Gorenje 9M17: 3Q17 disappointed and made it difficult to achieve all set goals, but Gorenje will seek strategic alliances.
Domestic Appliance sales is down 2.3% YoY in 3Q17 however this was compensated by 16.9% growth in non-core sales. This contributed to overall sales revenues growth of 4.8% YoY in 9M17 versus 9M16. At the same time EBITDA margin stagnated from YoY perspective at 6.2%, again with 3Q17 margin delivered lower. More concerning, labour costs increased in 3Q17 while Gorenje noted some favourable cost dynamic also ceased in the mentioned quarter and will persist in the following quarters. All in all while 1Q and 2Q dynamic was positive, 3Q soured it, so it’s becoming increasingly likely Gorenje will again miss its profitability guidance. Given good macro background this is not encouraging and from investment thesis point of view we remain concerned. On the other hand, market price dipped below unchanged target price while Gorenje search for strategic alliance could bring fresh speculations on the table. Therefore we are lingering between buy and hold depending on 10% upside potential mark, currently bounding us to buy – albeit noting we see better long term risk/return profiles elsewhere. In January 2018 Plan will be announced, after it (together with 4Q17 data) we could further revise our estimates and target price.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.