Anora Group Plc   Stock Exchange Release  25 August 2023 at 8:30 am EEST

Anora's Half-year Report January-June 2023: Growth in sales through Globus Wine, decline in profitability due to currency impact and increased input costs

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

• Net sales were EUR 182.7 (165.7) million, growth 10.2%. Net sales without Globus Wine were EUR 158.5 million.
• Comparable EBITDA was EUR 13.0 (18.9) million, or 7.1% (11.4%) of net sales.
• Net cash flow from operating activities was EUR 45.3 (-5.1) million.  
• Earnings per share EUR -0.06 (0.06).

• Net sales were EUR 342.2 (299.2) million, growth 14.4%. Net sales without Globus Wine were EUR 295.0 million.
• Comparable EBITDA was EUR 20.9 (31.9) million, or 6.1% (10.7%) of net sales.
• Net cash flow from operating activities was EUR 49.0 (-43.7) million.
• Earnings per share EUR -0.14 (0.09).
• Net debt/comparable EBITDA (rolling 12 months) was 3.9 (2.4).

Guidance

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

Key figures

Q2 23 Q2 22 H1 23 H1 22 2022
Net sales, EUR million 182.7 165.7 342.2 299.2 702.7
Comparable EBITDA, EUR 13.0 18.9 20.9 31.9 76.1
million
   % of net sales 7.1 11.4 6.1 10.7 10.8
EBITDA, EUR million 9.8 15.3 16.7 27.2 67.9
Comparable operating 4.8 11.1 4.1 16.3 42.9
result, EUR million
   % of net sales 2.6 6.7 1.2 5.5 6.1
Operating result, EUR 1.6 7.5 -0.1 11.7 34.7
million
Result for the period, EUR -4.2 4.4 -9.7 6.5 18.1
million
Earnings per share, EUR -0.06 0.06 -0.14 0.09 0.26
Net cash flow from 45.3 -5.1 49.0 -43.7 -0.4
operating activities, EUR
million
Net debt / comparable 3.9 2.4 3.9 2.4 4.0
EBITDA (rolling 12 months)
Personnel end of period 1 300 1 117 1 300 1 117 1 251

CEO Pekka Tennilä:

"In Q2, we experienced a significant negative impact on sales and profitability due to unfavourable currency exchange rates. The gross impact of exchange rate changes on profitability is estimated to have been almost EUR 5 million during Q2 and EUR 9 million in January-June.

EBITDA for the quarter was EUR 13 million, compared to EUR 19 million in the previous year. For H1, comparable EBITDA decreased from EUR 32 million to EUR 21 million.

The majority of the decline in EBITDA is attributed to negative currency exchange rates, particularly in the Wine segment. Additionally, our cost of goods. e.g. costs of energy, barley and glassbottles, were significantly higher than last year, and the product mix was negative. The profitability improvement plan for Globus Wine is progressing, but at a slower pace than planned, and there has still not been a positive impact on the bottom line. 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 was already seen in Q2, with operating expenses excluding Globus Wine decreasing by EUR 2.4 million. We plan to continue with price adjustments in the next monopoly pricing window in the autumn. 

Mainly due to the lower forecasted profitability of Globus Wine and the weakening of the Swedish and Norwegian crowns, we lowered our guidance for comparable EBITDA. Instead of  EUR 80-90 million, we now estimate that our comparable EBITDA for 2023 will be EUR 70-78 million.

Net sales in Q2 grew by 10% to EUR 183 million due to the acquisition of Globus Wine. Organic growth in local currencies was 1.3% but when currency exchange is factored in, it decreased by 4.7%. The Industrial segment, international spirits, and Anora's own wine had a good growth in sales, while partner wines in Sweden saw the steepest decline. Monopoly markets overall continued to decline slightly, with wine down by 1%, and spirits down by 4%. For H1, net sales were EUR 342 million, showing a growth of 14%.

In the Wine segment, Anora's own wine continued to perform well. In local currencies net sales grew by 10% in Q2 and we gained market share. The share of Anora's own wine products has increased significantly since the acquisition of Globus Wine. However, 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 partner losses. Globus Wine in Denmark had a strong quarter in both sales and market share.

In the Spirits segment, our sales in monopolies declined in line with the overall market. However, in local currencies, monopoly sales stayed at last year's level, and international sales showed a clear increase. The Koskenkorva brand was the strongest performer, with double-digit sales growth. The brand represented 15% of our total spirit sales.

The Industrial segment had a solid quarter, with sales increasing due to higher sales in industrial services. Industrial products sales were flat. The weak outlook for starch in pulp and paper industry led to lower grain consumption in the Koskenkorva distillery.

In terms of sustainability, Anora conducted a human rights assessment and completed its human rights commitment. We also made progress in developing more sustainable bottles, with the share of recycled material in PET bottles gradually reaching 50% across the portfolio, surpassing the EU target.

Looking ahead for the rest of this year, we remain highly focused on executing our strategy and strengthening profitability. 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 between EUR 70-78 million.

The guidance was lowered on 15 August. Thre previous guidance was: For 2023 Anora's comparable EBITDA is expected to be EUR 80-90 million. The key reasons for lowering the guidance are that the forecasted profitability of Globus Wine for 2023 is significantly lower than originally expected, and that the weakening of Swedish Krona and Norwegian Krone have 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 in 2023

Anora will publish Interim Report for January-September 2023 on 9 November 2023.
Anora applies a silent period of 30 days before the publication of financial reports.

ANORA GROUP PLC

Further information:

Pekka Tennilä, CEO
Sigmund Toth, CFO

Contacts:

Petra Gräsbeck, Corporate Communications, tel. +358 40 767 0867

Results presentation:

CEO Pekka Tennilä and CFO Sigmund Toth will present the report today at 11:00 am EEST. The presentation will be held as a Microsoft Teams Meeting and we recommend that participants join the event using the online meeting option: Join meeting here (https://teams.microsoft.com/l/meetup-join/19%3ameeting_YzMxOTkxMWQtNTk3Yi00NzJlLWI0OWUtMzYwNTQ2NmI0YTVh%40thread.v2/0?context=%7b%22Tid%22%3a%22c32b30ff-5871-4a7d-a29e-6f63e6b0ebfd%22%2c%22Oid%22%3a%226b9525e9-7b01-4867-a828-0ea0596880d1%22%7d)

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
DK: + 45 32 725680
SE: +46 8 502 428 54
UK: +44 20 7660 8309
US: +1 917-781-4622

Conference ID: 930 138 196#

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 Ltd

Principal media

www.anora.com