2015-02-25 07:59:59 CET
2015-02-25 08:01:02 CET
REGULATED INFORMATION
Olvi Oyj - Financial Statement Release
OLVI GROUP’S FINANCIAL STATEMENTS JANUARY TO DECEMBER 2014
Olvi Group's overall performance remained on a healthy level in 2014. The Board
proposes a dividend of 0.65 (0.65) euro per share
Iisalmi, 2015-02-25 07:59 CET (GLOBE NEWSWIRE) -- OLVI PLC
FINANCIAL STATEMENTS BULLETIN 25 FEB 2015 at 9:00 am
OLVI GROUP'S FINANCIAL STATEMENTS JANUARY TO DECEMBER 2014
FINANCIAL STATEMENTS IN BRIEF
Olvi Group's overall performance remained on a healthy level in 2014.
Full year 2014:
- Olvi Group's sales volume increased by 3.5 percent to 576.5 (557.2) million
litres
- The Group's net sales increased slightly and totalled 328.2 (327.3) million
euro
- The Group's reported operating profit declined slightly, amounting to 41.0
(43.2) million euro
- Olvi Group's earnings per share stood at 1.57 (1.61) euro per share
- The equity ratio remained good at 57.9 (58.0) percent
October to December 2014
- Olvi Group's sales volume increased by 3.1 percent to 127.2 (123.3) million
litres
- The Group's net sales amounted to 69.7 (70.0) million euro
- The Group's operating profit amounted to 4.5 (5.5) million euro. Devaluation
of
the Belarusian rouble and the associated country-specific hyperinflationary
accounting caused a decline of almost one million euro in operating profit.
- Olvi Group's earnings per share stood at 0.18 (0.23) euro per share
The Board proposes a dividend of 0.65 (0.65) euro per share.
Olvi estimates that the Group's sales volume for 2015 will increase slightly
and that net sales will be on a par with the previous year. Operating profit is
expected to be on a par with 2014 or slightly decline, depending greatly on the
stabilisation of the Belarusian economy and exchange rate.
CONSOLIDATED KEY RATIOS
10-12/ 10-12/ Change 1-12/ 1-12/ Change
2014 2013 % 2014 2013 %
--------------------------------------------------------------------------------
Sales volume, Mltr 127.2 123.3 3.1 576.5 557.2 3.5
--------------------------------------------------------------------------------
Net sales, MEUR 69.7 70.0 -0.5 328.2 327.3 0.3
--------------------------------------------------------------------------------
EBITDA, MEUR 8.2 9.0 -9.1 55.9 56.8 -1.7
--------------------------------------------------------------------------------
Operating profit, MEUR 4.5 5.5 -17.9 41.0 43.2 -5.1
--------------------------------------------------------------------------------
% of net sales 6.5 7.8 12.5 13.2
--------------------------------------------------------------------------------
Net profit for the 3.6 4.7 -22.8 33.1 34.2 -3.2
period
--------------------------------------------------------------------------------
% of net sales 5.2 6.7 10.1 10.4
--------------------------------------------------------------------------------
Earnings per share, 0.18 0.23 -21.7 1.57 1.61 -2.5
EUR
--------------------------------------------------------------------------------
Gross capital 9.7 14.6 -33.7 41.6 35.7 16.7
expenditure, MEUR
--------------------------------------------------------------------------------
Equity per share, EUR 9.17 8.14 12.7
--------------------------------------------------------------------------------
Equity to total 57.9 58.0 -0.2
assets, %
--------------------------------------------------------------------------------
Gearing, % 29.8 26.4 12.9
--------------------------------------------------------------------------------
BUSINESS DEVELOPMENT
LASSE AHO, MANAGING DIRECTOR:
Olvi Group's performance in 2014 can be considered quite good, taking into
account the decline of the overall market. We were able to increase our sales
volume and net sales, and our market position strengthened in the main market
areas. Operating profit fell slightly short of the previous year.
The Baltic states performed well in their business during 2014, and the same is
true of Belarus in spite of the devaluation of the local rouble. By contrast,
we faced challenges in Finland.
The business environment in Finland changed substantially during 2014. Weakened
consumer purchasing power and changes in purchasing patterns, tax hikes
effective as of the beginning of 2014, as well as price competition and
increased private imports hampered the parent company's profitability. Due to
this, Olvi initiated reorganisation of the Finnish operations in November with
the aim of responding to changes in the operating environment and ensuring our
competitive ability in the long term.
However, many positive things were seen during the year also in Finland.
According to an extensive study of beer brands commissioned by the
Markkinointi&Mainonta trade journal from the Taloustutkimus research agency
(10/2014), Sandels and OLVI were regarded the most appreciated brands of beer
in Finland. In a challenging business environment, Olvi was successful in
increasing its domestic sales volume and strengthening its market position.
However, domestic growth was insufficient to replace the gap in exports to
Russia after extraordinarily good development in 2013.
Overall development of the Baltic operations continued strong. Lithuania was
able to clearly improve its performance, and profitability in Estonia was at a
very good level. The situation in Latvia has been more challenging compared to
the other units in the Baltic states due to diminished intra-Group sales and
the weakened overall market situation.
In Belarus, the sales volume, net sales and operating profit increased on the
year 2013. The currency devaluation trend that started late in the year imposes
uncertainty on the Belarusian operations. This had its impact on the net sales
and earnings for 2014, particularly in the fourth quarter. A positive
opportunity worth mentioning is the co-operation agreement signed by our
Belarusian subsidiary OAO Lidskoe Pivo with PepsiCo, Inc., the second-largest
soft drinks company in the world, with regard to the Belarusian market.
Olvi continued on a track of intensive investments in 2014. The logistics
investment in Finland proceeded according to plan and will provide for more
efficient operations during the 2015 high season. A canning line was introduced
in Lithuania during 2014, and this has contributed to the growth and
performance improvements in Lithuania. Investments to further increase
production capacity are underway in Belarus. The investments in progress will
be completed during the 2015 summer season.
