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2016-12-21 08:00:37 CET 2016-12-21 08:00:37 CET REGLAMENTUOJAMA INFORMACIJA Kotipizza Group Oyj - Interim report (Q1 and Q3)Kotipizza Group Oyj: COMPARABLE NET SALES GROWTH OF 19% AND 23% COMPARABLE EBITDA GROWTH IN THE THIRD QUARTER OF THE FINANCIAL YEARKOTIPIZZA GROUP OYJ INTERIM REPORT 1 FEBRUARY - 31 OCTOBER 2016 COMPARABLE NET SALES GROWTH OF 19% AND 23% COMPARABLE EBITDA GROWTH IN THE THIRD QUARTER OF THE FINANCIAL YEAR August-October 2016 (8-10/2015) * Chain-based net sales grew 16.4% (7.4%) * Comparable net sales were 17.1 MEUR (14.4). Growth was 18.9% * Comparable EBITDA was 1.88 MEUR (1.53). EBITDA growth was 22.8% * Comparable EBIT was 1.64 MEUR (1.38) February-October 2016 (2-10/2015) * Chain-based net sales grew 16.2% (7.9%) * Comparable net sales were 49.1 MEUR (41.8). Growth was 17.5% * Comparable EBITDA was 5.20 MEUR (3.86). EBITDA growth was 34.6% * Comparable EBIT was 4.46 MEUR (3.43) * Net gearing was 27.3 percent (37.0%) * Equity ratio was 51.8 percent (52.4%) KOTIPIZZA GROUP UPGRADES ITS OUTLOOK FOR THE FINANCIAL YEAR New outlook The Group estimates for the full financial year that the chain-based net sales will grow by approximately fifteen (15) percent as compared to the previous financial year and that comparable EBITDA will grow significantly as compared to the previous year. Old outlook, provided on 23 August, 2016, and reiterated on 28 September, 2016 The Group estimates for the full financial year that the chain-based net sales will grow by over ten (10) percent as compared to the previous financial year and that comparable EBITDA will grow significantly as compared to the previous year. IMPACT OF NEW ESMA GUIDELINES New ESMA (European Securities and Markets Authority) guidelines on Alternative Performance Measures (APMs) are effective for the financial year 2016. Kotipizza Group presents APMs to reflect the underlying business performance and to enhance comparability between financial periods. APMs should not be considered as a substitute for measures of performance in accordance with the IFRS. Items affecting comparability and APMs used by Kotipizza Group are defined in note 6 of this report. KEY FIGURES, TEUR 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16 ------------------------------------------------------------------------------ Comparable figures Comparable net sales 17 132 14 409 49 079 41 765 56 370 Comparable EBITDA 1 883 1 533 5 196 3 861 5 026 Comparable EBITDA of 11.0% 10.6% 10.6% 9.2% 8.9% net sales, % Comparable EBIT 1 638 1 376 4 458 3 428 4 274 Reported figures Chain-based net sales 22 847 19 635 66 055 56 844 77 266 Reported net sales 18 038 14 409 50 329 41 765 56 370 Reported EBITDA 1 716 1 503 4 886 3 022 4 187 Reported EBITDA of net sales, % 9.5% 10.4% 9.7% 7.2% 7.4% 1 470 1 346 4 148 2 589 3 435 Reported EBIT Earnings per share 0.16 0.12 0.44 -0.17 0.05 Net cash flows from operating 4 190 -2 905 -671 activities Net cash used in investment -179 -773 -1 770 activities Net gearing, % 27.3 37.0 31.8 Equity ratio, % 51.8 52.4 51.8 ------------------------------------------------------------------------------ Tommi Tervanen, CEO of Kotipizza Group "Kotipizza's chain-based net sales continued their strong growth in the third quarter of the financial year. The chain's net sales continued on a good level both in same-store sales and in number of customers. The number of customers increased 13.2% and the average purchase 5.7% in the brick-and-mortar restaurants. The online store also continued to develop and during the review period, orders made through the online store amounted to roughly a tenth of the net sales in brick-and-mortar restaurants. The chain-based net sales growth was 16.4% in August-October, being clearly above the average growth in the Finnish fast food market. We expect that chain-based net sales will continue to develop favorably. Achieving similar relative growth figures will however become more challenging month after month as comparison months from the previous year are getting tougher. There are several reasons behind the strong growth in chain-based net sales. One of the main reasons is Kotipizza's brand and concept renewal, which was started at full speed at the beginning of 2015 and which has now been mostly finalized. The Group has consistently developed the Kotipizza chain in the spirit of the fast casual phenomenon, that is, emphasizing the freshness, authenticity and sustainability of the food, as well as actively following developments in food trends and consumer tastes. During the review period, this emphasis has been particularly evident in emphasis on vegetarian options. For example, during the popular "meat-free October" campaign the sales of vegetarian pizzas grew by 16% in the online store. Part of our emphasis on fast casual is the Mexican-style Chalupa chain started in September 2015. During the review period, Chalupa continued to develop its concept and strengthen its position on a franchising basis. At the end of the review period, three brick-and-mortar Chalupa restaurants were operating in Helsinki, and one in each of Kauniainen, Tampere, and Jyväskylä. In addition, Chalupa products were available in one Kotipizza lunch restaurant. We don't expect the Chalupa operations to become profitable in the near future, but rather see the segment as an investment in the fast casual phenomenon and the future growth of the Group. Comparable net sales grew 18.9% in the third quarter of the year and were 17.1 MEUR (14.4). Comparable EBITDA was 1.88 MEUR (1.53) in the third quarter, a growth of 22.8%. We are still on pace with our medium-term financial goals, both in terms of the development of chain-based sales as well as that of EBITDA. The financial standing of the Group is also on a solid ground at the end of the quarter with Net gearing at 27 percent and equity ratio 52 percent. The Group's net cash flow from operating activities in February-October was 4.2 MEUR. We don't expect any material changes to the chained fast food market this year compared to the previous year. The economic growth in Finland is expected to be slow and to underperform Eurozone. The development of the national economy has a direct impact to consumer demand and to demand for chained fast food. However, according to the statistics demand growth for fast food has been stable, closely following the overall economic development, during the past 15 years in Finland. The growth of our chain-based net sales exceeded the market growth for chained fast food in year 2015 based on the ongoing brand and concept renewal in Kotipizza, innovative R&D and sustainable procurement. Based on the positive chain-based net sales development in the beginning of the year and management's view on the market development for the rest of the year we expect our chain based net sales to exceed the fast food market average growth in Finland in 2016. We have upgraded our outlook for the financial year. We estimate the group's chain-based net sales will during the present financial year grow by approximately fifteen (15) percent as compared to the previous financial year, and the comparable gross margin/EBITDA will grow significantly as compared to the previous financial year." GROUP NET SALES August-October 2016 Chain-based net sales continued strong and grew 16.4% (7.4%) year