2014-10-30 07:59:53 CET
2014-10-30 08:00:55 CET
REGULATED INFORMATION
Olvi Oyj - Interim report (Q1 and Q3)
OLVI GROUP’S INTERIM REPORT, 1 JANUARY TO 30 SEPTEMBER 2014 (9 MONTHS)
Olvi Group's accumulated sales volume and net sales from January to September
increased slightly on the previous year. Olvi's position remained strong in all
market areas. Consolidated operating profit fell slightly short of the previous
year but relative profitability remained good. The earnings outlook for 2014
remains unchanged: sales volume and net sales are expected to slightly
increase, and operating profit is estimated to remain at the healthy level of
2013.
Iisalmi, 2014-10-30 07:59 CET (GLOBE NEWSWIRE) -- OLVI PLC INTERIM
REPORT 30 OCT 2014 at 9:00 am
OLVI GROUP'S INTERIM REPORT, 1 JANUARY TO 30 SEPTEMBER 2014 (9 MONTHS)
Olvi Group's accumulated sales volume and net sales from January to September
increased slightly on the previous year. Olvi's position remained strong in all
market areas. Consolidated operating profit fell slightly short of the previous
year but relative profitability remained good. The earnings outlook for 2014
remains unchanged: sales volume and net sales are expected to slightly
increase, and operating profit is estimated to remain at the healthy level of
2013.
Olvi Group's sales volume, net sales and operating profit from July to
September (Q3) improved clearly on the previous year. The euro-denominated
operating profit was Olvi plc's all-time high for the third quarter.
January-September in brief:
- The Group's sales increased by 15.4 percent to 449.3 (433.9) million litres
- The Group's net sales increased by 1.4 million euro to 258.6 (257.2) million
euro
- The Group's operating profit declined slightly to 36.5 (37.7) million euro
- The Group's equity to total assets ratio remained at a healthy level of 57.6
(58.3) percent
- Gross capital expenditure increased to 31.9 (21.1) million euro. The
expenditure was spent mostly on
increasing production capacity and improving production efficiency
- Business performance in Finland fell short of the previous year: sales
declined by 7.5 percent to 114.7
(124.0) million litres, net sales declined by 15.7 percent to 81.9 (97.1)
million euro and operating
profit declined by 41.1 percent to 6.5 (11.0) million euro. Factors affecting
the performance in Finland
included weakened consumer purchasing power, clearly intensified price
competition in the industry, a
strong increase in tourist imports, as well as a decline in the exports of
soft drinks
- The parent company's sales in the domestic market in Finland increased by
almost two percent and the
market position strengthened
- Business performance in the Baltic states was better than in the previous
year: sales increased by 5.3
percent to 230.6 (219.0) million litres, net sales improved by 2.2 percent to
123.8 (121.2) million euro
and operating profit improved by 6.1 percent to 18.3 (17.3) million euro
- Business performance in Belarus developed very favourably: sales increased by
10.5 percent to 135.2
(122.4) million litres, net sales improved by 22.0 percent to 65.8 (53.9)
million euro and operating
profit improved by 29.3 percent to 12.3 (9.5) million euro
KEY RATIOS
1-9/2014 1-9/2013 Change % 1-12/2013
Net sales, MEUR 258.6 257.2 +0.5 327.3
Operating profit, MEUR 36.5 37.7 -3.3 43.2
Gross capital expenditure, MEUR 31.9 21.1 +51.6 35.7
Earnings per share, EUR 1.39 1.39 +/-0 1.61
Equity per share, EUR 9.07 7.93 +14.4 8.14
Equity to total assets, % 57.6 58.3 58.0
Gearing, % 28.0 27.1 26.4
Lasse Aho, Managing Director of Olvi plc, said the following in connection with
the disclosure of the accounts: “In the beginning of the third quarter of 2014,
a long period of hot weather had a positive effect on third-quarter sales and
earnings in all of the Group's operating areas. Business developed very
favourably in Belarus and the Baltic states. An upturn in sales was also seen
in Finland; however, performance targets were not met.”
OLVI GROUP'S SALES VOLUME, NET SALES AND EARNINGS IN JANUARY-SEPTEMBER 2014
Olvi Group's sales from January to September increased by 15.4 million litres
or 3.5 percent to 449.3 (433.9) million litres.
The parent company's sales in the domestic market in Finland increased by
almost two percent but total sales declined by 9.3 million litres to 114.7
(124.0) million litres due to a decline in the volume of soft drink exports.
