Welcome. Thank you for joining us for our half-year report. Before we get to it, the usual disclaimer. We will be referring to future events slightly, and that always includes some uncertainty. Many of you are already familiar with us. I have Tiina-Liisa Liukkonen, our CFO, with me, and I'm Patrik Lundell, the CEO of Olvi Group. Before we get to the details, I just want to frame up the second quarter and indeed the first half of the year. Our investments that we made into our brands have held them really strong. We've invested in media, we've invested in store presence. We've also had a particularly active period in terms of sales activations across our channels, and this has helped us to secure our strong market positions. We've even strengthened our share in many categories. However, the overall market demand was significantly below expectations, especially in the second quarter.
This has clearly eaten into our profits, as many of you have already seen in the numbers shared. We should also keep in mind that we are operating in a business that has a certain degree of seasonality involved. Preparations for summer already start in Q1. You start building stock, you start securing promotional slots, you start preparing the materials for indoor or in-store execution, and you secure media slots. All of this was done expecting an average summer at the least, and with confidence in both our brands and our actions. We also invested in stock. As many of you know, we have a new high-bay warehouse in Iisalmi. We invested in our brands, as I mentioned, and we brought 220 new products to market during the first half of the year. We've really brought a lot to consumers to enjoy and celebrate around.
Despite the significantly smaller than anticipated market, we indeed kept our share. As I mentioned, we grew in some. To be more specific, in Finland, for instance, we took more than 2% share in the water category. In Latvia, we grew our beer share with 2%. Significant improvements in terms of our position in the market on an already strong starting point. Our delivery accuracy was on a very good level. In Finland, on a historically high level, we had 98.6% delivery accuracy throughout summer across our platforms. We improved our mix, which you can see in the expanding margins. The weather and the consumer confidence worked against us. This drove the market down, especially in the beginning of summer. We have to remember that we're overlapping a historically warm summer in 2024. In May and June alone in 2024, we had 30 hot days.
When I speak about hot days, it's a translation from Finland, from the Finnish language. We're referring to days where the average temperature was above 25. In 2024, we had 30 such days. This year, we had two. Also, the uncertainty in the environment generally and the economic strain that's on households and consumers has impacted demand overall. The market, as such, was very much smaller than anticipated. This has indeed resulted in detracting margins during the second quarter. I want to close on emphasizing that our portfolio is strong. Our people are committed. We have improved the efficiency of our operations. Through that, we've demonstrated the resilience and the relevance of our proposition. We remain very confident in our ability to deliver also in the future and to have a stronger second half of the year.
With those introductory words, Tiina-Liisa, why don't you go through the numbers for us?
Yes, thank you, Patrik. Let's start with the financial performance in Q2. As it was said, Q2 was behind our expectations, especially due to this cold weather in the early summer and this continued economical and political uncertainty, which then reflects in the consumer purchasing power. That caused this volume decline of 3.3% in Q2. Still, we were able to maintain our market shares and expand also our margins, despite the overall significantly reduced volumes in the market and this intensified competition. The total net sales in Q2 remained at the previous year level, and we improved our average sales price, as we can see from the figures. The profitability was affected by these decreased volumes, investments into the sales, marketing, and pricing, then higher logistic costs, and also business development measures.
I want to emphasize that our gross margin stayed at the previous year level, even though the EBIT declined. When we look at the segment performance in Q2, even though the cold and rainy early summer weather affected the sales volume in all the segments, the net sales declined less than volume, as the average price improved in all the segments. If we are looking for Finland, we can see that the volume decreased 4%, net sales 2.3%, and the EBIT was at the last year level. What we want to emphasize from Finland is that our strong brands performed well. As Patrik referred, in waters, we were able to grow our market share over 2%, even though the overall market decreased in waters 16% in May and June. Also in beer, we kept leading the market with more than 50% share.
Consumers chose Sanders as the number one beer brand in one of the surveys. In Finland, the total market in May and June in both non-alcoholic and alcoholic beverages declined by 10%. We can see how these hot days really reflect on the market totally. When we are looking at this Baltic Sea region, additionally to the weather conditions, weak development of consumer purchasing power continued, and that tightened price competition in a slowing market. In Latvia, the overall market in low alcoholic beverages, like beer, ciders, declined 14% in May and June. That is quite a big drop in one year. This declining market and then lower than expected sales volumes impacted the profitability, together with higher marketing and sales expenses.
