Not audited financial statements of AS "Latvijas balzams" for year 2012
Management report
Field of activity
The enterprise was founded in 1900, but received its current name in 1970. JSC “Latvijas balzams” is the leading producer of alcoholic beverages in the Baltic states, and produces more than 100 different kinds of alcoholic drinks. 75% of our products can be found in more than 160 countries via SPI Group exports and in more than 30 countries as the direct export of JSC “Latvijas balzams”. The major shareholder of JSC “Latvijas balzams” is SPI Regional Business Unit BV which owns 89.53% of the company’s equity capital.
Enterprise activity in 2012
JSC “Latvijas balzams” is the leading producer of alcoholic beverages in Latvia, as well as one of the largest taxpayers in Latvia. During 2012, JSC “Latvijas balzams” paid 36.4 millions lats to the state budget, including excise taxes amounting to 25.5 millions lats.
The unaudited turnover of the company reached 70.0 million lats in 2012, which is 3% more than for 2011. This has been achieved through developing new products, good sales results and cohesive teamwork where everyone plays an important role. Turnover in the domestic market increased by 6.4%, and in the export market dropped by 13%. Export orders of SPI Group have increased by 2.8%. In 2012, JSC “Latvijas balzams” continued to implement previously realized strategies in key markets and maintain similar sales to major customers abroad. The most significant increase in sales was achieved in important markets such as Russia, Ukraine, and retail travel channel. In some countries, like Lithuania, Estonia, and Poland, there was a decrease in sales compared with the previous year, due to customer order flow specifics. The significant customer order flow redistribution of private labels between multiple markets has been reflected in the decrease of volume in The Netherlands and the increase of volume in Germany, keeping total sales stable. Meanwhile, new export markets were actively acquired, such as Georgia and Kazakhstan.
The unaudited profit for 2012 was 4.07 million lats, which represents 11.53% growth versus 2011. The result was achieved through focused development of the beverage portfolio.
For JSC “Latvijas balzams”, 2012 has been a great year for introducing new products; namely, the enterprise has started to develop and produce eighteen new products that successfully compete with domestic and imported products. At the end of 2012, JSC “Latvijas balzams” began to produce an innovative product - Riga Black Vodka.
JSC “Latvijas balzams’” main pride - "Riga Black Balsam" - has produced excellent sales results. Total sales of “Riga Black Balsam” and “Riga Black Balsam Currant” products in the domestic and export markets increased by 19% achieving 1,205,932 liters. "Riga Black Balsam Currant" was particularly successful in 2012, for which sales performance in the export markets increased by 61%, while in the domestic market 52%. The enterprise has identified potential for increasing sales in 2013 by developing new projects both in the domestic market as well as in European and other markets.
In 2012, JSC “Latvijas balzams” consistently continued to implement responsible and sustainable development-oriented business strategy. The enterprise has received the Silver Medal in the Sustainability Index, which evaluated the processes and achievements that have been introduced in the enterprise highly.
JSC “Latvijas balzams” has received a special award from the Ministry of Welfare of Latvia for being a “Senior-friendly company”. This acknowledges JSC “Latvijas balzams’” expertise and the quality of its social programmes for supporting employees.
JSC “Latvijas balzams” implements an ambitious and open communication with the public and the media regularly and informs for the latest developments, innovations, achievements and related issues.
Future outlook of activities
JSC “Latvijas balzams” will continue to focus on development of competitive products, retain existing market share, and grow in export markets. This is not possible without a focused and knowledgeable team. In 2012, JSC “Latvijas balzams” supplemented its existing team with new employees, and congratulated those who have worked with the enterprise for twenty years or more. The value of the enterprise lies with its employees.
JSC “Latvijas balzams” priorities for 2013 include further control of production and logistics costs, optimization and improvement of production efficiency, increasing the company's competitiveness, and analysis and planning of potential export development opportunities.
JSC “Latvijas balzams” will continue to support nature-friendly solutions, persistently improving activities that decrease the company's negative impact on the environment, establishing high requirements for itself and company partners, and following the principles of sustainable business.
JSC Latvijas balzams
Chairman of the Board Guntis Āboltiņš - Āboliņš
Riga, 28 February 2013
|