Business News

Gorenje Planning EUR 1.5BN in Revenues for 2013

Velenje, 27 January (STA) - Gorenje, the Velenje-based household appliance maker, plans to increase sales revenues close to EUR 1.5bn in the coming three years, according to the 2010-2013 strategy of the group. This would mean a 20% rise on 2010 and up 30% on 2009.

Gorenje chairman Franjo Bobinac told Tuesday's presentation that the company had its feet on the ground and was prepared for change despite cautious optimism in the face of stabilisation on its markets.

"The guidelines will assure the Gorenje group stable operations and development in the long-term," he said, adding that the company would aspire to increase consumer satisfaction and meet expectations of its owners, employees and other stakeholders in a socially-responsible way.

Short-term targets include an operating income (EBIT) at the level of 5-6% margin at least, raising the value added per employee to at least EUR 40,000 and achieving basic financial indicators at the average of competitive companies.

The company plans to achieve these goals through an increase in sales of top-end products and services, a systemic approach to the trade mark, innovation and design, cost efficiency measures and economy of scale.

Gorenje would also "accelerate activities in low-cost environments", expand to more profitable business areas and target markets which are posting at least double the average world GDP growth rates. It will also focus sustainable development.

The management's goal is to finance the implementation of the strategy until 2013 by increasing the ability of self-financing through better operational excellence. This is to be attained through effective cost management, better productivity, increase in retail prices and by optimising company property, financial and business portfolio.

The reference year for the strategy is 2010, rather than the crisis year 2009. Thus the plan does not contain the effects of desinvestment, acquisitions, movement of production to cheaper locations and a capital injection.

Planed for the second half of 2010, the capital expansion would finance acquisitions, restructuring of the existing activities, new activities and growth within the divisions of household appliances and environment, energy and services.

Gorenje generates more than 95% of its turnover in foreign markets. It sells 85% of products under its own brand, which the independent Vienna-based European Brand Institute values at EUR 458m.

The company said it was intent on investing in innovative, top-design and energy-efficient products, while the volume of investments would be slightly below the level of depreciation. The bulk of free cash flow would be used to reduce debt.

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