Olvi Group’s Interim Report, 1 January to 30 September 2021 (9 months)

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OLVI PLC                Interim Report 2 November 2021 at 9:00 am


Olvi Group’s Interim Report, 1 January to 30 September 2021 (9 months)

Interim Report in brief

Olvi Group’s business development continued on a strong track in the third quarter. Sales volume, net sales, operating profit, and net profit increased clearly on the previous year. The Group’s financial standing is good.

 

Near-term outlook

 

Olvi’s operating profit for fiscal year 2021 is expected to remain on the previous year’s good level or increase slightly. Good business development is estimated to continue but uncertainties can be seen for the remainder of the year, associated with the continuing corona pandemic, the availability of raw materials and packaging supplies, as well as increasing costs. 

 

Consolidated key ratios

 

7-9/ 2021

7-9/

2020

Change % /

pp

1-9/ 2021

1-9/ 2020

Change % /

pp

1-12/ 2020

Sales volume, Mltr

247.3

212.6

16.3

661.0

595.5

11.0

765.9

Net sales, MEUR

134.3

116.3

15.5

351.6

321.9

9.2

414.9

Gross profit*, MEUR

58.2

52.0

11.9

150.2

139.4

7.8

178.0

% of net sales

43.3

44.7

 

42.7

43.3

 

42.9

Operating profit, MEUR

23.6

21.5

9.7

52.3

49.5

5.5

56.4

% of net sales

17.6

18.5

 

14.9

15.4

 

13.6

Net profit for the period, MEUR

20.8

18.1

15.3

42.7

38.0

12.3

40.9

% of net sales

15.5

15.5

 

12.1

11.8

 

9.9

Earnings per share, EUR

0.99

0.87

13.8

2.04

1.82

12.1

1.96

Investments, MEUR

6.2

6.2

-0.5

23.4

25.2

-7.3

32.0

Equity per share, EUR

 

 

 

13.94

12.76

9.2

12.81

Equity to total assets, %

 

 

 

59.5

65.1

-5.6

63.8

Gearing, %

 

 

 

-19.6

-11.3

8.3

-15.5

* Due to a change in the presentation of the income statement, gross profit is presented instead of gross margin.

Business development

Lasse Aho, Managing Director:

Olvi Group’s third-quarter business development was good. Sales volume increased by 16.3 percent, net sales by 15.5 and operating profit by 9.7 percent. The heat wave in July brought a substantial increase in sales volume but sales development was also good in early autumn. Strong demand continued in the retail sector. Growth was seen in all product groups, with best sales development in non-alcoholic products, particularly waters. Exports continued to develop well, increasing by more than 40 percent in the third quarter.

 

The corona pandemic has still affected business operations in the third quarter. Among the different sales channels, HoReCa sales improved in comparison with the first half of the year, but sales are still lower than they were before the pandemic. Sales restrictions were in force in almost all markets. Furthermore, the volume of cross-border and harbour sales has remained low. Olvi’s production has operated almost normally and there has not been any widespread virus exposure among personnel. There have been occasional difficulties in the availability of raw materials and packaging supplies, and there is substantial upward pressure in production costs. These may restrict production volumes, cause difficulties for deliveries, and have a negative impact on profitability during the rest of the year. However, the current outlook is that the impacts would be limited and manageable.

 

Business development in Finland continued on a strong track. Third-quarter sales volume increased by 8.5 percent, net sales by 8.6 and operating profit by 18.2 percent. The hot summer caused a high peak in overall demand. It was challenging to respond to this, and there were some delivery difficulties in waters, for example. Demand is also boosted by Olvi’s improved market position in several product groups, thanks to our strong brands and versatile range of packaging. Market shares have improved particularly in beers and mineral waters. Profitability was affected by increased production efficiency as the sales volumes were high.

 

In Estonia, third-quarter sales volume and net sales were stimulated into growth by the summer heat wave, and preparations for the season went well. The market share remained strong.  Among the different sales channels, retail and export sales increased. Growth in HoReCa was moderate in comparison with the previous year. Cross-border and harbour sales were still impacted by travel restrictions. Third-quarter operating profit improved by 6.8 percent and accumulated profit was almost on a par with the previous year.

 

In Latvia, third-quarter sales volume increased by 10.1 percent and net sales by 6.5 percent. Domestic market demand improved. Price competition has still been intense in retail trade, and legislative changes with regard to mixed drinks in particular have hampered profitability. This has caused a decline in the company’s operating profit. Operating profit declined by 13.6 percent. Sales of Piebalgas products have started strongly and the company's integration into the Latvian operations has proceeded according to plan. The company has acquired the Everest water brand in the beginning of October to strengthen the offering and sales of non-alcoholic products in Latvia.    

