2013-10-24 07:59:56 CEST
2013-10-24 08:00:59 CEST
REGULATED INFORMATION
Olvi Oyj - Interim report (Q1 and Q3)
OLVI PLC INTERIM REPORT 24 OCT 2013 at 9:00 am
Olvi Group's sales volume, net sales and operating profit developed favourably
from January to September.
Iisalmi, 2013-10-24 07:59 CEST (GLOBE NEWSWIRE) -- OLVI PLC
INTERIM REPORT 24 OCT 2013 at 9:00 am
OLVI GROUP'S INTERIM REPORT, 1 JANUARY TO 30 SEPTEMBER 2013 (9 MONTHS)
Olvi Group's sales volume, net sales and operating profit developed favourably
from January to September.
January-September in brief:
- Olvi Group's sales volume increased by 5.5 percent to 433.9 (411.2) million
litres
- The Group's comparable net sales increased by 9.2 percent to 257.2 (235.5)*)
million euro
- The Group's comparable operating profit increased by 14.3 percent to 29.6
(25.9) million euro
- Earnings per share improved by 32.4 percent to 1.39 euro per share
- Equity per share improved by 15.3 percent to 7.93 euro per share
KEY RATIOS
1-9/2013 1-9/2012 Change % 1-12/2012
Net sales, MEUR 257.2 235.5*) +9.2 304.9*)
Operating profit, MEUR 37.7**) 25.9 +45.6 30.5
Gross capital expenditure, MEUR 21.1 22.8 -7.8 29.8
Earnings per share, EUR 1.39 1.05 +32.4 1.24
Equity per share, EUR 7.93 6.88 +15.3 7.01
Equity to total assets, % 58.3 53.4 54.8
Gearing, % 27.1 41.9 35.8
*) The previous year's net sales in Finland have been adjusted for
comparability with the year 2013.
**) A new depreciation policy has been applied to the income statement for 2013.
Lasse Aho, Managing Director of Olvi plc, states the following in connection
with the disclosure of the accounts:
“Olvi Group's business has been successful and has developed favourably during
2013. Development was particularly good in Finland, Estonia and Belarus.”
CHANGES IN ACCOUNTING POLICIES STARTING FROM 1 JANUARY 2013
As of the beginning of 2013, the parent company Olvi plc has accounted for
marketing subsidies payable to customers as annual discounts under adjustments
to sales. The previous year's net sales figures in this interim report have
been adjusted for comparability with the year 2013. These marketing subsidies
were previously recognised under other operating expenses. The change did not
affect the parent company's or the Group's operating profit. After the change,
Olvi Group companies have a uniform policy of accounting for marketing
subsidies.
As of the beginning of the year, Olvi Group's depreciation periods for
buildings, production machinery and equipment, as well as storage and
fermentation tanks, have been extended to better correspond to their actual
economic life and the depreciation policies common in the industry. The new
depreciation period for buildings is 30 years, and for production machinery and
equipment 15 years. The depreciation period for tanks is 20 years. Due to the
change, consolidated depreciation in the period under review declined by 8.1
million euro compared to previous depreciation practice.
OLVI GROUP'S SALES VOLUME, NET SALES AND EARNINGS IN JANUARY-SEPTEMBER 2013
Olvi Group's sales from January to September 2013 amounted to 433.9 (411.2)
million litres. This represents an increase of 22.7 million litres or 5.5
percent. Sales in Finland increased by 10.1 million litres and in Belarus by
11.2 million litres. Sales in the Baltic states declined by 2.2 million litres.
Intra-Group sales declined by 3.6 million litres.
The Group's net sales from January to September amounted to 257.2 (235.5)*)
million euro. This represents an increase of 21.7 million euro or 9.2 percent.
Net sales development outperformed volume growth in all of the Group's
operating areas except Latvia.
Net sales in Finland amounted to 97.1 (86.0)*) million euro, while the
aggregate total for the Baltic states was 121.2 (119.7) and the corresponding
figure for Belarus was 53.9 (45.4) million euro. Net sales in Finland increased
by 11.1 million euro or 12.9 percent, in the Baltic states by 1.5 million euro
or 1.2 percent, and in Belarus by 8.5 million euro or 18.8 percent.
Olvi Group's operating profit for January-September stood at 37.7 **) (25.9)
million euro, or 14.7 (11.0) percent of net sales. The operating profit
improved by 11.8 million euro or 45.6 percent. The change in depreciation
practice improved operating profit by 8.1 million euro, which means that
comparable operating profit improved by 14.3 percent on the previous year to
29.6 million euro.
Operating profit in Finland amounted to 11.0 (7.2) million euro. The operating
profit improved by 3.8 million euro. Aggregate operating profit in the Baltic
states improved by 3.0 million euro to 17.3 (14.3) million euro, and operating
profit in Belarus improved by 4.9 million euro to 9.5 (4.6) million euro. The
effects of the extended depreciation periods on the operating profits of
different Group companies are described in connection with performance by
geographical segments.
The Group's profit after taxes in the period under review improved
substantially on the previous year, amounting to 29.5 (22.3) million euro.
Earnings per share calculated from the profit belonging to parent company
shareholders in January-September stood at 1.39 (1.05) euro per share. Earnings
per share improved by 0.34 euro or 32.4 percent.
OLVI GROUP'S SALES VOLUME, NET SALES AND EARNINGS IN JULY-SEPTEMBER 2013
Olvi Group's sales in the third quarter amounted to a total of 151.9 (149.9)
million litres. Sales increased by 2.0 million litres or 1.4 percent. Sales in
Finland declined by 1.3 million litres to 38.9 (40.2) million litres, sales in
the Baltic states increased by 2,0 million litres to 80.5 (78.5) million
litres, and sales in Belarus increased by 1.8 million litres to 44.6 (42.8)
million litres.
The Group's net sales from July to September amounted to 86.5 (86.0)*) million
euro. Net sales improved by 0.5 million euro or 0.6 percent.
