UNI - EN REPORT No
UNI - EN REPORT No6/2020
Last year the tour organizing industry in the Baltics has been defined by an intensified competition and also slightly changing customer habits due to shifting weather seasons. All these conditions have had an effect on all tour operators including Novaturas Group and are reflected in financials of 9 months of 2019.
However, the tour organising industry leader in the Baltics managed to overcome the challenges and ended 2019 with a robust last quarter. Future results also look promising as early booking campaign for summer 2020 is performing smoothly as never before.
“I am glad to state that we have ended challenging year of 2019 with a solid result of profitability for the last quarter. This demonstrates our long-time industry experience and tourism know-how also our fast pace when it comes to piloting changes”, says Audronė Keinytė, CEO of Novaturas Group.
She adds that despite holiday packages remain the Company’s core business and top choice for most of travellers in the Baltics, the habits are changing and so are the products. “More and more travellers are choosing sightseeing tours, exotic destinations or simply more extra activities during their beach holidays”, notices A. Keinytė.
Novaturas Group is constantly improving its products for the best traveller’s experience. During last year, clients were offered to plan their summer holidays in long haul exotic destinations - Bali and Seychelles, winter – in Mexico. Last year, travellers were also offered to plan their summer 2020 vacation in Greek island of Kefalonia, the emerald Slovenian Riviera or the Istria Peninsula in Croatia.
Solid profitability for the last quarter of 2019
The Company’s turnover during the last quarter of 2019 was EUR 40.3 million (3.6% lower compared to 2018) and number of served clients (56 thousand) was 10.3% lower compared to the last quarter of 2018. Despite that, the company demonstrated a solid profitability boost during the last quarter of 2019 – EBITDA has reached EUR 1.4 million (was 0.5 million in 2018), consolidated net profit – EUR 1.0 million (was negative during corresponding quarter of previous year).
Yearly revenue of Novaturas Group for 2019 has amounted to EUR 179.9 and was slightly (1.2%) lower than in 2018. Yearly EBITDA of 2019 was EUR 4.4 million – 44.2% lower compared to 2018. Consolidated net profit during 2019 amounted to EUR 2.3 million – 57% less than in 2018.
The company has successfully managed its operating costs: last year they have been reduced by 3.5% and reached EUR 18 million. Novaturas Group has been demonstrating a firm operating expenses control for the last few years in a row.
294 thousand people took advantage of Novaturas Group’s services during last year, down by 3.9% from 2018. This decline pertained chiefly to the Lithuanian and Estonian markets. The Group generated a positive sales growth rate in Latvia, where the number of clients increased by 6%.
Changing product portfolio according to client needs
Novaturas Group is happy to observe that more and more travellers are choosing not only beach holidays but also sightseeing tours. Sightseeing tours by plane increased by 31.7%, sightseeing tours by bus – by 11.8%. Sightseeing tours by plane are offered to travellers from all Baltic markets and are getting popular as a weekend gateway option.
However, the Company’s key product in terms of sales revenues and profit remains packaged holidays. Other products (when flight ticket or hotel only is chosen) had a little impact on financials. Novaturas Group remains stable in terms of managing a diversified distribution system. The key channel remains travel agencies (72.7% of sales) while direct online sales slightly increased by 0.2%.
Turkey invariably continues to enjoy the greatest popularity among the clients of the Baltics as a summer vacation destination. Other top options were Greece, Bulgaria and Spain. The top choice for winter was Egypt, followed by The Canary Islands. Skiing vacation, as well as exotic long-haul destinations, were also getting more popular during last year.
Novaturas Group – selected financial results
(EUR 000s) 12M 2019 12M 2018 y/y change
Revenue 179 858 182 032 -1.2%
Gross profit 22 092 26 279 -15.9%
EBITDA 4 409 7 908 -44,2%
Net profit 2 328 5 415 -57%
Novaturas Group is the leading tour operator in the Baltics states. Since 21 March 2018, Novaturas shares have been dual-listed on the Warsaw Stock Exchange and on Nasdaq Vilnius.
Novaturas was established in 1999, became the market leader in the Baltics in 2004. Aside from the Baltics, Novaturas has begun offering its products in Belarus, where they are retailed through local partners.
Novaturas continues to attract new clients thanks to its attractive and diverse offering and the high quality of its services. The Group offers both summer and winter package holidays as well as sightseeing tours by coach or plane to more than 30 destinations worldwide, including the most popular holiday resorts in Southern Europe as well as select locations in North Africa, the Middle East, Asia and Latin America.
The Group's strategy also aims to retain diverse and complementary distribution channels. Novaturas works with over 400 travel agencies, including all of the major agencies in the Baltics. It also operates retail offices of its own in main cities of Lithuania, Latvia and Estonia, and is investing in further development of its e-commerce channel.
The Company’s asset-light business model, which is characterized by strong cash flows from operating activities and low capital expenditures, allows it to pay out a large part of its earnings to shareholders. Paying regular dividends is one of the key elements of the Company's strategy. Every year the Management Board expects to propose for distribution 70% – 80% of the Company’s net profit.
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