Good morning everyone, welcome to our Q1 interim report presentation. My name is Petra Gräsbeck. I'm from Anora Communications. CEO Pekka Tennilä and CFO Sigmund Toth will talk you through our Q1 results. After that, we will have a Q&A. You can send questions through Teams chat already now and during the Q&A. I would also ask you to mute your mics and note that the presentation will be recorded and it will be available afterwards on our website anora.com. With this, we are ready to start and I will hand over to Pekka. Thank you, Petra, and welcome on my behalf as well. Let's start. Here's a recap of our results for Q1. Our sales growth organically, excluding Globus Wine, was a bit over 2%, which is a good result considering that our core markets declined by almost 3%. In constant currencies, our sales growth, again organically, was around 8% with all segments growing. There was a small positive impact of early Easter deliveries in our March sales. Profitability declined, driven mainly by weakening Norwegian and Swedish crowns, which had a very significant impact on especially our wine profitability. Input costs continued to increase and impacted negatively our profits. We've been negotiating the costs down, but overall, the cost level is still higher than in previous year. Price increases have been implemented as planned. Norway price increases were changed in January, Sweden only in March, and Finland in April after Q1. Therefore, the full impact of these increases will be seen from Q2 onwards. The next price increases will happen or has happened in May in Norway, and then in September, October in all three countries, monopoly countries. Our cost savings program is also started, targeting at EUR 6 million savings for the full year. The impact of this plan is not yet visible in Q1 numbers, but will be that from Q2 onwards. Next, we take a look at the market numbers. Market numbers are a combination of monopoly sales data and Nielsen off-trade data from Denmark. Markets declined by 2.5% on average across the Nordics, with a similar development in all markets and both categories. Even with significant price increases across the markets, the value development of the monopolies were flat, meaning that there likely is a consumer downtrading, i.e. consumers buying more affordable products than they did before. Looking at the longer-term development on the right-hand side, we see the corona years' growth. Compared to Q1 2019, we are now still on a bit higher level in Sweden and Norway. Therefore, we have expected the market to decline for the full year, but the decline should stabilize as the year progresses. Next, we take a look at our wine segment sales. Globus Wine was obviously the main reason for the 38% net sales growth. Currency volatility had a major impact on our development. Excluding Globus Wine, our sales increased by 3% in constant currencies, but in euro they declined by 4%. Our own wines continued their sales and market share growth during Q1. Our sales growth was 11% in constant currencies in own wine, excluding Globus Wine, with all markets growing, but especially Sweden is developing very, very positively. Relaunch of Chill Out, numerous new launches, and introduction of Il Capolavoro in Sweden drove our positive sales growth. In partner wine, the earlier communicated partner losses drove our sales down despite the new partners gained. Overall, our market share in the monopolies were on last year's level, so this is partner and own wine combined, and in Denmark, we grew significantly. EBITDA weakened versus last year, but is in line with our Q1 estimates. The biggest drivers of the decline was the weakening of the Norwegian and Swedish crowns, high input costs, and partner losses. On the right-hand side, you see some of the new launches and tender wins from Q1. Sköna Hönan, Beautiful Hen, from Sweden, Lindeman's Riesling, from Finland, YOKO Rosé from Norway, and Sangria in Sweden, among others. Moving on to spirits. In spirits, our sales grew by 9%. Both monopoly and international markets grew in sales, and we increased our market share across all monopoly markets. The weakening of Norwegian and Swedish crowns impacted our sales development negatively. EBITDA was lower than last year due to higher input costs, negative currency and higher marketing costs. As mentioned earlier, we have increased our prices according to our plans and local timelines. As Sweden prices changed, only in March and Finland in April, we do not see the full impact of our pricing, price changes yet in Q1. Like in wine, we are active with novelties in spirits as well. Due to local legislation in Finland, we are unable to show you pictures of the new spirit bottles, but have to do with just text. As you can see from the list, we have many exciting novelties ranging from whiskey to vodka to liqueurs and aquavits. The picture below is taken from a Helsinki Tallink vessel, where we had a very special Skagerrak gin showroom with a big video screen. Next, we move to Industrial Q1. Industrial net sales developed positively due to increased prices driven by higher input costs. External net sales grew by 6%, while total sales grew a bit more. Vectura sales increased in local currencies but declined in EUR. EBITDA weakened due to inventory revaluation