CEO Pekka Tenniläs comments on Anora's Q3 22 results
I am pleased with our net sales growth in the third quarter. Our net sales grew in double digits, to EUR 181.9 million, thanks to our acquisition of Globus Wine in Denmark. Net sales excluding Globus Wine was EUR 159.4 million. The comparable EBITDA declined by 22.3% to EUR 23.4 million due to higher operating expenses and lower gross margin than in the comparison year.
The decline in profitability was related mainly to the normalisation after Covid-19, with wine and spirits volumes in the monopolies continuing to see strong declines. In addition, our operating expenses were higher and the relative gross margin was lower due to the high input costs including barley price at a record-high level. We have implemented price increases across all of our businesses and markets, but due to the time lag between the increase in input costs and our price increases, the gross margin declined.
In spirits, net sales were at last year’s level supported by continued growth in International where the net sales grew in exports, Baltics and DFTR. In the monopoly markets, our net sales declined following the declining market, but we gained market shares in all countries showing the strength of our brands and innovations. As an example, our own premium gin brand – Skagerrak – won full distribution in the Norwegian monopoly.
The net sales growth in wine was driven by Globus Wine’s strong performance in Denmark. Globus Wine continued to gain market share and further strengthened its position as the market leader. In the monopoly markets, net sales declined largely following a declining market and due to the earlier partner losses, but we are working hard to mitigate the losses and we have already been successful with gaining new partners such as Zonin and AdVini. In our own wines, we saw positive development driven by the relaunch of the Chill Out brand across the Nordics. Our tender winning rate has been good and we have launched several interesting novelties during the quarter. We will be able to expand Globus Wine’s strong own wine portfolio to high-volume wine segments in Sweden, Norway and Finland.
The net sales growth in Industrial was driven by higher sales prices. Volumes in industrial products remained below last year’s level as we continued to run the Koskenkorva Distillery at a lower running speed to mitigate the push from the high cost of barley.
Our post-merger integration work has progressed as planned and on schedule. During the third quarter, we completed the product transfers to Anora’s in-house logistics centre in Sweden. With this,the logistics integration is now completed. The run rate of annualised net synergies at the end of Q3 22 was EUR 5.2 million, including the annual impact of EUR 4.6 million from the divestment of brands in connection with the completion of the merger.
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 barley crop this year was good. The prices have come down from the peak level earlier this year, but uncertainty in the global grain market remains a fact. The barley price level is expected to stay high, and due to overall uncertainties the cost pressure in other raw materials is expected to continue.
The last quarter of the year is important for us, and we have yet again a fantastic offering of products for the Christmas season, and we are well prepared for the highseason.I would like to thank everyone at Anora for their hard work and strong commitment.
The next milestone on our journey is the Capital Markets Day which we are hosting on 29 November 2022. Welcome to join the event and hear more about our growth strategy, financial targets and sustainability roadmap!