, and

changed dynamics of consumption by some industrial partners (GE).

*



43

Sales growth in Eastern Europe: the Czech Republic,

Slovenia, Hungary, Slovakia, Poland, Romania, Bulgaria,

Montenegro and Macedonia, Russia (+9% growth) and Ukraine

(more than 40% growth).

Sales growth in Western Europe: Benelux, (mostly in the

Netherlands), Germany. Lower sales: Scandinavia and France

(Gorenje brand).

Decrease in sales on the markets outside of Europe (-4.3%):

exchange rate fluctuations, changed dynamics in the offtake of

industrial partners and lower sales on the markets of Near and

Far East (mostly Saudi Arabia, Iraq, Iran). Essential growth:

Northern America, Caucasus, Asia, Brazil and Australia.

Higher sales of the Asko brand products were achieved on

the markets of Scandinavia, France, Benelux, America, Russia,

Asia and Australia.


Higher share of innovative appliance sales to:

10.3% (+1.1 p.p.) / +14.7% sales growth

Higher share of premium appliance sales to:

16.8% / +6.7% sales growth


Innovative appliances

… are appliances within individual group of products with the so-called

»innovative functionalities« which are more energy efficient (efficient storage,

lower energy and water consumption).

Premium appliances

... are appliances of the brands Atag and Asko brands, appliances from the

Gorenje design lines (Gorenje Simplicity, Gorenje Ora Ito, Gorenje Pininfarina,

Gorenje Classico, Gorenje One, Gorenje Karim Rashid, Gorenje Color edition,

Gorenje +, Gorenje Retro, and Gorenje by Starck).


9M 2016: Operating Performance

GroupRevenue

45

EURm

Q32015

Q32016

Index9M

20159M

2016Index

Revenue 317.4 319.6 100.7 875.2 900.9 102.9

CM 131.1 140.9 107.4 372.7 392.5 105.3

CM ( %) 41.3% 44.1% / 42.6% 43.6% /

EBIT 5.6 8.5 152.0 16.3 25.2 154.5

EBIT margin ( %) 1.8% 2.7% / 1.9% 2.8% /

Profit or loss for the period -2.5 2.0 / -9.4 4.1 /

ROS (%) -0.8% 0.6% / -1.1% 0.5% /

Improved contribution margin: improved sales volume, sales and geographical structure,

favourable sales structure of brands and product groups in Core activity Home.

268.0 285.5 289.8 295.8 317.4 319.6 349.8

875.2 900.9

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

1000.0

Q12015

Q12016

Q22015

Q22016

Q32015

Q32016

Q42015

9M2015

9M2016

mio

EU

R

+6.5% +2.1%

+2.9%

+0.7%


9M 2016: Revenue by activities

46

Organic

growth Home

+5.3%

Lower revenue from sales of:

• divesting or eliminating two companies from the

Ecology segment (Publicus, d.o.o., Ljubljana and

Ekogor, d.o.o., Jesenice) of the Group at the end of H1

2016. If effects of the sale of these companies would be

eliminated, NCA would achieve a 1.8%growth in revenue.

Higher sales revenues:

• field of catering,

• field of ceramics production,

• sale of coal,

• medical equipment and

• in the field of tool manufacture.

Lower revenue from sales of:

• Ecology (lower prices of secondary raw materials market).

Q12015

Q12016

Q22015

Q22016

Q32015

Q32016

Q42015

9M2015

9M2016

Home 224.0 242.8 248.8 256.7 283.3 282.7 299.9 756.1 782.2

Non-core activities 44.0 42.7 41.0 39.1 34.1 36.9 49.9 119.1 118.7

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

1000.0

mio

EU

R

%

-0.2%

+8.1%

%

+3.4%

-0.3%

Q32015

Q32016

9M2015

9M2016

Home 89.2% 88.4% 86.4% 86.8%

Non-core activities 10.8% 11.6% 13.6% 13.2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


9M 2016: EBIT

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

47

Contribution margin: EUR +19.8m Higher sales

volume, good cost management of raw materials,

favourable geographical sales structure, favourable sales

structure of brands and product groups.

Cost of services: +3.4% (EUR 5.1m increased

investments in marketing by 12.2%; increased costs

of logistics by 0.5%; Quality-related costs in

connection with repairs in warranty periods

remained nearly on the same level (improved quality of

products).

Employee benefits expense: +2.7% (EUR 4.6m

planned promotions, wage adjustments, retirement

benefits, expanding the catering-related activities).

