Earnings call transcript: Anora Q1 2025 sees improved margins amid sales dip

Published 07/05/2025, 10:00
 Earnings call transcript: Anora Q1 2025 sees improved margins amid sales dip

Anora Group Oyj reported its Q1 2025 financial results, highlighting a decrease in net sales but an improvement in gross margins. The company recorded net sales of €141.4 million, a 3.8% decline year-over-year. Meanwhile, Anora’s gross margin improved by 2.8 percentage points to 46%. The stock currently trades at €3.47, and according to InvestingPro analysis, appears undervalued based on its Fair Value calculation. The stock offers an attractive dividend yield of 6.88%, significantly above its 5-year average of 7%.

Key Takeaways

  • Anora’s Q1 net sales fell by 3.8% year-over-year.
  • Gross margin improved to 46%, up 2.8 percentage points.
  • Comparable EBITDA decreased by 9.6% to €8 million.
  • Anora is expanding into the Lithuanian market in Q2 2025.
  • The company is investing in carbon neutrality at its Koskenkorva distillery.

Company Performance

Anora’s performance in Q1 2025 showed mixed results. While net sales declined, the company managed to improve its gross margin, indicating better cost management and efficiency. With a price-to-book ratio of 0.53 and an Altman Z-Score of 5.42, InvestingPro data suggests strong financial stability. Anora continues to lead in the Nordic wine market, gaining market share in Finland, Sweden, and Denmark. The company remains a strong competitor internationally, despite facing challenges in a sluggish market environment. For deeper insights into Anora’s financial health and market position, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Financial Highlights

  • Revenue: €141.4 million, down 3.8% year-over-year
  • Gross Margin: 46%, an increase of 2.8 percentage points
  • Comparable EBITDA: €8 million, down 9.6% year-over-year
  • Net Debt: €208 million
  • Leverage: 3.1x (Net Debt/EBITDA)

Outlook & Guidance

Anora has provided a full-year comparable EBITDA guidance of €70-75 million. The company is focused on improving the profitability of its beverage business while continuing to manage costs and strengthen its balance sheet. Anora is also investing in profitable growth, including a significant investment in a bio boiler at its Koskenkorva distillery to achieve carbon neutrality.

Executive Commentary

CEO Kirsty Puntila stated, "We have the strongest Nordic portfolio at our hands," emphasizing the company’s robust market position. She also noted, "We are gaining market share in a very challenged environment." CFO Stein Eriksen highlighted improvements in working capital, saying, "We are very happy to see that the working capital has improved during the last years."

Risks and Challenges

  • Continued decline in the Nordic monopoly channel, with 15 consecutive negative quarters.
  • Potential supply chain disruptions as the company expands into new markets.
  • Macroeconomic pressures that could impact consumer spending in key markets.
  • The need to manage inventory levels effectively amid fluctuating demand.

Anora’s Q1 2025 results reflect the company’s resilience in a challenging market. While facing declining sales, Anora’s strategic initiatives and cost management have led to improved margins and a strong market position. With a beta of 0.68 and a high Piotroski Score of 7, InvestingPro analysis indicates lower market volatility and robust financial health. As the company looks forward, its focus on sustainability and market expansion will be crucial in driving future growth. Investors seeking detailed analysis of Anora’s market position and growth potential can access exclusive insights and valuation metrics through InvestingPro’s comprehensive research tools.

Full transcript - Anora Group Oyj (ANORA) Q1 2025:

Milena Hekstrom, Head of Investor Relations, Anora: Okay. Good morning, and a warm welcome to this presentation of Anora’s Q1 results. My name is Milena Hekstrom. I’m the Head of Investor Relations here at Anora. Our presenters today are our new CEO, Kirsty Puntila and our CFO, Stein Eriksen.

After their presentations, we will start with the Q and A session. And please be reminded that you can post questions through the chat, even during the call. And please note that this presentation will be recorded and published later today on our website, anora.com. And now, Kirsty, please go ahead.

Kirsty Puntila, CEO, Anora: Thank you, Milena, and good morning to everyone. I’m very happy to be here, seeing you all for the first time in this forum. There are a lot of first times for me now as a new CEO of Annora, the first board meetings, the first AGM, and now the first quarterly report. As you can imagine, it is all a bit daunting, at the same time hugely exciting and inspiring. So if okay for you, I will start by a quick introduction to who I am, then illustrate shortly the industry landscape and Anora’s position there, and then finally move on to the Q1 numbers.

