2017-06-20 08:00:25 CEST
2017-06-20 08:00:25 CEST
SÄÄNNELTY TIETO
Kotipizza Group Oyj - Interim report (Q1 and Q3)
Kotipizza Group Oyj: STRONG DEVELOPMENT CONTINUES, COMPARABLE NET SALES AND EBITDA GROW 19% AND 26%, RESPECTIVELY, COMPARED TO PREVIOUS YEAR
KOTIPIZZA GROUP OYJ INTERIM REPORT 1 FEBRUARY 2017-30 APRIL 2017
STRONG DEVELOPMENT CONTINUES, COMPARABLE NET SALES AND EBITDA GROW 19% AND 26%,
RESPECTIVELY, COMPARED TO PREVIOUS YEAR
February-April 2017 (2-4/2017)
* Chain-based net sales grew 18.5% (18.3%)
* Comparable net sales were 18.3 MEUR (15.4). Growth was 18.8%
* Comparable EBITDA was 1.62 MEUR (1.29). EBITDA growth was 25.7%
* Comparable EBIT was 1.32 MEUR (1.05)
* Net gearing was 23.1 percent (29.2%)
* Equity ratio was 51.4 percent (52.1%)
Outlook for the financial year 2018 according to the upgrade given on 6 June
2017
The Group estimates for the full financial year that the chain-based net sales
will grow by over ten (10) percent as compared to the previous year and that
comparable EBITDA will grow as compared to the previous year.
KEY FIGURES, TEUR
-----------------------------------------------------------------
2-4/17 2-4/16 2/16-1/17
-----------------------------------------------------------------
Comparable figures
Comparable net sales 18 281 15 387 66 580
Comparable EBITDA 1 617 1 286 6 726
Comparable EBITDA of
8.8% 8.4% 10.1%
net sales, %
Comparable EBIT 1 321 1 045 5 747
Reported figures
Chain-based net sales 24 185 20 415 89 893
Reported net sales 19 225 15 387 68 737
Reported EBITDA 1 565 1 286 6 225
Reported EBITDA of
8.6% 8.4% 9.3%
net sales, %
Reported EBIT 1 269 1 045 5 246
Earnings per share 0.13 0.10 0.55
Net cash flows from operating activities 1 348 1 442 5 278
Net cash used in investment activities -1 276 -117 -449
Net gearing, % 23.1 29.2 24.0
Equity ratio, % 51.4 52.1 52.1
-----------------------------------------------------------------
Tommi Tervanen, CEO of Kotipizza Group
"Kotipizza's chain-based net sales continued their strong growth in the first
quarter of the financial year. The chain's net sales continued their excellent
development both in terms of same-store sales and the number of customers. In
brick-and-mortar restaurants, the number of customers increased by 13.3% and the
average purchase by 3.3%. We also continued to make progress in our online sales
- during the review period, orders made through the online store amounted to
roughly a tenth of the net sales in brick-and-mortar restaurants. The chain-
based net sales growth was 18.5% in the first quarter, exceeding the average
growth in the Finnish fast food market. We expect the chain-based net sales to
continue to develop favorably. Achieving similar relative growth figures will,
however, become more challenging month by month as we draw comparisons to months
of very strong growth in the previous year.
There are several factors behind the strong growth in chain-based net sales. One
of the main reasons is Kotipizza's brand and concept reform that was launched at
full speed in the beginning of 2015 and which has now been mostly finalized. The
Group has consistently developed the Kotipizza chain in the spirit of the fast
casual phenomenon, emphasizing the freshness, authenticity and sustainability of
our food, as well as actively following the developments in food trends and
consumer preferences. A good example of our achievements is the MSC ecolabel
awarded to the Kotipizza chain during the review period, proving that all fish
and seafood products we use come from sustainable sources and responsible
fisheries. Kotipizza is the first pizza chain in the world to merit the MSC
label. The MSC ecolabel has been well received among consumers, and by securing
the label Kotipizza has materially gained positive media attention in Finland
and abroad. The chain's newly introduced vegetarian products have also been well
received by consumers and the media.
In accordance with the strong sales growth, we have not forgotten to invest in
future growth and in the future of the Kotipizza chain. Our new creative
director Risto Mikkola, responsible for the menu and developing new food
concepts, together with development director Riikka Ahtiainen, responsible for
new restaurant and service concepts, joined us during the review period. Amid
recent growth, we have also invested in the well-being of our personnel by
starting a programme which focuses on both physical and social well-being of our
people.
Comparable net sales of the Group grew 19% in the first quarter of the year and
were 18.3 MEUR (15.4). Comparable EBITDA was 1.62 MEUR (1.29) in the first
quarter, representing a growth of 26%. Our recent investments to future growth
in terms of e.g. recruitments and market studies were visible as growth in our
fixed costs, but we are still on pace with our medium-term financial goals, both
in terms of the development of chain-based sales as well as that of EBITDA. The
Group had a solid financial standing at the end of the quarter with net gearing
at 23 percent and equity ratio of 51 percent.
There are no material changes in the market environment since the close of the
previous financial year in the end of January. According to the estimate of the
Finnish Hospitality Association MaRa, the growth of sales in the restaurant
sector will continue in 2017 at nearly the previous year's level, along with the
growth of the Finnish national economy and the increased consumer confidence.
The development will be particularly positive in the fast food sector, as fast
food restaurants account for a considerable proportion of restaurant dining.
The growth of sales in the Kotipizza chain has continuously outperformed the
growth of the entire restaurant market and the fast food market. It can even be
estimated that the strong growth of the Kotipizza chain has contributed to the
more positive development of the fast food market compared with the rest of the
restaurant market. We believe that the financial development of the restaurant
business and consumer trends support Kotipizza Group's investment in the fast
casual concept, that is, restaurants that offer casual, fresh and responsibly
produced food in a restaurant environment.
We estimate that the group's chain-based net sales will, during the present
financial year, grow by more than ten (10) percent as compared to the previous
financial year, and that the comparable gross margin / EBITDA will grow as
compared to the previous financial year."