 

Business in Lithuania developed well. Third-quarter sales volume increased by 12.0 percent and net sales by 11.6 percent. Good net sales development was supported by the strong summer season, a more diversified product portfolio and increased market shares. Domestic retail demand was a driver for growth. Operating profit increased by 13.3 percent, which boosted full-year development to 22.0 percent.   

 

In Belarus, third-quarter sales volume increased by 23.0 percent and net sales by 30.2 percent. Sales have improved particularly well in non-alcoholic product groups, but two-figure growth figures can be seen across all product groups. Among the sales channels, growth in exports was excellent but domestic retail sales also developed well. Good development of net sales was partially attributable to the exchange rate, which has been improving since August. This evens out the poor foreign exchange development in the first half of the year; however, the accumulated figures are still impacted. Measured in the local currency, net sales have increased by 29.0 percent and operating profit by 9.3 percent since the beginning of the year. Operating profit measured in euro increased by 5.5 percent in the third quarter and the accumulated figure was –1.2 percent. Operating profit was impacted by an increase in logistics costs in line with sales volume, as well as marketing efforts to support the multi-beverage strategy. The company has been able to develop its business in spite of the situation in the country.

 

Strategic expansion has continued according to plan as the acquisition of the Vestfyen brewery in Denmark became effective on 1 September. Vestfyen has been consolidated with the Group since September, so the company does not yet have any major impact on the figures for the period under review. Integration has started according to plan. The objective is to gradually build up and grow the company in accordance with the focal points of Olvi’s strategy.

 

Strategically important Group-wide development projects, such as digitalisation projects and the responsible management operating model have been substantially pushed forward during the year in order to ensure competitive ability in the future. Investments have been implemented as planned, supporting future sales growth, improving production efficiency, and promoting the achievement of responsibility targets with regard to carbon neutrality, for example. Investments since the beginning of the year amount to 23.4 million euro.

 

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 in January-September by 11.0 percent to 661.0 (595.5) million litres. In July-September the sales volume increased by 16.3 percent to 247.3 (212.6) million litres. Growth was seen in all of the operating countries.    

Sales volume, million litres

7-9/ 2021

7-9/ 2020

Change %

1-9/ 2021

1-9/
2020

Change
%

Finland

69.1

63.7

8.5

197.0

182.2

8.1

Estonia

34.6

30.8

12.3

92.2

85.8

7.4

Latvia

23.1

21.0

10.1

59.8

57.0

5.0

Lithuania

39.3

35.1

12.0

101.4

95.4

6.2

Belarus

86.7

70.5

23.0

232.2

197.6

17.5

Eliminations and other segments

-5.5

-8.5

 

-21.7

-22.5

 

Total

247.3

212.6

16.3

661.0

595.5

11.0

 

The Group’s net sales in January-September increased by 9.2 percent and amounted to 351.6 (321.9) million euro. Third-quarter net sales increased by 15.5 percent.

 

Net sales, million euro

7-9/ 2021

7-9/ 2020

Change %

1-9/ 2021

1-9/
2020

Change
%

Finland

52.9

48.7

8.6

145.4

135.4

7.4

Estonia

22.9

20.4

12.2

59.8

55.8

7.2

Latvia

12.0

11.3

6.5

31.0

30.2

2.6

Lithuania

17.9

16.1

11.6

46.5

43.1

7.8

Belarus

30.9

23.7

30.2

77.4

67.5

14.6

Eliminations and other segments

-2.3

-3.9

 

-8.6

-10.2

 

Total

134.3

116.3

15.5

351.6

321.9

9.2

 

Earnings development

 

The Group’s operating profit in January-September stood at 52.3 (49.5) million euro, or 14.9 (15.4) percent of net sales. Operating profit in July-September stood at 23.6 (21.5) million euro, which was 17.6 (18.5) percent of net sales. From the beginning of the year, operating profit has improved by 5.5 percent on the previous year, and in the third quarter there was an improvement of 9.7 percent. Operating profit is boosted by increased gross profit but hampered by increased costs of logistics, sales, and marketing in comparison with the previous year.

Operating profit, million euro

7-9/ 2021

7-9/ 2020

Change %

1-9/ 2021

1-9/
2020

Change
%

Finland

9.8

8.3

18.2

21.5

18.9

14.0

Estonia

5.0

4.7

6.8

11.3

11.5

-1.8

Latvia

1.3

1.5

-13.6

2.8

3.4

-15.7

Lithuania

2.2

1.9

13.3

4.7

3.9

22.0

Belarus

5.7

5.4

5.5

12.6

12.7

-1.2

Eliminations and other segments

-0.3

-0.3

 

-0.8

-0.9

 

Total

23.6

21.5

9.7

52.3

49.5

5.5


The Group’s January-September profit after taxes amounted to 42.7 (38.0) million euro. The July-September figure was 20.8 (18.1) million euro. Profit for the period is affected by decreased financing costs related to foreign exchange translation differences. 

