Communications and Sustainability Director
+358 40 767 0867
Altia Plc Stock Exchange Release 8 May at 8:30 am EET
Altia Plc Business Review January-March 2019: Stable net sales development, timing of Easter and high raw material costs impacted profitability
This release is a summary of Altia Plc's Business Review January-March 2019. The complete report is attached to this release and is also available on the company website at www.altiagroup.com/investors.
January–March 2019 compared to January–March 2018
Reported net sales were EUR 73.8 (73.5) million
In constant currencies, net sales grew by 1.3% in comparison to previous year
Net sales of Finland & Exports segment declined to EUR 25.0 (27.1) million
Scandinavia segment’s net sales were EUR 21.7 (22.5) million; in constant currencies net sales were at last year’s level
Altia Industrial’s net sales grew by 13.1% to EUR 27.1 (24.0) million
Comparable EBITDA was EUR 4.3 (5.2) million, 5.8% (7.0%) of net sales
Comparable EBITDA without the impact from IFRS 16 standard was EUR 3.2 million, 4.4% of net sales
EBITDA was EUR 4.3 (1.1) million, 5.8% (1.5%) of net sales
Net debt / comparable EBITDA (rolling 12 months) was 2.2 (1.8)
In January-April, the Group net sales were above last year’s level, beverage sales were on last year’s level
Guidance remains unchanged
|Net sales, EUR million||73.8||73.5||357.3|
|Comparable EBITDA, EUR million||4.3||5.2||40.0|
|% of net sales||5.8||7.0||11.2|
|EBITDA, EUR million||4.3||1.1||34.0|
|Comparable operating result, EUR million||-0.3||1.6||25.6|
|% of net sales||-0.4||2.2||7.2|
|Operating result, EUR million||-0.3||-2.5||19.7|
|Result for the period, EUR million||0.3||-1.8||15.1|
|Earnings per share, EUR||0.01||-0.05||0.42|
|Net debt / comparable EBITDA, rolling 12 months||2.2||1.8||1.2|
|Average number of personnel||698||705||718|
|Comparable EBITDA without IFRS 16 impact, EUR million||3.2|
|Net debt/comparable EBITDA, rolling 12 months without IFRS 16 impact||2.0|
Reconciliation of alternative key ratios to IFRS figures is presented in the Business Review on page 11.
CEO Pekka Tennilä:
“The late timing of Easter this year has a significant impact on Altia’s net sales in the first quarter. During Easter, traditionally the consumption of both spirits and wine is higher. When taking into account the April sales and looking at the first four months of the year, the Group net sales have developed well and are above last year’s level, and also beverage sales have reached last year’s level.
Our profitability was impacted by high raw material costs during the first quarter, as already stated in our guidance for the on-going year. Furthermore, the timing of Easter impacted profitability.
In the first quarter, Altia’s reported net sales increased by 0.4% to EUR 73.8 (73.5) million. When the impact of the weak SEK is excluded, net sales growth was 1.3% compared to the same period last year. Comparable EBITDA declined to EUR 4.3 (5.2) million, which is 5.8% (7.0%) of net sales. Without the impact of the IFRS 16 Leasing standard, comparable EBITDA was EUR 3.2 million, 4.4% of net sales.
During the first quarter, we have carried out price increases in all categories in the three monopolies as planned. Price increases were implemented in January in Finland and Norway, and in March in Sweden. Therefore, the full impact of price increases is not visible in the first quarter. As part of our ongoing revenue management, we will closely monitor the market and use the upcoming pricing windows of the monopolies accordingly.
In April, after the review period, we announced a new partnership with Conaxess Trade Beverages in Denmark. Through this partnership, we are looking for a stronger route to market locally and to strengthen our presence especially in the on-trade channel. The partnership will also allow us to support the growth of our iconic Nordic brands, Koskenkorva Vodka and O.P. Anderson Aquavit, and the locally strong brands Brøndums aquavit and 1-Enkelt bitter.
Looking forward, we maintain our guidance for this year and, assuming a normal harvest, we expect comparable EBITDA, excluding IFRS 16 impact, to improve from the 2018 level. High raw material costs are expected to continue to impact profitability until the new harvest.
In February, we communicated about the further measures in reaching our long-term financial targets. The work is progressing and we are focusing strongly on implementing these measures within sales growth, revenue management, supply chain efficiencies, procurement savings and overall organisational efficiency.”
Outlook for 2019
The development of the Group’s business operations and profitability are affected by the competitive environment, the overall economic outlook, imports by consumers and changes in alcohol taxation. Uncertainty related to changes in consumer buying behaviour and consumer demand continues.
There are substantial seasonal fluctuations in the consumption of alcoholic beverages impacting the net sales and cash flow of Altia. The company typically generates large amounts of its revenue and cash flow during the fourth quarter of the year, whereas the first quarter of the year is significantly lower. In addition, excise taxes related to the high season at the end of the year are paid in January, resulting in large cash outflows at the beginning of the year.
Guidance as published on 7 February 2019 remains unchanged: The comparable EBITDA is expected to improve from the 2018 level.
The positive trend of Altia’s Nordic core brand portfolio is expected to continue. Market development in Finland is expected to flatten out in comparison to 2018 and the markets in Sweden and Norway are expected to grow. The negative impact of the increased barley cost will be reflected in high raw material costs especially in the first quarters of the year. The guidance assumes a normal harvest in 2019.
In addition, the impact from the implementation of the new IFRS 16 standard is expected to improve comparable EBITDA by 3-4 million.
Financial calendar for 2019
Altia will publish financial reports in 2019 as follows:
15 August 2019: Half-Year Report for January-June 2019
7 November 2019: Business Review for January-September 2019
Altia’s Annual General Meeting will be held on 15 May 2019 in Helsinki and the last day to give notice of attendance is 10 May 2019. AGM related material and instructions to give notice of attendance are available on www.altiagroup.com/agm2019.
Pekka Tennilä, CEO
Niklas Nylander, CFO
Analysts and investors: Tua Stenius-Örnhjelm, Investor Relations, tel. +358 40 7488864
Media: Petra Gräsbeck, Corporate Communications, tel. +358 40 767 0867
Conference call and audio webcast:
Altia will host a conference call and audio webcast for analysts and investors in English today at 11 am EET. CEO Pekka Tennilä and CFO Niklas Nylander will present the Q1 Business. To join the conference call, please dial in and register 5–10 minutes earlier on the following numbers:
Finland: +358 981 710 310
Sweden: +46 856 642 651
United Kingdom: +44 333 300 08 04
United States: +1 631 913 14 22
The conference call can also be followed online. To access the audio webcast and the presentation material please go to: www.altiagroup.com/investors
A recording of the audio webcast will be available later the same day on Altia’s website.
Nasdaq Helsinki Ltd