Anora Group Oyj (ANORA) Earnings Call Transcript & Summary

Good morning, everyone, and a warm welcome to the presentation of Anora's 2022 results. I am Petra Grasbeck from Anora Group Communications. CEO Pekka Tennila and CFO Sigmund Toth will talk you through the Q4 and the full year 2022 results. After the presentation, we have a Q&A and we will look -- and we are looking forward to many interesting questions. So please use the Team's chat to send your questions, and you can do so already during the presentation. As usually, we currently ask you to mute your microphones. And please note that we are recording the presentation and the on-demand version will be available publicly on our website, anora.com. Without further ado, we are ready to start. Pekka, please go ahead.

All right. I hope you hear me now. So let's do once again. So thank you, Petra, and welcome on my behalf as well. Let me start with a short summary of Q4. Our profits in Q4 were down by more than 33%, and that was obviously a disappointment to us. The reasons for decline, however, are clear. Our biggest and most profitable channels, the monopolies, continued to decline. Heavily increasing input costs put pressure on our product gross margins, and we could not fully mitigate that with price increases. The currencies were heavily against us, especially the weakening of Swedish and Norwegian crowns impacted our profits negatively. Our marketing costs were significantly higher due to marketing investment on our brands. And lastly, we discovered an inconsistency in Globus Wine inventory stock values, which resulted in a one-off stock value write-down of more than EUR 3 million. Improving our profitability will be the biggest focus for 2023. Price increases will continue in every market according to local time lines. Globus Wine has revised their annual plan and we expect them to deliver strongly this year. And we continue to push for further efficiencies throughout the organization. Today's announcement about the excellence center -- excellence centers is a big step forward in this area. We will also be looking for cost cuts and will make hard choices on our spending in 2023. But going back to last year, '22, and sales. Our sales was up by 7.8%, driven by acquisition of Globus Wine. Good sales performance of Industrial segment and Spirit sales growth in our international markets. The overall market development in the monopolies continued to decline as markets adjust to post-COVID levels, and that is visible in our sales, excluding the Globus Wine. On a declining market, we performed, however, really well and grew share in both Wine and in Spirits in the Nordics. But let's have a look at the market development on the next page. Market development is the off-trade sales -- off-trade sales -- off-trade development in the 4 Nordic markets, including the monopoly sales of Wine and Spirits in the 3 monopoly channels. As expected, sales continued to decline in all markets by an average of 5.7% and both categories declining at similar levels. The biggest decline in Q4 and full year we've seen in Norway and in Finland. On the left-hand side, you see the comparison to 2019, which represents the pre-COVID market. What you can see there is that the Norwegian monopoly sales are still significantly above the post -- pre-Covid levels. In Finland, Alko sales are already below 2019. Then we go back to our sales and our performance, and we start with Wine. Q4 sales in Wine were up by 16%, driven by acquisition of Globus. As I mentioned on the previous page, the wine market continued to decline in Q4. In comparable terms, our performance was better than the market. Globus Wine continued to gain market share in Denmark. We grew share in Norway overall, and our own wines performed better than the market. In partner wines, we lost sales and share due to earlier partner losses. New partners won during last year, did not fully compensate the loss. Profitability in Wine declined due to lower sales in partner wine, unfavorable currencies and high input costs overall, obviously, together with the market decline. The one-off inventory write-off of Global Wine, as I said earlier, was a bit more than EUR 3 million. Blossa continued to perform well during Christmas and gained share in Sweden from a very high base. As mentioned in strategy, we rolled out the Globus Wine products and launched Il Capolavoro in Sweden, and that has started off really promisingly. Chill Out continued to perform well and grew sales on a declining market. With this, we move on to Spirits. In Spirits, our sales was 2% down. Our international sales grew driven by this year's -- or last year's star performer Koskenkorva. In the monopolies, we saw a sales decline, but we continued to gain share on a declining market. Profitability was down due to monopoly sales channel declining and the decline in gross margins due to exceptionally high input costs. We have increased our prices, but that was not enough to offset the cost increases fully. Further, we invested significantly more in marketing during Q4 than we did last year. Christmas is an important season for aquavit especially, and we were happy to grow share in the big Norwegian aquavit market with our seasonal product variants. In Finland, we celebrated Jaloviina 90th anniversary. Next, we look at Industrial segment. In Industrial, our net sales grew by over 17%. The sales increase was driven by higher prices. We managed to offset the raw material increases with our own price increases, and lower personnel cost helped us to improve in profitability versus last year. Also last year, we had a cost accrual impacting the comparisons favorably this year. With this, I give word over to Sigmund for financials.

