[PPT] - Presentation of the Gorenje Group Business Performance 9M 2017 PowerPoint Presentation

SLIDE 1

Presentation

f the Gorenje

Group Business Performance 9M 2017

Investor Conference

Austria Trend Hotel, Thursday, the 23rd of November, 2017

SLIDE 2

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CO CONTENTS NTENTS:

1. 1. HIGHLIGHTS HIGHLIGHTS 2. 2. BUSINESS USINESS REPOR EPORT

2.1. 2.1. GROUP PERFO RFORM RMAN ANCE CE 2.2. 2.2. PERFO RFORM RMAN ANCE CE OUTLOOK

3. 3. FI FINANCIA NCIAL L REPOR EPORT

3.1. 3.1. FI FINAN ANCI CIAL AL MAN ANAGEMENT 3.2. 3.2. GROUP FI FINAN ANCI CIAL AL STATEMENTS

4. 4. EX EXEC ECUTI UTIVE E SUM SUMMARY AND ND KEY KEY MANAGERIA GERIAL L ACTIVITIES TIVITIES

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I. HIGHLI

. HIGHLIGHTS GHTS

SLIDE 4

9M 9M 20 2017 17 HIGHL HIGHLIGHTS IGHTS

Gorenje Group sales revenue: EUR 943.9m  4.8% more than in 9M 2016 Revenue from Domestic appliances sales: EUR 779.8m  1.2% more than in 9M 2016  3.3% lag behind the planned dynamics for 9M 2017  Stable market share also in 9M 2017 (2.6% in value and 3.0% in units)  Price index increased in 9M2017 (+1.0 p.p.) reached 89 in 28 EU Countries)  Premium products accounted for 28.7% in 9M 2017 (+1.5 p.p.)  Innovative products accounted for 20.9% in 9M 2017 (+1.9 p.p.) Sales revenue in Other businesses: EUR 164.1m  26.0% more than in 9M 2016 We generated net profit of EUR 4.6m.  EUR 0.2m more than in 9M 2016 (+12.1%)

I.

I. HIGHL

HIGHLIGHTS IGHTS

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SLIDE 5

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II. B
II. BUSIN

USINESS ESS R REPO EPORT IN 9M 201 IN 9M 2017

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2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE KEY KEY BUSINE USINESS SS ACTI CTIVI VITIE TIES

 Focus to sales growth supported by:

 launch of several new generations (freestanding cookers, premium washing machines and driers, premium dishwashers, cooker hobs) and new or refreshed product lines (Bulli refrigerators, dishwashers for OEM customers and Ora Ito2 line),  new build-in cooling appliances and connected appliances are in a final development phase. Connected appliances under ATAG brand will be available already until the end of 2017,  selective investments into marketing (digital marketing, marketing campaigns and fairs…) and R&D (connected appliances, activities for in-house development of electronics…).

 Start of serial production and sale of new generation of free standing cookers, premium washing machine and dryers, cooker hobs and premium

dishwashers. New generation of connected appliances will be launched until

year end under premium brand ATAG.  Cost management activities, neutralizing the negative effects in the raw and processed material markets (Q2) and labour cost pressures (signed agreements with social partners in Slovenia and Serbia);  We have secured the required refinancing for our financial liabilities due in 2017, and cut interest costs by 15.5%.

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SLIDE 7

REV REVENUE ENUES S BY BY QU QUAR ARTERS TERS 2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE

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 4.8% increase in comparison to 9M 2016.  Growth mainly in the markets outside Europe and in Eastern Europe.  Growth with premium brands ASKO and ATAG.  Disproportional growth of sales revenues in Other Businesses (+26.0% more than in 9M 2016).

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Period Q3 PYRP ACTP PYRQ ACTQ

900.9 943.9 319.6 320.0

4.8% 0.1%

SLIDE 8

2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE

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REV REVENUE ENUE ST STRUCTUR UCTURE E BY BY BUSINE USINESS SS

 Budgeted share of DA for 9M 2017 was 85.5%, and the achieved share was actually lower due to disproportional growth of sales revenues in Other Businesses.

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SLIDE 9

2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE

9

DOME DOMEST STIC IC APP APPLIANCES LIANCES REV REVENUE ENUES S BY BY QU QUAR ARTE TERS

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 1.2% increase in comparison to 9M 2016  Growth mainly in the markets outside Europe, Eastern Europe and Benelux and with premium brands ASKO and ATAG

Q1 Q2 Q3 Q4

PYRP ACTP PYRP ACTP PYRP ACTP PYRP ACTP

240 247 252 261 279 272 306 3.0% 3.3%

2.3%

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2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE

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DOME DOMEST STIC IC APP APPLIANCE LIANCES REV REVENUE ENUE ST STRUCTUR UCTURE BY BY BRAND BRANDS

 Growth of share of premium brands ASKO (1.1 p.p.) and ATAG (0.4 p.p.).  Share of Others dropped for 1.1 p.p. due to Panasonic.

