@Rauli_Juva could you explain how these interest-bearing debts work in the analysis? 
1 Like
In this company, sold accounts receivable are included as debt, which is indeed mentioned in the report. Normally, of course, it should match those balance sheet figures.
The amount can be found in Anora’s report; of course, that could be added after the text mentioned above in our report too.
4 Likes
Thanks!
For the sake of clarity, it would be good if those sold receivables were their own negative line item in the DCF model, if your system is flexible enough for that 
As we all know, you don’t really need to read any of the text in the report; you just take a quick look at the recommendation, target price, and dividend yield. After that, you can jump straight to the DCF model at the end of the report 
9 Likes
Rauli has shared his preview comments ahead of Anora’s Q1 results on Tuesday. 
Anora reports its Q1 results next Tuesday at approximately 8:30 am. We expect the results to have improved from the weak comparison period, similar to the previous quarter. The results are still at a weak level. We believe Anora will reiterate its full-year guidance, which expects an adj. EBITDA of 75–85 MEUR for the full year.
7 Likes
Anora published Q1 results: Anora Group Oyj:n osavuosikatsaus 1.1.-31.3.2024 | Kauppalehti
Q1 2024 in brief
- Net sales were EUR 146.9 (159.5) million, a decrease of 7.9 percent.
- Comparable EBITDA was EUR 8.9 (7.9) million or 6.1 (5.0) percent of net sales, an increase of 12.1 percent.
- EBITDA was EUR 7.8 (6.9) million or 5.3 (4.3) percent of net sales, an increase of 12.9 percent.
- Net cash flow from operating activities was EUR -44.6 (3.6) million.
- Earnings per share were EUR -0.03 (-0.08).
Quite a terrible cash flow at least, was there some seasonality to this, I suppose taxes at least are paid in Q1!?
“lower raw material prices and currency hedges supported our performance during the period.”
“Net sales decreased by 7.9 percent to EUR 146.9 million in the first quarter, mainly due to the decline in net sales in the Wine and Industrial segments.”
And @Rauli_Juva’s morning comment on the result: Anora Q1-aamutulos: Pieni tulosparannus tärkeimpien segmenttien ajamana - Inderes
4 Likes
The comment also includes an answer regarding this cash flow:
“Anora’s cash flow from operating activities was EUR -45 million due to typical seasonal variation in working capital. The figure for the comparison period (EUR 4 million positive) was significantly supported by the sale of trade receivables. The negative impact of inventory and trade payables was, however, clearly smaller than in the comparison period (EUR -47 million vs. EUR -84 million).”
7 Likes
Let’s share @Rauli_Juva’s morning comment here; he went and lowered the target price again, which for some reason was the first thing that caught my eye. In his defense, the recommendation remained on the “Add” side Anora: Marginaali nousutrendillä - Inderes
And a longer analysis for the Premium crowd: Marginaali nousutrendillä - Inderes
5 Likes
@Rauli_Juva interviewed the CEO and CFO regarding Q1! 
8 Likes
Anora’s Wine segment’s main competitor and a good peer, Viva Wine, reported its Q1 results today.
- Viva continued its growth and market share gains in all monopoly markets (Finland, Sweden, Norway). The Nordic segment, which includes the monopoly markets, grew by 6%, while Anora’s Wine segment declined by 9%
- Profitability remained at a low level, due to currency hedges and apparently, for example, more moderate price increases in the fall compared to Anora, which has presumably supported growth. I already mentioned this in connection with Q4.
- Viva still expects the margin to recover starting from Q2, although the recent weakening of the crowns poses a negative risk to this for H2
So, not much new compared to the trends seen and communicated in connection with Q4. Viva’s margin development seems to be more stable on a quarterly level than Anora’s, but if we look at the rolling 12-month figures, Anora has already been on an upward trend for a couple of quarters, while Viva is still sliding. (Note: in the image Anora uses EBITDA, Viva uses EBITA). This likely reflects that, in addition to market challenges, Anora’s internal problems have weighed on the margin, but also, in our view, Viva’s more moderate price increases. Viva should also finally see an upturn in Q2, and we also expect Anora’s Wine segment margin to remain on a clear upward trend throughout 2024.
9 Likes
Anora out shopping, glögg on the cusp of summer :Anora vahvistaa johtavaa asemaansa Pohjoismaiden glögimarkkinoilla ostamalla Blomberg-glögibrändin Orkla Denmarkilta | Anora
Anora has signed an agreement to purchase the Blomberg glögg brand and its recipes and intellectual property rights from Orkla Denmark. The transaction was completed today.
Blomberg is Denmark’s leading glögg brand with an annual turnover of approximately DKK 8 million and is a strategic addition to Anora’s extensive selection of alcoholic beverages. Blomberg complements Anora’s iconic premium glögg brand Blossa, further strengthening the company’s position as the leading glögg producer and distributor in the Nordics.
“The acquisition of Blomberg strengthens our market position in Denmark and further boosts our seasonal sales,” says Jens Voldmester, VP, Own Wine at Anora. “Blomberg’s strong heritage and solid position as a staple retail brand during the fourth quarter and Christmas season fit perfectly with our premium Blossa brand, offering consumers unparalleled quality and choice.”