So yes, I am still new to the role, but I have been in the company for eleven years now, and in different roles in the wines and spirit industry for twenty plus years. My professional background is in brand marketing, innovation and product development, and in several commercial roles, which I hope serves as a good background in leading a house of Nordic brands. I also have extensive experience in international business, having studied and worked in five countries and learned many lessons on the way. So all in all, I think I have a pretty profound experience to put all the right levers for Anora’s benefit moving forward. But before going to the Q1 numbers, I thought I’d elaborate a little as to how I see the world from within the company.

I got some questions after the nomination as to why did I want this job. And I think with ten plus years under my belt in this company, I have a little bit of a backbone to say that I wanted this job because I believe in Anora. I have worked in bigger companies, and I have worked in more international companies, but what we have at Anora is something special. Our greatest asset is, of course, the brands. If I look at the beverage business in general, we have the strongest Nordic portfolio at our hands.

We have a good combination of wines and spirits and everything in between. We have Koscenkorva that keeps amazing me with its flexibility in stretching from the traditional Vienna and vodka basis to growing categories such as liqueurs and RTDs. Then we have Blossa, which is the envy for our competition, a Gluck brand that has innovated and expanded from all kinds of different labour profiles to non alcoholic variants. We have Skagerag gene, which is a testament to our ability to innovate on our core strengths. And then we have a solid portfolio of other more local and regional wine and spirits brands that play in mainstream categories.

I’m often asked if the overall alcohol consumption is declining at the pace that is eventually killing our business. I have calmed people down before, and I’ll do the same now, saying that people will not stop enjoying good quality wines and spirits overnight, if ever. And although we do see shifts in consumption habits, Anora is in a great position to adjust to changing market conditions. Both Arcus and Altea combined, the current Anora, has been in the business for some two hundred plus years, and we intend to stay here also for the next two hundred years. In addition to the beverage business, we have well functioning industrial operations.

At Koskenkorva, we own the vertical process from barley to bottle, and we have succeeded in making the site products a decent business for us. We have a modern state of the art bottling plant in Rayamaki, which together with Koskenkorva enables us to seize the sustainability efforts. We have the legacy of crafted aqua beets in Norway, and we have a great opportunity with the wine operations in Kyrgy, with near filling possibilities and geographically ideal location for the biggest Nordic wine markets, Denmark and Sweden. I also see a company full of passionate and engaged individuals who want to win in the marketplace and who are determined to turn this company around. There’s a whole new generation of young, hungry, international talents who are bringing a whole new energy to the company.

So the world doesn’t always look as gloomy inside of Anora as it sometimes does outside of the company. But having said that, we are also very sober about our past, and admittingly, many mistakes have been made. It hasn’t been an easy ride with the integration that, I guess, blew air out of many of us in the beginning. And furthermore, macroeconomic environment hasn’t exactly placed for our benefit in the recent years. So we have seen some volume declines in our key markets.

So yes, it has been hard at times, but the learning curve has been very steep. And we are finally seeing light in the tunnel on many fronts, especially when the rest of the SAP integrations will be finished this year. So I hope I speak on behalf of the 1,200 Anora people that we are in good spirits moving forward. Let’s then put things into perspective, looking at the Nordic wine and spirits market and how we play in this landscape. So the number one, Anora has seen the ups and downs and the twists and turns of the industry, and is a resilient player in The Nordics.

Number two, since the booming pandemic, the combined Nordic monopoly data shows that our key channel has been through 15 consecutive negative quarters. But it is important to note that the share of monopolies was 47% of our net sales last year, which means that more than half of our net sales is already coming from other channels, such as groceries, horeca, travel, retail and exports. And then number three, although it has been a rough ride, the market is still above the pre COVID levels, and the CAGR development in volumes is stable, if not slightly positive in wines. And for spirits, we have a pretty good toolbox to fight against the market trend with our innovations and strong brand portfolio. And as you have witnessed in the past few quarters already, we have been on a positive profitability journey recently.

Right. Then let’s move on to the topic of the day, which is the Q1 results. But I will start with a short description of our group development and then go through the Q1 performance by segments before handing over to Stein, who will drill a bit deeper into the numbers. As you know, this industry is often hit by seasonality of the business. For us, Anora, it is the quarter four that pretty much defines the whole year, I would say.