and high operating expenses. The lower demand for starch and paper for year to go will impact our Koskenkorva distillery running speed in a negative way. Next, a few words on sustainability. Sustainability highlights from Q1 include Finland moving to 100% renewable energy and improvement in ESG rankings. Health and safety is at the very top of our sustainability agenda, and we have successfully reduced our accidents in our facilities in the long term. In Q1, however, our ratios moved in the wrong direction. We've taken strong measures to turn this trend around and are targeting towards further reducing lost time injury frequency this year. We started to conduct a human rights assessment and commitment in our value chain and activated and launched a number of new no and low alcohol products. With this, I would like to give the word over to Sigmund and financials. Thank you, Pekka. If we move to the first slide in the financial review. As usual, we have an overview on the barley price, very important input for us. The good news from our point of view is that it has actually decreased the average barley price by 11% this year compared to the last year. Although as you can, you know, clearly see on the graph, the current price is still significantly above what has been the historical level. I mean this input is something where, you know, we typically purchase at spot with no, there are no hedging tools available, and we have around 1 month of inventory. For now, we are not, we are not yet seeing the benefits of this lower barley price simply because we do have some purchasing agreements with certain volume commitments, and to purchase, you know, that volume at a given price. Now as Pekka mentioned, there has been, you know, decrease in the demand for starch from the paper industry and as a result, we haven't exhausted, you know, our current volume commitments. You know, we are still paying the somewhat higher price that you saw a bit earlier. We will get the benefit from the lower barley price in the second half of 2023. Of course, you know, a big impact on this price going forward is the harvest in August and September, about which it's, you know, too early to speak at the current time. If we move on to the next slide. The net net sales, the big increase, as you can see, is coming from Globus Wine. There were also increased sales in spirits and in industrial. In fact, as Pekka mentioned in constant currency, also on the wine segment, if only slightly, because of obviously the reported net sales were strongly negatively affected by the weak SEK and NOK. This quarter as the smallest one of ours, although this time around there was some slight benefit of the timing of Easter. If we move from net sales to the next slide, please. The profitability, it was weaker in Q1, clearly not at the level that we are happy with. A lot of it has to do with the higher input cost. Here with input cost, you know, we also have to consider the foreign exchange, especially the wine business, very heavily impacted by the weak NOK and SEK in the quarter. In addition to that, our spending levels, the OpEx, both marketing spend and other operating costs, even when excluding Globus, were also somewhat higher than the same quarter last year. That's not going to be the case for the year, the full year, because there we are implementing a savings plan. This quarter compared to last year, we were still spending more marketing funds and other operating expenses, which will then be a different case looking forward. I think another interesting picture to look at here is the comparison to prior years. I mean, again, this is the smallest quarter of the year. It's typically one where, you know, the gross profit levels, given that our other operating costs are rather fixed, have a big impact on the bottom line. The levels, the profitability levels last year and the year before, they were really more the exception rather than the rule. If you look at 2019, which is sort of a base year, or even 2020, that's the more normal level for Q1, when the gross profit levels due to the lower level of sales compared to the rest of the year are lower, and then our fixed costs, you know, are spread over a lower net sales level. You know, 2021 and 2022 were very good years to us, you know, thanks to the higher profitability during the COVID period. If we move to the next slide. Here are some key balance sheet figures. As we can see, of course, the net debt over comparable EBITDA, it's higher than last year. This, as we said at the year-end presentation, it's mainly due to the acquisition of Globus Wine, which was financed with debt. Then on the other hand, the cash flow from operations is typically very weak in the first quarter because not only are the profitability levels typically low, but in addition to that, the working capital needs also increases as we pay the alcohol taxes and VAT related to the big Christmas sales, which are still payable at the year-end. During Q1, they are then dispersed, leading to cash going out and working capital need going up. This year, that's a bit different because we have sold a very significant level of receivables by essentially expanding the sale of monopoly receivables program from the Altia side of the business to cover also the Arcus entities. You