Altia H1 sales drop due to Covid-19

Nordic drinks group Altia saw sales decrease by 9.5% during the first half of 2020 due to the impact of Covid-19 on travel retail, exports and on-trade sales.

Altia’s sales have been impacted by the coronavirus pandemic

The Larsen Cognac maker saw its reported sales for the six months to June 2020 decrease to €149.3 million (US$178m), a 9.5% drop on 2019 figures. In constant currencies, net sales decreased by 8.4%.

The company’s spirit sales for the period fell 5.5% to €53.2m (US$63m), impacted by “the shortfall coming from travel retail, exports and on-trade.”

In the the group’s Finland and exports segment, net sales stood at €53.0m (US$63), an 11.2% decrease on 2019, and the Scandinavian segment saw sales drop 1.1% to €50.1m (US$59m).

Altia CEO Pekka Tennilä said: “Net sales in the Finland and exports segment declined due to sales in travel retail, exports and on-trade being close to zero. However, in Finland, sales growth in the monopoly and grocery trade channels, and our focus on revenue management increased total beverage sales and improved profitability.

“In the Scandinavia segment, the reported net sales decline was driven by lower sales in Denmark due to the new business model and the closing of [the] on-trade. In Sweden, our overall sales grew with strong growth in spirits sales, supported by market share growth in the strategically important gin, rum and liqueur categories. In Norway, performance was strong across all categories and we have continued to gain market share.”

Managing Covid-19

Altia said that the recovery of its sales to pre-coronavirus levels could be impacted by “a possible second wave of Covid-19”, which the group warned would further impact consumer behaviour.

Altia also cautioned that government restrictions in place could further hamper the recovery of travel retail, exports and the on-trade due to any recommendations on travelling, movement and physical distancing.

However, the group pointed out that on-trade channels “could be expected to recover faster than travel retail” in the current climate.

Tennilä said the company was showing resilience and was “managing the Covid-19 crisis extremely well”.

He said: “During the second quarter of 2020, Covid-19 impacted our business significantly and it brought uncertainties to our operating environment. We reacted quickly to keep our operations running efficiently and stayed active in the sales channels that remained open, while securing the safety of our employees.”

To mitigate the impacts of the virus, Altia implemented remote and part-time working for its staff, as well as temporary lay-offs. Tennilä  expressed his “sincere thanks to all our skilled employees for their commitment and hard work during these challenging times”.

Last week, Altia extended its partnership with US firm Brown-Forman for the production of Finlandia Vodka until 2035.