Anora Group Oyj · OMXHEX:ANORA
Anora Group Oyj — Investor Day (November 2022)
70 slides from Anora Group Oyj's investor day presentation, Nov 29, 2022
Slide 1: Capital Markets Day 2022
Capital Markets Day 2022 29 November 2022
Slide 2: Building the future on our strong brands, continuous evolution and sustainable operations
Anora | The leading wine and spirits brand house in the Nordics Building the future on our strong brands, continuous evolution and sustainable operations 2006– 1996 Expansion to other Nordic countries 1807 Arcus established Sale of industrial spirits business 2016 The oldest aquavit as a demerger fr
Slide 3: Delivering growth through sustainability
Delivering growth through sustainability Taking our best Nordic brands to the world, and the best brands of the world to the Nordics Capital Markets Day 29 November 2022
Slide 4: Agenda and speakers
Agenda and speakers Delivering growth through sustainability Pekka Tennilä, CEO Our sustainability roadmap Petra Gräsbeck, Sustainability & Communications Director Q&A with Pekka Tennilä and Petra Gräsbeck International markets are a significant contributor to growth Kirsi Puntila , SVP, Internation
Slide 5: Delivering growth through sustainability
Delivering growth through sustainability Capital Markets Day 2022 | 5
Slide 6: Our ambitions
Anora | Our ambitions Delivering growth through sustainability Faster-than-market growth (1.5x) in our core monopoly markets Share of international1 from ~10% (today) to ~20% (future) 3–5% Annual net sales growth Including M&A, majority is organic Hero brands from ~15% (today) to ~30% (future)2 Self
Slide 7: The Nordic wine and spirits market is large and non-cyclical
Anora | Market The Nordic wine and spirits market is large and non-cyclical Large and profitable market Non-cyclical business Stable historical growth and solid growth forecast Value of the Nordic wine and spirits market1 Wine and spirits consumption vs. GDP growth (Norway)2 Wine: volume development
Slide 8: Key trends shaping our business
Anora | Trends Key trends shaping our business Premiumisation Consumers Balancing Demand for and in-home Digital are going consumption convenience consumption disruption green habits after COVID 14% environmental & No- and low (NoLo) 16% global volume Long-term tailwinds to 93% of consumers say alco
Slide 9: Leading positions across the Nordics and Baltics, forerunner in sustainability
Anora | Market positions Leading positions across the Nordics and Baltics, forerunner in sustainability Nordic overall market position Finland Wine Spirits Norway Wine Spirits #1 #1 Wine Spirits #1 #1 #1 #1 Forerunner in sustainability Sweden Denmark Wine Spirits Wine Spirits #2 #1 #1 #2 Baltics Ger
Slide 10: Acquisition of Globus Wine, the leading wine company in Denmark
Anora | Acquisitions Acquisition of Globus Wine, the leading wine company in Denmark Strengthens Anora's competitiveness in volume products Consistent above-market growth Close to market packing reduces CO2 foot print significantly. Market share The Danish wine 25.9% in still wines market is estimat
Slide 11: Integration proceeding as planned
Anora | Altia and Arcus merger Integration proceeding as planned Merger of Altia and Arcus: Forming the leading wine and spirits brand house in the Nordics The leading wine and Superior pan-Nordic Strength and Step-change in Strong value creation from spirits brand house in route-to-market willingne
Slide 12: A well-balanced business across categories and countries
Anora | Key figures A well-balanced business across categories and countries Net sales, MEUR Comparable EBITDA, MEUR Personnel 739 110 1,212 Industrial Industrial 19% Sweden 19% 28% DFTR & Export Wine 3% Anora 51% Beverage brands Net sales Baltics Net sales Partner net sales 49% by segment 2% by cou
Slide 13: Strong and versatile portfolio of leading own and partner brands
Anora | Brands Strong and versatile portfolio of leading own and partner brands Key Anora brands Key partner brands Wine Wine Spirits Spirits Capital Markets Day 2022 | 13
Slide 14: Our growth strategy up to 2030
Anora | Strategy Our growth strategy up to 2030 Lead category growth Scale our position in across consumer occasions Denmark and the Baltics and channels in the Swedish, to cement our regional Norwegian and Finnish markets as OUR AMBITION leadership the wine and spirits powerhouse Recognised #1 in E
Slide 15: Our key enablers to deliver growth