GROUP NET SALES
February-April 2017
Chain-based net sales continued strong and grew 18.5% (18.3%) year on year in
the first quarter of the financial year and were 24.2 MEUR (20.4). Average
purchase grew 3.3% and the number of customers 13.3% compared to the same period
in the previous year. The strong performance is based on renewed concept, brand,
successful marketing, and the emphasis placed on our online store and digital
presence. Chain sales of the Pizzataxi chain, which was acquired in February, is
not included in the chain-based net sales as none of the Pizzataxi restaurants
have thus far been converted into Kotipizza restaurants during the review
period.
Kotipizza received strong visibility with its cooperation with very popular tv-
format Putous, which kept the brand especially in the mind of families with kids
on six Saturdays from the beginning of February until mid-March. Also, as the
Kotipizza chain was awarded the MSC ecolabel in the beginning of February,
proving that all fish and seafood products we use come from sustainable sources
and responsible fisheries, we launched a tv ad around our Special Opera pizza
that also promoted the MSC ecolabel. In March, a campaign directed to elderly
people reminding them of the benefits of Kotipizza's rye dough was launched on
tv. A coupon campaign was also launched, targeting younger consumers. In April,
we ran tv advertising that focused on Kotipizza's pineapple as well as a strong
online campaign around our new vegetarian product Härkis. Kotipizza had
altogether 69 campaign days during the first quarter of this year compared to
60 in the previous year. Kotipizza's online sales also continued to grow.
According to a recent market study, Kotipizza has made significant progress in
reaching new customers as the amount of consumer who "Don't go to Kotipizza at
all" has decreased from 40 percent in last autumn to the current rate of 17
percent.
Comparable net sales for the first quarter of the financial year were 18.3 MEUR
(15.4) and they grew 18.8% compared to same period in the previous year.
Reported net sales were 19.2 MEUR (15.4) and they grew 24.9% compared to same
period in the previous year. The reported sales included 0.9 MEUR items
affecting comparability related to advertising and marketing fund flows of
Kotipizza's Franchisee Co-operative, which pass through Kotipizza-division's P&L
without result effect. Comparable net sales growth was mainly based on
Foodstock's increased sales volume to Kotipizza underpinned by the good
restaurant chain sales development. Helsinki Foodstock's other third-party
customers also increased net sales. The net sales of Foodstock grew 21.2% year
on year in the first quarter of the financial year and were 14.7 MEUR (12.1).
The Kotipizza segment's net sales increased 44.2% compared to the previous year
and were 4.5 MEUR (3.1). The Chalupa segment's net sales in the first quarter of
the financial year were EUR 76 thousand (EUR 180 thousand). Decline in net sales
compared to the previous year was due to all Chalupa restaurants were owned by
Chalupa franchisees. Chalupa's revenue recognition is now reported in accordance
with the reporting principles used in franchising. In the previous year, only
two out of five Chalupa restaurants were owned by franchisees and the remaining
three were still fully consolidated to the Chalupa segment's numbers.
The chain-based net sales is the total combined net sales of the company's
franchisees, based on which the company's franchising fees are invoiced monthly.
GROUP EBIT
February-April 2017
Comparable EBIT of the Group was 1.32 MEUR (1.05) in the first quarter of the
financial year. Reported EBIT was 1.27 MEUR (1.05). Reported EBIT included MEUR
0.05 of items affecting comparability (calculatory, non-cash), which were
related to incentive plan introduced on 6 May 2016 and other incentive plans in
the group. The reported EBIT of the previous year did not include items
affecting comparability.
The EBIT improved mainly due to volume improvement, but sales margin also
improved slightly from the previous year.
SALES AND EBITDA OF THE SEGMENTS
KOTIPIZZA SEGMENT
---------------------------------------------------------
EUR THOUSAND 2-4/17 2-4/16 2/16-1/17
---------------------------------------------------------
Comparable net sales 3 521 3 096 12 894
Net sales 4 465 3 096 15 051
Comparable gross margin / EBITDA 1 580 1 478 6 633
Depreciation and impairments -190 -147 -589
Comparable EBIT 1 390 1 331 6 044
Reported gross margin / EBITDA 1 580 1 478 6 517
Reported EBIT 1 390 1 331 5 929
---------------------------------------------------------
Markus Kaatranen, Deputy COO of Kotipizza
"Growth in sales in the Kotipizza chain has continued strong during the review
period. It should be noted that in addition to the rollout of the restaurant
design facelift, the reform of the restaurant network has been finalized. At the
beginning of the review period, the number of restaurants stood at 257 (257),
after which the number has once again started to rise through the opening of new
brick-and-mortar restaurants. At the end of the review period, the number of
restaurants stood at 265 (254). During the review period, Kotipizza also
continued to develop its online store. Orders made through the online store
amounted to roughly a tenth of the net sales in brick-and-mortar restaurants
during the period. Online sales were particularly significant in brick-and-
mortar restaurants offering a delivery service. At the same time the number of
restaurants offering delivery services has started to gradually increase and it
was 68 (63) at the end of the review period. In addition, in February we
acquired the Pizzataxi restaurant chain, which comprises 22 restaurants
operating in the Helsinki region and Southern Finland, all of which offer
delivery services."
February-April 2017
Comparable net sales of Kotipizza for the first quarter of the financial year
were 3.52 MEUR (3.10) and they increased 13.7% compared to same period in the
previous year. Net sales of Kotipizza for the first quarter of the financial
year were 4.47 MEUR (3.10) and they increased 44.2% compared to the same period
in the previous year. The franchising fees of the Pizzataxi chain, acquired in
February, were EUR 71 thousand in the review period. The reported sales included
MEUR 0.94 items affecting comparability related to advertising and marketing
fund flows of Kotipizza's Franchisee Co-operative, which pass through Kotipizza-
division's P&L without result effect. The remaining sales increase was based on
growth in chain-based net sales and, in consequence, all franchising contract-
based net sales increased.
Kotipizza's comparable EBITDA of was 1.58 MEUR (1.48) in the first quarter of
the financial year and it grew 6.9% compared to the same period in the previous
year. Improvement in comparable EBITDA was mainly due to favourable development
of chain-based net sales in Kotipizza. Reported EBITDA was 1.58 MEUR (1.48) in
the first quarter of the financial year. Reported EBITDA did not include items
affecting comparability.
