Good morning, everyone, and a warm welcome to this presentation of Anora's Q4 and full year 2023 results. My name is Milena Hæggström. I'm the head of IR here at Anora, and our presenters today are our CEO, Jacek Pastuszka, and CFO, Sigmund Toth. After their presentations, we will have a Q&A session. Please do post questions through the live chat, or you can also ask them via the phone. You are all now muted, so please unmute yourself if you have a question later on. Now, Jacek, please go ahead.
Thank you very much. Thank you, Milena. I hope you can hear me, hear me well. Good morning to everybody on the call. We will follow the regular routine here. I will start with some general introduction. I will spend about 15-20 minutes talking about different aspects of the business, and then Sigmund will take over for more detail, and then after that, we'll answer the questions.
We see there were a picture to.
Sorry, can you mute? Finish to a very challenging year. I think we have every reason to be satisfied with our performance in the fourth quarter. Obviously, it's much more difficult to be satisfied with the performance for the full year, but it's good to see that we were able to mobilize ourselves to deliver in the last quarter, which, because of the seasonality, is obviously the most important for us. 40% of our bottom line is realized in the fourth quarter. So this part of the year is critical to our performance for the whole year. In 2023, I'm glad to say that we were able to use this seasonality to our advantage. We leveraged the seasonal products, especially the aquavits and the Blossa.
The Blossa in December was exceptionally strong.
Maria Wikström, SEB.
While at the same time, we're keeping an eye.
Joining.
On cost control and, cash flow and, working capital. So I would like, before we get, any further, I would like to, thank our employees and business partners for delivering a strong, fourth quarter. Still, our net revenue was, -4% versus the fourth quarter of 2022. There are two primary reasons for this. The first one is, currency, impact, the translation impact from the, from the local currencies, and then the decrease in Industrial sales of side stream products and toll filling services. I will talk about Industrial and its role in, in our overall business mix, later in the presentation. The monopolies were also down, as broadly reported, in the, in the fourth, quarter, due to customer down trading a bit, probably in preparation for the, for the, Christmas season.
This triggered our profit warning in December, as we were simply unsure about how the fourth quarter and specifically December would pan out for us. In the end, it worked well, and we were at the top end of our guidance. Regarding consumer down trading, I want to mention that the lower mainstream part of our portfolio performed well in Q4, and actually throughout all of 2023. Which I believe demonstrates the breadth and depth and flexibility of our product offering. For the full year, the net sales grew by 3.5% to almost EUR 728 million, with Globus Wine, as you know, incorporated in the middle of 2022, so half year effect on our results in 2023.
Let's move to the bottom line. On the bottom line, especially comparable EBITDA performance, there were three big factors that influenced the 2023. First, the weakening of the currencies, NOK and SEK, which stabilized at the end of the year, but the full year impact is sizable. Also, lower than anticipated and planned for bottom line contribution from Globus Wine business, and then termination and the lost revenue and profits from two large partner contracts in Sweden. These were the three big factors that affected our bottom line performance across all of 2023. As we have communicated frequently in previous calls, the management took actions to address these headwinds. Throughout the year, there were multiple cost-cutting initiatives initiated already in Q2.
There were price increases that intensified in the second half of the year, and there were also changes in the operating model that we have communicated later in the year, and these changes in the operating model resulted in white-collar headcount reductions, and it affected 37 of our employees, as we have communicated separately. Also, what we have done in the second half of the year was a change in internal prioritization of tasks to be undertaken. So, we put profitability improvement or marginal improvement much higher on the agenda.
Reducing net leverage also has moved higher on the list of priorities, and generally reducing net working capital through inventory reduction and continued sales of receivables always also got lots of attention in the end of the year. This was obviously the management's reaction to the poor performance in the first few quarters of the year. All of this is aimed to improve the dividend capacity. So I'm glad to say that these actions brought the expected result in Q4, in bottom line numbers. Obviously, supported also by lower material prices, Sigmund will talk about it in more detail, and also more stable, more predictable currencies.
Q4 comparable EBITDA, as a result of all these actions, was EUR 28.2 million in Q4, which is, we believe, a good result, +35% ahead of last year. However, we obviously need to remember that what we have in the base is EUR 3.2 million of inventory corrections at Globus Wine, due to accounting error. Still, even if adjusting for this, the double-digit growth of 17% versus last quarter of last year is a solid result. For the full year, we are still in the negative territory, EUR 69.4 million, -9% versus the previous period. Margin of 9.5%, which is 130 basis points versus last year.