4.4 6.8 6.3 9.9 5.6 8.5

18.1 16.3

25.21.7%2.4% 2.2%

3.4%

1.8%

2.7%

5.2%

1.9%2.8%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

0.0

5.0

10.0

15.0

20.0

25.0

30.0

Q12015

Q12016

Q22015

Q22016

Q32015

Q32016

Q42015

9M2015

9M2016

EBIT

Margin

(%)

EBIT

(EURm)

16.3

19.8

-5.1

-4.6

-0.9

-0.1

-0.2

25.2

EBIT 9M 2015

EBIT 9M 2016

+51.8%+58.7%

+54.5%

+52.0%


9M 2016: Average number of employees

by activities

48

• Average number of employees in 9M 2016 by 241 higher than in 9M 2015:

• Higher production activities

• Changed business model in the retail studios

• Enhanced business activities in the field of catering

Total: 10,253 10,530 10,44410,74310,93611,083 +1.3% 10,849 10,544 10,785 +2.3%

Q12015

Q12016

Q22015

Q22016

Q32015

Q32016

Q42015

9M2015

9M2016

Home 8,830 9,077 9,008 9,289 9,496 9,640 9,408 9,110 9,335

Non-core activities 1,423 1,453 1,436 1,454 1,440 1,443 1,441 1,434 1,450

0

2,000

4,000

6,000

8,000

10,000

12,000

%

+1.5%

+0.2%

%

+2.5%

+1.1%


9M 2016: EBITDA

EBITDA

Margin

(%)

EBITDA

(EURm)

49

EBITDA was EUR 60.5m and shows a 19.2% increase over the 9M 2015.

EBITDA margin at 6.7% was higher by 0.9 p.p.

We have generated 71.3% of the planned EBITDA.

With respect to the fact that the sales process of certain Ecology-related companies

was not yet completed this year, the planned EBITDA was generated at 67.2%.

15.8 18.5 17.9 21.7 17.1 20.329.3

50.860.5

5.9%6.5% 6.2%

7.4%

5.4%

6.4%

8.4%

5.8%

6.7%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Q12015

Q12016

Q22015

Q22016

Q32015

Q32016

Q42015

9M2015

9M2016

+17.1%+21.6%

+19.2%

+18.5%


9M 2016: Net Result Performance

ROS

(%)

PAT

(EURm)

50

Negative result from financing activities: EUR 17.2m (by EUR 6.5m better in

comparison to 9M 2015). The negative result was primarily impacted by interest expenses

that in 9M 2016 show a decline by 14.9%, compared to 9M 2015. A positive result of

foreign exchange rate differences on the Group level were recorded at EUR 1.0m,

showing an improvement of EUR 7.6m over 9M 2015.

Income tax expense: EUR 3.9m (higher by EUR 1.8m in comparison to 9M 2015), includes

current and deferred income tax. Most of the increase is attributable to the improved

profitability and the impact of deferred taxes

-2.1

0.6

-4.8

1.5

-2.5

2.0 1.4

-9.4

4.1

-0.8%

0.2%

-1.7%

0.5%

-0.8%

0.6%0.4%

-1.1%

0.5%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

-12.0

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

Q12015

Q12016

Q22015

Q22016

Q32015

Q32016

Q42015

9M2015

9M2016


56.1%46.1%

59.2% 63.9% 64.3%

43.9%53.9%

40.8% 36.1% 35.7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

30 Sep 2012 30 Sep 2013 30 Sep 2014 30 Sep 2015 30 Sep 2016

Current financial liabilities Non-current financial liabilities

9M 2016: Financial performance

Cash flows from operating and investing activities

Movement of total and net financial liabilities in Q3 for the period 2012-2016 (EURm) and the

maturity structure of financial liabilities

51

• Very strong positive cash flow from

Q4 2015,

• Very low level of net working capital

recorded as at 31 Dec 2015, in

particular trade receivables as a

result of the additional launch of the

permanent factoring in most of the

countries.

• These dynamics are typical, as the

Group generates its positive cash

flows from operating and investing

activities in the H2 of the year.

-55.0-11.4

1.2

64.7

-0.5

-66.6

-12.3

6.8

-72.1

Q12015

Q22015

Q32015

Q42015

2015 Q12016

Q22016

Q32016

9M2016

v m

io E

UR

3.7 EURm

2.2 EURm

458.8 475.2

410.4 424.5 426.7436.7 447.2

387.6 401.4 405.1

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

500.0

30 Sep 2012 30 Sep 2013 30 Sep 2014 30 Sep 2015 30 Sep 2016

Total financial liabilities Net financial liabilities


9M 2016: Investment activities

Total 9.3 20.8 15.2 30.2 75.5 11.7 18.4 21.9 52.0

Q1 2015 Q2 2015 Q3 2015 Q4 2015 2015 Q1 2016 Q2 2016 Q3 20169M

2016

Home 7.7 18.5 13.3 27.7 67.2 10.2 17.4 20.7 48.3

Non-core activities 1.6 2.3 1.9 2.5 8.3 1.5 1.0 1.2 3.7

CAPEX margin, % 3.5% 7.2% 4.8% 8.6% 6.2% 4.1% 6.2% 6.9% 5.8%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

EU

Rm


Pursuant to the Group's strategic

goal, we have increased

investments in product

development to 2.7% in the Group’s

revenue structure (0.18 p.p. more

than in 9M 2015).

Key innovations that were launched in

9M 2016:

upgraded built-in undercounter

refrigerators (600 mm),

10 kg washing machine for the

strategic partner Panasonic,

Asko Craft premium built-in ovens

programme,

new programme of mid-price

range dishwashers.

