Marimekko - Upgrades its long-term financial targets
Marimekko raises its long-term financial targets and reveals its focus areas for the new strategy period of 2023-27.
- Marimekko’s new long-term financial targets are:
- Annual growth of 15% in net sales (prev. over 10%)
- Comparable EBIT margin of 20% (prev. 15%)
- Net debt/EBITDA ratio max. 2x (unchanged)
- Intentions to pay a yearly dividend, at least 50% of net income (unchanged).
- In our view, net sales target is somewhat ambitious but well within reach with int’l growth succeeding. However, current macroeconomic trends, especially in western economies, might cause some challenges in achieving annual growth of 15% in the short-term.
- A comparable EBIT margin target of 20% was expected as the company has outpaced its profitability target during the past two years. In 2021, the company recorded an EBIT margin of 20.5% while our margin estimate for 2022 is 19.4%.
- Marimekko intends to focus on scaling its business and growth, especially in international markets during the next strategy period of 2023–27. The success relies on factors such as focus on sustainability, vision to speak to a wider audience, accelerated growth in Asia, love for the Marimekko brand, and increased digitalization to boost omnichannel growth and efficiency.
- The company will elaborate on the strategic direction and the new long-term financial goals in its Capital Markets Day on 14 September. We maintain our estimates and recommendation intact and publish an update on Marimekko after the CMD.