Looking ahead, a few comments on what will be our top priorities going forward. Our focus on margin accretive businesses to improve our marginality and profitability will continue, and also we would like to solidify our gains, our recent gains in trade, working capital, and improve capital returns as a result. We are guiding for a turnaround in our bottom line performance in 2024, from -9% to high single-digit growth, and a range of EUR 75 million-EUR 85 million for the full year. To summarize the Q4, before I get into the segment performance, significant EBITDA and also margin improvement versus standalone Q4 of 2022.
Tight cost control and implementation of all the actions that the management committed to in Q4, and significantly improved cash position, and as a result of all of this, improved net debt ratio. Sigmund will talk more about how we calculate it and how we are looking at the average for the full year. Yes, so 2.0 is significantly ahead of 2.5, that we have as the ongoing target, but we need to remember, we look at the average for the full year. Also, I would like to spend now a bit of time on the impairments, without stealing the show from Sigmund, obviously.
But, the developments of 2023 and also current business realities were reflected in the impairment testing, which is the regular practice in the business. Obviously, this time we had to reflect quite a few developments of the last period. It obviously had negative impact on EPS. However, it is obviously improving many other ratios and indicators of the health of our business. So, as a result of impairment testing, we have made write-downs to the book value of both fixed assets and right of use assets, mostly in Norway. This is following the Centre of Excellence execution that we communicated before.
The second part of impairments, of write-downs, was the impairment in the value of shares of our Danish subsidiaries. Mainly due to lower than expected profitability of Globus Wine, which reduced the distributable funds by EUR 59 million only this impairment. And also, we impaired the value of our shares in Vingruppen, Sweden and Norway by EUR 24 million. Important to note, these impairments that prudently reflect the current state of the business and the developments, the business developments of the last year, they do not impact the loans, the cash flows, or the financial targets that we have. They just duly reflect, as I said, the current realities. We believe we still have good dividend capacity for years to come.
Also, I want to stress that we will continue to look for ways to lighten up the balance sheet to improve capital returns. Although I have no any specific updates on our plans, targets, or expectations to this effect at this point in time. I think now is the right moment to get into segment performance. I will start with Wine. Wine had a good quarter, which is nice to say, to be able to say after a few quarters in which this segment of our business was dragging us significantly down. Net sales for the fourth quarter was still -6% below last year, mostly due to currency impacts. So it's useful to look also at the performance in the local currency.
And for one, I want to mention the fact that Sweden net revenue in the fourth quarter actually increased by modest, but, very much welcome, 1%, in local currency, in SEK. So the lost revenue from contracts terminated last year was effectively replaced by the local team through solid performance of Anora own wine and also growth from some current and new large partners like AdVini, like Treasury Wine, like Spier, like The Wine Group. And also on top of that, we experienced very good Blossa performance in the very end of the year, in December of last year.
So all in all, I would say that specifically in the fourth quarter of the year, our portfolio depth in terms of partners and brands helped us balance the revenue risks that we have, that we have had in Q4. We were not able to deliver in a similar way for the whole year, but we also have to admit that the headwinds we were facing were even more severe. EBITDA for the Wine segment was EUR 10.22 million, 10% margin, up from EUR 6.9 million in Q4 2022. It is flat when adjusted for inventory corrections in Globus Wine, but it's still a good number.
This number is mostly secured by cost controls, tight cost controls, by the Wine team, while obviously retaining contractual investments in, in partner brands. Full year net sales for the Wine segment was +6%. Remember, we have consolidated the Globus Wine for half of this period. And this growth is delivered despite the currency impact, which was very sizable to the effect of EUR 21 million. EBITDA picture is obviously much worse for the full year. We lost half of our EBITDA in the Wine segment in 2023. Mostly through currency, both the translation part and the transactional part, terminated contract, which affected full year, and then Globus Wine profitability that was below expectations.
Maybe that's the right moment to say a few words about our stance on the partner business. It is an important and integral part of our overall model, as you well know, both in Spirits, actually, and in Wine. It's more pronounced in Wine, especially recently, because of the weakness in this part of the business. But I want to stress that our commitment to partner business is unchanged, while our ways of working will have to evolve to ensure it's sustainable. I mean, sustainable from the economic financial point of view, both for ourselves and, equally, importantly for our partners.