SEASONAL NATURE OF THE OPERATIONS
The Group's business operations are characterised by seasonal variation. The
net sales and operating profit from the reported geographical segments do not
accumulate evenly but vary according to the time of the year and the
characteristics of each season.
SALES DEVELOPMENT
Olvi Group's sales volume in 2014 made an all-time high of 576.5 (557.2)
million litres. This represents an increase of 19.3 million litres or 3.5
percent.
The strongest growth was seen in Belarus (increase 13.4 million litres) and in
Lithuania (increase 11.5 million litres). Sales volume increased also in the
Estonian unit. Latvia fell short of the previous year mostly due to a decline
in intra-Group sales.
The sales volume in Finland increased by 2.7 million litres but exports
included in the figures for the Finnish business area declined by 10.8 million
litres.
The Group's sales volume also increased in the fourth quarter, with the
greatest growth seen in Lithuania and Finland.
Sales volume, million 10-12/ 10-12/ Change 1-12/ 1-12/ Change
litres 2014 2013 % 2014 2013 %
--------------------------------------------------------------------------------
Finland (Olvi plc) 37.1 35.9 3.4 151.8 159.9 -5.1
--------------------------------------------------------------------------------
Estonia (AS A. Le Coq) 27.0 26.9 0.2 131.6 129.3 1.7
--------------------------------------------------------------------------------
Latvia (A/S Cesu Alus) 12.9 16.1 -19.9 76.1 79.7 -4.6
--------------------------------------------------------------------------------
Lithuania (AB Volfas 18.2 16.5 9.9 81.1 69.6 16.5
Engelman)
--------------------------------------------------------------------------------
Belarus (OAO Lidskoe 34.7 34.1 1.7 169.9 156.5 8.6
Pivo)
--------------------------------------------------------------------------------
Eliminations -2.7 -6.2 56.9 -34.0 -37.8 10.1
--------------------------------------------------------------------------------
Total 127.2 123.3 3.1 576.5 557.2 3.5
--------------------------------------------------------------------------------
The Group's net sales in 2014 amounted to 328.2 (327.3) million euro. In 2014,
net sales increased in Belarus by 10.5 million euro, in Lithuania by 4.3
million euro and in Estonia by 1.2 million euro. By contrast, net sales for the
Finnish business area declined due to diminished exports included in the
Finnish figures as well as domestic price competition.
Fourth-quarter net sales fell 0.5 percent short of the corresponding period in
the year before. A factor contributing to this is the revaluation of previous
months recognised in Belarus in December due to hyperinflationary accounting
under IAS 29. Hyperinflationary accounting has been applied in Belarus since
2011. Under the scheme, the income statement is to be based on the exchange
rate of the Belarusian rouble on the last day of the year.
Net sales, million 10-12/ 10-12/ Change 1-12/ 1-12/ Change
euro 2014 2013 % 2014 2013 %
--------------------------------------------------------------------------------
Finland (Olvi plc) 25.8 26.5 -2.7 107.7 123.6 -12.9
--------------------------------------------------------------------------------
Estonia (AS A. Le Coq) 18.1 16.7 8.7 82.5 81.3 1.5
--------------------------------------------------------------------------------
Latvia (A/S Cesu Alus) 5.6 7.3 -22.6 34.9 37.6 -7.0
--------------------------------------------------------------------------------
Lithuania (AB Volfas 8.2 7.9 4.6 38.4 34.1 12.4
Engelman)
--------------------------------------------------------------------------------
Belarus (OAO Lidskoe 13.0 14.4 -9.8 78.8 68.3 15.3
Pivo)
--------------------------------------------------------------------------------
Eliminations -1.1 -2.7 58.4 -14.0 -17.6 20.6
--------------------------------------------------------------------------------
Total 69.7 70.0 -0.5 328.2 327.3 0.3
--------------------------------------------------------------------------------
EARNINGS DEVELOPMENT
The Group's operating profit for January-December declined slightly and
amounted to 41.0 (43.2) million euro, or 12.6 (13.2) percent of net sales.
Performance in Belarus improved by 2.4 million euro, in Lithuania by 1.1
million euro and in Estonia by 0.5 million euro. By contrast, performance in
Finland and Latvia weakened on the previous year.
Fourth-quarter operating profit fell 1.0 million euro short of the previous
year. Performance in Lithuania improved substantially, and Estonia continued on
a strong track. The unfavourable exchange rate development in Russia was
reflected in Belarus towards the end of the year, resulting in a foreign
exchange loss of almost one million euro and a momentary drop in exports to
Russia in December. Profitability in Finland was weaker than in the previous
year.
Operating profit, 10-12/ 10-12/ Change 1-12/ 1-12/ Change
million euro 2014 2013 % 2014 2013 %
--------------------------------------------------------------------------------
Finland (Olvi plc) 1.0 1.9 -48.0 7.4 12.8 -42.1
--------------------------------------------------------------------------------
Estonia (AS A. Le Coq) 2.2 2.4 -8.0 16.5 16.0 3.2
--------------------------------------------------------------------------------
Latvia (A/S Cesu Alus) -0.1 -0.2 54.5 2.1 2.5 -16.3
--------------------------------------------------------------------------------
Lithuania (AB Volfas 0.5 0.2 91.2 2.4 1.3 86.5
Engelman)
--------------------------------------------------------------------------------
Belarus (OAO Lidskoe 0.9 1.2 -28.1 13.1 10.7 23.0
Pivo)
--------------------------------------------------------------------------------
Eliminations 0.1 0.0 -0.5 0.0
--------------------------------------------------------------------------------
Total 4.5 5.5 -17.9 41.0 43.2 -5.1
--------------------------------------------------------------------------------
The Group's profit after taxes in 2014 declined by 3.2 percent on the previous
year, amounting to 33.1 (34.2) million euro. Fourth-quarter operating profit
stood at 3.6 (4.7) million euro.