on year in the third quarter of the financial year and were 22.9 MEUR (19.6). Average purchase grew 5.7% and the number of customers 13.4% compared to the same period in the previous year. The strong performance is based on renewed concept, brand, successful marketing, and the emphasis placed on our online store and digital presence. Kotipizza classic Americana together with Kotipizza premium product Lankkupizza had successful campaigns in TV, social and online media. At the end of October Kotipizza had lower calorie Kana Kotzone in a TV campaign and Kotipizza introduced alongside the campaign a new Falafel Kotzone, which received a very good response due to increased interest in vegetarian food. Kotipizza had altogether 50 campaign days during the third quarter this year compared to 41 in the previous year. Increased investments in our own social media channels received very positive feedback. We launched for example an online series on Kotipizza franchisees and started co-operation together with top Finnish YouTube stars. Three new Kotipizza restaurants were opened and two closed during the third quarter of the financial year. Comparable net sales for the third quarter of the financial year were 17.1 MEUR (14.4) and they grew 18.9% compared to same period in the previous year. Reported net sales were 18.0 MEUR (14.3) and they grew 25.2% compared to same period in the previous year. The reported sales included 0.9 MEUR items affecting comparability related to advertising and marketing fund flows of Kotipizza's Franchisee Co-operative, which pass through Kotipizza-division's P&L without result effect. A separate stock exchange release on this was given on 30 May 2016. Comparable net sales growth was mainly based on Foodstock's increased sales volume to Kotipizza underpinned by the good chain-based sales development. New customers of Foodstock, Fafa's, Espresso House and Siipiravintolat chain, which were not yet Foodstock's customers in the previous year, increased net sales. The net sales of Foodstock grew 23.3% year on year in the third quarter of the financial year and were 13.8 MEUR (11.2). The Kotipizza segment's net sales increased 40.3% compared to the previous year and were 4.2 MEUR (3.0). The Chalupa segment's net sales in the third quarter of the financial year were EUR 65 thousand (EUR 231 thousand). February-October 2016 Chain-based net sales grew 16.2% (7.9%) year on year in February-October and were 66.1 MEUR (56.8). The chain-based net sales growth was based on both an increase in the average purchase and increase in number of customers. The comprehensive menu renewal done in summer 2014, successful new products together with targeted, influential and sustainability emphasized marketing has positively changed consumers' brand experience of Kotipizza. This has been seen as an increase in the number of customers. Nine new Kotipizza restaurants were opened and twelve closed during the review period. The chain-based net sales is the total combined net sales of the company's franchisees, based on which the company's franchising fees are invoiced monthly. Comparable net sales for February-October were 49.1 MEUR (41.8) and they grew 17.5% compared to same period in the previous year. Reported net sales were 50.3 MEUR (41.8). The reported sales included 1.2 MEUR items affecting comparability related to advertising and marketing fund flows of Kotipizza's Franchisee Co-operative, which pass through Kotipizza division's P&L without result effect. A separate stock exchange release on Kotipizza's Marketing Co- operative's change into Franchisee Co-operative was given on 30 May 2016. Comparable net sales growth was mainly based on Foodstock's increased sales volume to Kotipizza underpinned by the good chain-based sales development. New customers of Foodstock, Fafa's, Espresso House and the Siipiravintolat chain, which were not yet Foodstock's customers in the previous year, increased net sales. The net sales of Foodstock grew 19.4% year on year in February-October and were 39.0 MEUR (32.7). The Kotipizza segment's net sales increased 24.0% compared to the previous year and were 10.9 MEUR (8.8). The Chalupa segment's net sales in the February-October were 0.5 MEUR (0.3). GROUP EBIT August-October 2016 Comparable EBIT of the Group was 1.64 MEUR (1.38) in the third quarter of the financial year. Reported EBIT was 1.47 MEUR (1.35). Reported EBIT included MEUR 0,17 of items affecting comparability (calculatory, non-cash), which were related to incentive plan introduced on 6 May 2016 and other incentive plans in the group. The reported EBIT of the previous year included EUR 30 thousand of items affecting comparability related to listing the company's shares to the Nasdaq OMX Helsinki stock exchange. These items had a cash flow effect. The EBIT improved mainly due to volume improvement, but sales margin also improved slightly from the previous year. Clearly higher depreciations compared to the previous year (non-cash item) had a negative impact on the EBIT. February-October 2016 Comparable EBIT of the Group was 4.46 MEUR (3.43) in February-October. Reported EBIT was 4.15 MEUR (2.59). Reported EBIT included MEUR 0,31 of items affecting comparability (calculatory, non-cash), which were related to incentive plan introduced on 6 May 2016 and other incentive plans in the group. The reported EBIT of the previous year included 0.84 MEUR of items affecting comparability. Costs amounting to MEUR 0.23 related to initial public offering of company's shares to the Nasdaq OMX Helsinki Oy's stock exchange and 0.50 MEUR due to closing permanently down Kotipizza Oyj's previous headquarters in Vaasa had a cash flow effect. In addition, previous year's reported EBIT included 0.12 MEUR non-cash deferral error related to Foodstock's inventory as an item affecting comparability. The EBIT improved mainly due to volume improvement, but sales margin also improved slightly from the previous year. Fixed cost growth was also below the volume growth. Clearly higher depreciations compared to the previous year (non- cash item) had a negative impact on the EBIT. SALES AND EBITDA OF THE SEGMENTS KOTIPIZZA SEGMENT ------------------------------------------------------------------------- EUR THOUSAND 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16 ------------------------------------------------------------------------- Comparable net sales 3 298 2 997 9 598 8 749 11 784 Net sales 4 204 2 997 10 849 8 749 11 784 Comparable gross margin/EBITDA 1 819 1 607 5 081 4 086 5 465 Depreciation and impairments -150 -111 -441 -315 -584 Comparable EBIT 1 670 1 496 4 640 3 771 4 881 Reported gross margin/EBITDA 1 785 1 607 5 018 3 817 5 196 Reported EBIT 1 635 1 496 4 577 3 502 4 612 ------------------------------------------------------------------------- Olli Väätäinen, COO of Kotipizza "Continuously strong sales growth has marked all operations in the Kotipizza chain during the review period. The rollout of the facelift of the restaurant design has been largely finalized, and at the end of the review period, only a handful of the chain's brick-mortar restaurants are yet to be renovated. At the end of the review period, the number of restaurants stood at 255 (265). During the review period, Kotipizza continued to develop its online store. Orders made through the online store amounted to roughly