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SLIDE 11

2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE

11

 Favourable product structure of DA sales with growing sales in dishwashers (+17.9%), cooking appliances (+0.1%) and SDA (+18.3%).  Growth of the share of dishwashing programme (1.8 p.p.) and small domestic appliance programme (0.6 p.p.).

DOME DOMEST STIC IC APP APPLIANCE LIANCES REV REVENUE ENUE ST STRUCTUR UCTURE BY BY PR PROGRA OGRAMS

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DOME DOMEST STIC IC APP APPLIANCES LIANCES REV REVENUE ENUE FR FROM OM PRE PREMIUM MIUM PR PRODUCT ODUCTS

 Share of premium products in revenue in 9M 2017 was 28.7% compared to 27.2% in 9M 2016.  Premium appliances: Asko and Atag branded products, appliances from the Gorenje design lines.

2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE

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DOME DOMEST STIC IC APP APPLIANCES LIANCES REV REVENUE ENUE FR FROM OM INNO INNOVATIVE TIVE PR PRODUCT ODUCTS

 Share of Innovative products in revenue in 9M 2017 was 20.9% compared to 19.0% in 9M 2016%.  Innovative appliances: appliances within individual group of products with the so-called »innovative functionalities« are more energy efficient (efficient storage, lower energy and water consumption) based on the Gfk methodology.

2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE

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SLIDE 14

COMP COMPAR ARABLE LE ADDE ADDED VAL ALUE UE 2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE

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 Value added was by 4.7% higher then the comparable value added in 9M 2016.  Comparability adjustment in 9M 2016 data relates to transfer of trade receivables impairment from financial to operating part of P&L (EUR 4.7m).

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Period Q3 PYRP ACTP PYRQ ACTQ

231.7 242.5 80.4 81.0

4.7% 0.7%

SLIDE 15

COMP COMPAR ARABLE LE EBI EBITD TDA 2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE

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 EBITDA was by 5.2% higher then comparable EBITDA in 2016.  Comparability adjustment in 9M 2016 data relates to transfer of trade receivables impairment from financial to operating part of P&L (EUR 4.7m)

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Period Q3 PYRP ACTP PYRQ ACTQ

55.9 58.8 19.7 18.2

5.2%

7.4%

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COMP COMPAR ARABLE LE EBI EBIT 2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE

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 EBIT was for 12.1% lower then comparable EBIT in 2016  This pertains to the effect of growing depreciation cost (EUR 5.4m more depreciation than in 9M 2016) as a result of accelerated investment cycle and capitalisation of development costs (EUR 1.6m more amortization than in 9M 2016).  Comparability adjustment in 9M 2016 data relates to transfer of trade receivables impairment from financial to operating part of P&L (EUR 4.7m)

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Period Q3 PYRP ACTP PYRQ ACTQ

20.5 18.0 7.8 3.5

12.1%
55.4%

SLIDE 17

NET NET PR PROFIT OFIT 2.1. 2.1. GR GROUP OUP PE PERFORMA RFORMANC NCE

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 12.1% increase of net profit compared to 9M 2016.  Net financial result EUR 1.6m better than 9M 2016 mainly due to lower interest expenses  Income tax expenses EUR 1.9m lower than 9M 2016 as a result of a favourable and final decision in a tax audit.

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Period Q3 PYRP ACTP PYRQ ACTQ

4.1 4.6 2.1 0.2

12.1%

89.3%

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KEY KEY PE PERFORMA RFORMANC NCE E FACT CTORS ORS IN IN Q4 Q4 20 2017 17

 Consistently with the dynamics of the 2017 business plan, we expect the highest revenue from DA in Q4 2017, it is estimated, that revenues in Q4 will reach approximately 30% of the yearly budget .  Additional revenue and improved sales structure should result in improved integral net margin.  Effective manufacturing cost management, considering the higher production volume planned for the last quarter of the year.  Higher marketing investments supporting the sales growth in Q4, yet adjusted due to the pressure from the raw and processed material markets and labour costs.  Adjustment of the production volume and supplementary program purchases to the required decrease in finished product and merchandise inventories.  Effective cost management measures, including measures in the segment of white collar employees, to partly neutralize the effects of labour cost increase due to agreements reached with social partners.