Earnings per share calculated from the profit belonging to parent company
shareholders in January-December stood at 1.57 (1.61) euro, and the
fourth-quarter figure was 0.18 (0.23) euro.
BALANCE SHEET, FINANCING AND INVESTMENTS
Olvi Group's balance sheet total at the end of December 2014 was 332.8 (295.7)
million euro. Equity per share at the end of 2014 stood at 9.17 (8.14) euro.
The equity to total assets ratio was 57.9 (58.0) percent. In spite of
investments, the gearing ratio remained good at 29.8 (26.4) percent. The
current ratio, which represents the Group's liquidity, was 1.1 (1.2).
The amount of interest-bearing liabilities at the end of 2014 was 61.7 (52.8)
million euro, including current liabilities of 31.7 (24.3) million euro.
Olvi Group's gross capital expenditure in 2014 amounted to 41.6 (35.7) million
euro. The parent company Olvi accounted for 15.6 million euro, the Baltic
subsidiaries for 10.7 million euro and Lidskoe Pivo in Belarus for 15.3 million
euro of the total. The largest investments included a highly automated
logistics centre in Finland, as well as production-related investments in
Belarus.
PRODUCT DEVELOPMENT AND NEW PRODUCTS
Research and development includes projects to design and develop new products,
packages, processes and production methods, as well as further development of
existing products and packages. The R&D costs have been recognised as expenses.
The main objective of Olvi Group's product development is to create new
products for profitable and growing beverage segments.
NEW PRODUCTS - Finland
The most successful new product in Finland in 2014 was Sandels Wheat Beer,
which became the best-selling wheat beer in Finnish retail trade. In January
2015, two new Angry Birds soft drinks were launched in plastic bottles. April
2015 will see the launch of OLVI IPA, an Indian Pale Ale special beer, as well
as the OLVI Panthera and OLVI Dry Cranberry long drinks. The KevytOlo mineral
water range will be supplemented by the new Apple&Cucumber flavour, while the
Queen flavour will be introduced in KevytOlo juice mineral waters. OLVI soft
drinks will see the introduction of OLVI Grapefruit Light and OLVI Pinata
Colada. The Simpsons soft drink range will be supplemented by a new banana
flavour. A new version of the TEHO energy drink called TEHO Lite Red will be
introduced. Among sports nutrition bars, the TEHO Sport protein bar range will
get a new flavour, Hazelnut. In international products, the Sherwood Cider
range will see the introduction of Strawberry Fields. Crook's Head Dram long
drinks will be available in Grapefruit&Lemon and Grapefruit&Cucumber flavours.
NEW PRODUCTS - Subsidiaries
For A. Le Coq in Estonia, the most successful launch in beers in 2014 was A. Le
Coq Extra Ginger, a beer flavoured with real ginger. Vitamineral Water
well-being drinks were successful among non-alcoholic products.
New launches in 2014 by Cesu Alus in Latvia included, for example, the new
Miezītis beer brand that made it to the Latvian top three beers in sales
volume.
Volfas Engelman's launches in Lithuania in 2014 included, among others, the
Volfas Engelman Balta Pinta wheat beer which became the best-selling wheat beer
in Lithuania.
Lidskoe Pivo in Belarus made its greatest success through its new craft beer
range including two flavours, Swiss Black and Evening in Bruges. The range
already accounts for as much as 13.2 percent of the company's beers sold in
glass bottles. The company also started to manufacture Warsteiner beer under
licence.
Detailed information on new products can be found on each company's Web site.
PERSONNEL
Olvi Group's average number of personnel in January-December was 1,958 (1,999).
The Group's average number of personnel decreased by 41 people or 2.1 percent.
The greatest decrease was seen in Finland, affected by a cut in the number of
sales promoters due to a change in the procedures of a retail group.
Olvi Group's average number of personnel by country:
10-12/ 2014 10-12/ 2013 Change % 1-12/ 2014 1-12/ 2013 Change %
-------------------------------------------------------------------------------
Finland 339 362 -6.4 369 401 -8.0
-------------------------------------------------------------------------------
Estonia 318 305 4.3 331 314 5.4
-------------------------------------------------------------------------------
Latvia 196 196 0.0 214 215 -0.5
-------------------------------------------------------------------------------
Lithuania 217 209 3.8 214 216 -0.9
-------------------------------------------------------------------------------
Belarus 807 821 -1.7 830 853 -2.7
-------------------------------------------------------------------------------
Total 1,877 1,893 -0.9 1,958 1,999 -2.1
-------------------------------------------------------------------------------
MANAGEMENT AND AUDITORS
The Chairman of the Board of Olvi plc is Heikki Hortling, M.Sc. (Econ), and the
Vice Chairman is Esa Lager, M.Sc. (Econ), LL.M. Other members of the Board of
Directors include Heikki Sinnemaa, LL.M., Jaakko Autere, M.Sc. (Econ) and Tarja
Pääkkönen, Dr.Tech.
During the period under review, the company's auditor was the authorised public
accounting firm PricewaterhouseCoopers Oy, with Sami Posti, Authorised Public
Accountant, as auditor in charge.
MANAGEMENT
The Management Group of Olvi plc during the period under review consisted of
Lasse Aho, Managing Director (Chairman), Ilkka Auvola, Sales Director, Olli
Heikkilä, Marketing Director, Pia Hortling, Product Development and Purchasing
Director, Tuija Karppanen, Chief Financial Officer, Lauri Multanen, Production
Director, as well as Marjatta Rissanen, Customer Service and Administrative
Director.
