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2022-08-11 08:00:00 CEST 2022-08-11 08:00:10 CEST REGULATED INFORMATION Olvi Oyj - Half Year financial reportOlvi Group's half-year report 1 January to 30 June 2022 (6 months)OLVI PLC Half-year report 11 August 2022 at 9 am Olvi Group's half-year report 1 January to 30 June 2022 (6 months) Half-year report in brief Olvi Group's sales volume and net sales developed strongly during the second quarter, in line with the favourable trend that prevailed in the first quarter. The Group's operating profit decreased during the review period, but the previous year's level was achieved in the second quarter despite significant and rapid cost increases. The impact of higher costs has been successfully reduced through price increases in all markets. The Group's solvency has remained strong, thus enabling future growth investments. Near-term outlook unchanged The operating profit from continuing operations is expected to remain at the previous year's good level. However, business operations involve significant uncertainties due to the availability of raw materials, packaging materials and energy and the increase in costs. Olvi publishes its near-term outlook for continuing operations, which include the company's reporting segments in Finland and the Baltic Sea region. Its business operations in Belarus are presented as discontinued operations / assets held for sale in accordance with IFRS 5 and will therefore not be included in the near-term outlook. The Group's key ratios (continuing operations) 4-6/ 4-6/ Change, % 1-6/ 1-6/ Change, % 1-12/ 2022 2021 /pp 2022 2021 /pp 2021 Sales volume, 188.7 159.2 18.5 323.5 271.7 19.0 574.5 Mltr Net sales, 127.0 102.0 24.5 211.8 171.4 23.5 364.8 MEUR Gross profit, 48.6 44.7 8.7 79.9 72.9 9.6 151.7 MEUR % of net 38.3 43.8 37.7 42.5 41.6 sales Operating 15.4 15.5 -0.4 20.0 21.9 -8.3 45.1 profit, MEUR % of net 12.2 15.2 9.5 12.8 12.4 sales Profit for 10.8 10.9 -0.3 14.7 16.4 -10.2 36.7 the period, MEUR % of net 8.5 10.7 6.9 9.5 10.1 sales Earnings per 0.52 0.52 -1.2 0.71 0.79 -10.7 1.77 share, EUR Investments, 8.9 8.1 9.9 17.1 14.2 20.3 26.8 MEUR Equity per 14.45 12.86 12.4 14.19 share, EUR Equity ratio, 53.7 54.6 -0.9 60.7 % Gearing, % -11.6 -22.9 -11.3 -16.6 Key ratios for the Group, including assets held for sale 4-6/ 4-6/ Change, % 1-6/ 1-6/ Change, % 1-12/ 2022 2021 /pp 2022 2021 /pp 2021 Sales volume, Mltr 278.4 249.8 11.4 467.2 413.7 12.9 853.7 Net sales, MEUR 168.8 132.0 27.9 272.7 217.3 25.5 462.2 Operating profit, MEUR 26.7 20.6 29.4 33.1 28.7 15.4 59.4 % of net sales 15.8 15.6 12.1 13.2 12.9 Assets held for sale are discussed in more detail under item 12 of Table 5 in the table section of the half-year report bulletin. Business development Lasse Aho, Managing Director: Business development during the second quarter Demand for Olvi Group's products continued to be strong in the second quarter. The sales of non-alcoholic products in particular continued to grow rapidly in line with the strategy. Investments in new brands and new spring season products have been well received in the market. The sales volume increased by 18.5%, and growth was achieved in all geographical reporting segments as retail demand remained strong and sales to the hotel, restaurant and catering (HoReCa) sector and cross-border trade recovered following the lifting of sales channel and travel restrictions related to the coronavirus pandemic. Exports to Russia have ceased. Exports to other markets grew as planned. Net sales increased by 24.5%. Excluding the acquisitions made in 2021, the sales volume increased by 7.8% and the net sales by 17.7%. Because of the strong and sudden increase in costs, price increases have been implemented as far as possible in each market and sales channel. Net sales increased in all markets. Cost increases could not yet be fully transferred to prices. Production costs in raw materials, packaging materials, energy and fuel began to increase significantly during the coronavirus pandemic and have continued to do so because of the war in Ukraine. There have been challenges in the availability of materials. Salaries have increased, especially in the Baltics. Profitability management has been challenging due to the rapidly changing operating environment and inflation. The operating profit was EUR 15.4 million and remained close to the previous year's level, decreasing by only 0.4%, as the impact of cost increases was partly offset by the price increases implemented. Business development during the first half of the year During the first half of the year, the sales volume increased by 19.0% and net sales grew by 23.5%. The market shares remained at a good level or continued to improve in many product categories. In addition, new business operations - such as Vestfyen in Denmark and Piebalgas and the Everest water brand in Latvia - generated growth for the Group as planned. The operating profit was EUR 20.0 million, decreasing by 8.3% from the previous year. The company's performance improved significantly during the second quarter. Price increases have been implemented in response to cost increases. In addition, operational efficiency is being continuously improved through targeted investments and operational measures. During the