• Net Revenue: Declined by 6% for the quarter and 5.5% year-to-date.

• Gross Profit: Flat for the beverage business; wine up 1% for the quarter and 7% year-to-date, spirits down 1% for the quarter but up 4% year-to-date.

• EBITDA: Decreased by 21.4% to EUR15.9 million for the quarter.

• EBITDA Margin: 9.8% of net sales, down from 11.7% last year.

• Net Debt: EUR218 million, with a leverage ratio of 3.3.

• Cash Flow from Operations: Negative EUR68 million for the first nine months.

• CapEx: 1.8% of net sales, mainly for replacement investments.

• Inventory: Decreased to EUR174 million from EUR185 million.

• Wine Segment Revenue: Decreased by 5.1% for the quarter.

• Spirits Segment Revenue: Decreased by 8.1% for the quarter.

• Industrial Segment: Impacted by decreased ethanol and side product sales.

• Debt Repayment: Paid down EUR50 million of long-term debt.

• Warning! GuruFocus has detected 6 Warning Signs with FRA:28Q.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Anora Group PLC (FRA:28Q) managed to sustain most of the gains in marginality achieved earlier in the year, demonstrating effective pricing and mix management.

• Gross profit for the beverage business was relatively flat, with a slight increase in wine and a minor decrease in spirits, indicating resilience in gross margins.

• The company reported mid-single digit growth in gross profitability for spirits and wine on a year-to-date basis.

• Anora Group PLC successfully launched its 8% ABV wines in Finland, gaining a leading position in Finnish groceries and achieving 18% net revenue growth in the Finnish wine market for the third quarter.

• The company reduced its interest-bearing net debt by EUR50 million, reflecting a commitment to improving its cash position and balance sheet.

Negative Points

• The quarter was below expectations, leading to a reduction in full-year guidance due to soft volumes in key Nordic markets, particularly in Norway, Sweden, and Denmark.

• Net revenue declined by 6% for the quarter and 5.5% on a year-to-date basis, primarily due to lower volumes in the beverage sales of wine and spirits.

• EBITDA was significantly impacted by increased marketing spend and operational disruptions in the former Globus wine business in Denmark.

• The industrial segment remained a drag on performance, with a EUR5 million EBITDA shortfall compared to the previous year.

• The company faced challenges in maintaining market share in Norway and experienced a systematic issue with spirits volume decline in Finland due to new legislation affecting alcohol sales.