2012-10-26 07:59:33 CEST
2012-10-26 08:00:38 CEST
REGULATED INFORMATION
Olvi Oyj - Interim report (Q1 and Q3)
OLVI GROUP’S INTERIM REPORT, 1 JANUARY TO 30 SEPTEMBER 2012 (9 MONTHS)
Olvi Group's sales volume, net sales and operating profit developed favourably
from January to September.
Iisalmi, 2012-10-26 07:59 CEST (GLOBE NEWSWIRE) -- OLVI PLC
INTERIM REPORT 26 OCT 2012 at 9:00 am
OLVI GROUP'S INTERIM REPORT, 1 JANUARY TO 30 SEPTEMBER 2012 (9 MONTHS)
Olvi Group's sales volume, net sales and operating profit developed favourably
from January to September. It was particularly pleasing to see substantial
operating profit improvements in Latvia, Lithuania and Belarus.
January-September in brief:
- Olvi Group's sales volume increased by 2.4 percent to 411.2 (401.5) million
litres
- The Group's net sales increased by 7.7 percent to 241.6 (224.3) million euro
- The Group's operating profit increased by 2.8 percent to 25.9 (25.2) million
euro
- Earnings per share improved by 69.4 percent to 1.05 euro per share
- Equity per share improved by 22.2 percent to 6.88 euro per share
KEY RATIOS
1-9/2012 1-9/2011 Change % 1-12/2011
Net sales, MEUR 241.6 224.3 +7.7 285.2
Operating profit, MEUR 25.9 25.2 +2.8 26.7
Gross capital expenditure, MEUR 22.8 31.5 -27.6 43.2
Earnings per share, EUR 1.05 0.62 +69.4 0.65
Equity per share, EUR 6.88 5.63 +22.2 6.11
Equity to total assets, % 53.4 49.7 50.6
Gearing, % 41.9 48.0 43.2
Lasse Aho, Managing Director of Olvi plc, said the following in connection with
the disclosure of the accounts:
“Olvi Group's performance in January-September was slightly better than in the
previous year. Our balance sheet and earnings per share improved clearly on the
previous year. Net sales grew faster than the sales volume, and operating
profit improved on the previous year. Performance in Latvia, Lithuania and
Belarus improved substantially. Performance in Estonia fell slightly short of
the previous year due to the general decline of the beverages market. Operating
profit in Finland declined on the previous year. The parent company's
performance was affected by a general market decline, cool summer weather, as
well as detorioration of profitability due to increased costs and the product
mix. However, we were able to strengthen our overall market position.”
OLVI GROUP'S SALES VOLUME, NET SALES AND EARNINGS IN JANUARY-SEPTEMBER 2012
Olvi Group's sales from January to September 2012 amounted to 411.2 (401.5)
million litres. This represents an increase of 9.7 million litres or 2.4
percent. Sales volumes increased or remained unchanged in all other operating
areas but Latvia, where a slight decline was seen in sales.
In January-September, sales in Finland increased by 1.6 million litres, sales
in the Baltic states by 2.9 million and sales in Belarus by as much as 10.3
million litres.
Intra-Group sales increased by 5.1 million litres or 16.9 percent.
The Group's net sales from January to September amounted to 241.6 (224.3)
million euro. This represents an increase of 17.4 million euro or 7.7 percent.
Net sales growth outperformed sales volume growth in all of the Group's
operating areas.
Domestic net sales amounted to 92.1 (90.7) million euro. The Baltic
subsidiaries generated net sales of 119.7 (111.1) million euro, while net sales
in Belarus amounted to 45.4 (34.9) million euro. Net sales in Finland increased
by 1.5 million euro or 1.6 percent, in the Baltic states by 8.5 million euro or
7.7 percent, and in Belarus by 10.5 million euro or 29.9 percent.
The Group's operating profit for January-September stood at 25.9 (25.2) million
euro, or 10.7 (11.2) percent of net sales. The operating profit improved by 0.7
million euro or 2.8 percent on the previous year.
Earnings per share calculated from the profit belonging to parent company
shareholders stood at 1.05 (0.62) euro per share, an increase of 0.43 euro per
share or 69.4 percent on the previous year.
Operating profit in Finland amounted to 7.2 (11.7) million euro. The previous
year's operating profit in Finland includes 1.5 million euro of sales gains
from the sales of decommissioned production machinery. Commensurate operating
profit fell 3.0 million euro or 29.5 percent short of the previous year.
Aggregated operating profit in the Baltic states improved by 1.8 million euro
to 14.3 (12.5) million euro. Operating profit in Belarus amounted to 4.6 (2.6)
million euro, representing an increase of 1.9 million euro or 74.1 percent on
the previous year.
The Group's profit after taxes in the period under review was 22.3 (12.6)
million euro.
OLVI GROUP'S SALES VOLUME, NET SALES AND EARNINGS IN JULY-SEPTEMBER 2012
Olvi Group's sales in the third quarter amounted to a total of 149.9 (147.5)
million litres. Sales increased by 2.4 million litres or 1.6 percent. Sales in
Finland were on a par with the previous year at 40.2 (40.1) million litres,
sales in the Baltic states increased by 0.6 million litres to 78.5 (77.9)
million litres, and sales in Belarus increased by 2.0 million litres to 42.8
(40.8) million litres.
The Group's net sales from July to September amounted to 88.2 (82.6) million
euro. Net sales improved by 5.6 million euro or 6.8 percent. Net sales in
Finland amounted to 32.2 (32.3) million euro, net sales in the Baltic states to
43.1 (40.4) million euro, and net sales in Belarus to 18.0 (15.0) million euro.