a tenth of the net sales in brick- and-mortar restaurants during the period." August-October 2016 Comparable net sales of Kotipizza for the third quarter of the financial year were 3.30 MEUR (3.00) and they increased 10.0% compared to same period in the previous year. Net sales of Kotipizza for the third quarter of the financial year were 4.20 MEUR (3.00) and they increased 40.3% compared to same period in the previous year. The reported sales included 0.91 MEUR items affecting comparability related to advertising and marketing fund flows of Kotipizza's Franchisee Co-operative, which pass through Kotipizza-division's P&L without result effect. A separate stock exchange release on this was given on 30 May 2016. The rest of the sales increase was based on growth in chain-based net sales and in consequence all franchising contract based net sales increased. Kotipizza's comparable EBITDA of was 1.82 MEUR (1.61) in the third quarter of the financial year and it grew 13.2% compared to same period in the previous year. Improvement in comparable EBITDA was mainly due to favourable development of chain-based net sales in Kotipizza. Reported EBITDA was 1.79 MEUR (1.61) in the third quarter of the financial year. Reported EBITDA included EUR 34 thousand of items affecting comparability (calculatory, non-cash), which were related to incentive plan introduced on 6 May 2016 and other incentive plans in the group. February-October 2016 Comparable net sales of Kotipizza for the third quarter of the financial year were 9.60 MEUR (8.75) and they increased 9.7% compared to same period in the previous year. Net sales of Kotipizza for February-October were 10.85 MEUR (8.75) and they increased 24.3% compared to same period in the previous year. The reported sales included 1.25 MEUR items affecting comparability related to advertising and marketing fund flows of Kotipizza's Franchisee Co-operative, which pass through Kotipizza-division's P&L without result effect. A separate stock exchange release on this was given on 30 May 2016. Rest of the increase in net sales was based on growth in chain-based net sales and in consequence all franchising contract based net sales increased. Kotipizza's comparable EBITDA of was 5.09 MEUR (4.09) in February-October and it grew 24.3% compared to same period in the previous year. Improvement in comparable EBITDA was mainly due to restructuring measures implemented in the segment's operations and favourable development of chain-based net sales in Kotipizza. Reported EBITDA was 5.02 MEUR (3.82) in February-October. Reported EBITDA included EUR 63 thousand of items affecting comparability (calculatory, non-cash), which were related to incentive plan introduced on 6 May 2016 and other incentive plans in the group. The previous year's comparable EBITDA for the third quarter was adjusted with EUR 269 thousand of items affecting comparability related to costs of closing down company's previous headquarters. These items had a cash flow effect. FOODSTOCK SEGMENT ------------------------------------------------------------------------- EUR THOUSAND 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16 ------------------------------------------------------------------------- Comparable net sales 13 770 11 169 39 034 32 700 44 096 Net sales 13 770 11 169 39 034 32 700 44 096 Comparable gross margin/EBITDA 475 261 1 344 746 964 Depreciation and impairments -38 -28 -105 -85 -113 Comparable EBIT 437 233 1 239 661 851 Reported gross margin/EBITDA 466 261 1 328 631 849 Reported EBIT 428 233 1 223 546 736 ------------------------------------------------------------------------- Anssi Koivula, CEO of Foodstock "The strong sales growth in the Kotipizza chain has also been reflected in Foodstock's operations during the review period. Despite the strong growth, we have managed to take care of the reliability of our deliveries and our customer service, thanks to which our customer satisfaction has remained high. Foodstock's operations have also been affected by the Kotipizza chain's growing emphasis on the sustainability and local ingredients. Foodstock has also taken a continuously larger role in planning of the sourcing of the ingredients for the Chalupa chain and is now responsible for the chain's sourcing. For Foodstock, the review period has also been marked by the rollout of the unit's new visual identity which reflects Foodstock's principles and values: reliability, agility, continuously high quality, and modernity." August-October 2016 Comparable net sales of Foodstock for the third quarter of the financial year were 13.77 MEUR (11.17) and they grew 23.3% compared to same period in the previous year. Reported net sales of Foodstock for the third quarter of the financial year were 13.77 MEUR (11.17) and they grew 23.3% compared to same period in the previous year. The reported net sales did not include items affecting comparability. The growth in net sales was mainly due to favourable development of Kotipizza chain-based net sales, which had a positive boost to Foodstock's delivery volumes for the chain. Net sales to the Rolls burger chain increased notably compared to the previous year. Positive volume effect of Foodstock's new customers got in the previous year were also visible in the reported numbers. Foodstock's comparable EBITDA improved 81,9% from the previous year and was 0.48 MEUR (0.26) in the third quarter of the financial year. Improvement in the comparable EBITDA was due to operational gearing related to increase in sales volume and to favourable sales mix. Foodstock's reported EBITDA was 0.47 MEUR (0.26) in the third quarter of the financial year. Reported EBITDA included EUR 9 thousand of items affecting comparability (calculatory, non-cash), which were related to incentive plan introduced on 6 May 2016 and other incentive plans in the group. February-October 2016 Comparable net sales of Foodstock for February-October were 39.03 MEUR (32.70) and they grew 19.4% compared to same period in the previous year. Reported net sales of Foodstock for February-October were 39.03 MEUR (32.70) and they grew 19.4% compared to same period in the previous year. The reported net sales did not include items affecting comparability. The growth in net sales was mainly due to favourable development of Kotipizza chain-based net sales, which had a positive boost to Foodstock's delivery volumes for the chain. Net sales to Rolls burger chain also increased notably compared to the previous year. The positive volume effect of Foodstock's new customers such as Fafa's, Espresso House and the Siipiravintolat chain were also visible in the reported numbers. Foodstock's comparable EBITDA was 1.34 MEUR (0.75) in February-October and it grew 80.2% compared to the same period in the previous year. Improvement in the comparable EBITDA was due to operational gearing related to increase in sales volume. Foodstock's reported EBITDA was 1.33 MEUR (0.63) in February-October. Reported EBITDA included EUR 16 thousand of items affecting comparability (calculatory, non-cash), which were related to incentive plan introduced on 6 May 2016 and other incentive plans in the group. Previous year's EBITDA included EUR 115 thousand of items (non-cash) affecting comparability, which were related to Foodstock's accrual error. CHALUPA SEGMENT ------------------------------------------------------------------------- TUHATTA