Anora Group Plc’s Interim Report for 1 January - 30 September 2023

Anora Group Plc   Interim report  9 November 2023 at 8:30 am EET

Anora Group Plc’s Interim Report for 1 January - 30 September 2023

Q3: Price increases and cost cuts partly offset the decline in comparable EBITDA. The divestment of Larsen was successfully completed, strengthening net debt and cash flow.

This release is a summary of Anora Group Plc's Interim report January-September 2023. The complete report is attached to this release and is also available on the company website at: www.anora.com/en/investors

Q3 2023 in brief

• Net sales were EUR 173.0 (181.9) million, down by 4.9%. The one-off capital gain of EUR 12.2 million from the divestment of Larsen was reported under other operating income, which amounted to EUR 14.3 million.
• EBITDA was EUR 28.9 (21.8) million, or 16.7% (12.0%) of net sales, up by 32.4%.
• Comparable EBITDA was EUR 20.2 (23.4) million, or 11.7% (12.8%) of net sales, down by 13.5%.
• Net cash flow from operating activities was
• EUR -13.8 (7.3) million.
• Earnings per share EUR 0.21 (0.12).

January-September 2023 in brief

• Net sales were EUR 515.3 (481.1) million, growth of 7.1%.
• EBITDA was 45.6 (49.0) million, or 8.8% (10.2%) of net sales, down by 7.0%.
• Comparable EBITDA was EUR 41.1 (55.3) million, or 8.0% (11.5%) of net sales, down by 25.5%.
• Net cash flow from operating activities was EUR 35.2 (-36.4) million.
• Earnings per share EUR 0.06 (0.21).
• Net debt/comparable EBITDA (rolling 12 months) was 3.5x (3.6x).

Guidance

In 2023, Anora’s comparable EBITDA is expected to be EUR 70-78 million.

Key figures

* If including Globus Wine LTM figures, net debt/comparable EBITDA (LTM) would have been approx. 3.4 for Q1-Q3/22.

CEO Jacek Pastuszka:

“In my short time as the new CEO of Anora, I have already had the opportunity to start onboarding by meeting many new colleagues. I can only say that I am impressed by their expertise and passion to serve our customers. I am convinced that this continued customer focus combined with enhanced efficiency will enable us to deliver on our targets and strategy, which were launched at last year’s Capital Markets Day.

Towards the end of Q3, we carried out major price adjustments in the monopoly pricing window. We started to see the first results from the initiated price increases and also previously announced cost cuts. However, we still experienced a negative impact on sales and profitability due to lost partners in Wine and weaker currencies. The estimated impact of weaker currencies, particularly in the Wine segment, was about EUR 3.4 million in Q3 and EUR 9.5 million during the first nine months.

Comparable EBITDA for the quarter was EUR 20.2 million, compared to EUR 23.4 million in the previous year. For January–September, comparable EBITDA decreased from EUR 55.3 million to EUR 41.1 million. While our comparable EBITDA declined, the reported EBITDA improved to EUR 28.9 million in Q3 due to the one-off capital gain from the Larsen divestment.

Price increases late in the quarter and recent movements in currencies have given some tailwind lately. To improve profitability, a cost savings programme was launched in Q2, with a target of EUR 6 million in annual savings. A positive impact from the programme has already been seen, approximately two thirds of the savings were achieved by the end of Q3. The barley and fuel prices were also below the previous year.

Net sales in Q3 declined by 4.9% to EUR 173 million. Anora's own wine and International Spirits had a good growth in sales, while partner wines in Sweden saw the steepest decline. For the first nine months, net sales were EUR 515.3 million, showing a growth of 7.1%. Globus Wine is reported as part of Anora’s Wine segment as of 1 July 2022.

In the Wine segment, Anora’s own wines continued to perform well, growing by 11.5% in local currencies in Q3 and continued to gain market share. The partner business struggled, both declining in net sales and losing market share. The good performance of our own wines and the wines of our new partners only partly compensated for the impact of the currency exchange rates and previous partner losses in Sweden in particular. The share of Anora’s own wine products has increased significantly since the acquisition of Globus Wine. Globus Wine continued to gain market shares in the retail customer segment in Denmark. Cooperation with Globus Wine has also been beneficial in preparation for the potential legislative changes in the Finnish wine market allowing grocery outlets to sell wine allowed by the legislation.

In the Spirits segment, net sales were flat due to the weak currency exchange rates of the NOK and SEK and a volume decline in the Monopoly markets. In local currencies, net sales improved from the previous year by 3.9%. The relative share of international sales increased to 35.1% (34.9%). Koskenkorva sales continued growing but slower than in the very strong first half. The brand represented approximately 15% of our total spirit sales. The market shares increased in Sweden and Norway and declined slightly in Finland.

The Industrial segment sales decreased driven by lower volume and prices in the Industrial products business, mainly caused by lower starch and feed sales. The weak outlook for starch in the pulp and paper industry led to lower grain consumption at the Koskenkorva distillery.

Looking ahead to the rest of this year, our full-year guidance remains valid. We remain highly focused on executing our strategy and improving our profitability and efficiency. This includes the savings programme, price adjustments, and a focus on reducing net working capital and improving inventory turnover.”

Outlook and guidance for 2023

In 2023, the volumes in the monopolies are expected to be significantly lower than during the COVID-19 restrictions. Input costs are expected to remain at a high level.

In 2023, Anora’s comparable EBITDA is expected to be EUR 70-78 million.

The guidance was lowered on 15 August 2023. The key reasons for lowering the guidance were that the forecasted profitability of Globus Wine for 2023 was significantly lower than originally expected, and that the weakening of Swedish Krona and Norwegian Krone had a significant negative impact on Anora’s profits during the first half of the year, especially in the Wine segment.

Anora’s financial reporting for the year 2023

Anora will publish Financial Statement Release for January-December 2023 on 14 February 2024.

Anora applies a silent period of 30 days before the publication of financial reports.

ANORA GROUP PLC

Further information:
Jacek Pastuszka, CEO
Sigmund Toth, CFO

Contacts:
Milena Hæggström, Director, Investor Relations
tel. +358 40 5581 328
milena.haeggstrom@anora.com

Results presentation:

CEO Jacek Pastuszka and CFO Sigmund Toth will present the report today at 11:00 am EET. The presentation will be held as a Microsoft Teams Meeting. We recommend that participants join the event using the online meeting option: Join meeting here.

It is also possible to dial-in to the meeting about 5 minutes earlier at the following numbers:

• FI: +358 9 2310 6678
• NO: +47 21 40 41 04
• SE: +46 8 502 428 54
• DK: + 45 32 72 56 80
• UK: +44 20 7660 8309
• US: +1 917-781-4622

Conference ID: 893 774 793#

Q&A

Questions to the management can be sent through the Teams chat.

Presentation material and on-demand recording

The presentation material will be shared in the online meeting and it can be downloaded at: www.anora.com/en/investors. Recording of the presentation will also be available on Anora’s website.

Distribution:

Nasdaq Helsinki

Principal media

www.anora.com

Anora is a leading wine and spirits brand house in the Nordic region and a global industry forerunner in sustainability. Our market-leading portfolio consists of our own iconic Nordic brands and a wide range of prominent international partner wines and spirits. We export to over 30 markets globally. Anora Group also includes Anora Industrial and logistics company Vectura. In 2022, Anora’s net sales were EUR 703 million and the company employs about 1,200 professionals. Anora’s shares are listed on Nasdaq Helsinki.