THE PERIOD JANUARY - JUNE 2023

• Revenues (Jan - Jun): SEK 4,291 thousand (SEK 5,861 thousand on corresponding period 2022 which was positively affected by one-time other operating income of SEK 1,345 thousand) 
• EBITDA: SEK –8,849 thousand (SEK –20,659 thousand) 
• EBIT: SEK –9,976 thousand (SEK –21,450 thousand) 
• Net result: SEK –10,832 thousand (SEK –21.748 thousand) 
• Earnings per share (EPS) -0.43 SEK / share 
• Cash and cash equivalents: SEK 939 thousand (30 June 2023) 

APRIL - JUNE 2023

• Revenues (Apr - Jun): SEK 2,022 thousand (SEK 2.554 thousand on corresponding period 2022) 
• EBITDA: SEK –4,315 thousand (SEK –14,728 thousand) 
• EBIT: SEK –4,885 thousand (SEK –15,252 thousand) 
• Net result: SEK –5,729 thousand (SEK –15,549 thousand) 
• Earnings per share (EPS) -0.22 SEK / share 

SIGNIFICANT EVENTS DURING APRIL - JUNE 2023

• Company launches premium liquorice liqueur, Arctic Blue Laku. 
• Company announces the outcome of the exercise of warrants of series TO2. 
• Company announces that it has completed the restructuring of the Company’s new distribution and logistics set-up in Finland and Nordic travel retail and it is now fully operational. 
• Company announces that Arctic Blue Laku got a great start on the Finnish market. 
• Company announces the sale of its subsidiary Valamo Beverages Oy to boost strategic focus. 
• Arctic Blue Laku makes an impressive debut, wins Double Gold at Singapore World Spirits Competition 2023. 
• Company announces growth on the Finnish market and Laku’s international success. 
• Arctic Blue Laku awarded “Best Of Class” at Singapore World Spirits Competition 2023. 

SIGNIFICANT EVENTS AFTER PERIOD

• No significant events after the reporting period.

REPORT HIGHLIGHTS

“In the beginning of the second quarter 2023 we launched a new product - a premium liquorice liqueur, Arctic Blue Laku, together with the Finnish luxury liquorice producer Kouvolan Lakritsi. Arctic Blue Laku is a smooth liquorice liqueur which combines the all-natural sweet flavour of artisanal liquorice with organic ingredients carefully selected from Finland’s uniquely pure nature. Arctic Blue Laku had secured its standard selection status in Alko, the national alcoholic beverage retailing monopoly in Finland, and was widely available from the start. Availability in the rest of the world will be built gradually throughout the year 2023. 

Arctic Blue Laku achieved an impressive accomplishment by winning a prestigious Double Gold Medal in its first competition, the esteemed Singapore World Spirits Competition (SWSC) 2023. SWSC belongs to the Tasting Alliance, widely recognized for hosting the most influential spirits competitions in the world. Arctic Blue Laku was also honoured with the renowned “Best of Class” award at the Singapore World Spirits Competition 2023. The title “Best of Class” is granted to the best example within each spirit category. Arctic Blue Laku participated in the category “Other Liqueurs”. We have experienced great success on the Finnish market with Arctic Blue Laku in shape of sales and highly positive consumer feedback. Winning a double gold medal and best of class serves as an important marketing asset, to boost Arctic Blue Laku’s visibility on the international market, especially in Asia which is one of our most important focus areas. The assumption that only Nordic people take a liking to liquorice taste can now be disproven. I am genuinely delighted to witness the fruitful outcomes of our innovative approach. 

During the first half of 2023, our sales revenue decreased by 7% compared to the corresponding period last year. This decline is mainly because during first half 2023 we did not have the same fulfilment of stock-in orders that occurred during first half 2022 for the South-East Asia region. Additionally, there has been an unfavourable sales trend in the markets of UK and Sweden. On the other hand, there has been positive sales development in several other markets, including Finland and Travel Retail, as well as Germany and Benelux. These trends were largely due to the signing of new distribution partnerships. 
In the second quarter of 2023, sales revenue decreased by 25% compared to the same period last year. After a great start during first half 2023 sales decreased during second quarter in Finland and the Travel Retail sector. Due to challenging economic times consumers are switching to cheaper products and this can be seen in our main sales channel in Finland, Alko alcohol monopoly. Gin category sales is down by 7% in the overall market and premium gin segment even more. Despite the bottom of the premium market was Arctic Blue Gin sales in Alko down only 3% compared to same period last year. 

During first half 2023 we completed Arctic Blue Beverages’ new distribution and logistics set-up and it is now fully functional in Finland and Nordic travel retail. These are very important markets for Arctic Blue Beverages, and therefore we have been carefully building up the new set-up that will streamline and enhance the sales and distribution operations in these areas. In Finland, we now have two very experienced and focused distributors, Norex Selected Brands Oy and Oy Sinebrychoff Ab. In Nordic travel retail, Norex Selected Brands Oy acts as Arctic Blue Beverages’ products sales agent. This new arrangement enables us to concentrate many channels into two experienced sales organizations, and thus ensure a consistent brand image and competitive product portfolio in all our important channels. We also have a new logistics service provider Skanlog Oy, an independent 3rd party logistics specialist. Through this partnership, we aim to improve the efficiency of the Company’s travel retail and export logistics operations. 

We announced the sale of Arctic Blue Beverages Oy’s subsidiary Valamo Beverages Oy, as a part of its strategic decision to streamline our operations and optimise our product portfolio. Valamo Beverages Oy was sold to a group of Finnish investors. The sale of Valamo Beverages Oy is beneficial for Arctic Blue Beverages, to in the future being able to more efficiently focus all resources around one product line both on the home market Finland and abroad.

Challenging economic times and consumers switching to cheaper products is not making it easy for a premium craft beverage Company like Arctic Blue Beverages. However, we have shown that by releasing new innovative products like Arctic Blue Laku, focusing to our core markets and products, and being active in the HoReCa field, we can fight against the declining sales trend in the market. In Finland and in Travel Retail we are in the very beginning with our newest distribution partners, and I believe that we will see improved results once our collaborations progress. Export market has been in decline, and we need to carefully analyze the market and tighten the focus during rest of the year. Although we are a small player in global alcohol market, we have a portfolio of winning products that consumers love. So despite the decline in the premium alcohol sector, I believe we will are in good position to increase our market share and reach during second half of 2023”, says Valtteri Eroma, CEO of Arctic Blue Beverages