Anora | Strategy Our key enablers to deliver growth Consumer engagement Customer centricity across M&A and JV Supply in our DNA all our channels to scale operations Focus and scale Deepen collaboration with off-trade Proven and Optimised, A&P investment repeatable efficient and model to sustainable
Slide 16: Strong values and company culture support our growth
Anora | Our values Strong values and company culture support our growth COURAGE ENERGY EMPOWERING TO EXPLORE TO INSPIRE TO WIN We are passionate and We share a can-do attitude Our dynamic, open and ambitious to lead the industry. and enjoy going the extra inclusive way of working We have the courage
Slide 17: Delivering growth through sustainability
Anora | Our vision Delivering growth through sustainability We are the leading Nordic wine and spirits group delivering growth through sustainability. Our passion takes the best of the Nordics to the world and the best of the world to the Nordics. We are Anora, let’s drink better! Capital Markets Da
Slide 18: Our sustainability roadmap
Capital Markets Day 2022 Our sustainability roadmap Capital Markets Day 2022 | 18
Slide 19: Substantial reduction of CO2 emissions at Koskenkorva Distillery
Sustainability | Starting point Substantial reduction of CO₂ emissions at Koskenkorva Distillery Significant use of renewable energy at Gjelleråsen Capital Markets Day 2022 | 19
Slide 20: Our sustainability roadmap to growth
Sustainability | Roadmap Our sustainability roadmap to growth We are committed to set Science -Based Targets. Capital Markets Day 2022 | 20
Slide 21: Planet
Sustainability | Roadmap Planet 1 2 3 Carbon neutral We increase the share We reduce wastewater operations by 2030 of regeneratively with 20%, increase and Koskenkorva farmed barley to 30% recycling rate of waste Distillery by 2026 – of own grain spirit to 90% and reduce without products by 2030. la
Slide 22: We are committed to set Science-Based targets
Sustainability | Roadmap We are committed to set Science-Based targets Near-term Long-term 2030 Reduction target of 38% 2050 aligned with 1.5°C Net Zero covering Scopes 1–3 Sources Capital Markets Day 2022 | 22
Slide 23: How we will reduce emissions by 2030
Sustainability | Roadmap How we will reduce emissions by 2030 SCOPE 1+2 SCOPE 3 ◼ Category 9: Downstream transportation and distribution Packaging 4% 26,594 tCO2e 21.67% > 68% ◼ Categories 5+6+7: Wines of category 1 0.5% 18.3% of which emissions ◼ Category 4: 86% comes from Barley SCOPE 3: Upstream
Slide 24: Two key milestones to zero emissions
Sustainability | Roadmap Two key milestones to zero emissions Bioenergy plant at Koskenkorva distillery Koskenkorva heat pump Anora Electricity Non-renewable CO2 emissions per tonne baseline in Finland to 100% renewable Gjelleråsen steam (LPG) to biogas Koskenkorva Rajamäki steam boiler solar power
Slide 25: People
Sustainability | Roadmap People 1 2 3 100% of risk countries We increase the We ensure diversity, covered with audits number of safety equity and inclusion or certificates. 100% observations and at work. of suppliers have reduce accidents signed amfori code resulting to absence of conduct in 2023. t
Slide 26: Product
Sustainability | Roadmap Product 1 2 3 By 2030 all packages are We increase We support a light in weight, 100% the amount of modern, responsible recyclable and of sustainable and drinking culture materials from certified NoLo choices sources or recycled origin CO2 footprint of different Glass BiB pa
Slide 27: Building our sustainable future together with key partners
Sustainability | Partners Building our sustainable future together with key partners E S G GRI TCFD Taxonomy Capital Markets Day 2022 | 27
Slide 28: Our sustainability roadmap to growth
Sustainability | Closing Our sustainability roadmap to growth We are committed to set Science-Based Targets. Capital Markets Day 2022 | 28
Slide 29: We are the market leader in the Nordics and a challenger internationally
Spirits | Introduction We are the market leader in the Nordics and a challenger internationally Net sales, MEUR Gross margin Comparable EBITDA margin 225 48% 21% Spirits – Monopoly • Norway • Finland • Sweden Spirits – International • Denmark • Baltics • Germany • Duty-free travel retail • Exports A
Slide 30: International markets are a significant contributor to growth
Capital Markets Day 2022 International markets are a significant contributor to growth Capital Markets Day 2022 | 30
Slide 31: It's a new beginning – with high ambitions
