The turnover target of the cosmetics manufacturer “Madara Cosmetics” for the next year has been reduced from 27 million euros to 22 million euros, according to information provided by the company to the stock exchange “Nasdaq Riga”.
“The changes are related to changes in market development due to global political and economic factors, as well as to increased competition in the direct e-commerce segment,” explain company representatives.
Furthermore, representatives of “Madara Cosmetics” say that according to current forecasts, the current turnover target of 27 million euros would be reached in 2024.
The turnover of the cosmetics manufacturer “Madara Cosmetics” in the first six months of this year was 10,212 million euros, 3% more than in the corresponding period of 2021, but the company’s profit decreased by 2.4 times – to 840,489 euros, according to the statement of the company on the stock exchange “Nasdaq Riga”.
In the first half of 2022, the revenues of the company “Madara Cosmetics” deriving from the sale of products in the Latvian market increased by 5.7% compared to the corresponding period of last year, reaching 2,645 million euros, while in the other countries of the European Union , production was carried out for an amount of 6,841 million euros, or 6.2% more, but in the markets of other countries – for an amount of 662,100 euros, or a decrease of 23.8%. The company’s other revenues amount to € 64,200.
“We are seeing a gradual resumption of physical sales channels as we operate under increased competition in the e-commerce environment. The company’s diversification of sales channels has helped it successfully adapt to current market changes,” he says. the management report of the company’s financial report.
Among these, the financial report recalls that in the first half of 2022 e-commerce represented 33% of the turnover of the parent company, seven percentage points less than in the first half of last year.
“The decline in direct e-commerce revenue in the first half of the year is largely explained by a significant increase in competition in the e-commerce segment. After the rapid global development of the e-commerce industry during the Covid-19 pandemic, industry growth is currently more moderate, but competition has increased. E-commerce performance has also been impacted by growing demand for physical commercial channels and their benefits following the easing of pandemic restrictions “, explains the management report.
Furthermore, the management report states that the largest market for “Madara Cosmetics” outside of Latvia is still Finland: in the first half of 2022, the turnover in Finland increased by 52% and amounted to 2.15 million. EUR.
The report on the management of the financial report also reminds that “Madara Cosmetics” continues to implement the strategy of direct distribution abroad. This year the direct distribution model was introduced in Sweden and Denmark.
“Although the profitability indicators have deteriorated, the company has sufficient financial resources to adapt to new market conditions and carry out development projects of various kinds,” says the management report.
It has already been reported that the verified turnover of the company “Madara Cosmetics” last year was 19.369 million euros, which is 20.5% more than in 2020, while the profit of the company increased by 6.5%, reaching 3.669 million euros. At the same time, the parent company of “Madara Cosmetics” worked with a turnover of 18.914 million euros in 2021, or 21.3% more than the previous year, and made a profit of 3.476 million euros, with an increase of 0.6%.
In the first half of 2021, however, the turnover of the company “Madara Cosmetics” was 9,911 million euros, while the company’s profit was 2,004 million euros.
The company was registered in 2006 and its share capital is 377,058 euros. The major owners of “Madara Cosmetics” are Uldis Iltners (23.92%), Lotte Tisenkopfa-Iltner (23.76%), the Finnish “Transmeri Group Ab” (22.93%), Liene Drāzniece (6.79%) ) and Zane Tamane (6.35%). The “Madara Cosmetics” shares are listed on the “First North” alternative market of the “Nasdaq Riga” stock exchange.