know, on the overall picture and looking forward, our inventory levels, they are still much higher than we would like them to be. We have plans to lower that significantly by the end of the end of the year. With that, I think that was my. If we move on. Sorry, if we move to the next one. The outlook. Here we reiterate our guidance for the year. We expect comparable EBITDA to be between EUR 80 million and EUR 90 million. That of course is something that requires, you know, further focus on those things which we have mentioned, continuing to take price increases, implementing this cost-cutting program, which Pekka alluded to and that we've mentioned earlier, and then having strong cost control across the business. I mean, we do hope to have some relief from input costs, but they are still expected to be at a high level for the rest of the year. I think that was my last slide, if I'm not mistaken. With that, I would hand over to, well, to you, I guess, for the Q&A. Thank you, Pekka and Sigmund. We would now be ready to take questions. I see that there are not yet questions in the meeting chat, but you can start sending them and also use the raise your hand function to talk your questions. Okay. Joni, we got the first question. How much extra IT and maintenance cost in Q1? Were these cost additional compared to 2022, or was this a timing issue? Continuing the question, you aim for EUR 6 million cost savings in 2023. Are you expecting to reach the full run rate already in Q2? Still third question, how large cost inflation for 2023? A lot of questions all in one. Let me. Maybe I can take the one on the IT and maintenance costs all together, about one and a half those two. They are not meant to be incremental versus the previous year, but it's a matter of phasing, right? Sometimes, you know, some of the projects, you know, come earlier in the year or some of the maintenance which is due comes earlier in the year. Actually in some cases, you know, costs were particularly low last year, and now they are somewhat higher. You know, similar amounts actually for marketing and travel and representation. That was the answer to the first question. There the expectation is that they go down towards the end of, you know, towards the rest of the year. In terms of, what was the second question? Was it around the run rate? Yes. It was on the cost savings- Yeah Are we expecting to reach the full run rate of that EUR 6 million in Q2? Yes. The I would say probably not entirely, but almost, right? I mean, I think that, I think that the marketing spend already we should be seeing, help from that in the cuts there in Q2 already and then more to come in Q3 and Q4, which are typically heavy quarters on marketing spending, and were very heavy quarters last year. What was the third question? You had still a, you a third part that was, how large, is the cost inflation for 2023? Very good question. I guess my question back would be what exactly he means by cost inflation here. Are you thinking about the pure input costs? Joni, c an you specify maybe, with the audio on? Thanks. More on the, on the operating expenses side. We probably know what's going to happen with the, with the variable base, but then on the operating expenses. Okay. I mean on the operating OpEx, our notion is to take it down, you know, as we were saying, this EUR 6 million, right? That's what we mean. I mean, obviously, Globus is coming on top, if you look at it excluding Globus, the idea is to take it down by EUR 6 million, you know, mainly then in marketing and in sort of related expenses. There might be, you know, I would say EUR 1 or EUR 2 million going the other direction in some other OpEx, to keep it at a very low level. That's what we mean. In the EUR 6 million is including any sort of inflation effects on the other operating expense. Thank you. We could take here in the middle one from the raise your hand. Maria, you had raised your hand, so please you can ask. Yes. Perfect. I had three questions. The first one is that, I mean, you repeated the guidance of adjusted EBITDA- Yeah ... EUR 80 million-EUR 90 million, and you say that Q1 went as you had expected. Mm. now you initiated EUR 6 million of cost savings. Mm. Would I read this right, that your, in your initial projections? Mm ... you are looking to hit the high end of the guidance range? No. I mean, I think that this is. It's a good question. I think that probably we, you know, we need to be even more accurate in our language. I mean, I don't think that I want to comment on exactly what we were expecting at what time about where in our range we would hit it, right? That's the reason that we give a range. I think that it's fair to say that when we gave the range at that time, we, you know, we already had an idea about what Q1 would be looking like. We had an idea about how much cost cuts we could effect, you know, during Q1. That's what we mean, right? Is that we've known obviously for a while roughly what our spending levels would be and that, you know, our savings program always takes some time to implement, even when you are cutting marketing costs. So that's what we meant, right? It's not a statement about, you know, which part of the guidance range that we are expecting to hit. You know, from our point of view, it's not