2.2. 2.2. PE PERFORMA RFORMANC NCE E OUTL OUTLOOK OOK

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KEY KEY RIS RISKS KS

 Ensuring the planned sales volume, in particular on the very competitive Western European markets,  Accomplishing the planned profitable sales growth due to further concentration of distribution channels on key markets.  Efficient serial production of new generations of key product groups.  Delivering cost efficiency, especially on account of:  Growing costs of key raw materials and components; and  Pressures on labour costs in Slovenia, Serbia, and the Czech Republic (signed agreements with social partners in Slovenia and Serbia).  Improvement of working capital management to support our deleveraging efforts until the end of the fiscal year.

2.2. 2.2. PE PERFORMA RFORMANC NCE E OUTL OUTLOOK OOK

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KEY KEY ME MEASURES ASURES FOR FOR RIS RISK K MIT MITIGA IGATI TION ON IN IN Q4 Q4 2017 2017

 Increase of sales in last quarter with strongest sales, good product and geographical structure and positioning of our brands. Supported with strong, target-oriented marketing activities.  Increase of productivity and cost efficiency of processes aimed at minimizing the negative impacts on labour costs.  Improvement of working capital turnover through supply chain factoring, thereby decreasing of the Group‘s indebtedness  Inventory management through supply chain management, decreased complexity and appropriate co-ordination of production  Focus on DA as the Group‘s core activity with review of possibilities for divestment of Other Business and non-operating assets.  With respect to the worsened performance of the Gorenje Group in the third quarter and the described challenges or negative factors that are expected also in the last quarter of 2017, we will, based on the stated activities attend to achieve, to the maximum extent possible, the key planned objectives for 2017 which, however, will not be completely fulfilled. The Budget for the year 2018 together with the estimated financial results for 2017 will be published after the Supervisory Board meeting on 11th of January, 2018.

2.2. 2.2. PE PERFORMA RFORMANC NCE E OUTL OUTLOOK OOK

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III.

III. F

FIN INANCIAL R ANCIAL REPO EPORT

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KEY KEY BUSINE USINESS SS ACTI CTIVI VITIE TIES

 We have secured the required refinancing for our loans due in 2017, and cut interest payment by 15.5% (EUR 1.8m EUR).  We have prepared and are leading a range of measures and activities to ensure decrease in Gorenje Group debt till the end of the year.  We have accelerated activities with our suppliers with the aim to prolong payment terms with the support of supply chain financing (SCF) program (reverse factoring). More then 60 suppliers have joint the SCF program already and we are adding new suppliers to the program on a daily basis.  We issued a tender for the renewal of the Gorenje Group insurance programs, negotiations and completion of the process is expected in November 2017. Further to traditional insurances, we are planning to conclude also Cyber and Crime insurance policies in order to be covered also against growing cybernetic threats.

3.1. 3.1. FIN FINANCIA ANCIAL L MAN MANAGEMEN GEMENT

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KEY KEY BUSINE USINESS SS ACTI CTIVI VITIE TIES

 We have aligned risk management organisation to the new

rganisational structure of Gorenje Group.

 Currency risk management and Credit risk management policies were renewed.  We are preparing measures to avoid negative impact regarding new International financial reporting standards (IFRS) which will be effective from 2018 and 2019.  We have renewed monthly production planning in order to improve the accuracy of dynamic budgets.  We are further improving and aligning the internal reporting system with the new organisational structure of Gorenje Group.  We agreed the activities with external auditors to accelerate auditing process for business year 2017.

3.1. 3.1. FIN FINANCIA ANCIAL L MAN MANAGEMEN GEMENT

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FIN FINANCE ANCE INCOME INCOME AND AND EXP EXPENS ENSES ES 3.1. 3.1. FIN FINANCIA ANCIAL L MAN MANAGEMEN GEMENT

 Average weighted interest rate for utilized financial liabilities as at September 30, 2017, was 2.53% (3.05% as at September 30, 2016).  Net revaluation adjustments in 9M 2017 worsened compared to the same period in 2016, due to very favourable currency translation differences in H1 2016.Positive effect of RUB in 9M 2016 in amount of EUR 1m, while EUR 0.25m in 9M 2017.  Other finance income/expenses in 2016 included revaluation adjustments in the amount of EUR 4.7m, presented data are prepared on the comparable level.

