From the CEO
CEO Pekka Tennilä in the Financial Statements Bulletin 2020 (25 February 2021):
“I want to thank all employees for delivering such strong results for 2020. Last year was exceptional for us, with the outbreak of COVID-19 into a global pandemic and the challenges it brought to our business and to the health and safety of our employees. We have managed the situation very well and I am proud of the great achievements our employees have reached and for the strong commitment they have shown during this difficult year.
We ended the year with a fourth quarter largely in line with our own expectations with the COVID-19 restrictions still impacting travel retail and on-trade. In the important Christmas season, our sales of both Blossa and traditional Finnish glöggs developed well, while the sales of aquavits in Sweden were impacted by the lack of festivities and the restrictions in on-trade.
In 2020, Altia’s net sales decreased by 4.4% in constant currencies. The decline was largely driven by the negative impacts of COVID-19 restrictions on travel retail, exports and on-trade sales channels and contract manufacturing volumes. Following these restrictions, consumers have shifted purchases to the monopolies. In the Finland & Exports segment, net sales declined from the previous year due to the sales drop in travel retail and exports, while Altia’s net sales in the monopoly channel grew, driven by strong spirits sales. In the Scandinavia segment, net sales grew from the previous year driven by strong sales in the monopolies offsetting the decline in on-trade. In Altia Industrial, net sales declined due to lower contract manufacturing volumes, while we saw demand-driven growth of ethanol sales.
In 2020, our profitability improved from the previous year with comparable EBITDA increasing by 17.1% or EUR 7.6 million to EUR 52.4 million. As a result of this positive development, we have reached our long-term financial target with a comparable EBITDA margin of 15.3%. The drivers for the exceptionally strong profitability development were the Altia Industrial segment, the positive channel mix, and Group-wide cost savings measures. The reported result for the period was impacted by costs related to the Altia and Arcus merger plan booked as items affecting comparability.
Our financial position has been solid throughout the whole year with good cash flow development and strong liquidity. Net cash flow from operations improved to EUR 56.1 (52.6), driven by the positive development of working capital.
In line with Altia’s dividend policy, Altia’s Board of Directors has proposed to the Annual General Meeting that a dividend of EUR 0.35 per share be paid for the financial year 2020. The dividend will be paid in addition to the planned extra dividend of EUR 0.40 per share, which is to be paid just before the completion of the merger between Altia and Arcus.
During the year, our key priorities have been the health and safety of our employees and business continuity. My sincere thanks goes to our production teams, and also to our partners and suppliers who have supported us in keeping our operations running without major disruptions. During the pandemic our important contribution to society was to meet the increased demand of technical ethanol for hand sanitiser end-use. When the demand peaked during the first quarter, the daily amounts of denatured alcohol delivered to our customers was enough to produce around 200 000 half-litre hand sanitiser bottles.
For us, sustainability is both a strategic priority and a key success factor in our business. From the beginning of 2020, we have been implementing our Sustainability Roadmap 2030 with the key goal to have carbon neutral production in 2025. The investment in a new fuel silo at the Koskenkorva plant takes us one step closer to that target. At the Rajamäki plant, we have strengthened our own capabilities in low-alc and non-alc production, which places us in an excellent position to pursue innovations in this growing category. Thanks to our commitment to further develop occupational health and safety, we have made good progress towards our long-term target of zero absences due to injuries with the injury frequence continuing to decrease also in 2020 compared to the previous year
In 2021, we look forward to reaching an important strategic milestone with the planned merger of Altia and Arcus to form a leading Nordic wine and spirits brand house: Anora Group. We announced the merger plan in September which was approved by the shareholders at the Extraordinary General Meetings of Altia and Arcus, respectively, in November. The competition authority process is proceeding according to our expectations and in good dialogue with the competition authorities in Finland, Sweden and Norway. We continue to expect to complete the merger in H1 2021.
Looking ahead, we expect significant uncertainties in our operating environment due to continuing COVID-19 restrictions. Forecasting the recovery of the operating environment is difficult as it depends largely on the development of COVID-19, the progress of vaccinations, and changes in consumer behaviour. Due to these uncertainties the predictability is weak for the full year 2021, and we have decided to provide a short-term outlook but no guidance for 2021.”