Gorenje's 2013 Focus: Completing Restructure of Manufacturing
Dec 21, 2012
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Slovenian appliance producer Gorenje is planning on revenue of EUR 1.3 billion, which would put it up 4.5% from its estimate revenue for 2012. The appliance maker expects sales to rise in the markets where average profitability is higher - specifically Eastern European markets such as Russia, Ukraine, Slovenia, Czech Republic, Poland, Slovakia, and China.
Sales are also expected to rise in Slovenia, Germany, and markets beyond Europe such as China, Australia, and the Middle East.
Gorenje management emphasized that they expect 2013 to be highly challenging, with market conditions remaining harsh, and the company will continue with its strategic restructuring plan. This involves relocation of manufacturing operations, which it expects will be complete in Autumn 2013, generating savings of approximately EUR 15 million per year starting in 2014. Divestment and reduction of debt remain key goals for 2013.
Gorenje's broad-based manufacturing restructuring efforts were launched in 2012 and the effects of the first re-location - from Finland to the Czech Republic - were already seen in the last quarter of 2012.
By February of 2013, production of freestanding refrigerator-freezers, relocated from Velenje, Slovenia, will be launched in Serbia. Built-in refrigerator-freezers will continue to be produced in Velenje.
The company's entire production of washing machines, dryers, and dishwashers is being shifted from Sweden to Velenje.
"We are in the midst of one of the most challenging processes of strategic restructuring of manufacturing operations in the 62 years of Gorenje's history," said Gorenje President and CEO Franjo Bobinac. "Sales organization, too, is being adjusted to the new challenges, and our corporate governance is being upgraded. These steps are very strenuous for all employees; however, they are indispensable for stable development of the Gorenje Group."
Selective increase of prices in some markets, higher sales in markets where profit margins are higher, and higher sales of more profitable appliances are planned to increase the value of sales by 6.1% in the core activity of Home products.
The company said an important driver of growth and profitability are appliances with innovative features, sophisticated design, and high energy efficiency. In 2013 it will introduce its new Gorenje Simplicity line of appliances with innovative functions for a healthy lifestyle. It will also introduce a new generation of 600-mm refrigerator freezers with antibacterial technology.
The company expects 2012 EBITDA of EUR 86.3 million and plans for 2013 EBITDA of EUR 96.7 million.
At the third quarter of 2012, the company had a loss of EUR 6.4 million. For full-year 2012 it expects a profit of EUR 0.1 million of profit. The company plans on 2013 profit of EUR 4.2 million.
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