So we'll actively manage, as we indicated, in our last call, we'll actively manage the partner mix, to increase the share of, those partners who support our value creation and, our sustainability agenda. The sustainability agenda, part of it is, is showcased by expansion of near- market filling and bag-in-box packaging. What we have to offer, to our partners is a very unique combination of, elements that maybe can be replicated, individually, but in combination, very difficult, and matched in our view across the Nordics, which is a combination of, production, packaging, and logistics capabilities under one roof. Multi-channel route to market that includes monopoly, on- trade, grocery, travel retail, and border trade, and also Pan-Nordic coordination of activities.
And, last, but definitely not least, the local context, delivered through passionate wine experts under the Vingruppen umbrella, many of them certified masters of wine. While we will be focusing increasingly on large institutional partners in building these relations across the Nordics, I want to stress that fine wine imports to one trade channel will remain part of our formula. I know I gained this reputation of being a beer guy, so maybe to stay true to this, I would say that I believe this fine wine in on-trade is something that comparable to craft beer to the brewing industry. That much on Wine, maybe let me move to Spirits now. Good quarter.
Obviously, one should say because Spirits has had very strong streak of quarters under their belt at the time when we struggled on other fronts. So it's good to see that this continues, and that both of our commercial engines operate in sync and delivering respectable performance. So Spirits continue on a strong note. It's a strong set of numbers for both the quarter and the full year. Q4 net revenue was +2% versus last year, helped by price increases, obviously, offsetting the softness in the monopoly volumes and the currency impact.
Again, about currency, when we look at the net sales development on Spirits in local currency, Sweden is +11%, so double-digit net revenue growth in SEK, supported by market share increase, mostly in white spirits and vodka. Norway, 7% in net revenue growth in local currency, and also more modest, but still market share increase. In Finland, this market is supported by our increasing presence in the grocery channel and the NoL o category, driving growth of +5%, and also market share increase in Finland. Worth to mention, Koskenkorva is growing double-digit and has now 15% share in our performance, in our results.
Q4 EBIDTA for the Spirits business increased sharply to EUR 16.2 million, 22% margin, increase of 41% versus previous periods. So on any account, this is very good set of numbers. Combination of pricing and good cost control, and implementation of the efficiency or cost-cutting measures that were agreed already in the second quarter of the year by the management. For the full year, net revenue + 2%, so low single-digit growth on net revenue. EBITDA, double-digit growth, + 10% margin, + 120 basis points improvement up to 17.4%. So again, a very impressive, strong set of numbers.
The key strategy for Spirits and all ethanol-based products for that matter is to diversify sources of revenue for us beyond the monopoly channel and beyond the monopoly markets only. So we are talking here about mostly international expansion and also increasing attention that we are giving to our grocery business. With this, let's move to Industrial. On Industrial, the numbers are quite soft. I would say there are multiple reasons for it. Important to note what was unusual about this quarter is that all key elements of our business, so both the side streams and the services and the contract filling, went south.
So, both in terms of demand, or revenue and pricing, ethanol, starch, feed, contract manufacturing, they all decreased in revenue, and as a result, in profit in the fourth quarter due to a combination of factors. Importantly, the logistics part of our business, Vectura in Norway, performed well, so it behaved differently than the other parts of the business. The Q4 external net revenue was -18%. EBITDA dropped to 3.1%. For the full year, net revenue -6%, mostly affected by decrease in demand for starch and feed.
Flattish EBITDA for the full year, which is good to see, demonstrates that the Industrial team has the flexibility to cover for the revenue losses, a slight decline of EUR 200,000. The EBITDA for the full year was 17.5%. As a result of all that, the margin improved by 60 basis points to EUR 6.5 million, which we view as a sustainable normal level for this part of the business. The focus on the Industrial part is to help the overall efficiency of Anora operations, and marginality for this business is quite standard for us at 6%-7% level.
This is what we are aiming for, because as I said, the purpose is to make our overall supply chain operations more efficient, cover fixed costs, and support branded business with some additional profits. With this, I will hand over to Sigmund for more detail, and then we'll be back for questions. Thank you.
Thank you for that, Jacek. We move now first to the net sales development. So here you can see over the evolution over the last two years by quarter. And of course, first, we note that the strong seasonality of our business with the quarter that we are just closing, Q4 being the most important in each year. As Jacek mentioned, the revenue in Q4 it was down by 4% from the corresponding period in the previous year, driven then mainly by currency translation effects and the Industrial business like for like decline.
For the full year, and here you can see it very clearly in the graphs, the growth of 3.5% that's coming from Q1 and Q2, much higher than last year. And this is because, of course, Globus Wine was integrated as of Q3 last year, and then there was a full year positive effect in Q1 and Q2 of the current year. If we then move to look more at the composition of the Q4 revenue, you can then see here that there was this decline of 4%, where Spirits was growing slightly, but then Wine and Industrial were declining. Again, both Wine and Spirits were negatively impacted by currency translation effects.