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EUR thousand Comparable 9M 2016 9M 2017 %

Interest income 449 71 520 15.8% Revaluation adjustment income 1,879

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1,856

1.2%

Other finance income 954 148 1,102 15.5%

Total finance income 3,282 196 3,478 6.0%

Interest and similar expense 11,351

1,757

9,594

15.5%

Revaluation adjustment expense 860 1,347 2,207 156.6% Other finance expenses 3,607

983

2,624

27.3%

Total finance expenses 15,818

1,393

14,425

8.8%

Net interest

10,902

1,828

9,074
16.8%

Net revaluation adjustment 1,019

1,370
351

/ Net other finance income/expenses

2,653

1,131

1,522
42.6%

Financing activities balance

12,536
805
10,947
12.7%

SLIDE 25

NET NET WORKING ORKING CA CAPI PITAL M AL MAN ANAGEMENT GEMENT

3.1. 3.1. FIN FINANCIA ANCIAL L MAN MANAGEMEN GEMENT

282.4 248.4 227.7 221.7 227.4 22.3% 19.7% 18.8% 17.7% 17.5%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 0.0 50.0 100.0 150.0 200.0 250.0 300.0

30.9.2013 30.9.2014 30.9.2015 30.9.2016 30.9.2017

Net current assets (EURm) Share of Net current assets in revenue (%)

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Movement of net working capital in the 2013-2017 period (EURm)

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EURm

30 Sep 2013 30 Sep 2014 30 Sep 2015 30 Sep 2016 31 Dec 2016 30 Sep 2017 9M 2017 – 9M 2016

+ Inventories

250.8 249.8 249.7 249.3 225.9 258.5 9.2

+ Trade receivables

240.3 228.0 220.5 212.3 165.8 221.5 9.2

+ Other current assets

64.3 48.9 50.0 57.1 58.8 58.8 1.7

Trade payables
178.1
182.8
191.2
191.2
223.7
201.1
9.9
Other current liabilities
94.9
95.5
101.3
105.8
81.9
110.3
4.5

= Net working capital

282.4 248.4 227.7 221.7 144.9 227.4 5.7

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INVESTM INVESTMEN ENTS TS

EUR 46.5m of investments in 9M 2017 in comparison to EUR 52.0m 9M 2016. 90.0% pertains to DA.

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EURm 9M 2017 Investments in new products

15.1

R&D investments

13.4

Improvement of competitiveness

11.0

Investment into network sales activities

2.4

Investment in Other business

4.6

TOTAL INVESTMENT

46.5

PYRP ACTP-PYRP ACTP

ACTP-BUDF

BUDF EURk

abs % % GORENJE GROUP 52.048

5.579
10,7

46.469 +57,8 80.402 DOMESTIC APPLIANCES 46.723

4.872
10,4

41.851 +58,0 72.121 OTHER BUSINESS 5.325

707
13,3

4.618 +55,8 8.281

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3.1. 3.1. FIN FINANCIA ANCIAL L MAN MANAGEMEN GEMENT

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FIN INANCIA ANCIAL LIABIL IABILITIES ITIES

Tota

tal an

l and n d net finan et financia cial l lia liabilitie bilities in in the the y year ears 201 2013–201 2017, 7, in E in EUR R millio million; n; net net financial inancial lia liabilities bilities (de debt) bt) to E to EBI BITDA A ratio tio – is is compar comparable f ble for the y

r the year

ear 2017 and 2017 and 2016; and 2016; and changes hanges in in the ma the maturit turity pr prof

file

ile of

f financial

inancial lia liabiliti bilities es

 As at September 30, 2017, net financial liabilities amounted to EUR 417.1m, which is 2.9% higher than at the end of 9M 2016, mainly due to higher net working capital employed.  In 9M 2017 the net financial liabilities to EBITDA ratio was at 5.0 or 0.2 worse comparing to 9M 2016.  We have improved the maturity profile of our financial liabilities by 6.1 p.p. Long- term liabilities now account for 70.4%.

3.1. 3.1. FIN FINANCIA ANCIAL L MAN MANAGEMEN GEMENT

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46.1% 59.2% 63.9% 64.3% 70.4% 53.9% 40.8% 36.1% 35.7% 29.6%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

30.9.2013 30.9.2014 30.9.2015 30.9.2016 30.9.2017

Non-current financial liabilities Current financial liabilities

475.2 410.4 424.5 426.7 441.1 447.2 387.6 401.4 405.1 417.1 4.6 4.2 5.5 4.8 5.0

0.0 1.0 2.0 3.0 4.0 5.0 6.0 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 400.0 450.0 500.0

30.9.2013 30.9.2014 30.9.2015 30.9.2016 30.9.2017 Total financial liabilities Net financial libilities Net financial liabilities/EBITDA

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 In 9M 2017, we repaid EUR 51.9m of the current/maturing portion of long-term

borrowings. In Q4 2017, further EUR 43.4m of maturing borrowings are due for

repayment.  With refinancing activities in Q3 2017 we have decreased the level of maturing long term borrowings for 2018 for EUR 12.5m by changing the amortisation loan into a borrowing with one-off payment in 2020.