FOODSTOCK SEGMENT
---------------------------------------------------------
EUR THOUSAND 2-4/17 2-4/16 2/16-1/17
---------------------------------------------------------
Comparable net sales 14 684 12 112 53 198
Net sales 14 684 12 112 53 198
Comparable gross margin / EBITDA 377 334 1 596
Depreciation and impairments -35 -31 -143
Comparable EBIT 342 303 1 453
Reported gross margin / EBITDA 368 334 1 566
Reported EBIT 333 303 1 423
---------------------------------------------------------
Anssi Koivula, CEO of Foodstock
"The strong sales growth in the Kotipizza chain has also been reflected in
Foodstock's operations during the review period. Despite the strong growth, we
have managed to ensure the reliability of our deliveries and the quality of our
customer service, thanks to which our customer satisfaction has remained high.
Foodstock's operations have also been affected by the Kotipizza chain's growing
emphasis on sustainability and sourcing responsibly produced ingredients. The
MSC ecolabel awarded to Kotipizza during the review period is a direct result of
our long-standing commitment to sustainable fishing and using responsibly
produced fish and seafood products."
February-April 2017
Comparable net sales of Foodstock for the first quarter of the financial year
were 14.68 MEUR (12.11) and they grew 21.2% compared to the same period in the
previous year. Reported net sales of Foodstock for the first quarter of the
financial year were 14.68 MEUR (12.11) and they grew 21.2% compared to same
period in the previous year. The growth in net sales was mainly due to
favourable development of Kotipizza chain-based net sales, which gave a positive
boost to Foodstock's delivery volumes for the chain. Positive volume effect of
Foodstock's new customers gained in the previous year were also visible in the
reported numbers.
Foodstock's comparable EBITDA improved 12,9% from the previous year and was
0.38 MEUR (0.33) in the first quarter of the financial year. Improvement in the
comparable EBITDA was due to operational gearing related to increase in sales
volume and to favourable sales mix. Foodstock's reported EBITDA was 0.37 MEUR
(0.33) in the first quarter of the financial year. Reported EBITDA included EUR
9 thousand of items affecting comparability (calculatory, non-cash), which were
related to incentive plan introduced on 6 May 2016 and other incentive plans in
the group.
CHALUPA SEGMENT
---------------------------------------------------------
EUR THOUSAND 2-4/17 2-4/16 2/16-1/17
---------------------------------------------------------
Comparable net sales 76 180 487
Net sales 76 180 487
Comparable gross margin / EBITDA -4 -72 -161
Depreciation and impairments -2 -12 -27
Comparable EBIT -6 -84 -188
Reported gross margin / EBITDA -4 -72 -169
Reported EBIT -6 -84 -196
---------------------------------------------------------
Iman Gharagozlu, Creative Director of Chalupa
"During the review period, the Chalupa chain continued to strengthen its
position on a franchising basis. At the same time, the work of refining, testing
and documenting the Chalupa concept continued, and the responsibility for
sourcing of ingredients was transferred to Foodstock. A significant input for
the concept was opening up a new restaurant in Helsinki, which will serve also
as a R&D centre for the chain. At the end of the review period, Chalupa
restaurants were operating in three locations in Helsinki as well as in
Kauniainen, Espoo, Lahti, Tampere, and Jyväskylä, one in each. In addition,
Chalupa products were available in one Kotipizza lunch restaurant."
February-April 2017
Chalupa's comparable net sales were EUR 76 thousand (EUR 180 thousand) in the
first quarter of the financial year and comparable EBITDA was EUR -4 thousand
(EUR -72 thousand). Chalupa's reported net sales were EUR 76 thousand (EUR 180
thousand) in the first quarter of the financial year and reported EBITDA was EUR
-4 thousand (EUR -72 thousand). Decline in net sales compared to the previous
year was due to all Chalupa restaurants having been wnedo by Chalupa franchisees
in the beginning of the review period. Chalupa's revenue recognition is now
reported in accordance with the reporting principles used in franchising. In the
previous year only two out of five Chalupa restaurants were managed by
franchisees and the remaining three were still fully consolidated to the Chalupa
segment's numbers. Reported EBITDA did not include items affecting
comparability.
OTHERS SEGMENT
---------------------------------------------------------
EUR THOUSAND 2-4/17 2-4/16 2/16-1/17
---------------------------------------------------------
Comparable net sales 0 0 0
Net sales 0 0 0
Comparable gross margin / EBITDA -336 -454 -1 342
Depreciation and impairments -69 -51 -219
Comparable EBIT -405 -505 -1 561
Reported gross margin/ EBITDA -379 -454 -1 690
Reported EBIT -448 -505 -1 909
---------------------------------------------------------
The 'Others' segment includes mainly operations of the group headquarters.
February-April 2017
Comparable and reported net sales of the Others segment were 0.00 MEUR (0.00) in
the first quarter of the financial year. Comparable EBITDA was -0.34 MEUR (-
0.45). Reported EBITDA was -0.38 MEUR (-0.45). Reported EBITDA included EUR 43
thousand of items affecting comparability (calculatory, non-cash), which were
related to incentive plan introduced on 6 May 2016 and other incentive plans in
the group.
FINANCIAL ITEMS AND RESULT
Finance costs in the first quarter of the year were MEUR 0.20 (0.20).
Group taxes were MEUR -0.25 (-0.20) in the first quarter.
The result of the period was MEUR 0.84 (0.66) in the first quarter.
Earnings per share were EUR 0.13 (0.10) in the first quarter.
THE GROUP'S FINANCIAL POSITION
Kotipizza Group's balance sheet total as of 30 April 2017 was MEUR 61.2 (57.4).
The Group's non-current assets as at 30 April 2017 amounted to MEUR 42.1 (40.5),
and current assets amounted to MEUR 19.1 (16.9).
The Group's net cash flow from operating activities for the first quarter was
MEUR 1.35 (1.44). Working capital was practically at the same level than at the
end of January 2017 (tied 0.38).
