2011-08-11 08:00:00 CEST
2011-08-11 13:49:53 CEST
REGULATED INFORMATION
Olvi Oyj - Interim report (Q1 and Q3)
Olvi Group's favourable development continued
OLVI PLC INTERIM REPORT 11 AUG 2011 at 9:00 am
OLVI GROUP'S INTERIM REPORT, 1 JANUARY TO 30 JUNE 2011 (6 MONTHS)
Olvi Group's favourable development continued. Sales volumes and net sales
continued to increase in all of the Group's geographical areas, and operating
profit was as expected, improving slightly on the previous year.
January-June in brief:
- Olvi Group's sales volume increased by 14.6 percent to 254 (222) million
litres
- The Group's net sales increased by 12.2 percent to 141.7 (126.3) million euro
- The Group's operating profit stood at 13.8 (13.3) million euro, improving on
the previous year by 3.6 percent
KEY RATIOS
1-6/2011 1-6/2010 Change % 1-12/2010
Net sales, MEUR 141.7 126.3 +12.2 267.5
Operating profit, MEUR 13.8 13.3 +3.6 30.5
Gross capital expenditure, MEUR 22.2 13.8 +61.1 24.5
Earnings per share, EUR 0.28 0.52*) -46.2 1.21*)
Equity per share, EUR 5.34 5.51*) -3.1 6.13*)
Equity to total assets, % 43.9 44.8 54.7
Gearing, % 54.9 48.0 29.5
*) The per-share ratios have been adjusted for comparability.
Lasse Aho, Managing Director of Olvi plc, said the following in connection with
the disclosure of the annual accounts: “Olvi Group's performance in the first
half of the year was in line with our expectations. Operating profit improved
slightly on the previous year, and we are satisfied with this. Finland and the
Baltic states improved their aggregate performance, while the euro-denominated
result in Belarus went down due to devaluation of the rouble. Our overall
market position strengthened across our operating area, and our financial
position remained good. Investments supporting our growth and profitability
proceeded according to plan”.
OLVI GROUP'S SALES VOLUME, NET SALES AND EARNINGS IN JANUARY-JUNE 2011
Olvi Group's sales from January to June 2011 amounted to 254 (222) million
litres. This represents an increase of 32 million litres or 14.6 percent. Sales
volumes improved in all operating areas.
During the first half of the year, sales in Finland increased by 7 million
litres, sales in the Baltic states by 20 million and sales in Belarus by 11
million litres.
The Group's net sales from January to June amounted to 141.7 (126.3) million
euro. This represents an increase of 15.4 million euro or 12.2 percent. Net
sales increased in all of the Group's operating areas thanks to good sales
development.
Domestic net sales amounted to 58.4 (53.0) million euro. The Baltic
subsidiaries generated net sales of 70.7 (60.6) million euro, while net sales
in Belarus amounted to 19.9 (17.8) million euro. Net sales in Finland increased
by 5.4 million euro or 10.2 percent, in the Baltic states by 10.1 million euro
or 16.7 percent, and in Belarus by 2.1 million euro or 11.7 percent.
The Group's operating profit for January-June stood at 13.8 (13.3) million
euro, or 9.8 (10.6) percent of net sales. The operating profit improved by 0.5
million euro or 3.6 percent on the previous year.
Operating profit in Finland improved by 1.2 million euro to 7.1 (5.9) million
euro. The operating profit in Finland includes 1.5 (0.6 in 2010) million euro
of sales gains from the sales of decommissioned production machinery. The
commensurate operating profit improved by 0.3 million euro on the previous
year.
Aggregated operating profit in the Baltic states improved by 0.5 million euro
to 6.7 (6.2) million euro. Operating profit in Belarus fell 0.4 million euro
short of the previous year due to devaluation of the rouble. Measured in local
currency, the operating profit from Belarusian operations improved on the
previous year.
The Group's profit after taxes in the period under review was 5.4 (10.9)
million euro. The change was due to exchange rate losses arising from the
devaluation of the Belarusian rouble.
Earnings per share calculated from the profit belonging to parent company
shareholders in the first half of the year stood at 0.28 (0.52) euro per share
(the previous year's earnings per share have been adjusted for comparability).
OLVI GROUP'S SALES VOLUME, NET SALES AND EARNINGS IN APRIL-JUNE 2011
Olvi Group's sales in the second quarter amounted to a total of 156 (135)
million litres. Sales increased by 21 million litres or 15.5 percent. Sales in
Finland increased by 7 million litres to 44 (37) million litres, sales in the
Baltic states increased by 13 million litres to 87 (74) million litres, and
sales in Belarus increased by 6 million litres to 39 (33) million litres.
The Group's net sales from April to June amounted to 86.0 (76.8) million euro.
Net sales improved by 9.2 million euro or 12.0 percent. Net sales in Finland
amounted to 35.3 (30.3) million euro, net sales in the Baltic states to 44.7
(38.2) million euro, and net sales in Belarus to 11.3 (12.0) million euro.
The Group's operating profit for the second quarter stood at 10.4 (11.2)
million euro, or 12.1 (14.7) percent of net sales. The operating profit
declined by 0.8 million euro or 7.2 percent compared to the previous year.
Operating profit in Finland increased by 0.3 million euro to 3.9 (3.7) million
euro, operating profit in the Baltic states remained almost on a par with the
previous year at 5.7 (5.8) million euro, and operating profit in Belarus
declined by 1.1 million euro due to devaluation of the Belarusian rouble.