Earnings per share calculated from the profit belonging to parent company shareholders in January-September stood at 2.04 (1.82) euro, and the July-September figure was 0.99 (0.87) euro.

Balance sheet, financing, and investments

Olvi Group’s balance sheet total at the end of September 2021 was 491.4 (410.7) million euro. Equity per share at the end of September 2021 stood at 13.94 (12.76) euro. The equity ratio was 59.5 (65.1) percent and the gearing ratio was -19.6 (-11.3) percent. The current ratio, which represents the Group’s liquidity, remained on the previous level at 1.3 (1.3).

The amount of interest-bearing liabilities amounted to 12.9 (3.5) million euro at the end of September. The increase is due to the consolidation of Denmark into the Group’s figures. Current liabilities made up 5.2 (0.7) million euro of all interest-bearing liabilities.

Olvi Group’s investments in extensions and replacements from January to September amounted to 23.4 (25.2) million euro. The companies in Finland accounted for 9.1 million euro, the Baltic subsidiaries for 10.1 million euro and Lidskoe Pivo in Belarus for 4.2 million euro of the total. Olvi Group has invested in increasing and diversifying its production capacity, the modernisation of production facilities, as well as environmentally friendly operations.

Personnel

Olvi Group’s average number of personnel in January-September was 2,094 (1,927). The Group’s average number of personnel increased by 8.7 percent due to seasonal variation and the Piebalgas and Vestfyen acquisitions.

Olvi Group’s average number of personnel by country:

 

7-9/ 2021

7-9/ 2020

Change %

1-9/ 2021

1-9/
2020

Change
%

Finland

448

421

6.4

419

395

6.1

Estonia

361

334

8.1

347

327

6.1

Latvia

281

194

44.8

241

197

22.3

Lithuania

239

239

0.0

244

240

1.7

Belarus

859

776

10.7

830

768

8.1

Other segments*

39

0

 

13

0

 

Total

2,227

1,964

13.4

2,094

1,927

8.7

* At the end of the review period, the number of personnel was 118.

Board of Directors and management

There have been no changes in Olvi plc’s Board of Directors or management during the review period.

 

Other events during the review period

Changes in corporate structure

Olvi’s holdings in subsidiaries include the Bryggeriet Vestfyen brewing company in Denmark as of 1 September 2021. Because the company was taken over towards the end of the review period, its effect on the Group’s business in 2021 is minor, and Denmark has not been observed as a separate entity in segment reporting. The effects of consolidation are described in more detail in Table 5, Section 12 of the tables attached to this interim report.

Share-based payments

Olvi Group’s previous share-based incentive plan for key employees, which was initiated in 2019, expired on 31 January 2021. At its meeting of 1 February 2021, the Board of Directors of Olvi plc decided on three new share-based incentive plans for the Group’s key personnel: a performance-based share plan for 2021–2025, a matching share plan for 2021–2022 and a restricted share plan for 2021–2025. Detailed information on the incentive plans and the associated share repurchases is provided in Table 5, Sections 4 and 5 of the tables attached to this interim report.


Business risks and their management

The corona pandemic continues to impose risks on business, even though the overall economic impact has been minor so far. There are uncertainties associated with predicting business development as it is not possible to sufficiently anticipate the various impacts of the corona pandemic. The impacts are associated with sales channel restrictions imposed in order to contain the spreading of the corona pandemic, for example, but also changes in overall demand. Substantial sales channel restrictions can still be projected towards the end of the year, particularly in the Baltic states.

 

As the corona pandemic has continued, there have also been challenges in the availability of raw materials and packaging supplies, as well as upward pressure in their prices. The most substantial availability problems concern cans, as global demand for them has increased faster than supply. The situation has not caused substantial sales volume losses so far. Cost pressures concern the prices of all raw materials and packaging supplies, as well as other production costs such as energy. Mitigation measures against such pressures include product development, cost savings and focused price increases. It will be challenging to fully respond to the rapidly increasing production costs by the end of 2021.

 

Olvi has drafted several scenarios and made preparations for responding to changing situations through a variety of measures, paying particular attention to the corona pandemic situation. Olvi has made preparations for production disruptions and drafted contingency plans concerning the availability of personnel and raw materials, among other things. Uncertainty is also caused by potentially continuing fluctuation of the Belarusian exchange rate due to the political and economic situation in the country.

 

A more detailed description of normal business-related 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


There have been no significant reportable events after the review period.
 

