Baltika's unaudited financial results, Q4 and 12 months 2012
Baltika ended the fourth quarter with 1,294 thousand euros profit before tax and the net profit was 1,075 thousand euros. The year 2012 profit before tax was 1,056 thousand euros and net profit 805 thousand euros. Baltika exceeded the financial targets set for the year 2012, finishing the year with 3,725 thousand euros EBITDA, which is 24% higher than planned 3,000 thousand euros.
Performance exceeded the target owing to strong growth in sales efficiency (14% against the projected 10%) and a marked improvement in the gross margin. Gross margin in 2012 was 54.5%, increasing year over year 1.4 percentage points. Solid sales results and the rise in the gross margin were underpinned by sales growth in the Baltic countries and Russia. The best results were achieved in Latvia and Russia where sales per square metre grew by 21% and 15% respectively. Another contributing factor continued to be effective cost control: the ratio of operating expenses to revenue improved by 5 percentage points, 1 percentage point more than targeted.
The year 2012 was pivotal in both returning to profit and strengthening the financial position. By divesting real estate, considerably reducing the loan burden and improving its investment capabilities, Baltika has created a solid basis and opened up new opportunities for future development.
2012 fourth quarter highlights
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On 29 November 2012, Baltika signed an agreement for the purchase of the Bastion trademark and the acquisition of retail stores operated under the Bastion trade name. Six Bastion stores in Estonia were taken over from OÜ Bastion by Baltika’s subsidiary OÜ Baltman and one Bastion store in Latvia was taken over by Baltika’s subsidiary SIA Baltika Latvija. All seven stores have been successfully integrated into Baltika’s retail system and the figures for 2012 include the first Bastion sales within Baltika Group. By adding Bastion to its brand portfolio the Group can expand its target customer base, offer a wider product range and increase its market share in the Baltics. Baltika believes that Bastion has strong retail and wholesale potential in the Group’s home market, the Baltics, as well as in Scandinavia and Eastern Europe.
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On 28 December 2012, Baltika launched a revamped Monton concept flagship store in the Piterland shopping centre in St Petersburg. Following this, in February a revamped Monton concept flagship store was opened in Tallinn and in Riga and in March a Monton concept flagship store will be opened in Vilnius.
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As agreed in 2012, on 28 January 2013 Pille Põldsam joined Baltman OÜ Management Board. Pille Põldsam has gained experience at AS Stockmann group – last position as the area manager of both Seppälä’s Estonian region and Baltic and Ukrainian region. In Baltika Group, she will deal with the Estonian market, being responsible for setting and meeting the retail sales targets, organising the work of retail operations and managing the sales and service teams.
Objectives for 2013
Baltika’s goals for 2013 are business expansion and profitable growth. To achieve this, the Group will continue to implement its investment plan in 2013. In line with its unveiled investment plan, in the next few years the Group intends to open 25 new stores and to invest 5,000 euros in the retail system of which around 3,000 euros will be invested in 2013. Renovation of almost 20 stores and the launch of around ten new stores, primarily in Latvia, Russia and Ukraine will be made in 2013. According to the investment plan, the Group will also continue to launch new-concept Monton stores and in the second half of 2013 will open the first new-concept Mosaic stores.
Priorities of 2013 include developing international competitiveness of all Group brands. The Group will also continue to develop its additional sales channels and grow their sales: in 2013 special attention will be paid to increasing wholesale, franchise and e-store sales. In addition, to tap its extensive experience and strong retail competencies, the Group is considering the possibility of entering into franchising agreements for the sale of new brands in its current markets.
Management’s targets for 2013 are to increase total sales over 10% and to at least double the Group’s net profit. The targets are in line with the budget approved by the company’s Supervisory Council on 13 February 2013.
