From the CEO
CEO Pekka Tennilä in the Financial Statements Bulletin 2018 (7 February 2019):
“Our financial development in 2018 was challenged by external factors in the operating environment. Increased raw material costs and negative impact from currencies have driven our financial results down.
When excluding the negative impact from currencies, we are pleased with the net sales growth of 1.4%. Our Nordic core brands such as Koskenkorva Vodka and Larsen Cognac continued to perform at a good level driven by growth in exports. In addition, the opening of the grocery trade in Finland and of our own wine brands, Blossa and Chill Out, performed well.
Looking at the Nordic monopoly markets, we can see solid volume growth in Sweden and Norway, and a declining market in Finland in 2018. Due to the changes in alcohol legislation and taxation in Finland at the beginning of year 2018, the volumes in the Finnish monopoly market have declined. In total, the three monopoly markets for spirits and wine showed flat volume development during 2018. In these markets, Altia strengthened its market position in wines, but lost slightly in spirits due to partner portfolio changes in Sweden.
Altia Industrial’s positive contribution to net sales was driven by its continued good development in industrial products and the completed price increases following the higher barley prices.
Corporate responsibility is at the core of our strategy and business. In November 2018, Altia was presented with the Green Company of the Year award by the international Drinks Business magazine. This is a great recognition for Koskenkorva distillery’s circular economy.
We are also taking the right steps in digitalising Altia and developing our capabilities in this area. The work with our digital platforms Viinimaa in Finland and folkofolk in Sweden has proven successful. In May 2018, we opened a webshop for Nordic alcoholic beverages on the German market: www.nordicspirits.com.
In 2019, especially in the first quarters of the year, the negative impact of the increased barley cost will be reflected as higher raw material costs in comparison to the same period last year. We have already taken actions to improve our comparable EBITDA from the 2018 level through price increases in beverage products as well as cost savings. In the Scandinavia and Finland & Exports segments, we have completed organisational changes, and price increases in beverage products in the three monopoly markets are being implemented during the first quarter. In addition, we have identified initiatives to improve supply chain efficiency.
Our work to renew Altia continues. Based on our strategy to create profitable growth, we have identified further specific initiatives to reach the earlier communicated long-term net sales and profitability targets. These additional initiatives focus on sales growth, revenue management, supply chain efficiencies, procurement savings and overall organisational efficiency.
In March 2018, Altia was listed on Nasdaq Helsinki. Our first General Meeting of Shareholders since the IPO is planned to be held on 15 May 2019 in Helsinki. The Board of Directors will propose to the Annual General Meeting that a dividend of EUR 0.38 per share be paid for the financial year 2018.”