2016-12-21 08:00:37 CET
2016-12-21 08:00:37 CET
REGULATED INFORMATION
Kotipizza Group Oyj - Interim report (Q1 and Q3)
Kotipizza Group Oyj: COMPARABLE NET SALES GROWTH OF 19% AND 23% COMPARABLE EBITDA GROWTH IN THE THIRD QUARTER OF THE FINANCIAL YEAR
KOTIPIZZA GROUP OYJ INTERIM REPORT 1 FEBRUARY - 31 OCTOBER 2016
COMPARABLE NET SALES GROWTH OF 19% AND 23% COMPARABLE EBITDA GROWTH
IN THE THIRD QUARTER OF THE FINANCIAL YEAR
August-October 2016 (8-10/2015)
* Chain-based net sales grew 16.4% (7.4%)
* Comparable net sales were 17.1 MEUR (14.4). Growth was 18.9%
* Comparable EBITDA was 1.88 MEUR (1.53). EBITDA growth was 22.8%
* Comparable EBIT was 1.64 MEUR (1.38)
February-October 2016 (2-10/2015)
* Chain-based net sales grew 16.2% (7.9%)
* Comparable net sales were 49.1 MEUR (41.8). Growth was 17.5%
* Comparable EBITDA was 5.20 MEUR (3.86). EBITDA growth was 34.6%
* Comparable EBIT was 4.46 MEUR (3.43)
* Net gearing was 27.3 percent (37.0%)
* Equity ratio was 51.8 percent (52.4%)
KOTIPIZZA GROUP UPGRADES ITS OUTLOOK FOR THE FINANCIAL YEAR
New outlook
The Group estimates for the full financial year that the chain-based net sales
will grow by approximately fifteen (15) percent as compared to the previous
financial year and that comparable EBITDA will grow significantly as compared to
the previous year.
Old outlook, provided on 23 August, 2016, and reiterated on 28 September, 2016
The Group estimates for the full financial year that the chain-based net sales
will grow by over ten (10) percent as compared to the previous financial year
and that comparable EBITDA will grow significantly as compared to the previous
year.
IMPACT OF NEW ESMA GUIDELINES
New ESMA (European Securities and Markets Authority) guidelines on Alternative
Performance Measures (APMs) are effective for the financial year 2016. Kotipizza
Group presents APMs to reflect the underlying business performance and to
enhance comparability between financial periods. APMs should not be considered
as a substitute for measures of performance in accordance with the IFRS. Items
affecting comparability and APMs used by Kotipizza Group are defined in note 6
of this report.
KEY FIGURES, TEUR 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16
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Comparable figures
Comparable net sales 17 132 14 409 49 079 41 765 56 370
Comparable EBITDA 1 883 1 533 5 196 3 861 5 026
Comparable EBITDA of
11.0% 10.6% 10.6% 9.2% 8.9%
net sales, %
Comparable EBIT 1 638 1 376 4 458 3 428 4 274
Reported figures
Chain-based net sales 22 847 19 635 66 055 56 844 77 266
Reported net sales 18 038 14 409 50 329 41 765 56 370
Reported EBITDA 1 716 1 503 4 886 3 022 4 187
Reported EBITDA of
net sales, %
9.5% 10.4% 9.7% 7.2% 7.4%
1 470 1 346 4 148 2 589 3 435
Reported EBIT
Earnings per share 0.16 0.12 0.44 -0.17 0.05
Net cash flows from operating 4 190 -2 905 -671
activities
Net cash used in investment -179 -773 -1 770
activities
Net gearing, % 27.3 37.0 31.8
Equity ratio, % 51.8 52.4 51.8
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Tommi Tervanen, CEO of Kotipizza Group
"Kotipizza's chain-based net sales continued their strong growth in the third
quarter of the financial year. The chain's net sales continued on a good level
both in same-store sales and in number of customers. The number of customers
increased 13.2% and the average purchase 5.7% in the brick-and-mortar
restaurants. The online store also continued to develop and during the review
period, orders made through the online store amounted to roughly a tenth of the
net sales in brick-and-mortar restaurants. The chain-based net sales growth was
16.4% in August-October, being clearly above the average growth in the Finnish
fast food market.
We expect that chain-based net sales will continue to develop favorably.
Achieving similar relative growth figures will however become more challenging
month after month as comparison months from the previous year are getting
tougher.
There are several reasons behind the strong growth in chain-based net sales. One
of the main reasons is Kotipizza's brand and concept renewal, which was started
at full speed at the beginning of 2015 and which has now been mostly finalized.
The Group has consistently developed the Kotipizza chain in the spirit of the
fast casual phenomenon, that is, emphasizing the freshness, authenticity and
sustainability of the food, as well as actively following developments in food
trends and consumer tastes. During the review period, this emphasis has been
particularly evident in emphasis on vegetarian options. For example, during the
popular "meat-free October" campaign the sales of vegetarian pizzas grew by 16%
in the online store.
Part of our emphasis on fast casual is the Mexican-style Chalupa chain started
in September 2015. During the review period, Chalupa continued to develop its
concept and strengthen its position on a franchising basis. At the end of the
review period, three brick-and-mortar Chalupa restaurants were operating in
Helsinki, and one in each of Kauniainen, Tampere, and Jyväskylä. In addition,
Chalupa products were available in one Kotipizza lunch restaurant. We don't
expect the Chalupa operations to become profitable in the near future, but
rather see the segment as an investment in the fast casual phenomenon and the
future growth of the Group.
Comparable net sales grew 18.9% in the third quarter of the year and were 17.1
MEUR (14.4). Comparable EBITDA was 1.88 MEUR (1.53) in the third quarter, a
growth of 22.8%. We are still on pace with our medium-term financial goals, both
in terms of the development of chain-based sales as well as that of EBITDA. The
financial standing of the Group is also on a solid ground at the end of the
quarter with Net gearing at 27 percent and equity ratio 52 percent. The Group's
net cash flow from operating activities in February-October was 4.2 MEUR.
We don't expect any material changes to the chained fast food market this year
compared to the previous year. The economic growth in Finland is expected to be
slow and to underperform Eurozone. The development of the national economy has a
direct impact to consumer demand and to demand for chained fast food. However,
according to the statistics demand growth for fast food has been stable, closely
following the overall economic development, during the past 15 years in Finland.
The growth of our chain-based net sales exceeded the market growth for chained
fast food in year 2015 based on the ongoing brand and concept renewal in
Kotipizza, innovative R&D and sustainable procurement. Based on the positive
chain-based net sales development in the beginning of the year and management's
view on the market development for the rest of the year we expect our chain
based net sales to exceed the fast food market average growth in Finland in
2016.
