OLVI PLC INTERIM REPORT 28 APRIL 2017 at 9:00 am
OLVI GROUP’S INTERIM REPORT, 1 JANUARY TO 31 MARCH 2017 (3 MONTHS)
INTERIM REPORT IN BRIEF
Olvi Group’s business development in the first quarter was good. The Group’s sales volume, net sales and operating profit all improved on the previous year.
January to March 2017 in brief:
- Olvi Group’s sales volume increased by 11.6 percent to 130.4 (116.9) million litres
- The Group’s net sales increased by 14.5 percent and amounted to 71.2 (62.2) million euro
- The Group’s operating profit increased by 40.9 percent and amounted to 6.2 (4.4) million euro
- Olvi Group’s earnings per share stood at 0.26 (0.14) euro per share
- The equity ratio improved again, standing at 63.1 (58.7) percent
Olvi retains the outlook for 2017 presented in connection with the disclosure of the financial statements for 2016, and estimates that the Group’s sales volume and net sales for 2017 will increase slightly compared to the previous year. Operating profit for 2017 is estimated to be on a par with the previous year.
CONSOLIDATED KEY RATIOS
| 1-3/ 2017 | 1-3/ 2016 | Change % / pp | 1-12/ 2016 | |
| Sales volume, Mltr | 130.4 | 116.9 | 11.6 | 609.4 |
| Net sales, MEUR | 71.2 | 62.2 | 14.5 | 321.5 |
| Gross margin, MEUR | 11.1 | 8.8 | 25.8 | 59.2 |
| % of net sales | 15.6 | 14.2 | 18.4 | |
| Operating profit, MEUR | 6.2 | 4.4 | 40.9 | 40.4 |
| % of net sales | 8.7 | 7.1 | 12.6 | |
| Net profit for the period | 5.5 | 2.7 | 104.8 | 32.8 |
| % of net sales | 7.8 | 4.4 | 10.2 | |
| Earnings per share, EUR | 0.26 | 0.14 | 85.7 | 1.57 |
| Gross capital expenditure, MEUR | 4.4 | 5.5 | -21.0 | 20.5 |
| Equity per share, EUR | 10.05 | 8.69 | 15.7 | 9.73 |
| Equity to total assets, % | 63.1 | 58.7 | 4.4 | 62.0 |
| Gearing, % | 3.7 | 18.9 | -15.2 | 2.1 |
BUSINESS DEVELOPMENT
LASSE AHO, MANAGING DIRECTOR:
Olvi Group’s business has got off to a good start for 2017. In the first quarter, sales volume and net sales increased by more than 10 percent, and operating profit improved by more than 40 percent. According to the most important financial indicators, business development has been good across all of the Group’s units. The business in Belarus has developed particularly well.
Positive development in Finland continued also in the first quarter. The sales volume increased by 19 percent on the previous year, the market share became even higher and profitability improved. Increased sales volumes enabled efficient operations also during the first months of the year, when sales volumes are generally lower.
The year has started well in the Baltic states seen as a whole. In Estonia, profitability has remained on a very good level, and Latvia and Lithuania have improved their results compared to the previous year. Changes in the business environment add tone to the operations in the Baltic states. A substantial excise tax hike became reality in Lithuania in March. The planned excise tax hike in Estonia as of 1 July 2017 will probably result in a change of focus in volumes and consumption both from Estonia to the Latvian border and, to some degree, also from Estonia back to Finland. The effect of the change on the entire Olvi Group in 2017 is still difficult to estimate because there are several contributing factors, such as the pricing policies of companies doing business in harbours and on board after the excise tax changes. The change is also expected to cause a shift in Estonian sales during the summer season, giving more weight to the second quarter before the realisation of the tax hike.
Business development in Belarus in the first quarter was good. The sales volume increased by 17 percent, net sales increased by 31 percent, and earnings multiplied in comparison with the previous year. Sales have increased particularly through exports to Russia. Besides increased sales, positive earnings development was supported by more cost-efficient operations and appreciation of the local currency.
In addition to the good earnings development in the first quarter, other key figures also developed favourably. The Group’s equity to assets ratio improved and indebtedness declined on the previous year.
Investments have been initiated according to plan. The largest individual investment in 2017 is the energy plant at Iisalmi. Factors leading to the project include cost savings and environmental aspects. Through this investment, we will be able to discontinue the use of heavy fuel oil and replace it with Finnish renewable energy.
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 the time of the year and the characteristics of each season.