Net sales in Finland amounted to 29.5 (29.9)*) million euro, a decline of 0.4
million euro. Net sales in Belarus amounted to 18.6 (18.0) million euro, an
increase of 0.6 million euro, and net sales in the Baltic states amounted to
43.9 (43.1) million euro, an increase of 0.8 million euro.
The Group's operating profit for the third quarter stood at 14.9 (11.2) million
euro, or 17.2 (13.1)*) percent of net sales. The operating profit increased
substantially on the previous year, by 3.7 million euro or 32.8 percent.
Operating profit in Finland amounted to 3.9 (2.1) million euro, in the Baltic
states to 7.4 (6.3) million euro and in Belarus to 3.6 (2.8) million euro.
Operating profit in Finland increased by 1.7 million euro, in the Baltic states
by 1.1 million euro and in Belarus by 0.8 million euro.
SALES VOLUME, NET SALES AND EARNINGS BY GEOGRAPHICAL SEGMENT IN
JANUARY-SEPTEMBER AND JULY-SEPTEMBER 2013
Seasonal nature of the operations
The Group's business operations are characterised by seasonal variation. The
net sales and operating profit from the reported geographical segments do not
accumulate evenly but vary according to the time of the year and the
characteristics of each season.
PARENT COMPANY OLVI PLC (Olvi)
January to September 2013
According to statistics by the Federation of the Brewing and Soft Drinks
Industry, the Finnish beverage market in January-September diminished by an
approximate total of 4 million litres or 0.7 percent compared to the previous
year. Sales of alcoholic beverages declined by 0.4 percent while sales of
non-alcoholic beverages declined by 1.1 percent. The largest sales decline was
seen in long drinks, 6.0 percent. The sales of ciders declined by 1.1 percent,
whereas a slight improvement of 0.3 percent was seen in beers. The sales of
soft drinks declined by 3.2 percent but the sales of mineral waters improved by
more than 7 percent. (Federation of the Brewing and Soft Drinks Industry,September 2013).
Olvi's sales in January-September amounted to 124.0 (114.0) million litres.
Thanks to increased exports and tax-free sales, the volume improved by 10.1
million litres or 8.8 percent. Among the product groups, strongest growth in
Finland was seen in soft drinks. The sales of mineral waters also improved but
the sales of juice and energy drinks declined on the previous year. In
alcoholic beverages, slight growth was seen in beers while the sales of long
drinks and ciders declined. However, Olvi is the market leader in retail sales
of long drinks.
According to statistics by the Federation of the Brewing and Soft Drinks
Industry for January-September 2013, Olvi's market share in alcoholic beverages
(beers, ciders and long drinks) was on a par with the previous year at 24
percent. In mineral waters, Olvi had a market share of 23 (24), and in soft
drinks 5 (5) percent. The overall market share in January-September was 18 (18)
percent.
In the period under review, Olvi's exports and tax-free sales increased clearly
to 17.6 (4.9) million litres, an increase of 12.7 million litres. Olvi's export
sales were particularly based on exports of soft drinks to nearby regions.
Exports and tax-free sales represented 14.2 (4.3) percent of total sales.
The parent company's net sales growth in January-September was particularly
attributable to the development of exports. Net sales stood at 97.1 (86.0)*)
million euro, an increase of 11.1 million euro or 12.9 percent.
Olvi's operating profit stood at 11.0 (7.2) million euro, which was 11.3
(8.3)*) percent of net sales. The operating profit improved by 3.8 million
euro.
2.9 million euro of the operating profit improvement was attributable to the
extended depreciation periods. Comparable operating profit improved by 13.6
percent on the previous year. Furthermore, Olvi's earnings for
January-September include performance bonuses to employees, as well as
write-downs on inventories (including 0.33-litre glass bottles) which were not
included in last year's earnings.
July to September 2013
The parent company's sales in the third quarter amounted to 38.9 (40.2) million
litres. Sales declined slightly, mainly due to decreased intra-Group freighted
work. Net sales remained almost on the previous year's level at 29.5 (29.9)*)
million euro.
The company's operating profit for July-September stood at 3.9 (2.1) million
euro, or 13.1 (7.2)*) percent of net sales. The operating profit improved by
1.7 million euro or 80.2 percent in the third quarter. In the previous year,
third-quarter earnings included an extraordinarily high amount of costs due to
production planning challenges while total consumption declined.
AS A. LE COQ (A. Le Coq)
January to September 2013
With the exception of ciders and mineral waters, the sales of all other product
groups declined in the Estonian beverage market in January-September. The sales
of mineral waters increased by 15 percent and ciders by 3 percent. The greatest
decline was seen in beers, almost seven percent. The decline in long drinks was
2, soft drinks 4 and juices 3 percent. (Nielsen, June-July 2013).
A. Le Coq retained its strong position in the Estonian beverage market. The
company's sales in January-September amounted to 102.4 (105.5) million litres.
The sales volume declined by 3.1 million litres or 3.0 percent. The sales
decline is due to the fact that intra-Group sales diminished by 6.6 million
litres. The company's domestic sales improved by 2.5 million litres or 2.9
percent in spite of the decline in the overall Estonian market.
The greatest sales increase was seen in mineral waters, 31 percent. The sales
of beers, long drinks and ciders also improved by a few percent. The sales of
soft drinks (including kvass) and juices declined.
The company is the clear market leader in long drinks and juices. In beers, the
company is in a tight struggle for the number one position, and in ciders and
soft drinks it is the number two player. The company has increased its market
share in mineral waters and is equal in strength among the top three. (Nielsen,
June-July 2013).
The company's exports and tax-free sales increased by 23.5 percent to 4.7 (3.8)
million litres. Exports and tax-free sales represented 4.5 (3.6) percent of
total sales.
The company's net sales from January to September amounted to 64.6 (63.1)
million euro, representing an increase of 1.5 million euro or 2.3 percent. Net
sales growth outperformed volume growth thanks to improved average price.