EUROA 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16 ------------------------------------------------------------------------- Comparable net sales 65 231 447 278 443 Net sales 65 231 447 278 443 Comparable gross margin/EBITDA -54 3 -148 -67 -66 Depreciation and impairments -5 -6 -26 -9 -18 Comparable EBIT -59 -3 -174 -76 -84 Reported gross margin/EBITDA -56 3 -152 -67 -66 Reported EBIT -61 -3 -178 -76 -84 ------------------------------------------------------------------------- Iman Gharagozlu, Creative Director of Chalupa "During the review period, the Chalupa chain continued to strengthen its position on a franchising basis. At the same time, the work of refining, testing and documenting the Chalupa concept continued, and the responsibility for sourcing of ingredients was shifted to Foodstock. At the end of the review period, three Chalupa restaurants were operating in Helsinki, and one each in Kauniainen, Tampere, and Jyväskylä. Of the six restaurants, five are operated by franchisees. In addition, Chalupa products were available in one Kotipizza lunch restaurant." August-October 2016 Chalupa's comparable net sales were EUR 65 thousand (EUR 231thousand) in the third quarter of the financial year and comparable EBITDA was EUR -54 thousand (EUR 3 thousand). Chalupa's reported net sales were EUR 65 thousand (EUR 231thousand) in the third quarter of the financial year and reported EBITDA was EUR -56 thousand (EUR 3 thousand). Decline in net sales compared to the previous year was due Chalupa owning only one restaurant at the end of the review period. As the remaining five restaurants are sold to franchisees, Chalupa's revenue recognition has changed from fully consolidating restaurants to consolidating fees related to franchising contracts. Reported EBITDA included EUR 2 thousand of items affecting comparability (calculatory, non-cash), which were related to incentive plan introduced on 6 May 2016 and other incentive plans in the group. Chalupa owned only one restaurant in Punavuori, Helsinki at the end of the review period and the remaining five operated with franchising model. February-October 2016 Chalupa's reported net sales were EUR 447 thousand (EUR 278 thousand) in February-October and comparable EBITDA was EUR -148 thousand (EUR -67 thousand). Chalupa's reported net sales were EUR 447 thousand (EUR 278 thousand) in February-October and reported EBITDA was EUR -152 thousand (EUR -67 thousand). Reported EBITDA included EUR 4 thousand of items affecting comparability (calculatory, non-cash), which were related to incentive plan introduced on 6 May 2016 and other incentive plans in the group. Chalupa opened a new restaurant in Helsinki in Munkkiniemi and in Tampere during the review period. Both of the new restaurants were opened with franchising agreements. Restaurants in Kauniainen and in Kallio, Helsinki were sold to franchisees during the review period and Chalupa owned only one restaurant in Punavuori, Helsinki at the end of the review period. This will in practise mean a change in the Chalupa segment's reporting from fully consolidating restaurants into segments numbers to consolidating fees related to franchising contracts. OTHERS SEGMENT ------------------------------------------------------------------------- EUR THOUSAND 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16 ------------------------------------------------------------------------- Comparable net sales 0 12 0 38 47 Net sales 0 12 0 38 47 Comparable gross margin/EBITDA -357 -338 -1 081 -904 -1 337 Depreciation and impairments -53 -12 -166 -24 -37 Comparable EBIT -410 -350 -1 247 -928 -1 374 Reported gross margin/EBITDA -479 -368 -1 307 -1 359 -1 792 Reported EBIT -532 -380 -1 473 -1 383 -1 829 ------------------------------------------------------------------------- Others segment includes mainly operations of the group headquarters. August-October 2016 Comparable and reported net sales of the Others segment were 0.00 MEUR (0.01) in the third quarter of the financial year. Comparable EBITDA was -0.36 MEUR (- 0.34). Reported EBITDA was -0.48 MEUR (-0.37). Reported EBITDA included EUR 122 thousand of items affecting comparability (calculatory, non-cash), which were related to incentive plan introduced on 6 May 2016 and other incentive plans in the group. The previous year's comparable EBITDA included EUR 30 thousand of items affecting comparability related to listing the company's shares to the Nasdaq OMX Helsinki stock exchange. These items had a cash flow effect. February-October 2016 Net sales of the Others segment were 0.04 MEUR (0.05) in February-October. Comparable EBITDA was -1.08 MEUR (-0.90). Reported EBITDA was -1.31 MEUR (- 1.36). Reported EBITDA included EUR 226 thousand of items affecting comparability (calculatory, non-cash), which were related to incentive plan introduced on 6 May 2016 and other incentive plans in the group. In the previous year reported EBITDA included EUR 455 thousand of items affecting comparability. Out of items affecting comparability EUR 229 thousand were related to listing of company's shares to Nasdaq OMX Helsinki stock exchange and EUR 226 thousand related to closing down Kotipizza's Vaasa office. These items had a cash flow effect. FINANCIAL ITEMS AND RESULT Finance costs in the third quarter of the year were MEUR 0.22 (0.28). Finance costs in February-October were MEUR 0.61 (2.82). The materially higher financing costs in February-October in the previous year were based on materially more leveraged balance sheet structure together with higher interest rates on debt. In addition to the normal finance costs in the previous year MEUR 0.90 cost related to early redemption of the company's MEUR 30 unsecured bond. Group taxes were MEUR -0.25 (-0.26) in the financial year. The result of the period was MEUR 1.01 (0.76) in the financial year. Earnings per share were EUR 0.16 (0.12) in the financial year. THE GROUP'S FINANCIAL POSITION Kotipizza Group's balance sheet total as of 31 October 2016 was MEUR 57.7 (54.4). The Group's non-current assets as at 31 October 2016 amounted to MEUR 40.2 (38.9), and current assets amounted to MEUR 17.5 (15.4). The Group's net cash flow from operating activities for the financial year was MEUR 4.2 (-2.9). Working capital was released the amount of MEUR 0.00 (released 0.87). The net cash flow from investment activities for the period was MEUR -0.18 (- 0.78). Investments in tangible and intangible assets for the period amounted to MEUR 0.58 (0.81), and proceeds from sales of tangible assets were MEUR 0.40 (0.00). The net cash flow from financing activities was MEUR -2.94 (5.19). The Group payed out MEUR 2.2 as distribution from Fund for invested unrestricted equity to its shareholders during the review period. The Group's equity ratio was 51.8% (52.4%). Interest-bearing debt amounted to MEUR 17.3 (17.3), of which current debt accounted for MEUR 0.35 (0.81). Kotipizza Group Oyj redeem in full its three- year unsecured bond with a nominal value MEUR 30 on 11 August 2015 with the proceeds from the 4 June 2015 announced and 6 October 2015 implemented Initial Public Offering and the new MEUR 17.0 term loans withdrawn on 7 August 2015. New term loans have covenants. Further information on Kotipizza Group's financial risks is presented in the financial statements released on 31 