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

 

 

 

 

 

 

STATEMENT OF COMPREHENSIVE INCOME

 

 

 

 

EUR 1,000

 

 

 

 

 

 

7–9 / 2021

7–9 / 2020

1–9 / 2021

1–9 / 2020

1–12 / 2020

 

 

 

 

 

 

Gross sales

299,115

275,542

813,399

769,078

1,005,101

Excise taxes and other adjustments

-164,796

-159,254

-461,808

-447,211

-590,217

Net sales

134,319

116,288

351,591

321,867

414,884

 

 

 

 

 

 

Cost of sales

-76,154

-64,302

-201,380

-182,494

-236,849

Gross profit

58,165

51,986

150,211

139,373

178,035

 

 

 

 

 

 

Logistics, sales and marketing expenses

-26,335

-22,208

-73,729

-65,151

-87,300

Administrative expenses

-8,693

-8,319

-25,017

-25,065

-34,650

Other operating income and expenses

466

50

797

387

350

Operating profit

23,603

21,509

52,262

49,544

56,435

 

 

 

 

 

 

Financial income and expenses

-62

-907

-32

-2,143

-2,626

Share of profit in associates

0

0

 

0

2

Earnings before tax

23,541

20,602

52,230

47,401

53,811

 

 

 

 

 

 

Income taxes

-2,697

-2,522

-9,537

-9,400

-12,895

NET PROFIT FOR THE PERIOD

20,844

18,080

42,693

38,001

40,916

 

 

 

 

 

 

Other comprehensive income items that may be subsequently reclassified to profit and loss:

 

 

 

 

 

 

 

 

 

 

 

Translation differences related to foreign subsidiaries

1,692

-6,732

4,292

-14,338

-15,588

Income taxes related to these items

1

116

-43

257

263

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

22,537

11,464

46,942

23,920

25,591

 

 

 

 

 

 

Distribution of profit:

 

 

 

 

 

- parent company shareholders

20,603

17,913

42,247

37,679

40,559

- non-controlling interests

241

167

446

322

357

 

 

 

 

 

 

Distribution of comprehensive income:

 

 

 

 

 

 - parent company shareholders

22,238

11,501

46,358

24,027

25,704

 - non-controlling interests

299

-37

584

-107

-113

 

 

 

 

 

 

Earnings per share calculated from the profit belonging to parent company shareholders, EUR

 

 

 

 

 

-   undiluted

0.99

0.87

2.04

1.82

1.96

-   diluted

0.99

0.87

2.04

1.82

1.96

OLVI GROUP

 

 

TABLE 2

 

 

 

 

BALANCE SHEET

 

 

 

EUR 1,000

30 September 2021

30 September 2020

31 December 2020

ASSETS

 

 

 

Non-current assets

 

 

 

Tangible assets

228,199

204,619

204,156

Goodwill

25,913

25,266

25,172

Other intangible assets

11,931

9,866

9,925

Shares in associates

974

1,016

994

Other investments

888

851

851

Loans receivable and other non-current receivables

2,652

2,134

1,786

Deferred tax receivables

1,436

800

1,086

Total non-current assets

271,993

244,552

243,970

 

 

 

 

Current assets

 

 

 

Inventories

55,497

45,679

42,278

Accounts receivable and other receivables

93,656

86,943

88,234

Income tax receivable

196

288

773

Liquid assets

70,068

33,248

45,096

Total current assets

219,417

166,158

176,381

TOTAL ASSETS

491,410

410,710

420,351

 

 

 

 

SHAREHOLDERS’ EQUITY AND LIABILITIES

 

 

 

Shareholders’ equity held by parent company shareholders

 

 

 

Share capital

20,759

20,759

20,759

Other reserves

1,387

1,387

1,387

Treasury shares

-390

-503

-1,802

Translation differences

-54,731

-57,639

-58,842

Retained earnings

321,786

300,302

303,465

 

288,811

264,306

264,967

Share belonging to non-controlling interests

3,631

3,172

3,165

Total shareholders’ equity

292,442

267,478

268,132

 

 

 

 

Non-current liabilities

 

 

 

Financial liabilities

7,649

2,789

2,303

Other liabilities

4,873

4,266

4,473

Deferred tax liabilities

13,489

7,930

11,107

 

 

 

 

Current liabilities

 

 

 

Financial liabilities

5,209

703

1,333

Accounts payable and other liabilities

164,810

125,050

132,522

Income tax liability

2,938

2,494

481

Total liabilities

198,968

143,232

152,219

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES

491,410

410,710

420,351

 


OLVI GROUP

 

 

 

TABLE 3

CHANGES IN SHAREHOLDERS’ EQUITY

 

 

 

 

 

EUR 1,000

Share capital

Other reserves

Treasury shares reserve

Fair value reserve

Translation differences

Retained earnings

Share of non-controlling interests

Total

Shareholders’ equity
1 Jan 2021

20,759

1,092

-1,802

295

-58,842

303,465

3,165

268,132

Comprehensive income:

 

 

 

 

 

 

 

 

     Net profit for the period

 

 

 

 

42,247

446

42,693

     Other comprehensive income items:

 

 

 

 

 

 

          Translation differences

 

 

 

4,111

 

138

4,249

Total comprehensive income for the period

 

 