We have the Christmas parties and the New Year celebrations, which are making the quarter by far the biggest occasion for consumption. Then we have the extended summer months in Q2 and Q3, where usually most of the launches and events and campaigns take place. So when it comes to the Q1, it is by far the smallest quarter. It is also defined by the timing of Easter. If the Easter is in March, we have a bigger Q1.

If it falls on April, we have a smaller quarter. And this is what happened this year as well. Easter took place in April, which means that the already small quarter became even smaller. So the Easter effect and overall monopoly development resulted in 3.8% decline in net sales, primary due to lower volumes in Spirits and Industrial segment. I will soon zoom into the segments in more detail, but the big picture was that in wine, we maintained market leadership in Norway, Denmark and Finland, including the grocery retail, which is still very strong, thanks to the successful introduction of 8% wines in Finland.

In Q1, we also saw a turnaround of market shares in Sweden, which we hope to continue seeing going forward. For the spirits, all Nordic markets unfortunately declined in Q1. And as much as I hate excuses, Easter effect is even more prominent for spirits, as aqua beets in particular are very much a category that is consumed on Easter tables. We did grow in international, but proportionally not enough to compensate the big monopoly markets. As far as the industrial segment is concerned, we experienced lower volumes and side product sales.

But what pleases me to a great extent is our persistence in sticking with our plan to improve the profitability. We have taken the category captainship in many areas and continued with other revenue management actions, which enabled the gross margin percentage to jump from 43.3% to 46% of net sales. We also continued with the strong performance of comparable EBITDA in the Spirits and Industrial segments. The Wines tracked us down a little bit due to increased upfront investments in marketing. The decision we consciously made to push for the market share, and that is something we want to continue gaining.

We are fighting back to improve our market share position in Sweden, And we have also continued to strengthen the retail channel in Finland, and both of these require marketing investments. So as a result, we ended up the comparable EBITDA being 9.6% down, amounting to €8,000,000 or 5.7 percent of net sales. Looking ahead, this will not change our full year guidance for comparable EBITDA, which still is between 70,000,000 to €75,000,000 So let’s then have a bit closer look at the segment development, starting with wines. We have successfully maintained stable sales volume amidst overall market decline. Although our net sales shows a modest decline of 2.5% to €65,000,000 this was primarily due to variations in the channel and product mix as well as, of course, the earlier mentioned timing of Easter.

What defines this quarter the most is the fact that we focused on gaining market share in Denmark and Sweden in particular. So this together, with the success of the 8% APV wines in Finnish grocery channel, led to market share growth in all these three markets. Our comparable EBITDA declined to 200,000 which is 0.4% of net sales. The reasons I mentioned already, and it was mainly driven by changes in the channel and product mix, the Easter and the increased marketing spend to support the strategic growth initiatives in Sweden and the retail in Finland. So our wine gross margin was 29.6% of net sales, and gross profit amounted to €19,300,000 Moving on to the Spirits highlights.

In Q1, Spirits net sales declined by 4.5% to €44,900,000 explained mostly by the timing of Easter. All Nordic markets declined during the first quarter, which was only partially compensated by the growth from the rest of the markets, international in particular. Our international markets net sales increased, thanks to KOSK and KORVA net sales growth, which already represents over 70 of the total Spirit sales. Despite the lower volumes, our gross margin improved to 45.5%, reflecting the impacts of the recent price increases. Our Spirit’s comparable EBITDA also increased to €7,200,000 from €6,800,000 from last year due to lower operating expenses.

And the comparable EBITDA margin increased to 16% of the net sales. Then finally, let’s look at the Industrial segment. In Q1, the Industrial segment’s total net sales declined to €50,600,000 while the external net sales declined by 5.3 to €31,500,000,000 Net sales decrease was driven by lower volume lower volumes and side product sales prices. The industrial gross profit increased by 10.3% to €28,500,000 in Q1. We reported a gain on sale of certain assets in Rayamaki plant, which improved gross profit by €1,800,000 The Industrial segment’s comparable EBITDA increased significantly to €3,100,000 or 6.2% of net sales.