A. Le Coq's operating profit improved substantially in January-September.
Operating profit stood at 13.6 (10.7) million euro, which was 21.0 (16.9)
percent of net sales. The operating profit improved by 2.9 million euro or 27.0
percent. 1.4 million euro of the operating profit improvement was attributable
to the extended depreciation periods. In addition to increased average price of
net sales, the company has improved its production efficiency.
In a competition arranged by the Estonian Chamber of Commerce and Industry and
the Estonian Employers' Confederation, AS A. Le Coq was on 8 October 2013
awarded as the most competitive food industry company in Estonia. The purpose
of the competition is to identify the most competitive companies in Estonia, to
provide them with an opportunity of comparison with similar companies, and to
assess their success, achievements and sustainability.
July to September 2013
A. Le Coq's sales in the third quarter declined by 1.4 million litres or 3.8
percent to 35.4 (36.8) million litres due to diminished intra-Group
manufacturing. In spite of the sales decline, net sales were on a par with the
previous year at 22.5 (22.2) million euro.
The company's third-quarter operating profit stood at 5.6 (4.4) million euro,
or 24.8 (19.8) percent of net sales. The operating profit improved by 1.2
million euro or 27.5 percent.
A/S CESU ALUS (Cesu Alus)
January to September 2013
The total sales of beer in Latvia declined by three percent in
January-September. The cider market saw an even more dramatic decline at more
than 21 percent. On the other hand, the sales of long drinks increased by
almost four percent.
Cesu Alus improved its sales in January-September by 5.1 million litres or 8.8
percent. Sales amounted to 63.6 (58.5) million litres. The improvement was
attributable to increased internal sales to other Olvi Group companies.
Domestic sales declined by 4.1 percent.
Among the company's main product groups, only the sales of juice drinks
increased during January-September. Sales of long drinks were on a par with the
previous year. There was a decline of a few percent in beers, and slightly more
in soft drinks. The greatest sales decline was seen in ciders, 26.6 percent.
Fizz cider remains the best-selling cider in Latvia.
The company is a clear market leader in ciders and long drinks (Nielsen
June-July 2013). Cesu Alus has improved its position in the Latvian beer market
and remains the number two player (Nielsen, July 2013).
The company's net sales from January to September amounted to 30.3 (29.5)
million euro, representing an increase of 0.8 million euro or 2.8 percent.
Operating profit in the period stood at 2.7 (1.8) million euro, which was 8.8
(6.1) percent of net sales. The extended depreciation periods had an effect of
1.4 million euro on the operating profit.
July to September 2013
Cesu Alus's sales in the third quarter amounted to 24.0 (20.7) million litres,
representing an increase of 3.3 million litres or 16.1 percent. The increase
was attributable to increased intra-Group sales. Net sales amounted to 11.1
(10.5) million euro, representing an increase of 0.6 million euro or 6.5
percent on the previous year.
The company's operating profit in July-September stood at 1.0 (0.8) million
euro, or 9.3 (7.9) percent of net sales. The operating profit improved by 0.2
million euro or 25.6 percent.
AB VOLFAS ENGELMAN (Volfas Engelman)
January to September 2013
The Lithuanian beverage markets declined in the first half of the year mainly
due to stricter alcohol laws and new regulations concerning package sizes: the
maximum strength of mild brewery beverages is now limited to 7.5% and the
largest single package size to one-litre bottles. The only growth was seen in
the sales of long drinks, five percent. The total market in beers declined by
more than nine percent, in ciders as much as 18, and in kvass approximately
eight percent.
Volfas Engelman's sales in January-September amounted to 53.0 (57.2) million
litres. Sales declined by 4.2 million litres or 7.2 percent. 75 percent of the
sales decline accumulated in the second quarter. The sales of long drinks and
soft drinks (including kvass) increased clearly while the sales of beers and
ciders drinks declined correspondingly.
However, Volfas Engelman has retained its market position in the declining
Lithuanian beverage market. In the largest product group, beers, the company is
the number three player and has succeeded in slightly increasing its market
share on the previous year. The company had a market share of 16.7 percent in
beers (Nielsen, August-September 2013). The company is the market leader in
kvass. In ciders, the company is among the top two, and also in long drinks it
struggles for market leadership (Nielsen, July-September 2013).
The company's net sales stood at 26.3 (27.1) million euro, a decline of 0.8
million euro or 2.9 percent. The decline in net sales was smaller than the
decline in sales volume thanks to improved average price.
Operating profit in January-September declined by 0.7 million euro on the
previous year to 1.0 (1.7) million euro. Operating profit came to 3.9 (6.5)
percent of net sales. The extended depreciation periods had an effect of 0.7
million euro on the operating profit. The company was unable to adapt its
operating expenses to the declined sales volume or make sufficient efficiency
improvements.
July to September 2013
The company was able to stop the decline in sales volumes in the third quarter.
Sales in July-September were on a par with the previous year at 21.1 (21.0)
million litres. Third-quarter net sales stood at 10.3 (10.5) million euro,
representing a decline of 0.2 million euro or 1.8 percent.
However, the company's operating profit declined also in the third quarter
compared to the previous year. The operating profit stood at 0.8 (1.1) million
euro, which was 7.8 (10.6) percent of net sales.
OAO LIDSKOE PIVO (Lidskoe Pivo)
January to September 2013
The Belarusian beer market declined in January-September by approximately four
percent compared to the previous year. The imports of beer have increased all
the time, and its share of the total market in June-July was as much as 25.8
(18.2) percent. The sales of ciders has declined by approximately 20 percent in
2013. The sales of soft drinks increased by more than five and the sales of
waters by almost nine percent, while the sales of kvass declined by almost six
percent. The sales of juices are strongly growing, almost 59 percent on the
previous year. (Nielsen, June-July 2013).
Lidskoe Pivo's operations developed favourably in January-September. The
company's sales amounted to 122.4 (111.3) million litres, representing an
increase of 11.1 million litres or 10.0 percent. Among the main product groups,
the greatest sales increase was seen in mineral waters, approximately 56
percent. Clear growth was also seen in the sales of beers even though the
overall market declined slightly. There was a clear decline in the sales of
ciders as well as juice drinks. The sales of soft drinks (including kvass) were
almost on a par with the previous year.
