OLVI PLC INTERIM REPORT 28 APR 2011 at 9:00 am
OLVI GROUP’S INTERIM REPORT, 1 JANUARY TO 31 MARCH 2011 (3 MONTHS)
January-March in brief:
- The Group’s sales volume increased by 13.1 percent to 98 (87) million litres
- The Group’s net sales increased by 12.5 percent to 55.7 (49.5) million euro
- The Group’s operating profit increased to 3.4 (2.1) million euro
- The Group’s full-year earnings outlook is unchanged.
KEY RATIOS
| 1-3/2011 | 1-3/2010 | Change % | 1-12/2010 | |
| Net sales, MEUR | 55.7 | 49.5 | + 12.5 | 267.5 |
| Operating profit, MEUR | 3.4 | 2.1 | + 61.8 | 30.5 |
| Gross capital expenditure, MEUR | 13.2 | 6.4 | +107.1 | 24.5 |
| Earnings per share, EUR | 0.21 | 0.14 | + 50.0 | 2.41 |
| Equity per share, EUR | 12.12 | 10.73 | + 13.0 | 12.25 |
| Equity to total assets, % | 53.3 | 47.7 | 54.7 | |
| Gearing, % | 37.8 | 52.3 | 29.5 |
Lasse Aho, Managing Director of Olvi plc, said the following in connection with the disclosure of the accounts: “Olvi Group’s operating year started well. The Group strengthened its market shares across its entire operating area. Sales volume and net sales increased in all of our geographical areas. Our earnings improved in Finland, Estonia, Latvia and Belarus, and earnings in Lithuania were on a par with the previous year. We can look towards the rest of the year with a confident mind”.
OLVI GROUP’S SALES VOLUME, NET SALES AND EARNINGS IN JANUARY-MARCH 2011
In the first quarter of 2011, Olvi Group’s sales volume was 98 (87) million litres, an increase of 11 million litres or 13.1 percent.
Sales increased in all of the Group’s operating areas. Sales in Finland increased by one million litres, sales in the Baltic states by a total of 8 million and sales in Belarus by 5 million litres. Intra-Group sales increased by 2 million litres on the previous year.
The Group’s net sales from January to March amounted to 55.7 (49.5) million euro. This represents an increase of 6.2 million euro or 12.5 percent. Net sales increased in all of the Group’s operating areas thanks to good sales development.
Net sales in Finland amounted to 23.1 (22.7) million euro, while the aggregate total for the Baltic states was 26.1 (22.4) and the corresponding figure for Belarus was 8.7 (5.9) million euro. Net sales in Finland increased by 0.4 million euro or 1.7 percent, in the Baltic states by 3.7 million euro or 16.6 percent, and in Belarus by 2.8 million euro or 47.7 percent.
Olvi Group’s operating profit for January-March stood at 3.4 (2.1) million euro, or 6.1 (4.2) percent of net sales. The Group’s operating profit improved by 1.3 million euro or 61.8 percent.
Olvi Group’s profit after taxes in the period under review was 2.2 (1.5) million euro. Earnings per share calculated from the profit belonging to parent company shareholders in January-March stood at 0.21 (0.14) euro per share.
SALES VOLUME, NET SALES AND EARNINGS BY GEOGRAPHICAL SEGMENT IN JANUARY-MARCH 2011
Seasonal nature of the operations
The Group’s business operations are characterised by seasonal variation. The net sales and operating profit from the reported geographical segments do not accumulate evenly but vary according to season.
PARENT COMPANY OLVI PLC (Olvi)
According to statistics by the Federation of the Brewing and Soft Drinks Industry, the Finnish beverage market in January-March diminished by more than three percent compared to the previous year. Sales declined in all product groups except mineral waters. The sales decline in beers was -3.9 percent, in long drinks -6.8 percent and in ciders -0.9 percent. The sales of soft drinks declined by -1.8 percent. The sales of mineral waters improved by 1.1 percent.
Olvi’s sales in January-March amounted to 29 (28) million litres. Sales increased by one million litres or 1.2 percent. The sales of beers in Finland increased by 4.2 percent and the sales of long drinks by 1.6 percent while the sales of ciders were on a par with the previous year. There was a slight decline in the sales of mineral waters and a clear decline in the sales of soft drinks before the launch of a new soft drink concept.
According to statistics by the Federation of the Brewing and Soft Drinks Industry, Olvi’s market share in alcoholic beverages (beers, ciders and long drinks) increased from 22 percent to 24 percent. In mineral waters, Olvi had a market share of 19 (20) percent, and in soft drinks approximately 4 (5) percent.
Olvi’s exports and tax-free sales increased by 16.0 percent to 1.1 (0.9) million litres.
Olvi’s net sales from January to March amounted to 23.1 (22.7) million euro, representing an increase of 0.4 million euro or 1.7 percent.
The operating profit stood at 3.2 (2.3) million euro, which was 13.7 (10.0) percent of net sales. The operating profit increased by 0.9 million euro or 39.9 percent compared to the previous year. The operating profit includes 1.5 (0.6 in the previous year) million euro of sales gains from the sales of decommissioned production machinery. Commensurate operating profit excluding non-recurring sales gains was on a par with the previous year.
AS A. LE COQ (A. Le Coq)
The Estonian subsidiary AS A. Le Coq’s January-March sales amounted to 27 (23) million litres. Sales increased by 4 million litres or 17.8 percent.
The Estonian beverage market grew in all product groups during the review period. The sales of A. Le Coq beers increased by 11 percent and long drinks by 6 percent. The sales of ciders were almost on a par with the previous year. In non-alcoholic beverages, the greatest growth was seen in juices, 23 percent. Soft drinks gained 14 percent and mineral waters 10 percent.