first half of the year, Olvi continued its strategic investments in growing its production and storage capacity and strengthened its future competitiveness by implementing strategic reform projects related to sustainability and digitalisation, for example. Olvi aims to achieve carbon -neutral operations in its Iisalmi plant during 2023. Business capabilities are being improved in terms of data-based management and digitalisation. Segment-specific business development Business operations developed favourably in Finland in the second quarter as sales to the hotel, restaurant and catering (HoReCa) sector and cross-border trade recovered following the lifting of restrictions related to the coronavirus pandemic. Retail demand also remained strong. The sales volume increased by 3.3%, which is a good achievement, considering the impact of the warm early summer on the volume in the previous year, which is reflected in the figures for the comparison period. The sales volume increased by 2.1% during the first half of the year. Successes in 2022 include hard seltzers, in which Olvi is the market leader by a clear margin. Net sales grew by 9.7% as cost increases were partially transferred to customer prices during the spring. Net sales have increased by 8.6% since the beginning of the year. Operating profit increased by 9.6% during the second quarter but decreased by 3.0% during the first half of the year. The comparable operating profit improved, because costs related to remuneration were recognised in the previous year and there were no such costs in the reporting period. In operational terms, it has been challenging to reach the previous year's profitability level because of cost pressures and the timing of price increases. In the Baltic Sea region reporting segment, the sales volume increased by 35.0% and net sales grew by 46.1% in the second quarter. Excluding the acquisitions made in 2021, the sales volume increased by 15.8% and the net sales by 31.5%. The sales volume and net sales improved in all countries of operation and especially in Latvia. The sales of Everest water and Piebalgas beers have increased business operations in Latvia as planned. Export sales opportunities in new markets were successfully seized. The sales volume increased by 39.6% and net sales grew by 47.6% during the first half of the year. Denmark, which was not included in the previous year's comparison figures, is significantly contributing to the growth of the segment. Investments support sales growth. A new brewhouse is being built in Lithuania, the storage capacity in Estonia and Latvia has been expanded significantly, and production is being modernised in Denmark. The purpose of these measures is to ensure a strong market position in the future. Energy and fuel costs have increased steeply. Combined with the increase in raw material and packaging material prices and availability problems, this has reduced profitability. The integration in Denmark is still in progress. The operating profit decreased by 6.5% in the second quarter and has decreased by 8.5% since the beginning of the year. Seasonal nature of operations The nature of the Group's business operations involves seasonal fluctuation. The net sales and operating profit of the geographical reporting segments are not accumulated steadily. Instead, they fluctuate in accordance with the special characteristics of the seasons of the year and product seasons. Sales development Olvi Group's sales volume grew by 19.0% in January-June, totalling 323.5 (271.7) million litres. The growth focused on the Baltic Sea region segment, which did not include Denmark in the comparison period. Sales volume, 4-6/2022 4-6/2021 Change, % 1-6/2022 1-6/2021 Change, % Mltr Finland 75.1 72.7 3.3 130.7 127.9 2.1 Baltic Sea 128.4 95.0 35.0 218.3 156.4 39.6 region Eliminations -14.7 -8.5 -25.5 -12.6 Continuing 188.7 159.2 18.5 323.5 271.7 19.0 operations, total The Group's net sales increased by 23.5% in January-June and were EUR 211.8 (171.4) million. Net sales, 4-6/2022 4-6/2021 Change, % 1-6/2022 1-6/2021 Change, % MEUR Finland 58.9 53.7 9.7 100.5 92.5 8.6 Baltic Sea 76.1 52.1 46.1 124.7 84.5 47.6 region Eliminations -8.0 -3.8 -13.5 -5.6 Continuing 127.0 102.0 24.5 211.8 171.4 23.5 operations, total Financial performance The Group's operating profit in January-June was EUR 20.0 (21.9) million, or 9.5% (12.8%) of net sales. The operating profit was burdened by rapidly increasing production costs related to energy, raw materials, packaging materials and logistics in particular. It has not been possible to transfer the cost increases immediately to the prices of end products because of the pricing periods in the retail sector, among other reasons. Operating 4-6/2022 4-6/2021 Change, % 1-6/2022 1-6/2021 Change, % profit, MEUR Finland 8.8 8.0 9.6 11.4 11.7 -3.0 Baltic Sea 7.3 7.8 -6.5 9.6 10.5 -8.5 region Eliminations -0.6 -0.3 -0.9 -0.4 Continuing 15.4 15.5 -0.4 20.0 21.9 -8.3 operations, total The Group's profit after taxes in January-June was EUR 14.7 (16.4) million. Earnings per share calculated from the profit attributable to the owners of the parent company were EUR 0.71 (0.79) in January-June. Balance sheet, financing and investments Olvi Group's balance sheet total at the end of June 2022 was EUR 563.4 (493.6) million. Equity per share at the end of June 2022 was EUR 14.45 (12.86). The equity ratio was 53.7% (54.6%), and gearing was -11.6% (-22.9%). The Group's liquidity indicator, the current ratio, remained almost at the same level as before, at 1.0 (1.1). Interest-bearing liabilities amounted to EUR 8.9 (3.6) million at the end of June. The increase is due to Vestfyen's short-term interest-bearing loans in Denmark. Of the interest-bearing liabilities, short-term liabilities accounted for EUR 7.0 (1.3) million. Olvi Group's expansion and replacement investments totalled EUR 17.1 (14.2) million in January-June. Of the investments, EUR 6.2 million were made in Finnish companies and EUR 10.9 million in subsidiaries in the Baltic Sea region. Olvi Group has continued its investments in continuing operations as planned and has invested in increasing and diversifying its production and storage capacity and in modernising its production facilities and making them more environmentally friendly. In addition, investments have been made to ensure continuity in terms of energy solutions in the Baltic countries in particular. Personnel The average number of personnel in Olvi Group's continuing operations was 1,468 (1,210) in January-June. The Group's average number of personnel increased by 21.3%, mainly because of the acquisition of Piebalgas and Vestfyen in 2021. Olvi Group's average number of personnel by segment: 4-6/2022 4-6/2021 Change, % 1-6/2022 1-6/2021 Change, % Finland 476 437 8.9 441 404 9.2 Baltic Sea region 1,067 848 25.8 1,027 806 27.4 Total 1,543 1,285 20.1 1,468 1,210 21.3 Board of Directors and management No changes took place in Olvi plc's Board of Directors and management during the review period. By means of a separate stock exchange release issued on 20 June 2022, Olvi plc announced that it had appointed a new Managing Director due to the retirement of its current Managing Director. Patrik Lundell will take over as Olvi's Managing Director on 1 January 2023. Lasse Aho will continue as Managing Director until 31 December 2022. Patrik Lundell, MBA, will join Olvi from Starbucks, where he served as the Director of the Channel Business Development unit for operations in Europe, Africa and the Middle East. He has previously worked for several international companies, holding various positions at Unilever, PepsiCo and Scottish & Newcastle, for example. The Managing Director of the Estonian subsidiary will change on 1 September 2022. Tarmo Noop, who has led the company very successfully as its Managing Director for 25 years, will be followed by Jaanus Vihand. He has more than 20 years of experience in managerial positions in the food industry and the retail sector. In 2019, he was selected as the best Managing Director in Estonia. Other events during the review period Changes in the Group structure No significant changes took place in Olvi's subsidiary holdings during January-June 2022. Business risks and their management Impacts of the war in Ukraine The war in Ukraine has significantly increased business risks. There have been challenges in the availability of packaging materials because of the coronavirus pandemic, and the war in Ukraine has worsened the situation, especially in terms of cans and glass bottles. So far, there have been no significant losses of sales. The prices of packaging materials have continued to increase because of higher production and logistics costs. The prices of packaging materials begun to increase during the coronavirus pandemic. In addition, the prices of raw materials have increased rapidly, especially for barley and sugar, and availability has decreased in the market. The price of energy has multiplied for electricity and gas during the first half of the year, particularly in the Baltic Sea region segment, which affects production costs. The price of oil has increased fuel prices, which are directly reflected in logistics costs. The company will respond to the increase in costs by continuing price increases until the end of the year. Olvi has been actively seeking alternative suppliers and is working to improve the efficiency of its production operations. Consumer prices have risen rapidly during 2022, especially in Europe as a result of the war in Ukraine. General cost inflation is reducing consumers' purchasing power and thereby affecting consumer behaviour. The focus of consumption is shifting towards more affordable product options. In addition, overall consumption may decrease. This may have an impact on business growth opportunities over the long term. The possible end of Russian energy imports to Europe has been taken into account in Olvi's operations, especially in the Baltic region. Alternative energy solutions have been sought, and production plants have been successfully adapted to any energy-related changes to ensure uninterrupted production. The war in Ukraine has significantly changed the business environment in Russia and Belarus. In accordance with the stock exchange release issued by Olvi's Board of Directors on 5 March 2022, Olvi has stopped exports to Russia from all its countries of operation and has started careful planning to divest its business operations in Belarus. The end of exports to Russia, the increase in production and logistics costs caused