Altia is planning an initial public offering and listing on the Official List of Nasdaq Helsinki
Press release 23 February 2018 at 8:00 am
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Leading Nordic alcoholic beverage brand company Altia Plc (“Altia” or “the Company”) is planning to list its shares on the official list of Nasdaq Helsinki Ltd (“Nasdaq Helsinki”) (“Listing”).
Altia operates in the Nordic countries, Estonia and Latvia, and it has production in Cognac, France. The Company produces, imports, markets, sells and distributes both own and partner brand beverages and exports alcoholic beverages to approximately 30 countries. The Company is the market leader in the overall Nordic spirits and wine markets measured in volume. Altia’s own core brands are Koskenkorva, Chill Out, Blossa, Larsen, O.P. Anderson, Renault, Xanté and Valhalla.
Altia wants to advocate the development of a new, modern and responsible Nordic drinking culture. Continuous improvement and innovation are strongly present in the Company’s operations, and the Company’s systematic product development process has enabled the launch of numerous new products to the market. Finnish barley and local production are at the core of Altia’s business. The Company has created an operating model that is based on circular economy, for example at the Company’s Koskenkorva plant one-hundred per cent of the grain it utilises as a raw material is used by means of by-products and the Company’s own bioenergy plant.
In 2017, Altia’s net sales were EUR 359 million, EBITDA margin was 11.2 per cent and comparable EBITDA margin was 11.8 per cent. Operating margin was 7.3 per cent and comparable operating margin 7.8 per cent. The Company had 703 employees at the end of 2017.
The contemplated Listing is expected to consist of a share sale by the State of Finland, Altia’s sole shareholder, as well as an employee offering to the Company’s employees, in which the Company would issue new shares. The objective of the contemplated Listing is to enhance Altia’s possibilities to run its business, increase the transparency and recognition of the Company’s operations, and to provide the general public with an opportunity to invest in the Company.
CEO Pekka Tennilä:
“Altia is a brand house and a leading Nordic alcoholic beverage company in the wine and spirits markets. We have a stable market position in our core markets. We have developed our business operations systematically and in line with our strategy, and have turned the Company towards profitable growth. It is important for us to develop our Nordic quality brands and bring new, interesting product innovations to the market. If completed, the contemplated Listing would enable strategic flexibility. Moreover, it would mean more transparency and opportunities to develop the drinking culture in a responsible manner.”
Chairman of the Board Sanna Suvanto-Harsaae:
“Altia’s management has executed the Company’s strategy very successfully. The Company has been able to strengthen its market position in an extremely competitive industry and has improved its operational efficiency significantly. Even as a market leader the Company has succeeded in maintaining agility, flexibility and quality in its operations, and in launching consumer-friendly innovations to the market. We are very proud of Altia’s recent development. We believe the contemplated Listing would enable the Company’s competitiveness to improve even further.”
Minister of Economic Affairs and responsible for the State's ownership steering, Mika Lintilä:
“After a few decades, the State of Finland as an owner is once again able to offer a development track through a listing. The decision to further enable Altia’s growth and development represents actions of a responsible, contemporary owner. The entire Finnish general public has an opportunity to own a piece of a growth story based on domestic raw materials. I have full confidence in the Company’s management, strong financials and corporate governance in executing the Listing and operating as a public company.”
Altia in brief
Altia is a leading Nordic alcoholic beverage company in the wine and spirits markets. The Company’s product portfolio consists of iconic, beverage industry classics and new innovations. Altia’s Nordic core brands are Koskenkorva, Chill Out, Blossa, Larsen, O.P. Anderson, Renault, Xanté and Valhalla. The Company’s local heritage brands include Leijona and Jaloviina in Finland, Explorer and Grönstedts in Sweden, Brøndums and 1-Enkelt in Denmark and Saaremaa in Estonia. Key partner brands include, among others, Bollinger, Finlandia Vodka, Jack Daniel's, Codorníu, Pasqua, Nederburg, Tarapacá, Lindeman’s and Penfolds. Altia’s sales are balanced between wine and spirits product categories as well as the Company’s own and partner brands. The Company has the leading market position in wines and spirits in Finland and in spirits in Sweden, and it is also present in all its other core markets in the Nordics and Baltics.
Altia Group comprises three segments: Finland & Exports, Scandinavia and Altia Industrial. Finland & Exports and Scandinavia segments comprise importing, sale and marketing of wine, spirits and other beverage product categories. The Finland & Exports segment operates in Finland, the Baltics and travel retail channels and conducts exports. The segment’s net sales in 2017 were EUR 134 million and comparable EBITDA margin was 14.6 per cent. The Scandinavia segment operates in Sweden, Norway and Denmark, and the segment’s net sales in 2017 were EUR 124 million and comparable EBITDA margin was 9.3 per cent. The Altia Industrial segment comprises the Company’s production of ethanol, starch and feed component, logistics, procurement and manufacturing operations as well as contract services. The segment’s net sales in 2017 were EUR 101 million and comparable EBITDA margin was 12.3 per cent. As a result of extensive streamlining, the Company has been able to create an integrated and efficient operating model.
