AB „SNAIGĖ“ - NASDAQ OMX Baltic

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Consolidated annual report for year 2008 2.9.6 Company’s business overview for 2008 During year 2008 AB “Snaigė” has sold over 523 thous. refrigerators. Sales revenues have reached 339 m. LTL which is 17 percent less than in year 2007. Smaller sales revenues were result of decrease in overall consumption in almost all Company’s sales markets and currency devaluation in Russia and Ukraine. According to the importance of sales markets and geographical segmentation the company divides it sales markets into following groups: Baltic States market (Lithuania, Latvia, and Estonia), Eastern market (Russia, Ukraine, Kazakhstan, Uzbekhistan, over countries of CIS), Western market (Germany, France, Belgium, Holland, Poland, Portugal, Czech Republic, other Western and Central Europe countries). During 2008 AB “Snaigė” has sold most of its production in Eastern markets – the sales share amounted to 55%, total revenue of 195 m.LTL were received from the region. Devaluation of local currencies at the end of 2008 resulted in dropping sales in Eastern market, thus, if compared with 2007, the comparative weight in total sales have decreased by 22%. 41% of Company’s production was exported to Western markets, sales revenues from the region have reached 118 m.LTL. The share of sales in Western Europe relatively to total sales have increased by 6%, as economic downturn has affected Western Europe countries less dramatically then in Eastern Europe. The remaining revenues part of 4% was from sales in Baltic States markets, were sales revenues have reached 14.1 m.LTL. The Baltics In Baltic states during year 2008 AB “Snaigė“ has in total sold 24 thous. refrigerators and has received sales revenues of 14.1 m.LTL. Due to high inflation in the beginning of the year and growing economic instability the purchases of household appliances, including refrigerators, were decreasing. The sales of large household appliances have decreased significantly, when compared with year 2007. Sales of AB “Snaigė” in the region have halved. In Lithuania during year 2008 AB “Snaigė“ has sold almost 15 thous. refrigerators, sales revenues have reached more than 9.1 m.LTL. In Lithuania the company had market share of 12%. In Latvia during year 2008 over 5 thous. Refrigerators were sold, sales revenues have reached almost 3 m.LTL. In Estonia during year 2008 AB “Snaigė“ has sold almost 4 thous. refrigerators, sales revenues reached 2 m.LTL. Prepared by UAB FMĮ „Orion Securities“ p. 24
Consolidated annual report for year 2008 The most popular AB “Snaigė“ refrigerators sold in the Baltic states are middle sized, two doors refrigerators with freezer in the bottom. The main competitors in the market are Turkish „Beko“, Korean „Samsung“ and „LG“, Swedish „Electrolux“, Italian „Whirlpool“. Buyers of the Baltic States value the quality (only highquality materials from reliable suppliers are used), reliability , reliable servicing. Eastern Europe Compared with 2007, in Eastern markets AB “Snaigė“ has sold 26 % less refrigerators. In Eastern Europe and the CIS countries during year 2008 the Company has sold more than 286 thousand units of refrigerators and has received more than 195 m. LTL as revenues, which was 22 % less than in 2007. Sales in Ukraine and Russia accounted to the largest part of exports to Eastern markets. In Ukraine sales fell by 30 %, more than 116 thousand refrigerators were sold, generating revenues of over 73 m. LTL. The decline in sales resulted due to decrease in consumption, devaluation of local currency, which started in October 2008. The market for refrigerators has frozen completely after the devaluation. In Ukraine AB “Snaigė“ is the fifth most popular brand – it is achievement of company‘s consistent and hard work. Refrigerators of AB “Snaigė“ are valued by Ukrainians as reliable and of high quality products. In Russia AB “Snaigė“ sales, when compared with 2007, have decreased by 18 %. Over 158 thousand refrigerators were sold in the market which resulted in sales revenues of 114 m.LTL Entering the Russian market was easy for AB “Snaigė“, however it is hard to compete with other major manufacturers. The competitors have much greater resources to implement various marketing actions, keep lower prices, and offer more products. In addition, the major producers - "Electrolux", "LG", "Beko", Siemens, Indesit, and other brands in Russia are better known than “Snaigė“. Prepared by UAB FMĮ „Orion Securities“ p. 25
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