Anora: spirits grow but wine dampens Q1 sales
While spirits sales were up, wine sales declined during the first quarter of Anora Group’s 2022 fiscal year.
Subsequently, Koskenkorva Vodka owner Anora Group experienced a slight drop in sales during its first quarter (Q1) of 2022.
Net sales fell to €133.4 million (US$139.8m) during Q1, 0.6% lower than Q1 2021 (€134.2m/ US$140.7m).
The company, formed last year following the merger of Altia and Arcus, saw its markets for wine and spirits ‘returning to normal’, as noted by CEO Pekka Tennilä, despite ‘turbulent times’.
He said: “This year beverage sales in Q1 were impacted by the later timing of Easter sales occurring in Q2 rather than in Q1 as last year. Further, wine sales declined in line with the declining market volumes, while spirits sales grew thanks to the recovery of travel retail.
“On the industrial side price increases due to the high raw material costs supported net sales development positively. Profitability weakened in Q1 due to the price increases only partly offsetting high input costs, and the lower wine sales. Comparable EBITDA [earnings before interest, taxes, depreciation, and amortisation] reached €13.0m, or 9.8% of net sales.”
Consumption has shifted back to the on-trade as pandemic restrictions have eased, and travel retail and border trade has been able to rebound.
“The recovery of these sales channels has been good or even strong,” Tennilä added.
He noted the impact of Russia’s war against Ukraine, and voiced support for sanctions against Russia, in spite of the impact these have had on trading.
“We strongly condemn Russia’s war against Ukraine and respect all sanctions that have been set,” Tennilä said. “When the war started, we reacted quickly and suspended exports to Russia, and in our Baltic operations we suspended purchases of raw materials from Russia and Belarus.
“Discontinuing exports to Russia does not have a material impact on group net sales, but due to the war, global supply chain disruptions and constraints in the supply of grain have further increased.
“We are working hard to secure the availability of raw materials. Currently, the biggest concerns are with the availability of barley, bulk wine and glass bottles, in particular. In our supply chain operations, the teams are doing continuity planning and working very closely with our partners and suppliers.”
Looking ahead to the remainder of 2022, Anora Group expects volumes in its monopoly markets to be ‘significantly lower’ than in 2020 and 2021 as the lifting of Covid-19 restrictions results in higher on-trade, border trade and duty free sales. Input costs are expected to remain high.
Anora’s comparable EBITDA is expected to be between €75-€85m (US$78.6m-US$89.1m), corresponding with pre-pandemic levels and the annual impact of the company’s €4.6m (US$4.8m) divestment of Anora brands from the merger.
In March this year, Anora Group released its full-year 2021 results, posting a reported net sales year-on-year increase of 39.7%.
The Nordic drinks company is re-evaluating its sustainability strategy to secure its green goals, which include achieving carbon-neutral production.