SALES VOLUME, NET SALES AND EARNINGS BY GEOGRAPHICAL SEGMENT IN JANUARY-JUNE
AND APRIL-JUNE 2011
Seasonal nature of the operations
The Group's business operations are characterised by seasonal variation. The
net sales and operating profit from the reported geographical segments do not
accumulate evenly but vary according to the time of the year and the
characteristics of each season.
PARENT COMPANY OLVI PLC (Olvi)
January to June 2011
According to statistics by the Federation of the Brewing and Soft Drinks
Industry, the Finnish beverage market in January-June grew by an approximate
total of 4 percent compared to the previous year. Sales increased in all
product groups, with the largest growth seen in mineral waters, almost 13
percent. The sales of beers increased by 2 percent, ciders by some 4 percent
and long drinks by 6 percent. The sales of soft drinks increased by 4 percent.
Olvi's sales developed favourably during the first part of the year. Sales from
January to June amounted to 72 (65) million litres, representing an increase of
7 million litres or 10.9 percent. Long drinks were the fastest-growing product
group at 20 percent. In addition to Olvi Grapefruit Long Drink and Olvi
Cranberry Long Drink, the development of long drink sales was boosted by the
new OLVI Mojito Long Drink.
The sales of beers and mineral waters also increased clearly, by more than 14
percent. The sales of ciders and soft drinks declined on the previous year.
According to statistics by the Federation of the Brewing and Soft Drinks
Industry, in January-June 2011 Olvi's market share in alcoholic beverages
(beers, ciders and long drinks) increased from 22 percent to more than 24
percent. Olvi's market share in mineral waters remained at 20 percent, and in
soft drinks it slightly declined to 3 (4) percent.
Olvi's exports and tax-free sales increased by 17.7 percent on the previous
year, making up 3.5 (3.3) percent of total sales.
The parent company's net sales from January to June amounted to 58.4 (53.0)
million euro, representing an increase of 5.4 million euro or 10.2 percent.
The operating profit stood at 7.1 (5.9) million euro, which was 12.2 (11.2)
percent of net sales. The operating profit improved by 1.2 million euro or 19.7
percent. The operating profit includes 1.5 (0.6 in the previous year) million
euro of sales gains from the sales of decommissioned production machinery.
Commensurate operating profit improved by 0.3 million euro on the previous year
when non-recurring sales gains are excluded.
April to June 2011
The parent company's sales in the second quarter increased by 7 million litres
or 18.3 percent to 44 (37) million litres. Net sales stood at 35.3 (30.3)
million euro, an increase of 5.0 million euro or 16.6 percent.
Operating profit in April-June stood at 3.9 (3.7) million euro, or 11.1 (12.1)
percent of net sales. The operating profit improved by 0.3 million euro or 7.2
percent in the second quarter.
AS A. LE COQ (A. Le Coq)
January to June 2011
The Estonian subsidiary A. Le Coq's January-June sales amounted to 69 (60)
million litres. Sales increased by 14.0 percent.
The company strengthened its market position in the most important beverage
groups. The sales increase in soft drinks and juices was 24 percent. The sales
of beers increased by some 9 percent, and long drinks by 12 percent. The sales
of ciders were on a par with the previous year. The sales of soft drinks
increased by approximately 4 percent.
A. Le Coq is the clear Estonian market leader in ciders and long drinks and,
according to the latest statistics, also in beers.
A. Le Coq's market share in ciders was 44 (49), in long drinks 55 (57) and in
beers 39 (38) percent (Nielsen, April-May 2011). The company is the market
leader also in juices with a market share of 32 (23) percent. The market share
in soft drinks was 34 (36) and in mineral waters 15 (13) percent.
The company's exports and tax-free sales increased by more than 40 percent on
the previous year. Exports and tax-free sales represented 4.6 (3.7) percent of
total sales.
The company's net sales from January to June amounted to 38.6 (33.8) million
euro, representing an increase of 4.8 million euro or 14.1 percent.
Operating profit in the first half of the year increased substantially by 1.0
million euro or 18.7 percent to 6.5 (5.5) million euro, which is 16.9 (16.2)
percent of net sales. The earnings improvement was made possible by increased
sales volume and, above all, cost-efficient operations.
April to June 2011
A. Le Coq's second quarter was strong and outperformed the previous year.
Sales in the second quarter amounted to 42 (38) million litres, an increase of
4 million litres or 11.8 percent on the previous year. Net sales from April to
June amounted to 24.2 (21.7) million euro. Net sales improved by 2.5 million
euro or 11.6 percent.
The company's second-quarter operating profit stood at 4.9 (4.5) million euro,
or 20.4 (20.7) percent of net sales. The operating profit improved by 0.5
million euro or 10.3 percent.
A/S CESU ALUS (Cesu Alus)
January to June 2011
The sales of Cesu Alus operating in Latvia amounted to 38 (33) million litres
in the first half of 2011. Sales increased by 5 million litres or 17.1 percent.
The Latvian beer market grew (Nielsen, June 2011), while the cider and long
drink markets declined (Nielsen, April-May 2011). Cesu Alus's beer sales
increased by 7 percent and the sales of soft drinks (including kvass) increased
by 12 percent. The sales of ciders increased by 38 percent, and long drinks by
3 percent. Fizz cider still holds the number one position in Latvia with an
approximate market share of 52 percent.
Cesu Alus had a market share of 29 (28) percent of the Latvian beer market
(Nielsen, June 2011), 53 (52) percent in ciders and 51 (45) percent in long
drinks (Nielsen, April-May 2011). Cesu Alus is the clear market leader in
ciders and long drinks and a strong number two player in beers.