4,111

42,247

584

46,942

Transactions with shareholders:

 

 

 

 

 

 

 

     Payment of dividends

 

 

 

 

 

-22,771

-346

-23,117

     Share-based incentives, value of work performed

 

 

549

 

549

     Acquisition of treasury shares

-874

 

 

 

 

-874

     Issue of treasury shares to employees

1,687

 

 

-1,614

 

73

     Sales of treasury shares to employees

599

 

 

 

 

599

     Adjustment to previous periods

 

 

 

-90

-26

-116

Total transactions with shareholders

1,412

 

 

-23,926

-372

-22,886

Changes in holdings in subsidiaries:

 

 

 

 

 

 

     Change in share belonging to non-controlling interests

 

 

 

254

254

Total changes in holdings in subsidiaries

 

 

 

254

254

Shareholders’ equity 30 Sep 2021

20,759

1,092

-390

295

-54,731

321,786

3,631

292,442

 

 

 

 

 

 

EUR 1,000

Share capital

Other reserves

Treasury shares reserve

Fair value reserve

Translation differences

Retained earnings

Share of non-controlling interests

Total

Shareholders’ equity 1 Jan 2020

20,759

1,092

-503

295

-43,987

282,895

3,318

263,869

Comprehensive income:

 

 

 

 

 

 

 

 

     Net profit for the period

 

 

 

 

37,679

322

38,001

     Other comprehensive income items:

 

 

 

 

 

 

          Translation differences

 

 

 

-13,652

 

-429

-14,081

Total comprehensive income for the period

 

 

-13,652

37,679

-107

23,920

Transactions with shareholders:

 

 

 

 

 

 

 

     Payment of dividends

 

 

 

 

 

-20,710

-38

-20,748

     Share-based incentives, value of work performed

 

 

440

 

440

Total transactions with shareholders

 

 

 

-20,270

-38

-20,308

Changes in holdings in subsidiaries:

 

 

 

 

 

 

      Acquisition of shares from non-controlling interests

 

 

-3

 

-3

      Change in share belonging to non-controlling interests

 

 

1

-1

0

Total changes in holdings in subsidiaries

 

 

-2

-1

-3

Shareholders’ equity 30 Sep 2020

20,759

1,092

-503

295

-57,639

300,302

3,172

267,478

 


OLVI GROUP

 

TABLE 4

 

CASH FLOW STATEMENT

 

 

 

EUR 1,000

 

 

 

 

1–9 / 2021

1–9 / 2020

1–12 / 2020

 

 

 

 

Net profit for the period

42,693

38,001

40,916

Adjustments:

 

 

 

     Depreciation and impairment

19,870

18,471

24,972

     Other adjustments

9,768

12,338

16,327

Change in net working capital:

 

 

 

     Change in accounts receivable and other receivables

-1,593

-21,457

-22,809

     Change in inventories

-5,486

-4,413

-1,274

     Change in accounts payable and other liabilities

22,261

8,111

17,339

Interest paid

-366

-377

-588

Interest received

182

77

260

Dividends received

3

3

4

Taxes paid

-6,435

-6,377

-9,351

Cash flow from operations (A)

80,897

44,377

65,796

 

 

 

 

Investments in tangible and intangible assets

-22,983

-24,309

-31,533

Capital gains on disposal of tangible and intangible assets

1,072

1,409

1,697

Acquisition of shares from non-controlling interests

0

-3

-6

Acquired shares in subsidiaries, associates and joint ventures

-11,121

0

0

Expenditure on other investments

-30

-15

-15

Dividends received

21

0

24

Cash flow from investments (B)

-33,041

-22,918

-29,833

 

 

 

 

Withdrawals of loans

172

15,475

15,497

Repayments of loans

-1,774

-16,706

-16,917

Acquisition of treasury shares

-874

0

-1,299

Sales of treasury shares to employees

599

0

0

Dividends paid

-21,255

-19,602

-20,754

Increase (-)/decrease (+) in current interest-bearing business receivables

0

-6

26

Cash flow from financing (C)

-23,132

-20,839

-23,447

 

 

 

 

Increase (+)/decrease (-) in liquid assets (A+B+C)

24,724

620

12,516

 

 

 

 

Liquid assets 1 January

45,096

33,832

33,832

Effect of exchange rate changes

248

-1,204

-1,252

Liquid assets 30 Sep/31 Dec

70,068

33,248

45,096

 

 
OLVI GROUP     TABLE 5

NOTES TO THE INTERIM REPORT

The interim report has been prepared in accordance with IAS 34, applying the same accounting policies as for the financial statements of 31 December 2020.

 

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 ratios are calculated from exact amounts in euros. The information disclosed in the interim report is unaudited.

