Iisalmi, 2016-10-27 08:01 CEST (GLOBE NEWSWIRE) -- OLVI PLC INTERIM REPORT 27 OCTOBER 2016 at 9:00 am
OLVI GROUP’S INTERIM REPORT, 1 JANUARY TO 30 SEPTEMBER 2016 (9 MONTHS)
INTERIM REPORT IN BRIEF
Olvi’s good performance continued in the third quarter. The Group’s net sales, operating profit and earnings improved, and the balance sheet became stronger in comparison to the previous year.
January to September 2016 in brief:
- Olvi Group’s sales volume was 475.0 (452.1) million litres
- The Group’s net sales amounted to 249.7 (241.7) million euro
- The Group’s operating profit amounted to 35.1 (31.8) million euro
- Olvi Group’s earnings per share stood at 1.34 (0.83) euro per share
- The equity to total assets ratio was 60.4 (56.1) percent.
July to September 2016 in brief:
- Olvi Group’s sales volume was 168.6 (168.0) million litres
- The Group’s net sales amounted to 89.7 (88.9) million euro
- The Group’s operating profit amounted to 15.2 (14.1) million euro
- Olvi Group’s earnings per share stood at 0.64 (0.37) euro per share
Olvi retains the earnings outlook for 2016 and estimates that the Group’s sales volume and net sales for 2016 will increase slightly compared to the previous year. Operating profit for 2016 is estimated to be on a par with the previous year or increase slightly.
CONSOLIDATED KEY RATIOS
| 7-9/ 2016 | 7-9/ 2015 | Change % / pp | 1-9/ 2016 | 1-9/ 2015 | Change % / pp | 1-12/ 2015 | |
| Sales volume, Mltr | 168.6 | 168.0 | 0.3 | 475.0 | 452.1 | 5.0 | 579.9 |
| Net sales, MEUR | 89.7 | 88.9 | 0.9 | 249.7 | 241.7 | 3.3 | 310.5 |
| Gross margin, MEUR | 20.0 | 18.3 | 9.1 | 49.0 | 44.0 | 11.2 | 54.5 |
| % of net sales | 22.3 | 20.6 | 19.6 | 18.2 | 17.6 | ||
| Operating profit, MEUR | 15.2 | 14.1 | 7.5 | 35.1 | 31.8 | 10.3 | 38.2 |
| % of net sales | 16.9 | 15.9 | 14.1 | 13.2 | 12.3 | ||
| Net profit for the period | 13.4 | 7.6 | 76.3 | 27.9 | 17.2 | 62.6 | 22.2 |
| % of net sales | 15.0 | 8.6 | 11.2 | 7.1 | 7.2 | ||
| Earnings per share, EUR | 0.64 | 0.37 | 73.0 | 1.34 | 0.83 | 61.4 | 1.08 |
| Gross capital expenditure, MEUR | 4.7 | 5.1 | -7.0 | 15.7 | 21.1 | -25.9 | 26.0 |
| Equity per share, EUR | 9.32 | 8.73 | 6.8 | 8.92 | |||
| Equity to total assets, % | 60.4 | 56.1 | 4.3 | 59.4 | |||
| Gearing, % | 9.9 | 31.7 | -21.8 | 18.3 |
BUSINESS DEVELOPMENT
LASSE AHO, MANAGING DIRECTOR:
Olvi Group’s business development in the third quarter was good. Consolidated operating profit for the review period increased by 7.5 percent on the previous year and 10 percent in cumulative figures. Performance can be considered good, particularly when taking into account the unstable weather in the high-season months, which caused a market downturn in the third quarter. During this year’s season, the consumption peak was in early summer.
Our business has developed favourably in Finland in particular; the sales volume has increased in 2016, and our market share has become stronger. Commercial actions and cost-effectiveness have made it possible for the operating profit to show positive development.
All in all, development in the Baltic states has met our expectations. Accumulated operating profit outperforms that of the January-September period last year, and market shares have remained strong in our main product groups. The sales volume in the Baltic states in July-September declined slightly on the previous year, particularly due to poor weather conditions in midsummer. This affected performance in the local markets as well as the Travel Trade market. Performance in Estonia has remained on a very strong level, and operating profit in Latvia has increased by 15 percent cumulative. Operating profit in Lithuania has remained almost on the previous year’s level. The extension to the warehouse in Lithuania was completed on schedule and is expected to provide cost savings already during the rest of this year.
Third-quarter earnings in Belarus declined slightly on the previous year. The devaluation of the local currency in 2015 still had a negative impact on earnings for the period under review. Operations were also hampered by challenges in the Belarusian economy and weakened consumer solvency. However, we have been able to compensate the effect of the weakened home market by increasing exports from Belarus to Russia.
