Hello all InderesTV listeners and viewers. Anora reported their new Q1 this morning and we have for interview company CEO Kirsi Puntila and CFO Stein Eriksen. Hello.

Hello. Hi, hi.

So let's start with the usual question. Kirsi, how did the new Q1 go in the company's perspective, at least compared to market expectations? You were below, even if you improved compared Yes, to last year.

Rauli, I would describe Q1 for Anora as solid execution in a challenging market. I think one thing that we have said is profitability first, and I think that's where we delivered. I think our margins are at historic high levels in Q1, 46.7%. Secondly, we obviously had the very good EBITDA development,

Mm.

10% improvement from last year, ending at 8.8 million euros. So that, of course, is the second biggest thing. Those are the two areas that we have promised that we will improve. Thirdly, then, of course, the whole balance sheet. We're very proud of that, and strengthened balance sheet overall, lower net debt and then the reductions in the inventory. So I guess the only sort of puzzle Hmm. to be solved is then the top line, which was a bit down, four percent, resulting in 135.8 million euros in net sales.

Yeah, let's continue with that maybe for Stein then. The next one is that the sales decline was particularly steep in wine business, but perhaps otherwise as well, at least compared to the market expectations a bit weak. So can you open up the factors leading to that sales decline?

Yeah, so if you look at it, it's like you said. I mean, If we start with wine, then around 40% of the decline was related to this lost filler business that we have had now for a couple of years. And also we had some lower campaign activities in Denmark, as well as overall continued to characterize the market, especially in Finland, as pretty weak. So I think those were the three biggest elements. Also, like I said in the call, we are the market leader the market leader in selling of American wines Hmm. in Denmark, and there also we see quite a significant decline in sales of American wine in that Yeah. market. When it comes to spirits, most of our decline was actually related to these partner changes in 2025 and as you saw in industrial, we had quite good development in that, and that was mainly related to two things. First of all, higher contract manufacturing volumes. Yes. over especially in Finlandia, Yeah. what we are. And then also higher sales in our logistics business in Norway, Yeah. Vektura. Yeah. Yeah.

Yeah. What about then if you compare the kind of market development to Mm-hmm. Europe? The headline figures are clearly weaker than the market. But if you kind of Yep. strip out the the maybe the filler business and the partner Yep. loss which were Yep. prior events, Yep. how would you characterize your market share then development?

we are more or less, I think. The total market was down by one percent, and if we adjust for this filler business and partner, we are around zero percent, or on par with last year. Yeah, and I think that is in this given environment,

Okay.

I think it's actually is actually quite strong

Mm

because if we took those partly, I wouldn't call them external factors, but still areas that are already known. So then considering all that, I think even the top line would have been obviously very different.

Yeah. Yeah. Yeah. And there was obviously some positive impact from the timing of Easter. Do you have any quantification of how that that showed in your figures?

There was, and there obviously always is, as as we here internally know, we usually analyze March and April together because in one year it is in March and the other one it is in April. And of course in that sort of even in the EBITDA lift of 10%, there's the Easter effect included. But having said that, there's less and less of Easter impact, especially in Finland. A bit more in Sweden, but in Norway sure, there was a significant Easter impact in March. wise

Yes, yes.

Hmm.

Yeah.

And I think in Norway and March alone, the monopoly was up with 24%.

Yep. So obviously we had positive Easter effect, like Kirsi said, especially in Norway. Yep. Exactly. Yeah, then like you mentioned, the gross margin development was pretty strong. What were the drivers behind that? I guess there's some efficiency measures, but also other things, so can you elaborate a

bit? I would start with the fit, fix and focus. That is now proving successful. I think our midterm strategy of turning around the company and profitability in the first place, it's now proving very strong. So it's of course the revenue management efforts. I mean, the pricing plays a key role in gross margin development. And then our very disciplined cost and OPEX work that we have had now for months, and still already last year, and now that continued in Q1. So those are the key areas of measures for GM. So what we said in the call, around 1.30, is explained by better operations, and especially in the Mm-hmm. industrial segment. One third is related to positive revenue management effects, and one third more positive mix effects, of course partly then related to the loss of the Yeah. partner and Yeah. filler business. Yeah, except Uh but I think it's fair to say two third is explained by own performance. Own work. Yeah. yeah.

Yeah. Yeah. Yeah, that's good. But now that you made quite significant personnel cuts too in the year-end last year, were those savings now fully visible already in Q1?

Yeah, so we finished the change negotiations in December. We had a new organization in place starting from 1st of January. And if you look in our report, I believe the personnel expense was down from 27 to 26 million. So yes, we start to see effects in our results for Q1.

You also mentioned already, Kirsi, the strong balance sheet, its improvement and the cash flow. Obviously it is seasonally negative, but still Yeah. clearly, clearly improved. It was Yep. mostly due to working capital items. So can you a bit elaborate, like how structural is that? Yeah. Then how Yeah. much maybe some Yeah. timing effects there was?