The impact was heaviest in Denmark and in Latvia, but we can say that our investments in brands drove our Joli soda market share to be triple compared to last year. In our market share in Latvia in beer, that was 2% higher, as Patrik just mentioned. In Belarus, the weather also affected overall demand there, especially in beer and kvass categories. Our operations have developed according to the plan otherwise, but the increased costs, and in Belarus, especially in logistics, weakened the profitability. Unfortunately, we have to inform that the restrictions on the payment of the dividends by Western-owned companies have been extended to the year 2026 or end of the year 2026. We haven't changed our estimations that dividend what can be distributed is EUR 1 million-EUR 3 million per year. We can still say that this has no effect on parent company's ability to pay dividends.
Other changes in Belarus' situation, there are none. When we are looking at the whole year or the first half of the year, as we have been many times already stated, the whole year sales volumes were affected. This continued big consumer demand, the general market uncertainty, poor weather, especially in this early summer, and this product portfolio optimization measures adopted in Finland and Denmark, which then again are also visible in the improved margins. In line with our targets, we continue to improve the sales volumes in non-alcoholic products and retain our market shares in all our main product groups. Also, our net sales remained at the previous year level and were supported by this higher average sales price. Thanks to better portfolio and also channel mix, we have been able to improve our Horeca sales, for example.
The operating result in January and June was weakened by this increased and this first half of the year weighted sales and marketing activities, higher logistic costs, business development inputs in line with the strategy. The lower sales volumes reduced the sales margins in euros, even though the relative sales margin improved year-on-year. When we are looking at these segments for the whole reporting period, so January to June, in Finland, we can say that the operating result improved compared to last year, mainly as a result of improved production efficiency, the stabilization of the cost increases, and changes in the product portfolio. What we want to also highlight is that the sales of hard seltzers and non-alcoholic products continue to grow, and we maintained our strong market shares, as mentioned earlier, and even gained more in some categories.
In the Baltic Sea region, the sales volume declined, as said, especially in Denmark and Latvia, and the net sales decreased, but not as much as volumes. In the Baltic states, the continued weak development of consumer purchasing power was most pronounced in Latvia. Together with the tightening of the excise duty and alcohol legislation, price competition increased in the slowing market, especially in the beers. What we can say about Denmark is that the sales volume was affected by this product range optimization, as we have stated earlier, but we were successful with this Joli Cola brand, as saying that we were able to multiply the net sales, but weren't able to improve the result yet. In Latvia, the market decreased heavily, and the lower volumes with the greater investments to brand visibility, sales, and pricing affected profitability significantly.
In total, the Baltic Sea region, the market impacts, sales and marketing inputs, and increased logistic costs decreased the operating profit. Total market change was big and unexpected. That lowered the gross margin in euros, which we didn't cover, so that we didn't cover the fixed costs because of that. In Belarus, also weather affected overall demand, as said, especially in beer and kvass, and sales volume declined, but in non-alcoholic product categories, the sales volume increased in line with our strategic targets. Also in Belarus, the greater inputs were made in the sales and marketing than in the previous year. That supported also the demand, especially in this non-alcoholic. Net sales increased, and the operating result remained at the previous year level. The relative decrease in the operating result was especially affected by significantly higher logistic costs.
As a summary from this financial position, we can say that the balance sheet and financial position are still strong. Cash flow development was affected by the increase in the inventories due to the weather conditions and the delivery accuracy improvements. At the end of June, the inventories were higher. Also, the lower sales costs than lower accounts receivables. The cash flow from financing activities improved by the drawdown of long-term green loan for the brewhouse investment. Regarding the investments, our extension and replacement investments were almost EUR 21 million, about EUR 6 million more than last year. EUR 14 million was related to Finland for this logistic warehouse and the brewhouse investments. Those investments are going according to the plan and the budget. In the Baltic Sea region, investments focused on the procurement of the sales equipment and the improved production conditions, and those were EUR 4.3 million.
In Belarus, necessary replacement investments for the continuity of the production were made with the subsidiaries' own cash flow financing, about EUR 2.5 million. From sustainability, we can highlight that we got this A- rating in the CDP's value chain assessment. CDP is an international non-profit organization that helps companies and other organizations to disclose their environmental impact. The A- is the second best rating. I think those were the highlights from the financial part.
Yeah. The CDP is a great continuation on the recognition we got last year from Time Magazine.
Yes.
Placing us amongst the top companies in the world, that was a great achievement as well.
Yes.