1.  SEGMENT INFORMATION

 

 

 

 

NET SALES BY SEGMENT 1–9/2021

 

 

 

EUR 1,000

 

Finland

 

Estonia

 

Latvia

 

Lithuania

Belarus

Eliminations and other segments

 

Group

 

 

 

 

 

 

 

 

INCOME

 

 

 

 

 

 

 

External sales

144,599

55,773

27,868

44,296

76,585

2,470

351,591

     Beverage sales

143,730

55,773

27,868

44,296

76,585

2,470

350,722

     Equipment services

869

0

0

0

0

0

869

Internal sales

817

4,050

3,177

2,158

858

-11,060

0

Total net sales

145,416

59,823

31,045

46,454

77,443

-8,590

351,591

 

 

 

 

 

 

 

 

Total net profit for the period

35,883

8,894

2,728

4,068

10,690

-19,570

42,693

 

NET SALES BY SEGMENT 1–9/2020

 

 

 

EUR 1,000

 

Finland

 

Estonia

 

Latvia

 

Lithuania

Belarus

Eliminations and other segments

 

Group

 

 

 

 

 

 

 

 

INCOME

 

 

 

 

 

 

 

External sales

134,407

51,042

28,259

40,779

67,380

0

321,867

     Beverage sales

133,508

51,042

28,259

40,779

67,380

0

320,968

     Equipment services

899

0

0

0

0

0

899

Internal sales

996

4,742

1,987

2,320

168

-10,213

0

Total net sales

135,403

55,784

30,246

43,099

67,548

-10,213

321,867

 

 

 

 

 

 

 

 

Total net profit for the period

30,675

8,706

3,200

3,214

7,027

-14,821

38,001

 

2.  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 / 2021

 1–9 / 2020

 1–12 / 2020

Managing Director

852

462

550

Chairman of the Board

54

55

74

Other members of the Board

 

126

129

172

Total

1,032

646

796

 

 


3. SHARES AND SHARE CAPITAL

 

 

 

30 September 2021

      %

 

 

 

Number of A shares

16,989,976

82.0

Number of K shares

3,732,256

18.0

Total

20,722,232

100.0

 

 

 

Total votes carried by A shares

16,989,976

18.5

Total votes carried by K shares

74,645,120

81.5

Total number of votes

91,635,096

100.0

 

 

 

Votes per Series A share

1

 

Votes per Series K share

20

 

 

The registered share capital on 30 September 2021 totalled 20,759 thousand euro.

 

Olvi plc’s shares received a dividend of 1.10 euro per share for 2020 (1.00 euro per share for 2019), totalling 22.8 (20.7) million euro. The dividends were paid in two instalments. The first instalment of 0,55 euro per share was paid on 20 April 2021. The second instalment of 0,55 euro per share was paid on 3 September 2021. The Series K and Series A shares entitle to equal dividend. The Articles of Association include a redemption clause concerning Series K shares.

 

4. SHARE-BASED PAYMENTS

 

Olvi Group’s share-based incentive plan for key personnel, the performance period of which was from 1 February 2019 to 31 January 2021, has expired. The target group of the plan included approximately 60 people, and in accordance with the terms and conditions of the plan, rewards were paid in Olvi plc Series A shares and partially in cash. A total of 36,200 Series A shares were handed over as share-based rewards.

At its meeting of 1 February 2021, the Board of Directors of Olvi plc decided on the terms and conditions of three new share-based incentive plans for the Group’s key personnel: a performance-based share plan for 2021–2025, a matching share plan for 2021–2022 and a restricted share plan for 2021–2025. Among these incentive plans, the performance-based share plan for the performance periods 2021–2022 and 2021–2023 started on 15 February 2021. The target groups include approximately 18 people, including the Managing Director of the Group, the Managing Directors of the subsidiaries outside Finland, the members of Olvi plc’s Management Group and the Sales Directors of subsidiaries outside Finland. The rewards are based on the Group’s accumulated operating profit in euros and the increase of non-alcoholic sales volume. Net rewards payable for the performance period 2021–2022 amount to an approximate maximum of 6,100 Olvi plc Series A shares, and for the performance period 2021–2023, approximately 10,000 Olvi plc Series A shares.

Olvi plc initiated a new matching share plan for key personnel, the performance period of which is from 15 April 2021 to 14 April 2023. The plan is directed to approximately 55 people. In accordance with the share-based incentive plan, Olvi plc has sold a total of 12,495 treasury shares to the target group members by the end of September for an aggregate price of 598.9 thousand euro.

The objective of long-term rewards is to support the achievement of the company’s targets, make key personnel committed to the company and offer incentive plans based on earning the company’s shares. The rewards are payable partially in Olvi plc’s 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 employees involved. As a rule, no reward will be paid if employment or service ends before the reward payment. Under the scheme, the target group is able to earn Olvi plc Series A shares based on performance. The Board of Directors shall decide on the earning criteria and the targets for each of these at the beginning of the performance period. Any rewards from the scheme shall be paid after the end of each performance period.

