Annual Report Gorenje Group 2009

The main reasons for the reduction in profitability in 2009 were an important reduction in sales revenue
and gradual adjustment of costs to the new (lower) level of revenue. The negative impact of the
financial crisis caused lower borrowing of final consumers which significantly limited their purchase of
household appliances and interior furnishing in the year 2009. In addition to the smaller physical sales
volume structural changes of products and markets influenced the decrease in revenue.
The sales volume started increasing in the third quarter after two consecutive quarters of decrease
starting at the beginning of the year 2009. The position in the markets of Eastern and South-East
Europe improved most, which significantly contributed to the improvement of profitability of sales in the
second half of the year. In Western Europe the growth in sales was achieved in the first half of the year
in spite of the demanding environment; such trend was maintained also in the second half of the year.
Quarterly movement of product sales (in thousand EUR)
Source: Data of the Gorenje Group
In 2009 the value of contribution margin decreased by 55.9 million EUR. The decrease in scope of
business activities can be related to the reduction amounting to 56.5 million EUR, but the profitability of
the contribution improved by 0.6 million EUR.
When discussion the operation of the household appliances division special attention has to be paid to
the fact that inventories of raw material and materials valued higher contributed also to the profit or loss
of the first half of 2009. To the end of April 2009 the inventories from strategic purchasing carried out in
September and October 2008 were used. They were purchased at higher prices than the prices in the
market after the beginning of the world crisis at the end of 2008.
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Annual Report Gorenje Group 2009