Home Appliances Division
The division is engaged in the manufacture and sale of highly innovative and superiorly designed refrigerators and freezers, cooking appliances, as well as washers and dryers.
The products of the Home Appliances Division are available in seventy countries, its most important markets being Eastern and Western Europe. With its 9,042 employees, the division contributes a 78-percent share to the Group's total sales revenue. We face strong international competition in our key markets, which provides us with the incentive to continuously improve our products and production processes. Investments in design and innovativeness are therefore key factors to our success.
In 2010 we attracted attention with an innovation employing touch screen control - the Cooking Wizard, and the GreenConnected application for an intelligent home. In the area of design, we aroused the greatest interest with a prototype of the SmarSofa with integrated refrigerator, and the Gorenje Simplicity Moonlight line created in honour of Gorenje's 60th anniversary, which we celebrated in 2010.
In 2009 the division faced the most difficult market conditions in the history of Gorenje's operation. A rapid decline in orders, uncertain conditions in purchasing markets, and a strong credit crunch brought demanding challenges before the division, to which we responded with anti-crisis measures aimed at preserving and strengthening cash flow. The situation improved considerably in 2010, although markets stabilised at a relatively low level of demand, so that the majority of anti-crisis measures have remained in force.
The restraint of customers in purchasing durable goods can be attributed to high unemployment rates and stricter requirements of banks for granting consumer loans. On the cost side, a high degree of uncertainty can be felt regarding the speed of recovery of the global economy, which is reflected in our expenses through unpredictable fluctuations in the prices of raw materials and currency exchange rates.
In 2010 we gradually increased the share of products with higher added value, also as the result of our acquisition of the Swedish Asko Group. The improved results in 2010 can primarily be attributed to the favourable results attained in Eastern and Western European markets and also the Germany and the Netherlands.
The division is also engaged in the sale of a supplementary programme of consumer electronics and small household appliances, the manufacture and sale of heating-thermic appliances, and the manufacture of mechanical components.
Home Interior Division
The division is engaged in the manufacture and sale of kitchen and bathroom furnishings, sanitary equipment and ceramic tiles. Home furnishings account for a minor share of its production.
The products of this division are sold primarily in the markets of Southeastern Europe. Its highest sales revenue is generated in the domestic, Croatian, Bosnian and Serbian markets, where we intend to strengthen our presence in the future. We are also recognisable and well-represented in the Austrian and Czech markets. In our battle against crisis market conditions in the past two years, we substantially optimised production processes and renewed our product range. These novelties were successfully presented in 2010 at the two-day Gorenje Home Interior Trade Show.
Our plans in the year 2011 include further restructuring and optimisation of the division's production processes, and a three-percent growth in sales revenue. In the design of furniture, sanitary equipment and ceramics, great emphasis is given to the quality of materials and the excellence of services. The main focus in kitchen furnishings is, alongside the above-mentioned, on harmonising their design with the contours of household appliances. The division employs 926 persons. Our managerial employees actively and directly participate, while other employees indirectly participate in our integral quality management system according to the requirements of the ISO 9001:2000 standard. The division generates approximately four percent of the total sales revenue of the Gorenje Group.
Ecology, Energy and Services Division
The division offers integral solutions in the areas of ecology and energy, and provides services in the areas of trade, engineering, agency services, restaurant and catering services, tourism, real estate management, as well as toolmaking and the manufacture of industrial equipment, including the production of military vehicles.
Our key service in the area of environmental protection is integral waste management for the needs of industrial companies, where we are successfully applying our skills and forty years of experience. In the area of energy management, we are engaged in the marketing and sale of electric power, wood biomass, and coal. In the area of services, trade and catering account for the most important share of revenue generated in the domestic market.
Key markets of the division are in Southeastern Europe, where we intend to strengthen our presence in the future. Despite the difficult economic conditions in 2010, we managed to increase our sales revenue by 34.3 percent, whereas in the current year its growth is estimated at 5.5 percent. Within the division we are constantly searching for business opportunities with a higher potential for growth than our core activity. In the area of solar power, we began to offer comprehensive turnkey solar power plants in 2010. The Ecology, Energy Management and Services Division employs on average 1,206 persons, and accounts for an 18 percent share in the total sales revenue of the Gorenje Group.
Interior furnishings account for 4 percent of the Group's total sales revenue.
The division generates 18 percent of the Group's total sales revenue.