SALES DEVELOPMENT
Olvi Group’s sales volume increased by 11.6 percent to 130.4 (116.9) million litres. The sales volume increased particularly in Finland and Belarus. Aggregate sales in the Baltic states increased by some four percent, as the increases in individual companies’ figures were affected by increased sales between the Baltic units.
| Sales volume, million litres | 1-3/2017 | 1-3/2016 | Change % |
| Finland (Olvi plc) | 42.0 | 35.2 | 19.4 |
| Estonia (AS A. Le Coq) | 25.6 | 25.9 | -1.0 |
| Latvia (A/S Cēsu Alus) | 18.2 | 13.1 | 39.8 |
| Lithuania (AB Volfas Engelman) | 18.2 | 16.5 | 10.5 |
| Belarus (OAO Lidskoe Pivo) | 34.9 | 29.8 | 16.9 |
| Eliminations | -8.6 | -3.5 | -142.2 |
| Total | 130.4 | 116.9 | 11.6 |
The Group’s net sales increased by 14.5 percent and totalled 71.2 (62.2) million euro. The positive net sales development reflects increased sales volume, as well as the development of average net sales price.
| Net sales, million euro | 1-3/2017 | 1-3/2016 | Change % |
| Finland (Olvi plc) | 27.1 | 23.8 | 13.8 |
| Estonia (AS A. Le Coq) | 16.6 | 16.1 | 3.1 |
| Latvia (A/S Cēsu Alus) | 8.5 | 6.2 | 36.0 |
| Lithuania (AB Volfas Engelman) | 8.5 | 6.8 | 24.8 |
| Belarus (OAO Lidskoe Pivo) | 14.4 | 11.0 | 31.2 |
| Eliminations | -3.9 | -1.7 | -126.3 |
| Total | 71.2 | 62.2 | 14.5 |
EARNINGS DEVELOPMENT
The Group’s operating profit for January-March increased by 40.9 percent and amounted to 6.2 (4.4) million euro, or 8.7 (7.1) percent of net sales. Operating profit in Finland improved by 0.4 million euro, aggregate operating profit in the Baltic states by 0.6 million euro, and operating profit in Belarus by 1.0 million euro.
| Operating profit, million euro | 1-3/2017 | 1-3/2016 | Change % |
| Finland (Olvi plc) | 1.6 | 1.2 | 32.6 |
| Estonia (AS A. Le Coq) | 2.5 | 2.4 | 4.1 |
| Latvia (A/S Cēsu Alus) | 0.7 | 0.4 | 62.7 |
| Lithuania (AB Volfas Engelman) | 0.3 | 0.1 | 182.9 |
| Belarus (OAO Lidskoe Pivo) | 1.2 | 0.2 | 424.9 |
| Eliminations | 0.0 | 0.1 | -98.8 |
| Total | 6.2 | 4.4 | 40.9 |
The Group’s January-March profit after taxes doubled and amounted to 5.5 (2.7) million euro.
Earnings per share calculated from the profit belonging to parent company shareholders in January-March improved to 0.26 (0.14) euro per share.
BALANCE SHEET, FINANCING AND INVESTMENTS
Olvi Group’s balance sheet total at the end of March 2017 was 332.7 (309.0) million euro. Equity per share at the end of March 2017 stood at 10.05 (8.69) euro. The equity to total assets ratio was 63.1 (58.7) percent. The gearing ratio declined clearly to 3.7 (18.9) percent. The current ratio, which represents the Group’s liquidity, was 1.1 (0.9).
The amount of interest-bearing liabilities at the end of March was 22.4 (40.8) million euro, including current liabilities of 10.7 (18.9) million euro.
Olvi Group’s gross capital expenditure in January-March amounted to 4.4 (5.5) million euro. The parent company Olvi accounted for 1.9 million euro, the Baltic subsidiaries for 1.5 million euro and Lidskoe Pivo in Belarus for 1.0 million euro of the total.
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. The main objective of Olvi Group’s product development is to create new products for profitable and growing beverage segments.
NEW PRODUCTS
Olvi American Cream Ale is the first beer of its type manufactured in Finland. The country’s centennial is celebrated through Olvi Juhlaolut and Olvi Juhlamalja. Crook’s Head Hoppy Bitter is a new long drink with hops. Sherwood Black Cider gets its black colour from malt. The Le Coq Cocktails range was complemented by the Mojito flavour. Garden Grove Spin is a novel member of the Kane’s Soda Pop range. Apple-Blueberry was added to the Olvi Raikas juice drink range. The TEHO Sport product range was extended with BCAA beverages. Health Lab Superb is a new addition to the Health Lab range. It contains chia seeds and has no added sugar.
A. Le Coq of Estonia launched three new beers. A. Le Coq 1807 Pale Lager in a pyramid-shaped bottle is a tribute to the company’s 210th anniversary. A dark version of Alexander was launched with the name Dunkel, and British Red Ale was added to the Brewer’s Collection range. FIZZ Raspberry Smash is a new product in ciders. The Vinitto wine cooler range was launched in Estonia. G:N Long Drink Rumm’u Koola is a new long drink. In soft drinks, Kane’s Garden Grove Spin was launched in glass bottles, and the apple and cola flavoured Hull Õun in plastic bottles. Strawberry-Basil is a new addition to the Aura Fruit range of waters. The Vitamineral Water range saw the introduction of the new product Wellness.
Smoothies were introduced as a completely new product group for A. Le Coq. Aura Smoothies in one-litre Tetra Paks are free of preservatives and contain no added sugar. The BCAA beverages and Crook’s Head long drinks were also launched in Estonia.
