From the CEO
From the CEO

CEO Pekka Tennilä's comments from Anora's Interim Report January–September 2021

We had a historical and exciting third quarter with the completion of the merger of Altia and Arcus on 1 September when Anora was formed. Anora is a leading wine and spirits brand house in the Nordics, and we are a global forerunner in sustainability in our industry. As one company, we have a stronger position to pursue growth opportunities both in and outside the Nordics and we are well positioned to create value for our stakeholders.

I am very pleased that Anora has been well received and the feedback among our customers and partners has been welcoming. It has been inspiring to meet our people across the organisation and to see their strong commitment and enthusiasm. An important milestone was to announce Anora’s future operating model in October when we also made the first leadership nominations. The work to structure our operations continues and we expect to be ready by the end of December. Despite the transformation, we have been able to perform at a high level and deliver strong results.

I want to extend my thanks to all employees for their great work, resilience, and achievements during this time of transition.

Integration has started well and is progressing according to plan and on schedule. We are committed to the previously announced annual EBITDA net synergy target of EUR 8-10 million and we continue to expect that 80% of the net synergies are to be realised within 2 years.

When looking at Altia and Arcus stand-alone development in Q3, we can see that both companies have performed very well. During Q3, Covid-19 restrictions have been lifted and we have seen the travel retail and on-trade channels recovering gradually. As a result, the volumes in the monopolies have declined from the previous year yet are still at a higher level than before the pandemic.

In the former Altia, net sales in Q3 improved, driven by the growth in spirits sales in Finland & Exports and Scandinavia segments, and supported by favourable currency exchange rates. In Altia Industrial, net sales declined slightly despite the good recovery of contract manufacturing volumes.

In the former Arcus, the comparison against Q3 20 is particularly tough due to the Covid-19 effect. The reported net sales growth in Q3 was supported by favourable currency exchange rates. Net sales in wine in the large Swedish and Norwegian markets were at last year’s level, while net sales in spirits were slightly below last year’s level.

Mitigating climate change continues to be a high priority for us. Our own bio-energy plant at the Koskenkorva Distillery enables a high energy self-sufficiency and our modern production plant in Gjelleråsen already uses geothermal and renewable energy. We are taking further steps towards reaching carbon neutral production and our new sustainability targets will be set for the Group during 2022.

Looking forward, the fourth quarter of the year and the Christmas season are very important for us and we are well prepared. In aquavits, our strong combined offering of traditional brands such as Linie and O.P. Anderson are complemented with both original and novelty Christmas aquavits. In the other Christmas season big seller, glöggs, our wide offering includes exciting novelties under the Blossa brand, including launches in the no-low category as well as more traditional glöggs.

We are not providing guidance for 2021 but have updated our short-term outlook. Societies are returning to normal which is expected to impact our channel mix with the on-trade and travel retail growing share of sales. In the Industrial segment, barley market prices are expected to remain at a high level due to the historically poor crop in Finland, and a global imbalance between the demand for and supply of grain. We also see significant cost pressure in other raw materials. We continue to carefully monitor the development of Covid-19 and to implement necessary precautions for the health and safety of our employees.

Watch CEO Pekka Tennilä's comments on Anora's Q3 results