And on top of that, the efficiency improvement in supply chain successfully increased our profitability. In the next slide, we picked a couple of launch and investment actions from different segments. One thing that we are getting very excited about is the market share development in wines, where we grew market share in Finland, Sweden and Denmark. We launched several novelties, and here’s just a couple of examples with our flagship brand Chill Out. We had four new launches in Finland, which helped us gain over 9% volume market share in the Finnish grocery.

And then we had two new lodges in Sweden. In spirits, Koscenkorva keeps on giving. The long waited Koscenkorva Longero long drink saw a daylight on the grocery shelves in March. We immediately gained coverage in more than 1,000 retail stores. The Long Drink launch is a major investment for us, but at the same time, it has already now helped us increase the Costenkorva ready to drink segment by 84% in volume.

And although the industrial segment hasn’t been launching any new products, we are equally proud of the new bio boiler investment at the Kostenkorva distillery, because with this with the help of this investment, we can transition the distillery to fossil emissions free fuels by the end of twenty twenty six as planned and help achieve our carbon neutrality targets. So that’s the start from me, and then I will give a word to our CFO, Ostijn Eriksen, and his financial review.

Stein Eriksen, CFO, Anora: Thank you, Kirsty, and good morning, everybody. So let’s then have a look at the financials for Q1 twenty twenty five. And starting with these slides that show the development in some of our main KPIs in Q1. As already mentioned, our net sales in the first quarter declined by 3.8% to EUR 141,000,000 due to lower volumes in all segments. Part of the sales decline in Wine and Spirits was explained, like Kirsty already mentioned, by the timing of Easter.

When it comes to the gross margin, we are happy with the continued underlying improvement in the gross margin, up by 2.8 percentage points. And it was driven once again by good revenue and mix management, a stabilization of input costs as well, I would also like to highlight in this quarter, operational performance in our industrial segment. Comparable EBITDA ended at EUR 8,000,000, down by 9.6%. And Spirits and Industrial segment improved from last year, mainly due to both higher gross margin and lower OpEx, while Wine was partly down because of the higher A and P spend already mentioned. Let’s move then on and have a look at the composition of the net sales in Q1.

As visible on this slide, I think illustrates very well that Q1 is typically the smallest quarter for Anura or even so more this year because of timing of Easter. If we start with wine, although net sales had a modest decline of 2.5%, down to EUR 65,000,000. This was primarily due to variation in the channel and product mix as well as timing of Easter. But also worth mentioning in Q1, the wine segment successfully maintained stable volumes despite an overall market decline. And we are also very happy to see that the strategic focus on increasing market share in Denmark and Sweden alongside the sustained success of the 8% ABV wines in the Finnish grocery channel led to market share growth in all of these areas.

In Spirits, all markets declined, which was only partially compensated by the growth from the rest of the markets and once again partly also explained by the timing of Easter. Industrial net sales decrease was driven by lower volumes and side product sales prices. Then let’s continue to look at the gross margin. Here, we have on the right hand side adjusted for so called items affecting comparability. So here, you see the underlying development in gross margin.

And as I said, very happy to see that during the last quarters, Anura has significantly improved our gross margin, mainly due once again to good revenue management and mix management, stabilization of input costs as well as improved efficiency in our industrial business. Also, as previously mentioned, we have a more active hedging of currency that we started with in the beginning of twenty twenty four than to avoid the strong deviations in gross margins due to bigger changes in the currency. If we move over to the next slide and look at the group comparable EBITDA in Q1. Like I said, down with 9.6% from the previous year, amounted to EUR 8,000,000. On the right, you see that the comparable EBITDA increased in Wine and Industrial segment, whereas it declined in Wine.

Wine declined due to lower net sales, but also due to the increased marketing spend to then support the strategic growth initiatives in Sweden and to strengthen the retail channel in Finland. Spirits improved due to lower operating expenses as well as higher gross margin and industrial efficiency improvement in the supply chain successfully increased profitability. And our operating expenses were fairly in line with last year, and we had some additional group level expenses due to different timing of expenses. Then let’s move over to the development in cash flow and net debt. Net debt ended, as you can see on the right hand side, to EUR208 million at the end of Q1.