Lidskoe Pivo has retained its overwhelming market leadership in ciders and
kvass. The company has also become the market leader in juice drinks. In beers,
the company's market share has gone up a couple of percentage points on the
previous year. The company's market share in soft drinks and mineral waters is
approximately 3 percent. (Nielsen, June-July 2013).
The company's exports increased by 5.8 million litres in January-September.
Exports made 14.0 (10.3) percent of the company's total sales. The main
destinations for exports were Russia, Ukraine and Germany.
The company's net sales stood at 53.9 (45.4) million euro, an increase of 8.5
million euro or 18.8 percent. Factors contributing to net sales growth included
favourable development of sales volumes and an improved average price of net
sales.
Operating profit increased substantially on the previous year. Operating profit
from January to September amounted to 9.5 (4.6) million euro, representing an
increase of 4.9 million euro or 107.4 percent. The operating profit represented
17.6 (10.1) percent of net sales. 1.7 million euro of the operating profit
improvement was attributable to the extended depreciation periods. Factors
contributing to improved operating profit included growth in sales volumes,
improved average price of net sales and successful cost control.
July to September 2013
Lidskoe Pivo's sales in the third quarter increased to 44.6 (42.8) million
litres. This represents an increase of 1.8 million litres or 4.3 percent.
Net sales stood at 18.6 (18.0) million euro, an increase of 0.6 million euro or
3.4 percent.
The company's third-quarter operating profit increased to 3.6 (2.8) million
euro, or 19.6 (15.3) percent of net sales. The operating profit improved by 0.8
million euro or 32.6 percent.
FINANCING AND INVESTMENTS
Olvi Group's balance sheet total at the end of September 2013 was 286.6 (270.4)
million euro. Equity per share in January-September stood at 7.93 (6.88) euro,
an increase of +1.05 euro per share or 15.3 percent on the previous year. The
equity ratio of 58.3 (53.4) percent improved clearly on the previous year, by
4.9 percentage points.
The amount of interest-bearing liabilities was 51.0 (63.5) million euro,
including current liabilities of 18.6 (19.5) million euro.
During the period under review, the Group's gross capital expenditure amounted
to 21.1 (22.8) million euro. The parent company Olvi accounted for 13.1 million
euro and the subsidiaries in the Baltic states for 4.5 million euro of the
total. Lidskoe Pivo's gross capital expenditure in January-September was 3.5
million euro.
The largest investments in Finland in 2013 include improving the efficiency of
internal logistics, automated warehouse operations and automatic picking,
increasing the capacity of the juicing facility and improving the pre-treatment
of waste water.
In the Baltic states, A. Le Coq's largest investments include procurements
related to improving canning line efficiency, extensions to conveyor systems
and acquisition of a can storage hall. Cesu Alus's investments mainly consist
of extensions to the tank cellar and filtering department, and the acquisition
of a light-duty storage hall. Volfas Engelman's largest investments consist of
an extension to the boiling room and the associated control equipment, an
extension to the tank cellar and the introduction of a PET bottle format.
Lidskoe Pivo's largest investments in 2013 will be the second phase of the
fermentation cellar extension, extensions to cooling systems, and the
acquisition of a light-duty storage hall.
RESEARCH AND DEVELOPMENT
Research and development includes projects to design and develop new products,
packages, processes and production methods, as well as further development of
existing products and packages. The R&D costs have been recognised as expenses.
The main objective of Olvi Group's product development is to create new
products for profitable and growing beverage segments.
NEW PRODUCTS
Finland
New products for the third quarter were already presented in the Q2/2013
interim report.
Subsidiaries
In addition to the new products already presented in the Q2/2013 interim
report, Volfas Engelman launched the Angry Birds Space Comet soft drink in
0.33-litre cans and the Šnekorių dark 7,5% beer in one-litre plastic bottles.
PERSONNEL
Olvi Group's average number of personnel in January-September was 2,034
(2,000). The Group's average number of personnel increased by 34 people or 1.7
percent. The number of personnel was either unchanged or slightly increased in
all of the Group's operating countries. At the end of September, Olvi Group
employed a total of 1,934 (1,928) people.
Olvi Group's average number of personnel by country:
1-9/2013 1-9/2012
Finland 414 (411)
Estonia 317 (317)
Latvia 222 (221)
Lithuania 218 (211)
Belarus 863 (840)
Total 2034 (2000)
GROUP STRUCTURE
In August-September 2013, Olvi plc acquired a total of 24 shares in Cesu Alus,
corresponding to 0.01 percent of the company's share capital. At the end of
September 2013, Olvi's holding in Cesu Alus was 99.68 percent, in A. Le Coq
100.0 percent, in Volfas Engelman 99.57 percent and in Lidskoe Pivo 91.58
percent. Furthermore, A. Le Coq has a 49.0 percent holding in Karme AS and 20.0
percent holding in Verska Mineraalvee OÜ in Estonia.
OLVI A SHARE AND SHARE MARKET
Olvi's share capital at the end of September 2013 stood at 20.8 million euro.
The total number of shares was 20,758,808, of these 17,026,552 or 82.0 percent
being Series A shares and 3,732,256 or 18.0 percent Series K shares. Each
Series A share carries one (1) vote and each Series K share carries twenty (20)
votes. Series A and Series K shares have equal rights to dividends.
The Olvi A share was quoted on Nasdaq OMX Helsinki Ltd (Helsinki Stock
Exchange) at 25.89 (18.15) euro at the end of September. In January-September,
the highest quote for the Series A share was 27.93 (19.94) euro and the lowest
quote was 19.70 (14.75) euro. The average price was 23.58 (17.58) euro.
In January-September, a total of 1,820,943 (1,160,708) Series A shares were
traded, representing 10.7 (6.8) percent of the total number of Series A shares.
The value of trading was 43.0 (20.5) million euro.
