ALTIA — Earnings Release 2018

Nov 6, 2018

Altia Plc’s Business Review January–September 2018: Stable development continued

Altia Plc’s Business Review January–September 2018: Stable development continued

Altia Plc  Stock Exchange Release  6 November 2018 at 8:30 am EET

Altia Plc’s Business Review January–September 2018: Stable development continued

This is a summary of Altia Plc's Business Review for January–September 2018. The
complete report is attached to this release and is also available on the company
website at https://altiagroup.com/investors.

January–September 2018 compared to January–September 2017

· Reported net sales were EUR 246.4 (249.1) million
· In constant currencies net sales grew by 0.8% in comparison to previous year
· Net sales of Finland & Exports segment grew by 1.1% to EUR 94.3 (93.2)
million
· Scandinavia segment’s net sales were EUR 74.9 (79.4) million, in constant
currencies net sales grew by 0.4%
· Altia Industrial’s net sales grew by 0.8% to EUR 77.2 (76.6) million
· Comparable EBITDA was EUR 24.1 (23.8) million, 9.8% (9.6%) of net sales
· EBITDA was EUR 19.6 (24.0) million, 8.0% (9.6%) of net sales
· Net debt / comparable EBITDA (rolling 12 months) was 1.9 (0.9)

July–September 2018 compared to July–September 2017

· Reported net sales were EUR 85.7 (84.5) million
· Net sales grew by 1.4% compared to previous year and by 3.6% excluding the
currency impact
· Comparable EBITDA was EUR 10.3 (10.4) million, 12.0% (12.3%) of net sales
· EBITDA was EUR 10.3 (11.1) million, 12.0% (13.2%) of net sales
· Guidance remains unchanged

Important note: This is not an interim report as specified in the IAS 34
standard. The company complies with half-yearly reporting, according to the
Finnish Securities Markets Act and discloses business reviews for the first
three- (Q1) and nine-month (Q3) periods of the year. The figures in the review
are unaudited.

Key figures

+-----------------------+-----+-----+--------+--------+-----+
| |Q3 18|Q3 17|Q1-Q3 18|Q1-Q3 17|2017 |
+-----------------------+-----+-----+--------+--------+-----+
|Net sales, EUR million |85.7 |84.5 |246.4 |249.1 |359.0|
+-----------------------+-----+-----+--------+--------+-----+
|Comparable EBITDA, EUR |10.3 |10.4 |24.1 |23.8 |42.4 |
|million | | | | | |
+-----------------------+-----+-----+--------+--------+-----+
|   % of net sales |12.0 |12.3 |9.8 |9.6 |11.8 |
+-----------------------+-----+-----+--------+--------+-----+
|EBITDA, EUR million |10.3 |11.1 |19.6 |24.0 |40.3 |
+-----------------------+-----+-----+--------+--------+-----+
|Comparable operating |6.6 |6.9 |13.4 |13.2 |28.2 |
|result, EUR million | | | | | |
+-----------------------+-----+-----+--------+--------+-----+
|   % of net sales |7.7 |8.1 |5.4 |5.3 |7.8 |
+-----------------------+-----+-----+--------+--------+-----+
|Operating result, EUR |6.6 |7.6 |8.9 |13.3 |26.1 |
|million | | | | | |
+-----------------------+-----+-----+--------+--------+-----+
|Result for the period, |4.8 |5.6 |6.5 |10.3 |18.3 |
|EUR million | | | | | |
+-----------------------+-----+-----+--------+--------+-----+
|Earnings per share, EUR|0.13 |0.16 |0.18 |0.29 |0.51 |
+-----------------------+-----+-----+--------+--------+-----+
|Net debt / comparable |1.9 |0.9 |1.9 |0.9 |1.1 |
|EBITDA, rolling 12 | | | | | |
|months | | | | | |
+-----------------------+-----+-----+--------+--------+-----+
|Average number of |725 |763 |724 |777 |762 |
|personnel | | | | | |
+-----------------------+-----+-----+--------+--------+-----+

Reconciliation of alternative key ratios to IFRS figures is presented in the
appendix on page 6.

CEO Pekka Tennilä:

“I am pleased with the resilience that Altia has shown in the tough operating
environment. Net sales grew by 0.8% in constant currencies and despite cost
pushes profitability has been stable. The sales of our Nordic core brands has
continued to be strong and the development in exports has been positive.

The headwind from the unfavourable currency development, especially the weak
SEK, has impacted on reported net sales and on the profitability of the
Scandinavia segment. The changes in the Finnish alcohol legislation and taxation
at the beginning of the year have impacted negatively on the sales of spirits
and wine in the Finnish monopoly.