And I’ll try to go through then the development from the year end that you saw ended at EUR122 million. In Q1, the cash flow from operations totaled 76 negative EUR76 million euros compared to minus €45,000,000 last year. Just also wanted to highlight that the operative cash flow in Q1 is normally weak due to lower sales inventory buildup as well as payment of excise duties related to the high seasonal sales in the previous year. The deviation in the quarterly net cash flow from operations compared to last year was mainly explained by reduced sales of receivables of EUR 27,000,000. Net financial expenses were EUR 4,300,000.0 compared to EUR 4,500,000.0 last year.

And net cash flow from investing activities or CapEx was €3,000,000 and the CapEx in Q1 was mainly related to replacement investments. If you then look at the financial position for the group, you see that liquidity position remained strong throughout the period. And our liquidity reserves ended at €267,000,000 And the liquidity reserves comprised of overdraft facility of €20,000,000 as well as hundred and €50,000,000 in a revolving credit facility. Cash and cash equivalents totaled 97,000,000 compared to SEK 167,000,000 last year. But then please bear in mind that we paid down SEK 50,000,000 of the term loan last September as well as the already mentioned lower sales of receivables this year compared to last year.

Net debt amounted to EUR208 million and the leverage net debt divided on EBITDA ended at EUR3.1. Just let’s have a look at also the development in net working capital. As you can see, amounted to SEK 8,700,000.0 compared to minus SEK 31,700,000.0 last year. Throughout the period, and also we have previously mentioned in the calls, is that we are happy to see that the working capital has improved during the last years, partly explained by the increased sales of receivable program, but also an underlying improvement in reduced inventory levels. And talking about inventory, this quarter to 158,000,000, more or less the same as last year.

But that being said, we still believe we have more potential in reducing the inventory level, especially related to the tail of our product portfolio. Then moving over to the last slide before handing the giving the floor back to Kirsty. Here are our financial targets until 02/1930 compared to our recent performance over the past three years on the right hand side. Looking at the balance sheet and leverage, we have reduced it from the levels back in 2022, and we are happy with that improvement. However, still have some work to do in order to improve the operational performance of the company.

Our AGM decided to pay a dividend of SEK $0.02 2 per share for 2024, and the dividend was paid out the April 28. So with that, Kirsty, handing the floor over to you.

Kirsty Puntila, CEO, Anora: Thank you. Thank you, Stein. Let me then close with perhaps three key takeaways for our Q1. First, our net sales amounted to EUR 141,400,000.0, which is 4% down from last year. Second, our recent efforts in pricing and portfolio management continued, showing strong gross margin development, ending at 46%, which is up two seventy five basis points.

Thirdly, our comparable EBITDA amounted to EUR 8,000,000. And as a reminder, Q1 is, in Anara, typically a small quarter, and this year, smaller due to late Easter in 2025. On top of that, we are gaining market share in a very challenged environment. So as far as the priorities for the next months are concerned, we remain committed to our near term priorities and actions on improving the profitability of the beverage business. This we do by active mix and revenue management and, of course, continue carefully manage the cost base, strengthening our balance sheet and investing in profitable growth.

To finish off, the volumes in our key markets are still expected to be relatively flat compared to the 24 levels, while in value terms, the markets are expected to grow slightly. Therefore, as to the guidance for 2025, our comparable EBITDA is still valid and expected to be between 70,000,000 and €75,000,000 Thank you very much. And with these words, I would like to hand over back to Milena for opening up the Q and A.

Milena Hekstrom, Head of Investor Relations, Anora: Thank you, Kirstjen Stein. And we already have some questions in the chat, but please do continue to send them through to us. The meanwhile, please raise your hand if you would like to ask a question in person. The first question comes from Sanna Perala. Please go ahead.

Sanna Perala, Analyst: Oh, sorry. I was muted. Can you hear me now?

Kirsty Puntila, CEO, Anora: Yes.

Sanna Perala, Analyst: Alright. I have quite a few questions. Firstly, perhaps regarding your your guidance for the full year and that you mentioned expecting stable market volumes. How do you see that now after the first quarter? And could you also comment your expectation of your volumes increasing?

Kirsty Puntila, CEO, Anora: I think we’ve said that in the presentation already, that we expect the volumes being stable, that’s what we what we keep in guidance. Right.

Sanna Perala, Analyst: Right. Thanks. Then in the wine segment, you mentioned the three main reasons which pressured earnings, and the order of those was channel and product mix, Easter, and marketing. So is this the order of importance and or magnitude in absolute terms as well?