At the end of September 2013, the market capitalisation of the entire stock was
537.4 (376.8) million euro and the market capitalisation of Series A shares was
440.8 (309.0) million euro.
The number of shareholders at the end of September 2013 was 9,492 (9,052).
Foreign holdings plus foreign and Finnish nominee-registered holdings
represented 20.7 (17.7) percent of the total number of book entries and 6.8
(6.1) percent of total votes. Foreign and nominee-registered holdings are
reported in Table 5, Section 8 of the tables attached to this interim report,
and the largest shareholders are reported in Table 5, Section 9.
TREASURY SHARES
There were no changes in the number of treasury shares held by Olvi in
January-September 2013. At the end of the reporting period, Olvi plc held 1,124
Series A shares as treasury shares. Treasury shares held by Olvi plc are
reported in the tables section of this interim report, in Table 5, Section 5.
BUSINESS RISKS AND THEIR MANAGEMENT
Risk management is a part of Olvi Group's everyday management and operations.
It increases corporate security and contributes to the achievement of targets
set. The objective of risk management is to operate proactively and create
operating conditions in which business risks are managed comprehensively and
systematically in all of the Group companies and all levels of the
organisation. In addition to the company itself, risk management benefits its
personnel, customers, shareholders and other related groups.
The objective of risk management is to ensure the realisation of the company's
strategy and secure the continuity of business. Olvi Group identifies,
assesses, manages and monitors its crucial risks regularly. With regard to
identified risks, the effects, scope and probability of realisation are
assessed together with the means of eliminating or reducing the risk.
Furthermore, risk management aims to identify and utilise any business
opportunities that may arise.
The Group's strategic risks refer to risks related to the characteristics of
the Group's business and strategic choices. The Group's operations are located
in several countries that differ substantially in terms of their social and
economic situations and the phases and directions of development. For example,
strategic risks relate to changes in tax legislation and other regulations, the
environment as well as the financial and foreign exchange markets. If realised,
strategic risks can substantially hamper the company's operational
preconditions. The Group's most substantial identified strategic risks relate
to Belarus, particularly the situation in the country's economy and politics.
The Group's most substantial identified operational risks relate to the
procurement and quality of raw materials, the production process, markets and
customers, personnel, information security and systems, as well as changes in
foreign exchange rates.
Raw materials
General economic development and annual fluctuations in crop yield affect the
prices and availability of major raw materials used within Olvi Group.
Disruptions in raw material deliveries may hamper customer relations and
business operations. Purchases of major raw materials are made under
procurement contracts standardised at the Group level. The predictability of
purchase prices for the most critical raw materials is improved through
long-term procurement agreements and potentially derivatives. All units
emphasise the significance of the quality of raw materials and other production
factors in the overall production chain.
Production process
The aim is to minimise production risks through clear documentation of
processes, increasing the degree of automation, compliance with quality
management system and the pursuit of clear operating methods in relation to
decision-making and supervision. The efficiency and applicability of processes
and methods are monitored using internal indicators. The monitoring and
development of production efficiency includes, among other things, the
reliability and utilisation rate of production machinery, development of the
working environment and factors related to people's work. The Group has a
property and loss-of-profits insurance programme covering all of the operating
areas, and its coverage is reviewed annually.
Markets and customers
The Group's business operations are characterised by substantial seasonal
variation. The net sales and operating profit from the reported geographical
segments do not accumulate evenly but vary substantially according to the time
of the year and the characteristics of each season.
Negative changes in the economy may impact consumers' purchasing behaviour and
hamper the liquidity of hotel and restaurant customers in particular. All Group
companies employ efficient credit controls as a major method for minimising
credit losses.
Legislative changes and other changes due to the operations of authorities,
such as changes in excise taxes and marketing restrictions, may affect the
demand for the Group's products and their relative competitive position.
Personnel
Risks related to personnel include, among others, risks in obtaining labour,
employment relationship risks, key person risks, competence risks and risks
arising from insufficient well-being and accidents at work.
Crucial focal points in HR management include maintaining and developing a good
employer image, as well as ensuring the availability and commitment of
personnel. Other focal points include maintaining and developing well-being and
safety at work, the functionality of management, training and incentive
schemes, as well as the construction and maintenance of backup personnel
systems.
Information security and IT
Olvi Group employs an information security policy pertaining to all of the
companies. It defines the principles for implementing information security and
provides guidelines for its development.
Risks related to information technology and systems are manifested as
operational disruptions and deficiencies, for example. The availability and
correctness of data is ensured through the choice of operating methods and
various technical solutions. The Group's operations in Finland and the Baltic
states utilise a common enterprise resource planning system. A risk analysis
pertaining to information security and the operation of information systems is
carried out annually.
Financing risks
The Group operates in an international market and is therefore exposed to
foreign exchange risk due to changes in exchange rates. Foreign exchange risk
consists of sales, purchases and balance sheet items in foreign currency
(transaction risk), as well as investments and loans in foreign subsidiaries
(valuation risk). Foreign exchange risk is reduced by the fact that most of the
Group's product sales and purchases of raw materials are denominated in euro.
The objective of financing risks management is to protect the Group against
unfavourable changes in the financial markets and to secure the Group's
earnings development, liquidity and equity. The parent company's financial
management bears central responsibility for the Group's financing, liquidity
and the management of financing risks in accordance with principles confirmed
by the Group's Board of Directors. The objectives of centralisation include
optimisation of cash flows, cost savings and efficient risk management.
Financing risks are described in more detail in the Investors section of the
corporate Web site.
BUSINESS RISKS AND UNCERTAINTIES IN THE NEAR TERM
A slight economic upturn has already happened in the euro zone but growth is
still minor. In spite of the upturn, there are great risks involved in the
development of the euro zone. The unemployment rate is still high. Weakened
consumer purchasing power and changes in consumption patterns may have a
negative impact on demand for the Group's products. Demand in Finland is also
held back by the highest excise tax level in the European Union, as well as
increasing private imports.