The net cash flow from investment activities for the period was MEUR -1.28 (-
0.12). Kotipizza Oyj acquired all business operations of Helsinki Pizzapalvelu
Oy with 22 Pizzataxi restaurants operating in the Helsinki region and Southern
Finland during the review period. Investments in tangible and intangible assets
for the period amounted to MEUR 0.53 (0.38), and proceeds from sales of tangible
assets were MEUR 0.00 (0.26).
The net cash flow from financing activities was MEUR -0.34 (-0.37).
The Group's equity ratio was 51.4% (52.1%).
Interest-bearing debt amounted to MEUR 16.7 (17.8), of which current debt
accounted for MEUR 1.12 (0.84).
Further information on Kotipizza Group's financial risks is presented in the
financial statements released on 31 January 2017.
INVESTMENTS
The gross investments for the period amounted to MEUR 1.28 (0.38). The Company's
investments to fixed assets, related mainly to IT systems, amounted to MEUR
0.53 (0.38).
PERSONNEL
At the end of the review period, Kotipizza Group employed 47 people, all of who
worked in Finland. At the end of the previous financial year 31 January 2017,
the Company employed 47 people, all of who worked in Finland.
BUSINESS ARRANGEMENTS
Kotipizza Group acquired all business operations of Helsinki Pizzapalvelu Oy in
the review period with 22 Pizzataxi restaurants operating in the Helsinki region
and Southern Finland.
CHANGES IN THE MANAGEMENT
Group's Chief Operating Officer and member of the Management Board Olli
Väätäinen resigned from his position on 17 February 2017 and Heidi Stirkkinen
was appointed as his successor on 4 April 2017. Stirkkinen has previously worked
as Country Manager for Groupe SEB Finland that represents the brands OBH Nordica
and Tefal, as well as the Iittala Group's Retail Concept and Operative Director.
Stirkkinen will start in her new position on 1 September 2017.
MANAGEMENT BOARD
Kotipizza Group's Management Board comprised four members at the end of the
review period: Tommi Tervanen (CEO), Timo Pirskanen (Deputy to the CEO, CFO),
Anssi Koivula (Chief Procurement Officer) and Antti Isokangas (Chief Corporate
Responsibility and Communications Officer).
SHARES AND SHARE CAPITAL
Kotipizza Group Oyj's share capital at the end of the review period was EUR
80,000.00 and it comprised 6,351,201 shares. At the beginning of the review
period 1 February 2017 the number of the shares was 6,351,201. At the end of the
period, the Company had 2036 (600) shareholders. The Company does not hold any
treasury shares.
Information about the company's shareholder structure by sector and size of
holding, the largest shareholders can be viewed on the company's website at
www.kotipizzagroup.com.
FLAGGING NOTICES
The Company received a notification pursuant to Chapter 9, Section 5 of the
Securities Markets Act from Sentica Buyout III GP Oy and Sentica Buyout III Ky
on 9 February 2017. According to the notification, Sentica Buyout III Ky and
Sentica Buyout III Co-Investment Ky (together referred to as the "Funds") had
sold a total number of 4,020,618 shares. In connection with the completion of
the share sale, Sentica Buyout III Ky's direct ownership of the shares and
voting rights in Kotipizza fell below the 5 per cent threshold. According to the
notification, in the same connection Sentica Buyout III GP Oy's indirect
ownership through the Funds fell below the 5 per cent threshold of all the
shares and voting rights in Kotipizza. As a result of the share Sale, Sentica
Buyout III Ky and Sentica Buyout III Co-investment Ky no longer own any shares
or votes in Kotipizza.
The Company received a notification pursuant to Chapter 9, Section 5 of the
Securities Markets Act from Elementa Management AB on 9 February 2017, per which
its holding in Kotipizza Group Oyj was above (5) percent (1/20) of the share
capital. Exact proportion of share capital and voting rights as of February
9, 2017: The shares managed by Elementa Management AB totaled 323.065 shares
representing 5.09% of total share capital and total voting rights.
The Company received a notification pursuant to Chapter 9, Section 5 of the
Securities Markets Act from Evli Pankki Oyj on 10 February 2017, per which its
holding in Kotipizza Group Oyj was above (5) percent (1/20) of the share
capital. Exact proportion of share capital and voting rights as of February
10, 2017: The shares managed by Evli Pankki Oyj totaled 320.000 shares
representing 5.04% of total share capital and total voting rights.
The Company received a notification pursuant to Chapter 9, Section 5 of the
Securities Markets Act from Danske Bank A/S on 10 February 2017, per which its
holding in Kotipizza Group Oyj was above (5) percent (1/20) of the share
capital. Exact proportion of share capital and voting rights as of February
10, 2017: The shares managed by Danske Bank A/S totaled 421.539 shares
representing 6.64% of total share capital and total voting rights.
The Company received a notification pursuant to Chapter 9, Section 5 of the
Securities Markets Act from Keskinäinen Työeläkevakuutusyhtiö Elo on 10 February
2017, per which its holding in Kotipizza Group Oyj was above (5) percent (1/20)
of the share capital. Exact proportion of share capital and voting rights as of
February 10, 2017: The shares managed by Keskinäinen Työeläkevakuutusyhtiö Elo
totaled 513.200 shares representing 8.08% of total share capital and total
voting rights.
The Company received a notification pursuant to Chapter 9, Section 5 of the
Securities Markets Act from Swedbank Robur AB totaled on 10 February 2017, per
which its holding in Kotipizza Group Oyj was above (5) percent (1/20) of the
share capital. Exact proportion of share capital and voting rights as of
February 10, 2017: The shares managed by Swedbank Robur AB totaled 488.974
shares representing 7.70% of total share capital and total voting rights.
The Company received a notification pursuant to Chapter 9, Section 5 of the
Securities Markets Act from Financière de l'Echiquier on 10 February 2017, per
which its holding in Kotipizza Group Oyj was above (5) percent (1/20) of the
share capital. Exact proportion of share capital and voting rights as of
February 10, 2017: The shares managed by Financière de l'Echiquier totaled
346.041 shares representing 5.45% of total share capital and total voting
rights.
RESOLUTIONS OF THE GENERAL MEETINGS
Kotipizza Group's Annual General Meeting held on 17 May 2017 resolved that no
dividend is paid for the financial period ending 31 January 2017, but EUR 0,50
per share was decided to be paid from the reserves for invested unrestricted
equity.