Kirsty Puntila, CEO, Anora: Good question. Not necessarily in that order. As said, we made a conscious decision that, I mean, now we’ve obviously seen that the market share development has not been ideal for the wines in the past few months and years even. So I think we have consciously now started reinvesting in certain actions, and I think we’re now starting to see the it’s very early days, so we don’t want to overpromise that, but I think it now paying off, and the sort of total marketing spend for the whole year still remains at the same level. We just overinvested more now in Q1 as pre empting measure to gain the market shares.

Sanna Perala, Analyst: Right. So if I read that correctly, so that marketing expenses were the main reason behind the volume sorry, profitability drop in q one?

Stein Eriksen, CFO, Anora: Sorry, Sanna. If if I can just briefly comment. It’s around fifty fifty. 50 percent is around 50% marketing spend. Yes.

Sanna Perala, Analyst: Right. Thanks a lot. And then you already answered my third question about the marketing expenses going forward. I’m not sure if I remember you mentioning your wine sales in Finland in total. You mentioned that you gained market share or but did the overall volumes increase in Q1?

Kirsty Puntila, CEO, Anora: We only talked about the market share. And I mean, what we are super happy with is still sort of the 8% wines, which are sort of giving us momentum on the on the wines and and and further improving that and bringing new novelties to the market. So so that’s obviously the biggest driver for for the Finnish success in in wines. Alright.

Sanna Perala, Analyst: Then you talked a lot about Easter. And looking at your total volumes, was the Easter impact in line with your own expectations in in q one this year?

Kirsty Puntila, CEO, Anora: Yeah, I would say pretty much the impact is slightly bigger for spirits. As said that I especially in Sweden, Norway, and Denmark, people are drinking more agaveats, The impact is not equally huge for wines. I mean, wines is a more stable category, whereas you probably know that agaveats are trunk four, five times a year mostly, so that’s the biggest impact. And then obviously, different variations per market regarding the sort of a fluctuation of that Easter impact.

Sanna Perala, Analyst: All right. Thanks a lot. Then my last question is regarding the Anoro Lithuania. What kind of expectations do you have for that this year and perhaps going forward as well?

Kirsty Puntila, CEO, Anora: Yes. We wanted to sort of open up Lithuania already in Q1, but I think when slightly, slightly delayed to Q2. So we will talk about that more in Q2 reporting. But we’re super happy to see that now we were able to, for the first time in my life in Anora, we are opening up a new office, a completely new market. So Lithuania is now up and running, we have our own operations there.

Sanna Perala, Analyst: All right, thanks a lot. I will let others continue.

Milena Hekstrom, Head of Investor Relations, Anora: Okay, thank you, Sanna. And if there are any more questions, please raise your hand to mark this. It seems that there is not, so maybe I will continue with that. Okay, there is Matti Kaurala. Please go ahead.

Matti Kaurala, Analyst, OP Markets: Hello. Thank you for taking my question. This is Matti from OP Markets. Maybe about this marketing expenses. So you said that you’ve been kind of so called overspending during Q1.

What what kind of return on this invest or you were speaking about investment, not just spend. So what kind of return you’re expecting for this this marketing investments? That’s the first one. And and the second one, you you said that the input costs are stabilizing. So apparently, partly another raw materials.

But what about the other one? Of course, barley is only a one parcel of the formula.

Kirsty Puntila, CEO, Anora: Thank you, Matti. Maybe I’ll start with the marketing. And Stein, if you continue with the barley, value and other input costs. I mean, yes, that’s the nature of the marketing investments that the payback is coming a little bit later on. I wouldn’t call it overinvestment.

It’s just the phasing of the investment rather than overinvestment. We are set in line with the total marketing spend plan for this year. But it’s just, again, the phasing of exactly the same thing happened for the spirits a year ago. So Q1 ended up being more heavy in terms of certain campaigns and certain investments. So the payback is, of course, coming a little bit later.

How much exactly that remains to be seen? But as said, we already know because especially the how the mechanism, the monopoly mechanism works in Sweden, the payback is actually quite quick. And there, you can sort of maneuver the sales quite well with the monopoly. So therefore, we’re already seeing the benefit of those investments in Sweden. The other markets is the span is a little bit longer, so so the investments that you’re making in marketing are coming coming coming a bit later in the in the day then.