The most substantial factor hampering the predictability of Olvi Group's
business relates to Belarus and its economic outlook for the next few years.
The IAS 29 standard “Financial Reporting in Hyperinflationary Economies” will
probably be applied at least until the end of 2014.
NEAR-TERM OUTLOOK
Sales volumes and net sales are expected to continue favourable development
during the rest of the year.
Comparable operating profit is expected to improve on the previous year.
OLVI PLC
Board of Directors
Further information:
Lasse Aho, Managing Director
Phone +358 290 00 1050 or +358 400 203 600
TABLES:
- Statement of comprehensive income, Table 1
- Balance sheet, Table 2
- Changes in shareholders' equity, Table 3
- Cash flow statement, Table 4
- Notes to the interim report, Table 5
DISTRIBUTION
NASDAQ OMX Helsinki Ltd
Key media
www.olvi.fi
OLVI GROUP TABLE 1
INCOME STATEMENT
EUR 1,000
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
2013 2012 2013 2012 2012
Net sales 86512 85995*) 257213 235489 304891*)
*)
Other operating income 330 71 651 336 1020
Operating expenses -68656 -69198* -210023 -19391 -253552*
) 7*) )
Depreciation and impairment -3280 -5642 -10103 -15986 -21822
Operating profit 14906 11225 37738 25922 30537
Financial income 461 801 2293 3489 4871
Financial expenses -1048 -947 -2783 -1796 -3093
Financial expenses - net -587 -146 -490 1693 1778
Earnings before tax 14319 11079 37248 27615 32315
Taxes ***) -1801 -1239 -7790 -5357 -6151
NET PROFIT FOR THE PERIOD 12518 9840 29458 22258 26164
Other comprehensive income items:
Translation differences related to
foreign subsidiaries -1716 -831 -1398 2273 527
TOTAL COMPREHENSIVE INCOME FOR 10802 9009 28060 24531 26691
THE PERIOD
Distribution of profit:
- parent company shareholders 12334 9669 28813 21860 25668
- non-controlling interests 184 171 645 398 496
Distribution of comprehensive profit:
- parent company shareholders 10738 8897 27532 24130 26229
- non-controlling interests 64 112 528 401 462
Earnings per share calculated from the profit belonging
to parent company shareholders, EUR
- undiluted 0.59 0.47 1.39 1.05 1.24
- diluted 0.59 0.47 1.39 1.05 1.24
*) The previous year's net sales in Finland have been adjusted for comparability
with the year 2013.
***) Taxes calculated from the profit for the review period.
OLVI GROUP
TABLE 2
BALANCE SHEET
EUR 1,000
30.9.2013 30.9.2012 31.12.2012
ASSETS
Non-current assets
Tangible assets 157232 147022 146749
Goodwill 17856 17610 17730
Other intangible assets 2580 1742 2119
Shares in associates 1077 1077 1077
Financial assets available for sale 549 549 549
Loan receivables and other non-current 393 160 408
receivables
Deferred tax receivables 147 84 83
Total non-current assets 179834 168244 168715
Current assets
Inventories 43943 45111 40583
Accounts receivable and other receivables 56902 53716 53345
Income tax receivable 22 317 693
Other non-current assets available for sale 163 163 163
Liquid assets 5735 2892 5698
Total current assets 106765 102199 100482
TOTAL ASSETS 286599 270442 269197
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity held by parent company shareholders
Share capital 20759 20759 20759
Other reserves 1092 1092 1092
Treasury shares -8 -8 -8
Translation differences -18967 -15977 -17687
Retained earnings 161643 136857 141317
164519 142723 145473
Share belonging to non-controlling interests 2594 1818 1939
Total shareholders' equity 167113 144541 147412
Non-current liabilities
Financial liabilities 32359 43954 42474
Other liabilities 250 500 250
Deferred tax liabilities 4085 2633 3200
Current liabilities
Financial liabilities 18646 19540 15996
Accounts payable and other liabilities 62712 57830 58669
Income tax liability 1434 1445 1196
Total liabilities 119486 125902 121785
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 286599 270442 269197
OLVI GROUP
TABLE 3
CHANGES IN OLVI GROUP'S CONSOLIDATED
SHAREHOLDERS' EQUITY
EUR 1,000 Share Other Treasu Translati Retaine Share of Total
capit reserv ry on d non-control
al es share differenc earning ling
s es s interests
accoun
t
Shareholders' 20759 1092 -8 -18248 123286 1341 128222
equity 1 Jan
2012
Adjustments for 2033 187 2220
hyperinflation
Adjusted 20759 1092 -8 -18248 125319 1528 130442
shareholders'
equity 1 Jan
2012
Comprehensive
income:
Net profit for the 21860 398 22258
period
Other comprehensive income
items:
Translation 2271 2 2273
differences
Total comprehensive income for 2271 21860 401 24531
the period
Transactions with
shareholders:
Payment of dividends -10379 -14 -10393
Total transactions with shareholders -10379 -14 -10393
Changes in holdings in subsidiaries:
Acquisition of shares from non-
controlling interests 20 20
Change in shares held by non-
controlling interests 37 -37 0
Reduction of share capital -60 -60
Total changes in holdings in subsidiaries 57 -97 -40
Shareholders' 20759 1092 -8 -15977 136857 1818 144541
equity 30 Sep
2012
EUR 1,000 Share Other Treasu Translati Retaine Share of Total
capit reser ry on d non-control
al ves share differen earnin ling
s ces gs interests
accoun
t
Shareholders' 20759 1092 -8 -17687 141317 1939 147412
equity 1 Jan
2013
Adjustments for 1891 174 2065
hyperinflation
Adjusted 20759 1092 -8 -17687 143208 2113 149477
shareholders'
equity 1 Jan
2013
Comprehensive
income:
Net profit for the 28813 645 29458
period
Other comprehensive income
items:
Translation -1280 -117 -1397
differences
Total comprehensive income for -1280 28813 528 28061
the period
Transactions with
shareholders:
Payment of dividends -10379 -46 -10425
Total transactions with shareholders -10379 -46 -10425
Changes in holdings in subsidiaries:
Acquisition of shares from non-
controlling interests 0 0
Change in shares held by non-
controlling interests 1 -1 0
Reduction of share capital 0
Total changes in holdings in subsidiaries 1 -1 0
Shareholders' 20759 1092 -8 -18967 161643 2594 167113
equity 30 Sep
2013
Other reserves include the share premium account, legal reserve and other
reserves.