Good. Now then to the near-term outlook. We've updated our near-term outlook based on the actuals from H1. Our strong market position, normalized late summer weather conditions, and the investments we've made in the first half of the year is why we expect a better half, two, or second half of the year. We expect our operating results to improve from last year in line with the updated guidance. Now a short word on the strategy and our view on the future. Despite the setbacks in Q2, I emphasize the second quarter, our strategy is working. We see our brands performing strongly with solid market shares, even growth in some categories. Our margins and the efficiencies of our operations are improving. We continue to move forward and to execute our strategy with confidence.
Now, let's open the floor for questions, and we thank you for your attention and look forward to answering whatever you have in mind. Please, Janna, our colleague here, will coordinate things.
Let's start in the room. Maria Vikström from SEB had a few questions, starting from a gross margin that was flat in the second quarter, and you have seen an expansion in gross margin in many quarters ahead. Was the flat gross margin a result of a sales activation? Should we expect the gross margin expansion to continue in the second half, or is there a reason why we should expect a similar trend to continue in the second half?
We discussed this earlier with Tiina-Liisa. You had a great way of summarizing the changes that happened last year in terms of the underlying pricing and the comps there. Would you like to repeat that?
Yeah. In overall, the gross margin improvements are related to the cost of inflation earlier, which we were not able to adapt in the same time that the inflation came. All this efficiency work and also price increases were a little bit delayed. That's why you have seen many quarters now, the improvements. Especially in Finland, we have to remember that last year, quarter one, our compare numbers didn't include the price increases made last year, April. That's why in Finland, we cannot anymore see the profitability growth as much as we saw in quarter one. Now we have kind of reached the point where the major price increases have been implemented in the market to offset the inflations. Of course, we will continue to improve our product mix and then internal efficiencies to improve the gross margin.
The expectations to such kind of improvements that we have seen in many quarters is not kind of the case to expect.
Yeah, precisely so. I just repeat what I think is a key part of the message. Also, something we indicated already, I think at the end of last year, saying that the % improvement will be less going into this year for precisely these reasons. I emphasize improvement is yet to be delivered as well. We'll continue our work internally on efficiencies and our portfolio and our pricing and increasing our analytics. All of the strategic work that we're doing in-house will enable us to continue to improve, but perhaps to a lesser potential degree than we have in the past.
My second question will be on the profitability of the Baltic Sea region, which was one of the disappointments in Q2. I think you pinpointed the deteriorating profitability to Latvia as well as to Denmark. Can we talk a little bit about the future in both of these markets? I mean, how long-lasting are these? Of course, they are totally different operations. Denmark is a turnaround operation, but a little bit on the profitability aspects going forward.
Yeah. We haven't in the past gone into great detail around specific markets, but as you see in our report today, we highlight indeed these two markets, perhaps more than in the past. If we start from Denmark, as Tiina-Liisa shared and what was described here earlier, we have made investments behind our brands. I think it's strong evidence of the actions carrying results when you can talk about tripling your market share in the soft drinks category. Our Joli brand is really performing well. In terms of overall performance and profitability in the market, we are not where we need to get to. The work very much continues. With the increased demand for Joli, we are improving our relevance to trade, and we're having much stronger discussions around future collaboration and growth-driving initiatives in the market than we did maybe six months ago.
It will be some time to come before we are where we need to be, but we're not giving up, and we have a line of sight of how to get that improvement through. In Latvia, I think the theme that we've described, which holds true for all our markets in terms of going into summer very well prepared with strong activations, holds true in Latvia as well. In Latvia, what we saw was an even greater drop of demand and shrinking of the overall market, which clearly couldn't carry the investments we've done. You might be thinking, why didn't you react? Why didn't you put the brakes on in the midst of May and June?
The structure of our business is such that when you've agreed to a campaign, when you put in media spend, when you've put your placements in store, you can't really take them back and save any money. Quite the opposite. You lose that opportunity that you invested in. We see it very much as a situational moment in time whereby we are now enjoying 2% more market share. Now we will invest proportionately to the size of the market going forward, but of a higher base proportionately. When the market returns, we'll be in an even better position than we were going into summer. Is there something you'd like to extend on that?
Maybe to highlight that in Denmark, it is not a question that the profitability is significantly lower than last year. It is that it has not improved as we would, of course, like to. In Latvia, the case is that the profitability is lower, but we see that there are temporary reasons now why it is so. The lower demand, higher marketing and sales investments done to the summer, which kind of didn't match that well. We can see that we have gained market shares, and we see that also this is a long-term investment that hopefully will pay off in the later months that we are going forward. Also, to remind that we have made these sales and marketing inputs in the market now that is weighted to the first half of the year.