January 2016. INVESTMENTS The gross investments for the period amounted to MEUR 0.58 (0.81). The Company's investments to fixed assets, related mainly to IT systems, amounted to MEUR 0.58 (0.81). PERSONNEL On 31 July 2016, Kotipizza Group employed 42 people, all of who worked in Finland. At the end of the previous financial year 31 January 2016, the Company employed 38 people, all of who worked in Finland. BUSINESS ARRANGEMENTS Group structure was simplified by merging company shells Senhold 2 and Francount Oy to Domipizza Oy and Frankis Finland Oy to Kotipizza Group Oyj. Mergers were registered into the trade register on 30 June 2016. Simplifying will continue by merging Kotipizza Oyj to Domipizza Oy, which is expected to be registered to trade register on 31 January 2017. CHANGES IN THE MANAGEMENT There were no changes in Kotipizza Group's operative management, Board of Directors or Management Board during the period. MANAGEMENT BOARD Kotipizza Group's Management Board comprises five members: Tommi Tervanen (CEO), Timo Pirskanen (Deputy to the CEO, CFO), Olli Väätäinen (Chief Operating Officer), Anssi Koivula (Chief Procurement Officer) and Antti Isokangas (Chief Communications and Corporate Responsibility Officer). SHARES AND SHARE CAPITAL Kotipizza Group Oyj's share capital at the end of the review period was EUR 80,000.00 and it comprised 6,351,201 shares. At the beginning of the review period 1 February 2016 the number of the shares was 6,351,201. At the end of the period, the Company had 902 (486) shareholders. The Company does not hold any treasury shares. Information about the company's shareholder structure by sector and size of holding, the largest shareholders can be viewed on the company's website at www.kotipizzagroup.com. RESOLUTIONS OF THE GENERAL MEETINGS Kotipizza Group's Annual General Meeting held on 11 May, 2016 resolved that no dividend is paid for the financial period ending 31 January 2016, but EUR 0,35 per share was decided to be paid from the reserves for invested unrestricted equity. The AMG adopted the financial statements for financial year ending 31 January 2016 and discharged the members of the Board of Directors and CEO from liability for the financial year ending 31 January 2016. The AGM resolved the number of Board members to be six. Johan Wentzel, Minna Nissinen, Petri Parvinen, Kim Hanslin and Kalle Ruuskanen were re-elected as members of Board of Directors for a term of office that lasts until the end of the next AGM. Marjatta Rytömaa was elected as a new member. Johan Wentzel was re-elected as Chairman of the Board of Directors. The AGM resolved that the members of the Board will be paid as follows: Chairman of the Board of Directors Johan Wentzel and member Marjatta Rytömaa EUR 500 per month (EUR 6 000 p.a.) and other members of the Board of Directors EUR 2 000 per month (EUR 24 000 p.a.) each. The AGM resolved that the remuneration for the auditor be paid according to invoice approved by the company. The AGM resolved to re-elect audit firm Ernst & Young Oy as the company's auditor for a term that ends at the closing of the next AGM. The AGM resolved to authorize the Board of Directors to decide on a share issue on following terms: 1 The authorization may be used in full or in part by issuing shares in Kotipizza Group Oyj in one or more issues so that the maximum number of shares issued is 635 000 shares. 2 The Board of Directors may also decide on a directed share issue in deviation from the shareholders' pre-emptive rights in case there is a weighty financial reason to do so, such as in order to finance or carry out acquisitions or other business transactions, develop the company's capital structure, or in order to use the shares for an incentive scheme. The Board of Directors would be authorized to decide to whom and in which order the shares will be issued. In the share issues shares may be issued for subscription against payment or without charge. 3 Based on the authorization, the Board of Directors is also authorized to decide on a share issue without payment directed to the company itself, provided that the number of shares held by the company after the issue would be a maximum of 10 per cent of all shares in the company. This amount includes shares held by the company and its subsidiaries in the manner provided for in Chapter 15, section 11 (1) of the Companies Act. 4 This authorization includes the right for the Board of Directors to decide on the terms and conditions of the share issues and measures related to the share issues in accordance with the Companies Act, including the right to decide whether the subscription price will be recognized in full or in part in the invested unrestricted equity reserve or as an increase to the share capital. 5 The authorization is valid until 31 July 2017. 6 The authorization will supersede the authorization to decide upon share issues given to the company's Board of Directors on 28 May 2015. RISKS AND UNCERTAINTIES In the long term, Kotipizza Group's operative risks and uncertainties relate to a possible failure in predicting consumer preferences and in creating attractive new concepts, as well as to new business risks related to possible expansion to new cities and abroad. The competitive situation is expected to remain harsh in the fast food industry. Company's management cannot affect the general market development and consumer behaviour with its actions. Restaurant openings also have a material impact on company's franchising and rent income, income received from selling raw materials and supplies and transport and flow of goods related income and thus to the company's financial result. Kotipizza Group is currently launching a new fast casual concept, which is reported as Chalupa segment. Launching a new business concept has several risks related e.g. anticipation of consumer needs, habits, taste and behaviour. Launching a new concept has a risk of not reaching an established position at the market and not having a well-established clientele. Potential failure in launching a new concept causes costs to the company and has a material adverse impact on company's brand, financial position and financial result. EVENTS AFTER THE REPORT PERIOD Kotipizza-division introduced full vegan cheese and two new full vegan pizzas called Härkis Kotzone ja Härkis Burgerpizza. KOTIPIZZA GROUP UPGRADES ITS OUTLOOK FOR THE FINANCIAL YEAR Demand for chained fast food is estimated to remain stable. The economic growth in Finland is expected to be slow and to clearly underperform Eurozone. According to estimates the national economy in Finland is expected to remain on the previous years' level or to even slightly decline. The development of the national economy has a direct impact to consumer demand and to demand for chained fast food. According to the Finnish Hospitality Association (MaRa) the turnover of the chained based fast food restaurants in Finland grew 5.7% in 2015. Demand for fast food has according to statistics remained relatively stable, surely following the overall development of the economy. According to MaRa's statistics turnover of the chained based fast food restaurants in Finland has grown 2.2 percent a year (CAGR) in years 2000-2015. The growth of our chain-based net sales exceeded the market growth for chained fast food in year 2015 based on the ongoing concept renewal in