LHV Institutional Baltic Insight, April 22nd, 2020 (additional edition)

* MADARA Cosmetics (MDARA LR; ‘MADARA’), a leading Latvian producer of natural cosmetics and beauty products, announced that its Q1 2020 revenues increased 25% y-o-y to EUR 3.23m. As the company is listed on the alternative market, Nasdaq Baltic First North, the company publishes its full financial statements semi-annually only.
* According to the management, the company met its own Q1 2020 sales targets, primarily thanks to its well-diversified markets and sales channels. The company was able to ramp up sales on its own e-store platform, while MADARA’s resale customers with a strong e-commerce profile also showed solid performance recently. The company explained that many customers are nicely adapting to the current market situation and increasing their purchases from digital stores. During the past couple of years, MADARA made substantial investments into developments of e-commerce channels, and these investments have started to pay off.
* We treat the company’s Q1 2020 sales number as an encouraging sign about MADARA’s ability to avoid any significant setbacks due to the coronavirus situation and successfully continue its growth strategy with a stronger focus on e-commerce. Adding to the positives, the management claims that, based on the current data, the company will meet or even exceed its April 2020 sales targets. The management also reiterated its 2020 revenue guidance of EUR 15m, while our sales forecast is kept more conservative, projecting a figure of EUR 14.2m. Please also refer to the table in the attachment.