Gorenje 1H17: Good top line dynamic continued, albeit 2Q17 profitability slightly disappointed.
Gorenje sales revenues are up by hefty 7.3% in 1H17, strongly helped by FX (Eastern Europe sales up by 4.9% YoY, but FX adjusted rate at 0.8%) and by growth in non-core activities. It’s true also that premium appliances growth still strong, which is positive. On the other hand EBITDA margin fell to 6.5% and EBITDA missed our expectations by EUR 2m; albeit again due to non-core activities. Not much, however a disappointment given the slight sales beat. Profit doubled to EUR 4.3m and Gorenje is still on track to deliver upon its guidance, albeit it noted 3Q17 will be challenging. All in all no estimate or investment thesis change is warranted and we stick with our target price of EUR 6.8 and a Hold recommendation.
Gorenje dd is a Slovenia-based company engaged in the production and sale of household appliances. The Company operates through three business segments: Home, producing and selling products and services for home, such as major domestic appliances (MDA), small domestic appliances (SDA), heating, ventilation, air conditioning (HVAC) and kitchen furniture; Ecology, providing ecology-related services; and Other, with such activities as tool-making, engineering, hotels and hospitality services, trade, and design services. The Company covers the global markets with a portfolio of ten brands: Gorenje, Gorenje+, Korting, Sidex, Mora, Atag, Etna, Pelgrim, Asko and Upo. As of December 31, 2011, the Company was the parent company of the Gorenje Group, which consisted of numerous companies in such countries as Slovenia, Austria, Germany, Italy, France, Spain, the United Kingdom, Denmark, Sweden,, Norway, the Czech Republic, Slovakia, Hungary, Poland, Bulgaria and Croatia, among others.
ALTA Invest, investicijske storitve, d.d., (ALTA Invest, investment services, Inc.) is a part of ALTA Group, the biggest financial non-banking group in Slovenia. ALTA Invest has around 28% market share on the domestic Ljubljana Stock Exchange and has more than EUR 95m of assets under management.
Our trading advantage is our execution of large trading blocks with low impact on the market. We offer trading on several platforms on numerous markets, with a wide variety of financial instruments. Our advantage is also a research department, which is both sell side and buy side and has the far most extensive and regular coverage of domestic companies. We cover 9 companies on Ljubljana Stock Exchange, which is around 90% of Mcap on LJSE – and here we are practically the only local broker providing this kind of extensive and regular coverage for Slovenian companies.
A part of ALTA Group are ALTA Skladi, a mutual fund asset management company with roughly EUR 260m of asset under management. ALTA Group is also extensively involved in corporate finance projects and raised considerable assets (fixed income and equity) in the last two years for several companies.
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