A. Le Coq is the clear Estonian market leader in ciders and long drinks and, according to the latest statistics by AC Nielsen, also in beers. A. Le Coq’s market share in ciders was 48 (55), in long drinks 56 (65) and in beers 38 (40) percent (market shares from AC Nielsen statistics December 2010 – January 2011). The market share in juices has clearly increased on the previous year. According to the latest statistics, it was 33 (25) percent, which means that A. Le Coq is the clear market leader also in juices. The market share in soft drinks was 29 (25) and in mineral waters 13 (12) percent.
The company’s exports and tax-free sales increased substantially on the previous year, by as much as 63 percent. Exports and tax-free sales represented 4.0 (2.9) percent of total sales.
A. Le Coq’s net sales in the first quarter amounted to 14.5 (12.2) million euro. Thanks to good sales development, net sales increased by 2.3 million euro or 18.7 percent.
Operating profit in January-March stood at 1.6 (1.0) million euro, which was 10.9 (8.3) percent of net sales. The operating profit improved by 0.6 million euro on the previous year. The earnings improvement was made possible by increased sales volume and cost-efficient operations.
A/S CESU ALUS (Cesu Alus)
The sales of Cesu Alus operating in Latvia amounted to 14 (12) million litres in the first quarter of 2011. Sales increased by 2 million litres or 13.5 percent.
According to the latest statistics by AC Nielsen (January 2011), the Latvian beer market was growing while the cider and long drink markets clearly declined. Cesu Alus’s sales of beers increased by 9 percent and the sales of long drinks and ciders by 4 percent in January-March in spite of the decline in the long drink and cider markets. The sales of soft drinks increased clearly by 18 percent.
Cesu Alus had a market share of 31 (35) percent of the Latvian beer market, 58 (51) percent in ciders and 47 (44) percent in long drinks (statistics by AC Nielsen December 2010 – January 2011). Cesu Alus is the clear market leader in ciders and a strong number two player in beers. According to the latest statistics, Cesu Alus has also taken the leading position in the long drink market.
Cesu Alus’s net sales from January to March amounted to 6.1 (5.5) million euro, representing an increase of 0.6 million euro or 10.9 percent. The increase in net sales fell short of the increase in sales volume because the average price of net sales declined due to the product mix becoming more focused on beers.
The operating result for the first quarter of 2011 showed a loss of -0.4 (-0.5) million euro. The operating result was in the red but improved by 0.1 million euro compared to the previous year.
AB VOLFAS ENGELMAN (Volfas Engelman, formerly AB Ragutis)
The name of AB Ragutis operating in Lithuania was changed to AB Volfas Engelman on 8 April 2011. The change of name is aimed to leverage on the company’s renowned history and emphasise the premium quality of its products.
In the review period, the Lithuanian beer and cider markets were growing, while the long drink market saw a decline. The company had a market share of 13 (10) percent in beers, 43 (38) percent in ciders, 47 (43) percent in long drinks and 30 (28) percent in kvass. The company’s total sales in January-March amounted to 13 (11) million litres and increased across all crucial product groups. The sales of beers increased by 26 percent, ciders by 11 percent and long drinks by 5 percent on the previous year.
The company’s first-quarter net sales amounted to 5.5 (4.7) million euro. Net sales improved by 0.8 million euro or 17.8 percent. The increase in net sales fell short of the increase in sales volume because the average price of net sales declined due to the product mix becoming more focused on beers and due to the elimination of obsolete-brand products before a new product launch.
Volfas Engelman’s operating profit in January—March was on a par with the previous year at -0.2 million euro.
OAO LIDSKOE PIVO (Lidskoe Pivo)
The January-March sales of OAO Lidskoe Pivo operating in Belarus amounted to 22 (17) million litres. Sales increased by 5 million litres or 29.8 percent on the previous year. The sales of beers increased by 26 percent, mineral waters by 35 percent and soft drinks by 34 percent.
Lidskoe Pivo is the market leader in the Belarusian kvass market with a market share of 62 (42) percent. The brewery’s market share has increased in all product groups. The market share in beers was 10 (9), in long drinks 29 (22), in juice drinks 32 (28) and in soft drinks more than 5 (4) percent.
The company’s net sales from January to March amounted to 8.7 (5.9) million euro. Net sales improved by 2.8 million euro or 47.7 percent. The positive change was based on good sales development and successful product launches.
Operating profit in January-March stood at 0.7 (0.08) million euro, which was 8.0 (1.3) percent of net sales and represented an increase of 0.6 million euro. The improvement was made possible by increased sales volumes and improved average price of net sales.
FINANCING AND INVESTMENTS
Olvi Group’s balance sheet total at the end of March 2011 was 239.4 (239.0) million euro. Equity per share in January-March stood at 12.12 (10.73) euro. The equity to total assets ratio was 53.3 (47.7) percent. The amount of interest-bearing liabilities was 57.9 (66.5) million euro, including current liabilities of 11.6 (31.5) million euro.
During the period under review, Olvi Group’s gross capital expenditure amounted to 13.2 (6.4) million euro. The parent company Olvi accounted for 2.2 million euro and the subsidiaries in the Baltic states for 0.8 million euro of the total. Lidskoe Pivo’s gross capital expenditure in the first quarter was 10.2 million euro. The largest investments in Finland in 2011 consist of the modernisation of wine separation and filtering equipment, an extension to the tank cellar and improvements in the efficiency of the filling halls and storehouse logistics.
In the Baltic states, A. Le Coq’s investments are focused on labelling machines for the filling lines, as well as systems for the processing of malt and water. Cesu Alus will modernise its bottle formats and build an extension to the yeast tank cellar. Volfas Engelman’s investments comprise an extension to the pressure tank cellar and fermentation tanks, as well as some filling line equipment and machinery.