We have big businesses in Norway and Sweden, although those currencies strengthened a little bit towards the end of the quarter versus the very low levels they were at previously, they were still at lower levels than the same period last year. Spirits net sales, it was supported by, as Jacek mentioned, good international expansion, especially in Denmark and in Baltics. And then, we should mention here that, of course, for part of the period, the divestment of Larsen also impacted our figures. Although that figure, given that we have retained the distribution rights for Larsen in our core markets, was very limited.
It's actually, it's more on the bottom line that there is a bigger impact, but there was some negative impact also in this quarter. If we then move on to the next slide, here we see the full year and the decomposition of that. It's now, of course, at the highest level it has ever been for Anora as a company, and driven for the year, as you can very clearly see for Wine. But again, this is the incorporation of Globus Wine rather than real underlying growth, which was negative.
And the Spirits, where the net sales are supported by an international expansion, which was especially strong in the first half of the year, and somewhat more muted in the second half. And then on the Industrial products, as mentioned for the quarter, net sales negatively impacted by lower starch and feed sales. If we then move on to the next slide, and this is the comparable EBITDA. Again, a bit the same, the same dynamic showing the quarter-on-quarter changes. Very clear profile. This year, it is a crescendo in terms of profits.
Not only because, let's say, the performance is better due to the cost-cutting and price increase actions of management, but also simply because of the seasonality, which is present in all years. And this year it was very much so that the profits, both in absolute and in margin terms, were the strongest in the last quarter. Where we had the full impact of these price increases that were implemented as of September.
And in addi, i n addition to that, as I mentioned, when talking about the net sales, the local currencies, which were very detrimental to us in terms of profitability in the first few quarters, relatively speaking, they, both the second and also some strength towards the very end of the year. If we then move on to the composition of the group EBITDA for the quarter, as gone through by Jacek, positive contribution by Wine. Again, let's not forget that, actually, if you take out this Globus Wine inventory correction, which happened in Q4, we are basically flat on the comparable EBITDA for Wine.
But still, given the external headwinds, a strong performance versus the decreases that we saw in previous quarters. Spirits strongly up due to both improved gross margin and cost control, and then Industrial, somewhat down. If we then look at the same picture for the full year, there. Well, as mentioned by Jacek, the overall picture is still a negative one on the comparable EBITDA basis, down by almost 9%, from EUR 76.1 million to EUR 69.4 million. The more than the total is explained by the decline in Wine.
Again, no need to repeat too much the explanations, but they are foreign exchange losses in the Wine segment, and also, to some extent, higher input costs in other parts of the business. If we then move on to the next slide here, we're going into the non-recurring items, so the items affecting comparability for the full year. And you can see that basically the comparable EBITDA is almost equal actually to the EBITDA. Because on the one side, there is this net gains or losses from businesses disposed.
This is the gain, the accounting gain on the Larsen sale, EUR 12 million. That's a positive impact. Then, there is a lot of rather large chunk related to the cost of close of business operations restructuring. We mentioned that there were these programs, both the Centre of Excellence implementation program and these cuts in white-collar, a number of white-collar employees. Obviously, this resulted also then in the, in the, in, in some costs in terms of, of, of packages for these employees, which, which are booked here in items affecting comparability. And, and then, there is also costs related to merger of Altia-Arcus and other major corporate projects.
So, a lot of integration work still going on in terms of having a uniform SAP system across the business, among other things. These costs naturally, as you know, the merger or integration related cost, they should decrease in the coming years. And then, you know, for other major corporate projects, they will vary. If we then go to the next page. Barley, very important input that we love dearly, the Finnish barley, which is turned into the magnificent vodka and other spirits, ethanol-based products, as well as a number of side streams.
But of course, as you can see, it has been quite the difficult period in recent years, with both the poor harvests in Finland and then the geopolitical situation with the war in Ukraine, driving the price in tons to completely unprecedented levels. As you can see from the graph towards the end there, you know, we've come down somewhat from Mount Everest, not quite down to the old levels on the plains. But you know, it seems to be that we are at some sort of plateau, which is relatively stable.
So here there is. Let's say, for the time being, it's still at a higher level than what it used to be, but it's now stable, and it's expected to stay at this level, for the remainder of 2024. So it's providing, if this turns out to be true, some measure of stability, that we didn't have in this period when the prices were changing very, very rapidly and towards the high end. So if we then move on to the next slide, this is, these are the operating cash flows. And again, you know, shown by quarter.
