Altia sales up as Anora merger nears completion

Finnish drinks producer Altia reported an increase in sales during the first half of 2021 and is close to finalising its merger with Arcus.

From January to June 2021, Koskenkorva Vodka producer Altia’s reported net sales increased by 6.2% to €158.5 million (US$185.3m) in comparison with the same period in 2020.

All segments reported growth during this time, with ‘good’ net sales during the second quarter.

The Finland and Exports segment returned to growth thanks to the ‘positive’ impact of Covid-19 restrictions easing. Altia said sales were mainly driven by higher spirits sales in exports and travel retail.

In the Scandinavia segment, the company saw growth across all three markets: Sweden, Norway and Denmark.

Sales in Sweden were supported by ‘strong’ spirits sales in the monopoly and recovery in the on-trade, plus a favourable currency rate.

In Norway, Altia’s sales rose across all categories, boosted by high market volumes.

Pekka Tennilä, Altia CEO, said: “In January-June, our profitability improved from the previous year, with comparable EBITDA increasing from €18.8 million [US$22m] to €20.1m [US$23.5m].

“The profitability improvement was driven by the Finland and Exports and Scandinavia segments. In Q2, profitability declined due to the increased price of barley and temporary cost savings measures implemented due to Covid-19 in Q2 last year.

“Our liquidity position has remained strong throughout the period. However, the development of net cash flow from operations has been impacted by the change in channel mix and items affecting comparability.”

Altia and Arcus merger

Tennilä added that the Altia and Arcus merger to become Anora is expected to be completed on 1 September.

The two companies agreed to combine into a new wine and spirits company in September last year. As a result, Norway-based Arcus will be dissolved and merged with Altia.

At the time of the announcement, the companies said the creation of Anora will enable the firms to have a ‘strong foothold in the Nordic markets making it an attractive partner with its superior pan-Nordic route to market’.

The new combined firm will aim to become a ‘competitive northern European player able to seek further growth also through targeted M&A [mergers and acquisitions]’.

Tennilä said: “With the merger we aim at creating value for our shareholders with the annual EBITDA net synergy target of €8-€10m [US$9.3m-US$11.7m] which we expect to be achieved within approximately two years. The extra dividend payment of €0.40 per share to Altia shareholders which was approved by the annual general meeting is payable in connection with the completion of the merger.

“We have updated our short-term outlook but we are not providing guidance for 2021. In the second half of 2021, Covid-19 is still expected to impact travel retail, exports and the on-trade. The channel mix in monopoly markets depends on the restrictions and recommendations set in travel retail and the on-trade.”

Last month, Altia and Arcus agreed to sell seven spirits brands, mostly comprised of aquavit, to Galatea to complete their merger.