Stock Exchange Release

Altia Plc’s Business Review January–March 2018: Start of the year in line with expectations, comparable EBITDA improving

Altia Plc’s Business Review January–March 2018: Start of the year in line with expectations, comparable EBITDA improving

January–March 2018 compared to January–March 2017

Altia Plc’s Business Review January–March 2018: Start of the year in line with expectations, comparable EBITDA improving

January–March 2018 compared to January–March 2017

  • Growth in constant currencies was 2.0%, reported net sales of EUR 73.5 (73.4) million were impacted by unfavourable currency fluctuations
  • The timing of Easter in the first quarter contributed positively to net sales and profitability
  • Comparable EBITDA was EUR 5.2 (4.3) million, which is 7.0% (5.8%) of net sales
  • Items affecting comparability were EUR -4.1 (-0.5) million, driven by IPO costs
  • Net debt / comparable EBITDA (rolling 12 months) was 1.8 (0.7)
  • The new Alcohol Act in Finland opened the retail channel outside monopolies for Altia’s strong brands such as Koskenkorva, Jaloviina and Leijona
  • Guidance remains unchanged
Key figures
  Q1/18 Q1/17 2017
Net sales, EUR million 73.5  73.4  359.0 
Comparable EBITDA, EUR million 5.2  4.3  42.4 
   % of net sales 7.0  5.8  11.8 
EBITDA, EUR million 1.1  3.8  40.3 
Comparable operating result,   EUR million 1.6  0.7  28.2  
   % of net sales 2.2  1.0  7.8 
Operating result, EUR million -2.5  0.3  26.1 
Result for the period, EUR   million -1.8  0.7  18.3 
Earnings per share, EUR -0.05  0.02  0.51 
Net debt / comparable EBITDA,   rolling 12 months 1.8  0.7  1.1 
Average number of personnel 705  785  762 

Reconciliation of alternative key ratios to IFRS figures is presented in the Business Review on page 9

CEO Pekka Tennilä:

“The first three months of 2018 developed in line with our expectations. Net sales grew by 2.0% in constant currencies but the impact of the weak Swedish krona and Norwegian krone was EUR -1.3 million bringing the reported net sales to previous year’s level. This year, the timing of Easter has contributed positively to the first quarter’s net sales and profitability. The comparable EBITDA margin continued to improve in the first quarter and was 7.0% (5.8%). The IPO of Altia was completed as planned, and the costs related to it are impacting the reported profitability and result for the period.

The new Alcohol Act in Finland, which came into force at the beginning of the year, has opened the retail channel for Altia’s own and partner brands. In the first quarter, the focus has been to start building distribution and launching new products. In March, Altia launched Koskenkorva RTD’s (ready-to-drink), Jaloviina Long Drink and the new Leijona Long Drink in retail, and new launches are prepared from both our own and partner brands during the second quarter. Altia’s retail business has had a good early start. The retail offering will continue to develop in the coming months as retail chains are expected to expand their offering, especially in ready-to-drink products.

In exports, the focus continues to be on developing the key exports markets with the strong Nordic core brands Koskenkorva, O.P. Anderson and Larsen. Exports are showing good progress and are developing according to our expectations.

The first quarter was active with new launches in the key markets. For instance, in Finland, an innovation in the cognac category involving a unique process and new taste was launched with Renault Avec. In Sweden, Altia launched new sparkling wines in Systembolaget – Amies amies and Say Blush – and in Denmark, a new schnapps was launched: Brøndums Fadlagret. Easter is one of the annual peak seasons for both aquavit and schnapps, and the Altia brands performed well in the first quarter across the region.

The IPO of Altia, which was completed at the end of March, attracted a lot of interest and was significantly oversubscribed. We look very much forward to the journey together with our new shareholders. We will continue to further improve our ability to develop and compete successfully in the alcoholic beverage markets in the Nordics and globally. Going forward, we will continue to focus on our strategic streams: to grow the Nordic core brands, to execute a step change in wines, and to strengthen strategic partnerships and channel expansion while continuing to improve overall efficiencies.”

Outlook for 2018

Market outlook

The development of the Group’s business operations and profitability are affected by factors such as the market situation and competitive environment, economic outlook, imports by consumers and changes in alcohol taxation. The uncertainty in the eurozone and changes in customers’ buying behaviour are continuing. There is still significant uncertainty related to the development of consumer demand. Raw material prices and currencies are expected to remain volatile.

Seasonality

Sales in the sector are seasonal, with net sales and operating profit generally being significantly higher in the fourth quarter of the year compared to other quarters.

Guidance

The positive trend in Altia’s core brand portfolio is expected to continue. Cost increases in key raw materials and expansion in exports will impact profitability development. Unfavourable currency impact of the weak Swedish krona and Norwegian krone are expected to continue.

Guidance as published on 23 February 2018 remains unchanged: The Group’s comparable EBITDA is expected to improve or be at the 2017 level.

Additional information:

Pekka Tennilä, CEO
Matti Piri, CFO

Contacts:

Analysts and investors: Tua Stenius-Örnhjelm, Investor Relations, tel. +358 40 7488864

Media: Petra Gräsbeck, Corporate Communications, tel. +358 40 767 0867

Conference call and audio webcast:

Altia will host a conference call and audio webcast for analysts and investors in English on Friday 4 May 2018 at 11 am EET.

CEO Pekka Tennilä and CFO Matti Piri will present the Q1 Business Review, after which conference call participants will have the opportunity to ask questions. Presentation material will be made available before the call begins on Altia’s website at: https://altiagroup.com/investors.

Conference call participants are requested to dial in and register a few minutes earlier on the following numbers:

Finland: +358 (0)9 7479 0360

Sweden: +46 (0)8 5033 6573

United Kingdom: +44 (0)330 336 9104

Participant passcode: 310062

The conference call can also be followed online. To join the audio webcast, please go to: https://altia.videosync.fi/2018-05-04-q1-teleconference  

A recording of the audio webcast will be available later at Altia’s website: https://altiagroup.com/investors

Note:

This is a summary of Altia Plc's Business Review for January–March 2018. The complete review is attached to this release and is also available on the company website at https://altiagroup.com/investors.

Distribution:

Nasdaq Helsinki Ltd
Principal media
www.altiagroup.com

More information and contact:
Tua Stenius-Örnhjelm
Investor Relations Manager
tua.stenius-ornhjelm [at] altiagroup.com