LHV Institutional Baltic Insight, December 22nd, 2020

* MADARA Cosmetics AS (hereafter ‘MADARA’ or the ‘Company’), a leading Latvian producer of natural cosmetics and beauty products, announced its updated revenue guidance for the full year 2020 as well as for the next three years. According to the management, MADARA should end the current year on a strong note, generating total sales of c.a. EUR 16m, comfortably surpassing its earlier revenue guidance of EUR 15m for the year, while the new guidance for 2020 would mark nearly 40% annual growth in comparison with 2019.
* Considering MADARA’s planned development activities and the growing brand recognition in the most important European markets, as well as the development potential of the natural cosmetics industry in general, the management targets to continue achieving growth of around 20% per year over the next three years, with the total revenues reaching EUR 27m by 2023. The management indicated that rapidly expanding online sales play an important role in the Company’s long-term strategy and developments.
* Overall, we treat the Company’s 2020 sales results and the new revenue guidance as encouraging signs about MADARA’s ability to avoid any major setbacks due to the COVID-19 pandemic and successfully pursue its growth strategy with a stronger focus on e-commerce and finding new resellers in the Western Europe countries. Considering the recent news, we plan to review our financial projections and update the valuation. Please also refer to the tables in the attachment.