We have upgraded our outlook for the financial year. We estimate the group's
chain-based net sales will during the present financial year grow by
approximately fifteen (15) percent as compared to the previous financial year,
and the comparable gross margin/EBITDA will grow significantly as compared to
the previous financial year."
GROUP NET SALES
August-October 2016
Chain-based net sales continued strong and grew 16.4% (7.4%) year on year in the
third quarter of the financial year and were 22.9 MEUR (19.6). Average purchase
grew 5.7% and the number of customers 13.4% compared to the same period in the
previous year. The strong performance is based on renewed concept, brand,
successful marketing, and the emphasis placed on our online store and digital
presence.
Kotipizza classic Americana together with Kotipizza premium product Lankkupizza
had successful campaigns in TV, social and online media. At the end of October
Kotipizza had lower calorie Kana Kotzone in a TV campaign and Kotipizza
introduced alongside the campaign a new Falafel Kotzone, which received a very
good response due to increased interest in vegetarian food. Kotipizza had
altogether 50 campaign days during the third quarter this year compared to 41 in
the previous year. Increased investments in our own social media channels
received very positive feedback. We launched for example an online series on
Kotipizza franchisees and started co-operation together with top Finnish YouTube
stars. Three new Kotipizza restaurants were opened and two closed during the
third quarter of the financial year.
Comparable net sales for the third quarter of the financial year were 17.1 MEUR
(14.4) and they grew 18.9% compared to same period in the previous year.
Reported net sales were 18.0 MEUR (14.3) and they grew 25.2% compared to same
period in the previous year. The reported sales included 0.9 MEUR items
affecting comparability related to advertising and marketing fund flows of
Kotipizza's Franchisee Co-operative, which pass through Kotipizza-division's P&L
without result effect. A separate stock exchange release on this was given on
30 May 2016. Comparable net sales growth was mainly based on Foodstock's
increased sales volume to Kotipizza underpinned by the good chain-based sales
development. New customers of Foodstock, Fafa's, Espresso House and
Siipiravintolat chain, which were not yet Foodstock's customers in the previous
year, increased net sales. The net sales of Foodstock grew 23.3% year on year in
the third quarter of the financial year and were 13.8 MEUR (11.2). The Kotipizza
segment's net sales increased 40.3% compared to the previous year and were 4.2
MEUR (3.0). The Chalupa segment's net sales in the third quarter of the
financial year were EUR 65 thousand (EUR 231 thousand).
February-October 2016
Chain-based net sales grew 16.2% (7.9%) year on year in February-October and
were 66.1 MEUR (56.8). The chain-based net sales growth was based on both an
increase in the average purchase and increase in number of customers. The
comprehensive menu renewal done in summer 2014, successful new products together
with targeted, influential and sustainability emphasized marketing has
positively changed consumers' brand experience of Kotipizza. This has been seen
as an increase in the number of customers. Nine new Kotipizza restaurants were
opened and twelve closed during the review period.
The chain-based net sales is the total combined net sales of the company's
franchisees, based on which the company's franchising fees are invoiced monthly.
Comparable net sales for February-October were 49.1 MEUR (41.8) and they grew
17.5% compared to same period in the previous year. Reported net sales were
50.3 MEUR (41.8). The reported sales included 1.2 MEUR items affecting
comparability related to advertising and marketing fund flows of Kotipizza's
Franchisee Co-operative, which pass through Kotipizza division's P&L without
result effect. A separate stock exchange release on Kotipizza's Marketing Co-
operative's change into Franchisee Co-operative was given on 30 May 2016.
Comparable net sales growth was mainly based on Foodstock's increased sales
volume to Kotipizza underpinned by the good chain-based sales development. New
customers of Foodstock, Fafa's, Espresso House and the Siipiravintolat chain,
which were not yet Foodstock's customers in the previous year, increased net
sales. The net sales of Foodstock grew 19.4% year on year in February-October
and were 39.0 MEUR (32.7). The Kotipizza segment's net sales increased 24.0%
compared to the previous year and were 10.9 MEUR (8.8). The Chalupa segment's
net sales in the February-October were 0.5 MEUR (0.3).
GROUP EBIT
August-October 2016
Comparable EBIT of the Group was 1.64 MEUR (1.38) in the third quarter of the
financial year. Reported EBIT was 1.47 MEUR (1.35). Reported EBIT included MEUR
0,17 of items affecting comparability (calculatory, non-cash), which were
related to incentive plan introduced on 6 May 2016 and other incentive plans in
the group. The reported EBIT of the previous year included EUR 30 thousand of
items affecting comparability related to listing the company's shares to the
Nasdaq OMX Helsinki stock exchange. These items had a cash flow effect.
The EBIT improved mainly due to volume improvement, but sales margin also
improved slightly from the previous year. Clearly higher depreciations compared
to the previous year (non-cash item) had a negative impact on the EBIT.
February-October 2016
Comparable EBIT of the Group was 4.46 MEUR (3.43) in February-October. Reported
EBIT was 4.15 MEUR (2.59). Reported EBIT included MEUR 0,31 of items affecting
comparability (calculatory, non-cash), which were related to incentive plan
introduced on 6 May 2016 and other incentive plans in the group. The reported
EBIT of the previous year included 0.84 MEUR of items affecting comparability.
Costs amounting to MEUR 0.23 related to initial public offering of company's
shares to the Nasdaq OMX Helsinki Oy's stock exchange and 0.50 MEUR due to
closing permanently down Kotipizza Oyj's previous headquarters in Vaasa had a
cash flow effect. In addition, previous year's reported EBIT included 0.12 MEUR
non-cash deferral error related to Foodstock's inventory as an item affecting
comparability.
The EBIT improved mainly due to volume improvement, but sales margin also
improved slightly from the previous year. Fixed cost growth was also below the
volume growth. Clearly higher depreciations compared to the previous year (non-
cash item) had a negative impact on the EBIT.
SALES AND EBITDA OF THE SEGMENTS
KOTIPIZZA SEGMENT
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EUR THOUSAND 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16
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Comparable net sales 3 298 2 997 9 598 8 749 11 784
Net sales 4 204 2 997 10 849 8 749 11 784
Comparable gross margin/EBITDA 1 819 1 607 5 081 4 086 5 465
Depreciation and impairments -150 -111 -441 -315 -584
Comparable EBIT 1 670 1 496 4 640 3 771 4 881
Reported gross margin/EBITDA 1 785 1 607 5 018 3 817 5 196
Reported EBIT 1 635 1 496 4 577 3 502 4 612
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Olli Väätäinen, COO of Kotipizza
"Continuously strong sales growth has marked all operations in the Kotipizza
chain during the review period. The rollout of the facelift of the restaurant
design has been largely finalized, and at the end of the review period, only a
handful of the chain's brick-mortar restaurants are yet to be renovated. At the
end of the review period, the number of restaurants stood at 255 (265). During
the review period, Kotipizza continued to develop its online store. Orders made
through the online store amounted to roughly a tenth of the net sales in brick-
and-mortar restaurants during the period."