The Group’s other financial indicators have developed very well. This year, profit for the period has improved by 63 percent on the previous year, cash flow is clearly better and the balance sheet has become stronger. This makes it possible to develop the company’s operations persistently.
Olvi Group has made active efforts towards developing its operations, among other things by utilising the Lean management philosophy in business control and development. Olvi’s determined work was recognised through the second prize in the annual national competition ”Lean work of the year 2016” arranged by the Lean Association of Finland. In addition to the recognition, our effort is shown as positive development in profitability, which enables us to produce increasing sales volumes smoothly while making further cuts on our environmental footprint.
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
Sales volume development
Olvi Group’s sales volume increased in January-September by 5.0 percent to 475.0 (452.1) million litres. The sales volume from July to September was 168.6 (168.0) million litres.
The sales volume increased heavily in Finland both in January-September and in the third quarter. Sales volume in the other units remained approximately on par with the previous year.
Sales volume development by unit:
|
Sales volume, million litres |
7-9/ 2016 | 7-9/ 2015 | Change % | 1-9/ 2016 | 1-9/ 2015 | Change % |
| Finland (Olvi plc) | 47.5 | 41.0 | 15.7 | 132.5 | 110.9 | 19.5 |
| Estonia (AS A. Le Coq) | 31.9 | 33.7 | -5.3 | 97.0 | 96.7 | 0.3 |
| Latvia (A/S Cēsu Alus) | 19.2 | 19.3 | -0.4 | 53.6 | 54.6 | -1.7 |
| Lithuania (AB Volfas Engelman) | 23.9 | 25.5 | -6.1 | 64.9 | 66.8 | -2.8 |
| Belarus (OAO Lidskoe Pivo) | 51.3 | 54.0 | -5.0 | 142.2 | 140.5 | 1.2 |
| Eliminations | -5.2 | -5.4 | -15.3 | -17.3 | ||
| Total | 168.6 | 168.0 | 0.3 | 475.0 | 452.1 | 5.0 |
Net sales development
The Group’s net sales in January-September amounted to 249.7 (241.7) million euro and in July-September to 89.7 (88.9) million euro. Net sales increased particularly in Finland, reflecting the strong increase in sales volume. Net sales for January-September also increased in Estonia and Latvia.
Net sales development by unit:
| Net sales, million euro | 7-9/ 2016 | 7-9/ 2015 | Change % | 1-9/ 2016 | 1-9/ 2015 | Change % |
| Finland (Olvi plc) | 32.4 | 28.4 | 14.1 | 89.6 | 76.9 | 16.5 |
| Estonia (AS A. Le Coq) | 20.4 | 20.7 | -1.5 | 61.7 | 59.5 | 3.7 |
| Latvia (A/S Cēsu Alus) | 9.3 | 9.1 | 2.2 | 25.4 | 24.8 | 2.7 |
| Lithuania (AB Volfas Engelman) | 10.3 | 11.1 | -7.7 | 27.4 | 28.5 | -3.7 |
| Belarus (OAO Lidskoe Pivo) | 19.7 | 22.1 | -10.6 | 52.6 | 59.5 | -11.6 |
| Eliminations | -2.4 | -2.5 | -7.1 | -7.5 | ||
| Total | 89.7 | 88.9 | 0.9 | 249.7 | 241.7 | 3.3 |
EARNINGS DEVELOPMENT
The Group’s operating profit in January-September stood at 35.1 (31.8) million euro, or 14.1 (13.2) percent of net sales. Operating profit in January-September increased particularly in Finland, Estonia and Latvia. Operating profit in July-September increased by 7.5 percent and stood at 15.2 (14.1) million euro, which was 16.9 (15.9) percent of net sales.
Operating profit development by unit:
| Operating profit, million euro | 7-9/ 2016 | 7-9/ 2015 | Change % | 1-9/ 2016 | 1-9/ 2015 | Change % |
| Finland (Olvi plc) | 4.5 | 3.1 | 43.8 | 9.6 | 6.0 | 60.7 |
| Estonia (AS A. Le Coq) | 5.0 | 5.1 | -3.4 | 13.5 | 12.8 | 5.8 |
| Latvia (A/S Cēsu Alus) | 1.2 | 1.3 | -2.5 | 2.9 | 2.5 | 14.9 |
| Lithuania (AB Volfas Engelman) | 1.4 | 1.5 | -8.8 | 2.2 | 2.3 | -3.4 |
| Belarus (OAO Lidskoe Pivo) | 3.1 | 3.3 | -6.4 | 6.8 | 8.4 | -19.7 |
| Eliminations | 0.1 | -0.2 | 0.2 | -0.1 | ||
| Total | 15.2 | 14.1 | 7.5 | 35.1 | 31.8 | 10.3 |
The Group’s profit after taxes in January-September increased by 62.6 percent on the previous year, amounting to 27.9 (17.2) million euro. Profit after taxes from July to September stood at 13.4 (7.6) million euro.