The AMG adopted the financial statements for financial year ending 31 January
2017 and discharged the members of the Board of Directors and CEO from liability
for the financial year ending 31 January 2017.
The AGM resolved the number of Board members to be six. The current members of
the Board of Directors Minna Nissinen, Petri Parvinen, Kim Hanslin and Kalle
Ruuskanen were re-elected as members of the Board of Directors, and Virpi
Holmqvist as well as Dan Castillo were elected as new members of the Board of
Directors for a term continuing until the end of the next Annual General
Meeting. Furthermore, the Board of Directors elected Kalle Ruuskanen as Chairman
of the Board of Directors.
The AGM resolved that the members of the Board will be paid as follows: Chairman
EUR 3 500 per month (EUR 42 000 per year) and members EUR 2 000 per month (EUR
24 000 per year). Separate meeting remuneration is not paid for meetings of the
Board of Directors, but EUR 400 is to be paid to each chairman of the committees
of the Board of Directors for each committee meeting and EUR 200 be paid to each
member of the committees of the Board of Directors for each committee meeting.
The AGM resolved that the remuneration for the auditor be paid according to
invoice approved by the company. The AGM resolved to re-elect audit firm Ernst &
Young Oy as the company's auditor for a term that ends at the closing of the
next AGM.
The AGM resolved to authorize the Board of Directors to decide on a share issue
on following terms:
1. The authorization may be used in full or in part by issuing shares in
Kotipizza Group Oyj in one or more issues so that the maximum number of shares
issued is 635 000 shares.
2. The Board of Directors may also decide on a directed share issue in deviation
from the shareholders' pre-emptive rights in case there is a weighty financial
reason to do so, such as in order to finance or carry out acquisitions or other
business transactions, develop the company's capital structure, or in order to
use the shares for an incentive scheme. The Board of Directors would be
authorized to decide to whom and in which order the shares will be issued. In
the share issues shares may be issued for subscription against payment or
without charge.
3. Based on the authorization, the Board of Directors is also authorized to
decide on a share issue without payment directed to the company itself, provided
that the number of shares held by the company after the issue would be a maximum
of 10 per cent of all shares in the company. This amount includes shares held by
the company and its subsidiaries in the manner provided for in Chapter 15,
section 11 (1) of the Companies Act.
4. This authorization includes the right for the Board of Directors to decide on
the terms and conditions of the share issues and measures related to the share
issues in accordance with the Companies Act, including the right to decide
whether the subscription price will be recognized in full or in part in the
invested unrestricted equity reserve or as an increase to the share capital.
5. The authorization is valid until 31 July 2018.
6. The authorization will supersede the authorization to decide upon share
issues given to the company's Board of Directors on 11 May 2016.
RISKS AND UNCERTAINTIES
In the long term, Kotipizza Group's operative risks and uncertainties relate to
a possible failure in predicting consumer preferences and in creating attractive
new concepts, as well as to new business risks related to possible expansion to
new cities and abroad. The competitive situation is expected to remain harsh in
the fast food industry. Company's management cannot affect the general market
development and consumer behaviour with its actions.
Restaurant openings also have a material impact on the company's franchising and
rent income, income received from selling raw materials and supplies and
transport and flow of goods related income and thus to the company's financial
result.
Kotipizza Group is currently launching a new fast casual concept, which is
reported under the Chalupa segment. Launching a new business concept has several
risks related e.g. anticipation of consumer needs, habits, taste and behaviour.
Additionally, it runs the risk of not reaching an established position at the
market and not having a well-established clientele. Potential failure in
launching a new concept generates costs to the company and has a significantly
adverse impact on the company's brand, financial position and financial result.
EVENTS AFTER THE REPORT PERIOD
S-Pankki Oy announced that it had terminated the market making agreement with
Kotipizza Group Oyj and will cease to deliver liquidity providing services to
Kotipizza Group Oyj on 31 May 2017. The agreement between S-Pankki Oy and
Kotipizza Group Oyj was signed on 3 July 2015 and came into force on 7 July
2015, which was also the first day of trading in the company's shares the main
list of the Helsinki Stock Exchange. The company evaluates that the Kotipizza
Group's share has sufficient liquidity without market making operations.
The Company received a notification pursuant to Chapter 9, Section 5 of the
Securities Markets Act from Elementa Management AB on 16 May 2017, per which its
holding in Kotipizza Group Oyj had gone below the threshold of (5) percent
(1/20) of the share capital. Exact proportion of share capital and voting rights
as of 16 May 2017: The shares managed by Elementa Management AB totaled 265.406
shares representing 4.17% of total share capital and total voting rights.
OUTLOOK FOR THE FINANCIAL YEAR 2018
Finnish Hospitality Association MaRa forecasts that the total sales of the
restaurant business in Finland will increase by 6-8 percent during the first
half of 2017.
The total value of the Finnish restaurant market is approximately five billion
euros. The most important factors influencing the development of the sector
include the general economic development, consumers' disposable income, taxation
and government regulation. Consumers' preferences and, increasingly, food trends
influence financial development within the sector.
Finns are dining at restaurants more and more often, which is a key driver of
growth in the business. According to the trend survey published by MaRa in
December 2016, altogether 77 per cent of the respondents had dined at a
restaurant during the previous two weeks. The figure was 67 per cent in 2014 and
only about 40 per cent at the turn of the millennium.
The growth of sales in the Kotipizza chain has continuously outperformed the
growth of the entire restaurant market and the fast food market. It can even be
estimated that the strong growth of the Kotipizza chain has contributed to the
more positive development of the fast food market compared with the rest of the
restaurant market.
According to MaRa's estimate, the growth of sales in the restaurant sector will
continue in 2017 at nearly the previous year's level, along with the growth of
the Finnish national economy and the increased consumer confidence. The
development will be particularly positive in the fast food sector, as fast food
restaurants account for a considerable proportion of restaurant dining. In the
fast food sector, the influence of taxation and government regulation on
financial development is not as strong compared with the rest of the restaurant
business, particularly restaurants licensed to serve alcohol.