by the war and the divestment of business operations in Belarus are having a significant impact on the Group's business operations. The business operations of its company in Belarus are affected by the sanctions imposed by the EU and by the end of exports to Russia. However, successful efforts have been made to continue the Belarusian company's operational and maintenance activities by ensuring sufficient procurement locally. The situation concerning the divestment of business operations in Belarus is discussed in more detail under item 12 of Table 5 in the table section of the half-year report bulletin. Coronavirus pandemic There are uncertainties in forecasting the development of business operations, because it has been difficult to predict the spill over effects of the coronavirus pandemic. These effects are related to sales channel restrictions imposed to prevent the spread of the coronavirus pandemic and to travel restrictions, for example, as well as to changes in overall demand. In addition, there have been major challenges in global production and transport chains in terms of availability and cost pressures. These have continued because of the strict measures related to the coronavirus pandemic in China, among other reasons. During the first half of 2022, there were still significant sales channel restrictions related to the coronavirus pandemic in Olvi's countries of operation, but these restrictions were lifted at the beginning of the second quarter. The recovery of consumer demand has begun, especially in the hotel, restaurant and catering (HoReCa) sector and cross-border trade. Preparedness Olvi Group has drawn up several scenarios and is prepared to respond to changing situations through various measures. Preparations have been made for production disruptions and continuity plans have been drawn up for, among other things, the availability of personnel, raw materials and energy. Investments are in progress to ensure the availability of energy, in case of possible sanctions. The company has also made efforts to ensure the availability of raw materials and packaging materials. A more detailed description of the normal risks related to business operations is provided in the Board of Directors' report and the notes to the financial statements and on the company website (Investors > Olvi as an investment > Risks and risk management). Events after the review period There are no significant events to report after the review period. OLVI PLC Board of Directors More information: Lasse Aho, Managing Director, Olvi plc, tel. +358 290 00 1050 or +358 400 203 600 Tiina-Liisa Liukkonen, CFO, Olvi plc, tel. +358 290 00 1050 or +358 41 505 4779 TABLES: - Consolidated statement of comprehensive income, Table 1 - Consolidated balance sheet, Table 2 - Consolidated statement of changes in equity, Table 3 - Consolidated cash flow statement, Table 4 - Notes to the half-year report bulletin, Table 5 DISTRIBUTION: NASDAQ OMX Helsinki Ltd Key media outlets www.olvi.fi OLVI GROUP TABLE 1 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME EUR 1,000 4-6/2022 4-6/2021 1-6/2022 1-6/2021 1-12/202 1 Gross sales 294,385 260,773 498,359 446,320 924,637 Excise taxes and other -167,365 -158,732 -286,606 -274,909 -559,871 adjustments Net sales 127,020 102,041 211,753 171,411 364,766 Cost of sales -78,414 -57,343 -131,870 -98,529 -213,079 Gross profit 48,606 44,698 79,883 72,882 151,687 Logistics, sales and -25,305 -21,357 -44,318 -37,259 -77,723 marketing expenses Administrative -7,960 -7,827 -15,849 -13,998 -29,954 expenses Other operating income 98 -5 331 238 1,070 and expenses Operating profit 15,438 15,508 20,046 21,863 45,080 Financial income 85 16 106 24 46 Financial expenses -177 49 -235 20 -302 Share of the profit of 0 0 0 0 44 associated companies and joint ventures Profit before tax 15,347 15,572 19,917 21,907 44,868 Income taxes -4,498 -4,685 -5,223 -5,542 -8,198 Profit for the period, 10,849 10,887 14,695 16,365 36,670 continuing operations Profit for the period, 8,561 4,090 10,201 5,484 11,691 assets held for sale PROFIT FOR THE PERIOD 19,410 14,977 24,895 21,849 48,361 Other items of comprehensive income that may be later reclassified to profit or loss: Translation 13,858 1,192 5,809 2,600 5,366 differences related to foreign subsidiaries Income taxes related -188 -19 -66 -44 -85 to items TOTAL COMPREHENSIVE 33,080 16,150 30,638 24,405 53,642 INCOME FOR THE PERIOD Distribution of the profit for the period: - Owners of the parent 19,013 14,808 24,497 21,644 47,862 company - Non-controlling 397 169 398 205 499 interest Distribution of comprehensive income for the period: - Owners of the parent 32,250 15,944 30,060 24,120 52,977 company - Non-controlling 830 206 578 285 665 interest Earnings per share calculated from profit attributable to owners of the parent company, EUR - Undiluted, 0.52 0.52 0.71 0.79 1.77 continuing operations - Diluted, continuing 0.52 0.52 0.71 0.79 1.77 operations - Undiluted, assets 0.40 0.19 0.48 0.25 0.54 held for sale - Diluted, assets held 0.40 0.19 0.48 0.25 0.54 for sale OLVI GROUP TABLE 2 CONSOLIDATED BALANCE SHEET EUR 1,000 30 Jun 2022 30 Jun 2021 31 Dec 2021 ASSETS Non-current assets Tangible assets 196,888 173,352 190,627 Goodwill 22,204 22,204 22,204 Other intangible assets 