Earnings per share calculated from the profit belonging to parent company shareholders in January-September stood at 1.34 (0.83) euro, and the July-September figure was 0.64 (0.37) euro.
In addition to improved operating profit, the increase in profit for the period and earnings per share was fuelled by lower net financial expenses compared to the previous year. Profit for the comparison year included unrealised exchange rate differences related to the Belarusian subsidiary, which were recognised in financial items.
BALANCE SHEET, FINANCING AND INVESTMENTS
Olvi Group’s balance sheet total at the end of September 2016 was 322.6 (326.0) million euro. Equity per share at the end of September 2016 stood at 9.32 (8.73) euro. The equity ratio became even stronger at 60.4 (56.1) percent and the gearing ratio was 9.9 (31.7) percent.
The amount of interest-bearing liabilities declined heavily and stood at 29.8 (65.1) million euro at the end of September, including current liabilities of 13.7 (35.5) million euro.
Olvi Group’s gross capital expenditure in January-September amounted to 15.7 (21.1) million euro. The parent company Olvi accounted for 4.4 million euro, the Baltic subsidiaries for 8.6 million euro and Lidskoe Pivo in Belarus for 2.7 million euro of the total. The largest individual investment in 2016 has been the extension to the warehouse in Lithuania.
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
Finland
The most important product launch in the autumn was the new vitamin water Health Lab with three products: Power, Balance and Vitality. The Kane’s Soda Pop soft drink range was expanded with the new flavour ginger-lemon grass. At the same time, half-litre plastic bottles in a designated Kane’s shape were launched for the product range. The range of Olvi specialty beers was expanded with Olvi Black IPA (4.7%).
Subsidiaries
A. Le Coq in Estonia launched the new specialty beer Kihnu Jõnn, which is a pale smoke lager. The cider range saw the introduction of Linda Pihl, which has a semi-sweet rowan berry flavour.
Cēsu Alus in Latvia launched a new brand in the long drinks category, Cēsu BAR Cocktails with three flavour variants. It has an alcohol content of 15% and is packaged in 0.275-litre glass bottles with screw-off caps.
Volfas Engelman in Lithuania launched five different beers, three of them under the Volfas Engelman brand, one under the Horn Disel brand and one under the 1410 brand. The beers are Volfas Engelman Delikatus, Volfas Engelman Tradiciskas, Volfas Engelman Tamsusis Azuolas, Horn Disel Tradicinis and 1410 Tamsusis Elis.
The Belarusian subsidiary Lidskoe Pivo did not launch any new products in the third quarter.
Detailed information on new products can be found on each company’s Web site.
PERSONNEL
Olvi Group’s average number of personnel in January-September was 1,895 (1,970). The average number in July-September was 1,905 (1,978).
The Group’s average number of personnel decreased in January-September by 73 people in Belarus and 15 people in Finland. The decrease reflects the effect of operational efficiency measures.
Olvi Group’s average number of personnel by country:
| 7-9/ 2016 | 7-9/ 2015 | Change % | 1-9/ 2016 | 1-9/ 2015 | Change % | |
| Finland | 353 | 338 | 4.4 | 333 | 348 | -4.3 |
| Estonia | 350 | 348 | 0.6 | 346 | 343 | 0.9 |
| Latvia | 218 | 203 | 7.4 | 216 | 206 | 4.9 |
| Lithuania | 237 | 238 | -0.4 | 235 | 235 | 0.0 |
| Belarus | 747 | 851 | -12.2 | 765 | 838 | -8.7 |
| Total | 1905 | 1978 | -3.7 | 1895 | 1970 | -3.8 |
MANAGEMENT AND AUDITORS
The company’s Board of Directors consists of Chairman Esa Lager, M.Sc. (Econ), LL.M., Vice Chairperson Nora Hortling, M.Sc. (Econ), as well as members 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 parent company is represented in the subsidiaries’ Boards of Directors by 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.
GROUP STRUCTURE
During 2016, Olvi Group has acquired 31 shares in the subsidiary A/S Cēsu Alus.