OLVI GROUP TABLE 4
CASH FLOW STATEMENT
EUR 1,000
1-9/2013 1-9/2012 1-12/2012
Net profit for the period 29458 22258 26164
Adjustments to profit for the period 20213 24822 29754
Change in net working capital -4315 -12601 -8967
Interest paid -2528 -1552 -2077
Interest received 314 184 315
Taxes paid -5311 -3841 -4900
Cash flow from operations (A) 37831 29270 40289
Investments in tangible and intangible
assets -19312 -23610 -23757
Sales gains from tangible and intangible
assets -228 139 125
Expenditure on other investments 0 -582 -582
Cash flow from investments (B) -19540 -24054 -24214
Withdrawals of loans 688 36987 32738
Repayments of loans -8154 -32712 -36179
Dividends paid -10542 -10378 -10377
Increase (-) / decrease (+) in current interest-
bearing business receivables 0 2 0
Increase (-) / decrease (+) in long-term
loan receivables 16 0 -265
Cash flow from financing (C) -17992 -6100 -14083
Increase (+)/decrease (-) in liquid assets 299 -884 1992
(A+B+C)
Liquid assets 1 January 5698 3836 3836
Effect of exchange rate changes -262 -60 -130
Liquid assets 30 Sep/31 Dec 5735 2892 5698
OLVI GROUP
TABLE 5
NOTES TO THE INTERIM REPORT
The accounting policies used for this interim report are the same as those used
for the annual financial statements 2012, with the following changes
implemented as of 1 January 2013:
1) As of the beginning of 2013, marketing subsidies payable to customers on the
basis of litres sold have been accounted for as annual discounts under
adjustments to sales. These marketing subsidies were previously recognised
under other operating expenses. Due to the change, the consolidated net sales
and other operating expenses for the previous year's January-to-September
period have declined by the amount of the marketing subsidies, 6.2 million
euro. The change concerned the parent company Olvi.
2) As of the beginning of 2013, Olvi Group's depreciation periods for
buildings, production machinery and equipment, as well as storage and
fermentation tanks, have been extended to better correspond to their actual
economic life. The depreciation period for buildings was extended from 20 to 30
years and the depreciation period for production machinery and equipment from 8
years to 15 years. The depreciation period for tanks was extended from 8 years
to 20 years. Due to the change, depreciation in January-September 2013 declined
by 8.1 million euro.
Other accounting policies are presented in the Annual Report 2012 which was
published on 18 March 2013. The information disclosed in the interim report is
unaudited.
The interim report information is presented in thousands of euros (EUR 1,000).
For the sake of presentation, individual figures and totals have been rounded
to full thousands, which causes rounding differences in additions.
The Group has adopted the following new or revised standards and
interpretations in 2013:
- Amendment to IAS 12 “Income Taxes” concerning deferred taxes
- Amendment to IAS 1 “Presentation of Financial Statements” concerning other
comprehensive income items
- Amendment to IAS 19 “Employee Benefits”
- Amendment to IFRS 7 “Financial Instruments: Disclosures” concerning the
offset of assets and liabilities
- IFRS 13 “Fair Value Measurement”
1. SEGMENT INFORMATION
SALES BY GEOGRAPHICAL SEGMENT (1,000 litres)
7-9/2013 7-9/2012 1-9/2013 1-9/2012 1-12/2012
Olvi Group total 151915 149867 433919 411228 526753
Finland 38904 40185 124028 113965 148764
Estonia 35426 36842 102386 105542 134027
Latvia 24033 20698 63625 58490 72358
Lithuania 21069 20954 53023 57157 71661
Belarus 44658 42812 122422 111260 141496
- sales between segments -12175 -11624 -31565 -35186 -41553
NET SALES BY GEOGRAPHICAL SEGMENT (EUR 1,000)
7-9/2013 7-9/2012 1-9/2013 1-9/2012 1-12/2012
Olvi Group total 86512 85995*) 257213 235489*) 304891*)
Finland 29533 29925*) 97068 85994*) 113612*)
Estonia 22509 22177 64589 63135 80043
Latvia 11137 10462 30284 29463 36185
Lithuania 10294 10483 26281 27061 34245
Belarus 18600 17996 53906 45376 59030
- sales between segments -5561 -5048 -14915 -15541 -18224
*) The previous year's figures have been adjusted for comparability with the
year 2013.
OPERATING PROFIT BY GEOGRAPHICAL SEGMENT (EUR 1,000)
7-9/2013 7-9/2012 1-9/2013 1-9/2012 1-12/2012
Olvi Group total 14906 11225 37738 25922 30537
Finland 3873 2149 10985 7158 9066
Estonia 5587 4381 13581 10692 13017
Latvia 1033 822 2666 1811 1654
Lithuania 799 1108 1020 1747 1753
Belarus 3648 2752 9487 4573 4979
- eliminations -34 13 -1 -59 68
2. PERSONNEL ON AVERAGE 1-9/2013 1-9/2012 1-12/2012
Finland 414 411 401
Estonia 317 317 313
Latvia 222 221 217
Lithuania 218 211 212
Belarus 863 840 834
Total 2034 2000 1977
3. RELATED PARTY TRANSACTIONS
Employee benefits to management
Salaries and other short-term employee benefits to the Board of Directors and
Managing Directors
EUR 1,000
1-9/2013 1-9/2012 1-12/2012
Managing Directors 740 778 931
Chairman of the Board 63 62 84
Other members of the Board 97 91 125
Total 900 931 1140
4. SHARES AND SHARE CAPITAL
30.9.2013 %
Number of A shares 17026552 82.0
Number of K shares 3732256 18.0
Total 20758808 100.0
Total votes carried by A shares 17026552 18.6
Total votes carried by K shares 74645120 81.4
Total number of votes 91671672 100.0
Votes per Series A share 1
Votes per Series K share 20
The registered share capital on 30 September 2013 totalled 20,759 thousand euro.