The Board of Directors has set an upper limit for the gross total rewards payable to each person in a calendar year. The limit applies to all gross rewards payable under long-term incentive schemes. Any member of Olvi’s Management Group has to hold at least one-half of the shares received as net rewards from the new incentive
plans until the value of the member’s holding in the company equals at least one-half of their annual salary for the previous year. These Olvi plc Series A shares have to be held for as long as the person is a member of the Management Group.

In the period under review, costs associated with the plans were recognised for a total of 548.6 thousand euro. Olvi Group does not have any other share-based plans or option plans.

 

5. TREASURY SHARES

 

At the beginning of January 2021, Olvi plc held 38,560 of its own shares as treasury shares. Olvi plc continued its share repurchase plan in January. The plan started on 5 November 2020 and ended on 15 January 2021. The shares shall be acquired for the purpose of financing or executing any upcoming corporate acquisitions or other arrangements, implementing the company’s incentive schemes or for other purposes decided upon by the Board of Directors.

On 19 February 2021, the Board of Directors of Olvi plc decided to initiate a scheme of acquiring treasury shares based on the authorisation issued by the Annual General Meeting on 8 April 2020. On this basis, the Board will repurchase a maximum of 10,000 Series A shares. The repurchase of treasury shares is based on the new share-based incentive plan for the Group’s key personnel announced on 2 February 2021. The acquisition of shares started on 25 February 2021 and ended on 01 March 2021.

In accordance with the share-based incentive plan, Olvi plc has transferred a total of 11,495 treasury shares to the target group members of the matching share plan for an aggregate price of 551.5 thousand euro.

At the end of the review period, Olvi plc holds a total of 9,404 of its own Series A shares. The total purchase price of treasury shares was 438.0 thousand euro. Treasury shares held by the company itself are ineligible for voting. Series A shares held by Olvi plc as treasury shares represent 0.05 percent of all shares and 0.01 percent of the aggregate number of votes. The treasury shares represent 0.06 percent of all Series A shares and associated votes.

On 31 March 2021, 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.

6. NUMBER OF SHARES *)

 1–9 / 2021

 1–9 / 2020

 1–12 / 2020

  - average

20,704,514

20,710,683

20,708,331

  - at end of period

20,712,828

20,710,683

20,683,672

 

*) Treasury shares deducted.

 

 

 

7. TRADING OF SERIES A SHARES ON THE HELSINKI STOCK EXCHANGE

 

 

 

 1–9 / 2021

 1–9 / 2020

 1–12 / 2020

 

Trading volume of Olvi A shares

1,537,432

1,251,241

1,474,892

Total trading volume, EUR 1,000

75,018

50,160

60,470

Traded shares in proportion to

 

 

 

all Series A shares, %

9.0

7.4

8.7

 

 

 

 

Average share price, EUR

48.80

40.12

41.03

Price on the closing date, EUR

50.00

43.30

48.50

Highest quote, EUR

55.50

45.00

50.00

Lowest quote, EUR

43.10

30.25

30.25


8. FOREIGN AND NOMINEE-REGISTERED HOLDINGS ON 30 September 2021

 

 

Book entries

Votes

Shareholders

 

qty

%

qty

%

qty

%

Finnish total

16,276,006

78.54

87,188,870

95.15

17,254

99.52

Foreign total

64,711

0.31

64,711

0.07

73

0.42

Nominee-registered (foreign) total

337,337

1.63

337,337

0.37

6

0.03

Nominee-registered (Finnish) total

4,044,178

19.52

4,044,178

4.41

6

0.03

Total

20,722,232

100.00

91,635,096

100.00

17,339

100.00

 


9. LARGEST SHAREHOLDERS ON 30 September 2021

 

 

 

 

 

 

 

 

 

 

 

 

Series K

Series A

Total

%

Votes

%

1. Olvi Foundation       

2,363,904

890,613

3,254,517

15.71

48,168,693

52.57

2. The Estate of Hortling Heikki *)                                   

903,488

103,280

1,006,768

4.86

18,173,040

19.83

3. Hortling Timo Einari

212,600

49,152

261,752

1.26

4,301,152

4.69

4. Hortling-Rinne Marit    

149,064

14,699

163,763

0.79

2,995,979

3.27

5. OP Custody Ltd, nominee register

2,000,187

2,000,187

9.65

2,000,187

2.18

6. Skandinaviska Enskilda Banken Ab (publ) Helsinki branch, nominee register

1,054,038

1,054,038

5.09

1,054,038

1.15

7. Nordea Bank Abp, nominee register

952,691

952,691

4.60

952,691

1.04

8. Varma Mutual Pension Insurance Company

828,075

828,075

4.00

828,075

0.90

9. Ilmarinen Mutual Pension Insurance Company

699,213

699,213

3.37

699,213

0.76

10. Hortling Pia Johanna

23,388

25,366

48,754

0.24

493,126

0.54

Others

79,812

10,372,662

10,452,474

50.43

11,968,902

13.07

 

Total

3,732,256

16,989,976

20,722,232

100.00

91,635,096

100.00

 

*) The figures include the shareholder’s own holdings and shares held by parties in his control.