The extensive investment programme in Belarus will continue in 2011. The construction of a new storehouse and filling lines, as well as the extension of the tank cellar and filtering section, started already in last year. Refrigeration and water treatment equipment will also be modernised.
PRODUCT DEVELOPMENT
Research and development includes projects to design and develop new products, packages, processes and production methods, as well as further development of existing products and packages. The R&D costs have been recognised as expenses.
NEW PRODUCTS
Finland
The KevytOlo product group will get new labels and logos in the spring at the same time with a new recyclable plastic deposit bottle for non-alcoholic products. Two new flavours of KevytOlo juice-mineral waters will be introduced: Apple&Pear and Blood Orange. The soft drinks Jaffa, Jaffa Light, Cola and Lemon will be moved to the KevytOlo brand. The products are naturally light, without artificial sweeteners, but thanks to fruit sugar, their calorie content is approximately 30 percent lower. Finland’s first energy water, which was launched last year, will be complemented with another variant, TEHO Energy Water Apple. Olvi ciders will see the introduction of two new flavours, Golden Apple and Pineapple-Melon. The products contain only natural flavouring. The FIZZ Dry range will be expanded with the Cranberry flavour. The best-selling long drink in grocery stores (source Nielsen HomeScan), OLVI Lonkero, will be expanded by the new variant Mojito Long Drink. The long drink product group will also be strengthened by 12-packs of the most popular flavour Cranberry. In beers, OLVI will expand the popular range of pint-size (0.568-litre) packages. Sandels Premium beer will be launched in cases of 18 cans.
Subsidiaries
A. Le Coq launched the new Cranberry flavour to Estonia’s best-selling long drink brand G:N. A dark version of A. Le Coq Kali kvass was introduced. The primary product launch in beers this summer will be A. Le Coq Pils, which is a Czech-type pilsner with strong hops content. The Estonian beer market has previously lacked the mild beers segment. This gap will be filled by the new A. Le Coq I launched in 0.5-litre cans. The cider segment will see the introduction of the completely alcoho—free FIZZ Pear Alcohol Free in 0.5-litre cans. Aura waters saw the introduction of Aura Plus Blueberry. RC Cola, which was successfully launched one year ago, will get the new variant RC Cola Kick, which contains caffeine and guarana.
Cesu Alus in Latvia launched the main product of the Belarusian Lidskoe Pivo brewery, Lidskoe Premium, in 0.5-litre cans. The company’s own Cesu brand saw the introduction of the non-filtered Cesu Nefiltretais beer in 0.5-litre glass bottles. Cesu Special 1590 was introduced in pint-size cans. Cesu Dzons, the best-selling long drink in Latvia, got a new Yellow Submarine version in both bottles and cans. Similarly to Estonia, the alcohol-free FIZZ Pear was launched in Latvia. The new alcoholic cider for the summer is FIZZ Paradise in 0.5-litre cans. A new Porter version of Umanlaiku Kvass was introduced.
The Lithuanian company Volfas Engelman introduced two new Volfas Engelman beers to complement the 2009 launch of Volfas Engelman Imperial Porter. These were Stalo 4.0% and Rinktinis 5.2%. Under the Group’s cider brand FIZZ, alcohol-free pear cider already familiar in Estonia was launched. A. Le Coq G:N Grapefruit and Lemon Submarine long drinks were launched in 0.5-litre cans. The porter version of kvass, previously available in Latvia, was introduced under the Smetoniska brand.
The Belarusian Lidskoe Pivo launched the BCE Cranberry + Apple drink in one-litre plastic bottles.
PERSONNEL
Olvi Group’s average number of personnel in January-March was 1,963 (1,982). The Group’s average number of personnel decreased by 19 people or 1.0 percent. The total number of personnel at the end of March was 1,998 (1,999).
Olvi Group’s average number of personnel by country:
Finland 354 (353)
Estonia 309 (306)
Latvia 209 (200)
Lithuania 198 (183)
Belarus 893 (940)
Total 1,963 (1,982)
GROUP STRUCTURE
The parent company Olvi has increased its holding of the Latvian company Cesu Alus by 318 shares or 0.11 percent during January-March. At the end of March 2011, Olvi Group’s holding in Cesu Alus was 99.48 percent, in A. Le Coq 100.0 percent, in Volfas Engelman 99.57 percent and in Lidskoe Pivo 91.58 percent.
OLVI A SHARE AND SHARE MARKET
Olvi’s share capital at the end of March 2011 stood at 20.8 million euro. The total number of shares was 10,379,404, of these 8,513,276 or 82.0 percent being Series A shares and 1,866,128 or 18.0 percent Series K shares. Each Series A share carries one (1) vote and each Series K share carries twenty (20) votes. Series A and Series K shares have equal rights to dividends.
The Olvi A share was quoted on Nasdaq OMX Helsinki (Helsinki Stock Exchange) at 37.00 (27.27) euro at the end of March 2011. In January-March, the highest quote for the Series A share was 37.45 (28.70) euro and the lowest quote was 30.60 (25.10) euro. The average price was 33.56 (26.49) euro.
In January-March, a total of 419,907 (528,905) Olvi A shares were traded, representing 4.9 (6.2) percent of the total number of Series A shares. The value of trading was 14.1 (14.0) million euro.
At the end of March 2011, the market capitalisation of Series A shares was 315.0 (232.2) million euro and the market capitalisation of all shares was 384.0 (283.0) million euro.
Olvi had a total of 8,352 shareholders at the end of March 2011. Foreign holdings plus foreign and Finnish nominee-registered holdings represented 18.2 percent of the total number of book entries and 6.2 percent of total votes.
