Anora Q3'24 flash comment: Result even weaker than cut expectations

Translation: Original published in Finnish on 11/7/2024 at 08:59 am EET

Anora’s Q3 result was even weaker than the cut expectations and the comparison period, as the revenue and result of its beverage segments suffered from weak volumes. The guidance that was downgraded in connection with the profit warning (2024 adj. EBITDA 65-70 MEUR) was naturally reiterated in the report, but the poor result put downward pressure on our forecasts.

Revenue fell slightly more than we expected

Anora’s Q3 revenue decreased by 6% year-on-year, more than we expected. The revenue decreased in all segments, as revenue from beverage sales (Wine and Spirits segments) decreased more than we expected, especially in the Spirits segment. This was mainly due to weak market volumes. The revenue of the Industrial segment decreased as expected.

The result was weaker than the cut expectations driven by the beverage segments

Anora’s Q3 result was clearly lower than the comparison period and also weaker than the forecasts, although they had been cut after the October profit warning. Especially the Spirits segment generated a clearly weaker result than we expected, and the Wine segment's result also weakened from the weakish comparison period, contrary to our expectations. In our view, the weaker result of the beverage segments is mainly due to weak volume development. In contrast, the Industrial segment achieved a better result level than expected and compared to previous quarters. However, this highlights the weak performance of the beverage segments, as the Group’s figures remained below expectations. As earnings turned downwards, Anora’s net debt/adjusted. EBITDA was 3.3x, which is quite high.

The guidance cut in October was reiterated

Anora downgraded its guidance in mid-October and expects 2024 adjusted EBITDA of 65-70 MEUR, or about the 2023 level (68 MEUR), which we consider a weak year. This guidance was also reiterated in the Q3 report. For January-September, the company has 40 MEUR in adjusted EBITDA, 1 MEUR less than in the comparison period. Our forecast before the Q3 results was just under 69 MEUR, which is subject to downward pressure due to the weak result. Q4 is Anora’s most important quarter due to the Christmas season, and we believe that its volume development also has a major impact on the guidance for the whole year. In our latest report, we commented in more detail on the profit warning. After a profit warning, the company also announced that Jacek Pastuszka, who had been CEO for only one year, would leave the position once a successor was found.