Altia’s head office is located in Helsinki, Finland. The Company has a distillery in Koskenkorva village in Finland, an aquavit distillery in Sundsvall, Sweden, alcohol beverage and technical ethanol plants in Rajamäki village in Finland and alcohol beverage plant in Tabasalu municipality in Estonia, as well as warehouse operations and offices in the Company’s home markets. Altia also has a cognac house with production, storage and cognac aging cellars in Cognac, France.
The Company’s most significant customers and business partners are the Nordic state alcohol retail monopolies in Finland, Sweden and Norway (Alko, Systembolaget and Vinmonopolet), international alcoholic beverage companies, alcoholic beverage wholesalers, restaurants, travel retailers such as shipping and airline companies, grocery stores, and importers operating in export markets as well as industrial customers in Finland and Sweden.
The Company has identified the following key strengths that the management believes to provide it with competitive advantage.
Nordic market leader with iconic alcohol brands and a large wine portfolio
Experience and scale that provide unique capacity to operate on the stable and profitable Nordic market
Clear strategy that builds profitable growth
Integrated operating model that creates economies of scale and synergies, and enables more sustainable production
Experienced management team delivering on strategy effectively
Strong profitability and stable cash flow, and an attractive dividend policy
The purpose of the Company’s strategy and operations is developing a new, modern and responsible Nordic drinking culture, which the Company summarises in its purpose – “Let’s Drink Better”. The Company’s vision is to be an alcoholic beverage brand company that seeks growth through a strong understanding of consumer preferences and market development. The Company targets to be the key partner for the state retail monopolies and to create positive value development in all markets.
Altia has an experienced management team executing its strategy which is focused on creating sustainable profitable growth. The growth strategy is based on growing the Nordic core brands, strengthening the strategic partnerships, channel expansion, executing a step change in wines, improving efficiency of the operations and active brand portfolio management. The Company’s innovation capabilities play a key role in growth. Altia pursues long-term improvement of the profitability through a continuous renewal of the Company’s selection of products and ways of working.
Altia’s financial targets
The Company’s Board of Directors has adopted the following financial targets:
Profitable growth: Comparable EBITDA margin target to reach 15 per cent in the long-term
Annual net sales growth of 2 per cent over time (CAGR)
Dividend policy: Dividend pay-out ratio of 60 per cent or above of the result for the period
The Company aims to pursue active dividend policy, and result of the period not considered necessary to grow and develop the Company will be distributed to the shareholders
Capital structure: the Company’s target is to keep reported net debt in relation to comparable EBITDA below 2.5x in the long-term
The capital structure should enable flexibility and allow the Company to capture strategic opportunities while maintaining a solid financial position
Altia’s financial performance and key figures
|1 January to 31 December or as at 31 December|
|In EUR million, unless otherwise indicated||(unaudited, unless otherwise indicated)|
|Operating margin, %||7.3||13.0||6.6|
|EBITDA margin, %||11.2||17.0||10.4|
|Comparable operating result||28.2||26.4||23.6|
|Comparable operating margin, %||7.8||7.4||6.2|
|Comparable EBITDA margin, %||11.8||11.5||10.0|
|Items affecting comparability||(2.1)||19.9||1.7|
|Equity ratio, %||34.3||44.2||36.7|
|Net debt / Comparable EBITDA||1.1||0.1||0.5|
|Free cash flow||37.1||30.6||30.6|
|Cash conversion, %||87.6||74.8||80.4|
|Gross capex / Net sales, %||3.3||2.4||3.0|
|Earnings per share, basic, EUR1)||0.51||1.00||0.50|
|Number of employees at the end of the period||703||797||842|
1) Audited / The information has been drawn from the Company’s audited consolidated financial statements
Information on the contemplated Listing
The contemplated Listing is expected to consist of a share sale by the State of Finland, Altia’s sole shareholder. The Company and the current shareholder would be subject to customary lock-up arrangements in connection with the Listing. The State of Finland would remain a significant shareholder after the Listing. In addition, the Company is planning an employee offering in connection with the contemplated Listing, in which the Company would offer new shares to its employees.
The objective of the contemplated Listing is to improve the Company’s ability to successfully pursue its strategy and increase the transparency and recognition of Altia’s operations. From the perspective of the Company’s business partners, the contemplated Listing would bring more neutrality with regard to the Company considering its operations in the international environment. Altia’s operations have been run in an autonomous way and it has been operating in an internationally competitive environment for years, so the Listing is considered a logical next step. The contemplated Listing would also serve to broaden the ownership base in the Company, provide the general public with an opportunity to invest in the Company, provide the Company access to capital markets, as well as increase the general interest towards the Company and awareness of the Company with investors, business partners and customers.