Cēsu Alus of Latvia launched the Brūža Cherry Red beer containing 15% cherry juice. Latvia will celebrate the nation’s centennial next year, and as a tribute, Senlatvju Alus was launched. It is an ancient Latvian beer in three different variations, flavoured with cranberry, juniper berry and meadowsweet. The Vinitto range was extended with Mellone. The Kane’s Soda Pop and BCAA beverages were also launched in Latvia.
Volfas Engelman of Lithuania launched two new beers. Volfas Engelman Pasaulio Skonial (“Taste of the World”) Kriek is a Belgian-type cherry beer. Volfas Engelman Bavarian is a German-type pilsner. The kvass Smetoniska Gira became available in a new version containing cherry juice.
Lidskoe Pivo in Belarus launched four new beers. Lidskae Kriek is a light cherry lager. American Black Ale was introduced into the Master’s Collection range, Menskae 1067 is a light lager dedicated to the 950th anniversary of the city of Minsk, and Three Kings beer is sold in large plastic bottles. The Lidskae brand was extended to radlers, also known as shandy. The Le Coq Cocktails range saw the introduction of Bianco. Lidskij Kvass Light is flavoured with birch sap and raisins.
PERSONNEL
Olvi Group’s average number of personnel in January-March was 1,742 (1,818). The Group’s average number of personnel decreased by 76 people or 4.2 percent.
Olvi Group’s average number of personnel by country:
| 1-3/2017 | 1-3/2016 | Change % | |
| Finland | 309 | 290 | 6.6 |
| Estonia | 327 | 321 | 1.9 |
| Latvia | 189 | 202 | -6.4 |
| Lithuania | 229 | 229 | 0.0 |
| Belarus | 688 | 776 | -11.3 |
| Total | 1,742 | 1,818 | -4.2 |
MANAGEMENT AND AUDITORS
During the review period of January-April 2017, Olvi plc’s Board of Directors consisted of Chairman Esa Lager, M.Sc. (Econ), LL.M., and other members Nora Hortling, M.Sc. (Econ), Jaakko Autere, M.Sc. (Econ), Elisa Markula, M.Sc. (Econ), and Heikki Sirviö, Honorary Industrial Counsellor, M.Sc. (Engineering).
The company’s auditor is the authorised public accounting firm PricewaterhouseCoopers Oy, with Sami Posti, Authorised Public Accountant, as auditor in charge.
MANAGEMENT
The Management Group of Olvi plc consists of Lasse Aho, Managing Director (Chairman), Ilkka Auvola, Sales Director, Olli Heikkilä, Marketing Director, Pia Hortling, Product Development and Purchasing Director, Kati Kokkonen, Chief Financial Officer, Lauri Multanen, Production Director, as well as Marjatta Rissanen, Customer Service and Administrative Director.
The Managing Directors of the subsidiaries are:
AS A. Le Coq, Tartu, Estonia - Tarmo Noop
A/S Cēsu Alus, Cēsis, Latvia - Eva Sietiņsone
AB Volfas Engelman, Kaunas, Lithuania - Marius Horbačauskas
OAO Lidskoe Pivo, Lida, Belarus - Audrius Mikšys
The Managing Directors of the subsidiaries report to Lasse Aho, the Managing Director of Olvi plc. The Board of Directors of each subsidiary consists of Lasse Aho (Chairman), Pia Hortling, Kati Kokkonen and Lauri Multanen. The Management Group of each subsidiary consists of the corresponding Managing Director and two to four sector directors.
OTHER EVENTS DURING THE REVIEW PERIOD
Changes in corporate structure
In January–March, Olvi Group acquired 980 shares in its subsidiary OAO Lidskoe Pivo. There were no other changes in Olvi’s holdings in subsidiaries in January–March 2017.
Olvi’s holdings in the subsidiaries are
| 31 Mar 2017 | 31 Dec 2016 | Change | |
| AS A. Le Coq, Estonia | 100.00 | 100.00 | - |
| A/S Cēsu Alus, Latvia | 99.88 | 99.88 | - |
| AB Volfas Engelman, Lithuania | 99.58 | 99.58 | - |
| OAO Lidskoe Pivo, Belarus | 95.87 | 94.57 | 1.30 |
Furthermore, A. Le Coq has a 49.0 percent holding in AS Karme and 20.0 percent holding in Verska Mineraalvee OÜ in Estonia.
SHARES
Olvi’s share capital at the end of March 2017 stood at 20.8 million euro. The total number of shares was 20,758,808, of these 17,026,552 or 82.0 percent being publicly traded Series A shares and 3,732,256 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.
Detailed information on Olvi’s shares and share capital can be found in the tables attached to this interim report, in Table 5, Section 4.
The total trading volume of Olvi A shares on Nasdaq OMX Helsinki Ltd (Helsinki Stock Exchange) in January–March 2017 was 190,476 (327,567) shares, which represented 1.1 (1.9) percent of all Series A shares. The value of trading was 5.1 (7.4) million euro.
The Olvi A share was quoted on Nasdaq OMX Helsinki Ltd at 27.02 (25.10) euro at the end of March 2017. In January–March, the highest quote for the Series A share was 28.95 (25.48) euro and the lowest quote was 25.05 (20.30) euro. The average price in January–March was 26.98 (22.65) euro.
