Hello all, and welcome to Anora's Q3 this morning, and we have here for interview CEO Kirsi Puntila and CFO Stein Eriksen. Usually, highly welcome. So, Kirsi, let's start with the usual simple question: how did the Q3 go from your perspective?

At least, I mean, if you've been given the task to create a turnaround strategy for the company, then you start seeing the execution becoming successful, so you have to be happy, right? But in all seriousness, there are two takeouts that we would like to have after this Q3 first. First and foremost, the fact that this was the first quarter of 2022 when we actually saw the top line grow, modestly. Yes, 0.5%, but still we celebrate every victory in this company, and secondly EBIT is fundamentally a profitability strategy, and now since our Capital Markets Day a year ago we've been able to demonstrate double-digit growth in EBITDA every quarter. So that, of course, one has to consider a success.

EBITDA was 20.2 million euros, which is 0.5 million euros, or 2.5%, up from last year, so those are the two key measures of success, I would say, but on top of that, of course. Gross margin percentage keeps on delivering, and at record high, and it's a very broad-based improvement in all of the segments, Wine & Spirits and Industrial, and then at the same time our balance sheet is getting stronger and stronger. Our net debt was down to 150 million euros and inventories are down again by 9.9%, so in most of the parameters that we're following, I would consider Q3 to be successful, and we're very happy about it.

Good. The improvement came mainly from the Industrial segment if you look at the EBIT detail level, so Stein, can you open up a bit? You have some different businesses and components there, what was happening there and what was driving the improvement?

Industrial can be a little bit difficult segment to understand, right, but the right way to split it up is in three parts. First of all, industrial, we are producing contract manufacturing, mainly of Finlandia Vodka to Coca-Cola Hellenic, so the volumes there have been pretty good both in Q3 and year-to-date. Point number one. Also, when we produce a lot of ethanol there, we also produce a lot of side products, so that also means that the sales of starch, ethanol feed, has been good, so that's point number one. Point number two, we have factories, and especially Koskenkorva factory has been running very efficiently and well, so that's point two. Point number three, we have a logistics operation in Norway named Vectura, that's also continued to perform well both in the quarter and year-to-date. So those are mainly the three elements for the whole improvement in Industrial.

So basically all the parts of the business.

You have basically improved, basically. Yes, yes, yes, yes, yes.

All bits.

A little, yes.

Very, very good. But then if we look at the Wine & Spirits segment, you are both in Q3 and year-to-date roughly at last year's levels in terms of EBITDA. Is that kind of in line with your targets and expectations, or did you expect also that to kind of contribute to the overall improvement as well?

Very much in line. In spirits, as said, gross profit was improving in all of the segments and across, but in terms of top line. This was the last quarter when we see some comparisons with spirits, so we see the earlier lost partner still impacting, but this should be now done with. So that's one thing, and then the wines, the truth of the story is that we still have some work to do there. In fact, some encouraging steps in terms of the market. Our market share in Sweden for wines has been already very, very strong in the past few quarters, and we continued to keep the number two position in Sweden, but there are also glimpses of hope elsewhere. I mean, Finnish market shares in wine in the monopoly, Alko, are showing some very encouraging change figures, but there's still some work to be done, obviously, in the wines area.

Then earlier this month you concluded the Bacardi distribution deal, which we talked about already last quarter, so can you elaborate on how that will impact and how the deal is structured? This is it again, are you building the organizations and the inventories yourself, and you're not acquiring anything from the previous manager of the deal?

Maybe I can start here. We are ready to rock, so as of mid-November. We will start dealing with Bacardi's portfolio business in Sweden and in Norway, and we are ready to start. We're taking over their on-trade contracts, and everything is set from the support point of view, we're ready to go then, of course. We are building up the inventory gradually to get ready to sell the bottles, and finally we have opened up some positions so that we can work in the increased volumes, but contractually now we did not hand over many people as such.

Now, does that kind of ramp-up of the business incur any meaningful cost for you, or is it basically business as usual?

Business as usual, and it's...

Officially as well that we're expecting up to 5 million euros of net sales for Q4, so we don't see material impact on the business yet. That's the end of the year, but then next year, of course. Next year it's 20...

25 to 30 million, and then in Q4 we probably will build up inventory of our own by 5 million euros, yeah.

Exactly.

Good, okay. Then if we look back a bit on your Fit, Fix & Focus program, which you announced a year ago, and then you targeted 20 million in cost savings already during this year, or starting already last year, end of last year. How has that now progressed? Is that kind of fully... On your books already?

It's not fully in the books. I think from a run-rate perspective, we have a feel around 80% of the cost savings in procurement and rightsizing, or organization rightsizing, there absolutely we start to see effects. We will also see some effects going forward, but especially when you come to procurement, there we will see most effects in 2027, because it needs, first of all, for example glass bottles you buy, then you need to use the old ones and that has to go through the inventory, so we will first see effects, most effect, in 2027. But like I also mentioned in the end of the call, of course we also see increased input costs, so that can affect negatively, especially what we see so far this year is transportation, logistics cost and energy cost, so that's a little bit worrying.

Joo.

On the costs side, if we look at the timeline, obviously we saw now we had a spike in the oil price and energy in the spring, then it came down, and now again in the...

Fall.

So I would guess it would also become more pronounced towards next year. Rather than Q4, or how is it for you? You saw...

First half, I didn't see so big effects from that, but absolutely now in Q3 we start to see effects, and of course also I feel that we will see more negative effect into Q4, especially going into 2027, so unfortunately. And we do not manage easily to take it out in prices immediately, because you have pricing windows in Finland and Sweden and in Norway.

So in freight and energy are already in the house. Created exactly that. Presumably. It will also hike your packaging someplace. A bit.

See bottles and glass bottles. Yes, yes, yes, of course.

There is that, do you have a long time before your packaging contracts renew to the higher prices, or should we...

Half year or so.

Some delay.

Yes, yes, some delays. Joo, joo.

Good, great. Then the outlook, you mention in the guidance for the full year. You're now already quite a bit ahead for four nine months, and the full-year guidance actually indicates that the lower end indicates that your Q4 could be even below. Last year, even though you have been improving throughout the year, so why is that, what kind of risks do you see for Q4?

Yeah, well, one has to remember that Q4 is 40 to 45% of the full year. So I think we want to be rather conservative than building up the expectations, because one has to remember that it is a huge quarter, and first and foremost our key markets are still in decline, especially if you look at the monopoly channels in Finland and Norway in particular, so that outlook is still fairly negative, and secondly, as Stein. Mentioned, we have the energy and transportation costs now hiking up, so that will eventually then of course affect our cost structure, and then thirdly, we are, for good and bad, very dependent on our glögg, Blossa, and it's a little bit of a wildcard always in a way. So far the weather has been way too warm for our liking, so typically when the Celsius degrees go below zero, then the Blossa sales start to go up, and now it's been double-digit plus numbers, so that really remains to be seen, but we keep the guidance in the bracket with 70 to 75 million comparable EBITDA, and that's what we are committed to delivering.

Forty percent of our result is in Q4, so we really need to deliver.

Okay, thank you. Have the end of the year go well, good luck for the important season for you. Thank you for the interview.

Thank you so much.