Very important point that Jacek made earlier relating, and we'll come back to the net interest-bearing debt over EBITDA, is that, of course, operating cash flows, they vary seasonally on a regular basis with our business. The most cash-rich quarter is the last one. I mean, one, because that's where we make a lot of our profits, but also because, that's when, we receive a lot of the income from that profit, but we still haven't paid the alcohol taxes and VAT to the government. That happens then in the subsequent quarter in Q1, and that's what explains why typically, Q1 is a weak quarter for us in terms of operating cash flows, and then, Q4 is a strong one.
But moving beyond those seasonalities, what we can see is that the cash flow is stronger year-over-year in every quarter except the last one, Q3. And the reason behind this is that we have increased significantly the sales of receivables. So these are the monopoly receivables Vinmonopolet, Systembolaget, Alko, that we sell, and we get the cash up upfront. You can see that at the end of the year, it's increased from last year, EUR 59.4 million to EUR 173.6 million. And you can see that that actually has that big impact in Q1.
If you look at it compared to last year, that's one of the main explanations is that's towards the tail end of that quarter. That's when we started this program. And then that has contributed also very strongly to the good operating cash flows in the last quarter. That said, there is also then an underlying element here, which has improved things, and that's those are the lower inventory levels. So more about that, more about that later. And this is showing then the overall cash flows, but if you. Sorry, the operating cash flows, but if you look at the overall cash flows, you will see that there is also a very positive impact there, and that's thanks to the Larsen divestment.
So moving on then to the next slide, please. This is then the net working capital expressed in absolute terms, and then as a percentage of sales on running twelve months in these bubbles. And as you can see, at the end of Q4, we were now in negative territory. Again, explained by the fact mainly that we sold these receivables. Then there is a big impact actually of the Larsen divestments on inventories of around EUR 31.4 million. So the inventory numbers, the fact that they decreased to EUR 144.2 million at the end of the year versus EUR 186.2 million same time last year.
They are not exactly apple to apple, but because the Larsen divestment was a big contributor to, let's call it, ongoing, permanently lower levels of working capital. But there was then beyond the Larsen divestment, especially with effect in Q4, also a like-for-like reduction in inventory. And that is work, although I think that we've taken out probably most of the potential for that. That's work that we are obviously continuing on, and we are looking. We have now addressed accounts receivable, we have addressed inventory, continue to work on that, and we will also look into trade and other payables, obviously, to try to get even better performance on net working capital, freeing up more cash. If we move then to the next slide, please.
Yes. Here, we see those in, o n the in the sort of balance sheet view, inventory is very strongly down, trade and other receivables very strongly down, and then cash and cash equivalents very strongly up, from EUR 91.4 million to EUR 212.7 million. That is not driven only, of course, by the net working capital, but also by the Larsen sale. If we then move on to the next slide. This is, Jacek mentioned a little bit about the impairments, but before we get there, we thought that it would be good to provide, let's call it, some perspective on our balance sheet, and especially then the non-current asset or the fixed assets.
And as you can see or as you know from our accounts, this is a very important part of the balance sheet of Anora. There is significant values behind goodwill and other intangible assets, which are mainly brand values. And this goodwill is related then to various acquisitions, primarily the Altia-Arcus merger. Altia was the acquirer of Arcus from a technical point of view. And then the difference between the values that you could put to the various component parts of Arcus and merger compensation, the market value at the time, goes into goodwill. And the same thing is true of the Globus acquisition.
And then there are also other intangible assets, including brands. I mean, we have a number of spirit brands that have a very, very long heritage and that have a lot of brand value. Not all of them are valued on our balance sheet. That's just the way that it goes, that brands that have quote-unquote "not been acquired" although very valuable, such as Koskenkorva, they don't have a balance sheet value, whereas brands that have been acquired in the merger process, such as, for example, the Norwegian Aquavit brands, they do have a high value. And then there is these right-of-use assets, mainly related to the Gjelleråsen building lease contract.
And as you can see, there is a very strong decrease in those. That's what we're coming to, related to the impairments that we've made. But the point here is that, of course, for us, impairment testing of goodwill, other intangible assets, and in general, our asset values is a very important process, given the large values in play. So if we then go to the next slide, please. Here, we have then performed this annual impairment testing in... And here we list the impacts.
Important to mention, as Jacek said, but it bears repeating, that they don't impact the loans, the cash flows or the group financial targets on comparable EBITDA, these impairments on the left side of the slide, related to right-of-use and fixed assets owned. They are visible in the depreciation line of our P&L, and then they are, of course, also visible in our net profits.