that Q1 has come in, you know, worse than we were expecting at the time that we set the guidance. I don't know if that answers your question or not. Sure. I think it gives some color. Mm. I wanted to touch upon a bit, given that, you now say quite loud that you are going to cut the marketing spend, at the same time I hear from your presentation the push for your own brands in wine. Mm. At the same time last year, I mean, you got these quite significant partner losses that still affect your sales. Mm. how do you make sure that, I mean, you don't lose further partners? Because if I were your, partner in wine- Mm I would be quite concerned hearing that you are cutting the marketing spend. Mm and you are promoting your own brands. Yeah, very good question. Obviously, I mean, let me start with saying that, you know, all the partners listening in on this call, we obviously have your interest at heart, and we are not financing this marketing spend on own brands through cuts in partner brand marketing. The way that it works, Maria, with the partner brands is obviously the marketing spend on the partner brands is something which is reviewed and agreed upon, you know, with each of the partners. That's not really, you know, a financing source for spending on our own brands. That's the case both in spirits and in wine. What we are doing in terms of being able to support, you know, the own brands is that we are reallocating funds within the own brands marketing spend. I mean, we have... I don't know. I mean, Pekka probably can help me out here, but, you know, we have more brands than we can count, and it's quite clear, you know, that our marketing and sales teams, they are taking a very hard look at basically the portfolio, right? About how much are we spending on this, on that brand, and concentrating, you know, the spending behind those brands that we really want to focus on during this year. It's a matter of us reallocating and net cutting marketing spend, you know, on our own brands, and then still being able to protect, you know, our launches by focusing the remaining spending on where the priorities are. I don't know, Pekka, if you want to add a few words on that. Yeah. To build on that, with partner brands- Partner brands The spend is contractual. Any cuts would then be mutually agreed. The cuts that we're talking about, the EUR 6 million, like Sigmund said, it's about own brands, and they're, like Sigmund said, it's about reallocation of the funds. We have three important growth areas stated in the strategy. One is international growth, one is own brands in the monopolies, and the third one is low alcoholic brands. Those are the strategic growth items, and those we are supporting fully. With the rest, we are super selective. Did you have a third question? Yes. I had a third question, which is trying to get my estimates right, on the gross margin levels. The gross margin fell, 470 basis points in the Q1, and now you have these, I mean, two additional pricing windows open, opened, so in Sweden and Finland, and then I guess Norway in May. How should I look at the gross margin that? Are these price hikes enough to reverse the negative gross margin trend already in Q3, or Q2? How should it look, we look in the second half? Good question. How much precise guidance we should give on that? I mean, I feel, I think first one thing for the sake of good order is that there is obviously, or maybe not so obviously, but there is, you know, a gross margin dilution effect from the incorporation of Globus, right? That's obviously something that you have to take into account, that quite a significant chunk of this decrease, you know, is related to the fact that to the fact that Globus has is a relatively sizable business with quite significantly lower gross margins than the average of the business. That's one thing. To answer your question on the base business, well, I mean, I think that on average for the 2nd quarter, maybe, yes. I mean, maybe that'd be at the point where the margin erosion stops versus the last year, right? Finland, you know, has had a full quarter. I mean, Norway has had some additional FX impact, but that is now somewhat adjusting. Then you have the May 1st pricing window. You have 2 months in there. Sweden, you know, has had since March, but, so, you know, roughly probably that is the, that's when you should be seeing this sort of stabilization. For Q3 and Q4, I mean, I don't know if I wanna give, you know, that much specific guidance on it. Yes, we have further price windows in September and October, and we definitely intend to make the most out of those. Thank you, and thank you, Maria. Good questions. We have in chat from Rauli, "Can you comment the profitability of Globus separately? Is that similarly depressed as the wine segment overall, and what's driving that? Yeah. Good, good question. Yes, we can comment that. I mean, the EBITDA profitability of Globus was weak in Q1. I mean, as you know, we had bad news on the, let's call it, the ingoing or the base level of profitability of that business, you know, that was discovered during the annual closing process. I think that it's. Our expectation is that the profitability of Globus improve versus Q1, which was clearly not, you know, at the level that we expect it to be. It's not