11,845 9,807 12,355 Shares in associated 980 974 1,018 companies Other investments 888 880 888 Loans receivable and other 2,069 2,026 1,393 long-term receivables Deferred tax assets 1,415 632 1,452 Total non-current assets 236,290 209,876 229,937 Current assets Inventories 56,104 40,417 47,164 Accounts receivable and 125,349 101,478 86,270 other receivables Income tax receivables 22 215 0 Cash and cash equivalents 44,079 65,142 50,640 Total current assets 225,553 207,252 184,075 Non-current assets held for 101,540 76,429 76,231 sale TOTAL ASSETS 563,383 493,557 490,242 EQUITY AND LIABILITIES Equity attributable to owners of the parent company Share capital 20,759 20,759 20,759 Other reserves 1,387 1,387 1,387 Treasury shares -1,075 -400 -438 Translation differences -48,165 -56,366 -53,727 Retained earnings 326,092 300,914 326,016 298,998 266,294 293,997 Non-controlling interest 3,798 3,079 3,627 Total equity 302,796 269,373 297,624 Non-current liabilities Financial liabilities 1,984 2,321 1,913 Other liabilities 3,999 4,588 3,985 Deferred tax liabilities 13,760 11,031 13,943 Current liabilities Financial liabilities 6,961 1,275 1,269 Accounts payable and other 209,507 183,194 158,164 payables Income tax liability 3,243 3,268 872 Liabilities related to non 21,132 18,508 12,471 -current assets held for sale Total liabilities 260,586 224,184 192,617 TOTAL EQUITY AND 563,383 493,557 490,242 LIABILITIES OLVI GROUP TABLE 3 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY EUR 1,000 Share Other Reserve Fair Translation Earnings Attributable Total capital reserves for value differences to non treasury reserve -controlling shares interest Equity 1 Jan 20,759 1,092 -438 295 -53,728 326,016 3,627 297,624 2022 Comprehensive income: Profit 24,497 398 24,895 for the period Other items of comprehensive income: 5,629 180 5,809 Translation differences -66 -66 Income taxes related to items Total 5,563 24,497 578 30,638 comprehensive income for the period Business transactions with shareholders: Dividend -24,855 -175 -25,030 payment -637 -637 Acquisition of treasury shares Share 518 518 -based incentives, value of work performance -84 -84 Adjustment for previous periods Business -637 -24,421 -175 -25,233 transactions with shareholders, total Changes in holdings in subsidiaries: -232 -232 Acquisition of non -controlling interest Change 232 -232 0 in non -controlling interest Changes in 0 -232 -232 holdings in subsidiaries, total Equity 30 Jun 20,759 1,092 -1,075 295 -48,165 326,092 3,798 302,796 2022 EUR 1,000 Share Other Reserve Fair Translation Earnings Attributable Total capital reserves for value differences to non treasury reserve -controlling shares interest Total equity 20,759 1,092 -1,802 295 -58,842 303,465 3,165 268,132 1 Jan 2022 Comprehensive income: Profit 21,644 205 21,849 for the period Other items of comprehensive income: 2,520 80 2,600 Translation differences -44 -44 Income taxes related to items Total 2,476 21,644 285 24,405 comprehensive income for the period Business transactions with shareholders: Dividend -22,771 -346 -23,117 payment Share 296 296 -based incentives, value of work performance -874 -874 Acquisition of treasury shares Issue of 1,687 -1,614 73 treasury shares to personnel Sale of 589 589 treasury shares to personnel -105 -26 -131 Adjustment for previous periods Business 1,402 -24,194 -372 -23,164 transactions with shareholders, total Changes in holdings in subsidiaries: Change in -1 1 0 non -controlling interest Changes in -1 1 0 holdings in subsidiaries, total Equity 30 Jun 20,759 1,092 -400 295 -56,366 300,914 3,079 269,373 2021 OLVI GROUP TABLE 4 CONSOLIDATED CASH FLOW STATEMENT EUR 1,000 1-6/2022 1-6/2021 1-12/2021 Profit for the period, continuing 14,695 16,365 36,670 operations Profit for the period, assets held for 10,201 5,484 11,691 sale Adjustments: Depreciation and impairment 12,533 13,058 27,006 Other adjustments 8,568 7,047 10,251 Change in net working capital: Change in accounts receivable and -47,052 -32,277 -5,878 other receivables Change in inventories -13,310 -6,825 -8,684 Change in accounts payable and 44,246 55,330 28,561 other liabilities Interest paid -544 -186 -594 Interest received 140 108 268 Dividends received 5 2 3 Taxes paid -3,446 -1,997 -9,687 Cash flow from operating activities (A) 26,036 56,109 89,607 Investments in tangible and intangible -17,835 -16,816 -31,213 assets Proceeds from the sale of tangible and 377 881 1,068 intangible assets Acquisition of shares from non -378 0 0 -controlling interest Acquisition of shares in subsidiaries, 0 -2,094 -11,121 associated companies and joint ventures Expenditure on other investments 0 -30 -30 Dividends received 38 21 21 Cash flow from investing activities (B) -17,798 -18,038 -41,275 Loan withdrawals 6,864 0 884 Repayment of loans -1,125 -1,295 -12,371 Acquisition of treasury shares -637 -874 -874 Sale of treasury shares to personnel 0 589 551 Dividends paid -12,587 -11,734 -23,240 Cash flow from financing activities (C) -7,485 -13,314 -35,050 Increase (+) / decrease (-) in cash and 753 24,757 13,282 cash equivalents (A+B+C) Cash and cash equivalents 1 Jan 58,741 45,096 45,096 Impact of exchange rate changes 197 164 363 Cash and cash equivalents 30 Jun / 31 59,691* 70,017 58,741 Dec * The cash flow statement includes