From the CEO
CEO Pekka Tennilä in the Q1 business review 2021 (29 April 2021):
“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.”