“Anora is the right future owner to continue the journey of Denmark’s largest and most iconic glögg brand,” adds Carsten Hänel, CEO of Orkla Denmark. “With the sale, we will focus even more strongly on our core business and the food brands where Orkla Denmark has very strong expertise. The glögg market has developed significantly over the last 10 years, and even more attention is paid to taste and health. Anora has extensive experience in the wine and spirits market and is the right company to continue this development.”
Anora believes that the acquisition will generate synergies, increase sales especially during the end-of-year festive season, and offer significant long-term benefits to strategic areas of strength across various channels.
Blomberg Glögg products:
- Blomberg’s Luxus Glögg 8 % alc 1 l
- Blomberg’s White Glögg 8 % alc 1 l
- Blomberg’s Alcohol-Free Glögg 1 l
- Blomberg’s Glögg extract 0,5 l
8 Likes
This tweet by Varis might be of interest in this thread.
https://x.com/JuhaVaris/status/1796771107984265630
1 Like
These are manufacturers of quite high-priced beverages. Consumers hit by inflation and rising interest rates may not be able to buy expensive whiskeys, cognacs, and other premium spirits at the same pace. I don’t think it’s anything more revolutionary than that. The market value itself is predicted to grow in the future, although of course these are always forecasts viewed through consultants’ lenses.
In the food industry, volumes fell in Finland as well for two consecutive years. I still wouldn’t go so far as to write an article saying that people no longer eat or drink.
“The economic outlook for the food industry remains relatively weak this year. Food industry volume fell for two consecutive years in 2022–2023. This year, volume is starting to recover, but the pre-decline level will not be reached during the forecast period. A key factor causing uncertainty is the direction in which consumer demand develops.”
Speaking of Anora, the company has managed to get its seltzers into Systembolaget, specifically in a way where they are not just special order products but are available on the shelves of most stores. It seems to be the first Finnish product in that category at “Systemet”.
11 Likes
The valuations of those peers have been really high in the past, and even now EV/revenue is usually over 4, while for Anora it is only 0.7 (4traders). Another area where US valuations are high compared to Finland is waste management (Lassila & Tikanoja), but in socialist Finland, the municipalities’ own waste management likely ensures that the industry isn’t that profitable, and competitor Remeo’s trucks are also seen a lot these days..
1 Like
Updating here as well with information regarding the alcohol law amendment pushed through earlier this week, which will allow the sale of alcoholic beverages up to 8% in grocery stores shortly. The law change will presumably also be reflected in Anora’s business, as Alko is its most important sales channel in Finland.
Alko estimates that the change in the law will reduce Alko’s volume sales by approximately 6–11 percent during the first year. A more significant change to the market would certainly occur if the sale of alcohol stronger than what has now been decided were to be liberalized.
Alko’s press release here: https://www.alko.fi/alko-oy/uutishuone/mediatiedotteet/lakimuutos-haastaa-alkoa
In Anora’s comprehensive report published earlier this year, the impact of the alcohol law change was briefly touched upon, and in the same context, @Rauli_Juva wrote about this in more detail in the thread.
9 Likes
Anora, the leading Nordic wine and spirits brand house, is launching a wide and diverse range of products from wine brands favored by Finnish consumers following the amendment to alcohol legislation that took effect on June 10. The legislative reform allows the sale of alcoholic beverages containing up to 8% alcohol in grocery stores. Thanks to its leading market position and production facility located in Finland, Anora is in a unique position to seize this opportunity.
The amendment to the Finnish Alcohol Act, which came into force on June 10, will henceforth allow the sale of fermented beverages containing up to 8% alcohol in grocery stores, instead of the previous 5.5% limit. As the leading wine company in the Finnish market and thanks to its production facility in Rajamäki, Anora has an excellent opportunity to offer new, innovative wine-based products to Finnish consumers.
Anora’s new range of 8% products reflects the breadth of the company’s wine portfolio, including products from Anora’s own consumer-favorite wine brands as well as well-known international brands represented by the company in Finland. In total, the products entering store selections cover dozens of different sparkling, white, rosé, and red wine-based products from brands already popular with consumers, such as Chill Out, I.L.O., El Tiempo, Lindeman’s and Two Oceans.
10 Likes
HS Test Results
1. Kein Name Riesling 8 %
Country: Germany
Producer: Anora
2. Chill Out Cabernet Sauvignon 8 %
Country: Australia
Producer: Altia
There were no other Anora products in the top 10 list, but the top 2 is quite nice
6 Likes
Anora seems to have achieved a fairly reasonable position in wine sales in grocery stores
There are several drinks distributed or produced by Anora on the bestseller list. Of course, the sample size is still small, but the direction is right.