Finnish consumers are still spending a considerably smaller proportion of their
income on restaurant dining than consumers in most of the countries of
comparison. Thus, we have reason to believe that dining at restaurants will
increase in the next few years. MaRa has estimated that fast food restaurants
will be well-positioned for growth, particularly with regard to staff
restaurants, in which the growth of sales is forecast to slow down or even turn
negative.
According to MaRa's restaurant industry trend survey, rising phenomena in the
restaurant business include fast dining, leisure-time dining, hamburgers and
pizza, as well as the increased importance of the quality of food. The survey
shows that hamburgers and pizza, previously classified as 'fast food', have an
increasingly important role also when it comes to dinner as well as lunch
dining.
We believe that the financial development of the restaurant business and
consumer trends support Kotipizza Group's investment in the fast casual concept,
that is, restaurants that offer in a restaurant environment.
The Group estimates for the full financial year that the restaurant chain sales
will grow by over ten (10) percent as compared to the previous financial year
and that comparable EBITDA will grow as compared to the previous year.
ACCOUNTING POLICIES
Kotipizza Group's unaudited interim report for the three-month period ending 30
April 2017, including the audited comparison figures for the nine-month period
ending 30 April 2016, have been prepared according to IAS 34 and applying the
same accounting principles that were used in the previous audited full year
financial statements.
SUMMARY OF THE FINANCIAL STATEMENT AND NOTES
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
2-4/17 2-4/16 2/16-1/17
-------------------------------
000 € 000 € 000 €
Net sales 19 225 15 387 68 737
Other income 1 48 96
Change in inventory of raw materials and
finished goods (+/-) -159 -495 -3
Raw materials and finished goods (-) -14 538 -11 631 -52 872
Employee benefits/expenses (-) -984 -828 -3 887
Depreciations (-) -296 -241 -978
Impairments (-) - - -
Other operating expenses (-) -1 981 -1 195 -5 846
-------------------------------
Operating profit 1 269 1 045 5 246
Finance income 19 10 35
Finance costs -202 -200 -812
-------------------------------
Loss / profit before taxes 1 086 855 4 469
Income taxes -247 -200 -1 005
-------------------------------
Loss / profit for the period 839 655 3 464
-------------------------------
Earnings per share, EUR:
Basic, profit for the period attributable to
ordinary equity holders of the parent (no
dilutive instruments) 0.13 0.10 0.55
Earnings per share for continuing operations,
EUR:
Basic, profit for the period attributable to
ordinary equity holders of the parent (no
dilutive instruments) 0.13 0.10 0.55
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
2-4/17 2-4/16 2/16-1/17
------------------------
000 € 000 € 000 €
Profit (loss) for the period) 839 655 3 464
Other comprehensive income:
Other comprehensive income to be reclassified to
profit or loss in subsequent periods:
Cash flow hedges 14 10 69
Taxes related to other comprehensive income -3 - -14
Net other comprehensive income to be reclassified to 11 10 56
profit or loss in subsequent periods ------------------------
Other comprehensive income for the period, net of tax 11 10 56
------------------------
Total comprehensive income for the period, net of tax 850 665 3 520
------------------------
Attributable to:
Owners of the company 856 697 3 597
Non-controlling interest -6 -34 -77
------------------------
850 663 3 520
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30.4.2017 30.4.2016 31.1.2017
Assets 000 € 000 € 000 €
Non-current assets
Property, plant and equipment 1 035 1 449 1 138
Goodwill 36 508 35 819 35 819
Intangible assets 3 134 2 332 2 321
Non-current financial assets 2 2 2
Non-current receivables 984 560 872
Deferred tax assets 389 288 488
------------------------------
42 051 40 450 40 641
Current assets
Inventories 3 745 2 867 3 087
Trade and other receivables 5 964 4 941 5 761
Current tax receivables 4 58 4
Cash and cash equivalents 9 384 9 050 9 650
------------------------------
19 098 16 916 18 502
Assets classified as held for sale 13 15 13
Total Assets 61 162 57 381 59 156
------------------------------
30.4.2017 30.4.2016 31.1.2017
------------------------------
000 € 000 € 000 €
Equity and liabilities
Share capital 80 80 80
Translation differences 27 595 29 818 27 595
Fund for invested unrestricted equity 3 859 73 2 989
------------------------------
Retained earnings 31 534 29 971 30 664
Non-controlling interests -97 -48 -91
------------------------------
Total equity 31 437 29 923 30 573
Non-current liabilities
Interest bearing loans and borrowings 15 532 16 939 15 829
Financial liabilities at fair value through
profit or loss 283 357 298
Other non-current liabilities 3 346 2 449 2 745
Deferred tax liabilities 70 54 66
------------------------------
19 231 19 799 18 938
Current liabilities
Interest bearing loans and borrowings 1 115 841 1 165
Trade and other payables 9 233 6 562 8 480
Provisions - 57 -
Current tax liabilities 147 199 -
------------------------------
10 494 7 659 9 645
Liabilities related to assets held for sale - - -
Total liabilities 29 725 27 458 28 583
------------------------------
Total shareholders' equity and liabilities 61 162 57 381 59 156
------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to owners of the company
-------------------------------------------------------------
Fund for Retai- Non-
invested ned control-
Share unrestricted earn- ling Total
EUR THOUSAND capital equity ings Total interest equity
1 February 2017 80 27 595 2 989 30 664 -91 30 573
Result for the
period - - 844 844 -6 839
Other
comprehensive
income - - 11 11 - 11
-------------------------------------------------------------
Total
incomprehensive
income for the
period - - 856 856 -6 850
Transactions with
owners
Management
incentive
scheme - - 14 14 - 14
Dividends - - - - - -
-------------------------------------------------------------
Transactions with
owners total - - 14 14 14
30 April 2017 80 27 595 3 859 31 534 -97 31 437
-------------------------------------------------------------
Equity attributable to owners of the company
-------------------------------------------------------------