August-October 2016
Comparable net sales of Kotipizza for the third quarter of the financial year
were 3.30 MEUR (3.00) and they increased 10.0% compared to same period in the
previous year. Net sales of Kotipizza for the third quarter of the financial
year were 4.20 MEUR (3.00) and they increased 40.3% compared to same period in
the previous year. The reported sales included 0.91 MEUR items affecting
comparability related to advertising and marketing fund flows of Kotipizza's
Franchisee Co-operative, which pass through Kotipizza-division's P&L without
result effect. A separate stock exchange release on this was given on 30 May
2016. The rest of the sales increase was based on growth in chain-based net
sales and in consequence all franchising contract based net sales increased.
Kotipizza's comparable EBITDA of was 1.82 MEUR (1.61) in the third quarter of
the financial year and it grew 13.2% compared to same period in the previous
year. Improvement in comparable EBITDA was mainly due to favourable development
of chain-based net sales in Kotipizza. Reported EBITDA was 1.79 MEUR (1.61) in
the third quarter of the financial year. Reported EBITDA included EUR 34
thousand of items affecting comparability (calculatory, non-cash), which were
related to incentive plan introduced on 6 May 2016 and other incentive plans in
the group.
February-October 2016
Comparable net sales of Kotipizza for the third quarter of the financial year
were 9.60 MEUR (8.75) and they increased 9.7% compared to same period in the
previous year. Net sales of Kotipizza for February-October were 10.85 MEUR
(8.75) and they increased 24.3% compared to same period in the previous year.
The reported sales included 1.25 MEUR items affecting comparability related to
advertising and marketing fund flows of Kotipizza's Franchisee Co-operative,
which pass through Kotipizza-division's P&L without result effect. A separate
stock exchange release on this was given on 30 May 2016. Rest of the increase in
net sales was based on growth in chain-based net sales and in consequence all
franchising contract based net sales increased.
Kotipizza's comparable EBITDA of was 5.09 MEUR (4.09) in February-October and it
grew 24.3% compared to same period in the previous year. Improvement in
comparable EBITDA was mainly due to restructuring measures implemented in the
segment's operations and favourable development of chain-based net sales in
Kotipizza. Reported EBITDA was 5.02 MEUR (3.82) in February-October. Reported
EBITDA included EUR 63 thousand of items affecting comparability (calculatory,
non-cash), which were related to incentive plan introduced on 6 May 2016 and
other incentive plans in the group. The previous year's comparable EBITDA for
the third quarter was adjusted with EUR 269 thousand of items affecting
comparability related to costs of closing down company's previous headquarters.
These items had a cash flow effect.
FOODSTOCK SEGMENT
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EUR THOUSAND 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16
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Comparable net sales 13 770 11 169 39 034 32 700 44 096
Net sales 13 770 11 169 39 034 32 700 44 096
Comparable gross margin/EBITDA 475 261 1 344 746 964
Depreciation and impairments -38 -28 -105 -85 -113
Comparable EBIT 437 233 1 239 661 851
Reported gross margin/EBITDA 466 261 1 328 631 849
Reported EBIT 428 233 1 223 546 736
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Anssi Koivula, CEO of Foodstock
"The strong sales growth in the Kotipizza chain has also been reflected in
Foodstock's operations during the review period. Despite the strong growth, we
have managed to take care of the reliability of our deliveries and our customer
service, thanks to which our customer satisfaction has remained high.
Foodstock's operations have also been affected by the Kotipizza chain's growing
emphasis on the sustainability and local ingredients. Foodstock has also taken a
continuously larger role in planning of the sourcing of the ingredients for the
Chalupa chain and is now responsible for the chain's sourcing. For Foodstock,
the review period has also been marked by the rollout of the unit's new visual
identity which reflects Foodstock's principles and values: reliability, agility,
continuously high quality, and modernity."
August-October 2016
Comparable net sales of Foodstock for the third quarter of the financial year
were 13.77 MEUR (11.17) and they grew 23.3% compared to same period in the
previous year. Reported net sales of Foodstock for the third quarter of the
financial year were 13.77 MEUR (11.17) and they grew 23.3% compared to same
period in the previous year. The reported net sales did not include items
affecting comparability. The growth in net sales was mainly due to favourable
development of Kotipizza chain-based net sales, which had a positive boost to
Foodstock's delivery volumes for the chain. Net sales to the Rolls burger chain
increased notably compared to the previous year. Positive volume effect of
Foodstock's new customers got in the previous year were also visible in the
reported numbers.
Foodstock's comparable EBITDA improved 81,9% from the previous year and was
0.48 MEUR (0.26) in the third quarter of the financial year. Improvement in the
comparable EBITDA was due to operational gearing related to increase in sales
volume and to favourable sales mix. Foodstock's reported EBITDA was 0.47 MEUR
(0.26) in the third quarter of the financial year. Reported EBITDA included EUR
9 thousand of items affecting comparability (calculatory, non-cash), which were
related to incentive plan introduced on 6 May 2016 and other incentive plans in
the group.
February-October 2016
Comparable net sales of Foodstock for February-October were 39.03 MEUR (32.70)
and they grew 19.4% compared to same period in the previous year. Reported net
sales of Foodstock for February-October were 39.03 MEUR (32.70) and they grew
19.4% compared to same period in the previous year. The reported net sales did
not include items affecting comparability. The growth in net sales was mainly
due to favourable development of Kotipizza chain-based net sales, which had a
positive boost to Foodstock's delivery volumes for the chain. Net sales to Rolls
burger chain also increased notably compared to the previous year. The positive
volume effect of Foodstock's new customers such as Fafa's, Espresso House and
the Siipiravintolat chain were also visible in the reported numbers.
Foodstock's comparable EBITDA was 1.34 MEUR (0.75) in February-October and it
grew 80.2% compared to the same period in the previous year. Improvement in the
comparable EBITDA was due to operational gearing related to increase in sales
volume. Foodstock's reported EBITDA was 1.33 MEUR (0.63) in February-October.
Reported EBITDA included EUR 16 thousand of items affecting comparability
(calculatory, non-cash), which were related to incentive plan introduced on 6
May 2016 and other incentive plans in the group. Previous year's EBITDA included
EUR 115 thousand of items (non-cash) affecting comparability, which were related
to Foodstock's accrual error.