53

9M 2016: Development and new Products


EURm30 Sep

2012

30 Sep

2013

30 Sep

2014

30 Sep

2015

31 Dec

2015

30 Sep2016

+ Inventories 247.7 250.8 249.8 249.7 225.9 249.3

+ Trade receivables 282.3 240.3 228.0 220.5 161.0 212.3

+ Other current assets 53.2 64.3 48.9 50.0 52.2 57.1

- Trade payables -176.3 -178.1 -182.8 -191.2 -221.0 -191.2

- Other current liabilities -96.5 -94.9 -95.5 -101.3 -75.8 -105.8

= Net working capital 310.4 282.4 248.4 227.7 142.3 221.7

9M 2016: Working Capital

54

Movement of net working capital in the 2012-2015 period (EURm)

Investments in net working capital

Net working capital = inventories + trade receivables +other current assets –

trade payables – other current liabilities

310.4282.4

248.4227.7

142.3

221.7

0

50

100

150

200

250

300

350

30.9.2012 30.9.2013 30.9.2014 30.9.2015 31.12.2015 30.9.2016


9M 2016: Balance Sheet

55

EURm30 Sep

2015

30 Sep

2016EURm

30 Sep

2015

30 Sep

2016

Net non-current

assets513.3 532.2 Equity 363.9 370.0

Inventories 249.7 249.3Non-current financial

liabilities 271.3 274.2

Trade receivables 220.5 212.3 Current financial liabilities 153.2 152.4

Trade payables -191.2 -191.2Cash and cash

equivalents-23.2 -21.6

Other current assets /

liabilities-51.3 -48.7 Net debt capital 377.0 383.9

Net working capital 227.7 221.7 Financial investments -24.3 -21.2

NET ASSETS 740.9 753.9NET INVESTED

CAPITAL740.9 753.9

• Further decrease of net working capital (EUR -6m), at the same time the growth of

business operations:

• Inventories: declined by EUR 0.4m; (Inventories of coal at the end of Q3 2016 amounted to EUR

8.6m, and over the same period last year 0.044m.); Inventory turnover amounted to 71 days (-1

days).

• Trade receivables: declined by EUR 8.2m; The average turnover of receivables was 56 days (-6

days).

• Trade payables: at the level of 9M 2015; Turnover of liabilities was 82 days (+4 days).


Key managerial actions

Focus 2016:Sales• Growth (Asko, outside Europe, Atag, Eastern Europe)

• Improved sales structure (innovative / premium

appliances)

Cost reduction• Material

• Services (logistics etc.)

• Labour costs (productivity)

Reducing the debt• Divestment

• Working capital management

Increasing investments in Marketing R&D• Supporting increased sales volumes

• New product development and innovation

Processes• Supply Chain Management

• Complexity

Projects• Lean organisation, TQM, forecasting

Development of the premium

brand Asko

Strategic partnership with

industrial partners

Risk management

Realization of the Strategy 2020

(2016 is the 1st Year of the SP

2016-2020)

Preparations for the change in

the organizational structure:

from the functional to the

program structure


Key assumptions for business plan 2017

Realization of the Strategy 2020 (2017 is the 2nd year of the SP 2016-2020)

Sales• Growth (Asko, outside Europe, Atag, Eastern Europe)

• Improved sales structure (innovative / premium appliances)

Increasing investments in Marketing R&D• Supporting increased sales volumes

Cost reduction• Material

• Services (logistics etc.)

• Labour costs (productivity)

Reducing the debt• Working capital management

Processes• Supply Chain Management

• Complexity

Projects• Lean organisation, TQM, forecasting

Implementation of the change in the organizational structure: from the functional

to the program structure

Business plan for year 2017 shall be confirmed by Supervisory Board on January 12th, 2017.


Thank youfor your

attention!


Gorenje Representatives

59

Mr. Peter Groznik

Member of the Management

Board, CFO

T +386 3 899 2993

M +386 31892482

E [email protected]

Gorenje, d.d.

Partizanska cesta 12, SI-3320

Velenje, Slovenia

Slovenia

www.gorenjegoup.com

Mrs. Bojana Rojc

Head of IR & CFO Assistant

T +386 3 899 1346

M +386 51351706

E [email protected]

Gorenje, d.d.


Velenje, Slovenia


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.


Velenje, Slovenia

Slovenia


http://www.gorenje.com/





mailto:[email protected]













www.gorenje.si

www.gorenje.si

www.gorenje.si

www.gorenje.si






mailto:[email protected]





www.gorenje.si

www.gorenje.si


Forward-looking statements

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

than the past, and 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 and Warsaw

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 but are not necessarily limited to following: consumer demand and market

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

operating activities; effects of exchange rate fluctuations; competitive downward pressure on downstream prices;

major loss of business with a major account/customer; the possibility of late payment on the part of customers;

decrease in prices as a result of persistently harsh market conditions, in an extent much higher than currently

expected by Gorenje's Management Board; success of development of new products and their 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 allows any update or revision of these forecasts in light of development

differing from the expected events.

Documents

Presentation of the Gorenje Group for Investors...Gorenje, d.d., becomes a public company, listed on the Ljubljana Stock Exchange Fast Development in the Last Decade 4 2006 New refrigerator