We have been able to increase prices in all industrial products which partly
mitigate the increased cost of barley. In consumer products, the increased cost
of barley, puts pressure to make further price adjustments on top of ongoing
revenue management.

The deliveries of barley during the autumn have fulfilled the Koskenkorva
plant’s needs. After the grain price spikes in September and early October,
grain prices have now stabilised at lower levels and traditionally the supply of
barley activates at the beginning of the year. Based on market data it appears
that the grain prices are on a descending trend.

Earlier in the autumn, it was announced that alcohol taxes in Finland will be
increased as of January 2019. This unexpected decision was unfortunate following
a recent significant increase at the beginning of this year. Alcohol taxation in
Finland is already among the highest in the EU, and especially the taxation of
spirits is high in relation to other alcoholic beverages. A higher alcohol tax
level is likely to increase grey imports from abroad.

The last quarter of the year is particularly important for Altia. We have
launched this year’s Blossa 18 vintage glögg and the wide range of traditional,
low-alcohol and non-alcoholic Blossa’s. Christmas and New Year are a season also
for Cognac gift packs, premium red wines and champagne, and for aquavit
especially in Sweden and Norway. In exports of cognac to Asia, we are stocking
up for one of the key events, the Chinese New Year in February.

Outlook for 2018

Market outlook

The development of the Group’s business operations and profitability are
affected by factors such as the market situation and competitive environment,
economic outlook, imports by consumers and changes in alcohol taxation. The
uncertainty in the eurozone and changes in customers’ buying behaviour are
continuing. There is still significant uncertainty related to the development of
consumer demand. Raw material prices and currencies are expected to remain
volatile.

Seasonality

Sales in the sector are seasonal, with net sales and operating profit generally
being significantly higher in the fourth quarter of the year compared to other
quarters.

Guidance

The positive trend in Altia’s core brand portfolio is expected to continue. Cost
increases in key raw materials and expansion in exports will impact
profitability development. Unfavourable currency impact of the weak Swedish
krona and Norwegian krone are expected to continue.

Guidance as published on 23 February 2018 remains unchanged: The Group’s
comparable EBITDA is expected to improve or be at the 2017 level.

Financial calendar for 2019

Altia will publish financial reports in 2019 as follows:

· 7 February 2019: Financial Statements Bulletin for 2018
· 8 May 2019: Business Review for January-March 2019
· 15 August 2019: Half-Year Report for January-June 2019
· 7 November 2019: Business Review for January-September 2019

Altia Plc’s Annual General Meeting (AGM) 2019 is planned to be held on 15 May
2019 in Helsinki. The Board of Directors will summon the AGM later.

Helsinki, 5 November 2018

Altia Plc

Board of Directors

Additional information:

Pekka Tennilä, CEO

Matti Piri, CFO

Contacts:

Analysts and investors: Tua Stenius-Örnhjelm, Investor Relations, tel. +358 40
7488864

Media: Petra Gräsbeck, Corporate Communications, tel. +358 40 767 0867

Conference call and audio webcast:

Altia hosts a conference call and audio webcast for analysts and investors in
English on today at 11 am EET.

CEO Pekka Tennilä and CFO Matti Piri will present the Q3 Business Review, after
which participants will have the opportunity to ask questions. Presentation
material will be made available before the call begins on Altia’s website at:
https://altiagroup.com/investors.

Conference call participants are requested to dial in and register 5–10 minutes
beforehand on the following numbers:

Finland: +358981710310

Sweden: +46 856642651

United Kingdom: +44 3333000804

United States: +1 6319131422

Pin: 87848569#

The conference call can also be followed online. To join the audio webcast
please go to: https://altia.videosync.fi/2018-11-06-teleconference. A recording
of the audio webcast will be available later on Altia’s website:
https://altiagroup.com/investors

Distribution:

Nasdaq Helsinki Ltd

Principal media

www.altiagroup.com
Tua Stenius-Örnhjelm
Investor Relations Manager
+358 40 748 8864
tua.stenius-ornhjelm@altiagroup.com
Altia is a leading Nordic alcoholic beverage company operating in the wines and
spirits markets in the Nordic countries, Estonia and Latvia. Altia produces,
imports, markets, sells and distributes both own and partner brand beverages.
The Company also has production in Cognac, France. Further, Altia exports
alcoholic beverages to approximately 30 countries, most of which are in Europe,
Asia and North America. Altia’s own core brands are Koskenkorva, Chill Out,
Blossa, Larsen, O.P. Anderson, Renault, Xanté and Valhalla. Altia’s net sales in
2017 were EUR 359.0 million and the Company employs about 700 professionals.
Altia wants to enhance a modern, responsible Nordic drinking culture.
www.altiagroup.com.

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