From the CEO
From the CEO

CEO Jacek Pastuszka comments on Anora's Q3 2023 results

Jacek Pastuszka - CEOs comments
Jacek Pastuszka - CEOs comments

"In my short time as the new CEO of Anora, I have already had the opportunity to start onboarding by meeting many new colleagues. I can only say that I am impressed by their expertise and passion to serve our customers. I am convinced that this continued customer focus combined with enhanced efficiency will enable us to deliver on our targets and strategy, which were launched at last year’s Capital Markets Day.

Towards the end of Q3, we carried out major price adjustments in the monopoly pricing window. We started to see the first results from the initiated price increases and also previously announced cost cuts. However, we still experienced a negative impact on sales and profitability due to lost partners in Wine and weaker currencies. The estimated impact of weaker currencies, particularly in the Wine segment, was about EUR 3.4 million in Q3 and EUR 9.5 million during the first nine months.

Comparable EBITDA for the quarter was EUR 20.2 million, compared to EUR 23.4 million in the previous year. For January–September, comparable EBITDA decreased from EUR 55.3 million to EUR 41.1 million. While our comparable EBITDA declined, the reported EBITDA improved to EUR 28.9 million in Q3 due to the one-off capital gain from the Larsen divestment.

Price increases late in the quarter and recent movements in currencies have given some tailwind lately. 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 has already been seen, approximately two thirds of the savings were achieved by the end of Q3. The barley and fuel prices were also below the previous year.

Net sales in Q3 declined by 4.9% to EUR 173 million. Anora's own wine and International Spirits had a good growth in sales, while partner wines in Sweden saw the steepest decline. For the first nine months, net sales were EUR 515.3 million, showing a growth of 7.1%. Globus Wine is reported as part of Anora’s Wine segment as of 1 July 2022.

In the Wine segment, Anora’s own wines continued to perform well, growing by 11.5% in local currencies in Q3 and continued to gain market share. The partner business struggled, both declining in net sales and losing market share. 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 previous partner losses in Sweden in particular. The share of Anora’s own wine products has increased significantly since the acquisition of Globus Wine. Globus Wine continued to gain market shares in the retail customer segment in Denmark. Cooperation with Globus Wine has also been beneficial in preparation for the potential legislative changes in the Finnish wine market allowing grocery outlets to sell wine allowed by the legislation.

In the Spirits segment, net sales were flat due to the weak currency exchange rates of the NOK and SEK and a volume decline in the Monopoly markets. In local currencies, net sales improved from the previous year by 3.9%. The relative share of international sales increased to 35.1% (34.9%). Koskenkorva sales continued growing but slower than in the very strong first half. The brand represented approximately 15% of our total spirit sales. The market shares increased in Sweden and Norway and declined slightly in Finland.

The Industrial segment sales decreased driven by lower volume and prices in the Industrial products business, mainly caused by lower starch and feed sales. The weak outlook for starch in the pulp and paper industry led to lower grain consumption at the Koskenkorva distillery.

Looking ahead to the rest of this year, our full-year guidance remains valid. We remain highly focused on executing our strategy and improving our profitability and efficiency. This includes the savings programme, price adjustments, and a focus on reducing net working capital and improving inventory turnover."