Kotipizza, innovative R&D and sustainable procurement. Based on the positive sales growth in the Kotipizza chain and the management's outlook on the sales in the remaining period of the financial year we expect company's chain based net sales growth to exceed the Finnish fast food market average growth also in 2016. New outlook The Group estimates for the full financial year that the chain-based net sales will grow by approximately fifteen (15) percent as compared to the previous financial year and that comparable EBITDA will grow significantly as compared to the previous year. Old outlook, provided on 23 August, 2016, and reiterated on 28 September, 2016 The Group estimates the chain-based net sales will grow by over ten (10) per cent as compared to the previous financial year and that comparable EBITDA will grow significantly as compared to the previous year. ACCOUNTING POLICIES Kotipizza Group's unaudited interim report for the nine-month period ending 31 October 2016, including the audited comparison figures for the nine-month period ending 31 October 2015, have been prepared according to IAS 34 and applying the same accounting principles that were used in the previous audited full year financial statements. SUMMARY OF THE FINANCIAL STATEMENT AND NOTES CONSOLIDATED STATEMENT OF PROFIT OR LOSS 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16 ----------------------------------------------- 000 € 000 € 000 € 000 € 000 € Continuing operations Net sales 18 038 14 409 50 329 41 765 56 370 Other income 2 22 48 68 126 Change in inventory of raw materials and finished goods (+/-) 10 -792 -439 743 458 Raw materials and finished goods (-) -13 639 -10 585 -38 351 -33 814 -45 106 Employee benefits/expenses (-) -1 110 -810 -2 749 -2 766 -3 605 Depreciations (-) -245 -157 -738 -433 -735 Impairments (-) - - - - -17 Other operating expenses (-) -1 585 -741 -3 952 -2 974 -4 056 ----------------------------------------------- Operating profit 1 470 1 346 4 148 2 589 3 435 Finance income 8 5 23 19 28 Finance costs -216 -283 -607 -2 820 -3 011 ----------------------------------------------- Loss / profit before taxes from continuing operations 1 262 1 068 3 565 -212 452 Income taxes -248 -257 -766 -269 -124 ----------------------------------------------- Loss / profit for the period from continuing operations 1 014 811 2 798 -481 328 ----------------------------------------------- Discontinued operations Loss after tax for the period from discontinued operations - -54 - -113 -113 ----------------------------------------------- Loss / profit for the period 1 014 757 2 798 -594 215 ----------------------------------------------- Earnings per share, EUR: Basic, profit for the period attributable to ordinary equity holders of the parent (no dilutive instruments) 0,16 0,12 0,44 -0,17 0,05 Earnings per share for continuing operations, EUR: Basic, profit for the period attributable to ordinary equity holders of the parent (no dilutive instruments) 0,16 0,13 0,44 -0,14 0,08 CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16 ------------------------------------------ 000 € 000 € 000 € 000 € 000 € Profit (loss) for the period) 1 014 757 2 798 -594 215 Other comprehensive income: Other comprehensive income to be reclassified to profit or loss in subsequent periods: Cash flow hedges 61 -296 13 -296 -367 Taxes related to other comprehensive income 12 -59 2 -59 -73 Net other comprehensive income to be 49 -237 11 -237 -294 reclassified to profit or loss in ------------------------------------------ subsequent periods Other comprehensive income for the 49 -237 11 -237 -294 period, net of tax ------------------------------------------ Total comprehensive income for the period, net of tax 1 063 520 2 809 -831 -79 ------------------------------------------ Attributable to: Owners of the company 1 086 521 2 867 -801 -45 Non-controlling interest -23 -1 -58 -30 -34 ------------------------------------------ 1 063 520 2 809 -831 -79 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31.10.2016 31.10.2015 31.1.2016 Assets 000 € 000 € 000 € Non-current assets Property, plant and equipment 1 265 806 1 002 Goodwill 35 819 35 819 35 819 Intangible assets 2 182 1 633 2 118 Non-current financial assets 2 2 2 Non-current receivables 606 516 783 Deferred tax assets 284 128 289 -------------------------------- 40 159 38 904 40 013 Current assets Inventories 3 103 3 381 3 385 Trade and other receivables 5 153 5 063 4 945 Current tax receivables 58 270 58 Cash and cash equivalents 9 170 6 711 8 099 -------------------------------- 17 484 15 424 16 487 Assets classified as held for sale 13 28 19 Total Assets 57 657 54 356 56 519 -------------------------------- 31.10.2016 31.10.2015 31.1.2016 -------------------------------- 000 € 000 € 000 € Equity and liabilities Share capital 80 80 80 Translation differences 27 595 29 818 29 818 Fund for invested unrestricted equity 2 258 -1 380 -624 Retained earnings 29 933 28 518 29 274 Non-controlling interests -72 -10 -14 -------------------------------- Total equity 29 861 28 508 29 260 Non-current liabilities Interest bearing loans and borrowings 16 979 16 442 16 363 Financial liabilities at fair value through profit or loss 354 296 367 Other non-current liabilities 2 454 2 477 2 462 Deferred tax liabilities 56 44 54 -------------------------------- 19 843 19 259 19 246 Current liabilities Interest bearing loans and borrowings 354 813 1 041 Trade and other payables 6 833 5 755 6 882 Provisions 9 - 90 Current tax liabilities 757 10 - -------------------------------- 7 953 6 578 8 013 Liabilities related to assets held for sale - 11 - Total liabilities 27 796 25 848 27 259 -------------------------------- Total shareholders' equity and liabilities 57 657 54 356 56 519 -------------------------------- CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Equity attributable to owners of the company ---------------------------------------------------- Fund for Retai- Non- invested ned control- Share unrestricted earn- ling Total EUR THOUSAND capital equity ings Total interest equity 1 February 2016 80 29 818 -624 29 274 -14 29 260 Result for the period - - 2 856 2 856 -58 2 798 Other comprehensive income - - 11 11 - 11 ---------------------------------------------------- Total incomprehensive income for the period - - 2 867 2 867 -58 2 809 Transactions with owners Management incentive scheme - - 15 15 - 15 Dividends - -2 223 - -2 223 - -2 223 ---------------------------------------------------- Transactions with owners total - -2 223 15 -2 208 -2 208 31 October 2016 80 27 595 2 258 29 933 -72 29 861 ---------------------------------------------------- Equity attributable to owners of the company ---------------------------------------------------- Fund for Retai- Non- invested ned control- Share unrestricted earn- ling Total EUR THOUSAND capital equity ings Total interest equity 1 February 2015 80 5 362 -579 4 863 - 4 863 Result for the period - - -564 -564 -30 -594 Other comprehensive income - - -237 -237 - -237 ---------------------------------------------------- Total incomprehensive income for the period - - -801 -801 -30 -831 Transactions with owners Share issue - 25 501 - 25 501 20 25 521 Initial public offering costs -1 045 - -1 045 - -1 045 ---------------------------------------------------- Transactions with owners total 24 456 - 24 456 20 24 