Foreign and nominee-registered holdings are reported in Table 5, Section 9 of the tables attached to this interim report, and the largest shareholders are reported in Table 5, Section 10.
SHARE-BASED INCENTIVE SCHEMES
Olvi’s Board of Directors has decided on a share-based incentive scheme for the key personnel of Olvi Group on 26 January 2006. A more detailed description of the scheme is included in the tables section of this interim report, in Table 5, Section 5.
TREASURY SHARES
There were no changes in the number of treasury shares held by Olvi in January-March 2011. At the end of March 2011, Olvi held 12,400 of its own Series A shares. Treasury shares held by Olvi plc are reported in the tables section of this interim report, in Table 5, Section 6.
RESOLUTIONS OF OLVI PLC’S ANNUAL GENERAL MEETING ON 7 APRIL 2011
At their Annual General Meeting held on 7 April 2011, the shareholders of Olvi plc adopted the closing of the accounts for the year 2010 and granted discharge from liability to the members of the Board of Directors and Managing Director as regards the fiscal year 2010.
In accordance with the Board’s proposal, the General Meeting of Shareholders decided that a dividend of 1.00 (0.80) euro be paid on each K and A share for fiscal 2010. The dividend according to the decision represented 41.5 (37.2) percent of consolidated earnings per share. The dividend payout totalled 10.4 (8.3) million euro. The dividend was paid on 19 April 2011 to all shareholders recorded in the company’s register of shareholders maintained by Euroclear Finland Ltd on the record date 12 April 2011 at the latest.
No dividend was paid on treasury shares held by Olvi plc. The number of Olvi plc shares on the date of the General Meeting was 10,379,404, of which Series K totalled 1,866,128 shares and Series A 8,513,276 shares. Olvi plc holds 12,400 Series A shares as treasury shares.
Board members and auditors
The Annual General Meeting re-elected the current members of the Board: Mr. Heikki Hortling, Chairman of the Board, M.Sc. (Econ), Iisalmi, Mr. Esa Lager, CFO, LL.M., M.Sc. (Econ), Kauniainen, Mr. Heikki Sinnemaa, LL.M., Member of the Bar, Iisalmi, and Ms. Tarja Pääkkönen, Doctor of Technology, Helsinki. Mr. Jaakko Autere, M.Sc. (Econ.), Helsinki, was appointed new Member of the Board. Autere serves as President of the Fiskars Home business area and the Chief Executive Officer of Iittala Group Oy Ab.
The Annual General Meeting appointed PricewaterhouseCoopers Oy, Authorised Public Accountants, as the company’s auditor, with Mr. Sami Posti, Authorised Public Accountant, as auditor in charge until the closing of the next Annual General Meeting.
Organisation of the Board of Directors
At its organising meeting held on 7 April 2011, the Board elected Mr. Heikki Hortling as the Chairman of the Board and Mr. Esa Lager as the Vice Chairman of the Board.
Decision to increase the number of shares through a free issue
In accordance with the Board of Directors’ proposal, the General Meeting decided to implement a free issue (split) in which one Series A share produces one free Series A share, and one Series K share produces one free Series K share. 8,513,276 Series A shares and 1,866,128 Series K shares were issued. After the issue, the total number of Series A shares is 17,026,552, the total number of Series K shares 3,732,256, and the total number of all shares is 20,758,808.
The split was executed in the book-entry system of securities and did not require any action by the shareholders. All shareholders registered in the list of shareholders on the record date 12 April 2011 were entitled to the new shares issued. The new shares were included in public trading and the book-entry system on 13 April 2011, at which time they carried shareholders’ rights. The new shares did not entitle to dividends decided by the Annual General Meeting on 7 April 2011.
The increase in the number of shares will not affect the status of ownership of the company, the rights associated with shares or the relations between different series of shares.
Decision to amend the Articles of Association
In accordance with the Board of Directors’ proposal, the General Meeting decided to amend Article 3 of the company’s Articles of Association by eliminating the reference to the nominal value of shares.
Decision regarding the acquisition of own Series A shares
In accordance with the Board of Directors’ proposal, the Annual General Meeting decided to revoke all existing unused authorisations to acquire treasury shares and authorise the Board of Directors to decide on the acquisition of the company’s own Series A shares using distributable funds. The authorisation is valid for one year starting from the Annual General Meeting and covers a maximum of 245,000 Series A shares. The Board of Directors may also propose that any shares acquired on the company’s own account be cancelled by reducing the share capital.
The authorisation allows the Board of Directors to acquire the company’s own shares for use as consideration in case of any upcoming corporate acquisitions, for the funding of investments, for the incentive and commitment scheme for key personnel or for cancellation.
The shares would be purchased in accordance with the Board of Directors’ decision in public trading on the Helsinki Exchanges at the current market price at the time of acquisition. The purchase price shall be paid to the sellers within the payment period determined on the basis of the rules of Nasdaq OMX Helsinki Ltd and Euroclear Finland Ltd.
Because the maximum number of A shares to be acquired represents less than five percent of all the shares in the company and approximately one percent of all the votes, the acquisition would not have any significant effect on the distribution of shareholdings and voting rights in the company.
Decision regarding the transfer of own shares
In accordance with the Board of Directors’ proposal, the Annual General Meeting decided to revoke all existing unused authorisations for the transfer of own shares and authorise the Board of Directors to decide on the transfer of any A shares acquired on the company’s own account within one year of the Annual General Meeting.