Thank you, Pekka. If we move then to our first slide on the financials, we look, as usual, at the barley prices. If you can go back to the next slide, please, on barley prices. Thank you. So barley prices are at -- have been throughout 2022 on a historical high. Admittedly, in Q4, they have come down from the highest levels that we observed throughout the year, but still they were 15% above where they were in the same quarter last year. So this is something that we've had to deal with both in the Industrial segment and then also in the beverage segment, where these costs have made their way into the cost of goods sold of our Spirits and which we've tried to mitigate through price increases but have only partially been able to do so. Now we have lost the presentation. So if we could get that back, please.

Just a moment. We are fixing the technical issue. All set. Sorry about that.

Yes. Thank you very much, Petra. So as I was saying, the high cost of barley has made its way through also into the cost of goods sold of our beverage products. And while we have tried to mitigate that throughout the year, we have only been partially successful, which explains to a large extent the decline in our gross margins on the Spirit segment. So then if we move on to the next slide. So here we see the evolution in net sales first for Q4. And there, we can see that the increase, it was driven by an increase in Wine and in Industrial and with a slight decline in Spirits, where monopoly went down and international partner spirits business went up almost to the same extent. And then if you look at Wine and you look on the left side, you can see that the increase in EUR 11 million in Wine that was coming from Globus Wine, which increased -- which added EUR 22 million in sales this quarter. So actually, excluding Globus Wine, Wine was -- Anora Wine was down by around EUR 11 million due to the decline in the monopoly countries. And this is very much to do with the normalization after Covid, especially in Norway actually with the market declining. And then in addition to that, there are losses for us in the partner wine business in the monopolies, only partly offset by market share gains on own brands. If we then move on to the next slide, please. And here, we see the full year picture on the net sales. And here, again, a similar sort of picture. Industrial has grown, mainly then supported by higher sales prices. Spirit net sales, they have increased due to the international sales increasing more than the monopoly decline for the full year, so which was a different picture than Q4. And then in Wine, there is an increase of EUR 7.2 million for the year, but that decrease is coming entirely from the EUR 44 million contribution from Globus. If you look at the monopoly countries, our sales have declined significantly. Again, this is a combination of the markets declining or, I should say, normalizing after the COVID effect. This is something that you can see on the graph to the left there, where the net sales was EUR 629 million in 2019, which is the base year. And then also some market share decline due to partner wine losses throughout the year. If we then move to the next slide, please. So here we look at the comparable EBITDA. And as Pekka said, this was clearly a disappointing quarter for us in terms of the profitability. We declined in Wine, where out of the EUR 6.7 million decline versus last year, a significant part is attributable to Globus Wine with this inventory correction of EUR 3.2 million, only part of which can be attributed to this quarter. But that was discovered and reflected in the accounting of this quarter. And then for the rest of the Wine, the decline is essentially explained by the fact that net sales declined significantly, as we saw, excluding Globus. And then in addition, gross margins were also coming under challenge. And given that our Wine business has a relatively fixed cost base, when the net sales decline significantly and the gross profit even a little bit more due to somewhat declining gross margins, then you have a big impact on the EBITDA. On the Spirits then we had a decline, as Pekka mentioned. This is then mainly due to the gross margin decline due to the high input costs. And then adding to that, were the additional marketing investments that we did, again, compared to relatively low level during COVID times last year. And then Industrial and group and allocations contributed positively. But still, a very weak quarter. If you look at the graphs on the left comparing to the previous year's pro forma, it is a weak quarter even compared to 2019, which was the last pre-COVID year. It should be mentioned, as we'll see on the next slide, that in that year the 2000 -- Q4 in 2019 was very much a very good -- exceptionally good quarter, I would say. And the picture for the full year is more balanced. So if we can go to that -- into that slide, the next one, please. Okay. So for the full year, the picture is a more balanced one, right? We are down 25% versus last year's pro forma figure of EUR 101 million. And that's obviously not something that we are happy about. At the same time, and this is very, very clearly visible in the comparison, the time series versus 2019, we are down 6%, right? So a significantly lower figure. So actually versus the base year what you can say is that, on the one side, we have done synergies thanks to the merger, although most of those synergies since they were being done during this year, don't yet