Sales in the Baltic states increased by a total of 11.6 million litres to 230.6
(219.0) million litres. Sales in Lithuania increased by almost 19 percent, and
sales in Estonia by some 2 percent. Sales in Latvia remained almost on a par
with the previous year.
Sales in Belarus in January-September increased by 12.8 million litres to 135.2
(122.4) million litres. Intra-Group sales remained on a par with the previous
year.
The Group's net sales from January to September amounted to 258.6 (257.2)
million euro. Net sales improved by 1.4 million euro or 0.5 percent. Finnish
net sales declined to 81.9 (97.1) million euro. The net sales drop of 15.2
million euro was mainly due to a decrease in exports. Net sales in the Baltic
states increased by 2.6 million euro to 123.8 (121.2) million euro and in
Belarus by 11.9 million euro to 65.8 (53.9) million euro. Among the Baltic
states, a clear growth in net sales was seen in Lithuania, 14.7 percent. Net
sales in Latvia declined by 3.3 percent, and net sales in Estonia were almost
on a par with the previous year.
Olvi Group's operating profit for January-September stood at 36.5 (37.7)
million euro, or 14.1 (14.7) percent of net sales. The Group's operating profit
declined by 1.2 million euro or 3.3 percent.
Operating profit in Finland amounted to 6.5 (11.0) million euro, a decline of
4.5 million euro. Operating profit in the Baltic states improved by 1.0 million
euro to 18.3 (17.3) million euro. Among the Baltic states, the greatest
increase in operating profit was seen in Lithuania. Operating profit improved
also in Estonia, while a drop was seen in Latvia. Operating profit in Belarus
stood at 12.3 (9.5) million euro, showing an increase of 2.8 million euro.
Eliminations against operating profit increased by 0.6 million euro.
Olvi Group's profit after taxes in the period under review was 29.4 (29.5)
million euro. Earnings per share calculated from the profit belonging to parent
company shareholders in January-September stood at the previous year's level of
1.39 (1.39) euro per share.
OLVI GROUP'S SALES VOLUME, NET SALES AND EARNINGS IN JULY-SEPTEMBER 2014
As a whole, Olvi Group's sales volume, net sales and operating profit developed
favourably in the third quarter.
The Group's sales increased by 18.5 million litres or 12.2 percent to 170.4
(151.9) million litres. An extended period of hot weather in July and August
had a positive effect on sales volume development. Sales in Finland increased
by 3.4 million litres to 42.3 (38.9) million litres. Sales in the Beltic states
increased by 1.3 million litres to 81.8 (80.5) million litres and sales in
Belarus by 9.4 million litres to 54.1 (44.7) million litres. Among the Baltic
states, the greatest increase in sales was seen in Lithuania. Sales in Estonia
also increased in the third quarter but a drop was seen in Latvia. Intra-Group
eliminations declined by 4.4 million litres.
The Group's net sales from July to September amounted to 99.3 (86.5) million
euro. Net sales improved by 12.8 million euro or 14.7 percent mostly thanks to
excellent development in Belarus. Net sales in Finland achieved the previous
year's level at 29.4 (29.5) million euro. Net sales in the Baltic states were
also on a par with the previous year at 44.1 (43.9) million euro. Among the
Baltic states, net sales in Lithuania improved by 10.6 percent and in Estonia
by 3.6 percent. Net sales in Latvia declined by 15.9 percent. An excellent
improvement in net sales was seen in Belarus, with an increase of 10.4 million
euro or 56.1 percent to 29.0 (18.6) million euro.
The Group's operating profit for the third quarter stood at 17.2 (14.9) million
euro, or 17.3 (17.2) percent of net sales. The operating profit increased by
2.3 million euro or 15.1 percent on the previous year mainly due to excellent
performance in Belarus. Operating profit in Finland amounted to 2.3 (3.9)
million euro, a decline of -1.6 million euro on the previous year. Operating
profit in the Baltic states stood at 8.1 (7.4) million euro, and in Belarus at
6.6 (3.6) million euro. Operating profit in the Baltic states increased by 0.7
million euro, and operating profit in Belarus increased by 3.0 million euro.
Among the Baltic states, the greatest proportional increase in operating profit
was seen in Lithuania, and the operating profit improvement in Estonia was also
good. Operating profit in Latvia declined clearly.
SALES VOLUME, NET SALES AND EARNINGS BY GEOGRAPHICAL SEGMENT IN
JANUARY-SEPTEMBER AND JULY-SEPTEMBER 2014
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, the conditions
and the variation between seasons. Most of the Group's earnings are accumulated
during the second and third quarters.