3.1. 3.1. FIN FINANCIA ANCIAL L MAN MANAGEMEN GEMENT

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MA MATURI TURING NG PR PROFIL OFILE OF E OF THE THE LONG ONG TE TERM RM BORR BORROWI WING NGS

Year Q4 2017 2018 2019 2020 2021 2022 2023 LT repayments per years 43.4 69.4 101.4 69.0 43.2 44.9 6.9

12% 18% 27% 18% 11% 12% 2%

Maturity of long term borrowings per year

2017 2018 2018 2020 2021 2022 2023

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 Structure of debtors refers to utilized borrowings at the end of the period  Sound structure of debtors with a growth share of borrowings on capital markets and with development banks (SID, EIB, Eko sklad) and lower share

f banks with Russian origin.

3.1. 3.1. FIN FINANCIA ANCIAL L MAN MANAGEMEN GEMENT

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DEB DEBTORS ORS ST STRUCTUR UCTURE

20.5% 19.4% 34.4% 25.6%

Debtors structure as at 30 Sept 2016

Capital markets Development banks Other commercial banks Russian banks

27.9% 20.5% 32.3% 19.3%

Debtors structure as at 30 Sept 2017

Capital markets Development banks Other commercial banks Russian banks

SLIDE 30

ST STRUCTURE UCTURE OF GORENJE GR OF GORENJE GROUP OUP NET NET FIN INANC ANCIAL IAL LIABILI LIABILITI TIES ES

30

Volatility of Net financial liabilities and NFL/EBITDA ratio is highly correlated to the

Net working capital (NWC) seasonal development:

as of 30.9.2017 54.5% of NFL was related to NWC financing (EUR 227.4m),

while

at year-end NFL, when the majority NWC is released, NWC financing represented
approx. 42% (EUR 144.9m et the end of 2016 ).
NFL for Long term purposes/ EBITDA ratio is relatively stable in the observed period

(2.3 as of 30 September 2017)

3.1. 3.1. FIN FINANCIA ANCIAL L MAN MANAGEMEN GEMENT

309.1 312.9 310.4 235.7 307.0 280.0 282.4 207.5 244.8 254.3 248.4 175.1 227.4 233.9 227.7 142.3 211.8 233.2 221.7 144.9 215.2 225.2 227.4

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 400.0 450.0 500.0

Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 NFL for LT purposes NFL for NWC financing NFL/EBITDA (total) NFL for LT purposes / EBITDA

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KEY KEY ACTI CTIVI VITIE TIES FOR FOR SUS SUSTAIN AINAB ABLE LE DELE DELEVER VERAGIN ING

1. Decreasing inventories to the budgeted level by aligning

production with planned sales in year 2017 and 2018.

2. Trade payables policy and systematic use of supply chain

financing with the aim to prolong payment terms with suppliers.

3. Capex aligned with depreciation in year 2018 and in following years
4. Additional divestment of non-core assets and businesses/activities

possibilities evaluation is in process, potential effects expected in 2018.

5. Review of economics for under-performing businesses and

proposals for measures are in evaluation process, potential effects expected in 2018.

6. Adjusting the group lease policy to new accounting standards in
rder to prevent negative impacts on Group‘s financial covenants:

31

3.1. 3.1. FIN FINANCIA ANCIAL L MAN MANAGEMEN GEMENT

SLIDE 32

32

CURR CURREN ENCY CY RISK RISK MAN MANAGEME GEMENT NT AND AND EXPOSURE EXPOSURE 3.1. 3.1. FIN FINANCIA ANCIAL L MAN MANAGEMEN GEMENT

32

We renewed FX risk management policy: the main goal is still to protect budgeted profitability and main economic goals of the Group. Different types of FX policy and hedging techniques depends on: 1. Characteristics of individual markets and related prices adjustments ability due to FX parity change, 2. Local currency parity determination against EUR, 3. Local currency convertibility and efficient FX hedging instruments availability. item Estimated NET P&L FX Exposure in EUR rolling 12M P&L Net Exposure Estimated BS FX exposure in EUR BS Net Exposure RUB 103,0 Sales 4,0 Assets USD

68,3

Procurement 5,1 Assets HRK 32,6 Sales 12,4 Assets AUD 24,7 Sales 5,9 Assets HUF 23,2 Sales 2,3 Assets PLN 19,0 Sales 6,3 Assets

SLIDE 33

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INTE INTERES REST T RA RATE TE RIS RISK K MAN MANAGEMEN GEMENT T AND AND EXP EXPOSURE OSURE 3.1. 3.1. FIN FINANCIA ANCIAL L MAN MANAGEMEN GEMENT

