From the CEO
CEO Pekka Tennilä in the Business Review January-March 2019 (8 May 2019):
“The late timing of Easter this year has a significant impact on Altia’s net sales in the first quarter. During Easter, traditionally the consumption of both spirits and wine is higher. When taking into account the April sales and looking at the first four months of the year, the Group net sales have developed well and are above last year’s level, and also beverage sales have reached last year’s level.
Our profitability was impacted by high raw material costs during the first quarter, as already stated in our guidance for the on-going year. Furthermore, the timing of Easter impacted profitability.
In the first quarter, Altia’s reported net sales increased by 0.4% to EUR 73.8 (73.5) million. When the impact of the weak SEK is excluded, net sales growth was 1.3% compared to the same period last year. Comparable EBITDA declined to EUR 4.3 (5.2) million, which is 5.8% (7.0%) of net sales. Without the impact of the IFRS 16 Leasing standard, comparable EBITDA was EUR 3.2 million, 4.4% of net sales.
During the first quarter, we have carried out price increases in all categories in the three monopolies as planned. Price increases were implemented in January in Finland and Norway, and in March in Sweden. Therefore, the full impact of price increases is not visible in the first quarter. As part of our ongoing revenue management, we will closely monitor the market and use the upcoming pricing windows of the monopolies accordingly.
In April, after the review period, we announced a new partnership with Conaxess Trade Beverages in Denmark. Through this partnership, we are looking for a stronger route to market locally and to strengthen our presence especially in the on-trade channel. The partnership will also allow us to support the growth of our iconic Nordic brands, Koskenkorva Vodka and O.P. Anderson Aquavit, and the locally strong brands Brøndums aquavit and 1-Enkelt bitter.
Looking forward, we maintain our guidance for this year and, assuming a normal harvest, we expect comparable EBITDA, excluding IFRS 16 impact, to improve from the 2018 level. High raw material costs are expected to continue to impact profitability until the new harvest.
In February, we communicated about the further measures in reaching our long-term financial targets. The work is progressing and we are focusing strongly on implementing these measures within sales growth, revenue management, supply chain efficiencies, procurement savings and overall organisational efficiency.”