 

During January-September 2021, Olvi has not received any flagging notices in accordance with Chapter 2, Section 10 of the Securities Markets Act.

 

10. PROPERTY, PLANT AND EQUIPMENT

 

EUR 1,000

 

 

 

 

 1–9 / 2021

 1–9 / 2020

  1–12 / 2020

 

 

 

 

Opening balance

204,156

208,701

208,701

Additions

40,788

25,152

31,923

Deductions and transfers

-1,643

-1,868

-2,294

Depreciation

-18,028

-16,751

-22,625

Exchange rate differences

2,926

-10,615

-11,549

Total

228,199

204,619

204,156

 

 


11. CONTINGENT LIABILITIES

 

 

 

EUR 1,000

 

 

 

 

30 September 2021

30 September 2020

31 December 2020

 

 

 

 

Pledges and contingent liabilities

 

 

 

   For own commitments

19,226

1,938

1,938

 

 

 

 

Leasing and rental liabilities:

 

 

 

   Due within one year

756

764

788

   Due within 1 to 5 years

636

350

398

Leasing and rental liabilities total

1,392

1,114

1,186

 

 

 

 

Other liabilities

60

60

60


The increase in liabilities is due to the acquisition of Vestfyen and the consolidation of the company with Olvi Group.

 

12. BUSINESS COMBINATIONS

 

SIA Piebalgas Alus

Olvi’s Latvian subsidiary AS Cesu Alus is a leading player in the Latvian beverage market. Cesu Alus acquired the entire stock of Piebalgas Alus, a widely known and appreciated microbrewery in the Vidzeme province of Latvia. The acquisition brings more strength to our product portfolio in premium craft beers and kvass in the retail and HoReCa markets. The Piebalgas brewery was established in 1989. It is devoted to traditional manufacturing methods and high-quality raw materials.

Piebalgas Alus has been consolidated in Olvi Group since the beginning of June 2021. In Olvi Group’s segment reporting, the business operations of Piebalgas Alus are included in the Latvian figures. The company’s effect on the consolidated figures is minor.

 

The following tables present a summary of the acquisition price and the fair value of the assets acquired and liabilities assumed at the time of acquisition. The balance sheet has been prepared in its essential parts in accordance with IFRS and Olvi Group’s accounting policies. The acquisition was recognised as preliminary in the second quarter.

 

Acquisition price

 

EUR 1,000

 

 

 

 

 

Paid in cash

2,126

Total acquisition price (100%)

2,126

 

 

Amounts recognised for assets acquired and liabilities assumed (100%)

 

EUR 1,000

 

 

 

 

 

Tangible assets

1,540

Intangible assets

 

  Trademarks

584

  Other intangible assets

1

Inventories

771

Accounts receivable and other receivables

609

Liquid assets

32

Non-current liabilities

631

Current liabilities

1,236

Identifiable net assets total

1,671

Goodwill

455

A/S Bryggeriet Vestfyen

Earlier this year, Olvi announced the acquisition of 96.8% in Bryggeriet Vestfyen, a Danish brewery. The Bryggeriet Vestfyen company consists of a brewery producing beer and soft drinks in Assens as well as the Indslev microbrewery located in Norre Aaby. Bryggeriet Vestfyen was established in 1885.

Bryggeriet Vestfyen has been consolidated in Olvi Group since the beginning of September 2021. The business operations of Bryggeriet Vestfyen are not reported as a separate segment in 2021 because the company does not exceed the quantitative thresholds.

 

The following tables present a summary of the acquisition price and the fair value of the assets acquired and liabilities assumed at the time of acquisition. The balance sheet has been prepared in its essential parts in accordance with IFRS and Olvi Group’s accounting policies. The acquisition is recognised as preliminary in the interim report.

 

Acquisition price

 

EUR 1,000

 

 

 

 

 

Paid in cash (96.8%)

9,220

Share belonging to non-controlling interests (3.2%)

269

Total acquisition price (100%)

9,489

 

 

Amounts recognised for assets acquired and liabilities assumed (100%)

 

EUR 1,000

 

 

 

 

 

Tangible assets

16,519

Intangible assets

 

  Customer relationships

484

  Trademarks

1,789

  Other intangible assets

87

Other investments

5

Deferred tax receivables

551

Inventories

5,813

Accounts receivable and other receivables

2,785

Liquid assets

193

Non-current liabilities

5,536

Deferred tax liabilities

2,434

Current liabilities

10,767

Identifiable net assets total

9,489

 


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.

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)             

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