CHALUPA SEGMENT
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TUHATTA EUROA 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16
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Comparable net sales 65 231 447 278 443
Net sales 65 231 447 278 443
Comparable gross margin/EBITDA -54 3 -148 -67 -66
Depreciation and impairments -5 -6 -26 -9 -18
Comparable EBIT -59 -3 -174 -76 -84
Reported gross margin/EBITDA -56 3 -152 -67 -66
Reported EBIT -61 -3 -178 -76 -84
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Iman Gharagozlu, Creative Director of Chalupa
"During the review period, the Chalupa chain continued to strengthen its
position on a franchising basis. At the same time, the work of refining, testing
and documenting the Chalupa concept continued, and the responsibility for
sourcing of ingredients was shifted to Foodstock. At the end of the review
period, three Chalupa restaurants were operating in Helsinki, and one each in
Kauniainen, Tampere, and Jyväskylä. Of the six restaurants, five are operated by
franchisees. In addition, Chalupa products were available in one Kotipizza lunch
restaurant."
August-October 2016
Chalupa's comparable net sales were EUR 65 thousand (EUR 231thousand) in the
third quarter of the financial year and comparable EBITDA was EUR -54 thousand
(EUR 3 thousand). Chalupa's reported net sales were EUR 65 thousand (EUR
231thousand) in the third quarter of the financial year and reported EBITDA was
EUR -56 thousand (EUR 3 thousand). Decline in net sales compared to the previous
year was due Chalupa owning only one restaurant at the end of the review period.
As the remaining five restaurants are sold to franchisees, Chalupa's revenue
recognition has changed from fully consolidating restaurants to consolidating
fees related to franchising contracts. Reported EBITDA included EUR 2 thousand
of items affecting comparability (calculatory, non-cash), which were related to
incentive plan introduced on 6 May 2016 and other incentive plans in the group.
Chalupa owned only one restaurant in Punavuori, Helsinki at the end of the
review period and the remaining five operated with franchising model.
February-October 2016
Chalupa's reported net sales were EUR 447 thousand (EUR 278 thousand) in
February-October and comparable EBITDA was EUR -148 thousand (EUR -67 thousand).
Chalupa's reported net sales were EUR 447 thousand (EUR 278 thousand) in
February-October and reported EBITDA was EUR -152 thousand (EUR -67 thousand).
Reported EBITDA included EUR 4 thousand of items affecting comparability
(calculatory, non-cash), which were related to incentive plan introduced on 6
May 2016 and other incentive plans in the group. Chalupa opened a new restaurant
in Helsinki in Munkkiniemi and in Tampere during the review period. Both of the
new restaurants were opened with franchising agreements. Restaurants in
Kauniainen and in Kallio, Helsinki were sold to franchisees during the review
period and Chalupa owned only one restaurant in Punavuori, Helsinki at the end
of the review period. This will in practise mean a change in the Chalupa
segment's reporting from fully consolidating restaurants into segments numbers
to consolidating fees related to franchising contracts.
OTHERS SEGMENT
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EUR THOUSAND 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16
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Comparable net sales 0 12 0 38 47
Net sales 0 12 0 38 47
Comparable gross margin/EBITDA -357 -338 -1 081 -904 -1 337
Depreciation and impairments -53 -12 -166 -24 -37
Comparable EBIT -410 -350 -1 247 -928 -1 374
Reported gross margin/EBITDA -479 -368 -1 307 -1 359 -1 792
Reported EBIT -532 -380 -1 473 -1 383 -1 829
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Others segment includes mainly operations of the group headquarters.
August-October 2016
Comparable and reported net sales of the Others segment were 0.00 MEUR (0.01) in
the third quarter of the financial year. Comparable EBITDA was -0.36 MEUR (-
0.34). Reported EBITDA was -0.48 MEUR (-0.37). Reported EBITDA included EUR 122
thousand of items affecting comparability (calculatory, non-cash), which were
related to incentive plan introduced on 6 May 2016 and other incentive plans in
the group. The previous year's comparable EBITDA included EUR 30 thousand of
items affecting comparability related to listing the company's shares to the
Nasdaq OMX Helsinki stock exchange. These items had a cash flow effect.
February-October 2016
Net sales of the Others segment were 0.04 MEUR (0.05) in February-October.
Comparable EBITDA was -1.08 MEUR (-0.90). Reported EBITDA was -1.31 MEUR (-
1.36). Reported EBITDA included EUR 226 thousand of items affecting
comparability (calculatory, non-cash), which were related to incentive plan
introduced on 6 May 2016 and other incentive plans in the group. In the previous
year reported EBITDA included EUR 455 thousand of items affecting comparability.
Out of items affecting comparability EUR 229 thousand were related to listing of
company's shares to Nasdaq OMX Helsinki stock exchange and EUR 226 thousand
related to closing down Kotipizza's Vaasa office. These items had a cash flow
effect.
FINANCIAL ITEMS AND RESULT
Finance costs in the third quarter of the year were MEUR 0.22 (0.28). Finance
costs in February-October were MEUR 0.61 (2.82). The materially higher financing
costs in February-October in the previous year were based on materially more
leveraged balance sheet structure together with higher interest rates on debt.
In addition to the normal finance costs in the previous year MEUR 0.90 cost
related to early redemption of the company's MEUR 30 unsecured bond.
Group taxes were MEUR -0.25 (-0.26) in the financial year.
The result of the period was MEUR 1.01 (0.76) in the financial year.
Earnings per share were EUR 0.16 (0.12) in the financial year.
THE GROUP'S FINANCIAL POSITION
Kotipizza Group's balance sheet total as of 31 October 2016 was MEUR 57.7
(54.4). The Group's non-current assets as at 31 October 2016 amounted to MEUR
40.2 (38.9), and current assets amounted to MEUR 17.5 (15.4).
The Group's net cash flow from operating activities for the financial year was
MEUR 4.2 (-2.9). Working capital was released the amount of MEUR 0.00 (released
0.87).
The net cash flow from investment activities for the period was MEUR -0.18 (-
0.78). Investments in tangible and intangible assets for the period amounted to
MEUR 0.58 (0.81), and proceeds from sales of tangible assets were MEUR 0.40
(0.00).
The net cash flow from financing activities was MEUR -2.94 (5.19). The Group
payed out MEUR 2.2 as distribution from Fund for invested unrestricted equity to
its shareholders during the review period.
The Group's equity ratio was 51.8% (52.4%).
Interest-bearing debt amounted to MEUR 17.3 (17.3), of which current debt
accounted for MEUR 0.35 (0.81). Kotipizza Group Oyj redeem in full its three-
year unsecured bond with a nominal value MEUR 30 on 11 August 2015 with the
proceeds from the 4 June 2015 announced and 6 October 2015 implemented Initial
Public Offering and the new MEUR 17.0 term loans withdrawn on 7 August 2015. New
term loans have covenants.
Further information on Kotipizza Group's financial risks is presented in the
financial statements released on 31 January 2016.
INVESTMENTS
The gross investments for the period amounted to MEUR 0.58 (0.81). The Company's
investments to fixed assets, related mainly to IT systems, amounted to MEUR
0.58 (0.81).