have a full year impact. And then at the same time, we experienced significant to negative external events even versus the base year of 2019. And the main one of those is the historically high barley price, which we did manage to mitigate to a large extent, but not fully, as we've said. In addition to that, other input prices such as raw and packing materials, for example, glass bottles, which are -- the production of which is very energy intensive, we also saw exceptionally high price increases during the year, many of them coming after we ourselves have put price increases through to the monopoly. So our ability to fully compensate for those was not 100%. So in other words what you can say is that we have, for one thing, going back to a more normal level of profitability compared to the exceptionally high levels during COVID times, which was reflected in our guidance of EUR 75 million to EUR 85 million of comparable EBITDA for this year. And then in addition, we are at the lower end of that guidance and somewhat below the baseline of 2019, essentially due to our inability to fully compensate for these external cost effects. If we then move on to the next slide, please. Right. And then if you look at the balance sheet figures, we see that the biggest change versus the end of last year is a significant increase in net debt. And that is due to the acquisition of Globus Wine, which was financed entirely with debt. And then the reported net debt level compared to comparable EBITDA is 4, but then that doesn't include the rolling 12 figures from Globus Wine, so it would be at a somewhat lower level. But very clearly, that level of net debt is one that we are not happy about. So we're not happy about the profitability and we are not happy about the absolute level of the net debt. And it has to be said, as you see, in terms of the net cash flow from operations that for the year, they were not at a satisfactory level. And the primary reason for that compared to last year is, first, the lower EBITDA, it's the lower comparable EBITDA. We have also spent a significant amount on other costs which are not counted into the comparable EBITDA, so various corporate projects, including integration costs. And then last but definitely not least, there has been a very significant increase in working capital, primarily due to a higher inventory level. And that higher inventory level is again due to the significant disturbances in the global supply chains that we saw especially during the first half of the year. And so to avoid out-of-stocks, we increased the inventory levels. And that has come with a cost. It has increased our inventory levels, which, of course, the value of which is also up because of the higher input prices, but also due to the absolute levels of inventory being higher. So these things, both then -- the net debt, the profitability and the inventory, these are things that we will work very, very hard in the coming days and months to improve because they are currently not at a satisfactory level. So I think that with that, I hand back to Pekka. Sorry. Yes, I guess one last slide for me is obviously on the outlook of 2023. And here, comparable EBITDA guidance for the year is expected to be between EUR 80 million and EUR 90 million. We can already see that the first 2 quarters will be very challenging ones, and that has to do with our ability to take out the continuously high input costs and compensate for the fact that monopolies in -- volumes in the monopolies will be lower, especially during the Q1 than during the COVID restricted comparable period of 2022. And then the various impacts of our efforts to improve profitability, they will be more visible towards the latter half of the year. But overall for the year, our guidance is in the EUR 80 million to EUR 90 million range. And with that, I hand back to Pekka. Sorry about that. I'm -- also the dividend, obviously, is for me. So Anora's Board of Directors is proposing the Annual General Meeting dividend of EUR 0.22 per share to be paid for in the financial year 2020 -- sorry, that will be paid for the financial year 2022, but obviously this year in 2023. And the dividend is proposed to be paid in 2 installments. So that's a difference versus previous practice, but something that we will be doing going forward. And in its proposal, the Board is aiming to maintain the dividend payout ratio in the 50% to 70% range. Compared to the actual reported result, it's actually higher than that. But if you take into account the nonrecurring costs, so the items affecting comparability for the year, the dividend payout is actually in the middle of that 50% to 70% range. And the thinking behind that is, on the one hand, given that the results were weak for this year, we want to -- the Board wants to maintain a stable dividend payout. So logically, when the results are weak, the payout ratio should be at the higher end of the guidance. But on the other side, we have also said that the range of the dividend payout ratio being in 50% to 70% range is also that when you do big acquisitions which are entirely financed with debt, as we have done with Globus, and the net debt levels are high, the adjustment variable can also be the percentage of dividends which are paid out. And here, the Board has settled somewhere in the middle of that range when you exclude nonrecurring items in order to balance these 2 perspectives, which I just talked about. And with that, I think that now it is time to hand over to Pekka.