The Management Group of each subsidiary consists of the corresponding Managing
Director and two to four sector directors reporting to the Managing Director.
The Managing Directors of the subsidiaries are:
AS A. Le Coq, Tartu, Estonia - Tarmo Noop
A/S Cesu Alus, Cesis, Latvia - Eva Sietiņsone Zatlere
AB Volfas Engelman, Kaunas, Lithuania - Marius Horbačauskas
OAO Lidskoe Pivo, Lida, Belarus - Audrius Mikšys
The Managing Directors of the subsidiaries report to Lasse Aho, the Managing
Director of Olvi plc.
OTHER EVENTS DURING THE REVIEW PERIOD
Annual General Meeting
Olvi plc's Annual General Meeting of 16 April 2014 adopted the financial
statements and granted discharge from liability to the members of the Board of
Directors and Managing Director for the accounting period that ended on 31
December 2013.
In accordance with the Board's proposal, the Annual General Meeting decided
that a dividend of 0.65 (0.50) euro be paid on each A and K share for the
accounting period 2013. The dividend according to the resolution accounts for
40.4 (40.3) percent of Olvi Group's consolidated earnings per share. The record
date for dividend payment was 23 April 2014 and the dividends were paid on 30
April 2014.
In line with Board's proposal, the AGM decided to authorise the Board to decide
on the acquisition of treasury shares. Based on this authorisation, the Board
is entitled to repurchase a maximum of 500,000 Series A shares of the company
in one or more lots using the company's unrestricted equity. The shares shall
be acquired in public trading arranged by NASDAQ OMX Helsinki Ltd, due to which
the acquisition shall constitute a deviation from the pro rata principle among
shareholders, and the compensation payable for the shares shall be the market
price of the Olvi A share at the time of acquisition.
The shares shall be acquired for the purpose of financing or executing any
upcoming corporate acquisitions or other arrangements, implementing the
company's incentive schemes or for other purposes decided upon by the Board of
Directors. The maximum number of shares to be acquired represents approximately
2.4 percent of all shares in the company and approximately 0.5 percent of all
votes, which means that the acquisition would not have any significant effect
on the distribution of shareholdings and voting rights in the company. The
Board of Directors shall decide upon other matters related to the acquisition
of treasury shares. It is proposed that the authorisation to acquire treasury
shares shall be valid until the closing of the Annual General Meeting 2015,
however no longer than 18 months from the General Meeting's decision of
authorisation.
The Annual General Meeting decided to 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
("Issue authorisation") in accordance with the Board's proposal.
The new shares can be issued and the treasury shares transferred in one or more
lots either against payment or free of charge. The new shares can be issued and
the treasury shares transferred to the company's shareholders on a pro rata
basis in relation to their existing holdings, or a private placing can be
executed in deviation from shareholders' pre-emptive rights if a weighty
economic reason for this exists from the company's viewpoint, such as financing
or execution of corporate acquisitions or arrangements, development of the
company's equity structure, improvement of share liquidity or implementation of
the company's incentive schemes. A private placing can be free of charge only
if a particularly weighty economic reason for this exists from the company's
viewpoint, taking into consideration the interests of all shareholders.
The Board of Directors shall decide upon other matters related to share issues.
It is proposed that the issue authorisation shall be valid until the closing of
the Annual General Meeting 2015, however no longer than 18 months from the
General Meeting's decision of issue authorisation.
Share-based incentive plan
On 29 April 2014, Olvi plc's Board of Directors decided on a new share-based
incentive plan for the Group's key personnel. The aim of the new plan is to
combine the objectives of the shareholders and the key employees in order to
increase the value of the company, to commit the key employees to the company,
and to offer them a competitive reward plan based on earning the company's
shares.
A more detailed description of the share-based incentive plan is included in
the tables section of this financial statements bulletin, in Table 5, Section
5.
Changes in corporate structure
During 2014, Olvi increased its holding in the Belarusian subsidiary (OAO
Lidskoe Pivo) by a total of 2,256 shares, which increased the proportional
holding by 2.99 percent. The holding in the Latvian subsidiary (A/S Cesu Alus)
increased by 284 shares and the proportional holding by 0.10 percent.
At the end of the accounting period, Olvi's shares of holding are:
31 Dec 2014 31 Dec 2013 Change
---------------------------------------------------------------
AS A. Le Coq, Estonia 100.00 100.00 -
---------------------------------------------------------------
A/S Cesu Alus, Latvia 99.86 99.76 0.10
---------------------------------------------------------------
AB Volfas Engelman, Lithuania 99.58 99.58 -
---------------------------------------------------------------
OAO Lidskoe Pivo, Belarus 94.57 91.58 2.99
---------------------------------------------------------------
Furthermore, A. Le Coq has a 49.0 percent holding in AS Karme and 20.0 percent
holding in Verska Mineraalvee OÜ in Estonia.
Olvi's Managing Director Lasse Aho elected to the Board of Directors of The
Brewers of Europe
Lasse Aho, Managing Director of Olvi plc, has been elected to the Board of
Directors of The Brewers of Europe. The Brewers of Europe represents the
interests of European brewers' associations. The Finnish Federation of the
Brewing and Soft Drinks Industry has been a member since 1995. Aho is the first
Finn to serve on The Brewers of Europe's Board.
Statutory co-operation negotiations
Olvi plc announced on 17 November 2014 that it would initiate reorganisation of
its operations in Finland, with the aim of responding to changes in the
operating environment and ensuring competitive ability in the long term. In
spite of the Group's good overall standing, the business environment in Finland
has lately seen substantial changes, due to which profitability in Finland has
weakened. The most remarkable changes have been weakened consumer purchasing
power, a change in purchasing behaviour, as well as clearly intensified price
competition in the industry. Furthermore, repeated excise tax hikes, the share
of tourist imports becoming substantial, as well as increased restrictions on
the trade and marketing of alcoholic products, have made it more difficult to
succeed in the Finnish market.