PERSONNEL
On 31 July 2016, Kotipizza Group employed 42 people, all of who worked in
Finland. At the end of the previous financial year 31 January 2016, the Company
employed 38 people, all of who worked in Finland.
BUSINESS ARRANGEMENTS
Group structure was simplified by merging company shells Senhold 2 and Francount
Oy to Domipizza Oy and Frankis Finland Oy to Kotipizza Group Oyj. Mergers were
registered into the trade register on 30 June 2016. Simplifying will continue by
merging Kotipizza Oyj to Domipizza Oy, which is expected to be registered to
trade register on 31 January 2017.
CHANGES IN THE MANAGEMENT
There were no changes in Kotipizza Group's operative management, Board of
Directors or Management Board during the period.
MANAGEMENT BOARD
Kotipizza Group's Management Board comprises five members: Tommi Tervanen (CEO),
Timo Pirskanen (Deputy to the CEO, CFO), Olli Väätäinen (Chief Operating
Officer), Anssi Koivula (Chief Procurement Officer) and Antti Isokangas (Chief
Communications and Corporate Responsibility Officer).
SHARES AND SHARE CAPITAL
Kotipizza Group Oyj's share capital at the end of the review period was EUR
80,000.00 and it comprised 6,351,201 shares. At the beginning of the review
period 1 February 2016 the number of the shares was 6,351,201. At the end of the
period, the Company had 902 (486) shareholders. The Company does not hold any
treasury shares.
Information about the company's shareholder structure by sector and size of
holding, the largest shareholders can be viewed on the company's website at
www.kotipizzagroup.com.
RESOLUTIONS OF THE GENERAL MEETINGS
Kotipizza Group's Annual General Meeting held on 11 May, 2016 resolved that no
dividend is paid for the financial period ending 31 January 2016, but EUR 0,35
per share was decided to be paid from the reserves for invested unrestricted
equity.
The AMG adopted the financial statements for financial year ending 31 January
2016 and discharged the members of the Board of Directors and CEO from liability
for the financial year ending 31 January 2016.
The AGM resolved the number of Board members to be six. Johan Wentzel, Minna
Nissinen, Petri Parvinen, Kim Hanslin and Kalle Ruuskanen were re-elected as
members of Board of Directors for a term of office that lasts until the end of
the next AGM. Marjatta Rytömaa was elected as a new member. Johan Wentzel was
re-elected as Chairman of the Board of Directors.
The AGM resolved that the members of the Board will be paid as follows: Chairman
of the Board of Directors Johan Wentzel and member Marjatta Rytömaa EUR 500 per
month (EUR 6 000 p.a.) and other members of the Board of Directors EUR 2 000 per
month (EUR 24 000 p.a.) each.
The AGM resolved that the remuneration for the auditor be paid according to
invoice approved by the company. The AGM resolved to re-elect audit firm Ernst &
Young Oy as the company's auditor for a term that ends at the closing of the
next AGM.
The AGM resolved to authorize the Board of Directors to decide on a share issue
on following terms:
1 The authorization may be used in full or in part by issuing shares in
Kotipizza Group Oyj in one or more issues so that the maximum number of shares
issued is 635 000 shares.
2 The Board of Directors may also decide on a directed share issue in deviation
from the shareholders' pre-emptive rights in case there is a weighty financial
reason to do so, such as in order to finance or carry out acquisitions or other
business transactions, develop the company's capital structure, or in order to
use the shares for an incentive scheme. The Board of Directors would be
authorized to decide to whom and in which order the shares will be issued. In
the share issues shares may be issued for subscription against payment or
without charge.
3 Based on the authorization, the Board of Directors is also authorized to
decide on a share issue without payment directed to the company itself, provided
that the number of shares held by the company after the issue would be a maximum
of 10 per cent of all shares in the company. This amount includes shares held by
the company and its subsidiaries in the manner provided for in Chapter 15,
section 11 (1) of the Companies Act.
4 This authorization includes the right for the Board of Directors to decide on
the terms and conditions of the share issues and measures related to the share
issues in accordance with the Companies Act, including the right to decide
whether the subscription price will be recognized in full or in part in the
invested unrestricted equity reserve or as an increase to the share capital.
5 The authorization is valid until 31 July 2017.
6 The authorization will supersede the authorization to decide upon share issues
given to the company's Board of Directors on 28 May 2015.
RISKS AND UNCERTAINTIES
In the long term, Kotipizza Group's operative risks and uncertainties relate to
a possible failure in predicting consumer preferences and in creating attractive
new concepts, as well as to new business risks related to possible expansion to
new cities and abroad. The competitive situation is expected to remain harsh in
the fast food industry. Company's management cannot affect the general market
development and consumer behaviour with its actions.
Restaurant openings also have a material impact on company's franchising and
rent income, income received from selling raw materials and supplies and
transport and flow of goods related income and thus to the company's financial
result.
Kotipizza Group is currently launching a new fast casual concept, which is
reported as Chalupa segment. Launching a new business concept has several risks
related e.g. anticipation of consumer needs, habits, taste and behaviour.
Launching a new concept has a risk of not reaching an established position at
the market and not having a well-established clientele. Potential failure in
launching a new concept causes costs to the company and has a material adverse
impact on company's brand, financial position and financial result.
EVENTS AFTER THE REPORT PERIOD
Kotipizza-division introduced full vegan cheese and two new full vegan pizzas
called Härkis Kotzone ja Härkis Burgerpizza.
KOTIPIZZA GROUP UPGRADES ITS OUTLOOK FOR THE FINANCIAL YEAR
Demand for chained fast food is estimated to remain stable. The economic growth
in Finland is expected to be slow and to clearly underperform Eurozone.
According to estimates the national economy in Finland is expected to remain on
the previous years' level or to even slightly decline. The development of the
national economy has a direct impact to consumer demand and to demand for
chained fast food. According to the Finnish Hospitality Association (MaRa) the
turnover of the chained based fast food restaurants in Finland grew 5.7% in
2015. Demand for fast food has according to statistics remained relatively
stable, surely following the overall development of the economy. According to
MaRa's statistics turnover of the chained based fast food restaurants in Finland
has grown 2.2 percent a year (CAGR) in years 2000-2015.
The growth of our chain-based net sales exceeded the market growth for chained
fast food in year 2015 based on the ongoing concept renewal in Kotipizza,
innovative R&D and sustainable procurement. Based on the positive sales growth
in the Kotipizza chain and the management's outlook on the sales in the
remaining period of the financial year we expect company's chain based net sales
growth to exceed the Finnish fast food market average growth also in 2016.
New outlook
The Group estimates for the full financial year that the chain-based net sales
will grow by approximately fifteen (15) percent as compared to the previous
financial year and that comparable EBITDA will grow significantly as compared to
the previous year.