Fund for Retai- Non-
invested ned control-
Share unrestricted earn- ling Total
EUR THOUSAND capital equity ings Total interest equity
1 February 2016 80 29 818 -624 29 274 -14 29 260
Result for the
period - - 697 697 -34 663
Other
comprehensive
income - - - - - -
-------------------------------------------------------------
Total
incomprehensive
income for the
period - - 697 697 -34 663
Transactions with
owners
Share issue - - - - - -
Initial public
offering costs - - - - -
-------------------------------------------------------------
Transactions with
owners total - - - - -
30 April 2016 80 29 818 73 29 971 -48 29 923
-------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
2-4/17 2-4/16 2/16-1/17
Operating activities 000 € 000 € 000 €
Profit before tax 1 086 855 4 469
Loss for discontinued operations - - -
Adjustments to reconcile profit before tax to net cash
flows
Depreciation of property, plant and equipment 129 118 453
Depreciation and impairment of intangible assets 167 123 525
Other non-cash items -30 - 16
Gain on disposal of property, plant and
equipment - -35 -70
Finance income -19 -10 -35
Finance costs 202 200 812
Change in working capital
Change in trade and other receivables (+/-) -203 208 -557
Change in inventories (+/-) -653 518 299
Change in trade and other payables (+/-) 858 -312 1 443
Change in provisions (+/-) - -33 -90
Interest paid (-) -207 -198 -816
Interest received 19 10 35
Income tax paid (-) -1 -2 -1 206
------------------------------
Net cash flows from operating activities 1 348 1 442 5 278
Investing activities
Acquisition of subsidiaries - - -
Investments for tangible assets (-) -20 -40 -121
Investments for non-tangible assets (-) -506 -337 -728
Repayment for loan assets - - -
Proceeds from sale of assets-held-for-sale - - -
Acquisitions -750 - -
Sale of property, plant and equipment - 260 400
------------------------------
Net cash flows used in investing activities -1 276 -117 -449
Financing activities
Funds received from the share issue - - -2 223
Loans withdrawal - - -
Loans repayments (-) -288 -187 -850
Finance lease payments (+/-) -51 -187 -207
------------------------------
Net cash flow used in financing activities -338 -374 -3 280
Net change in cash and cash equivalents -266 951 1 550
Cash and cash equivalents at 1 February 9 650 8 099 8 100
------------------------------
Cash and cash equivalents at 30 April 9 384 9 050 9 650
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1. SEGMENT INFORMATION
The segment information presented below is in accordance with the segment
information presented in the previous financial statements.
KOTIPIZZA SEGMENT
---------------------------------------------------------
EUR THOUSAND 2-4/17 2-4/16 2/16-1/17
---------------------------------------------------------
Comparable net sales 3 521 3 096 12 894
Net sales 4 465 3 096 15 051
Comparable gross margin / EBITDA 1 580 1 478 6 633
Depreciation and impairments -190 -147 -589
Comparable EBIT 1 390 1 331 6 044
Reported gross margin / EBITDA 1 580 1 478 6 517
Reported EBIT 1 390 1 331 5 929
---------------------------------------------------------
FOODSTOCK SEGMENT
---------------------------------------------------------
EUR THOUSAND 2-4/17 2-4/16 2/16-1/17
---------------------------------------------------------
Comparable net sales 14 684 12 112 53 198
Net sales 14 684 12 112 53 198
Comparable gross margin / EBITDA 377 334 1 596
Depreciation and impairments -35 -31 -143
Comparable EBIT 342 303 1 453
Reported gross margin / EBITDA 368 334 1 566
Reported EBIT 333 303 1 423
---------------------------------------------------------
CHALUPA SEGMENT
---------------------------------------------------------
EUR THOUSAND 2-4/17 2-4/16 2/16-1/17
---------------------------------------------------------
Comparable net sales 76 180 487
Net sales 76 180 487
Comparable gross margin / EBITDA -4 -72 -161
Depreciation and impairments -2 -12 -27
Comparable EBIT -6 -84 -188
Reported gross margin / EBITDA -4 -72 -169
Reported EBIT -6 -84 -196
---------------------------------------------------------
OTHERS SEGMENT
---------------------------------------------------------
EUR THOUSAND 2-4/17 2-4/16 2/16-1/17
---------------------------------------------------------
Comparable net sales 0 0 0
Net sales 0 0 0
Comparable gross margin / EBITDA -336 -454 -1 342
Depreciation and impairments -69 -51 -219
Comparable EBIT -405 -505 -1 561
Reported gross margin / EBITDA -379 -454 -1 690
Reported EBIT -448 -505 -1 909
---------------------------------------------------------
ALL SEGMENTS TOGETHER
---------------------------------------------------------
EUR THOUSAND 2-4/17 2-4/16 2/16-1/17
---------------------------------------------------------
Comparable net sales 18 281 15 387 66 580
Net sales 19 225 15 387 68 737
Comparable gross margin / EBITDA 1 617 1 286 6 726
Depreciation and impairments -296 -241 -978
Comparable EBIT 1 321 1 045 5 747
Reported gross margin / EBITDA 1 565 1 286 6 225
Reported EBIT 1 270 1 045 5 246
---------------------------------------------------------
NOTE 2. NON-CURRENT ASSETS HELD FOR SALE, DISCONTINUED OPERATIONS AND ACQUIRED
OPERATIONS
On 1 February 2017, Kotipizza Group acquired all business operations of Helsinki
Pizzapalvelu Oy. The transaction includes an earn-out element, the value of
which is based upon the number of Pizzataxi restaurants converted to Kotipizza
restaurants by the end of the year 2019. The company operates the Pizzataxi
restaurant chain that comprises 22 restaurants operating in the Helsinki region
and Southern Finland. These restaurants will be merged into the Kotipizza
chain's operations. The transaction strengthens Kotipizza's home delivery
service offering in the capital region. The scope of the transaction included
intangible rights such as the ordering system, trademarks, domain names, company
names, auxiliary company names, client registers and separately defined
franchise, leasing and other contracts.
The transaction did not cover any of the following items related to business
operations:
- financial assets
- trade payables or other other liabilities
- liabilities generated prior to transaction
- personnel.
The non-current assets held for sale were related to Kotipizza Segment's
operations in Sweden and they did not have a profit and loss account effect in
the review period nor in the same period in the previous year.