Most popular under 8% drinks in K-stores during the first week of sales
(Anora products in bold)
- Ruppertsberger Riesling
- Chill Out Chardonnay
- Vina Maipo Sauvingnon Blanc
- Episode Riesling
- Happy Grape Blanco
Sparkling wines:
- Fresita Sparkling
- Gancia Asti DOCG
- Dos Caras Brut
- Hola! series Mediterraneo Brut
- Hola! series Mediterraneo Rose
Red wines:
- 2U Duas Uvas Red
- Chill Out Cabernet Sauvignon
- Happy Grape Tinto.
Rosé and other wines:
- Vina Maipo Rose
- Sabor Sol Classic Sangria
- Black Tower Rose
As a reminder, 14% or just under 50 million of Anora’s wine business revenue comes from Finland. Thus, there is indeed something to be gained if they can get products well onto the bestseller lists. Of course, sales at Alko will likely decrease partially.
I would also like to bring up the sustainability trend in stores regarding wines.
The lower the environmental impact desired for wine sales, the larger the share of bag-in-box packaging will be. Anora’s position in these is strong, as Rajamäki is one of the few facilities here where the packaging of wine into cardboard boxes can be done locally.
7 Likes
Globus Wine released its 2023 annual report/financial statements on Friday. The result was weak, as suggested by last year’s profit warnings and other communications from Anora. Apparently, there were also some one-off costs, similar to Anora’s financial statements. Here are the compiled explanations:
2023 was a disappointing year financially for the company, as several key events impacted the bottom-line result significantly. The commercial success and growth leading to increased volume the past years, required the company to staff up significantly to continue to deliver at the highest quality level and on time. The constant year over year volume growth furthermore led to a requirement for a significant capital investment in our production facility, to pave the way for further growth together with our clients. These investments impacted our operational efficiency and throughput, leading to the company having to utilize external filling solutions which came at a significant cost. Thirdly, the macro-economic and political turmoil impacted the predictability of the supply chain throughout the world, leading to suppliers stocking up and combining shipments to us. This led to significant demurrage (harbor rental cost) again directly impacting the bottom line. Finally, the uncertain energy situation throughout Europe led to very significant energy surcharges
So, while the bottom-line result was a disappointment, the company moves forward knowing that it was investments in our customers of tomorrow combined with significant one-off cost, that primarily led to the poor result."
What I find interesting is that the guidance provided for 2024 seems quite optimistic, considering the “wilderness trek” of the past couple of financial years. Globus’s guided improvement for '24 alone would ensure Anora hits its own group guidance with ease (an improvement of approximately 10 million euros, assuming other units perform at the same level).
For 2024, the company expects a revenue in the range DKK 900-940 million pre-excise wine duties and profit before tax of DKK 40-50 million. Positive cash flows from operating activities are expected
In 2024 we will continue and intensify the strategic focus on building brands and realize organic growth in the Northern European markets for both own and partner brands. We will continue the focus on operational excellence and efficiency, which was significantly improved during 2023. We furthermore expect to reap the FY benefits of the initiatives implemented in 2023, with respect to profit margins, as we continue to serve and grow with our customers, with a joint ambition of further adding value and innovation to the wine category. The further benefit of being under the Anora umbrella will continue to materialize and lead to increased volume going through our operation. Ultimately, we believe the investments and initiatives made will lead to a positive bottom line for 2024.
Perhaps @Rauli_Juva could take a look at this and comment on whether these Globus guidances are just letters to Santa Claus? Or can some indications be drawn from this regarding the Danish unit’s performance this year? The company’s official audited annual report was only released on June 28th. By then, there had already been almost half a year to see how the current year has progressed. Anora does not provide guidance for individual units’ EBITDA, but apparently Globus is an exception.
Globus’s board is staffed with members of Anora’s management team.
Globus Wine’s annual report:
4 Likes
As I see it, Globus’s guidance for 2023 was exactly the same and the result wasn’t anywhere near it, so I would treat it with caution; the revenue estimate is perhaps more credible. We also don’t know how much of the material recorded as one-off items in Anora’s figures is included in Globus’s numbers, and the figures may otherwise differ slightly between local accounting and the group level. Last year’s commentary also sounds like it was written in a rather optimistic tone compared to what Anora has said, and in Q1’24, Globus’s revenue fell when contracts were terminated, which doesn’t quite fit this story either. The fact that it was recorded at the end of June (probably due to statutory publication deadlines) doesn’t necessarily mean that the guidance was recently reconsidered, but could be from the start of the year when the numbers were actually finalized. It is indeed strange that this kind of thing is released to the public at all.
Of course, this year’s earnings improvement practically comes from the wine segment and part of it from Globus, so in that sense, the direction is expected.
5 Likes
Pauli has provided an interesting overview of this year’s harvest outlook and its impact on various companies.
Anora is, of course, mentioned in this overview as well.
We conducted a review of the 2024 harvest outlook and highlighted the most significant company-specific impacts on domestic listed food companies. Overall, the cost environment in the food industry has stabilized, and in some cases, raw material prices have even seen a slight decrease, though this is partly explained by modest demand. Changes in grain sowing areas are relatively moderate this summer. The higher rainfall in June compared to last year supports the harvest outlook relative to the dry previous summer.
4 Likes