Old outlook, provided on 23 August, 2016, and reiterated on 28 September, 2016
The Group estimates the chain-based net sales will grow by over ten (10) per
cent as compared to the previous financial year and that comparable EBITDA will
grow significantly as compared to the previous year.
ACCOUNTING POLICIES
Kotipizza Group's unaudited interim report for the nine-month period ending 31
October 2016, including the audited comparison figures for the nine-month period
ending 31 October 2015, have been prepared according to IAS 34 and applying the
same accounting principles that were used in the previous audited full year
financial statements.
SUMMARY OF THE FINANCIAL STATEMENT AND NOTES
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16
-----------------------------------------------
000 € 000 € 000 € 000 € 000 €
Continuing operations
Net sales 18 038 14 409 50 329 41 765 56 370
Other income 2 22 48 68 126
Change in inventory of raw
materials and finished goods
(+/-) 10 -792 -439 743 458
Raw materials and finished
goods (-) -13 639 -10 585 -38 351 -33 814 -45 106
Employee benefits/expenses
(-) -1 110 -810 -2 749 -2 766 -3 605
Depreciations (-) -245 -157 -738 -433 -735
Impairments (-) - - - - -17
Other operating expenses (-) -1 585 -741 -3 952 -2 974 -4 056
-----------------------------------------------
Operating profit 1 470 1 346 4 148 2 589 3 435
Finance income 8 5 23 19 28
Finance costs -216 -283 -607 -2 820 -3 011
-----------------------------------------------
Loss / profit before taxes
from continuing operations 1 262 1 068 3 565 -212 452
Income taxes -248 -257 -766 -269 -124
-----------------------------------------------
Loss / profit for the period
from continuing operations 1 014 811 2 798 -481 328
-----------------------------------------------
Discontinued operations
Loss after tax for the
period from discontinued
operations - -54 - -113 -113
-----------------------------------------------
Loss / profit for the
period 1 014 757 2 798 -594 215
-----------------------------------------------
Earnings per share, EUR:
Basic, profit for the period
attributable to ordinary
equity holders of the parent
(no dilutive instruments) 0,16 0,12 0,44 -0,17 0,05
Earnings per share for continuing operations, EUR:
Basic, profit for the period
attributable to ordinary
equity holders of the parent
(no dilutive instruments) 0,16 0,13 0,44 -0,14 0,08
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16
------------------------------------------
000 € 000 € 000 € 000 € 000 €
Profit (loss) for the period) 1 014 757 2 798 -594 215
Other comprehensive income:
Other comprehensive income to be
reclassified to profit or loss in
subsequent periods:
Cash flow hedges 61 -296 13 -296 -367
Taxes related to other comprehensive
income 12 -59 2 -59 -73
Net other comprehensive income to be 49 -237 11 -237 -294
reclassified to profit or loss in ------------------------------------------
subsequent periods
Other comprehensive income for the 49 -237 11 -237 -294
period, net of tax ------------------------------------------
Total comprehensive income for the
period, net of tax 1 063 520 2 809 -831 -79
------------------------------------------
Attributable to:
Owners of the company 1 086 521 2 867 -801 -45
Non-controlling interest -23 -1 -58 -30 -34
------------------------------------------
1 063 520 2 809 -831 -79
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31.10.2016 31.10.2015 31.1.2016
Assets 000 € 000 € 000 €
Non-current assets
Property, plant and equipment 1 265 806 1 002
Goodwill 35 819 35 819 35 819
Intangible assets 2 182 1 633 2 118
Non-current financial assets 2 2 2
Non-current receivables 606 516 783
Deferred tax assets 284 128 289
--------------------------------
40 159 38 904 40 013
Current assets
Inventories 3 103 3 381 3 385
Trade and other receivables 5 153 5 063 4 945
Current tax receivables 58 270 58
Cash and cash equivalents 9 170 6 711 8 099
--------------------------------
17 484 15 424 16 487
Assets classified as held for sale 13 28 19
Total Assets 57 657 54 356 56 519
--------------------------------
31.10.2016 31.10.2015 31.1.2016
--------------------------------
000 € 000 € 000 €
Equity and liabilities
Share capital 80 80 80
Translation differences 27 595 29 818 29 818
Fund for invested unrestricted equity 2 258 -1 380 -624
Retained earnings 29 933 28 518 29 274
Non-controlling interests -72 -10 -14
--------------------------------
Total equity 29 861 28 508 29 260
Non-current liabilities
Interest bearing loans and borrowings 16 979 16 442 16 363
Financial liabilities at fair value through
profit or loss 354 296 367
Other non-current liabilities 2 454 2 477 2 462
Deferred tax liabilities 56 44 54
--------------------------------
19 843 19 259 19 246
Current liabilities
Interest bearing loans and borrowings 354 813 1 041
Trade and other payables 6 833 5 755 6 882
Provisions 9 - 90
Current tax liabilities 757 10 -
--------------------------------
7 953 6 578 8 013
Liabilities related to assets held for sale - 11 -
Total liabilities 27 796 25 848 27 259
--------------------------------
Total shareholders' equity and liabilities 57 657 54 356 56 519
--------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to owners of the company
----------------------------------------------------
Fund for Retai- Non-
invested ned control-
Share unrestricted earn- ling Total
EUR THOUSAND capital equity ings Total interest equity
1 February 2016 80 29 818 -624 29 274 -14 29 260
Result for the period - - 2 856 2 856 -58 2 798
Other comprehensive income - - 11 11 - 11
----------------------------------------------------
Total incomprehensive
income for the period - - 2 867 2 867 -58 2 809
Transactions with owners
Management incentive
scheme - - 15 15 - 15
Dividends - -2 223 - -2 223 - -2 223
----------------------------------------------------
Transactions with owners
total - -2 223 15 -2 208 -2 208
31 October 2016 80 27 595 2 258 29 933 -72 29 861
----------------------------------------------------
Equity attributable to owners of the company
----------------------------------------------------
Fund for Retai- Non-
invested ned control-
Share unrestricted earn- ling Total
EUR THOUSAND capital equity ings Total interest equity
1 February 2015 80 5 362 -579 4 863 - 4 863
Result for the period - - -564 -564 -30 -594
Other comprehensive income - - -237 -237 - -237
----------------------------------------------------
Total incomprehensive
income for the period - - -801 -801 -30 -831
Transactions with owners
Share issue - 25 501 - 25 501 20 25 521
Initial public offering
costs -1 045 - -1 045 - -1 045
----------------------------------------------------
Transactions with owners
total 24 456 - 24 456 20 24 476
31 October 2015 80 29 818 -1 380 28 518 -10 28 508
----------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
2-10/2016 2-10/2015
Operating activities 000 € 000 €
Profit before tax 3 565 -212
Loss for discontinued operations - -140
Adjustments to reconcile profit before tax to net cash
flows
Depreciation of property, plant and equipment 347 170
Depreciation and impairment of intangible assets 391 263
Gain on disposal of property, plant and equipment -80 -20
Finance income -23 -19
Finance costs 607 2 820
Change in working capital
Change in trade and other receivables (+/-) -3 656
Change in inventories (+/-) 283 -431
Change in trade and other payables (+/-) -226 -1 092
Change in provisions (+/-) -81 -
Interest paid (-) -607 -4 878
Interest received 23 19
Income tax paid (-) -6 -40
--------------------
Net cash flows from operating activities 4 190 -2 905
Investing activities
Acquisition of subsidiaries - 20
Investments for tangible assets (-) -124 -184
Investments for non-tangible assets (-) -455 -629
Repayment for loan assets - -
Proceeds from sale of assets-held-for-sale - -
Sale of property, plant and equipment 400 20
--------------------
Net cash flows used in investing activities -179 -773
Financing activities
Funds received from the share issue -2 223 24 194
Loans withdrawal - 17 000
Loans repayments (-) -563 -35 886
Finance lease payments (+/-) -155 -120
Net cash flow used in financing activities -2 940 5 188
Net change in cash and cash equivalents 1 071 1 510
Cash and cash equivalents at 1 February 8 100 5 201
--------------------
Cash and cash equivalents at 31 October 9 170 6 711
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1. SEGMENT INFORMATION
The segment information is presented in accordance with the previous financial
statements.