PARENT COMPANY OLVI PLC (Olvi)
January to September 2014
According to statistics by the Federation of the Brewing and Soft Drinks
Industry, the Finnish beverage market in January-September increased by 6
million litres or one percent compared to the previous year.
Total sales of alcoholic beverages were on a par with the previous year, and
the sales of non-alcoholic beverages increased by slightly more than two
percent. The greatest increase in sales was seen in mineral waters, almost
eight percent. The sales of long drinks and soft drinks increased by
approximately one percent, while beers remained on the previous year's level.
The sales of ciders declined slightly. (Federation of the Brewing and Soft
Drinks Industry, September 2014).
Olvi's domestic sales in January-September increased by some two percent, which
is slightly more than the growth of the entire industry. Olvi's overall market
position improved slightly in January-September, from the previous year's 17.8
percent to 18.0 percent. According to statistics by the Federation of the
Brewing and Soft Drinks Industry, Olvi's market share in alcoholic beverages
(beers, ciders and long drinks) increased in January-September 2014 to 24 (23)
percent. The market share in non-alcoholic beverages was 9 (9) percent.
Olvi's sales in January-September amounted to 114.7 (124.0) million litres.
Sales declined by 9.3 million litres or 7.5 percent. The substantial decline in
sales was due to the fact that exports of Angry Birds soft drinks into Russia
diminished greatly in comparison to the previous year. The decline in soft
drink exports was also affected by substantial devaluation of the Russian
rouble. Any decline in the exchange rate of the rouble will increase the retail
prices of imported foodstuffs in Russia.
Among Olvi's main product groups in Finland, the sales of beers improved by a
few percent while the total sales of the industry were on a par with the
previous year. The sales of Olvi ciders increased by 16 percent simultaneously
with a decline in the industry's sales. The sales of Olvi long drinks declined
clearly. The sales of soft drinks declined clearly due to a sales dip in Angry
Birds beverages. The sales of mineral waters increased by almost 10 percent,
slightly outperforming the industry.
According to an extensive study of beer brands commissioned from the
Taloustutkimus market research agency by the trade magazine
Markkinointi&Mainonta (10/2014), the most valued beer brands in Finland are
Sandels and OLVI.
Olvi's exports and tax-free sales declined substantially during the review
period, amounting to 6.9 (17.6) million litres. The decline in exports was due
to a substantial drop in soft drink exports into Russia. However, tax free
sales to ships and harbour sales increased clearly in the review period.
Exports and tax-free sales represented 6.0 (14.2) percent of total sales.
Olvi's net sales from January to September declined to 81.9 (97.1) million
euro. Net sales declined by 15.2 million euro or 15.7 percent. The decline in
the average price of domestic net sales was affected by greatly intensified
price competition and a change in consumption habits towards a lower price
bracket due to a decline in consumer purchasing power.
Olvi's operating profit also declined in the review period. Operating profitstood at 6.5 (11.0) million euro, which was 7.9 (11.3) percent of net sales.
The operating profit declined by 4.5 million euro. In addition to a decreased
average price of net sales, the drop in performance was affected by write-downs
on unsaleable inventories and package scrapping costs totalling 0.8 million
euro. The company was also unable to adapt its fixed costs to the diminished
sales volume quickly enough.
Olvi's operating profit in January-September included 0.7 million euro of sales
gains arising from the sales of production machinery to the Lithuanian
subsidiary.
July to September 2014
The parent company's sales in the third quarter increased by 3.4 million litres
or 8.7 percent to 42.3 (38.9) million litres. An extended period of hot weather
in July and August had a positive effect on the increased sales volume.
Net sales were on a par with the previous year at 29.4 (29.5) million euro.
Operating profit for July-September stood at 2.3 (3.9) million euro, or 7.8
(13.1) percent of net sales. Third-quarter operating profit declined by 1.6
million euro or 40.6 percent due to the reasons described above in the context
of accumulated earnings.
AS A. LE COQ (A. Le Coq)
January to September 2014
The consumption of beers in the Estonian market remained on a par with the
previous year. An increase of a few percent was seen in ciders but the
consumption of long drinks dropped by five percent. The consumption of waters
in January-September increased by almost eight percent. The consumption of soft
drinks declined by approximately six percent and the consumption of juices by
almost 10 percent. (Nielsen, June-July 2014).
