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Research

Anora Q1'25: An expected weak start to the year

By Rauli JuvaAnalyst
Anora Group
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Translation: Original published in Finnish on 05/08/2025 at 07:00 am EEST

Especially due to the timing of Easter, Anora's Q1 was slightly weaker than last year but largely in line with our expectations. We made no major forecast changes and reiterate our Accumulate recommendation with a EUR 3.5 target price.

The timing of Easter weighed on the start of the year

Anora’s Q1 revenue decreased by 4% year-on-year, slightly less than we expected. Revenue decreased in all segments Revenue from beverage sales (Wine and Spirits segments) was negatively impacted by the timing of Easter in Q2, but their development was still slightly better than we expected. The company commented that its market share has improved in Sweden, which is a positive sign, as Anora has lost significant share there in recent years. Anora's adjusted EBITDA was 8.0 MEUR, which was a bit below the comparison period (8.9 MEUR) and our expectations (8.5 MEUR). Lower revenue naturally weakened earnings. In addition, marketing investments in the Wine segment and the timing of group expenses negatively impacted earnings. Q1 is seasonally Anora's weakest quarter, and, therefore, we do not consider the relatively small earnings deviation in absolute terms significant going forward. The company also stated that the quarter was roughly in line with expectations.

Guidance unchanged as expected

As expected, Anora reiterated its full-year guidance and expects an adjusted EBITDA margin of 70-75 MEUR. The guidance assumes that market volumes will remain roughly at last year's level and Anora's volumes will improve. Considering the market downturn seen in  H2’24 and early 2025 (the market declined even considering the timing of Easter), we find Anora’s assumptions somewhat optimistic. Our estimate remains at the bottom end of the guidance at 70 MEUR. We believe that the continued weakness in the demand environment may cause the guidance to be lowered later this year. We also note that Anora has had to lower its guidance in the past two years due to negative surprises in market development. With the Q1 result landing close to our expectations, we made no material estimate changes.

Q1 was the first earnings release for Kirsi Puntila, who took over as CEO at the beginning of March. Puntila emphasized the company's previously stated priority areas, namely improving profitability and the balance sheet. In our interview, she said that she would familiarise herself with the company in the new role before taking a stronger stance on, e.g., the strategy going forward. We expect to hear more about this later this year.

We expect an earnings improvement but value creation is difficult

While we believe Anora can improve its profitability in the coming years we don't see it reaching a significantly higher earnings level than currently. This is partly due to the sluggish growth outlook for the alcohol market (and the risk of further market decline) and, in our view, the company's limited ability to significantly reduce its costs. We expect that Anora's returns on capital will remain at approximately the level of our required return in the coming years, so we do not expect the company to create value.

Cash flow and dividend provide a sufficient expected return

Anora's 025 P/E ~10x is in line with our acceptable multiples. Anora's expected return at the current valuation is higher than our required return, supported by dividend and earnings growth. Dividend plays a significant role and it alone reaches close to our required return. However, a modest growth profile and return on capital weaken the risk/reward ratio. The value of our DCF model is in line with the target price at EUR 3.5 per share.

 

Anora Group

3.03EUR07.05.2025, 18.00
3.50EURTarget price
Accumulate
Changed from:Accumulate
Recommendation updated:08.05

Anora Group is a producer of alcoholic beverages. The product portfolio consists of wine and spirits marketed under various brands. The largest operations are found in the Nordics and the Baltics, and the company's products are exported to retailers in Europe and North America. The company was created through a merger of Altia and Arcus in 2021 and has its headquarters in Helsinki.

Read more on company page

Key Estimate Figures08.05

202425e26e
Revenue692.0688.9702.7
growth-%-4.7 %-0.4 %2.0 %
EBIT (adj.)42.143.449.6
EBIT-% (adj.)6.1 %6.3 %7.1 %
EPS (adj.)0.270.290.39
Dividend0.220.220.25
Dividend %7.9 %6.8 %7.7 %
P/E (adj.)10.411.18.4
EV/EBITDA4.94.64.2
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