The Group's operating profit for the third quarter stood at 11.2 (11.4) million
euro, or 12.7 (13.8) percent of net sales. The operating profit declined by 0.2
million euro or 1.6 percent compared to the previous year. Operating profit in
Finland declined by 2.5 million euro to 2.1 (4.6) million euro. Operating
profit in the Baltic states improved by 0.6 million euro to 6.3 (5.7) million
euro, and operating profit in Belarus improved by 1.6 million euro to 2.8 (1.1)
million euro.
SALES VOLUME, NET SALES AND EARNINGS BY GEOGRAPHICAL SEGMENT IN
JANUARY-SEPTEMBER AND JULY-SEPTEMBER 2012
Seasonal nature of the operations
The Group's business operations are characterised by seasonal variation. The
net sales and operating profit from the reported geographical segments do not
accumulate evenly but vary according to the time of the year and the
characteristics of each season.
PARENT COMPANY OLVI PLC (Olvi)
January to September 2012
According to statistics, the Finnish beverage market declined by 39.4 million
litres or 6.3 percent in January-September compared to the previous year
(Finnish Federation of the Brewing and Soft Drinks Industry, September 2012).
Sales declined in all product groups: the sales of beers declined by 6.6
percent, ciders 8.4, long drinks 7.1, mineral waters by 7.9 percent and soft
drinks by 4.8 percent.
Olvi's domestic sales in January-September declined by 2.1 million litres or
2.0 percent, which was a clearly smaller decline than that of the industry in
general.
In alcoholic beverages, the only growth was seen in Olvi's ciders, with a sales
increase of 7.8 percent. The sales of beers declined by 9.7 percent and the
sales of long drinks by 6.2 percent. In non-alcoholic beverages, sales
increased in all other product groups but energy drinks. The sales of soft
drinks increased by 72.0 percent on the previous year, thanks to the Angry
Birds and private label products. The sales of juices increased by 76.9
percent. The sales of mineral waters also increased by 10.7 percent thanks to
private label products.
Olvi's domestic market share in mild alcoholic beverages in the reporting
period remained on a par with the previous year at 24 percent. The market share
of non-alcoholic products increased from seven to nine percent.
Olvi's exports and tax-free sales increased by 35.4 percent on the previous
year, making up 4.3 (3.2) percent of total sales.
Olvi's total sales volume from January to September amounted to 114.0 (112.4)
million litres, representing an increase of 1.6 million litres or 1.4 percent.
The parent company's net sales from January to September amounted to 92.2
(90.7) million euro, representing an increase of 1.5 million euro or 1.6
percent.
Operating profit stood at 7.2 (11.7) million euro, which was 7.8 (12.9) percent
of net sales. The previous year's operating profit includes 1.5 million euro of
sales gains from the sales of decommissioned production machinery. Compared to
the previous year's commensurate operating profit, the operating profit for
January-September declined by 3.0 million euro or 29.5 percent.
Factors contributing to the operating profit decline included increased
depreciation due to substantial investments, as well as cost increases that
could not be fully covered due to the downtrend of the beverage industry.
July to September 2012
The parent company's sales volume in the third quarter was on a par with the
previous year at 40.2 (40.1) million litres. Net sales also remained on the
previous year's level at 32.2 (32.3) million euro.
Operating profit in July-September declined clearly on the previous year.
Operating profit stood at 2.1 (4.6) million euro, which was 6.7 (14.3) percent
of net sales. The operating profit declined by 2.5 million euro in the third
quarter. The decline in operating profit was affected by a clear increase in
costs in the third quarter, attributable to challenges with production planning
as the overall consumption diminished.
AS A. LE COQ (A. Le Coq)
January to September 2012
The Estonian beverage market declined in January-September with the exception
of ciders and long drinks. The sales of ciders in Estonia increased by 12.4
percent, and long drinks by 1.9 percent. The sales of beers declined by 3.5
percent, mineral waters 2.9 percent, soft drinks 5.5 percent and juices 10.4
percent (Nielsen, June-July 2012).
The Estonian subsidiary A. Le Coq retained its strong market position in
January-September. The company's sales were on a par with the previous year at
105.5 (105.4) million litres.
The sales of the company's mineral waters increased by 8.3 percent during the
period under review. However, the sales of beers, ciders and juices remained on
the previous year's level. The sales of long drinks declined by 4.3 percent and
the sales of soft drinks by 8.2 percent.
In the Estonian beverage market, the company is superior in long drinks and
juices, and a strong market leader also in beers. In the cider market as well
as the soft drink market, A. Le Coq is the clear number two player. FIZZ is
Estonia's largest cider brand.
The company had a market share of 41 (40) percent in beers, 35 (38) in ciders
and 55 (52) in long drinks. The market share in juices (tetrapacks) was 33 (29)
percent, in soft drinks 29 (32) and in mineral waters 17 (16) percent (Nielsen,
June-July 2012).
The company's exports and tax-free sales declined on the previous year. Exports
and tax-free sales represented 3.6 (4.3) percent of total sales.
A. Le Coq's net sales from January to September amounted to 63.1 (59.9) million
euro, representing an increase of 3.2 million euro or 5.3 percent.
Operating profit in January-September declined by 0.4 million euro or 3.3
percent to 10.7 million euro. The operating profit represented 16.9 (18.4)
percent of net sales.
July to September 2012
A. Le Coq's sales in July-September amounted to 36.8 (36.5) million litres, an
increase of 0.3 million litres or 0.9 percent on the previous year.
The company's net sales increased by 0.9 million euro or 4.1 percent compared
to the previous year. Net sales from July to September amounted to 22.2 (21.3)
million euro.