[Foreign Language], Sigmund. Thank you. So before the Q&A, a few words on sustainability. In ESG, we launched our new sustainability road map in Q4. We aim to be carbon neutral in our own operations by 2030 without compensations. We support regenerative farming and aim for 30% of our own grain-based Spirits to be regeneratively farmed. We are committed to science-based targets and joined UN Global Compact as part of our commitment to being a responsible company. Packaging is an important part of reduction of CO2 footprint in our production, and in Q4, we transferred the O.P. Anderson 70 centiliter bottle to a lightweight bottle. So that's a short recap on the ESG, and now I'll give word over to Petra for Q&A.

Thank you, Pekka and Sigmund. So we already have some questions in chat, but please continue sending them to us. And you can also use the Raise Your Hand function on the Team's control panel if you want to ask questions in person. Or then at the end of the Q&A, you can just unmute yourself and state your name. So the first question comes from Maria Wikstrom in SEB. So can you go to more in detail to inventory revaluation of Globus? Why this was not discovered during the due diligence process?

Let me try to -- let me try to address that. So the issue is related not to the physical quantities of inventory, but to the value of the products. And I think that it's fair to say that we are still investigating exactly what happened and why the due diligence reports or, for that matter, the audited financial statements of 2021, why they did not surface this problem either in the inventory valuation itself or in the accounting practices of Globus. So I think that at the current time, I cannot comment any more exactly on why it wasn't discovered earlier. I think that what I can say now is that we feel that we have a good grasp on what is the correct inventory value as at the end of 2022. And on that basis, have a good idea what is the true profitability of Globus currently or at least the gross margins going forward. And then, obviously, we are working very hard on putting into place different sort of controls to avoid a similar issue into the future, and we are continuing with the external help or investigation about what has resulted in the inventory value being that off, including why this was not surfaced during neither the vendor due diligence or the buy-side due diligence. So I mean, I hope that answers your question, Maria. If you want more details or clarification, then please in the chat. So that's one question. I see -- I don't know. Do you want to read them, Petra, or should I read?

You can read. Please go ahead.