The company's net sales from January to June amounted to 17.8 (14.7) million
euro, representing an increase of 3.0 million euro or 20.6 percent. Net sales
increased slightly more than the sales volume thanks to improved average price
of net sales.
Operating profit in January-June was on a par with the previous year at 0.4
(0.4) million euro, which was 2.2 (2.6) percent of net sales. In spite of
increased net sales, earnings did not improve due to increases in the cost of
raw materials and packaging.
April to June 2011
Cesu Alus's sales in the second quarter increased by 4 million litres or 18.9
percent to 24 (20) million litres. Net sales amounted to 11.7 (9.2) million
euro. Net sales increased by 2.4 million euro or 26.4 percent compared to the
previous year.
The company's operating profit in April-June stood at 0.8 (0.9) million euro,
or 6.7 (9.3) percent of net sales. The operating profit decreased by 0.1
million euro compared to the previous year.
AB VOLFAS ENGELMAN (Volfas Engelman, formerly AB RAGUTIS)
The name of AB Ragutis operating in Lithuania has been AB Volfas Engelman since
8 April 2011. Through the change of business name, the company wants to
leverage on its renowned history and to focus on building a premium brand
image.
January to June 2011
Volfas Engelman's sales in the first half of 2011 increased by 6 million litres
or 24.2 percent to 33 (27) million litres. The sales of beers increased by as
much as 29 percent, ciders by 13 percent and long drinks by 6 percent. The
sales of soft drinks and kvass increased by 19 percent.
The company's overall position in the Lithuanian beverage market has become
stronger. Volfas Engelman's market share in the largest product group, beers,
was 11 (10) percent. The company is a clear market leader in ciders with a
market share of 38 (44) percent and in long drinks with a market share of 38
(42) percent. The company is also the market leader in the kvass market with a
market share of 29 (31) percent (Nielsen, April-May 2011).
Volfas Engelman's net sales from January to June amounted to 14.3 (12.0)
million euro, representing an increase of 2.3 million euro or 19.1 percent. The
company's net sales grew less than the sales volume due to intense price
competition in Lithuania and the company's active promotional operations aimed
at increasing market shares.
The company's operating profit in the first half of the year stood at -0.2
(0.3) million euro. In spite of increased sales volume and net sales, the
company's result was unsatisfactory. Earnings were hampered by a decline in the
average price of net sales, as well as increased marketing costs arising from
the launch of the new company name and a long-term brand-building programme.
April to June 2011
Volfas Engelman's sales from April to June amounted to 20 (16) million litres,
representing an increase of 4 million litres or 26.2 percent. Second-quarter
net sales stood at 8.8 (7.3) million euro, representing an increase of 1.5
million euro or 20.0 percent.
No operating profit was recorded in the second quarter (0.5 million euro in the
previous year). The operating profit declined by 0.5 million euro. The
deteriorated second-quarter operating profit was due to the same reasons as the
drop in cumulative earnings.
OAO LIDSKOE PIVO (Lidskoe Pivo)
January to June 2011
The economic situation in Belarus has been unstable during the first half of
the year. The availability of foreign currency has been scarce and the
Belarusian rouble has devaluated by almost 80 percent if comparing the exchange
rate in June 2011 with the rate in December 2010.
The day-to-day operations of Lidskoe Pivo in Belarus have developed well in
spite of the difficult situation prevailing in the country. Lidskoe Pivo's
sales from January to June 2011 amounted to 60 (50) million litres,
representing an increase of 10 million litres or 21.5 percent. The sales of
beers increased by 23 percent, soft drinks and kvass by 19 percent and mineral
waters by as much as 76 percent. Sales of juices were on a par with the
previous year.
Lidskoe Pivo is the market leader in kvass with a market share of 47 (59)
percent. The market share in beers is 11 (11) and in juice drinks 31 (31)
percent.
The company's exports increased substantially in the first half of the year, by
69 percent on the previous year. Exports made 7.2 (5.2) percent of the
company's total sales. Export destination countries were Lithuania, Russia and
Poland.
Lidskoe Pivo's net sales from January to June amounted to 19.9 (17.8) million
euro, representing an increase of 2.1 million euro or 11.7 percent. The
increase in net sales is cut by the devaluation of the Belarusian rouble. The
net sales increase calculated in local currency was excellent, 57.4 percent on
the previous year. In addition to good sales development, factors contributing
to the net sales increase included a clear improvement in average price and
particularly successful new product launches.
Lidskoe Pivo's operating profit for the first half of the year stood at 1.5
(1.9) million euro, which was 7.5 (10.9) percent of net sales. The operating
profit diminished by 0.4 million euro or 22.8 percent on the previous year
mainly due to the devaluation of the Belarusian rouble. Operating profit
calculated in local currency increased by 7.1 percent on the previous year. The
operating profit failed to meet the growth rate of net sales in the beginning
of the year because due to the uncertain economic situation in Belarus, the
costs of raw materials and packaging, other production and logistics costs as
well as fixed costs have increased during the first half of the year by an
average of 50 to 80 percent on the previous year.
April to June 2011
Lidskoe Pivo's sales volume in the second quarter was 39 (33) million litres,
an increase of 6 million litres or 17.2 percent.
The company's net sales diminished by 0.7 million euro or 6.0 percent to 11.3
(12.0) million euro due to the devaluation of the rouble. Net sales calculated
in local currency increased in the second quarter by an excellent 59.7 percent.
Lidskoe Pivo's operating profit in the second quarter amounted to 0.8 (1.9)
million euro. The operating profit declined by 1.1 million euro or 56.6
percent. Operating profit calculated in local currency diminished by 26.9
percent due to increased costs.