Nordea Bank AB (publ) Finnish Branch is acting as the financial adviser to the Company and would be the global Coordinator and Bookrunner in the contemplated Listing (“Nordea” or “Global Coordinator”). Carnegie Investment Bank AB (publ) (“Carnegie”) would act as a Joint Bookrunner in the contemplated Listing and OP Corporate Bank plc (“OP”) would act as a Co-Lead Manager in the contemplated Listing (together with the Global Coordinator, “Managers”). Hannes Snellman Attorneys Ltd is acting as the Legal Adviser to the Company. Roschier Attorneys Ltd is acting as the Legal Adviser to the Managers. Borenius Attorneys Ltd is acting as the Legal Advisor to the State of Finland.
Altia and the State of Finland will host a joint press conference today, 23 February 2018, at 11:00 am, at the Helsinki Stock Exchange (Fabianinkatu 14, Helsinki).
Pekka Tennilä, CEO of Altia Sanna Suvanto-Harsaae, Chairman of the Board of Directors of Altia
For interview and other information requests please contact Corporate Communications:
Director, Corporate Relations and Communications Petra Gräsbeck, tel. +358 40 767 0867 Communications Manager Niina Ala-Luopa, tel. +358 400 728 957
It may be unlawful to distribute this announcement in certain jurisdictions. This announcement is not for distribution in Australia, Canada, the Hong Kong special administrative region of the People’s Republic of China, Japan, South Africa, the United States or to any other jurisdiction where such distribution would be unlawful. The information in this announcement does not constitute an offer of securities for sale in such jurisdictions.
This announcement does not constitute an offer for sale of, or a solicitation of an offer to purchase or subscribe for, any securities in the United States. Securities may not be offered or sold in the United States unless they are registered or are exempt from registration under the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder. Altia Plc (the “Company”) does not intend to register any portion of this offering in the United States or to conduct a public offering in the United States. Copies of this announcement are not being, and should not be, distributed in or sent into the United States.
The issue and/or sale of securities in connection with the Listing are subject to specific legal or regulatory restrictions in certain jurisdictions. The Company, Nordea Bank AB (publ) Finnish Branch (“Nordea”), Carnegie Investment Bank AB (publ) (“Carnegie”) and OP Corporate Bank plc (“OP”) assume no responsibility in the event there is a violation by any person of such restrictions.
Nordea, Carnegie and OP are acting exclusively for the Company and for no-one else in connection with any transaction mentioned in this announcement and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to any such transaction and will not be responsible to any other person for providing the protections afforded to their clients, or for advising any such person on the contents of this announcement or in connection with any transaction referred to in this announcement. The contents of this announcement have not been verified by Nordea, Carnegie or OP and neither Nordea, Carnegie nor OP accept liability for this information included in this announcement.
In the United Kingdom, this announcement is for distribution only to and is directed only at persons who (i) have professional experience in matters relating to investments which fall within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Financial Promotion Order”), (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc”) of the Financial Promotion Order, or (iii) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). This announcement is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this announcement relates is available only to relevant persons and will be engaged in only with relevant persons.
This announcement has been prepared on the basis that any offer of securities in any Member State of the European Economic Area, other than Finland, which has implemented the Prospectus Directive (2003/71/EC, as amended, including by Directive 2010/73/EU, the “Prospectus Directive”) (each, a “Relevant Member State”) will be made pursuant to an exemption under the Prospectus Directive, as implemented in that Relevant Member State, from the requirement to publish a prospectus for offers of securities. Accordingly any person making or intending to make any offer in that Relevant Member State of securities which are the subject of the offering contemplated in this announcement, may only do so in circumstances in which no obligation arises for the Company or any of the joint global coordinators to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive, in each case, in relation to such offer. Neither the Company nor any of the Managers have authorised, nor do they authorise, the making of any offer of the securities through any financial intermediary, other than offers made by the Managers which constitute the final placement of the securities contemplated in this announcement. Neither the Company nor any of the Managers have authorised, nor do they authorise, the making of any offer of securities in circumstances in which an obligation arises for the Company or any Managers to publish or supplement a prospectus for such offer.
The information contained in this announcement is for informational purposes only and does not purport to be full or completed. No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any shares or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor. The information in this announcement is subject to change. Investors must neither accept any offer for, nor acquire, any securities to which this document refers, unless they do so on the basis of the information contained in the applicable prospectus published or offering circular distributed by the Company.
This announcement includes forward-looking statements, which include statements regarding the Company’s business strategy, financial condition, profitability, results of operations and market data, as well as other statements that are not historical facts. Words such as “believe,” “anticipate,” “plan,” “expect,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “should,” “aim,” “continue,” “could,” “guidance,” “may,” “potential,” “will,” as well as similar expressions and the negative of such expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying these statements. By their nature, forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements. Except for any ongoing obligation to disclose material information as required by the applicable law, the Company does not have any intention or obligation to publicly update or revise any forward-looking statements after it distributes this announcement, whether to reflect any future events or circumstances or otherwise.