The authorisation comprises the transfer of all shares purchased on the basis of acquisition authorisations granted to the Board of Directors. The authorisation grants the Board of Directors with the power to decide to whom and in what order the shares held by the company shall be transferred. The Board of Directors could transfer the company’s own shares for use as consideration in case of any upcoming corporate acquisitions, for the funding of investments or for use within an incentive and commitment scheme for key personnel. The Board of Directors is authorised to decide on the transfer price of the company’s own shares and on the bases for determining the transfer price.
RISK MANAGEMENT
Olvi Group is exposed to risks that may arise from the operations of Group companies or changes in the business environment.
The Group’s risk management is an essential part of management and everyday operations. The objective of risk management is to ensure the realisation of the company’s strategy and the continuity of business. Olvi Group identifies, assesses, manages, monitors and reports its crucial risks regularly. With regard to identified risks, the effects, scope and probability of realisation are assessed together with the means of eliminating or reducing the risk.
Furthermore, risk management aims to identify and utilise any business opportunities that may arise.
Olvi operates internationally, and its business involves risks arising from foreign exchange fluctuations due to cash flows from purchases and sales, as well as the conversion of balance sheet items in foreign subsidiaries into euro. Olvi Group’s parent company is centrally responsible for managing financing and foreign exchange risks in accordance with the Board of Directors’ guidance.
Olvi’s operations are dependent on the reliability of materials management, production facilities, logistics and IT systems. The aim is to prevent the realisation of related risks through continuous analysis and development of processes. Olvi Group companies are prepared for property damage and business interruptions through insurance policies, the coverage of which is reviewed annually.
BUSINESS RISKS AND UNCERTAINTIES IN THE NEAR TERM
The overall economic situation seems uncertain at least in some European countries. However, the general belief is that the worst economic crisis is over even though the disaster in Japan created extra pressure on the economic recovery.
The economic outlook in the Baltic states is still conservative but in Olvi Group’s operating area, the markets have mostly turned to a growth track and the unemployment figures are becoming better. The Estonian economy has developed well, and economic uncertainty in Lithuania has eased.
The weakness of consumer purchasing power is reflected on the sales of Olvi Group products, and above all, it has an effect on the relationship between premium products and less expensive promotional products. This has an impact of lowering the average price of net sales and thus affecting the profitability of operations particularly in Latvia and Lithuania.
The most significant individual country risk in Belarus is the devaluation of the local currency. The most important raw materials and packaging supplies are procured mainly from local suppliers.
NEAR-TERM OUTLOOK
Olvi Group has a good starting position for 2011. Profitability is expected to remain on the good level of 2010.
Further information:
Lasse Aho, Managing Director
Phone +358 17 838 5200 or +358 400 203 600
OLVI PLC
Board of Directors
TABLES:
- Statement of comprehensive income, Table 1
- Balance sheet, Table 2
- Changes in shareholders’ equity, Table 3
- Cash flow statement, Table 4
- Notes to the interim report, Table 5
DISTRIBUTION
NASDAQ OMX Helsinki Ltd
Key media
www.olvi.fi
| OLVI GROUP | TABLE 1 | ||
| INCOME STATEMENT | |||
| EUR 1,000 | |||
| 1-3/2011 | 1-3/2010 | 1-12/2010 | |
| Net sales | 55679 | 49497 | 267509 |
| Other operating income | 163 | 146 | 717 |
| Operating expenses | -47762 | -42948 | -219101 |
| Depreciation and impairment | -4692 | -4601 | -18640 |
| Operating profit | 3388 | 2094 | 30485 |
| Financial income | 404 | 235 | 514 |
| Financial expenses | -1080 | -466 | -1831 |
| Financial expenses - net | -676 | -231 | -1317 |
| Earnings before tax | 2712 | 1863 | 29168 |
| Taxes *) | -524 | -378 | -3909 |
| NET PROFIT FOR THE PERIOD | 2188 | 1485 | 25259 |
| Other comprehensive income items: | |||
| Translation differences related to foreign subsidiaries | -3752 | 245 | 557 |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | -1564 | 1730 | 25816 |
| Distribution of profit | |||
| - parent company shareholders | 2148 | 1440 | 24954 |
| - minority | 40 | 45 | 305 |
| Distribution of comprehensive profit: | |||
| - parent company shareholders | -1288 | 1666 | 25405 |
| - minority | -276 | 64 | 411 |
| Earnings per share calculated from the profit belonging to parent company shareholders, undiluted and | |||
