Anora’s Financial Statement Bulletin January–December 2022: Exceptionally high input costs decreased profitability – net sales for 2022 grew 5.7%

Anora Group Plc Stock Exchange Release 28 February 2023 at 8:30 am EET

Anora’s Financial Statement Bulletin January–December 2022: Exceptionally high input costs decreased profitability – net sales for 2022 grew 5.7%

This release is a summary of Anora Group Plc's Financial Statement Bulletin January–December 2022. The complete report is attached to this release and is also available on the company website at: www.anora.com/en/investors

Q4 2022 in brief

• Net sales were EUR 221.6 million; 7.8% growth compared to the Q4 21 net sales of EUR 205.6 million. Q4 2022 net sales excluding Globus Wine was EUR 200.0 million.

• Comparable EBITDA was EUR 20.9 million, or 9.4% of net sales (Q4 2021: EUR 31.4 million, or 15.3%). Comparable EBITDA was negatively affected by an exceptional EUR 3.2 million correction of Globus Wine inventory values.

• Net cash flow from operating activities was EUR 36.1 (57.6) million.

• Earnings per share EUR 0.05 (0.25).

January–December 2022 in brief

• Net sales were EUR 702.7 million; 5.7% growth compared to the 2021 pro forma net sales of EUR 665.0 million. Full year 2022 net sales excluding Globus Wine were EUR 658.5 million.

• Comparable EBITDA was EUR 76.1 million, or 10.8% of net sales (2021 pro forma EBITDA: EUR 101.0 million or 15.2% of net sales).

• Net cash flow from operating activities was EUR -0.4 (50.8) million.

• Earnings per share EUR 0.26 (0.67).

• Net debt/comparable EBITDA (rolling 12 months) was 4.0 (1.8).

• Globus Wine was consolidated on 1 July 2022.

Dividend proposal The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.22 per share be paid for the financial year 2022. The dividend is proposed to be paid in two installments.

Guidance

In 2023, Anora’s comparable EBITDA is expected to be between EUR 80-90 million.

Key figures

Pro forma figures 2021: net sales EUR 665.0 million; comparable EBITDA EUR 101.0 million or 15.2% of net sales; EPS EUR 0.63. If calculated using pro forma figures, net debt / comparable EBITDA would have been 1.2 for Q4 21 and for 2021.

CEO Pekka Tennilä:

"The profitability in Q4 or full year 2022 didn’t meet our expectations. The comparable EBITDA in Q4 was EUR 21 million or 9.4% of net sales. Our full year comparable EBITDA was at EUR 76 million, or 10.8% of net sales.

The decline in profitability was related to the normalisation after Covid-19, as wine and spirits volumes in the monopolies declined significantly. The development of currency exchange rates during 2022 was very unfavourable to us. Our gross margin was lower due to record high input costs including barley price, and with significantly higher sales and marketing costs. In addition, an exceptional EUR 3.2 million inventory correction on the stock value differences in Globus Wine, recognized in Q4, impacted negatively on the results.

We have implemented price increases across all of our businesses and markets throughout the year but due to a time lag, they only partially compensated for the cost increases.

Our net sales in Q4 increased by 7.8% and amounted to EUR 222 million. The main contributor to this growth was the acquisition of Globus Wine. We continued to gain market share in spirits in declining monopoly markets during Q4. In wine, our market shares grew as well in the Nordic region while the total market declined.

For the full year 2022, our sales increased by 5.7%, amounting to EUR 703 million. The acquisition of Globus Wine together with growth of Industrial segment, and spirits sales growth in international markets, duty-free travel retail and exports, contributed positively to sales growth. The market decline in monopoly channels drove our sales down in Sweden, Norway and Finland.

At the end of the year, our net debt was EUR 301 million while at the end of 2021 it was EUR 126 million. The main driver for the increase in net debt was the debt-financed acquisition of Globus Wine. In addition, high inventory levels increased our working capital. This is something we will work to reduce in 2023.

In 2022, for wine and spirits we saw markets returning to normal after Covid-19 through the year. Volumes in the monopolies declined, as restrictions were lifted in all markets. Consumption has shifted back to on-trade, travel retail and border trade. However, the war in Ukraine, and the after effects of Covid, caused disruptions in the global supply chain and resulted in significant product cost increases and out-of-stock situations.

In November we announced our ambitious long-term financial targets and growth strategy with a sustainability roadmap. Our vision is to be the leading Nordic wine and spirits group delivering growth through sustainability. We aim at above-market growth in our home markets and a substantial increase in the share of our international business. Beyond the Nordics, our growth will focus on chosen hero brands and be supported by mergers and acquisitions.

In sustainability, new ambitious targets were set in our Sustainability Roadmap, and in Q4 we joined the United Nations Global Compact. We are committed to being carbon neutral in our own operations by 2030. Another important sustainability topic is our target of zero accidents at work. In 2022 no injuries were reported at the Gjelleråsen plant and the Koskenkorva Distillery was granted the year award in Starch Europe’s safety program for a second consecutive.

2022 was an exceptional year for us in Anora. It was not only the first full year of Anora after the merger of Altia and Arcus, but by acquiring Denmark’s leading wine company Globus Wine, we further strengthened our position as the leading wine and spirits brand house in the Nordic region. I want to thank all our employees for their hard work and dedication on this challenging year!

In 2023 economic growth is expected to remain slow especially during the first half of the year. The wine and spirits market in the Nordics is historically less impacted by the difficult economic climate, and Anora is well positioned for consumer downtrading or moving their consumption from the ontrade to the off-trade channels.

In 2023 our main focus will be on improving our profitability. The main tools for this are cost savings, improving efficiency, and the price increases. In addition, we will work on reducing working capital, primarily by optimizing inventory levels.“

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 80-90 million.

Anora’s financial reporting and Annual General Meeting in 2023

Anora will publish financial reports in 2023 as follows:

• 11 May 2023: Interim Report for January-March 2023

• 25 August 2023: Half-Year Report for January-June 2023

• 9 November 2023: Interim Report for January-September 2023

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

The Annual Report 2022 including the financial statements, Board of Directors' report, the Corporate Governance statement and the remuneration report will be published in English and Finnish as a PDF file on Anora’s website by the end of week 12. The Annual Report includes also the Sustainability Report.

Anora Group Plc’s Annual General Meeting (AGM) 2023 is planned to be held on Wednesday 19 April 2023 in Helsinki. The Board of Directors will summon the AGM later.

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 EET. 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

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: 677 456 92#

Q&A

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

Presentation material

The presentation material will be shared in the online meeting and it can be downloaded at: www.anora.com/en/investors

On-demand recording

A recording of the presentation will be available on Anora’s website.

Distribution:

Nasdaq Helsinki Ltd

Principal media

www.anora.com