FINANCING AND INVESTMENTS
Olvi Group's balance sheet total at the end of June 2011 was 254.8 (262.1)
million euro. Equity per share in January-June stood at 5.34 (5.51) euro, a
change of -0.17 euro per share on the previous year (the last year's per-share
ratios have been adjusted for comparability with this year's figures). The
equity ratio of 43.9 (44.8) percent declined by 0.9 percentage points on the
previous year. The amount of interest-bearing liabilities was 66.7 (69.7)
million euro, including current liabilities of 32.3 (28.8) million euro. The
balance sheet figures and key ratios also reflect the impacts of devaluation of
the Belarusian rouble.
During the period under review, Olvi Group's gross capital expenditure amounted
to 22.2 (13.8) million euro. The parent company Olvi accounted for 4.0 million
euro and the subsidiaries in the Baltic states for 2.4 million euro of the
total. Lidskoe Pivo's gross capital expenditure in the first half of the year
was 15.7 million euro.
The largest investments in Finland in 2011 consist of the modernisation of wine
separation and filtering equipment, an extension to the tank cellar and
improvements in the efficiency of the filling halls and storehouse logistics.
In the Baltic states, A. Le Coq's investments are focused on labelling machines
for the filling lines, as well as systems for the processing of malt and water.
Cesu Alus will modernise its bottle formats and build an extension to the yeast
tank cellar. Volfas Engelman's investments comprise an extension to the
pressure tank cellar and fermentation tanks, as well as some filling line
equipment and machinery.
Realisation of Lidskoe Pivo's investment programme continued during the first
half of the year. New production and storage capacity was taken into service in
the second quarter of the year.
PRODUCT DEVELOPMENT
Research and development includes projects to design and develop new products,
packages, processes and production methods, as well as further development of
existing products and packages. The R&D costs have been recognised as expenses.
The main objective of Olvi Group's product development is to create new
products for profitable and growing beverage segments.
NEW PRODUCTS
Finland
A light version of Finland's most popular 4.7% long drink, OLVI Cranberry Light
Long Drink in 0.5-litre cans will be introduced in retail stores in September.
Two new beers will be introduced: OLVI Harkko sold in an impressive one-pint
can (0.568 L) is a fresh and pale beer with fruitiness from Cascade hops. OLVI
6.12. beer can be used to celebrate Finland's independence at any time. The
beer is copper-coloured and has a soft roasted taste and sweet malt aroma.
KevytOlo Finnish Mineral water 2-litre 4-pack is targeted at households that
consume a lot of mineral waters.
Subsidiaries
In Estonia, A. Le Coq launched the new Yellow Submarine version to Estonia's by
far best-selling long drink brand G:N. A new version of the Estonian
market-leading cider FIZZ was introduced under the name FIZZ Paradise.
In Lithuania, Volfas Engelman will bring Real Wildberry cider to the market in
August. The long drink market leader Jamaica will be complemented by the new
Juniper-Lemon flavour.
In Belarus, Lidskoe Pivo opened a completely new product group, flavoured
waters, with two products Aura Mango-Orange and Aura Rhubarb-Melissa-Camomile.
A new packaging, one-litre plastic bottle, was introduced for Aura Premium
water. FIZZ ciders got a new summerly flavour FIZZ Strawberry. The Belarusian
market-leading juice drink Aura Orange got a new flavour Blueberry-Apple.
PERSONNEL
Olvi Group's average number of personnel in January-June was 2,049 (2,041). The
Group's average number of personnel increased by 8 people or 0.4 percent. At
the end of June, Olvi Group employed a total of 2,193 (2,171) people.
Olvi Group's average number of personnel by country:
Finland 382 (378)
Estonia 318 (314)
Latvia 224 (208)
Lithuania 205 (191)
Belarus 920 (950)
Total 2049 (2041)
GROUP STRUCTURE
In April-June 2011 the parent company Olvi increased its holding of Cesu Alus
by a total of 123 shares or 0.04 percent. Between January and June, Olvi has
acquired a total of 441 shares in Cesu Alus, which is 0.15 percent of share
capital. At the end of June 2011, Olvi Group's holding in Cesu Alus was 99.52
percent, in A. Le Coq 100.0 percent, in Volfas Engelman 99.57 percent and in
Lidskoe Pivo 91.58 percent.
SHARES AND SHARE MARKET
The General Meeting of Olvi on 7 April 2011 decided to implement a free issue
(split) in which one Series A share produced one free Series A share, and one
Series K share produced one free Series K share. 8,513,276 Series A shares and
1,866,128 Series K shares were issued. After the issue, the number of Series A
shares is 17,026,552 and the number of Series K shares is 3,732,256. The total
number of Olvi shares is 20,758,808, of which 82.0 percent are Series A shares
and 18.0 percent series K shares.
All shareholders registered in the list of shareholders on the record date 12
April 2011 were entitled to the new shares issued. The new Series A shares were
included in public trading and the book-entry system on 13 April 2011, at which
time they carried shareholders' rights.
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.
Olvi's share capital at the end of June 2011 stood at 20.8 million euro.
The Olvi A share was quoted on Nasdaq OMX Helsinki (Helsinki Stock Exchange) at
18.60 (13.70) euro at the end of June 2011. In January-June, the highest quote
for the Series A share was 19.86 (14.35) euro and the lowest quote was 15.30
(12.01) euro. The per-share quotes have been adjusted for comparability after
the split in April 2011.