At the end of March 2017, the market capitalisation of Series A shares was 459.8 (427.4) million euro and the market capitalisation of all shares was 560.6 (521.0) million euro.
The number of shareholders at the end of March 2017 was 10,124 (10,045). Foreign holdings plus foreign and Finnish nominee-registered holdings represented 24.3 (23.1) percent of the total number of book entries and 5.5 (5.2) 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.
Treasury shares
There were no changes in the number of treasury shares during the reporting period. At the end of the reporting period, Olvi held 11,124 Series A shares as treasury shares. The total purchase price of treasury shares was 228,162 euro. Treasury shares held by the company itself are ineligible for voting.
Detailed information on treasury shares is provided in Table 5, Section 6 of the tables attached to this interim report.
Flagging notices
During January–March 2017, Olvi has not received any flagging notices in accordance with Chapter 2, Section 10 of the Securities Markets Act.
BUSINESS RISKS AND THEIR MANAGEMENT
Risk management
Risk management is a part of Olvi Group’s everyday management and operations. The objective of risk management is to ensure the realisation of the company’s strategy and secure its financial development and the continuity of business. The task of risk management is to operate proactively and create operating conditions in which business risks are managed comprehensively and systematically in all of the Group companies and all levels of the organisation.
Business risks and uncertainties in the near term
The most substantial factor hampering the predictability of Olvi Group’s business relates to Belarus and its economic and political outlook for the next few years. Furthermore, negative development of the Russian economy may impose challenges on the Belarusian operating environment.
Operations in Belarus involve foreign exchange risks arising from the cash flows of purchases and sales in foreign currency, as well as the investment in the Belarusian subsidiary and the conversion of its income statement and balance sheet items into euro. The Group’s other foreign exchange risks can be considered minor.
Olvi Group’s operations may be affected to changes in consumer behaviour and the operations of our clientele arising from changes in official regulations. The planned excise tax hike in Estonia as of 1 July 2017 will probably result in a change of focus in volumes and consumption both from Estonia to the Latvian border and also from Estonia back to Finland. The effect of the change on the entire Olvi Group in 2017 is still difficult to estimate because there are several contributing factors, such as the pricing policies of companies doing business in harbours and on board after the excise duty changes, as well as a potential amendment to the Finnish Alcohol Act, the details and timing of which remain open for the time being.
Other short-term risks and uncertainties are related to the development of the general economic circumstances, changes in the competitive situation, as well as the impacts these may have on the company’s operations. In addition to the risks described above, there have been no significant changes in Olvi Group’s business risks. A more detailed description of the risks is provided in the Board of Directors’ report and the notes to the financial statements, as well as in the Investors/Corporate Governance section of the company’s Web site.
EVENTS AFTER THE REVIEW PERIOD
Annual General Meeting
Olvi plc’s Annual General Meeting of 21 April 2017 adopted the financial statements and granted discharge from liability to the members of the Board of Directors and Managing Director for the accounting period that ended on 31 December 2016.
In accordance with the Board’s proposal, the General Meeting decided that a dividend of 0.75 (0.70) euro be paid on each A and K share for the accounting period 2016. The dividend according to the resolution accounts for 47.9 (65.1) percent of Olvi Group’s consolidated earnings per share. The dividend will be paid to shareholders registered in Olvi plc’s register of shareholders held by Euroclear Finland Ltd on the record date of the dividend payment, 25 April 2017. The dividends will be paid on 10 May 2017.
The General Meeting decided that the Board of Directors shall have six (6) members. Jaakko Autere, Nora Hortling, Esa Lager, Elisa Markula and Heikki Sirviö were re-elected as Members of the Board, and Pentti Hakkarainen was elected as a new member.
All decisions made at the General Meeting can be found in the bulletin released on 21 April 2017.
Organisation of the Board of Directors
At its organising meeting held on 21 April 2017, the Board elected Pentti Hakkarainen as the Chairman of the Board and Nora Hortling as the Vice Chairperson of the Board.
NEAR-TERM OUTLOOK
Olvi estimates that the Group’s sales volume and net sales for 2017 will increase slightly on the previous year. Operating profit for 2017 is estimated to be on a par with the previous year.
OLVI PLC
Board of Directors
Further information: Lasse Aho, Managing Director, Olvi plc, phone +358 290 00 1050 or +358 400 203 600
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 bulletin, Table 5
DISTRIBUTION:
NASDAQ OMX Helsinki Ltd
Key media
www.olvi.fi
| OLVI GROUP | TABLE 1 | ||
| INCOME STATEMENT | |||
| EUR 1,000 | |||
| 1-3/2017 | 1-3/2016 | 1-12/2016 | |
| Net sales | 71159 | 62163 | 321478 |
| Other operating income | 473 | 458 | 1582 |
| Operating expenses | -60561 | -53820 | -263881 |
| Depreciation and impairment | -4854 | -4390 | -18734 |
| Operating profit | 6217 | 4411 | 40445 |
| Financial income | 1838 | 571 | 1207 |
| Financial expenses | -1708 | -1385 | -1816 |
| Share of profit in associates | 0 | 0 | 37 |
| Earnings before tax | 6347 | 3597 | 39873 |
| Taxes *) | -800 | -888 | -7079 |
| NET PROFIT FOR THE PERIOD | 5547 | 2709 | 32794 |
| Other comprehensive income items: | |||
| Translation differences related to | |||
| foreign subsidiaries | 1061 | -6843 | -74 |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 6608 | -4134 | 32720 |
| Distribution of profit: | |||
| - parent company shareholders | 5490 | 2902 | 32488 |
|
- non-controlling interests |
57 | -193 | 306 |
| Distribution of comprehensive income: | |||
| - parent company shareholders | 6533 | -3776 | 32406 |
|
- non-controlling interests |
75 | -358 | 314 |
| Earnings per share calculated from the profit belonging | |||
| to parent company shareholders, EUR | |||
| - undiluted | 0.26 | 0.14 | 1.57 |
| - diluted | 0.26 | 0.14 | 1.57 |
*) Taxes calculated from the profit for the review period.
