Baltic Sea

Financial performance

In the Baltic Sea segment, volumes for 2021 showed a 3% increase compared to 2020. The segment was more impacted by COVID-19 restrictions than Western Europe and International segments.

EBIT decreased to DKK 642 million and was DKK 33 million below the 2020 figure. The EBIT margin decreased by 2.3 percentage point from 21.5% in 2020 to 19.2% in 2021. The earnings development was negatively affected by increased input prices and channel mix.

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Volumes decreased by 5% in Q4 2021 (organically 6%), which is primarily due to the extraordinary beer campaign in Finland in 2020. Revenue increased by 7% due product mix. EBIT increased by 1% (organically 3%), whereas the EBIT margin declined by 1.2 percentage points from 13.5% in Q4 2020 to 12.7% in Q4 2021.

“A strong end to the year gives some optimism for 2022 where we hopefully will return to more normal conditions for us all. In 2021, we succeeded in strengthening many of our positions and we welcomed new colleagues in both Finland and Estonia.” – Kalle Järvinen, SVP Baltic Sea & MD Hartwall

Q4 Q4
mDKK 2021 2020 % changes % organic 2021 2020 % changes % organic
Volumes (thl) 5,554 5,409 3 3 1,248 1,321 -5 -6
Net revenue 3,338 3,141 6 6 789 736 7 7
EBIT 642 675 -5 -5 100 99 1 3
EBIT margin 19.2 21.5 12.7 13.5

 

Development and initiatives in 2021

The Baltic Sea segment was also impacted by COVID-19 restrictions. Especially throughout the second half of the year restrictions remained in place and drove a subdued development in the On-Trade throughout the year. In general, the restrictions in Finland have been significant and we expect a strong rebound during Q1 2022 in On-Trade as the restrictions are lifted.

In Finland, continued restrictions in On-Trade muted the development. We continued to see a premiumization of our beer portfolio, with strong development for our own brands Aura, Lahden Erikois and Lapin Kulta Pure, as well as for Heineken. In the RTD category, Original Long drink grew compared to 2021, and the Greyest Day Limited Edition Red Grapefruit variant performed well and will become part of our standard core portfolio in 2022.

We also continued our efforts in the low/no sugar/alco area, including different Jaffa launches within low/no sugar CSD. In the second quarter of 2021, we introduced a new plantbased enhanced water – one of the first of its kind in the world. This new Novelle Plus variant taps into the growing demand of healthy enhanced waters, a category we expect will expand further also outside of Finland. Tapping into the same demand trend is our new “0% Traditional Long drink” without alcohol.

Solera Finland will be merged with Hartwa Trade in 2022 to create a strong Finnish player in the wine import and distribution segment in Finland.

In the Baltics, we continued to increase the share of above mainstream beer in our portfolio, mainly through development of the Latvian Bauskas brand. High focus on and increased activation in the non-alcoholic beer segment led to significant growth within this segment, and in Lithuania we maintained and strengthened our category leader position with the Kalnapilis brand.

2021 was the second full-year for the energy brand CULT in the Baltics and has proved a successful category extension and supported a muti-beverage strategy implementation. Increasing brand awareness, high level of consumer engagement in brand novelties and consumer promotions, resulted in an almost doubling of the market share in the Baltic region to 8%.

We acquired the craft brewery Tanker in September and thereby increased our exposure to Estonia, strengthened our in-market competencies and has a strong platform from which to grow from in 2022.