476 31 October 2015 80 29 818 -1 380 28 518 -10 28 508 ---------------------------------------------------- CONSOLIDATED STATEMENT OF CASH FLOWS 2-10/2016 2-10/2015 Operating activities 000 € 000 € Profit before tax 3 565 -212 Loss for discontinued operations - -140 Adjustments to reconcile profit before tax to net cash flows Depreciation of property, plant and equipment 347 170 Depreciation and impairment of intangible assets 391 263 Gain on disposal of property, plant and equipment -80 -20 Finance income -23 -19 Finance costs 607 2 820 Change in working capital Change in trade and other receivables (+/-) -3 656 Change in inventories (+/-) 283 -431 Change in trade and other payables (+/-) -226 -1 092 Change in provisions (+/-) -81 - Interest paid (-) -607 -4 878 Interest received 23 19 Income tax paid (-) -6 -40 -------------------- Net cash flows from operating activities 4 190 -2 905 Investing activities Acquisition of subsidiaries - 20 Investments for tangible assets (-) -124 -184 Investments for non-tangible assets (-) -455 -629 Repayment for loan assets - - Proceeds from sale of assets-held-for-sale - - Sale of property, plant and equipment 400 20 -------------------- Net cash flows used in investing activities -179 -773 Financing activities Funds received from the share issue -2 223 24 194 Loans withdrawal - 17 000 Loans repayments (-) -563 -35 886 Finance lease payments (+/-) -155 -120 Net cash flow used in financing activities -2 940 5 188 Net change in cash and cash equivalents 1 071 1 510 Cash and cash equivalents at 1 February 8 100 5 201 -------------------- Cash and cash equivalents at 31 October 9 170 6 711 NOTES TO THE FINANCIAL STATEMENTS NOTE 1. SEGMENT INFORMATION The segment information is presented in accordance with the previous financial statements. KOTIPIZZA SEGMENT -------------------------------- EUR THOUSAND 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16 ------------------------------------------------------------------------- Comparable net sales 3 298 2 997 9 598 8 749 11 784 Net sales 4 204 2 997 10 849 8 749 11 784 Comparable gross margin/EBITDA 1 819 1 607 5 081 4 086 5 465 Depreciation and impairments -150 -111 -441 -315 -584 Comparable EBIT 1 670 1 496 4 640 3 771 4 881 Reported gross margin/EBITDA 1 785 1 607 5 018 3 817 5 196 Reported EBIT 1 635 1 496 4 577 3 502 4 612 ------------------------------------------------------------------------- FOODSTOCK SEGMENT -------------------------------- EUR THOUSAND 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16 ------------------------------------------------------------------------- Comparable net sales 13 770 11 169 39 034 32 700 44 096 Net sales 13 770 11 169 39 034 32 700 44 096 Comparable gross margin/EBITDA 475 261 1 344 746 964 Depreciation and impairments -38 -28 -105 -85 -113 Comparable EBIT 437 233 1 239 661 851 Reported gross margin/EBITDA 466 261 1 328 631 849 Reported EBIT 428 233 1 223 546 736 ------------------------------------------------------------------------- CHALUPA SEGMENT -------------------------------- EUR THOUSAND 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16 ------------------------------------------------------------------------- Comparable net sales 65 231 447 278 443 Net sales 65 231 447 278 443 Comparable gross margin/EBITDA -54 3 -148 -67 -66 Depreciation and impairments -5 -6 -26 -9 -18 Comparable EBIT -59 -3 -174 -76 -84 Reported gross margin/EBITDA -56 3 -152 -67 -66 Reported EBIT -61 -3 -178 -76 -84 ------------------------------------------------------------------------- OTHERS SEGMENT ------------------------------------------------------------------------- EUR THOUSAND 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16 ------------------------------------------------------------------------- Comparable net sales 0 12 0 38 47 Net sales 0 12 0 38 47 Comparable gross margin/EBITDA -357 -338 -1 081 -904 -1 337 Depreciation and impairments -53 -12 -166 -24 -37 Comparable EBIT -410 -350 -1 247 -928 -1 374 Reported gross margin/EBITDA -479 -368 -1 307 -1 359 -1 792 Reported EBIT -532 -380 -1 473 -1 383 -1 829 ------------------------------------------------------------------------- ALL SEGMENTS TOGETHER ------------------------------------------------------------------------- EUR THOUSAND 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16 ------------------------------------------------------------------------- Comparable net sales 17 132 14 409 49 079 41 765 56 370 Net sales 18 038 14 409 50 329 41 765 56 370 Comparable gross margin/EBITDA 1 883 1 533 5 196 3 861 5 026 Depreciation and impairments -245 -157 -738 -433 -752 Comparable EBIT 1 638 1 376 4 458 3 428 4 274 Reported gross margin/EBITDA 1 715 1 503 4 886 3 022 4 187 Reported EBIT 1 470 1 346 4 148 2 589 3 435 ------------------------------------------------------------------------- NOTE 2. NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS The non-current assets held for sale and discontinued operations were related to Kotipizza Segment's Russian operations, Domi-pizzapalat, sale of Franchising segment's 55 Burger, Cola, Fries concept and divestment of the Financial management services segment. Selling price of the both divested businesses, Financial management services and 55 Burger, Cola, Fries concept, was 1 euro. 31/10/2016 31/10/2015 ---------------------- 000 € 000 € Net sales - 32 Other operating income - - Depreciation - - Expenses - -144 Operating loss (EBIT) - -112 Finance costs - - Capital loss related to discontinued operations - -28 ---------------------- Loss for the period from a discontinued operation before tax - -140 Tax impact - 27 ---------------------- Loss for the period from the discontinued operations - -113 Earnings per share for discontinued operations, EUR: Basic, profit for the period attributable to ordinary equity holders of the parent (no dilutive instruments) - -0,04 The major classes of assets and liabilities related to discontinued operations: 31/10/2016 31/10/2015 ---------------------- Assets 000 € 000 € Inventories - 6 Trade receivable and other receivables - 21 ---------------------- Assets related to discontinued operations - 27 Liabilities Received collaterals - - Other liabilities - 11 Accrued expenses - - Liabilities related to discontinued operations - 11 Cash flows related to discontinued operations are not reported separately, and due to this, the information cannot be accurately reported.. NOTE 3. RELATED PARTY TRANSACTIONS Parties are considered to be related when a party has control or significant influence over the other party relating to decision-making in connection to its finances and business. The Group's related parties include the parent company, subsidiaries, members of the board of directors and management board, managing director and their family members. The key management comprises the members of the management board. The table below sets forth the total amounts of related party transactions carried out during the period. The terms and conditions of the related party transactions correspond terms and conditions applied to transactions between independent parties. Amounts Purchases owed to from Outstanding Sales to Outstanding Interest related related trade related trade paid parties parties payables parties receivables ------------------------------------------------------------ 000 € 000 € 000 € 000 € 000 € 000 € Key management of the group 2-10/16 - - 248 35 2 - 2-10/15 - - 526 2 621 148 Other related parties 2-10/16 - - 99 10 - - 2-10/15 - - 103 13 - - Controlling entities 2-10/16 - - - - - - 2-10/15 156 - - - - - Companies controlled by the members of the Board 2-10/16 2-10/15 - - - - - - NOTE 4. EMPLOYEE BENEFITS EXPENSE All employee benefits expenses are included in administrative (fixed) expenses. 