The company's third-quarter operating profit stood at 4.4 (4.5) million euro,
or 19.8 (21.3) percent of net sales. The operating profit declined by 0.1
million euro or 3.3 percent.
A/S CESU ALUS (Cesu Alus)
January to September 2012
In the Latvian beverage market, the sales of beers and ciders declined in
January-September, while the long drink market was on a strong growth track.
The beer market declined by 0.8 percent and the cider market by 3.7 percent.
Sales of long drinks in Latvia increased by 16.1 percent (Nielsen, June-July
2012 and July 2012).
Cesu Alus operating in Latvia strengthened its market position in
January-September in spite of a decline in the company's total sales. The
company's sales from January to September amounted to 58.5 (59.6) million
litres, representing a decline of 1.1 million litres or 1.8 percent.
The sales of Cesu Alus's long drinks increased by 21.9 percent while the sales
of ciders declined by 21.8 percent. There was a 6.7 percent decline in the
sales of beers.
The sales of the company's energy drinks increased by more than 42 percent but
the sales of other soft drinks remained on a par with the previous year.
Cesu Alus had a market share of 31 (27) percent of the Latvian beer market
(Nielsen, July 2011), 55 (52) percent in ciders and 57 (53) percent in long
drinks (Nielsen, June-July 2012). The company is the clear market leader in
ciders and long drinks and equally strong as its largest competitor in beers.
The company's net sales from January to September amounted to 29.5 (28.1)
million euro, representing an increase of 1.4 million euro or 4.7 percent.
Operating profit in January-September stood at 1.8 (0.9) million euro, which
was 6.1 (3.1) percent of net sales. The operating profit improved substantially
by 0.9 million euro or 106.6 percent. The performance improvement was made
possible by increased sales prices and strict control of costs.
July to September 2012
Cesu Alus's sales in the third quarter declined by 0.7 million litres or 3.4
percent to 20.7 (21.4) million litres. Net sales amounted to 10.5 (10.4)
million euro. Net sales increased by 0.1 million euro or 0.7 percent compared
to the previous year.
The company's operating profit in July-September improved clearly by 0.3
million euro or 66.2 percent on the previous year. Operating profit stood at
0.8 (0.5) million euro, which was 7.9 (4.8) percent of net sales.
AB VOLFAS ENGELMAN (Volfas Engelman)
January to September 2012
The Lithuanian beer market declined in January-September by 4.9 percent while
the long drink market grew strongly by almost 35 percent. The sales of ciders
also increased by 8.8 percent. The kvass market declined by almost 14 percent
(Nielsen June-July 2012).
Volfas Engelman operating in Lithuania retained its good market position in
January-September. The company's sales increased by 3.9 million litres or 7.2
percent to 57.2 (53.3) million litres. The sales of the company's beers
increased by 11.7 percent, and long drinks by as much as 28.9 percent. The
sales of ciders declined by 9.0 percent. The sales of soft drinks (including
kvass) declined by 14.3 percent.
Volfas Engelman is the number three player in the largest product group, beers,
with a market share of 13 (10) percent. In long drinks, the company's market
share is 24 (30) percent, making it the market leader. In ciders, Volfas
Engelman is equally strong as its largest competitor with a market share of 32
(38) percent. The company is the clear market leader in the kvass market with
a market share of 29 (29) percent (Nielsen, June-July 2012).
The company's exports increased substantially in the review period, by 97.9
percent. Exports accounted for 2.4 (1.3) percent of total volume.
The company's net sales from January to September amounted to 27.1 (23.0)
million euro, representing an increase of 4.1 million euro or 17.5 percent. The
net sales increase clearly outperformed the increase in sales volume.
The company's operating profit improved clearly in January-September. Operating
profit stood at 1.7 (0.5) million euro, which was 6.5 (2.3) percent of net
sales. The operating profit improved by 1.2 million euro. The improvement in
operating profit was made possible by a clear increase in the average price of
net sales and strict control of costs.
July to September 2012
Volfas Engelman's sales from July to September amounted to 21.0 (20.0) million
litres, representing an increase of 1.0 million litres or 5.0 percent.
Third-quarter net sales stood at 10.5 (8.7) million euro, representing an
increase of as much as 1.8 million euro or 20.5 percent.
Operating profit in July-September amounted to 1.1 (0.7) million euro. The
operating profit improved substantially by 0.4 million euro or 58.2 percent.
OAO LIDSKOE PIVO (Lidskoe Pivo)
January to September 2012
After the devaluation in October 2011, the exchange rate of the Belarusian
rouble has now stabilised, and inflation is still decelerating. However, the
country's situation is still unstable, and consumer purchasing power has
weakened. Lidskoe Pivo's financial reporting is still subject to the IAS 29
standard “Financial Reporting in Hyperinflationary Economies”. Application of
the standard has an effect particularly when comparing the change in net sales
with the previous year.
During the first half of the year, the country's beverage markets declined in
all main product groups except kvass. The sales of beers declined by 16.6
percent and ciders by 3.0 percent. The soft drinks market declined by 3.4
percent, mineral waters 12.9 and juices by 17.6 percent. The sales of kvass
increased by 19.1 percent.
The day-to-day operations of Lidskoe Pivo in Belarus have continued to develop
well in spite of the economic situation prevailing in the country. The
company's sales from January to September amounted to 111.3 (101.0) million
litres, representing an increase of 10.3 million litres or 10.2 percent.
The sales of the company's beers increased by one percent but the sales of
ciders declined by 5.8 percent. The sales of soft drinks and kvass increased by
19.9 percent and the sales of mineral waters by 33.3 percent. There was a 15.4
percent decline in the sales of juices.