The Estonian subsidiary AS A. Le Coq's January-September sales amounted to
104.6 (102.4) million litres. Sales increased by 2.2 million litres or 2.1
percent. The company's domestic sales and exports remained on a par with the
previous year. The sales increase was attributable to intra-Group sales.
The sales of A. Le Coq waters outperformed industry growth in the domestic
market while the sales of beers and long drinks were on a par with the previous
year. The sales of ciders and juices declined on the previous year.
A. Le Coq has still retained its good position in the Estonian beverage market.
The company is the market leader in beers and achieved its all-time high in the
market share statistics by Nielsen in June-July 2014, with a market share of
almost 43 percent. The company has also reinforced its clear market leader
position in long drinks and juices. In ciders and soft drinks the company is
the clear number two player. In mineral waters the company is the clear market
leader judged by value. (Nielsen, June-July 2014).
Exports and tourist sales made up 16.0 (18.2) percent of the company's total
sales in January-September.
A. Le Coq's net sales in January-September were almost on a par with the
previous year at 64.4 (64.6) million euro. Net sales declined by 0.2 million
euro or 0.3 percent.
The company's operating profit for the period under review improved on the
previous year. Operating profit stood at 14.3 (13.6) million euro, which was
22.2 (21.0) percent of net sales. The operating profit improved by 0.7 million
euro or 5.2 percent.
July to September 2014
A. Le Coq's third-quarter sales increased by 2.5 million litres or 7.0 percent,
ending up at 37.9 (35.4) million litres. Net sales from July to September
amounted to 23.3 (22.5) million euro. Net sales improved by 0.8 million euro or
3.6 percent.
The company was able to improve its profitability during the third quarter. A.
Le Coq's operating profit was 6.0 (5.6) million euro or 25.8 (24.8) percent of
net sales. The operating profit improved by 0.4 million euro or 7.8 percent.
A/S CESU ALUS (Cesu Alus)
January to September 2014
In the Latvian beverage market, total sales of long drinks in January-September
were on a par with the previous year while a slight decline was seen in beers.
A clear decline continued in the sales of ciders. (Nielsen, June-July 2014).
Cesu Alus's total sales in January-September were almost on a par with the
previous year at 63.2 (63.6) million litres. Sales declined by 0.4 million
litres or 0.7 percent. The company's domestic sales and exports improved by a
total of 3.6 percent while intra-Group sales declined by almost 12 percent.
Cesu Alus's domestic sales of beers and long drinks increased slightly on the
previous year. The sales of ciders declined, while a clear increase was seen in
soft drinks (including kvass). The company's sales of waters have also
increased substantially in 2014.
Cesu Alus is the market leader in the declining cider market. The company is
also the clear market leader in long drinks. The company holds the number three
position in the beer market if private label products are included. (Nielsen,
July 2014).
Cesu Alus's net sales from January to September amounted to 29.3 (30.3) million
euro, representing a decline of 1.0 million euro or 3.3 percent.
Operating profit for January-September stood at 2.2 (2.7) million euro, or 7.3
(8.8) percent of net sales. The operating profit declined by 0.5 million euro
or 19.2 percent. The decline in operating profit was due to deteriorated
profitability caused by the decline in average price of net sales.
July to September 2014
Cesu Alus's third quarter fell short of the previous year above all due to
declined intra-Group sales but also due to intensified competition in the
Latvian beverage market.
Cesu Alus's sales in the third quarter amounted to 20.0 (24.0) million litres,
representing a decline of 4.0 million litres or 16.7 percent. The drop in sales
was due to diminished intra-Group sales. Net sales amounted to 9.4 (11.1)
million euro, representing a decline of 1.7 million euro or 15.9 percent on the
previous year.
The company's operating profit for July-September stood at 0.8 (1.0) million
euro, or 8.9 (9.3) percent of net sales. Net sales declined by 0.2 million euro
or 19.5 percent.
AB VOLFAS ENGELMAN (Volfas Engelman)
January to September 2014
In the overall Lithuanian beverage market, the sales of beers increased while
the sales of long drinks and ciders declined clearly in the review period.
(Nielsen, June-July 2014).
Volfas Engelman's sales volume, net sales and operating profit developed well
in the review period. Sales amounted to 62.9 (53.0) million litres,
representing an increase of 9.9 million litres or 18.6 percent.
The sales of beers in the domestic market increased substantially. Clear growth
was also seen in the sales of long drinks even though the overall market
declined by 20 percent. The drop in cider sales was smaller than that of the
overall cider market. The sales of soft drinks (including kvass) were almost on
a par with last year.
