ANNUAL REPORT 2008 - Gorenje Group

65
3.12 BUSINESS PLAN AND
ANTICIPATED OPERATING
CONDITIONS IN THE YEAR 2009
THE ASSUMPTIONS CONSIDERED IN THE BUSINESS PLAN PREPARATION
Different scenarios of the business plan 2009 have been prepared due to the changed conditions
of operation that were strongly evident in the last weeks of the year 2008 and partly already in
the orders known for the first three months of the year 2009.
Various activities and measures for the adjustment of the scope of operation, structure of costs
and cash flows in case of materially relevant fluctuations in orders have been determined.
OPERATING COSTS
Optimisation activities relating to the cost control shall be carried out for the control of operations
in a crisis situation.
• Materials and raw materials, with temporarily favourable forward purchases of
raw materials with additionally accelerated development of supply sources in
Asia, in other dollar purchasing markets and in the countries of the South-Eastern
Europe; a decrease in costs of raw materials in world markets shall have a
certain positive impact on the cost structure,
• services referring to the control activities
• costs of logistics that will depend on oil prices in the market and new negotiations
with the providers of such services,
• costs of market communications that shall be limited exclusively to the activities
referring directly to sales promotion,
• all kinds of general costs related to the performance of overhead activities,
• labour – our objective is higher productivity and flexibility due to better organisation
of work and better adjustment of labour costs due to the level of orders
in scope of the social agreement.
In spite of a large share in costs of material and raw materials being almost completely changeable
costs that exceed 60 % in the structure of costs the Household Appliances Division has a high
share of fixed costs.
The adjustment of costs to the scope of production and sales is of key importance for the
achievement of the planned profitability of the Division.
FREE CASH FLOW
The projects of process arrangement and economic are at the implementation stage and they will
enable quick introduction of changes, optimisation of processes and reduction in current capital
and complexity.
The results will reflect in the planned decrease in current assets (inventories, receivables), which
will contribute to the increase in free cash flow and thus to the decrease in the financial liabilities
of the Group.