EURm

TOTAL Borrowings Borrowings with variable I.R. Borrowings with FIX I.R. TOTAL FIX % OF FIXED

Utilized borrowings: Floating Fixed with IRS

Sep 30,2017 440.0 95.8 168.1 176.1 344.2 78.2% June 30, 2017 443.2 111.2 161.6 170.4 332.0 74.9% March 31, 2017 427.9 144.5 121.6 161.8 283.4 66.2% Dec 31, 2016 371.2 128.1 118.3 124.8 243.1 65.5%  As per 30 Sep. 2017 40% borrowings with fixed interest rate (60% is at risk for interest rate change).  With hedging instruments (Interest rate swaps – IRS) we hedged additional 38.2% of the Group‘s borrowings, so the borrowing share with fixed interest rate a per 30 Sep. 2017 amounts 78.2%.

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SLIDE 34

34

LONG ONG TE TERM RM INTE INTERES REST T RA RATE TE ST STABILITY ABILITY 3.1. 3.1. FIN FINANCIA ANCIAL L MAN MANAGEMEN GEMENT

IRS forward start 2018 2019 2020 2021 2022 IRS level Dec 2018 170 0.49% Dec 2019 60 0.65% Dec 2020 30 0.80% Dec 2021 30 0.95% New hedging (cumulative) 170 230 260 290 0.55% Existing hedging 241 171 100 65 22 Total Hedging 241 341 330 325 312  In line with interest rate hedging policy during Q3 2017 we concluded IRS in amount of EUR 290m for the 5 years period (with forward start on 1st January 2019 until the end of year 2022) with the goal to hedge approximately 90% of the projected total borrowings of Gorenje Group.

SLIDE 35

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CRE CREDIT DIT RIS RISK K MAN MANAGEM GEMENT NT AND AND EXP EXPOSURE OSURE 3.1. 3.1. FIN FINANCIA ANCIAL L MAN MANAGEMEN GEMENT

 Increasing the share of insured receivables (>70%)  Acceptable credit instruments are defined in the renewed Group‘s credit management policy: insurance with credit insurance companies, first class unconditional bank guaranty, unconditional L/C, first class mortgage (based on the special confirmation), counter liability to the same partner and factoring of the receivables.  Insurance with credit insurance companies represents more than 73% of insured receivables, followed by bank guaranties (> 9%).  Centralized receivables control: Receivables of respective companies are monitored from the aspect of maturity, any excess of security/insurance limits, and acceptability of credit instruments.

EURm 31 Dec 2015 31 Dec 2016 30 Sep 2017 Trade receivables (GROUP) 161.0 165.8 221.5 Trade receivables (DA) 137.7 139.7 186.9 % of insured receivables (GROUP) 62.9% 65.9% 72.6% % of insured receivables (DA) 64.9% 70.8% 75.9%

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SLIDE 36

INCOME INCOME ST STATE TEME MENT NT (P (Per eriod) iod)

36

3.2. 3.2. GR GROUP OUP FIN FINANCIA ANCIAL L ST STATE TEME MENTS TS

36

Income statement

f Gorenje Group (EURk)

PYRP comp.

%

ACTP

%

ACTP/ PYRP Net Sales Revenues 900,853

96.9%

943,923

96.1%

104.8 Change in inventories 15,004

1.6%

14,191

1.4%

94.6 Other operating income 13,500

1.5%

23,645

2.4%

175.1 Gross yield 929,357

100.0%

981,759

100.0%

105.6 Cost of goods, materials and services

677,525
72.9%
720,349
73.4%

106.3 Cost of goods sold

170,830
18.4%
189,563
19.3%

111.0 Cost of materials

352,521
37.9%
365,762
37.3%

103.8 Cost of services

154,174
16.6%
165,024
16.8%

107.0 Other operating expenses

20,152
2.2%
18,872
1.9%

93.6 Added Value 231,680

24.9%

242,538

24.7%

104.7 Labour Costs

175,808
18.9%
183,758
18.7%

104.5 EBITDA 55,872

6.0%

58,780

6.0%

105.2 Amortisation and depreciation expense

35,342
3.8%
40,738
4.1%

115.3 EBIT 20,530

2.2%

18,042

1.8%

87.9 Net finance result

12,536
1.3%
10,947
1.1%

87.3 Net Foreign exchange result 1,019

0.1%

351

0.0%

/ Net other financial result

13,555
1.5%
10,596
1.1%

78.2 Share in profits or losses of associates 58

0.0%

415

0.0%

/ Profit or loss before tax 8,052

0.9%

6,680

0.7%

83.0 Income tax expense

3,908
0.4%
2,035
0.2%

52.1 Profit or loss for the period 4,144

0.4%

4,645

0.5%

112.1

SLIDE 37

37

NO NOTE TES S TO O INCOME INCOME ST STATE TEMENT MENT

 Comparable values for the year 2016 are adjusted for the effect of impairment of receivables that were recorded in financial income and expenses last year and among other operating income and expenses in 2017:  In 9M 2016 financial expenses pertaining to impairment of receivables amounted to EUR 5.1 m, financial income from reversal

f impairment of receivables amounted to EUR 0.4m, net effect:

