Baltika’s unaudited financial results, fourth quarter and 12 months
2022
The Group’s fourth quarter sales revenue
across all channels totalled 2,803 thousand euros, increasing by 7%
compared to the same period last year (Q4 2021: 2,614 thousand
euros). Sales revenue for 12 months reached 9,613 thousand euros,
decreasing by 18% compared to the previous year (2021: 11,770
thousand euros). In 2022, the sales revenue of the e-store
accounted for 10% (2021: 17%) of the Group’s total
revenue.
The year 2022 brought with it strong growth in
sales of Ivo Nikkolo products. The sales revenue of Ivo Nikkolo
products increased by 38% to 9,482 thousand euros in 2022. In 2022,
sales of Ivo Nikkolo products accounted for 98% of the Group’s
total sales revenue. From the second half of 2021, the Group
operated with only one brand – Ivo Nikkolo. In 2021, the sales
revenue of the discontinued brands Monton, Mosaic, Baltman and
Bastion made up 42%, the remaining 58% of the sales revenue was
made up by the sale of Ivo Nikkolo products.
In the fourth quarter, the Group showed strong
sales revenue growth in both retail and e-store sales. Fourth
quarter retail sales were 2,530 thousand euros, increasing by 6%
compared to the same period last year (Q4 2021: 2,395 thousand
euros). The sales revenue of the e-store in the fourth quarter was
235 thousand euros, which is 13% higher compared to the same period
last year (Q4 2021: 209 thousand euros).
In the last quarter of the year, we continued to
update our store network. At the end of November, we opened the
first new Ivo Nikkolo concept store in Lithuania – we replaced the
old Ivo Nikkolo store in the Vilnius Panorama shopping centre with
a new Ivo Nikkolo concept store. Panorama shopping centre is
located in Žverynas, one of the oldest and most prestigious
business and residential districts in the centre of Vilnius.
Panorama shopping centre is highly valued among visitors for its
bright interior design, comfortable shopping environment and
high-quality service. In the fourth quarter, Ivo Nikkolo’s main
focus was on marketing activities. In October, we started an
extensive brand awareness campaign in Latvia and Lithuania, which
lasted for three months. In addition to the above, Ivo Nikkolo
presented a modern feminine clothing and accessory collection at
the two biggest fashion events in the Baltics, which were Riga
Fashion Week (11.10.2022) and Tallinn Fashion Week
(20.10.2022).
The gross profit of the fourth quarter was 1,579
thousand euros, decreasing by 5% compared to the same period last
year (Q4 2021: 1,671 thousand euros). Gross profit for 12 months
was 4,938 thousand euros, decreasing by 19% compared to the same
period last year (12 months 2021: 6,120 thousand euros). The
decrease in gross profit is due to the fact that the Group operates
with only one brand (Ivo Nikkolo) in 2022, but in the comparable
period, a significant part of the Group’s sales revenue was the
sales results of the discontinued brands Monton, Mosaic, Baltman
and Bastion. The Group’s gross profit margin was 56% in the fourth
quarter, while the comparable period’s gross profit margin was 64%.
The decrease in the gross profit margin by 8 percentage points is
due to the increase in raw material and transportation prices in
the second half of 2022 and the strengthening of the US dollar,
which led to a significant increase in costs in the purchase price
and delivery of goods. The Group has only partially passed on the
price increase to customers, which explains the decrease in the
gross profit margin compared to the comparison period. The Group’s
12-month gross profit margin was 51%, remaining at a similar level
compared to the same period last year (12M 2021: 52%).
The net loss for the fourth quarter was 561
thousand euros, the result of the comparable period was a net loss
of 890 thousand euros. The Group’s 12-month net profit was 3,493
thousand euros. The 12-month result is significantly affected by
the conclusion of the contract for the sale of the Ivo Nikkolo
trademarks and the contract for the exclusive use of the Ivo
Nikkolo trademarks in August. The result for 12 months without
considering the sale transaction of Ivo Nikkolo trademarks was a
net loss of 3,943 thousand euros. In the comparable period, there
was a net loss of 2,900 thousand euros.
The Group’s distribution and administrative
expenses were 2,084 thousand euros in the fourth quarter,
decreasing by 9% compared to the same period last year (Q4 2021:
2,289 thousand euros). Despite high inflation and the energy
crisis, the Group has been able to reduce distribution and
administrative expenses through consistent cost reduction,
increased efficiency and closure of unprofitable stores.
The Management Board of the Group assesses the
results of 12 months as positive. The Group was able to strongly
increase the sales revenue of Ivo Nikkolo products and maintain
good gross profitability despite the uncertain economic
environment, increased raw material and transport prices and the
volatility of the US dollar. Consistently increasing efficiency and
closing unprofitable stores has gradually improved the Group’s
financial indicators. Increasing efficiency will continue to be the
Group’s focus. The Group remains committed to its chosen strategy
and continues to implement it:
- By developing modern, high-quality products in our women’s
fashion brand Ivo Nikkolo, which is available in Estonia, Latvia
and Lithuania and in other European countries through our
e-store.
- By continuing the development of our omnichannel strategy and
e-store functionalities.
- By continuing to open new Ivo Nikkolo concept stores in the
Baltics.
Ongoing quarter
The Group’s sales revenue in the period
01.01.2023 – 26.02.2023 was 1,365 thousand euros, decreasing by 6%
compared to the same period last year. The decrease in sales
revenue compared to the previous period is due to the following
circumstances:
- In the first quarter of 2022, deeply discounted products were
sold, which led to a very high demand for products. The impact of
the discount can be seen in the Group’s gross profit margins: the
gross profit margin for the period 01.01.2023 – 26.02.2023 was 56%,
the gross-profit margin for the comparable period was 43%.
