At the shareholders annual meeting of Baltika, held today, the management board of the company introduced Baltika Group strategy 2010–2014 created in co-operation with international strategy consultancy company Roland Berger. According to the strategy, Baltika grows ca 9% per year until 2014.
“Baltika grows ca 9% per year until 2014, reaching the sales of 1.13 billion kroons which is almost the same level we had during the best years,” said Meelis Milder, Chairman of the Management Board of Baltika. “Topline growth has planned based on experience, general assumptions and the growth of our brands. Main drivers of the sales remain to be Monton and Mosaic with the sales growth by the year 2014 of 171 million kroons for Monton and 109 million kroons for Mosaic.”
“Main reasons for Baltika’s situation today are declining sales caused by people’s radically changed buying behaviour. Almost 66% of our consumers stopped buying new clothes during the crisis. Sales growth bases on increasing purchasing power, quickening consumption and our brands focusing more on the needs of their target customers. With the intention to enhance the efficiency of the business model, we continue monitoring our markets and stores portfolio and developing our brands,” added Meelis Milder.
“Gross margin is going to be improved – the target is 54.9% by 2014. Main drivers of the growth are the stabile intake margin of and lower markdowns needed due to the overall improvement of the economy and better stock situation. By the year 2014, OPEX will decline by 17.5% and the OPEX/sales ratio is going down from today’s 67.5% to 43.3%.”
The stakeholders annual meeting decided to increase the share capital of AS Baltika by issuing additional 8 850 000 ordinary shares. Three investors are participating in the share emission: DCF Fund (II) Baltic states (3 250 000 ordinary shares), E.Miroglio S.A. (3 000 000 ordinary shares) ning East Capital Baltic Fund (2 600 000 ordinary shares). Share emission is part of the package for strengthening the Group’s financial position, assuring additional capital of 106.2 million kroons. In addition to the share emission, the company has disposed assets not directly related to the core business in the value of 23 million kroons and is having negotiations with suppliers and banks.
The stakeholders annual meeting appointed Edoardo Miroglio and Jaakko Sakari Mikael Salmelin as additional members of the supervisory council of AS Baltika.