Olvi’s holdings in the subsidiaries are:
| 30 September 2016 |
31 December 2015 |
Change | |
| AS A. Le Coq, Estonia | 100.00 | 100.00 | - |
| A/S Cēsu Alus, Latvia | 99.88 | 99.87 | 0.01 |
| AB Volfas Engelman, Lithuania | 99.58 | 99.58 | - |
| OAO Lidskoe Pivo, Belarus | 94.57 | 94.57 | - |
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 September 2016 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-September 2016 was 671,434 (1,810,277) shares, which represented 3.9 (10.6) percent of all Series A shares. The value of trading was 16.4 (43.4) million euro.
The Olvi A share was quoted on Nasdaq OMX Helsinki Ltd at 26.45 (22.09) euro at the end of September 2016. In January-September, the highest quote for the Series A share was 27.80 (27.20) euro and the lowest quote was 20.30 (20.51) euro. The average price in January-September was 24.42 (23.97) euro.
At the end of September 2016, the market capitalisation of Series A shares was 450.1 (376.1) million euro and the market capitalisation of all shares was 548.8 (458.6) million euro.
The number of shareholders at the end of September 2016 was 9,983 (10,034). Foreign holdings plus foreign and Finnish nominee-registered holdings represented 22.4 (22.4) percent of the total number of book entries and 5.1 (5.1) 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
Olvi acquired 5,500 of its own Series A shares in January-June 2016. The purchase price was 120,139 euro. There were no changes in the number of treasury shares held by Olvi in July-September 2016. 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
On 11 April 2016, Olvi plc received a flagging notice concerning its shares in accordance with Chapter 9, Section 5 of the Securities Markets Act from the Estate of Heikki Hortling.
According to the notice, shares held by Heikki Wilhelm Hortling have been transferred to the Estate of Heikki Hortling. Shares transferred to the Estate: 99,760 Series A shares representing 0.48 percent of all shares and 0.11 percent of all votes; and 903,488 Series K shares representing 4.35 percent of all shares and 19.29 percent of all votes. Holding, Series A and Series K shares combined: 4.83 percent of all shares and 19.40 percent of all votes.
During January-September 2016, 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.
Other short-term risks and uncertainties are related to continuing negative 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.
ANNUAL GENERAL MEETING
All decisions made at the General Meeting can be found in the bulletin released on 14 April 2016.
NEAR-TERM OUTLOOK
Olvi estimates that the Group’s sales volume and net sales for 2016 will increase slightly on the previous year. Operating profit for 2016 is estimated to be on a par with the previous year or increase slightly.
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
| OLVI GROUP | TABLE 1 | |||||
| INCOME STATEMENT | ||||||
| EUR 1,000 | ||||||
|
7-9/ 2016 |
7-9/ 2015 |
1-9/ 2016 |
1-9/ 2015 |
1-12/ 2015 |
||
| Net sales | 89681 | 88922 | 249696 | 241664 | 310494 | |
| Other operating income | 367 | 229 | 1385 | 1309 | 1743 | |
| Operating expenses | -70086 | -70855 | -202127 | -198966 | -257732 | |
| Depreciation and impairment | -4791 | -4183 | -13847 | -12178 | -16348 | |
| Operating profit | 15171 | 14113 | 35107 | 31829 | 38157 | |
| Financial income | 140 | -375 | 1044 | 299 | 281 | |
| Financial expenses | -152 | -5927 | -1916 | -11256 | -11641 | |
| Share of profit in associates | 0 | 0 | 0 | 0 | 21 | |
| Earnings before tax | 15159 | 7811 | 34235 | 20872 | 26818 | |
| Taxes *) | -1730 | -196 | -6303 | -3697 | -4598 | |
| NET PROFIT FOR THE PERIOD | 13429 | 7615 | 27932 | 17175 | 22220 | |
| Other comprehensive income items: | ||||||
| Translation differences related to | ||||||
| foreign subsidiaries | 1694 | -5881 | -3697 | -13441 | -14620 | |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 15123 | 1734 | 24235 | 3734 | 7600 | |
| Distribution of profit: | ||||||
| - parent company shareholders | 13256 | 7735 | 27734 | 17265 | 22334 | |
| - non-controlling interests | 173 | -120 | 198 | -90 | -114 | |
| Distribution of comprehensive income: | ||||||
| - parent company shareholders | 14906 | 2122 | 24122 | 4442 | 8358 | |
| - non-controlling interests | 217 | -388 | 113 | -708 | -758 | |
| Earnings per share calculated from the profit belonging | ||||||
| to parent company shareholders, EUR | ||||||
| - undiluted | 0.64 | 0.37 | 1.34 | 0.83 | 1.08 | |
| - diluted | 0.64 | 0.37 | 1.34 | 0.83 | 1.08 | |
*) Taxes calculated from the profit for the review period.