KOTIPIZZA SEGMENT
--------------------------------
EUR THOUSAND 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16
-------------------------------------------------------------------------
Comparable net sales 3 298 2 997 9 598 8 749 11 784
Net sales 4 204 2 997 10 849 8 749 11 784
Comparable gross margin/EBITDA 1 819 1 607 5 081 4 086 5 465
Depreciation and impairments -150 -111 -441 -315 -584
Comparable EBIT 1 670 1 496 4 640 3 771 4 881
Reported gross margin/EBITDA 1 785 1 607 5 018 3 817 5 196
Reported EBIT 1 635 1 496 4 577 3 502 4 612
-------------------------------------------------------------------------
FOODSTOCK SEGMENT
--------------------------------
EUR THOUSAND 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16
-------------------------------------------------------------------------
Comparable net sales 13 770 11 169 39 034 32 700 44 096
Net sales 13 770 11 169 39 034 32 700 44 096
Comparable gross margin/EBITDA 475 261 1 344 746 964
Depreciation and impairments -38 -28 -105 -85 -113
Comparable EBIT 437 233 1 239 661 851
Reported gross margin/EBITDA 466 261 1 328 631 849
Reported EBIT 428 233 1 223 546 736
-------------------------------------------------------------------------
CHALUPA SEGMENT
--------------------------------
EUR THOUSAND 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16
-------------------------------------------------------------------------
Comparable net sales 65 231 447 278 443
Net sales 65 231 447 278 443
Comparable gross margin/EBITDA -54 3 -148 -67 -66
Depreciation and impairments -5 -6 -26 -9 -18
Comparable EBIT -59 -3 -174 -76 -84
Reported gross margin/EBITDA -56 3 -152 -67 -66
Reported EBIT -61 -3 -178 -76 -84
-------------------------------------------------------------------------
OTHERS SEGMENT
-------------------------------------------------------------------------
EUR THOUSAND 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16
-------------------------------------------------------------------------
Comparable net sales 0 12 0 38 47
Net sales 0 12 0 38 47
Comparable gross margin/EBITDA -357 -338 -1 081 -904 -1 337
Depreciation and impairments -53 -12 -166 -24 -37
Comparable EBIT -410 -350 -1 247 -928 -1 374
Reported gross margin/EBITDA -479 -368 -1 307 -1 359 -1 792
Reported EBIT -532 -380 -1 473 -1 383 -1 829
-------------------------------------------------------------------------
ALL SEGMENTS TOGETHER
-------------------------------------------------------------------------
EUR THOUSAND 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16
-------------------------------------------------------------------------
Comparable net sales 17 132 14 409 49 079 41 765 56 370
Net sales 18 038 14 409 50 329 41 765 56 370
Comparable gross margin/EBITDA 1 883 1 533 5 196 3 861 5 026
Depreciation and impairments -245 -157 -738 -433 -752
Comparable EBIT 1 638 1 376 4 458 3 428 4 274
Reported gross margin/EBITDA 1 715 1 503 4 886 3 022 4 187
Reported EBIT 1 470 1 346 4 148 2 589 3 435
-------------------------------------------------------------------------
NOTE 2. NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS
The non-current assets held for sale and discontinued operations were related to
Kotipizza Segment's Russian operations, Domi-pizzapalat, sale of Franchising
segment's 55 Burger, Cola, Fries concept and divestment of the Financial
management services segment. Selling price of the both divested businesses,
Financial management services and 55 Burger, Cola, Fries concept, was 1 euro.
31/10/2016 31/10/2015
----------------------
000 € 000 €
Net sales - 32
Other operating income - -
Depreciation - -
Expenses - -144
Operating loss (EBIT) - -112
Finance costs - -
Capital loss related to discontinued operations - -28
----------------------
Loss for the period from a discontinued operation before
tax - -140
Tax impact - 27
----------------------
Loss for the period from the discontinued operations - -113
Earnings per share for discontinued operations, EUR:
Basic, profit for the period attributable to ordinary
equity holders of the parent
(no dilutive instruments) - -0,04
The major classes of assets and liabilities related to
discontinued operations:
31/10/2016 31/10/2015
----------------------
Assets 000 € 000 €
Inventories - 6
Trade receivable and other receivables - 21
----------------------
Assets related to discontinued operations - 27
Liabilities
Received collaterals - -
Other liabilities - 11
Accrued expenses - -
Liabilities related to discontinued operations - 11
Cash flows related to discontinued operations are not
reported
separately, and due to this, the information cannot be
accurately
reported..
NOTE 3. RELATED PARTY TRANSACTIONS
Parties are considered to be related when a party has control or significant
influence over the other party relating to decision-making in connection to its
finances and business. The Group's related parties include the parent company,
subsidiaries, members of the board of directors and management board, managing
director and their family members. The key management comprises the members of
the management board. The table below sets forth the total amounts of related
party transactions carried out during the period. The terms and conditions of
the related party transactions correspond terms and conditions applied to
transactions between independent parties.