Yes, yes. So from Rauli, you refinanced the loans in '22. Can you share the current average interest rate on your loans? I don't think that this is something that we communicate. I can say that, obviously, the interest rate that we are paying on our loans, it reflects the -- let's call it, more difficult conditions in the credit market in general. So I think that that's about what I want to disclose at this time. Joni is asking other operating expenses were up 21% year-on-year. How much of this is due to marketing? And what should we expect going forward? A very good question, Joni. I would say a significant part of that is due to A&P. I would say, most of it for both Spirits and Wine. And then there were also other costs in the Industrial segment, where, our logistics business in Norway, we were putting in extra costs to improve the customer service towards the monopoly, especially. And as far as what we should be expecting going forward, I think that you can essentially read between the lines in what we are saying that we are now to improve the profitability going forward. We are looking very, very hard at marketing spend and trying to make some tough choices, as Pekka said. So I don't think that I want to give a very specific guidance on marketing spend, but obviously, that will be one of the elements that will improve -- that we'll be looking into to improve the profitability in this year with all the various cost hits that are coming towards us. Next question also for -- from Joni. How much cost inflation do we expect for 2023 and what are the main drivers? How large impact SEK and NOK had in Q4? The cost inflation that we expect for 2023, I mean difficult to say. I mean, I think that we -- in some cost categories see a little bit the light at the end of the tunnel. I think that it's no secret that, for example, global freight rates, which are important to us, because of the bulk prices after hitting a peak, they are now going down again, which we hope to benefit from. Energy prices, they're also longer at their peak. So at some point, we also hope that those costs will start coming down. And as you have seen in terms of the barley prices, they are no longer at the very, very highest level, although in Q4, they were still higher than the previous year. So to give you -- I don't think I should give you an exact figure, but it's still significant amounts of cost inflation also on the salaries, right? We have seen that -- the figures. I think that we are roughly where other consumer goods companies are. And then the thing that we are focusing on now is to really compensate through pricing for that impact on our gross margin. And not only the new cost inflation that's hitting us, but obviously, the cost inflation that hit us last year and that we are now seeing in a full year impact. And in terms of the SEK and the NOK in Q4, let me get back to you on that. I don't have the exact figure. I think that the biggest impact was on SEK in Q4. And then NOK is more an element for Q1 of this year, is a fairly big impact that we will again have to compensate for with pricing. And then in terms of the barley prices. So Joni is asking, barley prices have been declining clearly towards year-end. Should we expect more normalized volumes in Industrial in 2023? I think the answer to that is yes. I mean we were running the distillery at lower than full capacity to compensate for that. So some normalization to be expected there. And then should lower barley prices become visible in Spirits to improve gross margin? And when should this become visible? Well, I mean -- I guess, again, there's always a bit of a decline, right, because the Industrial segment now, as of this year, we are updating the standard prices every quarter. So in Spirit segments, they get -- the barley price impact of the previous quarter is reflected to them or the forecast, they get it quarterly. So with lower barley prices, I think that at best for Spirits, it will be in Q2, and more likely with the delay of the inventories, more likely actually in Q3. But then in the meantime, on Spirits, we are working with the price increases to compensate for the gross margin. And there -- Norway was price increase in -- as of January 1 in the monopoly. Another one coming in May. And then in Sweden, it's March. And in Finland, it's April. So there is a little bit of a delay, and that should be the driver of the gross margin on Spirits more than the barley price coming down. And then the barley price -- I mean we hope that there will be a good harvest this fall, and we hope also that we can pass through the lower barley price in standard costs in Spirit, but then more from Q2 or Q3. Center of Excellence strategy is expected to be completed in 2025. So here, Joni is asking how much improvement potentially in 2023, '24? And how much additional costs are expected due to the centralization? So I mean, I think here -- first, the center of excellence for those who have not read up on it, you can read the press release about that. It is about specializing our bottling plants with wine in -- Globus Wine in Koge in Denmark; with Gjellerasen outside of Oslo in Norway, being the aquavit, Bitter center of excellence; and with Rajamaki outside of Helsinki being the Spirits center of excellence. So that is -- as is indicated, right, in our press release, it's expected to give us big benefits. So this is this EUR 5 million to EUR 10 million improvement that we've been talking about in our supply chain at the Capital Markets Day. But as it is clearly spelled out as well, it's expected to be complete by 2025. So it will take some time, right? And it has to be done properly, both in terms of ensuring the stability of the supply, in making sure that all legal requirements are followed in terms of the employees, consultation and employment process. So this will take time. So I mean, I think that the honest answer to that is that a lot of the improvement potential will come to the latter end of the period, probably not a whole lot in '23, more of it in '24 and then most of it in '25. And we've only just started this process, so we can provide more information on that later on. And in terms of additional costs expected due to the centralization. I mean, I think we are talking about net cost, right? So obviously, if you are thinking, Joni, about additional transportation and handling costs due to the centralization, meaning that for some products there is a longer transportation distance, we're obviously -- when we're talking about savings, we are talking about the net savings, including also any additional transportation costs. Next question for the -- from Joni, our last question as far as I can see from him. What are the main cost savings initiatives for '23? When do you expect to be able to lower excess inventory? I mean I think the main cost savings initiatives for '23 -- I mean, first, that's not the cost savings initiative, but it's a profit improvement initiative is to price for the very high input costs that we have, right? And we will do that as soon as we can and as much as we think is appropriate given the strong competition that we are facing with consumers. And then second, savings initiative. Obviously, what is more directly able to impact is the advertising and promotions. So that we will be looking into. Again, it's a balancing act just as with pricing. We will be pricing for the amount that we think our products can support in the market. For advertising and promotions, we need to look in to protect growth initiatives that we want to deliver versus delivering savings to the bottom line. And then obviously, the supply chain program. I mean, I was talking about the center of excellence strategy. But we are also obviously continuously trying to improve the efficiency of our supply chain, and that should be yielding some improvements this year. And then last but not least, we are looking into each business area, and within each business area, each geography and looking at what are the elements that we can improve structurally in that business. Some of those actions will take a longer time. And at all times, we are balancing the short-term profit delivery versus the long-term health of the business, and that's a difficult balancing act. Okay. And then we have from Maria 3 more questions. And she is asking, first, can you please remind us the pricing windows in different monopolies? So in Norway, it's 1st of January, 1st of May, 1st of September. In Sweden, it's 1st of March, 1st of September. And in Finland and here, correct me Pekka, if I remember wrong, but it's 1st of April and 1st of September, right? Or is it October?