due to the. It's not due to exactly the same factors as the rest of the business, which was very much around FX. In the case of Globus Wine, it's not so much FX, but the, let's call it, the base profitability level of the business, then there were some specific elements in Q1 that depressed those earnings. But going forward, the outlook there is that the Globus Wine management together with the rest of the wine management have a strong profit improvement plan that goes to a number of items. It's about cost savings affecting gross margins. There is now, I mean, they operate in a bulk wine business, there are now some good deals to be had on bulk wine from certain countries of origin. The inbound freight is also market. You know, global sea freight is also turning in the right direction, there are savings there. Globus Wine used to have a relatively high inventory in which they were paying demurrage costs in the, in the harbor of Copenhagen out of which they are now out, and then they also have a cost savings program in general on OpEx. All of those items, you know, we hope will return Globus to the sort of the profitability level that was, let's say, announced at the acquisition time, whereas it was clearly below that in Q1. Thank you. Joni has raised his hand. Please go ahead, Joni. Yeah. Yeah, thanks. Maybe one question related still to barley prices. The price level is coming down, so should we expect now that in industrial you see already during the Q2 or end of Q2? Mm ... the lower barley price and then, you know, due to lag effect then we would see, you know, lower price level on beverage side or spirit side than during Q3 or how should we now view this lower barley prices? I think that for barley in isolation, what you are describing is probably the correct thing, right? First it hits industrial and then, you know, through standard costs which are updated every quarter, it starts, you know, helping the beverage or spirits specifically. At the same time the cost inflation that we are seeing on input prices and maybe I think bottles is the one that is the biggest, you know, issue from this point of view. Some of those... You know, some of those price increases due to co- contracts, et cetera, have such a lag, so even though, you know, the underlying factors driving that cost increase such as energy prices, you know, have come down actually quite a while ago, you know, we still have in some cases, you know, increases in, for example, bottle prices that are hitting us, you know, still in Q1 or in Q3. So how that plays out exactly, net-net is a bit difficult to say. I guess it depends a bit on how much the barley price, you know, comes down if it continues to go down. Of course all of these things are things that we factor into our into our price increases, you know, for the remaining windows. I mean, I think we have an ambition to stop the declining gross margin and even increase it. Thank you. We have a question in chat from Paul. How big was the ingoing inventory revaluation in industrial? Is that only related to lower barley prices or ingoing inventory? Yeah. Yeah. Very good, very good question. This is something that is a bit difficult to explain, you know, in the short space we have available in a quarterly report. Actually the inventory valuation we are talking about here is a base effect, so it's actually that we had a positive effect from inventory revaluation last year, which we don't have this year. Thus the profitability is down because we are not getting, quote unquote, the positive impact from standard costs going up, last year that we don't have this year. It's not really that the inventory valuation as such has hurt our profitability in Q1. It's rather that Q1 last year had a positive impact that we don't have this year. Thank you. If you have more questions, please use the raise your hand function. We are also open to take question from the telephone lines, so if you are joining by phone, please state your name if you would like to ask a question. Joni, please go ahead. Yeah, maybe one more question related to FX. Have you any hedgings in place? We have quite limited hedging now, maybe a quarter of our exposure. Historically, Our policy has been on, especially on the Arcus side with the wine business to try to compensate for FX, rather through the really disciplined price increases and also through, you know, collaborative relationship with our partners, right? But obviously given the volatility especially of the NOK of late, that's a policy that we are very much looking into revising and probably in the future we will have a higher level of coverage in order to have more stability in our gross margin during the pricing periods in the monopoly. That, you know, obviously takes away some potential upside if the, if the NOK should strengthen. At the same time, you know, we stabilize the gross margins. Currently not particularly well-covered, maybe a quarter of the exposure. Thank you. Another question from Paul. Could you give any indication on what operating cashflow conversion to EBITDA you would expect in 2023? Well, I mean, I think that I think that what we have said is that our big target on... I mean, we have two big levers, right, to make the cashflow conversion better actually than the underlying economic