From the CEO
CEO Pekka Tennilä in the Financial Statements Bulletin 2019 (13 February 2020):
“Looking back at previous year, I am pleased to see our net sales in constant currencies and our profitability to improve after a solid fourth quarter performance. Scandinavia segment, especially Sweden, showed a strong sales and profitability improvement supported by another successful Blossa season. We continued to work on our sustainability roadmap with ambitious targets set for the future. Furthermore, we have refined our strategy to support our profitable growth ambitions towards our financial targets.
In 2019, our net sales in constant currencies grew by 1.5% driven by Scandinavia and Altia Industrial segments. In the monopoly markets, Altia’s spirit sales value grew in all three markets: Finland, Sweden and Norway. The growth in wine was driven by a strong performance in Sweden. In the Altia Industrial segment net sales growth was driven by higher prices and good volume development in industrial products. In 2019, Altia’s net sales totalled EUR 359.6 million.
Within the Nordic core brands, especially our grain-based spirits brands such as Koskenkorva Vodka and O.P. Anderson Aquavit have developed well during the year supported by successful product launches. For the Christmas season, we had a strong line-up of both traditional and novelty glöggs. Blossa had an exceptional season driven by novelties such as the sparkling Blossa in Sweden as well as new low and non-alcoholic glöggs.
Our profitability improved during the solid last quarter. In 2019, comparable EBITDA grew to EUR 44.8 million. This positive development was supported by efficiency initiatives and implemented price adjustments during the year.
I am especially pleased that our cash flow from operations significantly improved to EUR 52.6 million. The strong cash flow and our solid financial position enables a growing dividend payout. The Board of Directors proposes to increase the dividend by EUR 0.04 to EUR 0.42 per share to the Annual General Meeting.
Sustainability has for long been a strategic priority and key success factor for Altia and forms an intregral part of our refined strategy. In December, we published Altia’s Sustainability Roadmap extending to 2030, in which our key goal is to make Altia’s production carbon-neutral by 2025. Importantly, sustainability is also at the core of our brands such as Koskenkorva Vodka, and guides our innovation work and packaging development.
In our annual strategy process, we have reviewed our long-term strategic focus areas and growth ambitions. We build our refined strategy on our two core strengths: the Nordic distillery that masters sustainable and high-quality grain-based spirits, and the best route to market and channel excellence for our brands and our partners. To strengthen our growth, we aim to take our brands to new growing markets. We are committed to carbon neutral production by 2025 and to develop more value-added products from barley.
Our financial targets remain unchanged. In the long-term, we aim for an annual net sales growth of 2% and an comparable EBITDA margin of 15%. We also aim to keep the net debt to comparable EBITDA ratio below 2.5x and to distribute at least 60% of the result to our shareholders.
For 2020, we expect comparable EBITDA to be at the same level as or higher than in 2019 (2019: EUR 44.8 million). The continued decline in market volumes in Finland puts pressure on profitability growth. The uncertainties in global travelling impacts border trade and travel retail regionally and in Asia. Guidance assumes a normal barley price level following the 2020 harvest. Industrial services are impacted by phasing of volumes between the years.”