Volatile world, volatile top
It seems that companies are now facing an unprecedented number of business-influencing factors: inflation, shaky consumer sentiment, intense local and global competition, volatile commodity prices and increased regulation. All of these factors have been influencing the top five positions, which have historically been quite volatile. This volatility in the Baltic Top 5 has continued this year: three companies are newcomers, two of which are from Latvia. The only company with an extremely stable No. 1 position is Lithuanian telecom operator Telia.
Telia boasts an exceptionally strong financial position, combined with high profitability and sound cash management. These are precisely the qualities that the Baltic Corporate Excellence Award evaluation methodology primarily considers when determining companies’ positions in the ranking. The financial pillars taken into account are balance sheet strength, profitability and earnings growth. In addition to historical financial performance, the quality of management and the plausibility of the company’s strategy are also considered in the assessment process. The methodology, however, excludes valuation and focuses purely on fundamentals. It also applies a basic ESG filter to exclude certain industries and monitor potential controversies, following a standard ESG framework.
It is becoming somewhat boring that Telia’s leading position is so strong that it hardly seems possible to challenge it. With its strong balance sheet and decent profitability, Telia Lietuva continues to execute its growth strategy by improving operational efficiency and streamlining processes, resulting in margin expansion. On top of that, the company continues to grow its top line and invest in data centres.
The newcomer to the Top 3 is Lithuanian fashion retailer Apranga, which has improved its position from No. 5 to No. 3. It is astonishing how a company operating in such a highly competitive industry can continuously grow in a rather saturated market, often facing macroeconomic challenges such as inflation and volatile consumer sentiment, while successfully implementing the Inditex business philosophy. The company moved up the ranking mainly thanks to historical improvements in capital profitability and positive long-term earnings dynamics. It continues to strengthen its market position, as also reflected in its solid financial performance this year.
Earnings growth, coupled with healthy financials, helped Estonian Tallinna Sadam enter the Top 3 this year. It is another good example of corporate resilience: despite losing volumes due to geopolitical developments, the company managed to secure a place among the Baltic Corporate Excellence leaders. Its recent development has been supported by an improving macroeconomic environment, higher port fees and strong growth in cruise traffic.
A Latvian recovery story has made it into the Top 5 this year, supported by several global tailwinds, primarily the growing demand for networking equipment and, to a lesser extent, the defence sector, which represents more of a long-term opportunity. SAF has always had an extremely conservative balance sheet, while profitability was the missing piece for quite some time. Now that profitability has improved, the company has moved up the ranking.
Another Latvian company is a newcomer to the Top 5. Its long-awaited share price rally is finally rewarding investors, although the company’s fundamentals had already started improving in previous periods. Virši, the fuel station operator, has been going through a substantial capital expenditure cycle, expanding its network, acquiring competitors and enhancing its product range. It now seems to be harvesting the results of these investments. The company is delivering robust growth while managing to maintain a resilient balance sheet.
Bond rating – who is the winner
We are continuing our bond issuer evaluation as this market segment shows no signs of slowing down, with more and more issuers entering the Nasdaq Baltic bond market. Unfortunately, this year also brought a negative case, with Amber Beverages filing for legal protection.
The bond ranking is dominated by Latvian companies and, unlike the equity ranking, has turned out to be rather stable. Utility companies occupy the leading positions: CleanR, AST and Latvenergo have once again secured places at the top. Canned fish producer Banga has also maintained its position among the Corporate Excellence leaders in 2025. The newcomer to the ranking is Lithuanian shopping and entertainment giant Akropolis, which demonstrates high-quality financials based on historical data.
Financials and return vs. global equities
Since we conduct the Corporate Excellence evaluation not only in the Baltics but also on a global scale, we could not skip a comparison with global peers. Interestingly, global winners demonstrate almost identical median one-year EPS growth to that of Baltic winners: 26% versus 25%, respectively. On top of that, Baltic companies are considerably cheaper, with a median P/E ratio of 12 compared with 27 for their global peers.
It is worth noting that the balance sheets of both groups are exceptionally solid, with equity ratios exceeding 60%, well above the respective market medians. In terms of capital profitability, Baltic companies appear to lag behind the global benchmark. Nevertheless, the returns delivered by these winning companies remain very decent, demonstrating that fundamental analysis can add significant value in the Baltic equity market.
2018 we have tracked how Baltic shares selected on the same quality criteria perform as a portfolio. Over this period the portfolio has more than tripled in value, while the OMX Baltic Benchmark Gross Index gained just over a third. As this year’s newcomers SAF and Virši show, fundamentals can turn around – which is exactly why careful, ongoing company selection has mattered far more than simply owning the market.
Baltic Corporate Excellence Award: Since 2008 on a yearly basis Riga-based financial research company Alphinox, in cooperation with its partner, Hérens Quality Asset Management (Switzerland) and its academic partner, Riga Technical University (Latvia), evaluates the quality of the companies quoted on the Baltic stock exchanges. Both qualitative and quantitative assessment is applied to determine the best companies listed in the Baltic States, considering the companies included in the Baltic main list with trading history of at least three years. The quantitative screen contributes 50% to the overall assessment. It considers main fundamental ratios allowing to make a judgment on the strength of the balance sheet, profitability, capital efficiency, operating efficiency, earnings momentum. Another 50% of the decision is based on the qualitative assessment, which covers business model, corporate governance, social responsibility, quality of financial management and market environment. The Corporate Excellence Award recognizes historical fundamental performances (based on the result of FY 2025 and earlier) and ignores companies’ valuation. The results of the Baltic Corporate Excellence Award are not a stock recommendation.