| adjusted for dilution, EUR | 0.21 | 0.14 | 2.41 |
| OLVI GROUP | TABLE 2 | ||
| BALANCE SHEET | |||
| EUR 1,000 | |||
| 31.3.2011 | 31.3.2010 | 31.12.2010 | |
| ASSETS | |||
| Non-current assets | |||
| Tangible assets | 125889 | 124600 | 124857 |
| Goodwill | 17169 | 17176 | 17169 |
| Other intangible assets | 1178 | 1049 | 1134 |
| Financial assets available for sale | 545 | 2953 | 545 |
| Other non-current assets available for sale | 0 | 5 | 333 |
| Loan receivables and other non-current receivables | 138 | 144 | 137 |
| Deferred tax receivables | 1856 | 1374 | 1682 |
| Total non-current assets | 146775 | 147301 | 145857 |
| Current assets | |||
| Inventories | 40966 | 37810 | 35124 |
| Accounts receivable and other receivables | 41919 | 47056 | 47270 |
| Liquid assets | 9728 | 6852 | 7891 |
| Total current assets | 92613 | 91718 | 90285 |
| TOTAL ASSETS | 239388 | 239019 | 236142 |
| SHAREHOLDERS’ EQUITY AND LIABILITIES | |||
| Shareholders’ equity held by parent company shareholders | |||
| Share capital | 20759 | 20759 | 20759 |
| Other reserves | 1092 | 1092 | 1092 |
| Treasury shares | -222 | -222 | -222 |
| Translation differences | -7838 | -4627 | -4402 |
| Retained earnings | 111907 | 94186 | 109750 |
| 125698 | 111188 | 126977 | |
| Minority interest | 1973 | 2828 | 2277 |
| Total shareholders’ equity | 127671 | 114016 | 129254 |
| Non-current liabilities | |||
| Loans | 44707 | 33000 | 35607 |
| Other liabilities | 1638 | 2045 | 1755 |
| Deferred tax liabilities | 1950 | 1646 | 1847 |
| Current liabilities | |||
| Loans | 10579 | 30450 | 7578 |
| Accounts payable and other liabilities | 52843 | 57862 | 60101 |
| Total liabilities | 111717 | 125003 | 106888 |
| TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES | 239388 | 239019 | 236142 |
| OLVI GROUP | TABLE 3 | ||||||
| CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY | |||||||
| Share | Other | Treasury | Translation | Accrued | Minority | ||
| EUR 1,000 | capital | reserves | shares | difference | earnings | interest | Total |
| account | |||||||
| Shareholders’ equity 1 Jan 2010 | 20759 | 1092 | -222 | -4853 | 92746 | 2764 | 112286 |
| Total comprehensive income for the period | 226 | 1485 | 19 | 1730 | |||
| Share of profit belonging to the minority | -45 | 45 | 0 | ||||
| Shareholders’ equity 31 Mar 2010 | 20759 | 1092 | -222 | -4627 | 94186 | 2828 | 114016 |
| Share | Other | Treasury | Translation | Accrued | Minority | ||
| capital | reserves | shares | difference | earnings | interest | Total | |
| EUR 1,000 | account | ||||||
| Shareholders’ equity 1 Jan 2011 | 20759 | 1092 | -222 | -4402 | 109750 | 2277 | 129254 |
| Profit arising from the acquisition of minority shares | 9 | 9 | |||||
| Total comprehensive income for the period | -3436 | 2188 | -316 | -1564 | |||
| Share of profit belonging to the minority | -40 | 40 | 0 | ||||
| Change in minority interest | -28 | -28 | |||||
| Shareholders’ equity 31 Mar 2011 | 20759 | 1092 | -222 | -7838 | 111907 | 1973 | 127671 |
| Other reserves include the share premium account, legal reserve and other reserves. | |||||||
| OLVI GROUP | TABLE 4 | ||
| CASH FLOW STATEMENT | |||
| EUR 1,000 | |||
|
1-3/ 2011 |
1-3/ 2010 |
1-12/ 2010 |
|
| Net profit for the period | 2188 | 1485 | 25259 |
| Adjustments to profit for the period | 4913 | 6456 | 22253 |
| Change in net working capital | -7904 | -6139 | -1489 |
| Interest paid | -213 | -273 | -1848 |
| Interest received | 18 | 229 | 514 |
| Taxes paid | -1336 | 93 | -2767 |
| Cash flow from operations (A) | -2333 | 1852 | 41922 |
| Investments in tangible assets | -8141 | -4624 | -17419 |
| Investments in intangible assets | -203 | -183 | -522 |
| Capital gains on disposal of tangible and intangible assets | 617 | 5 | 376 |
| Expenditure on other investments | 0 | -2665 | -257 |
| Cash flow from investments (B) | -7727 | -7467 | -17822 |
| Increase of share capital | 0 | 0 | 25000 |
| Withdrawals of loans | 13016 | 15000 | 25000 |
| Repayments of loans | -1119 | -10801 | -41288 |
| Increase (-) / decrease (+) in current interest-bearing business receivables | 0 | -2 | |
| Dividends paid | -134 | -8321 | |
| Cash flow from financing (C) | 11897 | 4065 | -24611 |
| Increase (+)/decrease (-) in liquid assets (A+B+C) | 1837 | -1550 | -511 |
| Liquid assets 1 January | 7891 | 8402 | 8402 |
| Liquid assets 31 Mar/31 Dec | 9728 | 6852 | 7891 |
| Change in liquid assets | 1837 | -1550 | -511 |
OLVI GROUP TABLE 5
NOTES TO THE FINANCIAL STATEMENTS
The accounting policies used for this interim report are the same as those used for the annual financial statements 2010. The accounting policies are presented in the Annual Report 2010 which was published on 17 March 2011. The information disclosed in the interim report is unaudited.
The information in the interim report is presented in thousands of euros (EUR 1,000). For the sake of presentation, individual figures and totals have been rounded to full thousands, which causes rounding differences in additions.
