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Key elements in Novaturas Group’s strategy:
We have been the leader of the travel market in the Baltic countries since 2004. We intend to maintain this leading position and benefit from further market growth, protecting our market share from both existing and new competitors. The organised charter flight market in the region is consolidated around several significant players (including Novaturas Group). Any new entity faces high barriers of entry. We believe that it will be difficult for potential competitors to build up a reasonable scale of business and for existing market players to substantially increase their market shares through organic growth.
Novaturas Group’s leading market position, combined with a diversified product portfolio and an extensive distribution network, allows us to observe client behaviours. This gives us the opportunity to quickly react to changing market trends and to adapt our offering accordingly. This lets us secure the leading position in the Baltic countries in the future.
We continue gaining new clients thanks to an attractive and well-tailored offering as well as the high quality of our services. We offer summer and winter package holidays as well as sightseeing trips by plane and coach to more than 30 destinations around the world, including the most popular resorts in Southern Europe as well as selected locations in Northern Africa, the Middle East, Asia and Latin America.
Aside from the Baltic countries, we are also present in Belarus, where we sell our products through local partners. The short distance between Minsk and the airport in Vilnius gives us a clear advantage in developing our business in this promising market with 9.5 million people and a very low level of saturation as far as travel services are concerned.
Maintaining diverse and complementary distribution channels is one of the elements of our strategy. We work with over 400 travel agencies, including the largest ones in the Baltic countries and more than 60 in Belarus. We also operate our own locations in the major cities of Lithuania, Latvia and Estonia, and we are investing in further developing our e-commerce channel. Online sales go through our own websites and the international platform GDS (Global Distribution Systems), where we offer airline tickets. Sales in the e-commerce channel are systematically growing, as is this channel’s share in our overall sales mix. In 2019, e-commerce sales reached EUR 27 million (up by 24% y/y) and accounted for ca. 14% of total sales and we recorded 3.85 million unique visits to our websites.
Growing demand for our tours is driving growth in the scale of our business and market share, translating into dynamic growth in financial results. Our strategic goal is to retain high profitability and cash generation ratios, allowing us to pay dividends to our shareholders. We are monitoring profitability and sales dynamics on a daily basis and we are looking for better contract terms all season long. This lets us maintain strong margins and ensure profitable business growth.
Our business model features high operating cash flows and low capital expenditures, allowing us to pay out a large portion of our earnings to our shareholders. Regular dividend payments are one of the key elements in our strategy.
In the long term, the Management Board expects to recommend annual dividend payments corresponding to 70-80% of net profit.