Altia Plc Stock Exchange Release on 28 April 2021 at 8:30 am EET
Altia Plc’s Business Review January-March 2021: Sales and profitability improved
in Q1
This release is a summary of Altia Plc's Business Review for January-March 2021.
The complete review is attached to this release and is also available on the
company website at www.altiagroup.com/investors.
January–March 2021 compared to January–March 2020
· Reported net sales were EUR 71.7 (68.2) million
· In constant currencies, net sales increased by 3.1% in comparison to the
previous year
· Net sales of Finland & Exports segment were EUR 23.0 (23.8) million
· Scandinavia segment’s net sales were EUR 24.2 (22.0) million
· Altia Industrial’s net sales were EUR 24.5 (22.4) million
· Comparable EBITDA was EUR 7.7 (5.5) million, 10.8% (8.1%) of net sales
· EBITDA was EUR 4.6 (5.4) million, 6.4% (8.0%) of net sales
· Items affecting comparability were EUR -3.2 million relating to planned
merger between Altia and Arcus
· Net debt / comparable EBITDA (rolling 12 months) was 0.2 (1.1)
· Altia has decided to provide a short-term outlook but no guidance for 2021,
due to the uncertainties caused by COVID-19 and the low predictability for the
full year 2021.
This is not an interim report as specified in the IAS 34 standard. The company
complies with half-yearly reporting, according to the Finnish Securities Markets
Act and discloses business reviews for the first three- (Q1) and nine-month (Q3)
periods of the year. The figures in the review are unaudited. Reconciliation of
alternative key ratios to IFRS figures is presented in the appendix on page 13.
For important information for U.S. shareholders, please see “Important
Information” on page 12.
Key figures
Q1 21 Q1 20 2020
Net sales, EUR million 71.7 68.2 342.4
Comparable EBITDA, EUR million 7.7 5.5 52.4
% of net sales 10.8 8.1 15.3
EBITDA, EUR million 4.6 5.4 40.3
Comparable operating result, EUR million 3.9 1.1 35.0
% of net sales 5.4 1.6 10.2
Operating result, EUR million 0.7 1.0 22.9
Result for the period, EUR million 0.7 1.3 17.8
Earnings per share, EUR 0.02 0.04 0.49
Net cash flow from operating activities, EUR million -0.3 -15.4 56.1
Net debt / comparable EBITDA, rolling 12 months 0.2 1.1 -0.1
Average number of personnel 640 642 650
CEO Pekka Tennilä:
“I am happy that our year has gotten off to a great start. Our financial
performance during the first quarter of 2021 was solid. The preparations for the
Altia and Arcus merger is proceeding in good dialogue with the competition
authorities. During the pandemic our focus has been on the health and safety of
our employees and continuity of our operations. Thanks to our joint efforts in
supply chain, we have been able to run our operations without any major delays.
In the monopoly channels we have continued to strengthen our brands through
digital activations and bring exciting novelties to growing categories. I want
to thank all our employees for their strong and successful efforts during these
extraordinary times.
During the first quarter of 2021, Altia’s net sales increased by 5.1% from the
previous year. In the Scandinavia segment, net sales grew in all markets, in
Sweden, Norway, and Denmark. The growth was driven by strong sales in the
monopolies offsetting the decline in on-trade. By product categories, growth was
strongest in spirits. The Finland & Exports segment has been more affected by
the Covid-19 restrictions. Net sales declined from the previous year due to the
significant sales drop in travel retail and on-trade. However, in Finland, sales
increased driven by monopoly channel growth. The timing of Easter had a positive
impact on consumer goods sales in both consumer segments. Altia Industrial
segment sales exceeded our expectations in the first quarter with growth in all
industrial products’ categories.In the first quarter our profitability improved
from the previous year with comparable EBITDA increasing from EUR 5.5 million to
EUR 7.7 million. The drivers for the strong profitability performance were the
two consumer product segments, i.e. Scandinavia and Finland & Exports, where the
positive channel and product mix together with initiatives on revenue management
delivered good results. The strong performance in Scandinavia was further
supported by favourable currency rates. The reported result for the period was
impacted by costs related to the planned Altia and Arcus merger, booked as items
affecting comparability.
During the first quarter our financial position has strengthened further with an
improvement in net cash flow from operations. This was due the good development
of our net working capital. In our sustainability roadmap, we have set the
target for significantly reducing our packaging CO2 footprint and making our
packages fully recyclable. During the first quarter our new bag-in-box
production line was started at our Rajamäki plant, allowing not only the
introduction of new innovative packaging to the market, but -as the only
producer in the Nordics- enabling us to make wine bag-in-boxes which are 100%
recyclable. We also launched wine PET bottles made of 100% recycled
material, for example, for our Chill Out brand, again as the first in the
Nordics within wine and spirits.