Finally, I would ask on Belarus, as you were generating more cash than this EUR 1million -EUR 3 million that you were able to distribute, is there any possibility to invest the money in assets that are not quoted in Belarus BUN, or are you forced to keep the money in your accounts, or how does that work?
This is a tricky one to comment in detail. The operating environment remains challenging. The necessity to seek approval for sales is still there. We haven't received this approval. The market performs. We're investing in our own operations. We're looking after the health of the business. This extension of one year is not a dramatic event in our minds. It doesn't hinder our ability to pay dividends going forward. It's a continuation of the uncertainty in the market that we've seen for some time already.
You asked what will happen to the cash there. Naturally, there will be their own operations that we can support there. We have said also that we are looking for different kinds of options to the whole market situation, what we can do. We are still active to find different kinds of solutions to the situation.
Thank you for your questions. Please.
Hi, Sanna Perälä from Nordea. I'll start with a question about your guidance. You lowered the upper end of the guidance range. Now, after H1, your EBITDA is 8% behind last year, but you're still expected to improve for the full year compared to last year. You already mentioned something, but could you just elaborate a little bit more on how you aim to do this? Where should we see the most improvement in H2?
Yeah, thank you. Good question and great observation as well. As we've been already sharing, our plan for this year was a bit front-loaded. We went into summer with a strong plan that's there. On the other hand, we already saw the slight softness in the market come through in Q1. Of course, we started to identify levers where we might be able to then execute some cost-saving initiatives throughout the second half of the year if necessary. These have now been activated. We see us going into, as I've been describing, with a stronger position into the second half, and we've been able to then activate these initiatives that we identified already during the first half of the year.
That's why we have confidence in the second half being better than the first half and our ability to indeed deliver growth versus last year, as in line with our guidance.
Yeah. We said in the report that the summer weather has normalized in June, and now when we are living already August at the moment. We had the good heat days in July in Finland, but unfortunately, the weather conditions in the Baltics and Belarus were not that good. Anyway, kind of normalized, not that cold and rainy anymore. That is also one reason that we believe that we have kind of normalized also the market conditions, which are not any more burdened so much with this cold and rainy weather.
Thank you. That would have been my second question. How did July look like? I think you already answered it. I would like to ask about your product mix in terms of waters, beer, soft drinks. Did that change in Q2, and did it have a meaningful impact on earnings?
I'd say it's part of the trend that we've seen for some time, where our margin keeps expanding because we're focusing on our own brands on one hand, and then really the health of the portfolio overall. We also have a specific focus on non-alcoholic products. Of course, always looking after our core, which is beer and our heritage, and not abandoning that for a second, but adding on to that, an emphasis on non-alcoholics because we see these categories growing for the long term. That's why we're so pleased to share that we took share in these growth categories as well.
All right, thank you. Perhaps a follow-up. You mentioned price competition continuing in Q2. Which of these categories are the most affected by it?
Overall, I mean, competition is intense, but I think it's fair to say as a brewer that beer is perhaps the category which is mainly in the spotlight of competition.
Yeah. Just to add what you asked earlier, our kind of non-alcoholic product sales increased 5.8% more than the alcoholic sales. That is, of course, changing all the time because the market growth is also there. We are shifting or kind of changing our product portfolio to when we are launching novelties. You can see the average sales price increase. That is also one method to kind of shape the portfolio to bring these more premium products in the portfolio.
Good adds. Thank you.
Right, thanks. The last one. You mentioned in the report that in Finland, product portfolio optimization measures had a negative effect on sales volumes in Q2. Could you elaborate a bit more? What was done a year before and how did this impact sales in Q2?
Actually, that movement already started in 2023. We took some choices or made some decisions on certain beer SKUs in the Finnish market. Now we're kind of seeing that decline or the impact of those decisions which led into volume decline subside, but there's still some of that as we overlap previous years, stronger months. That's something that will neutralize. The effect of that should be going away.
Thanks. That's all from me.
Thank you.
Matti Kara from OP Markets. First question, a bit broader about the market. We've seen non-alcoholic consumption increasing quarter after quarter. I think that's quite a big and long-lasting trend. If we've seen the growth continuing as it's been as fast as it has been recently, is it playing against you or in favor of you? How is your kind of a total non-alcoholic share of the sales compared to alcoholic beverages?