The company's market position has become stronger. Lidskoe Pivo is a clear
market leader in ciders, kvass and juices. Its market share in ciders is 62
(73), in kvass 60 (50) and in juices 45 (31) percent. The market share in beers
is 12 (10) percent. In soft drinks and mineral waters, the company's market
share is slightly over two percent (Nielsen June-July 2012).
The company's exports in January-September increased by 66.7 percent on the
previous year. Exports made 10.3 (6.8) percent of the company's total sales.
The main destinations for exports were Russia and Lithuania.
Lidskoe Pivo's net sales for the reporting period amounted to 45.4 (34.9)
million euro, representing an increase of 10.5 million euro or 29.9 percent.
Factors contributing to net sales growth included favourable development of
sales volumes and a sustained good average price of net sales.
The operating profit for the period improved substantially and amounted to 4.6
(2.6) million euro, which was 10.1 (7.5) percent of net sales. The operating
profit increased by 2.0 million euro or 74.1 percent compared to the previous
year. The operating profit increase was attributable to improved efficiency
made possible by the commissioning of substantial investments, improved
profitability in all product groups, as well as successful new product
launches.
July to September 2012
The company's sales in the third quarter amounted to 42.8 (40.8) million
litres, representing an increase of 2.0 million litres or 4.9 percent.
The company's net sales increased by 3.0 million euro or 20.0 percent to 18.0
(15.0) million euro.
Lidskoe Pivo's operating profit in the third quarter amounted to 2.8 (1.1)
million euro. The operating profit improved substantially by 1.6 million euro
or 145.0 percent.
FINANCING AND INVESTMENTS
Olvi Group's balance sheet total at the end of September 2012 was 270.4 (237.0)
million euro. Equity per share in January-September stood at 6.88 (5.63) euro,
an increase of +1.25 euro per share or 22.2 percent on the previous year. The
equity ratio of 53.4 (49.7) percent improved by 3.7 percentage points on the
previous year.
The amount of interest-bearing liabilities was 63.5 (62.5) million euro,
including current liabilities of 19.5 (28.7) million euro.
During the period under review, the Group's gross capital expenditure amounted
to 22.8 (31.5) million euro. The parent company Olvi accounted for 10.7 million
euro and the subsidiaries in the Baltic states for 3.5 million euro of the
total. Lidskoe Pivo's gross capital expenditure in January-September was 8.6
million euro.
The largest investments in Finland in 2012 included the commissioning of a new
can filling line, the completion of a tank cellar extension, as well as
modernisation of beer filtering.
In the Baltic states, A. Le Coq's largest investments comprised extensions to
storage facilities and the pressure tank cellar, as well as a labelling machine
for glass bottles. Cesu Alus's major investments were associated with conveyors
for the glass bottle line, as well as other production machinery and equipment.
Volfas Engelman's investments consisted of a general renovation of the brewery,
a glass bottle reform, wine and kvass mixing equipment and other smaller
purchases of machinery and equipment.
The first stage of Lidskoe Pivo's extensive investment programme is mainly
completed. It included, among other things, storage, filling department and
tank cellar buildings, filling line machinery and equipment, an extension to
the kvass cellar, a new beer filter and air compressor.
RESEARCH AND DEVELOPMENT
Research and development includes projects to design and develop new products,
packages, processes and production methods, as well as further development of
existing products and packages. The R&D costs have been recognised as expenses.
The main objective of Olvi Group's product development is to create new
products for profitable and growing beverage segments.
NEW PRODUCTS
Finland
Olvi's new products for the autumn season were described in the previous
interim report.
Subsidiaries
The success story of Angry Birds soft drinks has continued in the autumn in the
Baltic subsidiaries. In the beginning of October, Cesu Alus in Latvia launched
Angry Birds Paradise, and Lidskoe Pivo in Belarus launched Angry Birds Tropic
Cola soft drinks. The licensing co-operation also continued through another
well-known brand with the launch of Hello Kitty strawberry-raspberry flavoured
soft drink across all of the subsidiaries. In Belarus, Hello Kitty soft drink
is also available with cola-caramel flavour.
Other new products included A. Le Coq's September launches of the 6.5-percent
A. Le Coq Strong beer and Dynami:t Green energy drink, which contains natural
caffeine. Cesu Alus launched the 6-percent Cēsu Porter beer, and Volfas
Engelman launched the Fortas Pils and 1410 beers.
PERSONNEL
Olvi Group's average number of personnel in January-September was 2,000
(2,069). The Group's average number of personnel decreased by 69 people or 3.3
percent. Personnel decreases were seen in Belarus, while in the other operating
areas, the number was either unchanged or increased slightly. At the end of
September, Olvi Group employed a total of 1,928 (2,029) people.
Olvi Group's average number of personnel by country:
1-9/2012 1-9/2011
Finland 411 (389)
Estonia 317 (316)
Latvia 221 (222)
Lithuania 211 (206)
Belarus 840 (936)
Total 2000 (2069)
GROUP STRUCTURE
During the reporting period in January-September, Olvi plc acquired a total of
407 shares in Cesu Alus, corresponding to 0.14 percent of the company's share
capital. At the end of September 2012, Olvi's holding in Cesu Alus was 99.67
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 total number of Olvi plc shares at the end of September 2012 was
20,758,808, of these 17,026,552 or 82.0 percent being publicly traded Series A
shares and 3,732,256 or 18.0 percent Series K shares. Each Series A share
carries one (1) vote and each Series K share carries twenty (20) votes. Olvi
held 1,124 of its own Series A shares on 30 September 2012 as treasury shares.