I think it's October.

Yes, it's October, right? So it's 1 month later than Sweden. So we -- so that was the first question from Maria. And the second one is, what are our debt covenants? And here on the debt, I don't think that that's something that we are communicating externally. That's a discussion directly with our banks. And in terms of cross-selling synergies between Globus Wine and other operations, what have we done so far and what do you plan to do in 2023? So I think -- and I'll answer that briefly, and then Pekka can elaborate if he wants to. But we mentioned already that Capolavoro, which is the biggest selling wine in Denmark from Globus Wine, has already been introduced in Sweden and the preliminary sales there are very, very promising. So that's what we are planning to expand, is to do more of those. And there are many, many, let's call it, candidates for that, where Globus Wine is really, really strong in having good brands with a great value for money proposition. And that we think has great potential, especially in the Swedish market, where a significant amount of the volume in bag-in-boxes is below SEK 200. And then that's where Il Capolavoro is placed. And there are other ideas, obviously, in that segment and other segments. So I don't know, Pekka, if you want to add on that?

Yes, to build on that. A big opportunity for us now and in the long term is near market filling. That's a strategic opportunity. What it means in practice is that, as monopolies are looking to significantly decrease the CO2 emissions of their products, more and more producers will turn to packaging like bag-in-boxes, PET, tetras, away from glass. And the second one is to lower the CO2. We expect the near market filling to grow significantly. And that, obviously, gives us an opportunity to produce for them, but combine that with the distribution in the monopolies, that is a very significant opportunity that we've seen a lot of demand for already now. And we believe that, that will be a big opportunity that will help us to grow share in the monopolies with the help of Globus Wine.