Thank you. Great question. I agree with your interpretation of the market. This is why we not only call ourselves a brewer, but a multi-beverage operator. When we refer to the strength of the portfolio, we talk about the breadth of the portfolio, not only beer, but also spring water, waters with carbonation, with flavor, with a bit of juice, soft drinks, energy drinks. We really have a broad portfolio of beverages. In our strategy, and equally in our long-term targets, we've identified non-alcoholic growth as one of the key focus areas. As Tiina-Liisa just mentioned, we see growth of non-alcoholic volume growing faster than the rest of the portfolio. We're on that track because we see what you're referring to. You also asked in terms of the weighting there.
If you, for instance, refer to our 2024 report, you'll see that roughly half of our volume is beer and the rest then other categories. One of the biggest being waters at roughly 25% of sales. This is where, again, for instance, in the market of Finland, we saw ourselves taking significant share. The focus is very much on this opportunity that you point to.
If you think about the margins with these alcoholic beverages and non-alcoholic beverages, could you open up? Is it like this change in favor of you or against you?
Very good and detailed question. I'd like to emphasize the importance of, again, a portfolio and satisfying various needs. There's a role for price-fighting propositions, whether it's a private label or a brand that fights in the everyday low-price category. You need to have that as well as part of your offering. You need to have premium. Of course, when you go to premium, the volumes are less and everything in between. The key thing is to manage the whole thing. That's what we're referring to when we say that we're trying to upskill ourselves in terms of analytics and getting more precise on how we optimize that complexity. Just to add a bit of color, in Iisalmi, for instance, as one of our sites, we produce more than 400 different SKUs.
You would understand that we need to throw a bit of science at it to make sure that we price everything accurately. Every proposition, every category has a role in the whole.
There is, of course, different kinds of price mixes inside the product categories. If you're asking if there are major differences between the product categories, no. It doesn't mean that if we are selling more non-alcoholic, our profitability would be lower. It doesn't mean that.
All right, thanks. That's all from my side.
Thank you. Johnny Salva from Nordea. Maybe one longer-term question related to, and I know that there could be changes still, but EU packaging and packaging waste regulation, it's entering next year. Adapting on this will start. With the current knowledge, do you have any ballpark figure of the required investments on this? A follow-up question on this. Taken into account, let's say we have quite sophisticated, let's say, management of recycled bottles and cans in Finland. How do you see, let's say, that the external competition in the Finnish market? Are you, let's say, benefiting from these changes or do you see it neutral for yourselves?
Good. This is a very big and broad question, so let's take it together.
It's also one of my favorite topics, so I might get even a bit, you know, red under the collar as I talk about it because unfortunately, from a Northern European perspective, where we have a well-functioning deposit return system, more than 90% of all the packaging goes back into circulation as being repurposed as material, oftentimes into a new bottle or a dashboard in a car. We're not creating plastic waste in this region, which is one of the key objectives of the initiative of this PPWR to reduce plastic and plastic waste. We don't have that problem. Now, they introduce this legislation, which if, and I emphasize if, because we're not giving up yet, as to Nordic countries, we're quite unified in our view on this topic. If that comes into play, it will mean several things that take us backwards on sustainability measures.
We will have to drive those products twice. There's a double amount of trucks and lorries driving across the Nordics here in between people who live in a very, you know, scatterly populated region. A lot of more road hauling. We will have to use a lot more water because these bottles need to be cleaned. We will generate not only increased water usage, which is another directive on the table currently to manage water usage, but we will create wastewater because we will have to use strong detergents to clean those bottles. We have to use a lot more energy because the washing machines for those bottles need a lot of energy, heat, to function. We're going backwards on several, several key measures. Therefore, the idea is great for perhaps some countries where the problem persists, but not from a Northern European perspective.
We're trying to bring this message across to the legislators, also to the Finnish decision makers, to make sure that we find the courage to object to some changes that clearly take us backwards. What will happen? We'll see. Now, to the practicality, the owners, the responsibility for managing this is actually with the seller, the person who sells it to the consumers, named in a supermarket store, for instance. They will have to handle the complexity of recycling bottles. We will have to have double systems in stores. Stores will have to be expanded. More heat will have to be consumed. These operators are also with us in recognizing the challenges with the idea. The law, as proposed today, suggests that we should have 10% of packaging return to the factory. That's a quite small amount.
It will create more hassle and complexity than actually benefits in the first stage. To achieve that, it's not a major drama for us. We will have to reintroduce the washing machine that we had back in the end of the 1990s when EU legislation changed and pushed us towards the current system. We're going back 20 years in time. We know how it works. I don't want to throw a number at it, but it's not something from an investment perspective that we're worried about. We're just seeing the impact being contrary to the ambition. That's the part that we want to stop.