| OLVI GROUP | TABLE 2 | ||
| BALANCE SHEET | |||
| EUR 1,000 | |||
| 30 September 2016 |
30 September 2015 |
31 December 2015 | |
| ASSETS | |||
| Non-current assets | |||
| Tangible assets | 194758 | 185426 | 185240 |
| Goodwill | 15693 | 16122 | 16017 |
| Other intangible assets | 5240 | 4234 | 4183 |
| Shares in associates | 1146 | 1125 | 1146 |
| Financial assets available for sale | 543 | 544 | 543 |
| Loans receivable and other non-current receivables | 311 | 333 | 310 |
| Deferred tax receivables | 261 | 168 | 147 |
| Total non-current assets | 217952 | 207952 | 207586 |
| Current assets | |||
| Inventories | 35037 | 43359 | 42236 |
| Accounts receivable and other receivables | 59066 | 66418 | 51232 |
| Income tax receivable | 0 | 787 | 236 |
| Other non-current assets held for sale | 2 | 421 | 421 |
| Liquid assets | 10528 | 7095 | 12786 |
| Total current assets | 104633 | 118080 | 106911 |
| TOTAL ASSETS | 322585 | 326032 | 314497 |
| SHAREHOLDERS’ EQUITY AND LIABILITIES | |||
| Shareholders’ equity held by parent company shareholders | |||
| Share capital | 20759 | 20759 | 20759 |
| Other reserves | 1092 | 1092 | 1092 |
| Treasury shares | -228 | -8 | -108 |
| Translation differences | -40552 | -35787 | -36940 |
| Retained earnings | 212348 | 195221 | 200415 |
| 193419 | 181277 | 185218 | |
| Share belonging to non-controlling interests | 1513 | 1496 | 1447 |
| Total shareholders’ equity | 194932 | 182773 | 186665 |
| Non-current liabilities | |||
| Financial liabilities | 16114 | 29640 | 24179 |
| Other liabilities | 11 | 0 | 4 |
| Deferred tax liabilities | 7852 | 6045 | 6777 |
| Current liabilities | |||
| Financial liabilities | 13702 | 35474 | 22683 |
| Accounts payable and other liabilities | 87963 | 71176 | 74153 |
| Income tax liability | 2011 | 924 | 36 |
| Total liabilities | 127653 | 143259 | 127832 |
| TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES | 322585 | 326032 | 314497 |
| OLVI GROUP | TABLE 3 | ||||||||||
| CHANGES IN SHAREHOLDERS’ EQUITY | |||||||||||
|
EUR 1,000 |
Share capital | Other reserves | Treasury shares reserve | Translation differences | Retained earnings | Share of non-controlling interests | Total | ||||
| Shareholders’ equity 1 Jan 2015 | 20759 | 1092 | -8 | -22964 | 191408 | 2252 | 192539 | ||||
| Comprehensive income: | |||||||||||
|
Net profit for the period |
17265 | -90 | 17175 | ||||||||
|
Other comprehensive income items: |
|||||||||||
|
Translation differences |
-12823 | -168 | -13441 | ||||||||
| Total comprehensive income for the period | -12823 | 17265 | -708 | 3734 | |||||||
| Transactions with shareholders: | |||||||||||
| Payment of dividends | -13492 | -47 | -13539 | ||||||||
| Share-based incentives | 40 | 40 | |||||||||
| Total transactions with shareholders | -13452 | -47 | -13499 | ||||||||
| Changes in holdings in subsidiaries: | |||||||||||
| Acquisition of shares from | |||||||||||
|
non-controlling interests |
0 | 0 | |||||||||
| Change in share belonging to non- controlling | |||||||||||
| interests | 0 | -1 | -1 | ||||||||
| Total changes in holdings in subsidiaries | 0 | -1 | -1 | ||||||||
| Shareholders’ equity 30 Sep 2015 | 20759 | 1092 | -8 | -35787 | 195221 | 1496 | 182773 | ||||
|
EUR 1,000 |
Share capital |
Other reserves |
Treasury shares reserve |
Translation differences |
Retained earnings |
Share of non-controlling interests |
Total |
||||
| Shareholders’ equity 1 Jan 2016 | 20759 | 1092 | -108 | -36940 | 200415 | 1447 | 186665 | ||||
| Comprehensive income: | |||||||||||
|
Net profit for the period |
27734 | 198 | 27932 | ||||||||
|
Other comprehensive income items: |
|||||||||||
|
Translation differences |
-3612 | -85 | -3697 | ||||||||
| Total comprehensive income for the period | -3612 | 27734 | 113 | 24235 | |||||||
| Transactions with shareholders: | |||||||||||
| Payment of dividends | -14523 | -42 | -14565 | ||||||||
