Anora’s Financial Statement Bulletin January–December 2022
Feb 28, 2023
Anora’s Financial Statement Bulletin January–December 2022: Exceptionally high input costs decreased profitability – net sales for 2022 grew 5.7%
CEO Pekka Tennilä comments the year 2022 on Stock exchange release:
"The profitability in Q4 or full year 2022 didn’t meet our expectations. The comparable EBITDA in Q4 was EUR 21 million or 9.4% of net sales. Our full year comparable EBITDA was at EUR 76 million, or 10.8% of net sales.
The decline in profitability was related to the normalisation after Covid-19, as wine and spirits volumes in the monopolies declined significantly. The development of currency exchange rates during 2022 was very unfavourable to us. Our gross margin was lower due to record high input costs including barley price, and with significantly higher sales and marketing costs. In addition, an exceptional EUR 3.2 million inventory correction on the stock value differences in Globus Wine, recognized in Q4, impacted negatively on the results.
We have implemented price increases across all of our businesses and markets throughout the year but due to a time lag, they only partially compensated for the cost increases.
Our net sales in Q4 increased by 7.8% and amounted to EUR 222 million. The main contributor to this growth was the acquisition of Globus Wine. We continued to gain market share in spirits in declining monopoly markets during Q4. In wine, our market shares grew as well in the Nordic region while the total market declined.
For the full year 2022, our sales increased by 5.7%, amounting to EUR 703 million. The acquisition of Globus Wine together with growth of Industrial segment, and spirits sales growth in international markets, duty-free travel retail and exports, contributed positively to sales growth. The market decline in monopoly channels drove our sales down in Sweden, Norway and Finland.
At the end of the year, our net debt was EUR 301 million while at the end of 2021 it was EUR 126 million. The main driver for the increase in net debt was the debt-financed acquisition of Globus Wine. In addition, high inventory levels increased our working capital. This is something we will work to reduce in 2023.
In 2022, for wine and spirits we saw markets returning to normal after Covid-19 through the year. Volumes in the monopolies declined, as restrictions were lifted in all markets. Consumption has shifted back to on-trade, travel retail and border trade. However, the war in Ukraine, and the after effects of Covid, caused disruptions in the global supply chain and resulted in significant product cost increases and out-of-stock situations.
In November we announced our ambitious long-term financial targets and growth strategy with a sustainability roadmap. Our vision is to be the leading Nordic wine and spirits group delivering growth through sustainability. We aim at above-market growth in our home markets and a substantial increase in the share of our international business. Beyond the Nordics, our growth will focus on chosen hero brands and be supported by mergers and acquisitions.
In sustainability, new ambitious targets were set in our Sustainability Roadmap, and in Q4 we joined the United Nations Global Compact. We are committed to being carbon neutral in our own operations by 2030. Another important sustainability topic is our target of zero accidents at work. In 2022 no injuries were reported at the Gjelleråsen plant and the Koskenkorva Distillery was granted the year award in Starch Europe’s safety program for a second consecutive.
2022 was an exceptional year for us in Anora. It was not only the first full year of Anora after the merger of Altia and Arcus, but by acquiring Denmark’s leading wine company Globus Wine, we further strengthened our position as the leading wine and spirits brand house in the Nordic region. I want to thank all our employees for their hard work and dedication on this challenging year!
In 2023 economic growth is expected to remain slow especially during the first half of the year. The wine and spirits market in the Nordics is historically less impacted by the difficult economic climate, and Anora is well positioned for consumer downtrading or moving their consumption from the ontrade to the off-trade channels.
In 2023 our main focus will be on improving our profitability. The main tools for this are cost savings, improving efficiency, and the price increases. In addition, we will work on reducing working capital, primarily by optimizing inventory levels.“
Stock Exchange Release is available on our website www.anora.com.