EUR -4.7m .  In 9M 2017 other operating expenses pertaining to impairment of receivables amounted to EUR 2.0 m and other operating income from reversal of impairment of receivables amounted to EUR 0.4m, net effect: EUR -1.6m.  Non-adjusted categories for the period January - September 2016 are:  Added value EUR 236.4 m,  EBITDA EUR 60.6 m and  EBIT EUR 25.2 m.

37

3.2. 3.2. GR GROUP OUP FIN FINANCIA ANCIAL L ST STATE TEME MENTS TS

SLIDE 38

BALANCE ALANCE SHE SHEET ET

38

3.2. 3.2. GR GROUP OUP FIN FINANCIA ANCIAL L ST STATE TEME MENTS TS

38

Gorenje Group Balance Sheet (EURk)

PYRP % ACTP % ACTP/ PYRP NET ASSETS 753,851 100.0% 783,735 100.0% 104.0 Net non-current assets 532,191 70.6% 556,302 71.0% 104.5 Tangible and Intangible Assets 581,139 77.1% 601,699 76.8% 103.5 Non-current accounts receivables 2,754 0.4% 2,342 0.3% 85.0 Deferred tax assets 23,674 3.1% 24,735 3.2% 104.5

Provisions
68,735
9.1%
66,160
8.4%

96.3

Non-current operating liabilities
4,053
0.5%
3,705
0.5%

91.4

Deferred tax liabilities
2,588
0.3%
2,609
0.3%

100.8 NWC 221,660 29.4% 227,433 29.0% 102.6 WC 518,753 68.8% 538,749 68.7% 103.9 Inventories 249,318 33.1% 258,494 33.0% 103.7 Trade receivables 212,328 28.2% 221,493 28.3% 104.3 Other current operational assets 57,107 7.6% 58,762 7.5% 102.9

Current operational liabilities
297,093
39.4%
311,316
39.7%

104.8

Trade payables
191,248
25.4%
201,062
25.7%

105.1

Other current operational liabilities
105,845
14.0%
110,254
14.1%

104.2 NET INVESTED CAPITAL 753,851 100.0% 783,735 100.0% 104.0 Equity 369,970 49.1% 381,133 48.6% 103.0 Net Debt 383,881 50.9% 402,602 51.4% 104.9

Financial investments
21,221
2.8%
14,453
1.8%

68.1

Cash and cash equivalents
21,558
2.9%
24,033
3.1%

111.5 = Financial liabilities total 426,660 56.6% 441,088 56.3% 103.4 Non-current financial liabilities 274,221 36.4% 310,606 39.6% 113.3 Current financial liabilities 152,439 20.2% 130,482 16.6% 85.6

SLIDE 39

CAS CASH H FL FLOW S W STATE TEMENT MENT

39

3.2. 3.2. GR GROUP OUP FIN FINANCIA ANCIAL L ST STATE TEME MENTS TS

39

in EURk PYRP ACTP

A. CASH FLOWS FROM OPERATING ACTIVITIES

Profit or loss for the period 4,144 4,645 Adjustments for:

Depreciation of property, plant and equipment

28,707 32,431

Amortisation of intangible assets

6,635 8,307

Investment income
3,724
3,478
Finance expenses

20,882 14,840

Gain on sale of property, plant and equipment
133
539
Income tax expense

3,908 2,035 Cash flow from operating activities before changes in net operating current assets and provisions 60,419 58,241 Change in trade and other receivables

55,157
53,319

Change in inventories

23,418
32,558

Change in provisions 1,274

2,901

Change in trade and other payables 4,672 6,112 Cash generated from operations

72,629
82,666

Interest paid

11,782
10,114

Income tax paid

2,522
2,148

Net cash from operating activities

26,514
36,687
B. CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from sale of property, plant and equipment 3,868 3,869 Interest received 449 520 Dividends received 58

352

Divestment of subsidiary, exclusive of disposal financial assets 74 434 Acquisition of property, plant and equipment