And then the input cost time, do you wanna

Stein Eriksen, CFO, Anora: Yes. I can comment I I can comment briefly on the input cost. No. It’s it’s pretty boring, to be honest with you, Matte. It’s very flat, the development in not only Bali, but also other types of input costs.

So but as I already mentioned, we are very happy, especially with the industrial segment that managed to improve their efficiency at both in the logistic part of the business and also in at the factories. So that’s the main explanation for the margin improvement in industrial in addition to the sale of some assets like Kirsty already mentioned in the Ryamek plant. But overall, very flat and boring variation in input costs. But to be honest with you, I like that it’s boring.

Matti Kaurala, Analyst, OP Markets: Thank you. That’s good. Maybe one more that’s just crossed into my mind. So you mentioned that you are starting your new SAP integration. And if I remember correctly, that’s been one big headache for this Articus Altea integration back in the days.

So what kind of financial impacts you are expecting from that integration, so especially if you are speaking about fixed cost side, for example?

Stein Eriksen, CFO, Anora: I don’t want to promise any number here, Matti, but what we can say, of course, this is, like you said, this has been a headache for the whole organization. But of course, when starting to get the one ERP system, then we will have common processes, common master data. We can start to have a common payment terms towards the same supplier that we’re currently not having. So of course, this will be of very high importance for the company to get finally one ERP. And so far, it’s we are going and moving according to our internal plan.

And that’s a rollout at the end of twenty twenty five.

Matti Kaurala, Analyst, OP Markets: All right. Thank you. No further questions.

Milena Hekstrom, Head of Investor Relations, Anora: Thank you. And are there any more questions? Please raise your hand to mark this. Maybe I will take one chat question here in between, if there are any more questions in the meanwhile. This one is coming from Micah Rautjainen.

Some of your bigger peers like Braun and Foreman announced beginning of the year to cut 12% of their global workforce due to weaker than expected alcohol demand. Anora also has one of the weakest operating margins in listed alcohol companies. Why Anora have not reacted meaningfully? While your volumes and revenue is decreasing quarter after quarter and your yearly EBITDA margin is 600 basis points behind your local long term financial targets?

Kirsty Puntila, CEO, Anora: I can start. Thank you, Mika. You are right. Without obviously talking too much about our competition or our peer companies, it’s not only Braunforman. We calculated that there are close to 10 companies in the past twelve months in the wines and global wines and spirits companies that introduced some sort of cost cutting exercises.

So we are painfully aware of the situation in the global wines and spirits environment. Then to your question, I would still say that we are progressing step by step. And all I can say right now is that we are remain we are highly committed to our long term strategy. And in the meanwhile, we are doing what I think we’ve demonstrated we can do very well, which is improving the marginality and sort of progressing step by step in terms of improving our overall profitability. We are aiming and continue strengthening our cash position and balance sheet.

And then eventually, we want to restore our organic revenue growth, and that is still the plan.

Milena Hekstrom, Head of Investor Relations, Anora: Thank you, Kirsty. Are there any more questions, live questions? Please raise your hand to mark this. And if not, there is one final question in the chat. So that’s also coming from Micah Rautjainen.

You claim that Globus Wine is market leader in wines in Denmark. How much value does market leadership bring if your share of profits is nonexistent in that market?

Kirsty Puntila, CEO, Anora: I don’t know if Stein you want to say more about it, but what I would say what I will say anyway, that like with our other profitability actions, the same applies to our Kyrgy operations. And we’re very committed to improve the profitability of the Danish wine business and are progressing with that action these actions as well. I don’t know, Stein, if you want to add anything to that.

Stein Eriksen, CFO, Anora: I can add and just say that we’ve of course, we were not happy with the operations in Denmark last year. And but we haven’t we initiated some actions in order to improve the profitability. And so far in Denmark, we have gained market share. We have net sales growth. We have gross margin improvement.

And we have a good EBITDA improvement. So we are moving according to plan, I would say, in order to improve the profitability in Denmark. So very happy with the Danish operations in the first quarter.

Milena Hekstrom, Head of Investor Relations, Anora: Thank you. And it seems that we don’t have any more questions in the chat. And one last moment to ask a question live, so please mark your raise your hand to Magnus. It seems that we do not have any more questions, so thank you to the speakers and everyone online for joining our call today and for these good questions. And please also be reminded that our next scheduled event is the Q2 report on August 15.

So hope to see you then. Thank you.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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