Yes.
Thanks a lot. That's all. Thank you.
Great. We have a few questions from the chat. Let's start with the Q2 related questions. Even though we discussed the weather a lot and its effect, one more time, how much of the Q2 volume drop in general in the market do you estimate was due to the weak weather? How meaningful was the weather for Q2?
I'd say it's clearly the major reason.
Yes. OK. We continue Q2. Why was working capital related to receivables so weak in Q2?
It is just a direct cause of the sales. We saw that the market dropped, so our sales were impacted accordingly. It also delayed the impact. I think the major thing is if we compare last year and this year. The heat days last year were in the early summer, so we had the higher volumes, higher sales. Now we had the lower sales. I think it's a comparison of that one.
OK. About the tax rate, why was the tax rate so high in Q2? Will the full year 2025 tax rate be above 24%?
I think our expectation is not that the full year tax rate will be significantly different than last year. Our tax rate is affected when, for example, subsidiaries are paying the dividends to us. For example, in Latvia and Estonia, the tax rates are related to the dividend payments and the timing of that one.
Thank you. About the product portfolio optimization, that was discussed earlier already a bit, and you said the effect is going away. Will it have any effect still in the H2 in 2025, or will it have effect in the next year, 2026?
Great question, because I think we can correct one misunderstanding. We're not saying it's going away. We're saying that the angle at which it grows is reducing. If we had double-digit % improvements in previous quarters, we're going to see a lesser improvement. It's not going away. It's becoming smaller. This is really one of the big areas of opportunity that we have. Across our group, we have more than 5,500 SKUs. You can't manage that with a pen and paper. Of course, we haven't been doing it. We have great technological systems in place. This is where we have an opportunity yet to sharpen our focus on the overall portfolio optimization, whether it has to do with price elasticity or promotional pressures and demand planning and all of this. It will tease out further savings in our internal operations.
This is an important part of our strategy and what we call data as an accelerator.
Thank you. A couple of more questions. There have been some leadership changes in Denmark and Latvia. What is expected from the new leadership?
Continued commitment and improvement. We have Evija, who started on the 1st of August in Latvia. She's a local. She's operated in grocery trade before, and she comes with high credentials. Working together with the other Baltic leaders, we're confident that they will find a way to constantly improve. Also, in the market of Latvia, let's remember we're talking about specifically a Q2 issue. The model is not broken. In terms of Denmark, we also have new resources there. We have a Chief Operating Officer, Nadia, that has started actually in spring. She brings in a lot of international experience from working in large FMCG companies. She's also a known person to us. She's worked in the Olvi Group before. She's worked on various projects around net revenue management, for instance. Bringing in this competence and strength of strategic leadership will help us take these steps towards our targets.
Thank you. The last question. You were discussing that the investments into sales and marketing were more weighted on the H1. The expenses have been in logistics, sales, and marketing and have been increasing for quite some time now. How long will this continue?
If I start, for example, we emphasize that the logistic costs were significantly higher in Belarus. The inflation, what happened in Europe, is a little bit delayed in that market. Now we can see this year quite a big effect, for example, in logistics because of that reason that the inflation is now pushing through there. We do not expect this high inflation going forward a long time. Of course, we cannot predict that one for sure. We are doing all our measures to get our own operations more efficient so that we can kind of handle the kind of these cost increases that are happening.
Maybe touching on that marketing spend. As mentioned, we came into this summer with an exceptionally strong package. It has carried dividends. We've taken market shares. It has been a conscious choice to invest. We weren't expecting the market to be as small as it was, hence this blip in terms of earnings in Q2. The intention is not to overinvest. If you look at the proportionality of our spend versus net sales, it is very modest still for a branded operator. We've perhaps increased a bit, but we're keeping a tight eye on our spend not to move away from our usual levels of profit and ability to pay dividends.
To summarize what we have discussed today, we still believe very strongly this year. We know that it has been a little bit challenging now in a quarter or two, but all the actions that are needed are now going forward so that we can balance the profitability situation. We will continue our kind of strategy implementation. We believe that will help. We know that the weight in the cost was in the quarter of this H1. I think we are very confident to go forward with our plans and hoping that also the weather conditions are not against us in this last part of the year.
They seem to have normalized already.
Yes, that's good too.
Great. Thank you. That was all.
Thank you. All right. Thank you all for your activity. Thank you for those who took the time to join us in the room and for all of you online for your active questions. I look forward to seeing you after the third quarter.