Volfas Engelman has further improved its position in the Lithuanian beverage
market. The company is the clear market leader in long drinks and kvass, and it
has clearly improved its market share in comparison with the previous year. In
the beer market, the company shares the number two position with another
player. (Nielsen, June-July 2014).
The company's exports in the review period increased by 22.5 percent on the
previous year. Exports accounted for 3.0 (3.0) percent of total sales.
The company's net sales from January to September amounted to 30.1 (26.3)
million euro. Thanks to good sales development, net sales increased by 3.8
million euro or 14.7 percent.
Thanks to good performance in the third quarter, operating profit increased to
1.9 (1.0) million euro compared to the previous year. Operating profit came to
6.3 (3.9) percent of net sales. The operating profit improved by 0.9 million
euro or 85.3 percent. The improvement in operating profit was attributable to
good development in sales volumes and cost-cutting.
July to September 2014
Volfas Engelman performed well in the third quarter. The company's sales volume
from July to September amounted to 23.9 (21.1) million litres, representing an
increase of 2.8 million litres or 13.4 percent. Third-quarter net sales
increased by 1.1 million euro or 10.6 percent to 11.4 (10.3) million euro.
The company's operating profit improved substantially in July-September.
Operating profit stood at 1.3 (0.8) million euro, which was 11.1 (7.8) percent
of net sales. The operating profit improved by 0.5 million euro or 58.7
percent.
OAO LIDSKOE PIVO (Lidskoe Pivo)
January to September 2014
The overall beverage market in Belarus saw an upward trend from January to
September. The sales of beers declined slightly in the review period. The
sales of juice drinks increased substantially, and good growth was also seen in
the sales of waters. The sales of soft drinks increased slightly while a slight
drop was seen in the sales of kvass. The sales of ciders declined clearly.
(Nielsen, June-July 2014).
The January-September sales of Lidskoe Pivo operating in Belarus amounted to
135.2 (122.4) million litres. Sales increased by 12.8 million litres or 10.5
percent on the previous year.
The sales of waters in the domestic market increased substantially. Clear
growth was also seen in the sales of juice drinks and beers. There was slight
growth in soft drinks (including kvass). On the other hand, the sales of ciders
declined clearly.
Lidskoe Pivo has clearly grown in the beer and juice drink markets. The company
is the clear market leader in kvass as well as ciders. The market shares in
waters and soft drinks are in the order of a few percent but the market share
in waters is gradually increasing (Nielsen, June-July 2014).
Lidskoe Pivo's exports increased substantially in the review period, by 40.8
percent. Exports accounted for 17.9 (14.0) percent of total sales. The main
destination for exports was Russia.
The company's net sales in January-September increased by 11.9 million euro or
22.0 percent on the previous year, amounting to 65.8 (53.9) million euro.
Operating profit in the review period was very good at 12.3 (9.5) million euro,
or 18.7 (17.6) percent of net sales. Operating profit improved by 2.8 million
euro or 29.3 percent on the previous year thanks to good performance in the
third quarter.
July to September 2014
Lidskoe Pivo's sales in the third quarter increased to 54.1 (44.7) million
litres. This represents an increase of 9.4 million litres or 21.1 percent.
Net sales stood at 29.0 (18.6) million euro, an increase of 10.4 million euro
or 56.1 percent. The increase in net sales in July-September substantially
outperformed sales volume growth.
The company's profitability improved with an operating profit increase to 6.6
(3.6) million euro, which is 22.7 (19.6) percent of net sales. The operating
profit improved by 3.0 million euro.
FINANCING AND INVESTMENTS
Olvi Group's balance sheet total at the end of September 2014 was 331.0 (286.6)
million euro. Equity per share stood at 9.07 (7.93) euro, an increase of 1.14
euro per share or 14.4 percent. The equity to total assets ratio declined
slightly but remained on a healthy level of 57.6 (58.3) percent. The amount of
interest-bearing liabilities was 61.2 (51.0) million euro, including current
liabilities of 26.4 (18.6) million euro.
During the period under review, Olvi Group's gross capital expenditure amounted
to 31.9 (21.1) million euro. The parent company Olvi accounted for 14.1 million
euro and the subsidiaries in the Baltic states for 8.0 million euro of the
total. Lidskoe Pivo's gross capital expenditure in the first part of the year
was 9.8 million euro.
