CEO Pekka Tenniläs comments on Anora's Q2 22 results
I am pleased with our good net sales development in the second quarter. Anora’s net sales grew by 3.4% to EUR 166 million compared with the pro forma net sales of EUR 160 million in Q2 last year. The comparable EBITDA development was more challenging due to increased input costs and weaker performance in our Wine segment. Comparable EBITDA declined by 20.0% to EUR 18.9 million.
During Q2, we saw market normalisation continue with a strong recovery of the on-trade and travel retail channels while the market volumes in the monopolies returned to pre-pandemic levels. The timing of Easter sales in Q2 this year provided a positive phasing impact on the sales of wine and spirits.
The strong net sales growth in the Spirits segment was driven by travel retail and on-trade. Also Koskenkorva brand showed strong performance both in the monopoly and international markets. Net sales for our Wine segment declined largely following the declining market and partner portfolio changes. In the Industrial segment, net sales grew because of higher sales prices in both contract manufacturing and industrial products.
The decrease in profitability was driven mainly by the Wine segment, where profitability dropped due to both lower sales and lower margins. The sales decrease was driven by significantly lower overall market volumes, as Covid-effects dissipated, and by a decline in Anora’s market share. Margins declined mainly due to higher input costs, which we have not yet been able fully mitigate through the price increases we have already implemented. Going forward, efficient revenue management will remain important for us.
Our important focus area is to turnaround the development in our wine business – we are working hard with redesigning and relaunching our own brands, to win more tenders and replace lost partners. We have already taken important steps in the right direction and I am convinced that we have the right strategy to turn the wine business on a growth path again.
A significant event in Q2 was the announcement of the acquisition of Globus Wine, the leading wine company in Denmark. Globus Wine is a growing company with a successful own wine brands business and strong capabilities in brand-building and wine sourcing. This acquisition further strengthens our position as the leading Nordic wine and spirits group, and I am very excited about the opportunitiesthis brings to further expand our wine business in the Nordics and start regaining market shares.
After Q2, we announced an investment in ISH, the award-winning Danish scale-up company in non-alcoholic beverages. ISH has done groundbreaking innovation work and has an impressive track record. Non- and low-alcoholic beverages is an strategically interesting and growing category.
Our post-merger integration work has progressed as planned and on schedule. During the second quarter, we continued to work on the logistics integration and completed the first wave of product transfers to Anora’s inhouse logistics center in Sweden. The run rate of annualised net synergies at the end of Q2 22 was EUR 3.0 million, including the annual impact of EUR 4.6 million from the divestment of brands.
Looking at the rest of the year, we reiterate our guidance and expect the comparable EBITDA in 2022 to be between EUR 75-85 million. The outlook for the barley crop is good with the estimated volume better than last year and we expect the cost of barley to decrease from current record-high levels. The operating environment remains unstable, and while it is difficult to foresee all impacts on our business, I believe that our strengths are our stable and resilient business, our extensive brand portfolio covering all segments and our committed and skilled employees. I would like to extend my sincerest thanks to everyone at Anora for their continued hard work during this quarter.