The Group has adopted the following new or revised standards in 2011:
- IAS 24 (Revised), Related Party Disclosures
- IAS 32 (Amendment), Classification of Rights Issues
- IFRIC 19, Extinguishing Financial Liabilities with Equity Instruments
- IFRS 14 (Amendment), Prepayments of a Minimum Funding Requirement
| 1. SEGMENT INFORMATION | |||
| SALES BY GEOGRAPHICAL SEGMENT (1,000 litres) | |||
| 1-3/ 2011 | 1-3/ 2010 | 1-12/ 2010 | |
| Olvi Group total | 98131 | 86754 | 471913 |
| Finland | 28682 | 28349 | 136832 |
| Estonia | 26631 | 22610 | 124772 |
| Latvia | 13932 | 12269 | 68705 |
| Lithuania | 12810 | 10579 | 59075 |
| Belarus | 21586 | 16627 | 111323 |
| - sales between segments | -5510 | -3680 | -28794 |
| NET SALES BY GEOGRAPHICAL SEGMENT (EUR 1,000) | |||
| 1-3/ 2011 | 1-3/ 2010 | 1-12/ 2010 | |
| Olvi Group total | 55679 | 49497 | 267509 |
| Finland | 23066 | 22678 | 110989 |
| Estonia | 14464 | 12189 | 69935 |
| Latvia | 6074 | 5476 | 31448 |
| Lithuania | 5522 | 4689 | 26379 |
| Belarus | 8661 | 5862 | 40769 |
| - sales between segments | -2108 | -1397 | -12011 |
| OPERATING PROFIT BY GEOGRAPHICAL SEGMENT (EUR 1,000) | |||
| 1-3/ 2011 | 1-3/ 2010 | 1-12/ 2010 | |
| Olvi Group total | 3388 | 2094 | 30485 |
| Finland | 3163 | 2262 | 11702 |
| Estonia | 1583 | 1016 | 11905 |
| Latvia | -398 | -483 | 1714 |
| Lithuania | -185 | -175 | 1423 |
| Belarus | 693 | 79 | 4444 |
| - eliminations | -1468 | -605 | -703 |
|
|
|||
| 2. PERSONNEL ON AVERAGE |
1-3/ 2011 |
1-3/ 2010 |
1-12/ 2010 |
| Finland | 354 | 353 | 378 |
| Estonia | 309 | 306 | 312 |
| Latvia | 209 | 200 | 207 |
| Lithuania | 198 | 183 | 195 |
| Belarus | 893 | 940 | 959 |
| Total | 1963 | 1982 | 2051 |
| 3. RELATED PARTY TRANSACTIONS | ||||
| Employee benefits to management | ||||
| Salaries and other short-term employee benefits to the Board of Directors and Managing Directors | ||||
| EUR 1,000 | ||||
| 1-3/2011 | 1-3/2010 | 1-12/2010 | ||
| Managing Directors | 389 | 261 | 668 | |
| Chairman of the Board | 86 | 55 | 225 | |
| Other members of the Board | 28 | 26 | 109 | |
| Total | 503 | 342 | 1002 | |
| 4. SHARES AND SHARE CAPITAL | |
| 31.3.2011 | |
| Number of A shares | 8513276 |
| Number of K shares | 1866128 |
| Total | 10379404 |
| Total votes carried by A shares | 8513276 |
| Total votes carried by K shares | 37322560 |
| Total number of votes | 45835836 |
In accordance with the Board of Directors’ proposal, the General Meeting of Olvi plc on 7 April 2011 decided to implement a free issue (split) in which one Series A share produces one free Series A share, and one Series K share produces one free Series K share. 8,513,276 Series A shares and 1,866,128 Series K shares were issued. After the issue, the number of Series A shares is 17,026,552 and the number of Series K shares is 3,732,256. The total number of shares is 20,758,808.
All shareholders registered in the list of shareholders on the record date 12 April 2011 were entitled to the new shares issued. The new shares were included in public trading and the book-entry system on 13 April 2011, at which time they carried shareholders’ rights.
The registered share capital on 31 March 2011 totalled 20,759 thousand euro.
Olvi plc’s Series A and Series K shares received a dividend of 1.00 euro per share for 2010 (0.80 euro per share for 2009), totalling 10.4 (8.3) million euro. The dividends were paid on 19 April 2011.
The new shares issued in the free issue decided by the General Meeting of 7 April 2011 did not entitle to dividends paid for 2010.
Nominal value of A and K shares, 31 March 2011, EUR 2.00
Votes per Series A share 1
Votes per Series A share 20
The Series K and Series A shares entitle to equal dividend. The Articles of Association include a redemption clause concerning Series K shares.
Olvi Group’s General Meeting of 7 April 2011 decided to amend Article 3 of the Articles of Association by eliminating the reference to nominal value of shares.
5. SHARE-BASED PAYMENTS
Olvi plc’s Board of Directors decided on 26 January 2006 on a share-based incentive scheme for Olvi Group’s key personnel.
The share-based bonus scheme was a part of the incentive and commitment scheme for the Group’s key personnel and its purpose was to combine the objectives of shareholders and key personnel to improve the company’s value.
The scheme included two vesting periods, the first one extending from 1 January 2006 to 31 December 2007 and the second one from 1 January 2008 to 31 December 2010. The amount of bonuses payable out of the scheme was linked to Olvi Group’s net sales and the operating profit percentage in relation to net sales.
The bonuses were paid partially in Olvi plc’s Series A shares and partially in cash. The proportion paid in cash covered the taxes and other statutory fees arising from the share-based bonuses. The bonuses for the first vesting period were paid in April 2008. The shares carried a ban on transferring them within two years of reception.
The bonuses for the second vesting period were paid in April 2011. 50 percent of the shares received as bonus for the second vesting period may be transferred after one year of reception, and 50 percent after two years of reception. The right to dividends began when the shares were transferred to the key employees’ book-entry accounts.
On the basis of this incentive scheme, a total of 11,858 Olvi plc Series A shares became payable in 2011 for the second vesting period on the basis of achieved targets.
The target group of the scheme included 20 key employees.
No accounting entries associated with the incentive scheme were recognised in January-March 2011 or January-March 2010. The incentive scheme does not have any diluting effect.
Olvi Group has no warrants or options.
6. TREASURY SHARES
Olvi plc held a total of 12,400 of its own Series A shares on 1 January 2011.
The total purchase price of treasury shares was 222 thousand euro. Olvi plc has not acquired more treasury shares or transferred them to others in January-March 2011, which means that the number of Series A shares held by the company is unchanged on 31 March 2011.
Series A shares held by Olvi plc as treasury shares represented 0.12 percent of the share capital and 0.03 percent of the aggregate number of votes. The treasury shares represented 0.15 percent of all Series A shares and associated votes.