The largest investments in Finland in 2014 are an extension and performance
improvement in automated picking, the completion of the new high-rise
storehouse and installations of related equipment, an extension to the dispatch
area, development of packaging options at the production lines, as well as
acquisitions of additional product conveyors. Olvi's investments include 0.7
million euro of shares acquired from minority shareholders of Lidskoe Pivo in
April 2014.
In the Baltic states, A. Le Coq's largest investments consist of new PET bottle
formats, a reception, storage and handling system for glucose syrup, an
extension to the cold storage rooms of the juice factory, and replacement of
conveyor systems for logistics. Cesu Alus's largest investments consist of the
replacement of the bottle-blowing machine, the acquisitions of pre-mixing
equipment for the juicing facility and a machine for laying PET bottles on
pallets, as well as investments related to logistics performance improvements.
The largest investments in Volfas Engelman consist of the acquisitions of a
bottle-blowing machine and a new canning line.
Lidskoe Pivo's investments in 2014 include extensions to storage and production
facilities, the construction of a new boiling room, replacement of pipelines in
fermentation and yeast tanks, the acquisition of new pressure tanks, mixing
equipment for fermentation tanks, as well as the acquisition of buffer
conveyors and new formats.
PRODUCT DEVELOPMENT
Research and development includes projects to design and develop new products,
packages, processes and production methods, as well as further development of
existing products and packages. The R&D costs have been recognised as expenses.
The main objective of Olvi Group's product development is to create new
products for profitable and growing beverage segments.
NEW PRODUCTS
Only the most important new products are announced in interim reports and
financial statement bulletins. Detailed information on new products can be
found on the Web pages of each company.
Finland
New products for September have already been presented in the Q2 interim
report. In addition to them, the Balanssi Proteiini snack drink in 0.33 L
tetrapack was introduced. It is a milk-based high-protein product manufactured
by Osuuskunta Maitomaa.
Subsidiaries
Volfas Engelman in Lithuania introduced a 0.33-litre aluminium bottle for its
Volfas Engelman Rinktinis (5.2%) and Volfas Engelman Balta (5.0%) beers.
PERSONNEL
Olvi Group's average number of personnel in January-September 2014 was 1,986
(2,034). The Group's average number of personnel decreased by 48 people or 2.4
percent. The total number of personnel at the end of September was 1,886
(1,934).
Olvi Group's average number of personnel by country:
1-9/2014 1-9/2013
Finland 379 (414)
Estonia 336 (317)
Latvia 219 (222)
Lithuania 214 (218)
Belarus 838 (863)
Total 1,986 (2,034)
GROUP STRUCTURE
There were no changes in Olvi Group's structure from July to September.
At the end of September 2014, Olvi Group's holding in A. Le Coq was 100.0
percent, in Cesu Alus 99.76 percent, in Volfas Engelman 99.58 percent and in
Lidskoe Pivo 94.57 percent. Furthermore, A. Le Coq had a 49.0 percent holding
in AS Karme and a 20.0 percent holding in Verska Mineraalvee OÜ in Estonia.
OLVI A SHARE AND SHARE MARKET
Olvi's share capital at the end of September 2014 stood at 20.8 million euro.
The total number of shares was 20,758,808, of these 17,026,552 or 82.0 percent
being Series A shares and 3,732,256 or 18.0 percent Series K shares. Each
Series A share carries one (1) vote and each Series K share carries twenty (20)
votes. Series A and Series K shares have equal rights to dividends.
The Olvi A share was quoted on Nasdaq OMX Helsinki (Helsinki Stock Exchange) at
23.95 (25.89) euro at the end of September 2014. In January-September, the
highest quote for the Series A share was 29.90 (27.93) euro and the lowest
quote was 23.30 (19.70) euro. The average price was 25.98 (23.58) euro.
In January-September, a total of 1,579,911 (1,820,943) Olvi A shares were
traded, representing 9.3 (10.7) percent of the total number of Series A shares.
The value of trading was 41.0 (43.0) million euro.
At the end of September 2014, the market capitalisation of Series A shares was
407.8 (440.8) million euro and the market capitalisation of all shares was
497.2 (537.4) million euro.
The number of shareholders at the end of September 2014 was 9,983 (9,492).
Foreign holdings plus foreign and Finnish nominee-registered holdings
represented 20.0 (20.7) percent of the total number of book entries and 4.5
(6.8) percent of total votes.
Foreign and nominee-registered holdings are reported in Table 5, Section 9 of
the tables attached to this interim report, and the largest shareholders are
reported in Table 5, Section 10.