Spirits International | Introduction It’s a new beginning – with high ambitions Net sales, MEUR1 Denmark Baltics Beyond the Nordics 85 • #2 in spirits on the competitive Danish market • Portfolio focused on aquavit • #4 in spirits in Estonia and #3 in Latvia • Challenger position in both • #1 on the
Slide 32: Tripling International sales by 2030 and increasing share from 10% to 20%
Spirits International | Growth ambition Tripling International sales by 2030 and increasing share from 10% to 20% supported by M&As Topline projected to grow at ~17% CAGR 2022-2030; profitability weak in early years, given significant increase in A&P and people investments Net sales ambition of Spir
Slide 33: Scale our position in Denmark and Baltics to cement regional leadership
Spirits International | Win in open markets Scale our position in Denmark and Baltics to cement regional leadership Utilise our strong portfolio of own and partner brands in all channels Similar growth priorities with open Become the leading spirits player Unlock full potential in the Baltics market
Slide 34: Accelerate beyond the Nordics: repeatable brand growth model
Spirits International | Scale up hero brands across markets Accelerate beyond the Nordics: repeatable brand growth model provides an attractive opportunity Develop a proven growth model on sustainable hero brands, starting with Winning route-to-market Koskenkorva partnerships Modelling operations: w
Slide 35: Koskenkorva Climate Action, first sustainable vodka from regeneratively farmed barley
Spirits International | Scale up hero brands across markets Our first priority is Koskenkorva Climate Action, the first sustainable vodka made of regeneratively farmed barley 1. Growing international 2. Demand for sustainable 3. Regenerative farming vodka market brands revolution in the industry Att
Slide 36: Global Travel Retail builds brands and provides consumer experiences
Spirits International | Maximise the enabling channels Global Travel Retail builds brands and provides consumer experiences SUSTAINABILITY Global Travel Retail (GTR) provides opportunities for both building brand value for 54 countries monopolies and expanding into new markets • • Enabler for intern
Slide 37: Expanding our digital dialogue with international consumers
Spirits International | Maximise the enabling channels Expanding our digital dialogue with international consumers Continue to grow nordicspirits.com, scale Amazon and expand into new markets through digital marketplaces Grow share of e-comm to 20% of International sales Build strong digital brand e
Slide 38: International markets are a significant contributor to growth
Spirits International | Closing International markets are a significant contributor to growth Our growth priorities Impact Target 2030 Grow market share: take ownership Win in open markets of full own portfolio and attract strong partners Triple the sales of Less dependency on monopoly International
Slide 39: Long-term profitable growth in spirits
Capital Markets Day 2022 Long-term profitable growth in spirits Capital Markets Day 2022 | 39
Slide 40: Leader on the stable and profitable spirits market
Spirits Monopoly | Introduction Leader on the stable and profitable spirits market The strongest spirits portfolio in the market with iconic local and international brands Net sales, MEUR Categories Own brands Largest regional Market partner brands share1 145 Unflavoured vodka and spirits Aquavit 54
Slide 41: Growth driven by capturing market share and building new business with RTD and NoLo
Spirits Monopoly | Growth Growth driven by capturing market share and building new business with RTD and NoLo Topline projected to grow ~4% CAGR 2022-2030; profitability relatively flat in early years, increase in A&P investments in early years Market CAGR (21-26) 1,2% Market CAGR (21-30) 2,0% Net s
Slide 42: Grow share with market leading partner spirits portfolio
Spirits Monopoly | Earn the right to expand partner business Grow share with market leading partner spirits portfolio Win through channel excellence in monopoly and on-trade Strong overall Nordic position with room Faster-than-market growth with to grow in underrepresented categories our partners Ca
Slide 43: Doubling A&P investments on hero brands to ~20% of net sales
Spirits Monopoly | Scale our hero brands Doubling A&P investments on hero brands to ~20% of net sales supporting above-market growth Hero brands have biggest Additional investment into A&P potential to grow in the Nordics to deliver 3.5% CAGR Consumer On-trade Digital Sustainability centric excellen