both continuing operations and assets held for sale. OLVI GROUPTABLE 5 NOTES TO THE HALF-YEAR REPORT The half-year report has been prepared in accordance with IAS 34, applying the same accounting principles that were applied to the 2021 financial statements (31 December 2021), with the exception of IFRS 5 (Non-current Assets Held for Sale and Discontinued Operations), which has been applied as a new standard. In accordance with IFRS 5, the Belarusian operations have been classified as non -current assets held for sale. More detailed information about the impacts of the classification is provided in Note 12. Olvi has changed its segment reporting in accordance with IFRS 8 (Operating Segments) from 1 January 2022 onwards. The comparison information has been changed accordingly. The figures in the half-year report are presented in thousands (1,000) of euros. For presentation, individual figures and totals have been rounded up to the next full thousand, which causes differences in totals. Exchange rates obtained from the Central Bank of Belarus have been used as the exchange rate for the Belarusian rouble. The key ratios have been calculated by using accurate euro -denominated figures. The information published in the half-year report has not been audited. 1. SEGMENT INFORMATION SEGMENTS' NET SALES AND PROFIT 1 -6/2022 EUR 1,000 Finland Baltic Sea region Eliminations Group total INCOME External 99,840 111,913 0 211,753 sales Beverage 99,031 111,913 0 210,944 sales 809 809 Equipment services Internal 664 12,824 -13,488 0 sales Total net 100,504 124,737 -13,488 211,753 sales Total profit 29,170 6,164 -20,639 14,695 for the period SEGMENTS' NET SALES AND PROFIT 1 -6/2021 EUR 1,000 Finland Baltic Sea region Eliminations Group total INCOME External 92,070 79,341 0 171,411 sales Beverage 91,613 79,341 0 170,954 sales 457 457 Equipment services Internal 443 5,166 -5,609 0 sales Total net 92,513 84,507 -5,609 171,411 sales Total profit 28,230 7,468 -19,333 16,365 for the period 2. RELATED PARTY TRANSACTIONS Management's employee benefits Board members' and the Managing Director's salaries and other short -term employee benefits EUR 1,000 1-6/2022 1-6/2021 1-12/2021 Managing Director 407 758 939 Chair of the Board 36 36 73 Other Board members 86 86 172 Total 529 880 1,184 3. SHARES AND SHARE CAPITAL 30 Jun 2022 % Series A shares, 16,989,976 82.0 number of shares Series K shares, 3,732,256 18.0 number of shares Total 20,722,232 100.0 Total number of 16,989,976 18.5 votes, Series A shares Total number of 74,645,120 81.5 votes, Series K shares Total number of 91,635,096 100.0 votes Votes per Series A 1 share Votes per Series K 20 share The registered share capital totalled EUR 20,759 thousand on 30 June 2022. A dividend of EUR 1.20 per share for 2021 (EUR 1.10 per share for 2020), totalling EUR 24.9 (22.8) million, will be paid on shares in Olvi plc. The dividend will be paid in two instalments. The first instalment, EUR 0.60 per share, was paid on 20 April 2022. The second instalment, EUR 0.60 per share, will be paid on 2 September 2022. Series K shares and Series A shares provide their holders with equal rights to dividends. The Articles of Association include a redemption clause concerning Series K shares. 4. TREASURY SHARES On 30 March 2022, Olvi plc's Annual General Meeting (AGM) decided to authorise the Board of Directors to decide, within one year of the AGM, on the acquisition of Series A shares in the company with distributable funds. The authorisation covers up to 500,000 Series A shares and revokes previous unused authorisations to acquire treasury shares. The AGM also decided to authorise the Board of Directors to decide on the issue of up to 1,000,000 new Series A shares and the transfer of up to 500,000 Series A shares held by the company. This authorisation revokes previous unused authorisations to transfer treasury shares held by the company. At its meeting on 23 May 2022, the Board of Directors of Olvi plc decided to initiate a scheme to acquire treasury shares based on the authorisation issued by the Annual General Meeting on 30 March 2022. On this basis, the Board will repurchase a maximum of 20,000 Series A shares. The acquisition of shares began on 30 May 2022 and ended on 14 June 2022. At the end of the review period, Olvi plc held a total of 29,404 of its own Series A shares as treasury shares. The total acquisition price of treasury shares was EUR 1,075.4 thousand. The treasury shares do not provide the company with voting rights. The Series A shares held by Olvi plc represent 0.14% of all shares in the company and 0.03% of all votes provided by the shares in the company. The treasury shares account for 0.17% of all Series A shares in the company and the votes provided by all Series A shares in the company. 