Annual Report Gorenje Group 2009

A sharper fall in the market was suffered in France. Our sales dropped by 35.3 %, partly because of
the impact of the financial crisis and partly because of the decision to eliminate those appliances from
the sales range that do not cover their production costs. We focused on the sale of appliances of a
higher price bracket and a built-in segment on the French market.
Sales of household appliances in Western-European markets (in pieces)
Industry
Gorenje Group
Market share of the
Gorenje Group
2009 2008 2009 2008 2009 2008
Austria 1,273,496 1,156,845 104,350 90,515 8.19 % 7.82 %
Belgium 1,555,782 1,577,151 18,211 18,123 1.17 % 1.15 %
France 9,357,868 9,904,131 113,210 175,045 1.21 % 1.77 %
Germany 11,672,189 11,675,550 501,250 444,326 4.29 % 3.81 %
Italy 6,996,008 7,302,152 15,192 12,520 0.22 % 0.17 %
Scand. countries 3,739,278 4,094,895 181,417 187,284 4.85 % 4.57 %
Great Britain 6,941,796 8,319,464 56,981 49,223 0.82 % 0.59 %
TOTAL 41,536,417 44,030,188 990,611 977,036 2.38 % 2.22 %
Source: CECED; accessible at http://www.ceced.org/
Eastern-European markets
The crisis gravely hit some of our key markets in Eastern Europe, where the number of sold appliances
decreased by 25 percent. The highest loss (44 percent) was registered in the Romanian market. The
demand shifted greatly to products of the low and middle price brackets. A dramatic decrease was
observed in the cooking appliances programme that accounts for 70 % in the structure of the Division
sales in Russia.
Alongside the consequences of the financial and economic crisis, which were felt in Slovenia, the crisis
also led to a devaluation of local currencies, which in turn raised the prices of products imported from
the euro area. Two major consequences were high inflation and a fall in the purchasing power of the
population. Countries experienced budget difficulties, which led to the devaluation of local currencies in
Eastern European countries. This raised the prices of our products in these markets, and consequently
decreased sales.
The situation in the markets mentioned was marked by very poor liquidity and financial solvency. Two
of our major customers stopped operating in Croatia. In Romania banks practically stopped financing
private consumption which resulted in a dramatic decrease in the market (44 %).
After a sharp fall at the beginning of the year 2009 some markets recovered quickly. In the last quarter
of 2009 the growth in Ukraine achieved 44 % when compared to the same period of the year 2008.
The Gorenje Group was unable to fully avoid the decline in sales in Eastern European markets, but
managed to limit its effects and even increase the Group's market share in these markets in 2009.
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Annual Report Gorenje Group 2009