| Acquisition of treasury shares | -120 | -120 | |||||||||
| Share-based incentives | 159 | 159 | |||||||||
| Change in accounting policies | -1437 | -3 | -1440 | ||||||||
| Total transactions with shareholders | -120 | -15801 | -45 | -15966 | |||||||
| Changes in holdings in subsidiaries: | |||||||||||
| Acquisition of shares from | |||||||||||
|
non-controlling interests |
1 | 1 | |||||||||
|
Change in share belonging to non- controlling |
|||||||||||
| interests | -1 | -2 | -3 | ||||||||
| Total changes in holdings in subsidiaries | 0 | -2 | -2 | ||||||||
| Shareholders’ equity 30 Sep 2016 | 20759 | 1092 | -228 | -40552 | 212348 | 1513 | 194932 | ||||
| Other reserves include the share premium account, legal reserve and other reserves. | |||||||||||
|
|
|||||||||||
| OLVI GROUP | TABLE 4 | ||||||||||
| CASH FLOW STATEMENT | |||||||||||
| EUR 1,000 | |||||||||||
| 1-9/2016 | 1-9/2015 | 1-12/2015 | |||||||||
| Net profit for the period | 27932 | 17175 | 22220 | ||||||||
| Adjustments to profit for the period | 19104 | 23227 | 28684 | ||||||||
| Change in net working capital | -942 | -3909 | 14169 | ||||||||
| Interest paid | -574 | -738 | -1113 | ||||||||
| Interest received | 296 | 141 | 228 | ||||||||
| Taxes paid | -2221 | -1841 | -2520 | ||||||||
| Cash flow from operations (A) | 43595 | 34055 | 61668 | ||||||||
| Investments in tangible and intangible | |||||||||||
| assets | -15683 | -21366 | -25100 | ||||||||
| Sales gains from tangible and intangible | |||||||||||
| assets | 427 | 194 | 249 | ||||||||
| Expenditure on other investments | 0 | 5 | -16 | ||||||||
| Cash flow from investments (B) | -15256 | -21167 | -24867 | ||||||||
| Withdrawals of loans | 745 | 20571 | 20360 | ||||||||
| Repayments of loans | -16928 | -17313 | -35250 | ||||||||
| Acquisition of treasury shares | -120 | 0 | -64 | ||||||||
| Dividends paid | -14528 | -13509 | -13514 | ||||||||
| Increase (-) / decrease (+) in current interest- | |||||||||||
| bearing business receivables | 31 | 7 | -8 | ||||||||
| Increase (-) / decrease (+) in long-term | |||||||||||
| loan receivables | -8 | 3 | 26 | ||||||||
| Cash flow from financing (C) | -30808 | -10241 | -28450 | ||||||||
| Increase (+)/decrease (-) in liquid assets (A+B+C) | -2469 | 2647 | 8351 | ||||||||
| Liquid assets 1 January | 12786 | 4382 | 4382 | ||||||||
| Effect of exchange rate changes | 211 | 66 | 53 | ||||||||
| Liquid assets 30 Sep/31 Dec | 10528 | 7095 | 12786 | ||||||||
OLVI GROUP TABLE 5
NOTES TO THE INTERIM REPORT
Except for the changes detailed below, the accounting policies used for this interim report are the same as those used for the annual financial statements 2015. The accounting policies are presented in the Annual Report 2015, which was published on 24 March 2016.
The Group has adopted the following new or revised standards and interpretations in 2016:
- Annual improvements to IFRS 2012–2014
- Disclosure Initiative – amendments to IAS 1 Presentation of Financial Statements
The above changes in standards do not have any substantial effect on the income statement or balance sheet. Some changes in standards may affect the scope of information disclosed in the notes.
Other changes in accounting policies as of 1 January 2016
As of 1 January 2016, Olvi Group adopts the general industry practice of presenting recyclable beverage packages in tangible assets when they meet the criteria of IAS 16. This means that starting from 1 January 2016, property, plant and equipment includes not only the recyclable packages in inventory but also Olvi plc’s share of the package stock in accordance to shares determined by the Ekopulloyhdistys association, as well as packages held by the clients of subsidiaries, which the Group is obliged to repurchase. The repurchase obligation related to packaging used by clients will be presented as a current liability on the balance sheet.