TREASURY SHARES
There were no changes in the number of treasury shares held by Olvi in
January-September 2014. At the end of September 2014, Olvi held 1,124 of its
own Series A shares. Treasury shares held by Olvi plc are reported in the
tables section of this interim report, in Table 5, Section 6.
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.
Strategic and operational risks
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 operating environment and foreign exchange markets. If
realised, strategic risks can substantially hamper the company's operational
preconditions.
The Group's most substantial identified operational risks relate to the
procurement and quality of raw materials, the production process, markets and
customers, information security and systems, as well as changes in foreign
exchange rates.
Financing risks
Olvi Group operates internationally, and its business involves risks arising
from exchange rate fluctuations. Foreign exchange risks arise from the cash
flows of purchases and sales in foreign currency, as well as investments in
foreign subsidiaries and the conversion of their balance sheet items into euro.
Foreign exchange risk is reduced by the fact that most of the Group's product
sales and raw material purchases are denominated in euro. In addition to
Finland, Estonia and Latvia belong to the euro zone, and from the beginning of
2015 Lithuania will be included.
The objective of financing risk management is to minimise the adverse effects
of changes in the financial markets on the Group's financial performance,
shareholders' equity and liquidity. The general principles of the Group's risk
management are approved by the Board of Directors of the parent company, and
the parent company's management together with the management of subsidiaries is
responsible for their practical implementation. Responsibility for Olvi Group's
financing tasks is centralised in the parent company Olvi. The objectives of
centralisation include optimisation of cash flows and financing costs, as well
as efficient management of risks and liquidity.
There have not been any significant changes in Olvi Group's business risks
since the closing of the accounts 2013. A more detailed description of the
risks is provided in the Board of Directors' report and the notes to the
financial statements. Financing risks are also described in more detail in the
Investors section of the corporate Web site.
BUSINESS RISKS AND UNCERTAINTIES IN THE NEAR TERM
With regard to the economic situation in Europe, unstability can still be seen
in individual countries. The unemployment rate is still high. Weakened consumer
purchasing power leads to a choice of less expensive products. Demand in
Finland is also held back by the highest excise tax rates within the European
Union.
The continuation of the Ukrainian crisis, increased tension, the European
Union's sanctions against Russia and the counter-sanctions imposed by Russia
make exports difficult and also affect the exchange rate of the rouble. Olvi is
putting effort to increasing exports into Russia particularly from Belarus,
which is in a customs union with Russia.
Another substantial factor hampering the predictability of Olvi Group's
business still relates to Belarus and its outlook for the next few years. The
IAS 29 standard “Financial Reporting in Hyperinflationary Economies” will be
applied at least until the end of 2014.
NEAR-TERM OUTLOOK
The full-year sales volumes and net sales in 2014 are expected to grow slightly
in the current accounting period. The operating profit for 2014 is expected to
be on a par with the healthy level of 2013.
OLVI PLC
Board of Directors
Further information:
Lasse Aho, Managing Director, Olvi plc
Phone +358 290 00 1050 or +358 400 203 600
TABLES:
- Statement of comprehensive income, Table 1
- Balance sheet, Table 2
- Changes in shareholders' equity, Table 3
- Cash flow statement, Table 4
- Notes to the 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/ 7-9/ 1-9/ 1-9/ 1-12/
2014 2013 2014 2013 2013
Net sales 99264 86512 258574 257213 327256
Other operating income 294 330 1037 651 983
Operating expenses -78264 -68656 -211895 -210023 -271391
Depreciation and impairment -4138 -3280 -11216 -10103 -13627
Operating profit 17156 14906 36500 37738 43221
Financial income 377 461 2482 2293 3105
Financial expenses 374 -1048 -1659 -2783 -4501
Share of earnings of associates 0 0 0 0 -11
Earnings before tax 17907 14319 37323 37248 41814
Taxes *) -2359 -1801 -7893 -7790 -7628
NET PROFIT FOR THE PERIOD 15548 12518 29430 29458 34186
Other comprehensive income items:
Translation differences related to
foreign subsidiaries 1416 -1716 -538 -1398 -2858
TOTAL COMPREHENSIVE INCOME FOR THE 16964 10802 28892 28060 31328
PERIOD
Distribution of profit:
- parent company shareholders 15221 12334 28860 28813 33520
- non-controlling interests 327 184 570 645 666
Distribution of comprehensive income:
- parent company shareholders 16607 10738 28387 27532 30886
- non-controlling interests 357 64 505 528 442
Earnings per share calculated from the profit
belonging
to parent company shareholders, EUR
- undiluted 0.73 0.59 1.39 1.39 1.61
- diluted 0.73 0.59 1.39 1.39 1.61
*) Taxes calculated from the profit for the review period.