Treasury shares held by the company itself are ineligible for voting. Olvi's
share capital at the end of September 2012 stood at 20,758,808 euro.
The Olvi A share was quoted on Nasdaq OMX Helsinki (Helsinki Stock Exchange) at
18.15 (15.22) euro at the end of September 2012. In January-September, the
highest quote for the Series A share was 19.94 (19.86) euro and the lowest
quote was 14.75 (13.49) euro.
At the end of September 2012, the market capitalisation of the entire stock was
376.8 (315.9) million euro and the market capitalisation of Series A shares was
309.0 (259.1) million euro. In January-September, a total of 1,160,708
(2,296,430) Series A shares were traded, representing 6.8 (13.5) percent of the
total number of Series A shares. The value of trading was 20.5 (48.5) million
euro.
The number of shareholders at the end of the review period was 9,052 (9,006).
Foreign holdings plus foreign and Finnish nominee-registered holdings
represented 17.7 (18.4) percent of the total number of book entries and 6.1
(6.3) percent of total votes. Foreign and nominee-registered holdings are
reported in Table 5, Section 8 of the tables attached to this interim report,
and the largest shareholders are reported in Table 5, Section 9.
The company did not receive any flagging notices during the reporting period.
BUSINESS RISKS AND THEIR MANAGEMENT
Risk management is a part of Olvi Group's everyday management and operations.
It increases corporate security and contributes to the achievement of
operational targets. The objective of risk management is to operate proactively
and create operating conditions in which business risks are managed
comprehensively and systematically in all of the Group companies and all levels
of the organisation. In addition to the company itself, risk management
benefits its personnel, customers, shareholders and other related groups.
The objective of risk management is to ensure the realisation of the company's
strategy and secure the continuity of business. Olvi Group identifies,
assesses, manages and monitors its crucial risks regularly. With regard to
identified risks, the effects, scope and probability of realisation are
assessed together with the means of eliminating or reducing the risk.
Furthermore, risk management aims to identify and utilise any business
opportunities that may arise.
Olvi Group's strategic risks refer to risks related to the characteristics of
the company's business and strategic choices. The Group's operations are
located in several countries that differ substantially in terms of their social
and economic situations and the phases and directions of development. For
example, strategic risks relate to changes in tax legislation and other
regulations, the environment and foreign exchange markets. If realised,
strategic risks can substantially hamper the company's operational
preconditions. The Group's most substantial identified strategic risks are
associated with Belarus.
The Group's most substantial identified operational risks relate to the
procurement and quality of raw materials, the production process, markets and
customers, personnel, information security and systems, as well as changes in
foreign exchange rates.
Procurement of raw materials
General economic development and annual fluctuations in crop yield affect the
prices and availability of major raw materials used within Olvi Group.
Disruptions in raw material deliveries may hamper customer relations and
business operations. Purchases of major raw materials are made under
procurement contracts standardised at the Group level. The predictability of
purchase prices for the most critical raw materials is improved through
long-term procurement agreements and potentially derivatives. All units
emphasise the significance of the quality of raw materials and other production
factors in the overall production chain.
Production process
The aim is to minimise production risks through clear documentation of
processes, increasing the degree of automation, compliance with quality
management system and the pursuit of clear operating methods in relation to
decision-making and supervision. The efficiency and applicability of processes
and methods are monitored using internal indicators. The monitoring and
development of production efficiency includes, among other things, the
reliability and utilisation rate of production machinery, development of the
working environment and factors related to people's work. The Group has a
property and loss-of-profits insurance programme covering all of the operating
areas, and its coverage is reviewed annually.
Markets and customers
The Group's business operations are characterised by substantial seasonal
variation. The net sales and operating profit from the reported geographical
segments do not accumulate evenly but vary substantially according to the time
of the year and the characteristics of each season.
Negative changes in the economy may impact consumers' purchasing behaviour. All
Group companies employ efficient credit controls as a major method for
minimising credit losses.
Legislative changes and other changes in the operations of authorities may
affect the demand for products and their relative competitive position.
Personnel
Risks related to personnel include, among others, risks in obtaining labour,
employment relationship risks, key person risks, competence risks and risks
arising from insufficient well-being and accidents at work.
Crucial focal points in HR management include maintaining and developing a good
employer image, as well as ensuring the availability and commitment of
personnel. Other focal points include maintaining and developing well-being and
safety at work, management, training and incentive schemes, as well as the
construction and maintenance of backup personnel systems.
Information security and IT
Olvi Group employs an information security policy pertaining to all of the
companies. It defines the principles for implementing information security and
provides guidelines for its development.
Risks related to information technology and systems are manifested as
operational disruptions and deficiencies, for example. The availability and
correctness of data is ensured through the choice of operating methods and
various technical solutions. The Group's operations in Finland and the Baltic
states utilise a common enterprise resource planning system, which will be
introduced in Belarus during the current accounting period. A risk analysis
pertaining to information security and the operation of information systems is
carried out annually.
Financing risks
The Group operates in an international market and is therefore exposed to
foreign exchange risk due to changes in exchange rates. Foreign exchange risk
consists of sales, purchases and balance sheet items in foreign currency
(transaction risk), as well as investments and loans in foreign subsidiaries
(valuation risk). Foreign exchange risk is reduced by the fact that most of the
Group's product sales and purchases of raw materials are denominated in euro.
The objective of financing risks management is to protect the Group against
unfavourable changes in the financial markets and to secure the Group's
earnings development, liquidity and equity. The parent company's financial
management bears central responsibility for the Group's financing and the
management of financing risks in accordance with principles confirmed by the
Group's Board of Directors. The objectives of centralisation include
optimisation of cash flows, cost savings and efficient risk management.