Slide 44: Optimised and focused investments to support profitable growth
Spirits Monopoly | Optimise local warriors and tactical drivers Optimised and focused investments to support profitable growth Local warriors account for 70% of Spirits monopoly sales with strong local presence Profitable growth in line with Local icon delivering strong Sweden’s oldest aquavit – Opl
Slide 45: Significant growth contributor for Spirits: convenience and health-focused consumer trends
Spirits Monopoly| Capture share in growing and adjacent categories Significant growth contributor for Spirits: convenience and health- focused consumer trends Growing share of sizable RTD Strengthen grocery trade Increase innovations for both Leverage partnerships market1 to 9% by 2030 capabilities
Slide 46: Long-term profitable growth in Spirits
Spirits Monopoly | Closing Long-term profitable growth in Spirits Our growth priorities Impact Target 2030 Strong development in on-trade Earn the right to expand partner channel drives us to reach above- business market growth in partner spirits Double the A&P to reach the full Scale our hero brand
Slide 47: Lead in growing sustainable wine, win share across markets
Capital Markets Day 2022 Lead in growing sustainable wine, win share across markets Capital Markets Day 2022 | 47
Slide 48: We are the market leader in the Nordics
Wine | Introduction We are the market leader in the Nordics Capabilities in partner wine imports and own label wine make us unique Net sales, MEUR Gross margin Comparable EBITDA margin 377 30% 13% • Multiple independent wine • Developing, sourcing, filling and Partner import companies, long history
Slide 49: Target to grow sales faster than the market: +3.6% annually
Wine | Growth Target to grow sales faster than the market: +3.6% annually Improving profitability following increased share of own label wine Wines net sales ambition, EURm1 38% Anora Wines Vingruppen Partner Filling Market CAGR Market CAGR Market CAGR Market CAGR (21-30) 1,3% (21-30) 1,4% (21-26) 1
Slide 50: Grow Vingruppen sales through successful monopoly collaboration and on-trade focus
Wine | Grow Vingruppen Grow Vingruppen sales through successful monopoly collaboration and on-trade focus Our partners benefit from access to our sustainable filling and packing Vingruppen companies to drive growth #1 premium wine distributor in on-trade Option for smart and near-market wine in prem
Slide 51: Win in the fast-growing market for own label wine in Sweden
Wine | Own label wine Win in the fast-growing market for own label wine in Sweden Market for own label wine has exploded in the past 5 years due to innovative local concept wines Win share in high-volume wine segments, Improve our position in Italian wines Become leader in sustainable wines BIBs <20
Slide 52: Scale up our digital platforms to engage consumers and drive growth
Wine | Digital dialogue Scale up our digital platforms to engage consumers and drive growth Leading the digital dialogue with consumers in Sweden and Finland (SE) (FI) Monthly visits* Monthly visits* Folkofolk.se Nigab.se Vinguiden.com vinklubben.se Vivavinomat.se Ardvidnordquist.se Viinikartta.fi J
Slide 53: Lead in growing sustainable wine, win share across markets
Wine | Closing Lead in growing sustainable wine, win share across markets Our growth priorities Impact Target 2030 Grow Vingruppen NS +15% to Grow Vingruppen through focus on MEUR 260 and partner filling monopoly tenders and on-trade +20MEUR Grow faster than the overall market Win in the growing mar
Slide 54: Funding the growth journey through efficiency
Capital Markets Day 2022 Funding the growth journey through efficiency Capital Markets Day 2022 | 54
Slide 55: State-of-the-art supply chain
Industrial | Introduction State-of-the-art supply chain Industrial and logistics business Supply chain footprint Net sales, MEUR Comparable EBITDA margin ◼ Bottling production 138 7% 136 million litres Logistics Industrial services ◼ Distillation production (Vectura) 30 20% 47% million litres Net sa
Slide 56: Efficient supply chain enables growth
Industrial | Supply chain Efficient supply chain enables growth Logistics centres Bottling plants Distilleries Outstanding route-to-market through efficient World class bottling plants for spirits and wines – Unique distillation and maturation logistics capabilities covering 23.3% of all forerunner
Slide 57: Koskenkorva is a unique distillery