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) | |||||
|
7-9/ 2016 |
7-9/ 2015 |
1-9/ 2016 |
1-9/ 2015 |
1-12/ 2015 |
|
| Olvi Group total | 168552 | 168031 | 474951 | 452127 | 579901 |
| Finland | 47486 | 41047 | 132523 | 110888 | 148029 |
| Estonia | 31860 | 33657 | 97023 | 96727 | 123871 |
| Latvia | 19191 | 19266 | 53620 | 54565 | 68122 |
| Lithuania | 23894 | 25452 | 64889 | 66774 | 84877 |
| Belarus | 51332 | 54026 | 142194 | 140510 | 175129 |
| - sales between segments | -5211 | -5417 | -15298 | -17337 | -20127 |
|
|
|
||||
| NET SALES BY GEOGRAPHICAL SEGMENT (EUR 1,000) | |||||
|
7-9/ 2016 |
7-9/ 2015 |
1-9/ 2016 |
1-9/ 2015 |
1-12/ 2015 |
|
| Olvi Group total | 89681 | 88922 | 249696 | 241664 | 310494 |
| Finland | 32386 | 28377 | 89561 | 76851 | 102869 |
| Estonia | 20423 | 20729 | 61726 | 59508 | 75790 |
| Latvia | 9263 | 9061 | 25444 | 24775 | 31188 |
| Lithuania | 10278 | 11137 | 27410 | 28465 | 35843 |
| Belarus | 19726 | 22074 | 52639 | 59519 | 73550 |
| - sales between segments | -2395 | -2456 | -7084 | -7454 | -8746 |
|
OPERATING PROFIT BY GEOGRAPHICAL SEGMENT (EUR 1,000) |
|||||
|
7-9/ 2016 |
7-9/ 2015 |
1-9/ 2016 |
1-9/ 2015 |
1-12/ 2015 |
|
| Olvi Group total | 15171 | 14113 | 35107 | 31829 | 38157 |
| Finland | 4476 | 3113 | 9579 | 5962 | 7839 |
| Estonia | 4958 | 5134 | 13483 | 12745 | 15913 |
| Latvia | 1248 | 1280 | 2879 | 2506 | 2987 |
| Lithuania | 1378 | 1511 | 2220 | 2298 | 2610 |
| Belarus | 3052 | 3260 | 6785 | 8446 | 8838 |
| - eliminations | 59 | -185 | 161 | -128 | -30 |
| 2. PERSONNEL ON AVERAGE | ||||||||||||
|
7-9/ 2016 |
7-9/ 2015 |
1-9/ 2016 |
1-9/ 2015 |
1-12/ 2015 |
||||||||
| Finland | 353 | 338 | 333 | 348 | 336 | |||||||
| Estonia | 350 | 348 | 346 | 343 | 336 | |||||||
| Latvia | 218 | 203 | 216 | 206 | 206 | |||||||
| Lithuania | 237 | 238 | 235 | 235 | 233 | |||||||
| Belarus | 747 | 851 | 765 | 838 | 829 | |||||||
| Total | 1905 | 1978 | 1895 | 1970 | 1940 | |||||||
|
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 | ||||||||||||
|
1-9/ 2016 |
1-9/ 2015 |
1-12/ 2015 |
||||||||||
| Managing Director | 310 | 268 | 350 | |||||||||
| Chairman of the Board | 49 | 67 | 83 | |||||||||
| Other members of the Board | 102 | 109 | 150 | |||||||||
| Total | 461 | 444 | 583 | |||||||||
| 4. SHARES AND SHARE CAPITAL | ||
| 30 September 2016 | % | |
| 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 30 September 2016 totalled 20,759 thousand euro.
Olvi plc’s Series A and Series K 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 two active share-based incentive plans for key personnel. 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 bonuses for the performance periods (2014-2016/2017) will be paid in 2017 partially in Olvi plc Series A shares and 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 40,000 series A shares in Olvi plc and a cash payment needed for taxes and tax-related costs arising from the shares. The share-based incentive plan includes one three-year performance period, calendar years 2014–2016. The potential reward from the performance period 2014–2016 will be based on Olvi Group’s cumulative operating profit, also known as earnings before interest and taxes (EBIT).
Furthermore, the plan includes one three-year performance period, beginning on 1 July 2014 and ending on 30 June 2017. The prerequisite for receiving 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 September 2016, accounting entries associated with the performance period from 1 July 2014 to 30 June 2017 were recognised for a total of 65.8 thousand euro.
On 24 February 2016, Olvi plc’s Board of Directors decided on a new share-based incentive plan for the Group’s key personnel. 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 plan is directed to approximately 50 people. The rewards to be paid on the basis of the plan are in total a maximum of 36,280 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 as expenses over the performance period from 1 July 2016 to 30 June 2018. From January to September 2016, costs associated with the plan established on 24 February 2016 were recognised for a total of 179.5 thousand euro.