| OLVI GROUP | TABLE 2 | ||
| BALANCE SHEET | |||
| EUR 1,000 | 31 Mar 2017 | 31 Mar 2016 | 31 Dec 2016 |
| ASSETS | |||
| Non-current assets | |||
| Tangible assets | 196391 | 193172 | 196239 |
| Goodwill | 16067 | 15435 | 15978 |
| Other intangible assets | 5174 | 4457 | 5295 |
| Shares in associates | 1183 | 1146 | 1183 |
| Financial assets available for sale | 544 | 549 | 543 |
| Loans receivable and other non-current receivables | 280 | 303 | 280 |
| Deferred tax receivables | 281 | 161 | 265 |
| Total non-current assets | 219920 | 215223 | 219783 |
| Current assets | |||
| Inventories | 39969 | 34225 | 32669 |
| Accounts receivable and other receivables | 58129 | 52170 | 55627 |
| Income tax receivable | 0 | 236 | 129 |
| Other non-current assets held for sale | 0 | 580 | 0 |
| Liquid assets | 14648 | 6564 | 20297 |
| Total current assets | 112746 | 93775 | 108722 |
| TOTAL ASSETS | 332666 | 308998 | 328505 |
| SHAREHOLDERS’ EQUITY AND LIABILITIES | |||
| Shareholders’ equity held by parent company shareholders | |||
| Share capital | 20759 | 20759 | 20759 |
| Other reserves | 1092 | 1092 | 1092 |
| Treasury shares | -228 | -228 | -228 |
| Translation differences | -35979 | -43618 | -37022 |
| Retained earnings | 222935 | 202283 | 217234 |
| 208579 | 180288 | 201835 | |
| Share belonging to non-controlling interests | 1329 | 1046 | 1714 |
| Total shareholders’ equity | 209908 | 181334 | 203549 |
| Non-current liabilities | |||
| Financial liabilities | 11689 | 21913 | 12932 |
| Other liabilities | 23 | 0 | 17 |
| Deferred tax liabilities | 7667 | 7456 | 7749 |
| Current liabilities | |||
| Financial liabilities | 10727 | 18910 | 11708 |
| Accounts payable and other liabilities | 91975 | 79324 | 92328 |
| Income tax liability | 677 | 61 | 222 |
| Total liabilities | 122758 | 127664 | 124956 |
| TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES | 332666 | 308998 | 328505 |
| OLVI GROUP TABLE 3 | |||||||
| CHANGES IN SHAREHOLDERS’ EQUITY | |||||||
|
Share capital |
Other reserves |
Treasury shares account |
Translation differences |
Retained earnings |
Share of non-controlling interests |
Total | |
| EUR 1,000 | |||||||
| Shareholders’ equity 1 Jan 2016 | 20759 | 1092 | -108 | -36940 | 200415 | 1447 | 186665 |
| Comprehensive income: | |||||||
| Net profit for the period | 2902 | -193 | 2709 | ||||
| Other comprehensive income items: | |||||||
| Translation differences | -6678 | -165 | -6843 | ||||
| Total comprehensive income for the period | -6678 | 2902 | -358 | -4134 | |||
| Transactions with shareholders: | |||||||
| Payment of dividends | -41 | -41 | |||||
| Acquisition of treasury shares | -120 | -120 | |||||
| Share-based incentives | 14 | 14 | |||||
| Change in accounting policies | -1048 | -2 | -1050 | ||||
| Total transactions with shareholders | -120 | -1034 | -43 | -1197 | |||
| Shareholders’ equity 31 Mar 2016 | 20759 | 1092 | -228 | -43618 | 202283 | 1046 | 181334 |
|
Share capital |
Other reserves |
Treasury shares account |
Translation differences |
Retained earnings |
Share of non-controlling interests |
Total | |
| EUR 1,000 | |||||||
| Shareholders’ equity 1 Jan 2017 | 20759 | 1092 | -228 | -37022 | 217234 | 1714 | 203549 |
| Comprehensive income: | |||||||
| Net profit for the period | 5490 | 57 | 5547 | ||||
| Other comprehensive income items: | |||||||
| Translation differences | 1043 | 18 | 1061 | ||||
| Total comprehensive income for the period | 1043 | 5490 | 75 | 6608 | |||
| Transactions with shareholders: | |||||||
| Payment of dividends | -35 | -35 | |||||
| Share- based incentives | 132 | 132 | |||||
| Total transactions with shareholders | 132 | -35 | 97 | ||||
| Changes in holdings in subsidiaries: | |||||||
| Acquisition of shares from | |||||||
| non-controlling interests | 258 | 258 | |||||
| Change in share held by | |||||||
| non-controlling interests | -179 | -425 | -604 | ||||
| Total changes in holdings in subsidiaries | 79 | -425 | -346 | ||||
| Shareholders’ equity 31 Mar 2017 | 20759 | 1092 | -228 | -35979 | 222935 | 1329 | 209908 |