In connection with the reorganisation, statutory co-operation negotiations
between the employer's and employees' representatives were initiated across
Olvi plc's Finnish operations. The scope of the negotiations included the
entire personnel in Finland, and according to original estimates, the
implementation of potential measures arising from them may lead to reductions
of a maximum of 35 people.
EVENTS AFTER THE REVIEW PERIOD
The completion of the statutory co-operation negotiations was announced on 29
January 2015. The outcome of the negotiations is that across the organisation
in Finland, efficiency measures will be taken and procedures will change. In
total, this will call for redundancies of 32 people. This will come true
through pension arrangements concerning 10 people, temporary layoffs of three
people and dismissal of 19 people.
As of 1 January 2015, Kati Kokkonen, M.Sc. (Econ) was appointed Chief Financial
Officer (CFO) and member of the Management Group of Olvi plc following the
retirement of the previous CFO Tuija Karppanen at the end of 2014.
SHARES
Olvi's share capital at the end of December 2014 stood at 20.8 million euro.
The total number of shares was 20,758,808, of these 17,026,552 or 82.0 percent
being publicly traded Series A shares and 3,732,256 or 18.0 percent Series K
shares.
Each Series A share carries one (1) vote and each Series K share carries twenty
(20) votes. Series A and Series K shares have equal rights to dividends.
Detailed information on Olvi's shares and share capital can be found in the
tables attached to this financial statements bulletin, in Table 5, Section 4.
The total trading volume of Olvi A shares on Nasdaq OMX Helsinki in 2014 was
2,174,302 (2,601,699) shares, which represented 12.8 (15.3) percent of all
Series A shares. The value of trading was 54.3 (63.9) million euro.
The Olvi A share was quoted on Nasdaq OMX Helsinki (Helsinki Stock Exchange) at
21.07 (28.60) euro at the end of 2014. In January-December, the highest quote
for the Series A share was 29.90 (28.75) euro and the lowest quote was 20.70
(19.70) euro. The average share price in 2014 was 25.03 (24.26) euro.
At the end of December 2014, the market capitalisation of Series A shares was
358.7 (487.0) million euro and the market capitalisation of all shares was
437.4 (593.7) million euro.
The number of shareholders at the end of December 2014 was 10,021 (9,522).
Foreign holdings plus foreign and Finnish nominee-registered holdings
represented 20.5 (21.3) percent of the total number of book entries and 4.6
(6.9) percent of total votes.
Foreign and nominee-registered holdings are reported in Table 5, Section 9 of
the tables attached to this financial statements bulletin, and the largest
shareholders are reported in Table 5, Section 10.
Treasury shares
There were no changes in the number of treasury shares held by Olvi during
2014. At the end of the reporting period, Olvi held 1,124 Series A shares as
treasury shares. Treasury shares held by the company itself are ineligible for
voting. Detailed information on treasury shares is provided in Table 5, Section
6 of the tables attached to this financial statements bulletin.
Flagging notices
During 2014, Olvi has not received any flagging notices in accordance with
Chapter 2, Section 10 of the Securities Markets Act.
BUSINESS RISKS AND THEIR MANAGEMENT
Risk management
Risk management is a part of Olvi Group's everyday management and operations.
The objective of risk management is to ensure the realisation of the company's
strategy and secure its financial development and the continuity of business.
The task of risk management is to operate proactively and create operating
conditions in which business risks are managed comprehensively and
systematically in all of the Group companies and all levels of the
organisation.
Business risks and uncertainties in the near term
The most substantial factor hampering the predictability of Olvi Group's
business relates to Belarus and its economic and political outlook for the next
few years.
Foreign exchange risks arise from the cash flows of purchases and sales in
foreign currency, as well as the investment in the Belarusian subsidiary and
the conversion of its balance sheet items into euro. Financial reporting in
Belarus is subject to the IAS 29 standard “Financial Reporting in
Hyperinflationary Economies”. Furthermore, negative development of the Russian
economy may impose challenges on the Belarusian operating environment.
Other short-term risks and uncertainties are related to continuing negative
development of the general economic circumstances and the impact it may have on
the company's operations.
There have not been any other significant changes in Olvi Group's business
risks. A more detailed description of the risks is provided in the Board of
Directors' report and the notes to the financial statements, as well as in the
Investors/Corporate Governance section of the company's Web site.
NEAR-TERM OUTLOOK
Olvi estimates that the Group's sales volume for 2015 will increase slightly
and that net sales will be on a par with the previous year. Operating profit is
expected to be on a par with 2014 or slightly decline, depending greatly on the
stabilisation of the Belarusian economy and exchange rate. Sales volumes in
Belarus are expected to develop well.
BOARD OF DIRECTORS' PROPOSAL FOR THE DISTRIBUTION OF PROFIT
The parent company Olvi plc had 49.5 (50.6) million euro of distributable funds
on 31 December 2014, of which profit for the period accounted for 12.5 (15.8)
million euro.
Olvi plc's Board of Directors proposes to the Annual General Meeting that
distributable funds be used as follows:
1) A dividend of 0.65 (0.65) euro shall be paid for 2014 on each Series K and
Series A share, totalling 13.5 (13.5) million euro. The dividend represents
41.4 (40.4) percent of Olvi Group's earnings per share. The dividend will be
paid to shareholders registered in Olvi plc's register of shareholders held by
Euroclear Finland Ltd on the record date of the dividend payment, 20 April
2015. It is proposed that the dividend be paid on 30 April 2014.
No dividend shall be paid on treasury shares.
2) 36.0 million euro shall be retained in the parent company's non-restricted
equity.
FINANCIAL REPORTS IN 2015
Olvi Group's financial statements, Board of Directors' report, Corporate
Governance Statement 2014 and a report on wages, salaries and emoluments in
2014 will be published on 24 March 2015.