At the end of June 2011, the market capitalisation of the entire stock was
386.1 (284.4) million euro and the market capitalisation of Series A shares was
316.7 (233.3) million euro. In January-June 2011, a total of 1,508,059 Series A
shares were traded, representing 8.9 (9.1) percent of the total number of
Series A shares. The value of trading was 35.3 (20.5) million euro.
The number of shareholders at the end of June 2011 was 8,839 (7,892). Foreign
holdings plus foreign and Finnish nominee-registered holdings represented 19.0
percent of the total number of book entries and 6.4 percent of total votes.
Foreign and nominee-registered holdings are reported in Table 5, Section 9 of
the tables attached to this interim report, and the largest shareholders are
reported in Table 5, Section 10.
SHARE-BASED INCENTIVE SCHEMES
Olvi's Board of Directors decided on a share-based incentive scheme for the key
personnel of Olvi Group on 26 January 2006.
The scheme included two vesting periods: 1 January 2006 to 31 December 2007 and
1 January 2008 to 31 December 2010. The amount of bonuses payable out of the
scheme was linked to Olvi Group's net sales and the operating profit percentage
in relation to net sales.
The bonuses for the first vesting period were paid in April 2008. The bonuses
for the second vesting period were paid in April 2011. The bonuses were paid
partially in Olvi Series A shares and partially in cash. The proportion paid in
cash covered the taxes and other statutory fees arising from the share-based
bonuses. A total of 11,838 Olvi Series A shares were paid out as share-based
bonuses.
50 percent of the shares received as bonus for the second vesting period may be
transferred after one year of reception, and 100 percent after two years of
reception. The right to dividends began when the shares were transferred to the
key employees' book-entry accounts.
A more detailed description of the scheme is included in the tables section of
this interim report, in Table 5, Section 5.
TREASURY SHARES
In the beginning of 2011, Olvi possessed a total of 12,400 of its own Series A
shares. The total purchase price of treasury shares was 222 thousand euro. In
April 2011 Olvi's Board of Directors decided to transfer a total of 11,838
treasury shares as bonuses for the second vesting period to key employees
belonging to the Group's share-based incentive scheme.
After the share-based bonuses were paid, Olvi possessed a total of 562 of its
own Series A shares, the purchase price being 8.5 thousand euro. Because Olvi
implemented a free issue on 12 April 2011 in which one Series A share produced
one new Series A share, the number of Series A shares held by Olvi after the
split was 1,124. There have been no other changes in the number of Series A
shares held by Olvi by 30 June 2011.
A more detailed description of Olvi's treasury shares and the Board of
Directors' authorisations to acquire and transfer the company's own Series A
shares is included in the tables section of this interim report, in Table 5,
Section 6.
RISK MANAGEMENT
Olvi Group is exposed to risks that may arise from the operations of Group
companies or changes in the business environment.
The Group's risk management is an essential part of management and everyday
operations. The objective of risk management is to ensure the realisation of
the company's strategy and the continuity of business. Olvi Group identifies,
assesses, manages, monitors and reports its crucial risks regularly. With
regard to identified risks, the effects, scope and probability of realisation
are assessed together with the means of eliminating or reducing the risk.
Furthermore, risk management aims to identify and utilise any business
opportunities that may arise.
Olvi operates internationally, and its business involves risks arising from
foreign exchange fluctuations due to cash flows from purchases and sales, as
well as the conversion of balance sheet items in foreign subsidiaries into
euro. Olvi Group's parent company is centrally responsible for managing
financing and foreign exchange risks in accordance with the Board of Directors'
guidance.
Olvi's operations are dependent on the reliability of production facilities,
materials management, logistics and IT systems. The aim is to prevent the
realisation of related risks through continuous analysis and development of
processes. Olvi Group companies are prepared for property damage and business
interruptions through insurance policies, the coverage of which is reviewed
annually.
BUSINESS RISKS AND UNCERTAINTIES IN THE NEAR TERM
Among Olvi Group's operating areas, the greatest risks and uncertainties are
associated with Belarus, where the local currency has devaluated against the
euro by almost 80 percent during the first half of the year. Due to the
exchange rate change, the prices of imported raw materials have increased
substantially. The prices of locally produced raw materials have also
increased. Additional devaluation of the local currency is possible also in the
near term. Olvi has initated an adaptation programme to minimise the impact of
devaluation on operating profit.
The problems with the Belarusian national economy are not estimated to have
critical impacts on Olvi Group's operations or operating profit because Lidskoe
Pivo's share of the Group's operating profit has been minor so far,
approximately 10 percent. The local Belarusian beverage market and exports to
nearby markets are still estimated to have great potential and be growing far
into the future. Furthermore, there are several beverage product groups in the
Belarusian market where Olvi is not yet involved.
The overall markets in the Baltic states have mostly turned to a growth track.
However, consumer demand is still weak in the more expensive product segments
particularly in Latvia and Lithuania due to a high unemployment rate and slow
recovery of consumer purchasing power. In Estonia, sales of several beverage
product groups have turned upward, and market growth is supported by increased
tourism from Finland.
NEAR-TERM OUTLOOK
In the first half of the year, Olvi Group's sales volume, net sales and
profitability have met the expectations. Full-year sales volumes and the net
sales level are estimated to be higher than in the previous year, and the
operating profit is estimated to remain at the healthy level of 2010.
