Translation: Original published in Finnish on 10/31/2026 at 12:00 noon EET

Anora’s Q3 earnings exceeded our expectations, driven by the Industrial segment, and the company reiterated its guidance for the current year. We raised our estimates slightly, but we believe that accelerating cost inflation next year will limit earnings growth. We believe the dividend yield provides a positive expected return, but the valuation is fair. We reiterate our EUR 4.0 target price and Reduce recommendation.

Industrial drove the Q3 result above expectations

Anora's revenue increased slightly to 157.5 MEUR (estimate 155 MEUR), as contract manufacturing volumes in the Industrial segment offset the decrease in revenue in the beverage segments. Adjusted EBITDA improved to 20.2 MEUR and clearly exceeded our estimate (18.5 MEUR). The beat came from the Industrial segment, whose result rose to a record 7.2 MEUR. The Wine and Spirits segments generated results on a par with the comparison period, which, in the case of Spirits, was slightly weaker than our estimate. Cash flow from operating activities was seasonally weak, but in January-September it improved by nearly 10 MEUR year on year. The net debt/adjusted EBITDA ratio decreased to 2.5x, which is in line with the company's target.

Guidance appears safe, cost pressure growing next year

After nine months, Anora is 5 MEUR ahead of the comparison period, so the guidance of 74-79 MEUR requires an adjusted EBITDA of 29-34 MEUR for Q4 (Q4'25: 31 MEUR). We raised our adjusted EBITDA estimate for the full year to 77.5 MEUR (was 75 MEUR) and 2027-28 estimates by 2-3%. The fixed cost savings of the efficiency program are already largely visible in this year's figures, and next year should, in addition, see savings specifically in the supply chain and procurement. However, we estimate that inflation in transport, energy, and packaging costs will dilute the net impact of the savings, as Anora's rigid pricing passes on cost increases with a delay. We expect revenue to return to growth next year, as the Bacardi distribution agreement generates over 20 MEUR in additional revenue. However, the profitability of the distribution agreements is low, so the impact on earnings is limited. Our adjusted EBITDA estimate for 2028 (81 MEUR) remains below the company’s target of 85-90 MEUR.

Value creation still seems difficult

Although we believe Anora can improve its profitability somewhat, the company's return on capital remains roughly at the level of our required return in our forecasts. We estimate the company's investment needs to be small, and it continues to aim at freeing up working capital, which is only realized to a limited extent in our estimates. The growth outlook for the longer term is also subdued, as we do not believe there is any growth in the alcohol market in sight. In an environment of flat or decreasing volumes, the company must continuously improve its efficiency just to compensate for normal cost inflation. Therefore, after the earnings improvement in the coming years, we estimate earnings and cash flow to remain at the same levels in 2028-2034.

Valuation is neutral; dividend creates a positive expected return

Anora's 2026 adjusted P/E (10x) is in line with our acceptable multiples (10-12x), and for 2027 the multiple decreases to 9x. A dividend yield of 6–7% over the next few years alone nearly meets our required return. However, accelerating cost inflation and the structural decline of the alcohol market put pressure on earnings, which keeps us cautious regarding the share. Based on our DCF model the share value is around EUR 4.0, which corresponds to our target price.