5. SHARE-BASED REWARDS By means of a stock exchange release issued on 27 May 2022, Olvi plc's Board of Directors announced two new share-based incentive schemes for the Group's key employees. The aim of incentive plans is to support the achievement of Olvi's targets, retain key employees in the company and provide them with incentive schemes that are based on earning and accumulating shares. The Performance Share Plan 2022-2024 consists of one performance period. During the 2022-2024 performance period, the rewards are based on the Group's cumulative EBIT in euros, the Group's cumulative sales volume of non-alcoholic products and the reduction of CO2 emissions in the Group's entire value chain compared with the 2021 level. The net amount of rewards to be paid based on the performance period will amount to a maximum of 10,670 Olvi plc Series A shares. During the 2022-2024 performance period, 16 people, including the Managing Director and the other Olvi Management Team members, belong to the target group for the performance period. The Matching Share Plan for new key employees consists of one matching period, covering the 2022-2023 financial years. In the plan, the target group is offered an opportunity to receive matching shares for their personal investment in Olvi plc Series A shares. The rewards based on the plan will be paid after the end of the matching period. The net amount of rewards to be paid for the matching period will amount to a maximum of 2,000 Olvi plc Series A shares. Around 10 people belong to the target group of the plan. 6. NUMBER OF SHARES* 1-6/2022 1-6/2021 1-12/2021 - Average 20,708,869 20,700,288 20,706,610 - At the end of the period 20,692,828 20,712,828 20,712,828 * The treasury shares held by the company have been deducted. 7. TRADING IN SERIES A SHARES ON THE NASDAQ HELSINKI 1-6/2022 1-6/2021 1-12/2021 Trading in Series A shares in Olvi, 1,438,181 1,146,330 1,812,283 number of shares Total value of trading, EUR 1,000 52,513 54,729 89,417 Proportion of the trading out of 8.5 6.7 10.7 the total number of Series A shares, % Average share price, EUR 36.58 47.77 49.35 Closing price, EUR 32.35 50.70 51.20 Highest price, EUR 52.00 55.50 55.70 Lowest price, EUR 29.40 43.10 43.10 8. FOREIGN AND NOMINEE -REGISTERED HOLDINGS 30 JUNE 2022 Book-entry shares Number of votes Shareholders number % number % number % Finnish, total 16,344,735 78.88 87,257,599 95.22 20,433 99.57 Foreign, total 65,155 0.31 65,155 0.07 77 0.38 Nominee 495,616 2.39 495,616 0.54 6 0.03 -registered (foreign), total Nominee 3,816,726 18.42 3,816,726 4.17 5 0.02 -registered (Finnish), total Total 20,722,232 100.00 91,635,096 100.00 20,521 100.00 9. LARGEST SHAREHOLDERS 30 JUNE 2022 Series K Series A Total % Number of % votes 1. Olvi Foundation 2,363,904 890,613 3,254,517 15.71 48,168,693 52.57 2. The estate of Heikki 903,488 103,280 1,006,768 4.86 18,173,040 19.83 Hortling* 3. Timo Einari Hortling 212,600 49,152 261,752 1.26 4,301,152 4.69 4. Marit Hortling-Rinne 149,064 14,234 163,298 0.79 2,995,514 3.27 5. Nordea Bank Abp, nominee-registered 2,003,344 2,003,344 9.67 2,003,344 2.19 6. Skandinaviska Enskilda Banken Ab (publ), 1,773,223 1,773,223 8.56 1,773,223 1.94 Helsinki branch, nominee-registered 7. Varma Mutual Pension Insurance Company 828,075 828,075 4.00 828,075 0.90 8. Ilmarinen Mutual Pension Insurance 683,000 683,000 3.30 683,000 0.75 Company 9. Pia Johanna Hortling 23,388 25,366 48,754 0.24 493,126 0.54 10. Jens Einari Hortling 23,388 16,216 39,604 0.19 483,976 0.53 Others 56,424 10,603,473 10,659,897 51.42 11,731,953 12.79 Total 3,732,256 16,989,976 20,722,232 100.00 91,635,096 100.00 * The shareholding includes shares held by the shareholder and the entities controlled by them. Olvi did not receive any flagging notifications under chapter 2, section 10 of the Securities Markets Act in January-June 2022. 10. PROPERTY, PLANT AND EQUIPMENT EUR 1,000 1-6/2022 1-6/2021 1-12/2021 Opening balance 190,627 168,833 168,833 Additions 16,615 15,298 43,203 Deductions and transfers -90 -1,324 -1,951 Depreciation and amortisation -10,260 -9,455 -19,458 Exchange rate differences -4 0 0 Total 196,888 173,352 190,627 11. CONTINGENT LIABILITIES EUR 1000 30 Jun 2022 30 Jun 2021 31 Dec 2021 Pledged assets and contingent liabilities On the company's own behalf 10,004 1,938 10,007 Lease and rental liabilities: Maturing in less than a year 1,294 805 1,012 Maturing within 1-5 years 1,399 637 550 Total lease and rental liabilities 2,693 1,442 1,562 Other liabilities 60 60 60 12. NON-CURRENT ASSETS HELD FOR SALE Classification and accounting principles Olvi strongly condemns the Russian attack on Ukraine. At its meeting on 5 March 2022, Olvi plc's Board of Directors decided to divest the company's business operations in Belarus and start preparations to sell Lidskoe Pivo, a subsidiary in which Olvi plc has a holding of 96.36%. Since the interim report for January-March 2022 (31 March 2022), Lidskoe Pivo has been classified as discontinued operations / assets held for sale in accordance with IFRS 5 (Non -current Assets Held for Sale and Discontinued Operations). The divestment of Lidskoe Pivo is expected to be highly probable within the next 12 months. The divestment in Belarus will cause the Group's business operations to reduce significantly. In 2021, Belarus represented 33.2% of the Group's sales volume, 21.1% of its net sales and 24.3% of its operating profit. In addition, the planning and implementation of the divestment will cause non-recurring costs. Following the Board's decision, Olvi stopped investments in Lidskoe Pivo, ended its significant Russian exports and started identifying potential buyers and negotiating the divestment of the business. The process has progressed as planned and is being actively promoted. Local