Further information:
Lasse Aho, Managing Director
Phone +358 17 838 5200 or +358 400 203 600
OLVI PLC
Board of Directors
TABLES:
- Statement of comprehensive income, Table 1
- Balance sheet, Table 2
- Changes in shareholders' equity, Table 3
- Cash flow statement, Table 4
- Notes to the interim report, Table 5
DISTRIBUTION
NASDAQ OMX Helsinki Ltd
Key media
www.olvi.fi
OLVI GROUP TABLE 1
INCOME STATEMENT
EUR 1,000
4-6/ 4-6/ 1-6/ 1-6/ 1-12/
2011 2010 2011 2010 2010
Net sales 85987 76772 141666 126269 267509
Other operating income 88 214 251 361 717
Operating expenses -71225 -61011 -118987 -103959 -219101
Depreciation and impairment -4416 -4727 -9108 -9329 -18640
Operating profit 10434 11248 13822 13342 30485
Financial income -318 459 86 694 514
Financial expenses -7246 -786 -8327 -1252 -1831
Financial expenses - net -7564 -327 -8241 -558 -1317
Earnings before tax 2870 10921 5581 12784 29168
Taxes *) 381 -1465 -142 -1843 -3909
NET PROFIT FOR THE PERIOD 3251 9456 5439 10941 25259
Other comprehensive income items:
Translation differences related to
foreign subsidiaries -7715 2224 -12361 2470 557
TOTAL COMPREHENSIVE INCOME FOR THE -4464 11680 -6922 13411 25816
PERIOD
Distribution of profit:
- parent company shareholders 3653 9254 5801 10694 24954
- minority -402 202 -362 247 305
Distribution of comprehensive profit:
- parent company shareholders -3534 11263 -5716 12931 25405
- minority -930 417 -1206 480 411
Ratios calculated from the profit belonging
to parent company shareholders:
- earnings per share, EUR 0.18 0.45**) 0.28 0.52**) 1.21**)
*) Taxes calculated from the profit for the review period.
**) The per-share ratios have been adjusted for comparability with this year's
figures.
OLVI GROUP TABLE 2
BALANCE SHEET
EUR 1,000
30.6.2011 30.6.2010 31.12.2010
ASSETS
Non-current assets
Tangible assets 122277 127406 124857
Goodwill 14315 17171 17169
Other intangible assets 1303 1018 1134
Financial assets available for sale 544 288 545
Other non-current assets available for sale 50 0 333
Loan receivables and other non-current 138 137 137
receivables
Deferred tax receivables 2435 1622 1682
Total non-current assets 141062 147642 145857
Current assets
Inventories 41764 38860 35124
Accounts receivable and other receivables 66638 62268 47270
Liquid assets 5316 13308 7891
Total current assets 113718 114436 90285
TOTAL ASSETS 254780 262078 236142
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity held by parent company shareholders
Share capital 20759 20759 20759
Other reserves 1092 1092 1092
Treasury shares -8 -222 -222
Translation differences -15919 -2616 -4402
Retained earnings 104906 95095 109750
110830 114108 126977
Minority interest 1033 3244 2277
Total shareholders' equity 111863 117352 129254
Non-current liabilities
Loans 32743 38896 35607
Other liabilities 1652 1936 1755
Deferred tax liabilities 1909 1714 1847
Current liabilities
Loans 31344 27879 7578
Accounts payable and other liabilities 75269 74301 60101
Total liabilities 142917 144726 106888
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 254780 262078 236142
OLVI GROUP TABLE 3
CHANGES IN OLVI GROUP'S CONSOLIDATED SHAREHOLDERS' EQUITY
EUR 1,000 Share Other Treasury Transl Retained Minority Total
capit reserv shares . earning interes
al es reserve diff. s t
Shareholders' 20759 1092 -222 -4853 92746 2764 112286
equity 1 Jan
2010
Payment of -8345 -8345
dividends
Total comprehensive income for 2237 10941 233 13411
the period
Share of profit belonging to the minority -247 247 0
Shareholders' 20759 1092 -222 -2616 95095 3244 117352
equity 30 June
2010
EUR 1,000 Share Other Treasury Transl Retained Minority Total
capit reserv shares . earning interes
al es reserve diff. s t
Shareholders' 20759 1092 -222 -4402 109750 2277 129254
equity 1 Jan
2011
Payment of -10660 -10660
dividends
Transfer of 214 -214 0
treasury shares
Gains from 216 216
transfer of
treasury shares
Total -11517 5439 -844 -6922
comprehensive
income for the
period
Share of profit belonging to the 362 -362 0
minority
Profit arising from the 13 13
acquisition of minority shares
Change in minority -38 -38
interest
Shareholders' 20759 1092 -8 -15919 104906 1033 111863
equity 30 June
2011
Other reserves include the share premium account, legal reserve and other
reserves.
OLVI GROUP TABLE 4
CASH FLOW STATEMENT
EUR 1,000
1-6/2011 1-6/2010 1-12/2010
Net profit for the period 5439 10941 25259
Adjustments to profit for the period 11373 12312 22253
Change in net working capital -12860 -5700 -1489
Interest paid -874 -884 -1848
Interest received 43 129 514
Taxes paid -1972 -1066 -2767
Cash flow from operations (A) 1149 15732 41922
Investments in tangible assets -15205 -9639 -17419
Investments in intangible assets -502 -236 -522
Sales gains from tangible and intangible
assets 1712 60 376
Expenditure on other investments 1 -257
Cash flow from investments (B) -13994 -9815 -17822
Withdrawals of loans 32316 25000 25000
Repayments of loans -11666 -17680 -41288
Increase (-) / decrease (+) in current interest-
bearing business receivables 2 0 -2
Dividends paid -10382 -8331 -8321
Cash flow from financing (C) 10270 -1011 -24611
Increase (+)/decrease (-) in liquid assets -2575 4906 -511
(A+B+C)
Liquid assets 1 January 7891 8402 8402
Liquid assets 30 June/31 December 5316 13308 7891
Change in liquid assets -2575 4906 -511
OLVI GROUP TABLE 5
NOTES TO THE INTERIM REPORT
Olvi Group's interim report for January-June 2011 has been prepared in
accordance with IAS 34, Interim Financial Reporting. The accounting policies
used for the interim report are the same as those used for the annual financial
statements 2010.