The Annual General Meeting of the shareholders of Olvi plc will be held in
Iisalmi, Finland, on Thursday 16 April 2015 starting at 11:00 am. A notice to
convene the meeting will be published on 24 March 2015. The financial
statements, Board of Directors' report and notice to convene the AGM will be
available on Olvi plc's Web site on the same day.
The following interim reports will be released in 2015:
Interim report from January to March on 29 April 2015,
Interim report from January to June on 13 August 2015, and
Interim report from January to September on 29 October 2015.
OLVI PLC
Board of Directors
Further information:
Lasse Aho, Managing Director, Olvi plc
Phone +358 290 00 1050 or +358 400 203 600
TABLES:
- Statement of comprehensive income, Table 1
- Balance sheet, Table 2
- Changes in shareholders' equity, Table 3
- Cash flow statement, Table 4
- Notes to the financial statements bulletin, Table 5
DISTRIBUTION:
NASDAQ OMX Helsinki Ltd
Key media
www.olvi.fi
OLVI GROUP TABLE 1
INCOME STATEMENT
EUR 1,000
10-12/2 10-12/2013 1-12/2014 1-12/2013
014
Net sales 69665 70043 328239 327256
Other operating income 589 332 1626 983
Operating expenses -62063 -61368 -273958 -271391
Depreciation and impairment -3691 -3524 -14907 -13627
Operating profit 4500 5483 41000 43221
Financial income 1508 812 3990 3105
Financial expenses -2326 -1718 -3985 -4501
Share of earnings of associates 48 -11 48 -11
Earnings before tax 3730 4566 41053 41814
Taxes *) -81 162 -7974 -7628
NET PROFIT FOR THE PERIOD 3649 4728 33079 34186
Other comprehensive income items:
Translation differences related to
foreign subsidiaries -2336 -1459 -2874 -2858
TOTAL COMPREHENSIVE INCOME FOR THE 1313 3269 30205 31328
PERIOD
Distribution of profit:
- parent company shareholders 3662 4707 32522 33520
- non-controlling interests -13 21 557 666
Distribution of comprehensive profit:
- parent company shareholders 1492 3354 29879 30886
- non-controlling interests -179 -85 326 442
Earnings per share calculated from the profit
belonging
to parent company shareholders, EUR
- undiluted 0.18 0.23 1.57 1.61
- diluted 0.18 0.23 1.57 1.61
*) Taxes calculated from the profit for the review period.
The notes constitute an essential part of the financial statements.
OLVI GROUP TABLE 2
BALANCE SHEET
EUR 1,000 31 Dec 2014 31 Dec 2013
ASSETS
Non-current assets
Tangible assets 192149 165783
Goodwill 18217 17805
Other intangible assets 4562 2701
Investments in associated companies 1125 1077
Financial assets available for sale 549 549
Loans receivable and other non-current receivables 333 349
Deferred tax receivables 163 87
Total non-current assets 217098 188351
Current assets
Inventories 43522 41178
Accounts receivable and other receivables 66309 57705
Income tax receivable 1023 848
Other non-current assets available for sale 421 124
Liquid assets 4382 7507
Total current assets 115657 107362
TOTAL ASSETS 332755 295713
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity held by parent company
shareholders
Share capital 20759 20759
Other reserves 1092 1092
Treasury shares -8 -8
Translation differences -22964 -20321
Retained earnings 191408 167420
190287 168942
Share belonging to non-controlling interests 2252 2597
Total shareholders' equity 192539 171539
Non-current liabilities
Financial liabilities 30040 28483
Other liabilities 2 0
Deferred tax liabilities 5598 3761
Current liabilities
Financial liabilities 31652 24348
Accounts payable and other liabilities 72899 66704
Income tax liability 25 878
Total liabilities 140216 124174
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 332755 295713
The notes constitute an essential part of the financial statements.
OLVI GROUP
TABLE 3
CHANGES IN SHAREHOLDERS' EQUITY
Share Other Treasur Transl Retain Share of Total
capital reserv y ation ed non-control
es shares differ earnin ling
account ences gs interests
EUR 1,000
Shareholders' 20759 1092 -8 -17687 141317 1939 147412
equity 1 Jan
2013
Adjustments for hyperinflation 2945 271 3216
Adjusted 20759 1092 -8 -17687 144262 2210 150628
shareholders'
equity 1 Jan
2013
Comprehensive income:
Net profit for the period 33520 666 34186
Other comprehensive income items:
Translation differences -2634 -224 -2858
Total comprehensive income for the period -2634 33520 442 31328
Transactions with shareholders:
Payment of dividends -10379 -44 -10423
Total transactions with shareholders -10379 -44 -10423
Changes in holdings in subsidiaries:
Acquisition of shares from
non-controlling interests 6 6
Change in shares held by
non-controlling interests 11 -11 0
Total changes in holdings in subsidiaries 17 -11 6
Shareholders' 20759 1092 -8 -20321 167420 2597 171539
equity 31 Dec
2013
Share Other Treasur Transl Retain Share of Total
capital reserv y ation ed non-control
es shares differ earnin ling
account ences gs interests
EUR 1,000
Shareholders' 20759 1092 -8 -20321 167420 2597 171539
equity 1 Jan
2014
Adjustments for hyperinflation 4263 245 4508
Adjusted 20759 1092 -8 -20321 171683 2842 176047
shareholders'
equity 1 Jan
2014
Comprehensive income:
Net profit for the period 32522 557 33079
Other comprehensive income items:
Translation differences -2643 -231 -2874
Total comprehensive income for the period -2643 32522 326 30205
Transactions with shareholders:
Payment of dividends -13492 -80 -13572
Share-based incentives 27 27
Total transactions with shareholders -13465 -80 -13545
Changes in holdings in subsidiaries:
Acquisition of shares from
non-controlling interests -168 -168
Change in shares held by
non-controlling interests 836 -836 0
Total changes in holdings in subsidiaries 668 -836 -168
Shareholders' 20759 1092 -8 -22964 191408 2252 192539
equity 31 Dec
2014
Other reserves include the share premium account, legal reserve and other
reserves.