| Other reserves include the share premium account, legal reserve and other reserves. | |||||||
| OLVI GROUP | TABLE 4 | ||
| CASH FLOW STATEMENT | |||
| EUR 1,000 | |||
| 1-3/2017 | 1-3/2016 | 1-12/2016 | |
| Net profit for the period | 5547 | 2709 | 32794 |
| Adjustments to profit for the period | 4937 | 4773 | 25512 |
| Change in net working capital | -9395 | -2988 | 8828 |
| Interest paid | -199 | -219 | -777 |
| Interest received | 211 | 61 | 428 |
| Dividends received | 0 | 0 | 2 |
| Taxes paid | -284 | -145 | -5553 |
| Cash flow from operations (A) | 817 | 4191 | 61234 |
| Investments in tangible and intangible | |||
| assets | -4429 | -4875 | -18520 |
| Sales gains from tangible and intangible | |||
| assets | 156 | 122 | 744 |
| Expenditure on other investments | 0 | -5 | -37 |
| Cash flow from investments (B) | -4273 | -4758 | -17813 |
| Withdrawals of loans | 78 | 99 | 447 |
| Repayments of loans | -2314 | -5634 | -21835 |
| Acquisition of treasury shares | 0 | -120 | -120 |
| Dividends paid | 0 | 0 | -14529 |
| Increase (-) / decrease (+) in current interest- | |||
| bearing business receivables | 7 | 6 | 8 |
| Increase (-) / decrease (+) in long-term | |||
| loan receivables | 0 | 0 | 23 |
| Cash flow from financing (C) | -2229 | -5649 | -36006 |
| Increase (+)/decrease (-) in liquid assets (A+B+C) | -5685 | -6216 | 7415 |
| Liquid assets 1 January | 20297 | 12786 | 12786 |
| Effect of exchange rate changes | 36 | -6 | 96 |
| Liquid assets 31 Mar/31 Dec | 14648 | 6564 | 20297 |
OLVI GROUP TABLE 5
NOTES TO THE INTERIM REPORT
The accounting policies used for this interim report are the same as those used for the annual financial statements 2016. The accounting policies are presented in the Annual Report 2016, which was published on 29 March 2017.
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 information disclosed in the interim report is unaudited.
|
1. SEGMENT INFORMATION |
|||
| SALES VOLUME BY GEOGRAPHICAL SEGMENT (1,000 litres) | |||
| 1-3/2017 | 1-3/2016 | 1-12/2016 | |
| Olvi Group total | 130409 | 116883 | 609375 |
| Finland | 42014 | 35182 | 178044 |
| Estonia | 25619 | 25865 | 121467 |
| Latvia | 18249 | 13051 | 67246 |
| Lithuania | 18207 | 16479 | 81800 |
| Belarus | 34901 | 29849 | 178298 |
| - sales between segments | -8581 | -3543 | -17480 |
| NET SALES BY GEOGRAPHICAL SEGMENT (EUR 1,000) | |||
| 1-3/2017 | 1-3/2016 | 1-12/2016 | |
| Olvi Group total | 71159 | 62163 | 321478 |
| Finland | 27053 | 23772 | 118876 |
| Estonia | 16579 | 16077 | 76926 |
| Latvia | 8461 | 6221 | 31839 |
| Lithuania | 8495 | 6804 | 35342 |
| Belarus | 14426 | 10992 | 66776 |
| - sales between segments | -3855 | -1703 | -8281 |
| OPERATING PROFIT BY GEOGRAPHICAL SEGMENT (EUR 1,000) | |||
| 1-3/2017 | 1-3/2016 | 1-12/2016 | |
| Olvi Group total | 6217 | 4411 | 40445 |
| Finland | 1576 | 1188 | 10743 |
| Estonia | 2530 | 2430 | 15926 |
| Latvia | 654 | 402 | 3377 |
| Lithuania | 271 | 96 | 2702 |
| Belarus | 1185 | 226 | 7471 |
| - eliminations | 1 | 69 | 226 |
| 2. PERSONNEL ON AVERAGE | 1-3/2017 | 1-3/2016 | 1-12/2016 |
| Finland | 309 | 290 | 329 |
| Estonia | 327 | 321 | 339 |
| Latvia | 189 | 202 | 207 |
| Lithuania | 229 | 229 | 235 |
| Belarus | 688 | 776 | 749 |
| Total | 1,742 | 1,818 | 1,859 |
|
3. RELATED PARTY TRANSACTIONS |
|||
| Employee benefits to management | |||
| Salaries and other short-term employee benefits to the Board of Directors and Managing Director | |||
| EUR 1,000 | |||
| 1-3/2017 | 1-3/2016 | 1-12/2016 | |
| Managing Director | 392 | 104 | 393 |
| Chairman of the Board | 16 | 17 | 68 |
| Other members of the Board | 27 | 41 | 137 |
| Total | 435 | 162 | 598 |
| 4. SHARES AND SHARE CAPITAL | ||
| 31 Mar 2017 | % | |
| Number of A shares | 17026552 | 82.0 |
| Number of K shares | 3732256 | 18.0 |
| Total | 20758808 | 100.0 |
| Total votes carried by A shares | 17026552 | 18.6 |
| Total votes carried by K shares | 74645120 | 81.4 |
| Total number of votes | 91671672 | 100.0 |
| Votes per Series A share | 1 | |
| Votes per Series K share | 20 |
The registered share capital on 31 March 2017 totalled 20,759 thousand euro.