Yeah. That's an extremely advanced question that I'll If I should dare to give a statement, of course we have positive Easter effects also in Q1 because of higher excise duties and also higher sales receivables compared to the previous year. But then also we have good underlying reduction in inventory. I mean, if we compare us to Q1 2023, we've actually reduced the inventory with 86 million euros. take out the sale of Larsen and it's still an underlying reduction of 55 million euros. Hmm. But that being said, answering your question, if I if I should dare to give a number We had an operational improvement of cash flow of 41 million. Mm. Around half is related to Easter effects and around half is related to the good work underlying work that we have done with especially reducing the inventory. But I have to build on what Stein is saying about the inventory reduction in general. I do think that's almost a cultural shift within the organization. It's something that everybody in every function now understands the role of net working capital and then the impact of inventories in our balance sheet. So I think that's something that I'm very proud to see around the company, that everybody's sort of taking pride in reducing the inventory, something that we probably didn't even, you know, talk that much about a few years ago. So I think that definitely plays a big role.

Yeah, that's good. Then there was one question, maybe a kind of bit broader or kind of on other topics. posted on our investor forum for you. And that question was basically, if I try to kind of rewrite it, it was about how could you kind of utilize or use more of your existing distribution reach and cost base to kind of increase your third-party products, maybe to something else that you don't have, maybe some other line of products. Is that kind of a relevant stream for you to

I think

to explore.

it's a really really good question actually. And actually, thank you for whoever asked that question, because it is the fact that our dual model is now proven to be very strong. And by that dual model, I'm referring to us being the strongest wines and spirits player in the Nordics and the Baltic region. And that question is very relevant because we have an existing multi-channel, multi-market operation. So we have sales and marketing teams in all of our markets. We have support functions, we have access to all the channels in the beverage industry. Mm. So I think it's a very good question. And yes, we are ready. So we have the full setup basically and the service model already for other partners and any other adjacent categories that you're referring to, as beer or any other segments.

Yeah, yeah. And kind of how topical is that.

I already So we're looking for growth. We're looking for growth. I mean, that is a set that's the only element that we're still missing. So I can assure you that we're working night and day in the growth part of the business as well. I think we've proven our agility to adjust to the market environment and being very strong in improving our profitability. So the rest is then to get the growth. And by looking at the growth, we have to obviously look at all kinds of creative solutions. Yes.

Yep, good. Then obviously one kind of key topical question is the spike in energy costs we saw Mm. and as a result of the Iran war I guess there wasn't much visible at least in Q1 for you, but there will definitely be impacts to at least logistics and packaging costs. So Yes. can Yes. you say anything about the kind of magnitude you're expecting now and when would those impacts hit you?

Of course this is something we are following very Yeah. closely. It's like you said, there are very small effects in Q1, but of course given the fact that oil prices have gone up, we see polyethylene as an important factor, for example in our packaging material, up with 50%. We see glass bottles are up, so obviously this is something we are following very closely. We have bi-weekly meetings with our procurement team. So and also fertilizers will go up. That will eventually impact the harvest and so on, but But that being said, I won't give you a number, Mm but -hmm. of course we have several tools in our toolbox in order to mitigate this. Revenue management is one of them, OPEX reductions is another one, and of course harmonizing packaging material and doing everything in our power to keep the cost down. But of course there will be cost increases, probably partly mitigated by the fact that the Norwegian kroner and the Swedish kroner has strengthened. somewhat towards the euro and especially then the US dollar, but there will probably be cost increases and we need to be on our toes in order to not bleed on our margins. Hmm. Yeah, because like Kirsi said, we are very pleased with our gross margin improvement. If you compare us to the Q1 2023, we have an underlying improvement of gross margin of six percentage points. And that's because we have been much more active when it comes to especially the revenue management part and that will continue also going forward. Yeah.

Yeah. And what about the kind of impacts on the demand or consumer outlook? in general, have you changed your view of the market as a result of this? Of course it was challenging to begin with

Yeah, but yeah It was challenging to begin with. But no, not no, we haven't changed any outlook because of that. We don't see, apart from the fact that economies in general are challenged all over Europe and the western part of the world, but no changes in our guidance or anything else.

Yeah, yeah, you maintain the full year guidance for the earnings, so I guess I guess that at least implicitly states that you expect to mitigate these these headwinds you are

We facing. expect to mitigate Yeah. the headwinds and I think as said we've already shown that we are quite agile in changing the actions. So not only mitigating, but also looking at how effective the FFF is in terms of improving the efficiencies and strengthening our balance sheet, but also looking at the pipelines. It's not only the amazing partner portfolio that we have, but also our own innovations, for example. So looking at the plans for the rest of the year, there's no reason for us to sort of drop the ball or change the guidance at this stage. And one has to remember that Q1 is only 10% of the full year. So we're still talking quite a small part.

Indeed. Good. That's a good point to end. Thank you, Kirsi and Stein, for the interview.

Thank you. Thank you, Rauli.

Thank you.