Consolidated statement of financial position
|
|
31 Dec 2012 |
31 Dec 2011 |
|
ASSETS |
|
|
|
Current assets |
|
|
|
Cash and bank |
2,078 |
863 |
|
Trade and other receivables |
1,836 |
2,189 |
|
Inventories |
11,471 |
10,048 |
|
Total current assets |
15,385 |
13,100 |
|
Non-current assets |
|
|
|
Deferred income tax asset |
637 |
838 |
|
Other non-current assets |
1,088 |
629 |
|
Investment property |
0 |
8,549 |
|
Property, plant and equipment |
2,256 |
8,031 |
|
Intangible assets |
4,150 |
3,665 |
|
Total non-current assets |
8,131 |
21,712 |
|
TOTAL ASSETS |
23,516 |
34,812 |
|
|
|
|
|
EQUITY AND LIABILITIES |
|
|
|
Current liabilities |
|
|
|
Borrowings |
1,598 |
3,178 |
|
Trade and other payables |
7,005 |
6,785 |
|
Total current liabilities |
8,603 |
9,963 |
|
Non-current liabilities |
|
|
|
Borrowings |
4,702 |
15,144 |
|
Other liabilities |
25 |
83 |
|
Total non-current liabilities |
4,727 |
15,227 |
|
TOTAL LIABILITIES |
13,330 |
25,190 |
|
|
|
|
|
EQUITY |
|
|
|
Share capital at par value |
7,159 |
25,056 |
|
Share premium |
63 |
89 |
|
Reserves |
1,182 |
2,494 |
|
Retained earnings |
1,667 |
-11,592 |
|
Net profit (loss) for the period |
804 |
-5,863 |
|
Currency translation differences |
-689 |
-727 |
|
Total equity attributable to equity holders of the parent |
10,186 |
9,457 |
|
Non-controlling interest |
0 |
165 |
|
TOTAL EQUITY |
10,186 |
9,622 |
|
TOTAL LIABILITIES AND EQUITY |
23,516 |
34,812 |
Consolidated statement of comprehensive income
|
|
Q4 2012 |
Q4 2011 |
2012 |
2011 |
|
|
|
|
|
|
|
Revenue |
16,188 |
15,485 |
56,332 |
53,409 |
|
Cost of goods sold |
-7,109 |
-7,001 |
-25,615 |
-25,042 |
|
Gross profit |
9,079 |
8,484 |
30,717 |
28,367 |
|
|
|
|
|
|
|
Distribution costs |
-7,021 |
-6,812 |
-26,193 |
-27,095 |
|
Administrative and general expenses |
-734 |
-742 |
-2,722 |
-2,864 |
|
Other operating income |
285 |
36 |
341 |
59 |
|
Other operating expenses |
-141 |
-2,490 |
-184 |
-2,917 |
|
Operating profit (loss) |
1,468 |
-1,524 |
1,959 |
-4,450 |
|
|
|
|
|
|
|
Finance income |
0 |
2 |
61 |
3 |
|
Finance costs |
-174 |
-314 |
-964 |
-1,344 |
|
|
|
|
|
|
|
Profit (loss) before income tax |
1,294 |
-1,836 |
1,056 |
-5,791 |
|
|
|
|
|
|
|
Income tax expense |
-219 |
-44 |
-251 |
-69 |
|
|
|
|
|
|
|
Net profit (loss) |
1,075 |
-1,880 |
805 |
-5,860 |
|
Profit (loss) attributable to: |
|
|
|
|
|
Equity holders of the parent company |
1,075 |
-1,883 |
804 |
-5,863 |
|
Non-controlling interest |
0 |
3 |
1 |
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss) |
|
|
|
|
|
Currency translation differences |
26 |
-30 |
38 |
20 |
|
|
|
|
|
|
|
Total comprehensive income (loss) |
1,101 |
-1,910 |
843 |
-5,840 |
|
Comprehensive income (loss) attributable to: |
|
|
|
|
|
Equity holders of the parent company |
1,101 |
-1,913 |
842 |
-5,843 |
|
Non-controlling interest |
0 |
3 |
1 |
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share, EUR |
0.03 |
-0.05 |
0.02 |
-0.19 |
|
Diluted earnings per share, EUR |
0.03 |
-0.05 |
0.02 |
-0.19 |
Maigi Pärnik
Member of the Management Board
maigi.parnik@baltikagroup.com
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