Amounts Purchases
owed to from Outstanding Sales to Outstanding
Interest related related trade related trade
paid parties parties payables parties receivables
------------------------------------------------------------
000 € 000 € 000 € 000 € 000 € 000 €
Key management of
the group
2-10/16 - - 248 35 2 -
2-10/15 - - 526 2 621 148
Other related
parties
2-10/16 - - 99 10 - -
2-10/15 - - 103 13 - -
Controlling
entities
2-10/16 - - - - - -
2-10/15 156 - - - - -
Companies
controlled by the
members of the
Board
2-10/16
2-10/15 - - - - - -
NOTE 4. EMPLOYEE BENEFITS EXPENSE
All employee benefits expenses are included in administrative (fixed) expenses.
2-10/16 2-10/15
----------------
000 € 000 €
Wages and salaries 2 223 2 308
Social security costs 100 56
Pension costs (defined contribution plans) 426 402
----------------
Total employee benefits expense 2 749 2 766
NOTE 5. CONTINGENT LIABILITIES
Commitments 31/10/2016 31/10/2015
000 € 000 €
Leasing commitments 89 353
Tertiary commitments - 6
Rental guarantees 685 604
Bank guarantees 420 800
Rental commitments for premises 3 871 3 236
Loans from financial institutions 16 250 17 000
Guarantees for other than Group companies 6 432
Guarantees
Pledged deposits 146 352
Business mortgages 17 500 18 500
Guarantees 32 520
Pledged shares, book value 19 984 29 637
General guarantee for other Group companies unlimited
NOTE 6: ALTERNATIVE PERFORMANCE MEASURES (APMs)
New ESMA (European Securities and Markets Authority) guidelines on Alternative
Performance Measures (APMs) are effective for the financial year 2016. Kotipizza
Group presents APMs to reflect the underlying business performance and to
enhance comparability between financial periods. APMs should not be considered
as a substitute for measures of performance in accordance with the IFRS. APMs
used by Kotipizza Group are listed and defined in this note.
CHAIN-BASED NET SALES
Chain-based net sales is the total combined net sales of the company's
franchisees, based on which the company's franchising fees are invoiced monthly.
COMPARABLE NET SALES:
Net sales- items affecting comparability
EUR thousand 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16
------------------------------------------------------------------------
Net sales 18 038 14 409 50 329 41 765 56 370
Items affecting comparability 906 0 1 251 0 0
------------------------------------------------------------------------
Comparable net sales 17 132 14 409 49 079 41 765 56 370
------------------------------------------------------------------------
Items affecting comparability in 8-10/16 and 2-10/16 related to advertising and
marketing fund flows of Kotipizza's Franchisee Co-operative, which pass through
Kotipizza division's P&L without result effect. A separate stock exchange
release on Kotipizza's Marketing Co-operative's change into Franchisee Co-
operative was given on 30 May 2016.
COMPARABLE EBIT:
EBIT- items affecting comparability
EUR thousand 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16
------------------------------------------------------------------------
EBIT 1 470 1 346 4 148 2 589 3 435
Items affecting comparability 168 30 310 839 839
------------------------------------------------------------------------
Comparable EBIT 1 638 1 376 4 458 3 428 4 274
------------------------------------------------------------------------
Reported EBIT in 8-10/16 included EUR 168 thousand of items affecting
comparability (calculatory, non-cash), which were related to incentive plan
introduced on 6 May 2016 and other incentive plans in the group. The reported
EBIT in 8-10/15 included EUR 30 thousand of items affecting comparability
related to listing the company's shares to the Nasdaq OMX Helsinki stock
exchange. These items had a cash flow effect.
Reported EBIT in 2-10/16 included EUR 310 thousand of items affecting
comparability (calculatory, non-cash), which were related to incentive plan
introduced on 6 May 2016 and other incentive plans in the group. The reported
EBIT in 2-10/15 included EUR 839 thousand of items affecting comparability.
Costs amounting to EUR 229 thousand related to initial public offering of
company's shares to the Nasdaq OMX Helsinki Oy's stock exchange and EUR 495
thousand related to closing permanently down Kotipizza Oyj's previous
headquarters in Vaasa. These items had a cash flow effect. In addition, 2-10/15
reported EBIT included EUR 115 thousand non-cash deferral error related to
Foodstock's inventory as an item affecting comparability.
The reported EBIT in 2/15-1/16 included EUR 839 thousand of items affecting
comparability. Costs amounting to EUR 229 thousand related to initial public
offering of company's shares to the Nasdaq OMX Helsinki Oy's stock exchange and
EUR 495 thousand related to closing permanently down Kotipizza Oyj's previous
headquarters in Vaasa. These items had a cash flow effect. In addition, 2-10/15
reported EBIT included EUR 115 thousand non-cash deferral error related to
Foodstock's inventory as an item affecting comparability.
Items affecting comparability are material items or transactions, which are
relevant for understanding the financial performance of Kotipizza Group when
comparing profit of the current period with previous periods. These items can
include, but are not limited to, capital gains and losses, significant write-
downs, provisions for planned restructuring and other items that are not related
to normal business operations from Kotipizza Group's management view. Such items
are always listed in Euros in Kotipizza Group's interim-, half year and full
year financial reports for the whole Group and for the operating segments.
EBITDA
EBIT + depreciation
EUR thousand 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16
-----------------------------------------------------------------------
EBIT 1 470 1 346 4 148 2 589 3 435
Depreciation and impairments 245 157 738 433 752
-----------------------------------------------------------------------
EBITDA 1 715 1 503 4 886 3 022 4 187
-----------------------------------------------------------------------
COMPARABLE EBITDA
EUR thousand 8-10/16 8-10/15 2-10/16 2-10/15 2/15-1/16
------------------------------------------------------------------------
EBIT 1 470 1 346 4 148 2 589 3 435
Depreciation and impairments 245 157 738 433 752
Items affecting comparability 168 30 310 839 839
------------------------------------------------------------------------
Comparable EBITDA 1 883 1 533 5 196 3 861 5 026
------------------------------------------------------------------------
Items affecting comparability have been detailed earlier in this Note in section
COMPARABLE EBIT.
COMPARABLE EBITDA OF NET SALES, %
Comparable EBITDA
-------------------* 100
Net sales
NET DEBT
Long term ja short term interest bearing debt - Cash and cash equivalents
EUR thousand 31.10.2016 31.10.2015 31.1.2016
-----------------------------------------------------------------
Long term interest bearing debt 16 979 16 442 16 363
Short term interest bearing debt 354 813 1 041
Cash and cash equivalents -9 170 -6 711 -8 099
-----------------------------------------------------------------
Net debt 8 163 10 543 9 305
-----------------------------------------------------------------
NET GEARING, %
Net debt
--------------* 100
Total equity
EQUITY RATIO, %
Total equity
--------------* 100
Total assets
In Helsinki on 21 December 2016
Kotipizza Group Oyj's Board of Directors
Further information: CEO Tommi Tervanen, tel. +358 207 716, and CFO Timo
Pirskanen, tel. +358 207 716 747
[]
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