performance of the business. Those two levers, one of which we have implemented already, so there you can see the impact of the sales or the receivables. So that's one. Then the second big impact is the reduction in the inventory, and there our goal is around EUR 30 million by year-end, you know, on a like for like basis. So that's what we are aiming for. Thank you. We still have well time to take questions. If there is still any, please raise your hand or use the chat. Joni, please go ahead. Yeah, maybe follow up on the, on the working capital level still. How should we now view the inventory impact going forward? Are you aiming for, you know, sequential improvements now during Q2 to Q4, or is there some timing issues also here? I think very, very tough, very tough question. I mean, I think that it's something that we are still very much working on. I mean, inventory reduction, you can do it in a stupid way, or you can do it in a smart way, and we try to aim to do it in a smart way. I mean, the reason that inventory is higher, I mean, part of it is cost inflation, but part of it is also that we have higher safety stocks to avoid, you know, sort of out of shipment. A lot of the global logistic issues that caused us here are sort of, you know, behind us. You know, I mean, we wanna do the inventory reduction the smart way, right? I mean, we could be scrapping, you know, and that would take it down, but it wouldn't help on cash conversion. We could be, you know, very rapidly taking down the safety stocks, but it would lead to out of stock in store. I mean, I think that we're trying to do it in an intelligent way. I mean, I think that it's fair to say that Q3 and especially Q4 are the ones where you really see the impact of that rather than Q2. Okay, thanks. Maybe one question to Pekka then about the international sales. Could you give some more color here, how this have been going, for example, in the Middle Europe? It's growing by double digits. We're really happy with the international sales growth. It's driven by Koskenkorva. We've seen already for many quarters, we've seen solid growth with the brand and that just continues. We're very happy with that. Coming from many different countries, I mean, in Europe, obviously in our own region, Baltics is doing really well. If you look at countries like Germany, Switzerland, Slovakia, Hungary, sorry Ukraine, growing fast. We just became the number one vodka brand in Iceland. Small market, but it's nice to be number one there. Solid growth in international, which obviously drives the good growth in the spirits overall. Okay, thanks. That's all from me. Thank you. We have Maria in chat. Adjusted fixed costs up 20% year-on-year in Q1. You will have cost savings, but also underlying inflation. How is this developing in the coming quarters? I think that it's developing so that, you know, we aim for having EUR 6 million less, right, than last year. On an annual basis. You don't see underlying inflation, outside this EUR 6 million coming from personnel cost, rents. I mean, personnel cost and rents, of course, we do have that, but then we try to compensate with the... Well, I mean, we... Yes, we do cut EUR 6 million net in the marketing and travel, and that's, you know, including any inflation there. In terms of personnel costs, clearly, I mean, I think we have about the same sort of inflation levels that others have, right? I mean, it's still in negotiation, but around this 5% level, I think that's the level at which it is. Of course, you know, we are trying to have strict control of our headcounts, right, to try to compensate for at least partly for that. Thank you. Maria had another question. How close are you with financial covenants with net debt EBITDA trailing four times? I mean, I think maybe it's not something that we disclose in very much detail. I mean, I think it's not a secret that it's we want to bring the net debt or EBITDA down towards this target of 2.5. That's something that obviously we are talking a lot about with the banks as well, what's our path down to that level. We have a very, very strong banking group that we work together with. I'm not sure that I want to comment specifically on how close we are with the covenants. Great. Any more questions? I think we are done with the questions now. I will hand over to Pekka for a summary. Thank you, Petra, and thanks for all the great questions. As a summary of our Q1, we had a very positive start in terms of sales in Q1. In constant currencies, we grew sales across all segments, and most of our categories and markets gained market share as well. We continue to battle the impact of weakening Norwegian and Swedish crowns, and our focus is on price increases and cost savings for year to go. To strengthen our growth strategy implementation, we have hired Mikkel Pilemand as our Chief Growth Officer and member of EMT from first of May. With this, I want to say, thank you for joining and hand back over to Petra for final words. Thank you. This concludes our Q1 results presentation. Thank you all for joining today. If you have any feedback or further questions, please don't hesitate to contact us, so we are happy to set follow-up calls with you. With this, we wish you all a good rest of the week and a great weekend. Thank you. Bye.