The notes constitute an essential part of the financial statements.
OLVI GROUP TABLE 4
CASH FLOW STATEMENT
EUR 1,000
1-12/2014 1-12/2013
Net profit for the period 33079 34186
Adjustments to profit for the period 25699 24214
Change in net working capital -2358 2451
Interest paid -3393 -4246
Interest received 385 530
Taxes paid -7063 -7126
Cash flow from operations (A) 46349 50009
Investments in tangible and intangible
assets -43855 -31975
Sales gains from tangible and intangible
assets 200 220
Expenditure on other investments -298 0
Cash flow from investments (B) -43953 -31755
Withdrawals of loans 32657 5541
Repayments of loans -24542 -11180
Dividends paid -13531 -10541
Increase (-) / decrease (+) in current interest-
bearing business receivables -23 1
Increase (-) / decrease (+) in long-term
loan receivables 16 55
Cash flow from financing (C) -5423 -16124
Increase (+)/decrease (-) in liquid assets (A+B+C) -3027 2130
Liquid assets 1 January 7507 5698
Effect of exchange rate changes -98 -321
Liquid assets 31 December 4382 7507
The notes constitute an essential part of the financial statements.
OLVI GROUP TABLE 5
NOTES TO THE FINANCIAL STATEMENTS
The financial statements for 1 January to 31 December 2014 have been prepared
in compliance with the International Financial Reporting Standards (IFRS),
observing the IAS and IFRS standards as well as the official SIC and IFRIC
interpretations valid on 31 December 2014.
Preparation of financial statements in accordance with the IFRS standards
requires the company's management to make estimates and assumptions that have
an effect on the amount of assets and liabilities on the balance sheet at the
closing date as well as the amounts of income and expenses for the accounting
period. In addition, the management must exercise its judgment regarding the
application of accounting policies. Since the estimates and assumptions are
based on the views on the date of the financial statements, they include risks
and uncertainties. The actual results may differ from the estimates and
assumptions.
The accounting policies used for the financial statements 2014 are the same as
those used for the annual financial statements 2013, however taking into
account the new or revised standards and interpretations that entered into
force as of 1 January 2014:
-- IFRS 10 Consolidated Financial Statements
-- IFRS 11 Joint Arrangements
-- IFRS 12 Disclosures of Interests in Other Entities
-- IAS 27 (Revised 2011) Separate Financial Statements
-- IAS 28 (Revised 2011) Investments in Associates and Joint Ventures
-- Amendments to IFRS 10, IFRS 11, IFRS 12 on transition guidance
-- Amendments to IFRS 10, IFRS 12 and IAS 27 concerning investment company
consolidation
-- Amendment to IAS 32 “Financial Instruments: Presentation” concerning the
offset of assets and liabilities
-- Amendment to IAS 36, “Impairment of Assets” concerning recoverable amount
disclosures
-- Amendment to IAS 39, “Financial Instruments: Recognition and Measurement”
concerning the novation of derivatives
The above changes in standards have not had any substantial effect on the
income statement, balance sheet or notes.
The information in the financial statements bulletin is presented in thousands
of euros (EUR 1,000). For the sake of presentation, individual figures and
totals have been rounded to full thousands, which causes rounding differences
in additions. The ratios are calculated from exact amounts in euros.
1. SEGMENT INFORMATION
SALES BY GEOGRAPHICAL SEGMENT (1,000 litres)
10-12/2014 10-12/2013 1-12/2014 1-12/2013
Olvi Group total 127172 123313 576478 557232
Finland 37112 35880 151828 159909
Estonia 26983 26928 131550 129314
Latvia 12897 16099 76096 79724
Lithuania 18170 16532 81054 69554
Belarus 34691 34101 169919 156523
- sales between segments -2681 -6227 -33969 -37792
NET SALES BY GEOGRAPHICAL SEGMENT (EUR 1,000)
10-12/2014 10-12/2013 1-12/2014 1-12/2013
Olvi Group total 69665 70043 328239 327256
Finland 25816 26540 107675 123608
Estonia 18129 16672 82507 81261
Latvia 5638 7287 34936 37571
Lithuania 8216 7857 38356 34139
Belarus 12999 14413 78771 68319
- sales between segments -1133 -2726 -14006 -17642
OPERATING PROFIT BY GEOGRAPHICAL SEGMENT (EUR 1,000)
10-12/2014 10-12/2013 1-12/2014 1-12/2013
Olvi Group total 4500 5483 41000 43221
Finland 968 1859 7436 12844
Estonia 2223 2417 16504 15998
Latvia -95 -208 2058 2458
Lithuania 465 243 2356 1264
Belarus 848 1178 13117 10665
- eliminations 91 -6 -471 -8
2. PERSONNEL ON AVERAGE 10-12/2014 10-12/2013 1-12/2014 1-12/2013
Finland 339 362 369 401
Estonia 318 305 331 314
Latvia 196 196 214 215
Lithuania 217 209 214 216
Belarus 807 821 830 853
Total 1,877 1893 1958 1999
3. RELATED PARTY TRANSACTIONS
Employee benefits to management
Salaries and other short-term employee benefits to the Board of Directors and
Managing Director
EUR 1,000
1-12/2014 1-12/2013
Managing Director 361 340
Chairman of the Board 84 85
Other members of the Board 125 130
Total 570 555
4. SHARES AND SHARE CAPITAL
31 Dec 2014 %
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 31 December 2014 totalled 20,759 thousand euro.