And here we have done impairments totaling EUR 65.4 million, and they are then mainly related to this, to the Gjelleråsen plant of the Industrial segment or the production unit, in Norway, based at Gjelleråsen, which has lost volume to other factories, following the Centre of Excellence program. Again, this is in the overall scheme of things for the company's profitability levels. Obviously, the Centre of Excellence is a program that aims at having lower cost of goods sold, more efficiency throughout Anora.
But if you then look in isolation at that unit in Norway, what it has meant in isolation is that that unit has lost a lot of volume and is no longer, so to say, generating the internal profits that it previously was, and as a result of that, is not able, in impairment testing, to support its assets, and in particular, this right- of- use asset of the building. And then we have also done the same for Vectura, our logistics business in Norway. It's a bit of a different situation.
It has not had a loss of volume, rather the contrary, but it shares the same right- of-u se assets, same building, and its overall profitability, although slightly improved last year, has also been over a number of years quite poor. So we have also impaired related to Vectura. As a total of that, on a reported basis, the group's operating result weakened then to EUR -30.2 million. And then we have in the shares of subsidiaries, impairments relating to our Danish subsidiaries, mainly then to Globus Wine. This doesn't impact the group P&L, but it reduces the distributable funds of Anora Group, the parent company, by the amount to.
But distributable funds remain relatively solid at EUR 100.2 million. And then we have also done other impairments in group companies that are not directly owned by the parent, in Sweden and Norway, due to recent partner losses. Moving then on to the next slide. We've talked then about the reduction in working capital.
We talked about the increase in cash flow also coming from the Larsen sale and all of that, what it basically means that is that our net debt has decreased to EUR 237.5 million, which is two turns of comparable EBITDA, compared to four turns of at the end of last year. Mainly this is coming then through this decrease in cash and cash equivalents, although we have also repaid some of the short-term commercial paper that we used to have during the year. Our liquidity position is strong.
We have a revolving credit facility of EUR 150 million, which is not at all drawn at the current time. And we've also exercised the option to prolong the current credit agreement by one year. Moving on to the next slide, and we are nearing the end of my section. Here is a comparison then of our long-term financial targets for 2030 and our current performance. And what we can see is that in 2023, as in 2022, in terms of the net sales growth, boosted then by Globus, we were within this range that we communicated, but on the comparable EBITDA margin, we were not.
So that is, you know, as Jacek mentioned, very important focus area that there has been a clear shift in management's and the entire organization's focus from the top to the bottom line, because that's really where we are not in line or even getting closer actually this year to the target for 2030.
On the other hand, then on the net interest-bearing debt over comparable EBITDA, we are below the target, but it bears then, you know, mentioning that, of course, the seasonality in our net working capital and really the average net interest-bearing debt over comparable EBITDA, although at the end of the year, we are quite a bit below the 2.5x, we are, we're not really there on average, even if we, you know, were to project the current, let's call it, like-for-like improvement in net working capital. So there is still some work to be done, before we are on average throughout the year, below the 2.5x. Then in terms of the dividend payout ratio, of course, it's a very odd dividend.
Payout ratio this year because it's negative, because our net results are negative reported, but we are, or the board is proposing to pay a dividend of EUR 0.22 per share. If you were to add back in the items affecting comparability with the exclusion of Larsen, which we can consider to be, you know, a transaction that somehow should benefit our shareholders in terms of dividends, then you could say that this adjusted result based on that, the EUR 0.22 that are proposed are within the 50%-70% range and towards the high end of it. Yes, and I think that now is I hand the word back to Jacek for a summary.
Yes. Very good, so, very good. Three points I want to highlight from our discussion. First, we are satisfied with Q4. Our EBITDA and our marginality was significantly up from last year, which results from price increases we have taken, and also not only announced, but also well-executed cost cuts throughout the year, and especially in the second half. Then the second point I want to highlight is that net debt and cash flow development was very positive due to multiple factors: Larsen divestment, inventory reduction, sales of receivables. All of this improved significantly our cash position and gave us flexibility for doing other things, like the third point that I want to highlight, which is the dividend payment proposal at EUR 0.22 p er share. With this, I think we are open to questions. Yes, Milena?
Thank you, Jacek and Sigmund. Yeah, like I said, we are now ready for questions. You can post them both on the chat or ask live. At current stage, I don't see any.. Yes, now we got the first chat question, so let's start going through those. The first one is coming from Rauli Juva, and it's regarding the write-downs. "I presume the write-downs have some impact on depreciations going forward. So what kind of depreciation level are you expecting for 2024?
