Anora Group’s Profits Bruised by Currency Woes Despite Strong Sales: A Second-Quarter Analysis
Anora Group, the parent company of Koskenkorva Vodka, reported a 14.4% uptick in net sales for the first half of 2023. Despite the gains, the company’s profits took a hit due to the devalued Swedish and Norwegian currencies.
After a 9% surge in Q1, Anora’s second-quarter net sales climbed 10.2% to €183 million (US$197.6m), thanks in part to its 2022 acquisition of Globus Wine. However, CEO Pekka Tennilä acknowledged that weakened currencies and rising input costs adversely affected Q2 performance. Currency fluctuations alone cost the company nearly €5 million (US$5.4m) in Q2 and €9 million (US$9.7m) for the first half of the year.
Tennilä pointed out that input costs—including energy, barley, and glass bottles—were notably higher than the previous year. Efforts to improve Globus Wine’s profitability are underway but lagging, and the subsidiary has yet to positively impact Anora’s bottom line.
To counter these challenges, a Q2 cost-saving program targeting €6 million (US$6.5m) in annual savings was initiated. This move already yielded a €2.4 million (US$2.6m) reduction in operating expenses, excluding Globus Wine. Anora plans additional price adjustments in the upcoming autumn.
Despite a 1.3% organic growth in local currencies, currency exchange dropped it by 4.7%. Spirits net sales for the first half-year increased by 2.8% to €107.3 million (US$115.9m), propelled by international sales. Anora revised its 2023 EBITDA guidance downward to €70–€78 million (US$77m-US$83m) on August 15.
Q2 Highlights:
- Spirits segment net sales dipped 1.8% to €58.4 million (US$63m).
- In Norway, liqueurs outperformed, while other categories declined.
- Finnish net sales increased, boosted by the grocery channel, resulting in a 40% growth in alcohol-free and low-alcohol beverages.
- The Baltics and exports experienced strong growth, while Denmark’s gross profit rose despite lower sales.
- In Sweden, vodka sales surged, but whisky, aquavit, and gin faltered.
Koskenkorva Vodka led the charge, posting double-digit sales growth and accounting for 15% of the company’s total spirits sales.
Going forward, Tennilä emphasized a rigorous focus on executing Anora’s strategy to strengthen profitability, which includes the ongoing savings program, price adjustments, and inventory turnover improvements.