Olvi plc's Series A and Series K shares received a dividend of 0.65 euro per
share for 2013 (0.50 euro per share for 2012), totalling 13.5 (10.4) million
euro. The dividends were paid on 30 April 2014. The Series K and Series A
shares entitle to equal dividend. The Articles of Association include a
redemption clause concerning Series K shares.
5. SHARE-BASED PAYMENTS
On 29 April 2014, Olvi plc's Board of Directors decided on a new share-based
incentive plan for the Group's key personnel. The aim of the new plan is to
combine the objectives of the shareholders and the key employees in order to
increase the value of the company, to commit the key employees to the company,
and to offer them a competitive reward plan based on earning the company's
shares.
The new share-based incentive plan includes one three-year performance period,
calendar years 2014—2016. The potential reward from the performance period
2014—2016 will be based on Olvi Group's cumulative operating profit, also known
as earnings before interest and taxes (EBIT) Furthermore, the new plan includes
one three-year performance period, beginning on 1 July 2014 and ending on 30
June 2017. The prerequisite for receiving reward on the basis of this
performance period is that a key employee purchases the company's series A
shares up to the number determined by the Board of Directors. Furthermore,
entitlement to a reward is tied to the continuance of employment or service
upon reward payment.
Rewards from both performance periods will be paid partly in the company's
series A shares and partly in cash in 2017. The cash proportion is intended to
cover taxes and tax-related costs arising from the rewards to the key
employees. As a rule, no reward will be paid if the key employee's employment
or service ends before the reward payment. Members of the Management Group must
hold one half of the shares received on the basis of the performance period
2014—2016 for the entire validity of their employment or service.
The plan is directed to approximately 50 people. The rewards to be paid on the
basis of the plan are in total an approximate maximum of 40,000 series A shares
in Olvi plc and a cash payment needed for taxes and tax-related costs arising
from the shares.
From January to December 2014, accounting entries associated with the
performance period from 1 July 2014 to 30 June 2017 were recognised for a total
of 44.7 thousand euro.
Olvi Group does not have any other share-based plans or option plans.
6. TREASURY SHARES
Olvi plc held a total of 1,124 of its own Series A shares on 1 January 2014.
Olvi plc has not acquired more treasury shares or transferred them to others in
January-December 2014, which means that the number of Series A shares held by
the company was unchanged on 31 December 2014. 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 16 April 2014, 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-December 2014, the Board of Directors of Olvi plc has not exercised
the authorisations granted by the General Meeting.
7. NUMBER OF SHARES *) 1-12/2014 1-12/2013
- average 20757684 20757684
- at end of period 20757684 20757684
*) Treasury shares deducted.
8. TRADING OF SERIES A SHARES ON THE HELSINKI STOCK EXCHANGE
1-12/2014 1-12/2013
Trading volume of Olvi A shares 2174302 2601699
Total trading volume, EUR 1,000 54313 63938
Traded shares in proportion to
all Series A shares, % 12.8 15.3
Average share price, EUR 25.03 24.26
Price on the closing date, EUR 21.07 28.60
Highest quote, EUR 29.90 28.75
Lowest quote, EUR 20.70 19.70
9. FOREIGN AND NOMINEE-REGISTERED HOLDINGS ON 31 DECEMBER 2014
Book entries Votes Shareholders
qty % qty % qty %
Finnish total 16500810 79.49 87413674 95.36 9957 99.36
Foreign total 434445 2.09 434445 0.47 56 0.56
Nominee-registered (foreign) 29295 0.14 29295 0.03 3 0.03
total
Nominee-registered (Finnish) 3794258 18.28 3794258 4.14 5 0.05
total
Total 20758808 100.00 91671672 100.00 10021 100.00
10. LARGEST SHAREHOLDERS ON 31 DECEMBER 2014
Series Series A Total % Votes % K
1. Olvi Foundation 2363904 890613 3254517 15.68 48168693 52.54
2. Hortling Heikki 903488 103280 1006768 4.85 18173040 19.82
Wilhelm *)
3. The Heirs of Hortling 187104 25248 212352 1.02 3767328 4.11
Kalle Einari
4. Hortling Timo Einari 165824 35308 201132 0.97 3351788 3.66
5. Hortling-Rinne Laila 102288 2980 105268 0.51 2048740 2.23
Marit
6. Pohjola Bank plc, nominee 1902900 1902900 9.17 1902900 2.08
register
7. Nordea Bank Finland plc, 1308666 1308666 6.30 1308666 1.43
nominee register
8. Ilmarinen Mutual Pension 849218 849218 4.09 849218 0.93
Insurance Company
9. Varma Mutual Pension Insurance 788075 788075 3.80 788075 0.86
Company
10. Skandinaviska Enskilda Banken 481612 481612 2.32 481612 0.53
Ab (Publ)
Helsinki branch, nominee register
Others 9648 10638652 10648300 51.29 10831612 11.81
Total 3732256 17026552 20758808 100.00 91671672 100.00
*) The figures include the shareholder's own holdings and shares held by parties
in his control.
11. PROPERTY, PLANT AND EQUIPMENT
EUR 1,000
1-12/2014 1-12/2013
Opening balance 165783 146749
Additions 38998 34509
Deductions and transfers -818 -1087
Depreciation -14139 -12988
Exchange rate differences and adjustments for 2325 -1400
hyperinflation
Closing balance 192149 165783
12. CONTINGENT LIABILITIES
EUR 1,000
31 Dec 2014 31 Dec 2013
Pledges and contingent liabilities
For own commitments 2397 2715
Leasing and rental liabilities:
Due within one year 1143 1238
Due within 1 to 5 years 758 637
Due in more than 5 years 5 6
Leasing and rental liabilities total 1906 1881
Package liabilities 2133 2781
Other liabilities 2000 2000
13. 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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