The accounting policies are presented in the Annual Report 2010 which was
published on 17 March 2011. The information disclosed in the interim report is
unaudited.
The interim report information is presented in thousands of euros (EUR 1,000).
For the sake of presentation, individual figures and totals have been rounded
to full thousands, which causes rounding differences in additions.
The Group has adopted the following new or revised standards in 2011:
- IAS 24 (Revised), Related Party Disclosures
- IAS 32 (Amendment), Classification of Rights Issues
- IFRIC 19, Extinguishing Financial Liabilities with Equity Instruments
- IFRS 14 (Amendment), Prepayments of a Minimum Funding Requirement
1. SEGMENT INFORMATION
SALES BY GEOGRAPHICAL SEGMENT (1,000 litres)
4-6/ 4-6/ 1-6/ 1-6/ 1-12/
2011 2010 2011 2010 2010
Olvi Group total 155859 134897 254039 221650 471913
Finland 43592 36834 72274 65184 136832
Estonia 42239 37779 68870 60389 124772
Latvia 24161 20315 38142 32584 68705
Lithuania 20537 16276 33347 26854 59075
Belarus 38572 32901 60158 49527 111323
- sales between segments -13242 -9208 -18752 -12888 -28794
NET SALES BY GEOGRAPHICAL SEGMENT (EUR 1,000)
4-6/ 4-6/ 1-6/ 1-6/ 1-12/
2011 2010 2011 2010 2010
Olvi Group total 85987 76772 141666 126269 267509
Finland 35347 30323 58413 53001 110989
Estonia 24168 21656 38632 33845 69935
Latvia 11679 9243 17754 14719 31448
Lithuania 8804 7335 14325 12024 26379
Belarus 11266 11985 19927 17847 40769
- sales between segments -5277 -3770 -7385 -5167 -12011
OPERATING PROFIT BY GEOGRAPHICAL SEGMENT (EUR 1,000)
4-6/ 4-6/ 1-6/ 1-6/ 1-12/
2011 2010 2011 2010 2010
Olvi Group total 10434 11248 13822 13342 30485
Finland 3934 3669 7097 5931 11702
Estonia 4938 4476 6521 5492 11905
Latvia 779 858 382 376 1714
Lithuania 8 497 -178 321 1423
Belarus 810 1868 1503 1947 4444
- eliminations -35 -120 -1503 -725 -703
2. PERSONNEL ON AVERAGE 1-6/2011 1-6/2010 1-12/2010
Finland 382 378 378
Estonia 318 314 312
Latvia 224 208 207
Lithuania 205 191 195
Belarus 920 950 959
Total 2049 2041 2051
3. RELATED PARTY TRANSACTIONS
Employee benefits to management
Salaries and other short-term employee benefits to the Board of Directors and
Managing Directors
EUR 1,000
1-6/2011 1-6/2010 1-12/2010
Managing Directors 665 371 668
Chairman of the Board 108 113 225
Other members of the Board 61 55 109
Total 834 539 1002
4. SHARES AND SHARE CAPITAL
30.6.2011 %
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
The General Meeting of Olvi plc on 7 April 2011 decided to implement a free
issue (split) in which one Series A share produced one free Series A share, and
one Series K share produced one free Series K share. 8,513,276 Series A shares
and 1,866,128 Series K shares were issued. After the issue, the number of
Series A shares is 17,026,552 and the number of Series K shares is 3,732,256.
The total number of shares is 20,758,808.
All shareholders registered in the list of shareholders on the record date 12
April 2011 were entitled to the new shares issued. The new Series A shares were
included in public trading and the book-entry system on 13 April 2011, at which
time they carried shareholders' rights.
Votes per Series A share 1
Votes per Series K share 20
The registered share capital on 30 June 2011 totalled 20,759 thousand euro.
Olvi Group's General Meeting of 7 April 2011 decided to amend Article 3 of the
Articles of Association by eliminating the reference to nominal value of
shares.
Olvi plc's Series A and Series K shares received a dividend of 1.00 euro per
share for 2010 (0.80 euro per share for 2009), totalling 10.4 (8.3) million
euro. The dividends were paid on 19 April 2011. The new shares issued in the
free issue decided by the General Meeting of 7 April 2011 did not entitle to
dividends paid for 2010.
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
Olvi plc's Board of Directors decided on 26 January 2006 on a share-based
incentive scheme for Olvi Group's key personnel.
The share-based bonus scheme was a part of the incentive and commitment scheme
for the Group's key personnel and its purpose was to combine the objectives of
shareholders and key personnel to improve the company's value.
The scheme included two vesting periods, the first one extending from 1 January
2006 to 31 December 2007 and the second one from 1 January 2008 to 31 December
2010. The amount of bonuses payable out of the scheme was linked to Olvi
Group's net sales and the operating profit percentage in relation to net sales.
The bonuses were paid partially in Olvi plc's Series A shares and partially in
cash. The proportion paid in cash covered the taxes and other statutory fees
arising from the share-based bonuses. The bonuses for the first vesting period
were paid in April 2008. The shares carried a ban on transferring them within
two years of reception.