Financing risks are described in more detail in the Investors section of the
corporate Web site.
BUSINESS RISKS AND UNCERTAINTIES IN THE NEAR TERM
The economic situation and future development in Europe is still characterised
by uncertainty. However, the outlook for the daily consumer goods market can be
considered stable in comparison to many other industries. The economic
situation in Estonia is stable, and the economies of Latvia and Lithuania are
showing signs of resurrection. However, uncertainty and weakened consumer
purchasing power are impacting the volumes and price levels of grocery trade,
which will have an effect also on the beverage market trends.
The most substantial factor hampering the predictability of Olvi Group's
business relates to Belarus and its outlook for the next few years. The IAS 29
standard “Financial Reporting in Hyperinflationary Economies” will probably be
applied at least until 2014.
NEAR-TERM OUTLOOK
The full-year sales volumes and net sales level are expected to develop
favourably in 2012. The full-year operating profit is estimated to equal or
slightly exceed the previous year's result.
OLVI PLC
Board of Directors
Further information:
Lasse Aho, Managing Director
Phone +358 290 00 1050 or +358 400 203 600
TABLES:
- Statement of comprehensive income, Table 1
- Balance sheet, Table 2
- Changes in shareholders' equity, Table 3
- Cash flow statement, Table 4
- Notes to the interim report, Table 5
DISTRIBUTION
NASDAQ OMX Helsinki Ltd
Key media
www.olvi.fi
OLVI GROUP TABLE 1
INCOME STATEMENT
EUR 1,000
7-9/201 7-9/201 1-9/201 1-9/201 1-12/201
2 1 2 1 1
Net sales 88240 82602 241645 224268 285174
Other operating income 71 86 336 337 522
Operating expenses -71443 -67019 -200073 -186006 -240376
Depreciation and impairment -5642 -4265 -15986 -13373 -18637
Operating profit 11225 11404 25922 25226 26683
Financial income 801 46 3489 132 8352
Financial expenses -947 -1753 -1796 -10080 -16596
Financial expenses - net -146 -1707 1693 -9948 -8244
Earnings before tax 11079 9697 27615 15278 18439
Taxes *) -1239 -2585 -5357 -2727 -5485
NET PROFIT FOR THE PERIOD 9840 7112 22258 12551 12954
Other comprehensive income items:
Translation differences related to
foreign subsidiaries -831 -1242 2273 -13603 -15170
TOTAL COMPREHENSIVE INCOME FOR THE 9009 5870 24531 -1052 -2216
PERIOD
Distribution of profit:
- parent company shareholders 9669 7115 21860 12916 13506
- non-controlling shareholders 171 -3 398 -365 -552
Distribution of comprehensive profit:
- parent company shareholders 8897 5958 24130 242 -340
- non-controlling shareholders 112 -88 401 -1294 -1876
Earnings per share calculated from the profit belonging
to parent company shareholders, EUR
- undiluted 0.47 0.34 1.05 0.62 0.65
- diluted 0.47 0.34 1.05 0.62 0.65
*) Taxes calculated from the profit for the review period.
OLVI GROUP TABLE 2
BALANCE SHEET
EUR 1,000
30.9.2012 30.9.2011 30.12.2011
ASSETS
Non-current assets
Property, plant and equipment 147022 124963 142443
Goodwill 17610 14083 16761
Other intangible assets 1742 1273 1017
Shares in associates 1077 0 0
Financial assets available for sale 549 544 548
Loan receivables and other non-current 160 138 141
receivables
Deferred tax receivables 84 2447 196
Total non-current assets 168244 143448 161106
Current assets
Inventories 45111 39959 35875
Accounts receivable and other receivables 53716 47321 52718
Income tax receivable 317 216 0
Other non-current assets available for sale 163 56 56
Liquid assets 2892 6000 3836
Total current assets 102199 93552 92485
TOTAL ASSETS 270442 237000 253591
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity held by parent company shareholders
Share capital 20759 20759 20759
Other reserves 1092 1092 1092
Treasury shares -8 -8 -8
Translation differences -15977 -17075 -18248
Retained earnings 136857 112022 123286
Total shareholders' equity held by parent 142723 116790 126881
company shareholders
Share belonging to non-controlling interests 1818 942 1341
Total shareholders' equity 144541 117732 128222
Non-current liabilities
Loans 43954 31843 29436
Other liabilities 500 1999 1513
Deferred tax liabilities 2633 1915 2097
Current liabilities
Loans 19540 27714 27039
Accounts payable and other liabilities 57830 54858 64953
Income tax liability 1445 939 331
Total liabilities 125902 119268 125369
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 270442 237000 253591
OLVI GROUP TABLE 3
CHANGES IN OLVI GROUP'S CONSOLIDATED SHAREHOLDERS' EQUITY
Share Other Treasu Transl Accru Share of Total
capita reserv ry ation ed non-contr
l es shares differ earni olling
accoun ences ngs interests
t
EUR 1,000
Shareholders' equity 1 20759 1092 -222 -4402 10975 2277 129254
Jan 2011 0
Comprehensive income
Net profit for the period 12916 -365 12551
Other comprehensive income items
Translation differences -12673 -930 -13603
Total comprehensive income for the -12673 12916 -1295 -1052
period
Transactions with shareholders
Payment of dividends -1066 -10660
0
Acquisition of shares from non-
controlling shareholders 14 14
Change in share belonging to non-
controlling interests -40 -40
Transfer of treasury shares 214 -214 0
Gains from transfer of treasury shares 216 216
Shareholders' equity 20759 1092 -8 -17075 11202 942 117732
30 Sep 2011 2
Share Other Treasu Transl Accru Share of Total
capita reserv ry ation ed non-contr
l es shares differ earni olling
accoun ences ngs interests
t
EUR 1,000
Shareholders' equity 1 20759 1092 -8 -18248 12328 1341 128222
Jan 2012 6
Adjustments for hyperinflation 2033 187 2220
Adjusted shareholders' 20759 1092 -8 -18248 12531 1528 130442
equity 1 Jan 2012 9
Comprehensive income
Net profit for the period 21860 398 22258
Other comprehensive income items
Translation differences 2271 2 2273
Total comprehensive income for the 2271 21860 401 24531
period
Transactions with shareholders
Payment of dividends -1037 -14 -10393
9
Acquisition of shares from non-
controlling shareholders 20 20
Change in share belonging to non-
controlling interests 37 -37 0
Reduction of share capital -60 -60
Shareholders' equity 20759 1092 -8 -15977 13685 1818 144541
30 Sep 2012 7
Other reserves include the share premium account, legal reserve and other
reserves.