In 2021, we look forward to reaching an important strategic milestone with the
planned merger of Altia and Arcus to form the leading Nordic wine and spirits
brand house: Anora Group. The competition authority process is proceeding in
good dialogue with the competition authorities in Finland, Sweden and Norway. As
disclosed on 15 April 2021, completion of the Merger may be delayed till
autumn of 2021, since a binding agreement on the divestments must be entered
into prior to the completion of the Merger.
Altia´s Annual General Meeting was held in March 2021. In line with Altia’s
Board of Directors proposal, it decided that a dividend of EUR 0.35 per share is
to be paid for the financial year 2020. The AGM also decided to renew the Board
of Directors’ authorisation to resolve on an extra dividend of EUR 0.40 per
share, which is to be paid just before the completion of the merger between
Altia and Arcus.
Forecasting the recovery of the operating environment is difficult as this
depends largely on the development of COVID-19, the progress of vaccinations,
and changes in consumer behaviour. Due to these uncertainties predictability is
weak for the full year 2021, and we have decided to provide a short-term outlook
but no guidance for 2021.”
Outlook for 2021
Market outlook
The development of the Group’s business operations and profitability are
affected by the competitive environment, the overall economic outlook and
changes in alcohol taxation and regulation. Uncertainty related to changes in
consumer buying behaviour and consumer demand continues. In addition, overall
fluctuations of direct product costs affect the Group’s profitability.
COVID-19 update: Of Altia’s beverage sales channels, travel retail, exports and
on-trade are restricted or closed due to COVID-19 restrictions. The recovery of
these channels depends on the level and extent of government restrictions and
recommendations and how consumer behaviour changes. The pace of recovery is
difficult to estimate and is expected to vary across sales channels. Uncertainty
in the economy and operating environment is high, and the risk of an economic
slowdown is high.
Seasonality
There are substantial seasonal fluctuations in the consumption of alcoholic
beverages impacting the net sales and cash flow of Altia. The company typically
generates large amounts of its revenue and cash flow during the fourth quarter
of the year, whereas the first quarter of the year is significantly lower. In
addition, excise taxes related to the high season at the end of the year are
paid in Q1, resulting in large cash outflows at the beginning of the year. Also
Easter fluctuating between Q1 and Q2 impacts quarterly sales and profitability.
This year most of the Easter sell-in took place in Q1.
Short-term outlook
Altia has decided to provide a short-term outlook but no guidance for 2021, due
to the uncertainties caused by COVID-19 and the low predictability for the full
year 2021. The short-term outlook remains the same as in the Financial
Statements Bulletin on 25 February 2021.
In the first half of 2021, COVID-19 is expected to impact travel retail, exports
and on-trade. The channel shift in the monopoly markets is expected to continue
for as long as travel retail and on-trade continue to be restricted. The
situation is expected to stabilise earliest after the summer period.
In Altia Industrial, for the first half of 2021, COVID-19 is expected to
continue to impact contract manufacturing and industrial products in a
significant way. The increased prices of imported ethanol puts pressure on
technical ethanol margins. Barley prices increased at the beginning of this year
and the price level is expected to be higher than in 2020 until the new crop.
The recovery of the operating environment depends largely on the development of
COVID-19, the progress of vaccinations, and changes in consumer behaviour.
Additional information:
Pekka Tennilä, CEO
Juhana Jokinen, Interim CFO
Contacts:
Petra Gräsbeck, Corporate Communications, tel. +358 40 767 0867
Results presentation:
CEO Pekka Tennilä and interim CFO Juhana Jokinen will present the report on 28
the same day at 11:00 am EET. The presentation will be held as a Microsoft Teams
Meeting. We recommend that participants join the event using the online meeting
option: Join meeting here (https://teams.microsoft.com/l/meetup
-join/19%3ameeting_NDdlZGQ1OWUtZjViZS00MTU3LTk3MmItMGY0MDUyYzVmZjAz%40thread.v2/0
?context=%7b%22Tid%22%3a%22c32b30ff-5871-4a7d-a29e
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It is also possible to dial-in to the meeting about 5 minutes earlier at the
following numbers:
FI: +358 9 2310 6678
SE: +46 8 502 428 54
UK: +44 20 3443 9579
US: +1 917-781-4622
Conference ID: 988 958 12#
We recommend that questions to the management are sent through the Teams chat.
The presentation material will be shared in the online meeting and it can be
downloaded on the same day on Altia’s website at: www.altiagroup.com/investors
A recording of the event will be available later on Altia’s website.
Distribution:
Nasdaq Helsinki Ltd
Principal media
www.altiagroup.com