Karelia remains stable in its positive business direction, along with its contribution to society as a result of its solid national and international business activity.
As Victoria Karelia, president of the tobacco company of the same name, emphasizes in her corporate message, “We are committed to the values and principles that govern all aspects of our corporate existence. We have planned and implemented a targeted but also flexible strategy that allows us to adapt to developments and lay the foundations for our dynamic course in the years to come. As our 135-year history has taught us, good entrepreneurship never leaves room for complacency, even in the most promising times.”
The company invests in quality and evolutionary innovation, while honouring its inseparable ties with its roots, its place and its history. At the same time, it maintains strong ties with society, actively supporting agencies and organisations in their differentiated performance. In a particularly volatile business environment, with geopolitical tensions, intense inflationary pressures, instability in energy and transport costs, but also increases in tobacco taxation in the most important international markets, the group’s performance during 2023 was characterized as completely satisfactory, with an increase in turnover, maintaining profitability at high levels and further strengthening cash reserves. Karelia’s investment programme continued perfectly during 2023, reaching 4.8 million euros in the context of the ongoing modernization of the Kalamata plant with state-of-the-art technology, adapted to the demands of the industry as well as its international markets. For 2024, the investment plan is estimated at 10 million euros.
By market and product
In the Greek market, the company achieved an increase in cigarette sales volume of approximately 8.5% in 2023, while in rolling tobacco, despite a slight contraction in the category, sales volumes of its brands rose to 2022 levels, also improving its local share. In international markets, cigarette sales volume recorded a slight increase of around 2%, while in rolling tobacco the increase was around 14%.
Volumes from Karelia to the remaining EU countries also increased, with notable growth in its sales in Spain (+6%), Slovakia (+3.5%) and Luxembourg (+11%), achieving a 6% increase in volume and offsetting a drop in sales in France. The group achieved impressive results in the travel retail markets of the Far East, the Middle East and especially Turkey (cigarettes +24%, tobacco +64%), driven by a return of travel traffic to 2019 levels, but also by increased awareness of its brands.
In the first quarter of 2024
The performance of the company and the group during the first quarter of 2024 is considered very satisfactory, during which the company’s net profit before tax increased by 48% (group: +43%). During this period, the increase in turnover (net of excise duty and VAT) exceeded 4.3%. Cigarette sales volumes increased by 2.5%, while rolling tobacco saw a 4% drop in volume, mainly due to delayed shipments in March.
Regarding the group’s medium-term outlook, no particular deviations from management’s forecasts are expected, with the possible exception of a slightly better sales trend in the European Union and Balkan markets than initially expected. In the Bulgarian market in particular, the company’s market share during the first half of the second half of the year appears to be developing at particularly high levels, while the brands’ upward trend continues in the French, Spanish and Portuguese markets.
Karelias in 2023 strengthened its position by enriching its product range, strengthening its presence in the countries where it already operates, but also by penetrating new markets. As a result, it not only maintained its already strengthened shares in most of its markets, but also recorded a further increase in its sales volumes both in Greece and abroad.
An important role in this context was played by the strategic choice to give priority to maintaining its competitiveness, despite the increase in taxation in several of its markets, but also the significant increase in the cost of tobacco and key raw materials. In addition, Karelias launched new business partnerships and continued its investments in order to adequately prepare for the future, ensure the further international development of its brands, but also generate value for its shareholders.