The major classes of assets and liabilities related to
discontinued operations:
30/04/2017 30/04/2016
----------------------
Assets 000 € 000 €
Inventories - -
Trade receivable and other receivables 13 15
----------------------
Assets related to discontinued operations 13 15
Liabilities
Received collaterals - -
Other liabilities - -
Accrued expenses - -
Liabilities related to discontinued operations - -
Cash flows related to discontinued operations are not
reported separately, and due to this, the information
cannot be accurately reported.
NOTE 3. RELATED PARTY TRANSACTIONS
Parties are considered to be related when a party has control or significant
influence over the other party relating to decision-making in connection to its
finances and business. The Group's related parties include the parent company,
subsidiaries, members of the board of directors and management board, managing
director and their family members. The key management comprises the members of
the management board. The table below sets forth the total amounts of related
party transactions carried out during the period. The terms and conditions of
the related party transactions correspond terms and conditions applied to
transactions between independent parties.
Sales to Purchases Outstanding Outstanding
related from trade trade Paid
parties related payables receivables interests
parties
-------------------------------------------------------------
2/16-1/17 000 € 000 € 000 € 000 € 000 €
Key management of - - - - -
the group
Other related - 43 10 - -
parties
Controlling - - - - -
entities
Companies
controlled by the - - - - -
members of the
Board
2/15-1/16
Key management of - 9 3 - -
the group
Other related - 139 29 - -
parties
Controlling - - - - -
entities
Companies
controlled by the - - - - -
members of the
Board
NOTE 4. EMPLOYEE BENEFITS EXPENSE
All employee benefits expenses are included in administrative (fixed) expenses.
2-4/17 2-4/16
--------------
000 € 000 €
Wages and salaries 761 665
Social security costs 41 45
Pension costs (defined contribution plans) 130 118
--------------
Total employee benefits expense 932 828
--------------
NOTE 5. CONTINGENT LIABILITIES
Commitments 30/04/2017 30/04/2016
000 € 000 €
Leasing commitments 241 107
Thirdary commitments - -
Rental guarantees 825 641
Bank guarantees 420 420
Rental commitments for premises 3 634 3 379
Loans from financial institutions 15 675 16 625
Guarantees for other than Group companies 3 415
Guarantees
Pledged deposits 146 146
Business mortgages 17 500 17 500
Guarantees 12 20
Pledged shares, book value 44 236 30 487
General guarantee for other Group companies unlimited unlimited
NOTE 6: ALTERNATIVE PERFORMANCE MEASURES (APMs)
Kotipizza Group presents APMs to reflect the underlying business performance and
to enhance comparability between financial periods. APMs should not be
considered as a substitute for measures of performance in accordance with the
IFRS. APMs used by Kotipizza Group are listed and defined in this note.
CHAIN-BASED NET SALES
Chain-based net sales is the total combined net sales of the company's
franchisees, based on which the company's franchising fees are invoiced monthly.
COMPARABLE NET SALES:
Net sales items affecting comparability
EUR thousand 2-4/17 2-4/16 2/16-1/17
------------------------------------------------------
Net sales 19 225 15 387 68 737
Items affecting comparability -944 0 -2 157
------------------------------------------------------
Comparable net sales 18 281 15 387 66 580
------------------------------------------------------
Items affecting comparability in 2-4/17 and 2/16-1/17 related to advertising and
marketing fund flows of Kotipizza's Franchisee Co-operative, which pass through
Kotipizza division's P&L without result effect.
COMPARABLE EBIT:
EBIT items affecting comparability
EUR thousand 2-4/17 2-4/16 2/16-1/17
------------------------------------------------------
EBIT 1 270 1 045 5 246
Items affecting comparability 52 0 501
------------------------------------------------------
Comparable EBIT 1 321 1 045 5 747
------------------------------------------------------
Reported EBIT in 2-4/17 and in 2/16-1/17 included EUR 52 thousand and EUR 501
thousand, respectively, of items affecting comparability (calculatory, non-
cash), which were related to incentive plan introduced on 6 May 2016 and other
incentive plans in the group.
Items affecting comparability are material items or transactions, which are
relevant for understanding the financial performance of Kotipizza Group when
comparing profit of the current period with previous periods. These items can
include, but are not limited to, capital gains and losses, significant write-
downs, provisions for planned restructuring and other items that are not related
to normal business operations from Kotipizza Group's management view. Such items
are always listed in Euros in Kotipizza Group's interim-, half year and full
year financial reports for the whole Group and for the operating segments.
EBITDA
EBIT and depreciation
EUR thousand 2-4/17 2-4/16 2/16-1/17
-----------------------------------------------------
EBIT 1 270 1 045 5 246
Depreciation and impairments 296 241 978
-----------------------------------------------------
EBITDA 1 565 1 286 6 225
-----------------------------------------------------
COMPARABLE EBITDA
EUR thousand 2-4/17 2-4/16 2/16-1/17
------------------------------------------------------
EBIT 1 270 1 045 5 246
Depreciation and impairments 296 241 978
Items affecting comparability 52 0 501
------------------------------------------------------
Comparable EBITDA 1 617 1 286 6 726
------------------------------------------------------
Items affecting comparability have been detailed earlier in this Note in section
COMPARABLE EBIT.
COMPARABLE EBITDA OF NET SALES, %
Comparable EBITDA
-------------------* 100
Net sales
NET DEBT
Long term ja short term interest bearing debt - Cash and cash equivalents
EUR thousand 30.4.2017 30.4.2016 31.1.2017
---------------------------------------------------------------
Long term interest bearing debt 15 532 16 939 15 829
Short term interest bearing debt 1 115 841 1 165
Cash and cash equivalents -9 384 -9 050 -9 650
---------------------------------------------------------------
Net debt 7 263 8 730 7 344
---------------------------------------------------------------
NET GEARING, %
Net debt
--------------* 100
Total equity
EQUITY RATIO, %
Total equity
--------------* 100
Total assets
In Helsinki on 20 June 2017
Kotipizza Group Oyj's Board of Directors
Further information: CEO Tommi Tervanen, tel. +358 207 716, and CFO and Deputy
to the CEO Timo Pirskanen, tel. +358 207 716 747
[]
© 2024 Nasdaq, Inc. All Rights Reserved |
| Evästeet |