OLVI GROUP TABLE 4
CASH FLOW STATEMENT
EUR 1,000
1-9/2012 1-9/2011 1-12/2011
Net profit for the period 22258 12551 12954
Adjustments to profit for the period 24822 16650 32530
Change in net working capital -12601 -14007 -3910
Interest paid -1552 -1398 -2205
Interest received 184 86 151
Taxes paid -3841 -4408 -5064
Cash flow from operations (A) 29270 9474 34456
Investments in tangible assets -22499 -21243 -33358
Investments in intangible assets -1111 -643 -295
Sales gains from tangible and intangible
assets 139 4446 130
Expenditure on other investments -582 1 -2980
Cash flow from investments (B) -24054 -17439 -36503
Withdrawals of loans 36987 30772 30266
Repayments of loans -32712 -14314 -17103
Increase (-) / decrease (+) in current interest-
bearing business receivables 2 -2 0
Dividends paid -10378 -10382 -10377
Cash flow from financing (C) -6100 6074 2785
Increase (+)/decrease (-) in liquid assets -884 -1891 738
(A+B+C)
Liquid assets 1 January 3836 7891 7891
Effect of exchange rate changes -60 0 -4793
Liquid assets 30 Sep/31 Dec 2892 6000 3836
OLVI GROUP TABLE 5
NOTES TO THE INTERIM REPORT
The accounting policies used for this interim report are the same as those used
for the annual financial statements 2011. The accounting policies are presented
in the Annual Report 2011 which was published on 19 March 2012. 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 2012:
- IFRS 7 (Amendment), Financial Instruments: Disclosures - Derecognition
- IAS 12 (Amendment), Income taxes - Deferred tax
1. SEGMENT INFORMATION
SALES BY GEOGRAPHICAL SEGMENT (1,000 litres)
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
2012 2011 2012 2011 2011
Olvi Group total 149867 147470 411228 401509 518211
Finland 40185 40106 113965 112380 149084
Estonia 36842 36498 105542 105368 133421
Latvia 20698 21423 58490 59565 75352
Lithuania 20954 19958 57157 53305 67540
Belarus 42812 40831 111260 100989 128005
- sales between segments -11624 -11346 -35186 -30098 -35191
NET SALES BY GEOGRAPHICAL SEGMENT (EUR 1,000)
7-9/ 7-9/ 1-9/ 1-9/ 1-12/ 2012 2011 2012 2011 2011
Olvi Group total 88240 82601 241645 224268 285174
Finland 32170 32258 92150 90671 119788
Estonia 22177 21307 63135 59940 75964
Latvia 10462 10391 29463 28145 35184
Lithuania 10483 8701 27061 23025 29495
Belarus 17996 14991 45376 34919 39609
- sales between segments -5048 -5047 -15541 -12432 -14866
OPERATING PROFIT BY GEOGRAPHICAL SEGMENT (EUR 1,000)
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
2012 2011 2012 2011 2011
Olvi Group total 11225 11404 25922 25226 26683
Finland 2149 4611 7158 11709 13239
Estonia 4381 4532 10692 11053 12973
Latvia 822 495 1811 877 737
Lithuania 1108 701 1747 523 411
Belarus 2752 1123 4573 2626 737
- eliminations 13 -58 -59 -1562 -1414
2. PERSONNEL ON AVERAGE 1-9/2012 1-9/2011 1-12/2011
Finland 411 389 383
Estonia 317 316 311
Latvia 221 222 217
Lithuania 211 206 205
Belarus 840 936 916
Total 2000 2069 2032
3. RELATED PARTY TRANSACTIONS
Employee benefits to management
Salaries and other short-term employee benefits to the Board of Directors and
Managing Directors
EUR 1,000
1-9/2012 1-9/2011 1-12/2011
Managing Directors 778 844 1017
Chairman of the Board 62 129 150
Other members of the Board 91 92 125
Total 931 1065 1292
4. SHARES AND SHARE CAPITAL
30.9.2012 %
Number of A shares 17026552 82.02
Number of K shares 3732256 17.98
Total 20758808 100.00
Total votes carried by A shares 17026552 18.57
Total votes carried by K shares 74645120 81.43
Total number of votes 91671672 100.00
The registered share capital on 30 September 2012 totalled 20,759 thousand euro.
Olvi plc's Series A and Series K shares received a dividend of 0.50 euro per
share for 2011 (0.50 euro per share for 2010), totalling 10.4 (10.4) million
euro. The dividends were paid on 23 April 2012. The Series K and Series A
shares entitle to equal dividend.