2-10/16 2-10/15 ---------------- 000 € 000 € Wages and salaries 2 223 2 308 Social security costs 100 56 Pension costs (defined contribution plans) 426 402 ---------------- Total employee benefits expense 2 749 2 766 NOTE 5. CONTINGENT LIABILITIES Commitments 31/10/2016 31/10/2015 000 € 000 € Leasing commitments 89 353 Tertiary commitments - 6 Rental guarantees 685 604 Bank guarantees 420 800 Rental commitments for premises 3 871 3 236 Loans from financial institutions 16 250 17 000 Guarantees for other than Group companies 6 432 Guarantees Pledged deposits 146 352 Business mortgages 17 500 18 500 Guarantees 32 520 Pledged shares, book value 19 984 29 637 General guarantee for other Group companies unlimited NOTE 6: ALTERNATIVE PERFORMANCE MEASURES (APMs) New ESMA (European Securities and Markets Authority) guidelines on Alternative Performance Measures (APMs) are effective for the financial year 2016. Kotipizza Group presents APMs to reflect the underlying business performance and to enhance comparability between financial periods. APMs should not be considered as a substitute for measures of performance in accordance with the IFRS. APMs used by Kotipizza Group are listed and defined in this note. CHAIN-BASED NET SALES Chain-based net sales is the total combined net sales of the company's franchisees, based on which the company's franchising fees are invoiced monthly. COMPARABLE NET SALES: Net sales- items affecting comparability EUR thousand 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16 ------------------------------------------------------------------------ Net sales 18 038 14 409 50 329 41 765 56 370 Items affecting comparability 906 0 1 251 0 0 ------------------------------------------------------------------------ Comparable net sales 17 132 14 409 49 079 41 765 56 370 ------------------------------------------------------------------------ Items affecting comparability in 8-10/16 and 2-10/16 related to advertising and marketing fund flows of Kotipizza's Franchisee Co-operative, which pass through Kotipizza division's P&L without result effect. A separate stock exchange release on Kotipizza's Marketing Co-operative's change into Franchisee Co- operative was given on 30 May 2016. COMPARABLE EBIT: EBIT- items affecting comparability EUR thousand 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16 ------------------------------------------------------------------------ EBIT 1 470 1 346 4 148 2 589 3 435 Items affecting comparability 168 30 310 839 839 ------------------------------------------------------------------------ Comparable EBIT 1 638 1 376 4 458 3 428 4 274 ------------------------------------------------------------------------ Reported EBIT in 8-10/16 included EUR 168 thousand of items affecting comparability (calculatory, non-cash), which were related to incentive plan introduced on 6 May 2016 and other incentive plans in the group. The reported EBIT in 8-10/15 included EUR 30 thousand of items affecting comparability related to listing the company's shares to the Nasdaq OMX Helsinki stock exchange. These items had a cash flow effect. Reported EBIT in 2-10/16 included EUR 310 thousand of items affecting comparability (calculatory, non-cash), which were related to incentive plan introduced on 6 May 2016 and other incentive plans in the group. The reported EBIT in 2-10/15 included EUR 839 thousand of items affecting comparability. Costs amounting to EUR 229 thousand related to initial public offering of company's shares to the Nasdaq OMX Helsinki Oy's stock exchange and EUR 495 thousand related to closing permanently down Kotipizza Oyj's previous headquarters in Vaasa. These items had a cash flow effect. In addition, 2-10/15 reported EBIT included EUR 115 thousand non-cash deferral error related to Foodstock's inventory as an item affecting comparability. The reported EBIT in 2/15-1/16 included EUR 839 thousand of items affecting comparability. Costs amounting to EUR 229 thousand related to initial public offering of company's shares to the Nasdaq OMX Helsinki Oy's stock exchange and EUR 495 thousand related to closing permanently down Kotipizza Oyj's previous headquarters in Vaasa. These items had a cash flow effect. In addition, 2-10/15 reported EBIT included EUR 115 thousand non-cash deferral error related to Foodstock's inventory as an item affecting comparability. Items affecting comparability are material items or transactions, which are relevant for understanding the financial performance of Kotipizza Group when comparing profit of the current period with previous periods. These items can include, but are not limited to, capital gains and losses, significant write- downs, provisions for planned restructuring and other items that are not related to normal business operations from Kotipizza Group's management view. Such items are always listed in Euros in Kotipizza Group's interim-, half year and full year financial reports for the whole Group and for the operating segments. EBITDA EBIT + depreciation EUR thousand 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16 ----------------------------------------------------------------------- EBIT 1 470 1 346 4 148 2 589 3 435 Depreciation and impairments 245 157 738 433 752 ----------------------------------------------------------------------- EBITDA 1 715 1 503 4 886 3 022 4 187 ----------------------------------------------------------------------- COMPARABLE EBITDA EUR thousand 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16 ------------------------------------------------------------------------ EBIT 1 470 1 346 4 148 2 589 3 435 Depreciation and impairments 245 157 738 433 752 Items affecting comparability 168 30 310 839 839 ------------------------------------------------------------------------ Comparable EBITDA 1 883 1 533 5 196 3 861 5 026 ------------------------------------------------------------------------ Items affecting comparability have been detailed earlier in this Note in section COMPARABLE EBIT. COMPARABLE EBITDA OF NET SALES, % Comparable EBITDA -------------------* 100 Net sales NET DEBT Long term ja short term interest bearing debt - Cash and cash equivalents EUR thousand 31.10.2016 31.10.2015 31.1.2016 ----------------------------------------------------------------- Long term interest bearing debt 16 979 16 442 16 363 Short term interest bearing debt 354 813 1 041 Cash and cash equivalents -9 170 -6 711 -8 099 ----------------------------------------------------------------- Net debt 8 163 10 543 9 305 ----------------------------------------------------------------- NET GEARING, % Net debt --------------* 100 Total equity EQUITY RATIO, % Total equity --------------* 100 Total assets In Helsinki on 21 December 2016 Kotipizza Group Oyj's Board of Directors Further information: CEO Tommi Tervanen, tel. +358 207 716, and CFO Timo Pirskanen, tel. +358 207 716 747 [] |
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