On 7 April 2011, the General Meeting of Shareholders of Olvi plc decided to revoke any unused authorisations to acquire treasury shares and authorise the Board of Directors of Olvi plc to decide on the acquisition of the company’s own shares using distributable funds. The authorisation is valid for one year starting from the General Meeting and covers a maximum of 245,000 Series A shares
The Annual General Meeting decided to revoke all existing unused authorisations for the transfer of own shares and authorise the Board of Directors of Olvi plc to decide on the transfer of any A shares acquired on the company’s own account within one year of the Annual General Meeting.
| 7. NUMBER OF SHARES *) |
1-3/ 2011 |
1-3/ 2010 |
1-12/ 2010 |
| - average | 10367004 | 10367004 | 10367004 |
| - at end of period | 10367004 | 10367004 | 10367004 |
| *) Treasury shares deducted. | |||
|
|
|||
| 8. TRADING OF SERIES A SHARES ON THE HELSINKI STOCK EXCHANGE | |||
| 1-3/ 2011 | 1-3/ 2010 | 1-12/ 2010 | |
| Trading volume of Olvi A shares | 419907 | 528905 | 1628258 |
| Total trading volume, EUR 1,000 | 14148 | 14022 | 45735 |
| Traded shares in proportion to | |||
| all Series A shares, % | 4.9 | 6.2 | 19.1 |
| Average share price, EUR | 33.56 | 26.49 | 28.05 |
| Price on the closing date, EUR | 37.00 | 27.27 | 30.70 |
| Highest quote, EUR | 37.45 | 28.70 | 31.45 |
| Lowest quote, EUR | 30.60 | 25.10 | 24.01 |
| 9. FOREIGN AND NOMINEE-REGISTERED HOLDINGS ON 31 MARCH 2011 | ||||||
| Book entries | Votes | Shareholders | ||||
| qty | % | qty | % | qty | % | |
| Finnish total | 8491859 | 81.82 | 4297655 | 93.76 | 8308 | 99.5 |
| Foreign total | 431378 | 4.16 | 1403114 | 3.06 | 37 | 0.4 |
| Nominee-registered (foreign) total | 774 | 0.01 | 774 | 0.00 | 1 | |
| Nominee-registered (Finnish) total | 1455393 | 14.02 | 1455393 | 3.18 | 6 | 0.1 |
| Total | 10379404 | 100.00 | 45835836 | 100.00 | 8352 | 100.00 |
| 10. LARGEST SHAREHOLDERS ON 31 MARCH 2011 | ||||||
| Series K | Series A | Total | % | Votes | % | |
| 1. Olvi Foundation | 1181952 | 433486 | 1615438 | 15.56 | 24072526 | 52.52 |
| 2. Hortling Heikki Wilhelm *) | 450712 | 87472 | 538184 | 5.19 | 9101712 | 19.86 |
| 3. The Heirs of Hortling Kalle Einari | 93552 | 12624 | 106176 | 1.02 | 1883664 | 4.11 |
| 4. Hortling Timo Einari | 82912 | 17304 | 100216 | 0.97 | 1675544 | 3.66 |
| 5. Hortling-Rinne Marit | 51144 | 1050 | 52194 | 0.50 | 1023930 | 2.23 |
| 6. Skandinaviska Enskilda Banken AB, nominee reg. | 829384 | 829384 | 7.99 | 829384 | 1.81 | |
| 7. Nordea Bank Finland plc, nominee register | 535918 | 535918 | 5.16 | 535918 | 1.17 | |
| 8. Ilmarinen Mutual Pension Insurance Company | 457323 | 457323 | 4.41 | 457323 | 1.00 | |
| 9. Oy Autocarrera Ab | 223000 | 223000 | 2.15 | 223000 | 0.49 | |
| 10. Kamprad Ingvar | 212600 | 212600 | 2.05 | 212600 | 0.46 | |
| Others | 5856 | 5703115 | 5708971 | 55.01 | 5820235 | 12.70 |
| Total | 1866128 | 8513276 | 10379404 | 100.00 | 45835836 | 100.00 |
| *) The figures include the shareholder’s own holdings and shares held by parties in his control. | ||||||
| 11. PROPERTY, PLANT AND EQUIPMENT | |||
| EUR 1,000 | |||
|
1-3/ 2011 |
1-3/ 2010 |
1-12/ 2010 |
|
| Increase | 6186 | 6186 | 23044 |
| Decrease | -952 | -952 | -4405 |
| Total | 5234 | 5234 | 18639 |
| 12. CONTINGENT LIABILITIES |
31.3.2011 |
31.3.2010 | 31.12.2010 |
| EUR 1,000 | |||
| Pledges and contingent liabilities | |||
| For own commitments | 5566 | 4184 | 4453 |
| For others | 809 | 810 | 810 |
| Leasing liabilities: | |||
| Due within one year | 725 | 648 | 748 |
| Due within 1 to 5 years | 678 | 634 | 672 |
| Due in more than 5 years | 0 | 0 | 0 |
| Total leasing liabilities | 1403 | 1282 | 1420 |
| Package liabilities | 3000 | 2913 | 3648 |
| Other liabilities | 1980 | 1980 | 1980 |
13. CALCULATION OF FINANCIAL RATIOS
Equity to total assets, % = (Shareholders’ equity held by parent company shareholders + minority interest)/100 * (balance sheet total – advances received)
Earnings per share = Profit belonging to parent company shareholders / Average number of shares during the period, adjusted for share issues
Equity per share = Shareholders’ equity held by parent company shareholders / Number of shares at end of period, adjusted for share issues
Gearing, % = (Interest-bearing debt – cash in hand and at bank) / (Shareholders’ equity held by parent company shareholders + minority interest)