The Articles of Association include a redemption clause concerning Series K
shares.
Olvi plc held a total of 1,124 of its own Series A shares on 1 January 2012.
Olvi plc has not acquired more treasury shares or transferred them to others in
January-September 2012, which means that the number of Series A shares held by
the company was unchanged on 30 September 2012. The purchase price of the
Series A shares held as treasury shares totalled 8.5 thousand euro.
Series A shares held by Olvi plc as treasury shares represented 0.005 percent
of the share capital and 0.001 percent of the aggregate number of votes. The
treasury shares represented 0.007 percent of all Series A shares and associated
votes.
On 11 April 2012, the General Meeting of Shareholders of Olvi plc decided to
revoke any unused authorisations to acquire treasury shares and authorise the
Board of Directors of Olvi plc to decide on the acquisition of the company's
own shares using distributable funds. The authorisation is valid for one year
starting from the General Meeting and covers a maximum of 500,000 Series A
shares.
The Annual General Meeting also decided to revoke all existing unused
authorisations for the transfer of own shares and authorise the Board of
Directors to decide on the issue of a maximum of 1,000,000 new Series A shares
and the transfer of a maximum of 500,000 Series A shares held as treasury
shares.
In January-September 2012, the Board of Directors of Olvi plc has not exercised
the authorisations granted by the General Meeting.
6. NUMBER OF SHARES *) 1-9/2012 1-9/2011 1-12/2011
- average 20757684 20749272 20751392
- at end of period 20757684 20757684 20757684
*) Treasury shares deducted.
7. TRADING OF SERIES A SHARES ON THE HELSINKI STOCK EXCHANGE
1-9/2012 1-9/2011 1-12/2011
Trading volume of Olvi A shares 1160708 2296430 3208911
Total trading volume, EUR 1,000 20512 48535 62299
Traded shares in proportion to
all Series A shares, % 6.8 13.5 18.8
Average share price, EUR 17.58 23.27 16.68
Price on the closing date, EUR 18.15 15.22 14.75
Highest quote, EUR 19.94 19.86 19.86
Lowest quote, EUR 14.75 13.49 13.49
8. FOREIGN AND NOMINEE-REGISTERED HOLDINGS ON 28 SEPTEMBER 2012
Shareholders Book entries Votes
qty % qty % qty %
Finnish total 9004 99.47 17078355 82.27 86047747 93.87
Foreign total 40 0.44 412969 1.99 2356441 2.57
Nominee-registered (foreign) 2 0.02 1107 0.01 1107 0.00
total
Nominee-registered (Finnish) 6 0.07 3266377 15.73 3266377 3.56
total
Total 9052 100.00 20758808 100.00 91671672 100.00
9. LARGEST SHAREHOLDERS ON 28 SEPTEMBER 2012
Series Series A Total % Votes %
K
1. Olvi Foundation 2363904 896332 3260236 15.71 48174412 52.55
2. Hortling Heikki 901424 155674 1057098 5.09 18184154 19.84
Wilhelm *)
3. The Heirs of Hortling 187104 25248 212352 1.02 3767328 4.11
Kalle Einari
4. Hortling Timo Einari 165824 34608 200432 0.97 3351088 3.66
5. Hortling-Rinne Laila 102288 2100 104388 0.50 2047860 2.23
Marit
6. Pohjola Bank plc, nominee 1895700 1895700 9.13 1895700 2.07
register
7. Ilmarinen Mutual Pension 1069026 1069026 5.15 1069026 1.17
Insurance Company
8. Nordea Bank Finland plc, 859780 859780 4.14 859780 0.94
nominee register
9. Nasdaq OMXBS/Skandinaviska Enskilda
Banken AB, nominee register 460436 460436 2.22 460436 0.50
10. Autocarrera Oy Ab 460000 460000 2.22 460000 0.50
Others 11712 11167648 11179360 53.85 11401888 12.43
Total 3732256 17026552 20758808 100.00 91671672 100.00
*) The figures include the shareholder's own holdings and shares held by parties
in his control.
10. PROPERTY, PLANT AND EQUIPMENT
EUR 1,000
1-9/2012 1-9/2011 1-12/2011
Increase 22306 31278 42937
Decrease -759 -4622 -6436
Total 21547 26656 36501
11. CONTINGENT LIABILITIES 30.9.2012 30.9.2011 31.12.2011
EUR 1,000
Pledges and contingent liabilities
For own commitments 7513 3511 4632
For others 130 134 130
Leasing liabilities:
Due within one year 575 512 644
Due within 1 to 5 years 845 852 663
Due in more than 5 years 0 0 0
Total leasing liabilities 1420 1364 1307
Package liabilities 2597 3778 4208
Other liabilities 2000 1980 1980
12. CALCULATION OF FINANCIAL RATIOS
Equity to total assets, % = 100 * (Shareholders' equity belonging to parent
company shareholders + non-controlling interests + voluntary provisions and
depreciation difference deducted by deferred tax liability)/(Balance sheet
total - advances received)
Earnings per share (EPS) = (Profit before taxes - taxes +/- non-controlling
interests)/ Average number of shares during the year, adjusted for share issues
Equity per share = (Shareholders' equity + voluntary provisions and
depreciation difference deducted by deferred tax liability and non-controlling
interests) / Number of shares at end of period, adjusted for share issues
Gearing, % = 100 * (Interest-bearing liabilities + advances received - cash and
other liquid assets) /(Shareholders' equity + voluntary provisions and
depreciation difference deducted by deferred tax liability)
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