35,498
30,215

Acquisition of an associated company

1,130

Other investments

529

4,085 Acquisition of intangible assets

16,550
16,254

Net cash used in investing activities

49,258
37,913
C. CASH FLOWS FROM FINANCING ACTIVITIES

Borrowings/Repayment of borrowings 65,720 65,821 Payment of dividends

2,430

Net cash used in financing activities 65,720 63,391 Net change in cash and cash equivalents

10,052
11,209

Cash and cash equivalents at beginning of period 31,610 35,242 Cash and cash equivalents at end of period 21,558 24,033

SLIDE 40

40

IV

IV. EXECUTI

. EXECUTIVE SUMMA VE SUMMARY Y AND AND KEY MA KEY MANAGERIAL GERIAL ACTIVITIE CTIVITIES

SLIDE 41

41

EX EXEC ECUTIV UTIVE E SUMMA UMMARY

 Market growth, growth of material prices  Lower currencies volatility, stable low Interest rates  Revenue growth, market share stable also in 9M 2017  More premium and innovative products  Growth outside Europe, East Europe, Benelux  Lower sales in Germany, UK, Serbia  Revenue from Other businesses sales ahead of the planned dynamics  In Q2 and Q3 pressure on material prices and wages

IV IV. . EXEC EXEC. . SUMMAR SUMMARY AND AND KEY KEY MAN.

MAN. ACTIVI

CTIVITIE TIES

SLIDE 42

42

Specific measures to improve economics in Q4 2017 already

started. Focus on:

Budgeted revenues and margins Production, purchasing, service costs reduction Productivity improvement by labour cost reduction Marketing cost reduction Net working capital management Focused investment and new product development Key activities for sustainable deleveraging

KEY EY MAN MANAGERIAL GERIAL ACTIVITI CTIVITIES ES

IV IV. . EXE EXEC. . SUM SUMMAR MARY AND AND KEY KEY MAN.

MAN. ACTI

CTIVI VITIE TIES

SLIDE 43

Thank you for your attention!

SLIDE 44

Gorenje Representatives

44

Mrs. Bojana Rojc

Head of IR & CFO Assistant T +386 3 899 1346 M +386 51351706 E bojana.rojc@gorenje.com Gorenje, d.d. Partizanska cesta 12, SI-3320 Velenje, Slovenia www.gorenjegroup.com

Mr. Štefan Kuhar

Executive director, Finance, Tax and Asset Management T +386 3 899 7394 M +386 41 343 500 E stefan.kuhar@gorenje.com Gorenje, d.d. Partizanska cesta 12, SI-3320 Velenje, Slovenia www.gorenjegoup.com

SLIDE 45

45

Forward-looking statements

This presentation includes forward-looking information and forecasts – i.e. statements regarding the future, rather than the past, and regarding events within the framework and in relation to the currently effective legislation on publicly traded companies and securities and pursuant to the Rules and Regulations of the Ljubljana and Warsaw Stock Exchange. These statements can be identified by the words such as "expected", "anticipated", "forecast", "intended", "planned or budgeted", "probable or likely", "strive/invest effort to", "estimated", "will", "projected", or similar expressions. These statements include, among others, financial goals and targets of the parent company Gorenje, d.d., and the Gorenje Group for the upcoming periods, planned or budgeted operations, and financial plans. These statements are based on current expectations and forecasts and are subject to risk and uncertainty which may affect the actual results which may in turn differ from the information stated herein for various reasons. Various factors, many of which are beyond reasonable control by Gorenje, affect the operations, performance, business strategy, and results of Gorenje. As a result of these factors, actual results, performance, or achievements of Gorenje may differ materially from the expected results, performance, or achievements as stated in these forward-looking

statements. These factors include but are not necessarily limited to following: consumer demand and market

conditions in geographical segments or regions and in industries in which the Gorenje Group is conducting its

perating activities; effects of exchange rate fluctuations; competitive downward pressure on downstream prices;

major loss of business with a major account/customer; the possibility of late payment on the part of customers; decrease in prices as a result of persistently harsh market conditions, in an extent much higher than currently expected by Gorenje's Management Board; success of development of new products and their implementation in the market; development of manufacturer's liability for the product; progress of attainment of operative and strategic goals regarding efficiency; successful identification of opportunities for growth and mergers and acquisitions, and integration

f such opportunities into the existing operations; further volatility and aggravation of circumstances in capital

markets; progress in attainment of goals regarding structural reorganization and reorganization in purchasing. If one

r more risks or uncertainties are in fact materialized or if the said assumptions are proven wrong, actual results may

deviate materially from those stated as expected, hoped for, forecast, projected, planned, probable, estimated, or anticipated in this announcement. Gorenje allows any update or revision of these forecasts in light of development differing from the expected events.