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On February 1, Baltika Group reported its January 2013 sales revenue, which totaled EUR 5.1m. This indicates an increase of 4% y/y. The company no longer releases its retail efficiency numbers for its five target countries. The overall retail efficiency (sales per m2) increased again in January, growing by 8.3% y/y.
In line with the growth in the Baltic retail trade (Estonia +5.0% y/y, Latvia +12.5% y/y and Lithuania +1.4% y/y in December), Baltika had retail sales growth of 22% y/y in Estonia, 11% y/y in Latvia and 8% y/y in Lithuania in Jan- uary (in EUR). Retail sales in Russia and the Ukraine dropped by 11% and 10% in EUR terms, respectively, affected by the 14% decrease in average sales area in both countries relative to January 2012. Wholesale, which in- cludes e-commerce, increased by 2% y/y in January. The number of stores was 113 and the sales area was 22,210 m2, which are unchanged from December 2012.
We have not made any fundamental changes to our estimates. We calculate 2013e EV/EBIT at 12.3x, while the peer group’s median is 10.3x. We reite- rate our EUR 0.55 target price and Sell recommendation.
Recommendation: Sell
Target Price: EUR 0.550
Share price: EUR 0.648