Olvi plc's Series A and Series K shares received a dividend of 0.50 euro per
share for 2012 (0.50 euro per share for 2011), totalling 10.4 (10.4) million
euro. The dividends were paid on 22 April 2013. The Series K and Series A
shares entitle to equal dividend.
The Articles of Association include a redemption clause concerning Series K
shares.
5. TREASURY SHARES
Olvi plc held a total of 1,124 of its own Series A shares on 1 January 2013.
Olvi plc has not acquired more treasury shares or transferred them to others in
January-September 2013, which means that the number of Series A shares held by
the company was unchanged on 30 September 2013.
The purchase price of the Series A shares held as treasury shares totalled 8.5
thousand euro.
Series A shares held by Olvi plc as treasury shares represented 0.005 percent
of the share capital and 0.001 percent of the aggregate number of votes. The
treasury shares represented 0.007 percent of all Series A shares and associated
votes.
On 10 April 2013, the General Meeting of Shareholders of Olvi plc decided to
revoke any unused authorisations to acquire treasury shares and authorise the
Board of Directors of Olvi plc to decide on the acquisition of the company's
own shares using distributable funds. The authorisation is valid for one year
starting from the General Meeting and covers a maximum of 500,000 Series A
shares.
The Annual General Meeting also decided to revoke all existing unused
authorisations for the transfer of own shares and authorise the Board of
Directors to decide on the issue of a maximum of 1,000,000 new Series A shares
and the transfer of a maximum of 500,000 Series A shares held as treasury
shares.
In January-September 2013, the Board of Directors of Olvi plc has not exercised
the authorisations granted by the General Meeting.
6. NUMBER OF SHARES *)
1-9/2013 1-9/2012 1-12/2012
- average 20757684 20757684 20757684
- at end of period 20757684 20757684 20757684
*) Treasury shares deducted.
7. TRADING OF SERIES A SHARES ON THE HELSINKI STOCK EXCHANGE
1-9/2013 1-9/2012 1-12/2012
Trading volume of Olvi A shares 1820943 1160708 1793149
Total trading volume, EUR 1,000 43038 20512 32789
Traded shares in proportion to
all Series A shares, % 10.69 6.82 10.53
Average share price, EUR 23.58 17.58 18.26
Price on the closing date, EUR 25.89 18.15 19.65
Highest quote, EUR 27.93 19.94 20.43
Lowest quote, EUR 19.70 14.75 14.75
8. FOREIGN AND NOMINEE-REGISTERED HOLDINGS ON 30 SEPTEMBER 2013
Book entries Votes Shareholders
qty % qty % qty %
Finnish total 16455751 79.27 85425143 93.19 9446 99.52
Foreign total 533340 2.57 2476812 2.70 38 0.40
Nominee-registered (foreign) 18466 0.09 18466 0.02 3 0.03
total
Nominee-registered (Finnish) 3751251 18.07 3751251 4.09 5 0.05
total
Total 20758808 100.00 91671672 100.00 9492 100.00
9. LARGEST SHAREHOLDERS ON 30 SEPTEMBER 2013
Series Series A Total % Votes % K
1. Olvi Foundation 2363904 890613 3254517 15.68 48168693 52.54
2. Hortling Heikki 903488 144194 1047682 5.05 18213954 19.87
Wilhelm *)
3. The Heirs of Hortling 187104 25248 212352 1.02 3767328 4.11
Kalle Einari
4. Hortling Timo Einari 165824 34608 200432 0.97 3351088 3.66
5. Hortling-Rinne Laila 102288 2100 104388 0.50 2047860 2.23
Marit
6. Pohjola Bank plc, nominee 1902920 1902920 9.17 1902920 2.08
register
7. Nordea Bank Finland plc, 962694 962694 4.64 962694 1.05
nominee register
8. Skandinaviska Enskilda Banken Ab (Publ)
Helsinki branch, nominee register 831405 831405 4.01 831405 0.91
9. Ilmarinen Mutual Pension 472018 472018 2.27 472018 0.51
Insurance Company
10. Autocarrera Oy Ab 460000 460000 2.22 460000 0.50
Others 9648 11300752 11310400 54.47 11493712 12.54
Total 3732256 17026552 20758808 100.00 91671672 100.00
*) The figures include the shareholder's own holdings and shares held by parties
in his control.
10. PROPERTY, PLANT AND EQUIPMENT
EUR 1,000
1-9/2013 1-9/2012 1-12/2012
Increase 20147 22306 28197
Decrease -1082 -759 -1122
Total 19065 21547 27075
11. CONTINGENT LIABILITIES 30.9.2013 30.9.202 31.12.2012
EUR 1,000
Pledges and contingent liabilities
For own commitments 4991 7513 7415
For others 0 130 0
Leasing and rental liabilities:
Due within one year 1224 1029 1480
Due within 1 to 5 years 1006 1445 784
Due in more than 5 years 6 7 7
Leasing and rental liabilities total 2236 2481 2271
Package liabilities 2813 2597 2265
Other liabilities 2000 2000 2000
12. CALCULATION OF FINANCIAL RATIOS
Equity to total assets, % = 100 * (Shareholders' equity held by parent company
shareholders + non-controlling interests) / (Balance sheet total - advances
received)
Earnings per share = Profit belonging to parent company shareholders / Average
number of shares during the period, adjusted for share issues
Equity per share = Shareholders' equity held by parent company shareholders /
Number of shares at end of period, adjusted for share issues
Gearing, % = 100 * (Interest-bearing debt - cash in hand and at bank) /
(Shareholders' equity held by parent company shareholders + non-controlling
interests)
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