Olvi Group does not have any other share-based plans or option plans.
6. TREASURY SHARES
Olvi acquired 5,500 of its own Series A shares in January-June 2016. The purchase price was 120,139 euro. There were no changes in the number of treasury shares held by Olvi in July-September 2016. 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.
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 14 April 2016, 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 500,000 Series A shares.
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 *) | 1-9/2016 | 1-9/2015 | 1-12/2015 |
| - average | 20747761 | 20757684 | 20757645 |
| - at end of period | 20747684 | 20757684 | 20753184 |
|
*) Treasury shares deducted. |
|||
|
8. TRADING OF SERIES A SHARES ON THE HELSINKI STOCK EXCHANGE |
|||
| 1-9/2016 | 1-9/2015 | 1-12/2015 | |
| Trading volume of Olvi A shares | 671434 | 1810277 | 2036830 |
| Total trading volume, EUR 1,000 | 16384 | 43408 | 48413 |
| Traded shares in proportion to | |||
| all Series A shares, % | 3.9 | 10.6 | 12.0 |
| Average share price, EUR | 24.42 | 23.97 | 23.76 |
| Price on the closing date, EUR | 26.45 | 22.09 | 22.19 |
| Highest quote, EUR | 27.80 | 27.20 | 27.20 |
| Lowest quote, EUR | 20.30 | 20.51 | 20.51 |
| 9. FOREIGN AND NOMINEE-REGISTERED HOLDINGS ON 30 SEPTEMBER 2016 | ||||||||||||
|
|
||||||||||||
| Book entries | Votes | Shareholders | ||||||||||
| qty | % | qty | % | qty | % | |||||||
| Finnish total | 16110944 | 77.62 | 87023808 | 94.93 | 9828 | 99.34 | ||||||
| Foreign total | 401343 | 1.93 | 401343 | 0.44 | 56 | 0.57 | ||||||
| Nominee-registered (foreign) total | 93928 | 0.45 | 93928 | 0.10 | 4 | 0.04 | ||||||
| Nominee-registered (Finnish) total | 4152593 | 20.00 | 4152593 | 4.53 | 5 | 0.05 | ||||||
| Total | 20758808 | 100.00 | 91671672 | 100.00 | 9893 | 100.00 | ||||||
| 10. LARGEST SHAREHOLDERS ON 30 SEPTEMBER 2016 | |||||||||
| 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 reg. | 2153872 | 2153872 | 10.38 | 2153872 | 2.35 | ||||
| 6. Hortling-Rinne Laila Marit | 102288 | 3380 | 105668 | 0.51 | 2049140 | 2.24 | |||
| 7. Nordea Bank Finland plc, nominee register | 1943122 | 1943122 | 9.36 | 1943122 | 2.12 | ||||
| 8. Ilmarinen Mutual Pension Insurance Company | 849218 | 849218 | 4.09 | 849218 | 0.93 | ||||
| 9. Varma Mutual Pension Insurance Company | 828075 | 828075 | 3.99 | 828075 | 0.90 | ||||
| 10. AC Invest Oy | 460000 | 460000 | 2.22 | 460000 | 0.50 | ||||
| Others | 9648 | 9733436 | 9743084 | 46.93 | 9926396 | 10.83 | |||
| 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 | |||
| 1-9/2016 | 1-9/2015 | 1-12/2015 | |
| Opening balance | 185240 | 192149 | 192149 |
| Additions *) | 28289 | 20757 | 25495 |
| Deductions and transfers | -2775 | -130 | -390 |
| Depreciation | -12802 | -11548 | -15495 |
| Exchange rate differences | -3194 | -15802 | -16519 |
| Total | 194758 | 185426 | 185240 |
| *) The additions in 2016 include a reclassification of recyclable packaging arising from changes to accounting policies, totalling 13.0 million euro. | |||
| 12. CONTINGENT LIABILITIES | |||
| EUR 1,000 | |||
| 30 September 2016 | 30 September 2015 | 31 December 2015 | |
| Pledges and contingent liabilities | |||
| For own commitments | 2352 | 2422 | 2352 |
| Leasing and rental liabilities: | |||
| Due within one year | 1328 | 1153 | 1402 |
| Due within 1 to 5 years | 1770 | 1260 | 1179 |
| Due in more than 5 years | 3 | 5 | 4 |
| Leasing and rental liabilities total | 3101 | 2418 | 2585 |
| Package liabilities | 0 | 2771 | 3234 |
| 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)