The bonuses for the second vesting period were paid in April 2011. 50 percent
of the shares received as bonus for the second vesting period may be
transferred after one year of reception, and 100 percent after two years of
reception. The right to dividends began when the shares were transferred to the
key employees' book-entry accounts.
The share-based bonuses paid for the second vesting period in 2011 totalled
11,838 Olvi plc Series A shares (the shares were transferred before the free
issue, or split, implemented by Olvi plc on 12 April).
The target group of the scheme included 20 key employees.
The incentive scheme does not have any diluting effect.
Olvi Group has no warrants or options.
6. TREASURY SHARES
Olvi plc held a total of 12,400 of its own Series A shares on 1 January 2011
(before the split). The total purchase price of treasury shares was 222
thousand euro.
On 7 April 2011, 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 245,000 Series A
shares (before the split).
The Annual General Meeting also decided to revoke all existing unused
authorisations for the transfer of own shares and authorise the Board of
Directors of Olvi plc to decide on the transfer of any A shares acquired on the
company's own account within one year of the Annual General Meeting.
Olvi plc's Board of Directors has not exercised the authorisation granted by
the General Meeting to acquire more Series A shares during January-June 2011.
In April 2011 Olvi plc transferred a total of 11,838 treasury shares (before
the split) as bonuses for the second vesting period to key employees belonging
to the Group's share-based incentive scheme.
After the share-based bonuses were paid, Olvi plc held a total of 562 of its
own Series A shares. Because Olvi plc implemented a free issue on 12 April 2011
in which one Series A share produced one new Series A share and one Series K
share produced one new Series K share, the number of Series A shares held by
Olvi plc after the split was 1,124.
Olvi plc still held a total of 1,124 of its own Series A shares on 30 June
2011. The purchase price of the remaining Series A shares held as treasury
shares on 30 June 2011 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.
7. NUMBER OF SHARES *) 1-6/ 2011 1-6/ 2010 **) 1-12/ 2010 **)
- average 20744996 20734008 20734008
- at end of period 20757684 20734008 20734008
*) Treasury shares deducted.
**) The numbers of shares have been adjusted for comparability with the numbers
for 2011.
8. TRADING OF SERIES A SHARES ON THE HELSINKI STOCK EXCHANGE
1-6/ 2011 1-6/ 2010 1-12/ 2010
Trading volume of Olvi A shares 1508059 1554630 *) 3256516 *)
Total trading volume, EUR 1,000 35302 20462 45735
Traded shares in proportion to
all Series A shares, % 8.9 9.1 19.1
Average share price, EUR 17.67 13.16 **) 14.03 **)
Price on the closing date, EUR 18.60 13.70 **) 15.35 **)
Highest quote, EUR 19.86 14.35 **) 15.73 **)
Lowest quote, EUR 15.30 12.01 **) 12.01 **)
*) The numbers of shares have been adjusted for comparability with the numbers
for 2011.
**) The share prices have been adjusted for comparability with the prices for
2011.
9. FOREIGN AND NOMINEE-REGISTERED HOLDINGS ON 30 JUNE 2011
Book entries Votes Shareholders
qty % qty % qty %
Finnish total 16820537 81.03 85789929 93.58 8787 99.41
Foreign total 870899 4.20 2814371 3.07 44 0.50
Nominee-registered (foreign) 729 0.00 729 0.00 1 0.01
total
Nominee-registered (Finnish) 3066643 14.77 3066643 3.35 7 0.08
total
Total 20758808 100.00 91671672 100.00 8839 100.00
10. LARGEST SHAREHOLDERS ON 30 JUNE 2011
Series Series A Total % Votes %
K
1. Olvi Foundation 2363904 866972 3230876 15.56 48145052 52.52
2. Hortling Heikki 901424 155124 1056548 5.09 18143240 19.79
Wilhelm *)
3. The Heirs of Hortling 187104 25248 212352 1.02 3767328 4.11
Kalle Einari
4. Hortling Timo Einari 165824 34608 200432 0.97 3351088 3.66
5. Hortling-Rinne Marit 102288 2100 104388 0.50 2047860 2.23
6. Skandinaviska Enskilda Banken, 1701782 1701782 8.20 1701782 1.86
nominee reg.
7. Nordea Bank Finland plc, 1125297 1125297 5.42 1125297 1.23
nominee register
8. Ilmarinen Mutual Pension 903235 903235 4.35 903235 0.99
Insurance Company
9. Autocarrera Oy Ab 446000 446000 2.15 446000 0.49
10. Kamprad Ingvar 425200 425200 2.05 425200 0.46
Others 11712 11340986 11352698 54.69 11615590 12.68
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
1-6/2011 1-6/2010 1-12/2010
Increase 21787 13579 23044
Decrease -2731 -2323 -4405
Total 19056 11256 18639
12. CONTINGENT LIABILITIES 30.6.2011 30.6.2010 31.12.2010
EUR 1,000
Pledges and contingent liabilities
For own commitments 5184 6259 4453
For others 134 810 810
Leasing liabilities:
Due within one year 772 551 748
Due within 1 to 5 years 843 720 672
Due in more than 5 years 0 0 0
Total leasing liabilities 1615 1271 1420
Package liabilities 4277 2256 3648
Other liabilities 1980 1980 1980
13. CALCULATION OF FINANCIAL RATIOS
Equity to total assets, % = 100 * (Shareholders' equity held by parent company
shareholders + minority interest) / (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 + minority interest)
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