Very good question, Rauli. Yes, it will have an impact on the depreciations. I think I'll have to come back to you with the precise figure, but of course, significantly, significantly lower level, especially on the, since it's impacting both the fixed assets and right-of-use assets.
Then a question from Juho Saarinen: "What kind of CapEx level are you expecting for 2024?
On CapEx for 2024, I would expect a somewhat higher level than what we had this year. Several million higher, related mainly to the fact that we will be making investments that are related to our sustainability commitment, specifically various types of bio boilers at the Koskenkorva plant. In addition to that, of course, we still have IT investments that are related to the rollout of a single SAP platform for Anora. And it is also true that, of course, we may make various efficiency or safety-improving investments across Anora. So I would say that for 2024, somewhat higher CapEx level than current year.
Okay, and then we can take a couple of question online. So we have hands raised. First, there's a phone number I can't see, but maybe you can open your line. And it's 050 number. If you can unmute yourself and open the line. Ask your question. Maybe not. So there's a question also from Joni Sandvall, so please go ahead.
Yeah. Thanks, Jacek, and Sigmund, for the presentation. You mentioned the partner deal wins now in your presentation. Could you please open up how much actually the last partner portfolio deals affected the Q4 2023 top line?
No, I don't, I don't think that we've communicated or that we want to communicate exactly the impact of that. I think we would want to have the. I think, you know, the partners, they come, and they, they go. I think that the results are visible in our results. I would say that in Q4, maybe, Jacek, you want to comment as well, but I think that we can say that it's more stable than it has been. There were big losses that were, in essence, known to us or impacting us starting Q1 of 2023.
They were really the big ones that have been with us throughout the year and were the last of the, let's call it, year-on-year impacts will be felt in Q1 2024. And then, you know, they are incorporated into the baseline. And then other than that, you know, there are some partners that have come and some that have gone, but nothing of the materiality level of what we have seen in the past. I don't know if, Jacek, you wanna comment further?
Okay.
Yes, if I may add something to this, then we will not provide the exact numbers, but the losses in partners were significant enough to dent our annual performance in Wine, especially in Sweden, as you can see. We are in the business of developing and gaining partners, not losing them. So losing a partner is obviously not desired. It's a failure of some kind, without going into details of who is at fault here, but it's not desired. We want to gain partners, we want to develop partner business, and we don't want to lose them going forward. And I'm glad to say that in our Q4 numbers, we already see some stability and positive balance in terms of gains and losses. Thank you.
Okay. Okay, thanks. Then maybe a question related to, to.
Thank you. And, do we have.
Yeah, continue.
Yes, please.
No. Thank you. I seem to have a bit of a difficulty with my mic. Sorry about that. So did we have a question from this phone number starting 050 earlier? I'm sorry if I cut you.
That doesn't look like it.
No.
I guess, Joni, if you want to ask your follow-up question?
Yes
Then please go ahead.
Yep, thanks. Then, a follow-up question.
Can you hear me now?
Yes, we can.
Okay, you can, Joni, go first. I'll go then. Now I figured out the system.
Okay, thanks.
Perfect. Thank you.
A question related to the guidance. So, what are the main assumptions when you consider your opportunities and risk for this year, and how much actually the profit improvement program should support 2024 profitability?
I'm sorry. I've had. There was something wrong with my headset here. So if there was a question from Joni for me, then I'll. I'm sorry to everyone, but if you could please repeat it.
Yeah, uh.
If Jacek wants to address it, then that's also fine. I didn't hear the question.
Can you hear me now?
No, I can't.
I can send. I'll put on the chat.
Yes, we seem to have a bit of technical difficulties. Sorry about that. Well, let's continue with the chat questions. So, question from Yuri Liasho: regarding the permanency of the net working capital level, do you expect the level to be in the negative territory also in the coming Q4s or quarters, or your new initiatives have permanently lowered the net working capital, of course, adjusting for seasonality? Or is it inevitable that we will see increase during 2024?
Let me try to address that. I'm back in business now, I hope. I would say that the reduction is in the sense. I mean, can you say, call something permanent? Yes, we will sell as much sales of receivables as we did last year, or 2023. So that is a permanent change, and you should expect that it has improved our net working capital, "permanently." As for the inventory, I mean, we are also aiming for the same thing, and actually even, as I mentioned, to go somewhat beyond. But I would say that maybe the big decreases and positive impacts are behind us.