and international legislation and the employees will be taken into account during the process. The classification in accordance with IFRS 5 has required management discretion. Permission from the local authorities and the competition regulator is required for the divestment. These are two separate processes. The Belarusian authorities have a pre-emptive right in company acquisitions. In June, the Belarusian Government announced additional restrictions on the sale of companies under Western ownership for shareholders from countries that have imposed sanctions. Despite the new restrictions, the company's management believes, based on the information currently available and the negotiations carried out with the local authorities, that it is possible to implement the divestment in accordance with the 12-month period previously determined. Income statement, assets held for sale EUR 1,000 1-6/2022 1-6/2021 1-12/2021 Net sales 60,911 45,862 97,464 Expenses -47,884 -39,065 -83,105 Operating profit 13,027 6,797 14,359 Financial items -814 -15 -115 Profit before tax 12,213 6,782 14,244 Income taxes -2,012 -1,298 -2,553 Profit for the period, assets held for sale 10,201 5,484 11,691 Olvi's sales volume in Belarus decreased by 1.0% in the second quarter, but its net sales grew by 39.5%. Since the beginning of the year, the sales volume has increased by 1.0% and net sales have grown by 32.8%. The sales volume is affected by the end of Russian exports in particular. On the other hand, domestic demand has remained at a good level, and Lidskoe Pivo's market share has increased. Significant price increases were implemented during the spring, which caused net sales to grow. Price increases were made in response to the uncertain situation in the operating environment. Production costs have increased significantly, and the impact of sanctions is reflected in the availability of materials in particular. The operating profit increased by 120.3% during the second quarter and has increased by 92.0% since the beginning of the year. Increased net sales, the adjustment measures and the significantly stronger exchange rate have a positive impact on the comparable operating profit in euros. In addition, depreciation is not recognised for assets held for sale in accordance with the IFRS. The impact of this depreciation on the result would have been EUR 1.8 million. The adjustment measures have not affected the number of personnel. Balance sheet, assets held for sale EUR 1,000 30 Jun 2022 30 Jun 2021 31 Dec 2021 Consolidated goodwill 4,072 3,597 3,762 Intangible assets 376 208 341 Tangible assets 41,543 37,630 38,729 Loans receivable and 289 307 338 other long-term receivables Deferred tax assets 252 3 36 Inventories 17,229 10,174 11,445 Current receivables 22,167 19,635 13,479 Cash in hand and at bank 15,612 4,875 8,101 Non-current assets held 101,540 76,429 76,231 for sale EUR 1,000 30 Jun 2022 30 Jun 2021 31 Dec 2021 Non-current financial 17 0 0 liabilities Deferred tax liabilities 5 71 0 Current financial 6 19 3 liabilities Accounts payable and other 19,181 17,309 12,468 payables Income tax liability 1,923 1,109 0 Liabilities related to non 21,132 18,508 12,471 -current assets held for sale Other information concerning assets held for sale 1,000 euros/litres 1-6/2022 1-6/2021 1-12/2021 Sales volume 143,737 141,977 279,197 Average number of personnel 849 816 832 Earnings per share, EUR, undiluted 0.48 0.25 0.54 Earnings per share, EUR, diluted 0.48 0.25 0.54 Cash flow from operating activities 7,955 4,380 12,847 Cash flow from investing activities -637 -2,697 -5,043 Cash flow from financing activities -6 -2,474 -5,569 13. CALCULATION PRINCIPLES FOR KEY RATIOS In its summary of key ratios (page 1), the Group presents key ratios directly derived from the consolidated income statement (net sales, operating profit, profit for the period and their proportions of net sales, as well as earnings per share). (Earnings per share = Profit for the period attributable to owners of the parent company / Average number of shares during the period, adjusted for share issues). In addition to its IFRS-based consolidated financial statements, Olvi plc presents Alternative Performance Measures that describe the financial performance of its business operations and provide a comparable overview of the company's profitability, solvency and liquidity. The Group has applied the European Securities and Markets Authority's (ESMA) new guidelines (effective since 3 July 2016) on Alternative Performance Measures and has determined such measures as follows: The Group presents sales volume data in millions of litres as an Alternative Performance Measure that supports net sales. Sales volume is an important and widely used indicator in the industry that describes the scope of operations. Earnings per share = Equity attributable to owners of the parent company / Number of shares at the end of the period, adjusted for share issues. Equity ratio, % = 100 * (Equity attributable to owners of the parent company + non-controlling interest) / (Balance sheet total). Gearing, % = 100 * (Interest-bearing debt - Cash in hand and at bank) / (Equity attributable to owners of the parent company + Non-controlling interest). |
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