Olvi plc’s shares received a dividend of 0.70 euro per share for 2015 (0.65 euro per share for 2014), totalling 14.5 (13.5) million euro. The dividends were paid on 28 April 2016. The Series K and Series A shares entitle to equal dividend. The Articles of Association include a redemption clause concerning Series K shares.
5. SHARE-BASED PAYMENTS
Olvi Group has share-based incentive plans for key employees. The aim of the share-based incentive plans is to combine the objectives of the shareholders and the key employees in order to increase the value of the company, to make the key employees committed to the company, and to offer them a competitive reward plan based on earning the company’s shares.
The Group has an active share-based incentive plan with one three-year performance period, beginning on 1 July 2014 and ending on 30 June 2017. In accordance with the terms and conditions of the plan, rewards will be paid in Olvi plc Series A shares and partially in cash.
The cash proportion is intended to cover taxes and tax-related costs arising from the rewards to the key employees. The prerequisite for receiving a reward for this performance period is that a key employee purchases the company’s Series A shares up to the maximum number determined by the Board of Directors. Furthermore, entitlement to a reward is tied to the continuance of employment or service upon reward payment. From January to March 2017, accounting entries associated with the performance period from 1 July 2014 to 30 June 2017 were recognised for a total of 20.5 thousand euro.
In addition, the Group has an active share-based incentive plan for key personnel started in 2016. The performance period for the share-based incentive plan is two years. The prerequisite for receiving reward is that a key employee purchases the company’s Series A shares up to the maximum number determined by the Board of Directors. Furthermore, entitlement to a reward is tied to the continuance of employment or service upon reward payment. Rewards will be paid partly in the company’s Series A shares and partly in cash in 2018. The cash proportion is intended to cover taxes and tax-related costs arising from the rewards to the key employees. The Board of Directors may decide that the share proportion be paid fully or partially in cash. The plan is directed to approximately 50 people. The rewards to be paid on the basis of the plan are in total an approximate maximum of 36,280 series Series A shares in Olvi plc and a cash payment needed for taxes and tax-related costs arising from the shares. The costs of the plan will be recognised over the performance period from 1 July 2016 to 30 June 2018. From January to March 2017, costs associated with the plan established on 24 February 2016 were recognised for a total of 179.9 thousand euro.
Olvi Group does not have any other share-based plans or option plans.
6. TREASURY SHARES
Olvi plc holds a total of 11,124 of its own Series A shares. The total purchase price of treasury shares was 228,162 euro. Olvi has not acquired any treasury shares during the review period. Treasury shares held by the company itself are ineligible for voting.
Series A shares held by Olvi plc as treasury shares represented 0.054 percent of the share capital and 0.012 percent of the aggregate number of votes. The treasury shares represented 0.065 percent of all Series A shares and associated votes.
On 21 April 2017, 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 a maximum of 500,000 Series A shares using distributable funds.
The Annual General Meeting also decided to revoke all existing unused authorisations for the transfer of own shares and authorise the Board of Directors to decide on the issue of a maximum of 1,000,000 new Series A shares and the transfer of a maximum of 500,000 Series A shares held as treasury shares.
