Anora H1 sales down 5.3%

Koskenkorva owner Anora Group posted a 5.3% dip in sales for the first half of 2024 after challenges in the Finnish market affected its performance.

The Nordic drinks group’s net sales for the first half (H1) of 2024, from January to June, stood at €324 million (US$359m), down from €342.2m (US$379.1m) in the same period last year.

Jacek Pastuszka, who was named Anora’s new CEO in September last year, said the company was on course to improve its profitability.

He explained: “During the second quarter, we stayed firmly on the course of improving our profitability and strengthening the balance sheet by increasing the share of margin accretive businesses, price increases, cost efficiencies and net working capital reduction. Also, lower raw material prices supported our performance.”

The group’s first quarter (Q1) net sales in 2024 totalled €146.9m (US$162.7m), while the second quarter (Q2) amount reached €177.1m (US$196.2m).

Sales in Q2 2024 were down by 3.1% from 2023, but Pastuszka noted the blame for this was solely down to the decline in the industrial segment.

For the company’s spirits brands, the CEO noted that Sweden and Norway delivered “strong” net sales growth, while there were declines in Finland, the Baltics and global travel retail.

“The performance of spirits also remained on a positive trajectory, with comparable earnings before interest, taxes, depreciation, and amortisation (EBITDA) up by 16.6% and gross margin up by 420bps from the previous year”, Pastuszka continued.

Challenges in Finland

Anora’s H1 net sales for spirits fell by 1.7% to €105.5m (US$116.9m). For Q2, net sales were at €58.5m (US$64.8), down by 0.2%.

Koskenkorva vodka, which accounts for more than 16% of the company’s spirits sales, saw its net sales grow during Q2. Anora introduced new flavours for the brand last year, as well as new ready-to-drink hard seltzers.

While most Nordic markets delivered growth, Finland (where the company is headquartered) suffered, especially internationally where a harbour strike affected its performance with exports. In addition, an amendment in the country’s alcohol market legislation was also cited as a factor.

The law approved by the Finnish parliament means the ABV limit of fermented alcoholic beverages for sale in licensed retailers has risen to 8% from 5.5%.

In Q2, Sweden (up by 5.5%) and Norway (up by 1.4%) were both risers, however net sales in international markets declined. Anora said this was because of a preference for local travel (Norway to Sweden and vice versa) with a weak home currency influencing decision-making in not travelling abroad and in turn, boosting travel retail.

For the rest of 2024, the company expects volumes in key markets to be lower than what was achieved in 2023 due to ‘challenging economic conditions’. In the long term, the company hopes to achieve a net sales growth between 3-5% for 2030.

On improving profitably, Pastuszka added: “We seek to restore organic net sales growth in the wine and spirits segments by focusing our efforts on the largest brands and partnerships.

“I am convinced that these actions and the progress achieved so far in 2024 will allow us to execute on our post-merger transformation strategy and deliver on our long-term financial targets.”

Management changes

As the industrial segment negatively impacts the company’s net sales, it has overseen a management change in this area too.

Risto Gaggl, who is Anora’s senior vice-president, industrial, has stepped down from his position. He will see out his duties until the end of 2024, before Hannu Vähämurto takes over as his successor from 1 January 2025.

Vähämurto has been with Anora since 2011, most recently as director, industrial products. Before joining Anora, he has also worked through various manufacturing and supply chain management positions at Tellabs, gaining extensive experience.

Pastuszka said: “I am extremely happy to have Hannu take the lead in Anora’s industrial segment and join our executive management team as of next year. His strong background in supply chain management and industrial operations planning is key to our success over the coming years.”

Pastuszka also wished Gaggl well in his future endeavours, saying: “On behalf of the management team and all our colleagues, I want to thank Risto for his valuable contribution in developing the segment and reducing production footprint complexity of the company.”

Furthermore there’s also been a reshuffle in the group’s executive team. Johanna Sundén will take charge of the group communications, to go alongside her current duties as chief HR officer. Meanwhile Thomas Heinonen, group general counsel, will become a member of the company’s executive management team.

Last September, Anora finalised the sale of Larsen Cognac to ThaiBev’s International Beverage division for €54.1m (US$58m).

Anora noted that the sale of Larsen resulted in working capital for 2024 being lower than in 2023.