Okay. Then continuing, with a question from Joni Sandvall: What are the main assumptions in your guidance in terms of opportunities and risks? How much profit improvement programs should support profitability in 2024?
Well, I think that the main assumptions here is that we continue with what has happened in Q4. We get full year impacts of.
Maria Wikström, SEB.
We get full year impacts of price increases already taken in September 2023 and October 2023. And then we have taken further price increases and will probably take even further price increases during 2024, if needed. Then, of course, there is the impact of the Centre of Excellence and the white collar reduction programs that essentially will have effect starting beginning of 2024. Since, as announced previously, those negotiations were ongoing in 2023, so most of the effects are in 2024. And roughly speaking, those are the assumptions behind the profit forecast.
Nothing radical, nothing particular beyond the main impacts that we have been talking about now. And then, of course, there is commercial work ongoing in terms of recruiting new partners, in terms of organic growth for our own spirits brands and own brands. Obviously, we have high ambitions for the continued growth in wine brands across the Nordics and continued profit improvement in Globus Wine.
Thank you. And a follow-on question from Joni. How do you expect Industrial volumes to develop in 2024, following, for example, improving pulp and paper activity?
Yeah, if I may, a few words on Industrial. We are planning conservatively for next year, so we are not really expecting major uptick in demand or in volumes. Many of the demand drivers and thus revenue drivers are beyond our control. Much of this activity is market-driven. Therefore, we are planning conservatively on the top-line front for next year, and it's hard to predict how the market will develop. For us, the most important thing is maintaining this profitability I was talking about before, between 6% and 7% EBITDA of net revenue. That's the important thing for us in a stable way. Thank you.
Yes, and now, Maria, if you have a question, you can go ahead, please.
Yes. Yes, please. So, firstly, as you mentioned, I mean, you raised prices in September and October, and you.
Maria Wikström, yes.
Yes, can you hear me?
Yes, I can hear you. I'm sorry.
Okay. You announced these price increases September, October, and planning to do more, if needed next year. I mean, what. I think, I mean, Jacek, you mentioned in the beginning of the presentation, impacts on the consumer demand, but if you could elaborate a bit that how do you see these price increases impacting the, the consumer demand?
Thank you for this question. Obviously, there is a big elasticity element here. We cannot take prices too much without observing very carefully the impact it has on demand. I would say that it works differently for different brands. Some of our brands seem to have strong enough equity to be able to withstand more pricing than others. We are observing this very closely and taking action in a dynamic way to address it, as dynamic as enabled, obviously, by the pricing window in the monopolies. But we are staying very close to understand the volume impact from price increases at individual brand or even SKU level.
Thank you, Jacek.
Maria.
Currently, we don't have any more questions on the chat. Do we have still.
Yes, if I may go.
More live questions? If so, please do raise your hand so that we notice. A follow-on question from Maria Wikström. Please go ahead.
Yes. I think this is more of a technical question to Sigmund, that now when you take this impairment on the right- of- use assets, so how will that impact on the, like, the depreciation component that now going forward, or does it have an impact? So help me a little bit to understand the technicality. How does it impact on the IFRS 16 depreciations and interest rates?
Well, in terms of the interest rates or what we have to pay under this contract, it doesn't impact it in the least, because that's a contract. So in terms of the liability side of the balance sheet, there is no change. But of course, in terms of, in terms of. And here it's, I will have to, as I said, mention to a previous question by, I only come back a bit more with the technical details. But logically, since we have written down the asset, that there will also then be a decrease in depreciation on an annual basis. Let me come back to you on these quite technical matters.
Perfect. Thank you.
So, additional question from Joni Sandvall: Have you any news related, related to claims under the warranties, of an indemnity insurance policy related to Globus?
We don't have any news that we can share with you, but we are, of course, diligently working and pursuing this claim, which as stated in the quarterly bulletin, is still open. How long it will take until this matter reaches its conclusion is not yet known. This type of policy is not only, from what I understand, new to us in Anora, but is a relatively new product actually in the Nordic insurance market. Which means that, you know, how long these type of claims take being processed, discussions back and forth between insurer and the company is a bit unclear. And as you can understand, it's also quite a complex matter.
What I can say on it is that we are working on it, diligently pursuing it, but for now, we don't have any news that we can share with you.
Okay. Do we have any more questions? At least not from the chat, but among the live audience. If so, please raise your hand. It seems that we don't have any more questions today, so thank you all. Thank you to the speakers and everyone online for joining us and for all these good questions. And our next scheduled event will be the Q1 results on the 7th of May. So hope to see you then. Thank you.