| 7. NUMBER OF SHARES *) | 1-3/2017 | 1-3/2016 | 1-12/2016 |
| - average | 20747684 | 20747916 | 20747742 |
| - at end of period | 20747684 | 20747684 | 20747684 |
| *) Treasury shares deducted. | |||
| 8. TRADING OF SERIES A SHARES ON THE HELSINKI STOCK EXCHANGE | |||
| 1-3/2017 | 1-3/2016 | 1-12/2016 | |
| Trading volume of Olvi A shares | 190476 | 327567 | 881172 |
| Total trading volume, EUR 1,000 | 5134 | 7418 | 22162 |
| Traded shares in proportion to | |||
| all Series A shares, % | 1.1 | 1.9 | 5.2 |
| Average share price, EUR | 26.98 | 22.65 | 25.17 |
| Price on the closing date, EUR | 27.02 | 25.10 | 28.00 |
| Highest quote, EUR | 28.95 | 25.48 | 28.51 |
| Lowest quote, EUR | 25.05 | 20.30 | 20.30 |
|
9. FOREIGN AND NOMINEE-REGISTERED HOLDINGS ON 31 MARCH 2017 |
||||||
| Book entries | Votes | Shareholders | ||||
| qty | % | qty | % | qty | % | |
| Finnish total | 15716280 | 75.71 | 86629144 | 94.50 | 10063 | 99.40 |
| Foreign total | 369734 | 1.78 | 369734 | 0.40 | 52 | 0.51 |
| Nominee-registered (foreign) total | 102559 | 0.49 | 102559 | 0.11 | 3 | 0.03 |
| Nominee-registered (Finnish) total | 4570235 | 22.02 | 4570235 | 4.99 | 6 | 0.06 |
| Total | 20758808 | 100.00 | 91671672 | 100.00 | 10124 | 100.00 |
|
10. LARGEST SHAREHOLDERS ON 31 MARCH 2017 |
||||||
| Series K | Series A | Total | % | Votes | % | |
| 1. Olvi Foundation | 2363904 | 890613 | 3254517 | 15.68 | 48168693 | 52.54 |
| 2. The Estate of Hortling Heikki *) | 903488 | 103280 | 1006768 | 4.85 | 18173040 | 19.82 |
|
3. The Estate of Hortling Kalle Einari |
187104 | 25248 | 212352 | 1.02 | 3767328 | 4.11 |
| 4. Hortling Timo Einari | 165824 | 36308 | 202132 | 0.97 | 3352788 | 3.66 |
| 5. OP Corporate Bank plc, nominee register | 2153672 | 2153672 | 10.37 | 2153672 | 2.35 | |
| 6. Hortling-Rinne Laila Marit | 102288 | 3380 | 105668 | 0.51 | 2049140 | 2.24 |
| 7. Nordea Bank AB (publ), Finnish Branch, nominee reg. | 1808527 | 1808527 | 8.71 | 1808527 | 1.97 | |
|
8. Mutual Pension Insurance Company Ilmarinen |
849218 | 849218 | 4.09 | 849218 | 0.93 | |
| 9. Varma Mutual Pension Insurance Company | 828075 | 828075 | 3.99 | 828075 | 0.90 | |
| 10. Skandinaviska Enskilda Banken AB (publ) Helsinki branch, nominee register | 566873 | 566873 | 2.73 | 566873 | 0.62 | |
| Others | 9648 | 9761358 | 9771006 | 47.08 | 9954318 | 10.86 |
| Total | 3732256 | 17026552 | 20758808 | 100.00 | 91671672 | 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 | |||
| 1-3/2017 | 1-3/2016 | 1-12/2016 | |
| Opening balance | 196239 | 185240 | 198258 |
| Additions | 4234 | 18472 | 19750 |
| Deductions and transfers | -328 | -695 | -3769 |
| Depreciation | -4578 | -4161 | -17452 |
| Exchange rate differences | 824 | -5684 | -548 |
| Total | 196391 | 193172 | 196239 |
| 12. CONTINGENT LIABILITIES | |||
| EUR 1,000 | |||
| 31 Mar 2017 | 31 Mar 2016 | 31 Dec 2016 | |
| Pledges and contingent liabilities | |||
| For own commitments | 2659 | 2352 | 1886 |
| Leasing and rental liabilities: | |||
| Due within one year | 1400 | 1344 | 1540 |
| Due within 1 to 5 years | 1537 | 1227 | 1396 |
| Due in more than 5 years | 2 | 3 | 2 |
| Leasing and rental liabilities total | 2939 | 2574 | 2938 |
| Other liabilities | 2000 | 2000 | 2000 |
13. CALCULATION OF FINANCIAL RATIOS
In the summary of financial indicators (page 1), the Group presents figures directly derived from the consolidated income statement: net sales, operating profit and profit for the period, the corresponding percentages in proportion to net sales, as well as the earnings per share ratio. (Earnings per share = Profit belonging to parent company shareholders / Average number of shares during the period, adjusted for share issues).
In addition to the consolidated financial statements prepared in accordance with IFRS, Olvi Group presents Alternative Performance Measures that describe the financial development of its business and provide a commensurate overall view of the company’s profitability, financial position and liquidity.
The Group has applied the ESMA (European Securities and Markets Authority) new guidelines on Alternative Performance Measures that entered into force on 3 July 2016 and defined APMs as described below.
As an APM supporting net sales, the Group presents sales volumes in millions of litres. Sales volume is an important indicator of the extent of operations generally used in the industry.
The definition of gross margin is operating profit plus depreciation and impairment.
Gross capital expenditure consists of total expenditure on fixed assets, including the effect of any corporate acquisitions.
Equity per share = Shareholders’ equity held by parent company shareholders / Number of shares at end of period, adjusted for share issues
Equity to total assets, % = 100 * (Shareholders’ equity held by parent company shareholders + non-controlling interests) / (Balance sheet total)
Gearing, % = 100 * (Interest-bearing debt – cash in hand and at bank) / (Shareholders’ equity held by parent company shareholders + non-controlling interests)