Industrial | Industrial business Innovations enabling premium products and growth Koskenkorva is a unique distillery • Koskenkorva Climate Action Vodka of regeneratively farmed grain Sustainability, innovation, premium quality • Koskenkorva organic vodka and efficiency all in one • High quality etha
Slide 58: Performance and productivity developing positively
Industrial | Efficiencies Performance and productivity Execution of supply chain developing positively – Culture of synergy benefits is on track… continuous improvement Rajamäki • Strong execution capability: Prompt follow-up and Bottling OEE Working hours +44% actions of planned synergy benefits ac
Slide 59: ...with further efficiencies in the pipeline
Industrial | Improvement steps …with further efficiencies in the pipeline Estimated additional efficiency potential is EUR 5-10 million per year, implementation during next 3 years Execution of Supply Chain Platform, including Globus Wine Scope: 1. Scale benefits of Procurement Assessment 2. Logisti
Slide 60: Funding the growth journey through efficiency
Industrial | Closing Funding the growth journey through efficiency Internal culture Additional Sustainability drives efficiency efficiency potential identified and growth Continuous improvement Globus Wine volumes provide Pioneering sustainability work will culture enables positive performance addit
Slide 61: Value creation through profitable growth
Capital Markets Day 2022 Value creation through profitable growth Capital Markets Day 2022 | 61
Slide 62: Net sales grew in Q3 – strong performance by Globus Wine
Financials | Q3 2022 Net sales grew in Q3 – strong performance by Globus Wine Decline in profitability due to normalisation after Covid-19, higher opex and lower gross margin The decline in volumes was related to the normalising Net sales growth driven by the strong performance of the newly acquired
Slide 63: Synergy realisation progressing as planned
Financials | Merger synergies Synergy realisation progressing as planned 9.8 4.6 ~3-5 ~8-10 Potential run-rate EBITDA net synergies EUR ~8-10 million of 5.4 which about 80% realised within 2 years of merger completion 5.2 4.3 Well on track to deliver on the promised strategies Remaining synergies wi
Slide 64: Our long-term financial targets for 2030
Financials | Targets Our long-term financial targets for 2030 3–5% 16% <2.5x 50–70% Annual net sales Comparable EBITDA Net interest-bearing Dividend growth margin debt / comparable pay-out ratio EBITDA Including M&A, Through increased focus on Debt levels may occasionally Anora aims to maintain a st
Slide 65: All commercial units contributing to growth
Financials | Net sales All commercial units contributing to growth; strongest growth will come from outside the Nordic monopoly markets Illustrative Anora Group revenue development by unit 2021 PF actuals – 2030F, EUR millions ~950-1.150 +5% 3-5% 739 640 665 2019 PF 2021 PF Globus 2021 incl. Wine gr
Slide 66: Earnings driven by topline growth, incremental marketing investments financed by efficiency
Financials | Profitability Earnings driven by topline growth, incremental marketing investments financed by efficiency improvements and expanded margins Illustrative Anora Group EBITDA development 2021 PF actuals – 2030F, EUR millions; % of net sales 15% ~-3% ~0% ~2% ~-2% ~0% ~4% 16% ~150-180 101 80
Slide 67: Cash generation expected to remain stable throughout the strategy period
Financials | Cash generation Cash generation expected to remain stable throughout the strategy period thanks to stable margins, capex and working capital Anora’s underlying business will Anora is well invested. Capex will Throughout the strategy period, continue to produce strong remain at current l
Slide 68: We will continue to use M&As to support our strategy
Financials | M&A We will continue to use M&As to support our strategy Strategic Lead category growth across consumer Scale our position in Denmark and Accelerate beyond the Nordics pillar occasions and channels in the Swedish, the Baltics to cement our regional with strong, sustainable Norwegian and
Slide 69: Value creation: higher growth at improved margins
Financials | Value creation Value creation: higher growth at improved margins, with strong cash flow generation and stable dividends • Increased revenue growth through market share gains in home markets Higher revenue growth and international expansion • M&A to strengthen our capabilities and expand
Slide 70: Thank you for joining our Capital Markets Day!
Thank you for joining our Capital Markets Day! 29 November 2022