Drinks group Anora has reported a decline in profitability across the business in its financial year 2022, amid high input costs.
Its full-year comparable EBITDA was €76 million, or 10.8% of net sales, down from a pro forma EBITDA of €101.0 million or 15.2% of net sales the previous year.
In the fourth quarter, comparable EBITDA amounted to €20.9 million, or 9.4% of net sales. In the fourth quarter of 2021, EBITDA was €31.4 million, or 15.3% of net sales.
Anora chief executive Pekka Tennilä stated, "The profitability in Q4 or full year 2022 didn’t meet our expectations. [...] 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 €3.2 million inventory correction on the stock value differences in Globus Wine, recognised in Q4, impacted negatively on the results."
Net sales in full-year 2022 increased 5.7%, to €702.7 million, the group said, compared with pro forma net sales of €665.0 million in 2021. Net sales excluding Globus Wine amounted to €58.5 million.
Anora's performance was driven by the acquisition of Globus Wine, the growth of its industrial segment, spirits sales growth in international markets, and duty-free travel retail and exports.
The market decline in monopoly channels drove the company's sales down in Sweden, Norway and Finland.
In the fourth quarter, Anora generated net sales of €221.6 million, up 7.8% year-on-year. Net sales excluding Globus Wine was €200.0 million.
Tennilä added, "In 2022, for wine and spirits, we saw markets returning to normal after COVID-19 throughout 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-19, caused disruptions in the global supply chain and resulted in significant product cost increases and out-of-stock situations."
In 2022, Anora's wine division generated net sales of €316.6 million with a positive contribution from Globus Wine.
EBITDA for the period amounted to €23.5 million, or 7.4% of net sales, while the comparable EBITDA was negatively impacted by the lower net sales and gross margin in the monopolies, as the implemented price increases only managed to partly offset the high input costs.
The spirits business saw net sales growth of 4.0% to €233.8 million, driven by international sales related to the re-opening of duty-free and cross-border travel retail as well as good performance in the Baltics.
Anora's industrial business reported a 12.0% increase in total net sales in full-year 2022 due to higher sales prices following the increase in raw material prices.
Outlook For 2023
Anora expects economic growth to remain slow in 2023, especially during the first half of the year.
Tennilä added, "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 on-trade 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 price increases. In addition, we will work on reducing working capital, primarily by optimising inventory levels."
© 2023 European Supermarket Magazine – your source for the latest drinks news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.