Good. And then last question, at least for now, from Maria is, what will be a good euro level of inventory, including Globus? I mean -- and how much do you have extra now in euros? Well, I would say let me not answer about the absolute level of inventory, because, of course, that's related to the size of our business. But I could say that I think that we have, in my opinion, EUR 30 million too much versus where we should be. So that's something that we will have to work on getting down. I think Joni was also asking -- and I'm sorry if I didn't answer that -- when do you expect to be able to lower the excess inventory? I mean, I think that here, excess inventory, there is, again, a fine balance between taking it down very rapidly, and we will try to do that as quickly as we can. And remembering that there is a reason that it was there in the first place, right? And that was to avoid out-of-stock situations or lost sales in the monopolies in a very difficult global supply chain situation. So now that, that situation has stabilized, we think that, that's the right time to reduce the inventory. And then the question is, is this sitting in outsourced inventory facilities? Yes, some of it is sitting in outsourced inventory facilities. And that is part of the OpEx cost for Q4, and for that matter, for the rest of the year that we have been hit with. And obviously, reducing the inventory will not only free up working capital and get our net debt levels down, but it will also lead to lower rental fees for the outsourced inventory, and this is especially in Norway and in Globus Wine. And then it will also lead to lower handling costs, right, because obviously it -- when you have -- in an outsourced facility some of your inventory is sitting there, you have extra cost of sending inventory back and forth between your normal warehouse and the outsourced inventory. So there are many benefits to getting that level down. And then the last question I can read it is from Joni, but I think that this is from -- this is for Pekka. You've had changes in the management team after the CMD. Are you looking for new members or are you satisfied with the current setup? I think this is for you, Pekka.

Yes. So what we did after Capital Markets Day is that we combined the Spirits and International segment into Spirits. So we have a similar setup in both Wine and in Spirits. And Spirits is now headed by Kirsi Puntila and Wine by Janne Halttunen. And obviously, there's no change there. Then I think the other thing which is public is our ambition to hire a Strategy Officer or a Growth Officer. And that's something that is ongoing. Are we happy with the setup? Yes, yes, we are. We're definitely looking forward to getting the Growth Officer in place, but we're very happy with the team. And then I guess the last question from Paul to Sigmund. You reduced your factoring volumes year-on-year. What is the reason for that?

Yes. I think here the reason is simply that for the part of our business where we are doing sales of receivable or factoring, which was the ex-Altia part of our business, the absolute volumes that were sellable at the end of the quarter were lower. Why were they lower? Well, because as we saw, there was a decline in our monopoly business, both in Spirits and especially in Wine. So we simply had a lower level of receivables that were available for sale, right? They were boosted last year by the COVID impact, and then this year they were significantly lower. Now that being said, there are still important parts of our business where we have not for the time being used sales of receivables. So this is in Norway for the combined Anora business. It is in Sweden and in Finland for the ex- Anora business, where we also have very high-quality receivables to the monopolies. And we are actively looking into increasing that volume because we think that it's a good source of financing that will also be a significant contributor to bringing our net debt down. So thank you for that question, Paul. And that's the reason that it's not something that we are -- we have done actively. It simply we had less to sell, and then we are looking into expanding actually the sales of receivables to the totality of our monopoly receivables.

Thank you, Sigmund and Pekka. Okay. Thank you. Comment on the link not working. We will investigate that. All right. If you would like to ask a question personally, please unmute your phone and state your name before the question. I think we are ready with the teams and open to take questions from telephone lines. So please state your name if you would like to ask a question by phone. Is there background noise or somebody with a question? All right. It looks like we have no more questions. So back to Pekka for summary.

Yes. Thank you for all the great questions, and special thanks to Sigmund for very good and detailed and transparent answers as well. So to summarize our Q4, we saw a net sales increase on a declining market. Obviously, there was the acquisition of Globus Wine, but we did have good sales development in Industrial segment and positive growth in our international Spirit sales. Profitability declined largely due to the monopoly market decline. That was very, very significant. Also, high input costs, negative currency impact, the marketing cost and inventory write-off of Globus Wine played a very significant role. In Q4, we published our sustainability road map and are officially committed to science-based targets. And lastly, as Sigmund said, the Board proposes a dividend of EUR 0.22 per share for the financial year of '22. With this, I would like to hand over to Petra for final remarks.

Thank you, Pekka. So this concludes our Q4 and full year results presentation. Thank you all for joining and following the presentation today. If you have any feedback or questions, please don't hesitate to reach us. We are happy to set up also follow-up calls when needed. So with this, we wish you all a relaxing rest of the week and hopefully speak to you soon again. Bye.