Well-managed discount campaigns in the current quarter have
significantly improved the Group’s gross profitability compared to
the comparable period; and
- Closure of unprofitable stores has decreased sales
revenue. In January 2022, the Group had 8 stores more than this
year, and in February 2022, 5 stores more than this year.
Retail sales efficiency during the period
01.01.2023 – 26.02.2023 (sales per m2 per month, EUR) was 119 EUR,
increasing by 27% compared to the same period last year.
At the beginning of January, we joined the Tango
e-shop packaging recycling system. The goal of joining the system
is to reduce the amount of disposable packaging waste generated
when shopping in our e-store. From now on, our customers have the
opportunity to order their goods in Low imPACK reusable packaging
and get the deposit money back after returning the packaging. Among
the clothing trade companies, Baltika is the first to have joined
the e-shop’s packaging circulation system with its Ivo Nikkolo
brand e-shop.
At the beginning of January, we closed our Ivo
Nikkolo store in Vilnius Akropolis shopping centre in Lithuania due
to the expiration of the lease. The new Ivo Nikkolo concept store
opened in Lithuania in November 2022 in the Vilnius Panorama
shopping centre has been well received by our former Vilnius
Akropolis centre customers.
At the beginning of February, we reopened the
brand store at Ivo Nikkolo Suur-Karja 14. The store was closed in
November 2020, when during the COVID pandemic, the legendary
location of the Suur-Karja street store became commercially
problematic due to the lack of tourists. In today’s market
situation, the Group again believes in the potential of this
region. In addition to the above, in the current quarter we will
finish the renovation of the Ivo Nikkolo store in the Galleria Riga
shopping centre in Latvia, as a result of which we will open a new
Ivo Nikkolo concept store in Latvia at the begging of March.
Consolidated statement of financial
position
|
31 Dec 2022 |
31 Dec 2021 |
ASSETS |
|
|
Current
assets |
|
|
Cash and cash
equivalents |
222 |
614 |
Trade and other
receivables |
3,285 |
696 |
Inventories |
2,056 |
2,491 |
Total
current assets |
5,562 |
3,801 |
Non-current assets |
|
|
Deferred income
tax asset |
91 |
80 |
Trade and other
receivables |
2,756 |
0 |
Other
non-current assets |
107 |
172 |
Property, plant
and equipment |
1,269 |
855 |
Right-of-use
assets |
4,602 |
6,210 |
Intangible
assets |
586 |
631 |
Total
non-current assets |
9,411 |
7,948 |
TOTAL
ASSETS |
14,973 |
11,749 |
|
|
|
LIABILITIES AND EQUITY |
|
|
Current
liabilities |
|
|
Borrowings |
3,096 |
364 |
Lease
liabilities |
1,714 |
2,050 |
Trade and other
payables |
1,950 |
2,438 |
Total
current liabilities |
6,760 |
4,852 |
Non-current liabilities |
|
|
Borrowings |
1,070 |
2,425 |
Lease
liabilities |
3,364 |
4,333 |
Trade and other
payables |
147 |
0 |
Total
non-current liabilities |
4,582 |
6,758 |
TOTAL
LIABILITIES |
11,342 |
11,611 |
|
|
|
EQUITY |
|
|
Share capital at
par value |
5,408 |
5,408 |
Reserves |
4,431 |
4,431 |
Retained
earnings (-losses) |
-6,208 |
-9,701 |
TOTAL
EQUITY |
3,631 |
138 |
TOTAL
LIABILITIES AND EQUITY |
14,973 |
11,749 |
Consolidated statement of profit or loss and other
comprehensive income
|
4Q 2022 |
4Q 2021 |
12m 2022 |
12m 2021 |
|
|
|
|
|
|
|
|
|
|
Revenue |
2,803 |
2,614 |
9,613 |
11,770 |
Cost of goods
sold |
-1,223 |
-943 |
-4,675 |
-5,650 |
Gross
profit |
1,579 |
1,671 |
4,938 |
6,120 |
|
|
|
|
|
Distribution
costs |
-1,779 |
-1,960 |
-7,111 |
-8,084 |
Administrative
and general expenses |
-305 |
-329 |
-1,448 |
-1,467 |
Other operating
income (-expense) |
-12 |
-128 |
7,408 |
926 |
Operating profit (loss) |
-518 |
-746 |
3,787 |
-2,505 |
|
|
|
|
|
Finance
costs |
-53 |
-79 |
-304 |
-330 |
Profit
(loss) before income tax |
-571 |
-825 |
3,483 |
-2,835 |
|
|
|
|
|
Income tax
expense |
11 |
-65 |
11 |
-65 |
|
|
|
|
|
Net
profit (loss) for the period |
-561 |
-890 |
3,493 |
-2,900 |
|
|
|
|
|
Total
comprehensive income (loss) for the
period |
-561 |
-890 |
3,493 |
-2,900 |
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share from net profit (loss) for the period, EUR |
-0,01 |
-0,02 |
0,06 |
-0,05 |
|
|
|
|
|
Diluted earnings
per share from net profit (loss) for the period, EUR |
-0,01 |
-0,02 |
0,06 |
-0,05 |
Brigitta Kippak Chairman of The Management Board, CEO
brigitta.kippak@baltikagroup.com
- Baltika_Interim_Report_4Q 2022
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