OLVI GROUP TABLE 2
BALANCE SHEET
EUR 1,000
30.9.2014 30.9.2013 31.12.2013
ASSETS
Non-current assets
Tangible assets 189618 157232 165783
Goodwill 18565 17856 17805
Other intangible assets 2663 2580 2701
Interests in associates 1077 1077 1077
Financial assets available for sale 549 549 549
Loan receivables and other non-current 349 393 349
receivables
Deferred tax receivables 171 147 87
Total non-current assets 212992 179834 188351
Current assets
Inventories 46498 43943 41178
Accounts receivable and other receivables 63475 56902 57705
Income tax receivable 341 22 848
Other non-current assets available for sale 4 163 124
Liquid assets 7682 5735 7507
Total current assets 118000 106765 107362
TOTAL ASSETS 330992 286599 295713
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 -20793 -18967 -20321
Retained earnings 187282 161643 167420
188332 164519 168942
Share belonging to non-controlling interests 2365 2594 2597
Total shareholders' equity 190697 167113 171539
Non-current liabilities
Financial liabilities 34810 32359 28483
Other liabilities 1 250 0
Deferred tax liabilities 5288 4085 3761
Current liabilities
Financial liabilities 26354 18646 24348
Accounts payable and other liabilities 72747 62712 66704
Income tax liability 1095 1434 878
Total liabilities 140295 119486 124174
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 330992 286599 295713
OLVI GROUP TABLE 3
CHANGES IN CONSOLIDATED
SHAREHOLDERS' EQUITY
EUR 1,000 Share Other Treasur Transla Retai Share of Total
capita reserv y tion ned non-controllin
l es shares differe earni g interests
reserve nces ngs
Shareholders' 20759 1092 -8 -17687 14131 1939 147412
equity 1 Jan 7
2013
Adjustments for 1891 174 2065
hyperinflation
Adjusted 20759 1092 -8 -17687 14320 2113 149477
shareholders' 8
equity 1 Jan
2013
Comprehensive
income:
Net profit for 28813 645 29458
the period
Other comprehensive
income items:
Translation -1280 -117 -1397
differences
Total comprehensive -1280 28813 528 28061
income for the period
Transactions with
shareholders:
Payment of -1037 -46 -10425
dividends 9
Total transactions with -1037 -46 -10425
shareholders 9
Changes in holdings in
subsidiaries:
Acquisition of shares from
non-controlling 0 0
interests
Change in share belonging to
non-controlling
interests 1 -1 0
Total changes in holdings in 1 -1 0
subsidiaries
Shareholders' 20759 1092 -8 -18967 16164 2594 167113
equity 30 Sep 3
2013
EUR 1,000 Share Other Treasur Transla Retai Share of Total
capita reserv y tion ned non-controllin
l es shares differe earni g interests
reserve nces ngs
Shareholders' 20759 1092 -8 -20320 16742 2597 171540
equity 1 Jan 0
2014
Adjustments for 3780 217 3997
hyperinflation
Adjusted 20759 1092 -8 -20320 17120 2814 175537
shareholders' 0
equity 1 Jan
2014
Comprehensive
income:
Net profit for 28860 570 29430
the period
Other comprehensive
income items:
Translation -473 -65 -538
differences
Total comprehensive -473 28860 505 28892
income for the period
Transactions with
shareholders:
Payment of -1349 -72 -13564
dividends 2
Total transactions with -1349 -72 -13564
shareholders 2
Changes in holdings in
subsidiaries:
Acquisition of shares from
non-controlling -168 -168
interests
Change in share belonging to
non-controlling
interests 882 -882 0
Total changes in holdings in 714 -882 -168
subsidiaries
Shareholders' 20759 1092 -8 -20793 18728 2365 190697
equity 30 Sep 2
2014
Other reserves include the share premium account, legal reserve and
other reserves.
OLVI GROUP TABLE 4
CASH FLOW STATEMENT
EUR 1,000
1-9/201 1-9/201 1-12/2013
4 3
Net profit for the period 29430 29458 34186
Adjustments to profit for the 22272 20213 24214
period
Change in net working capital -5744 -4315 2451
Interest paid -1519 -2528 -4246
Interest received 235 314 530
Taxes paid -4826 -5311 -7126
Cash flow from operations (A) 39848 37831 50009
Investments in tangible and intangible
assets -34066 -19312 -31975
Sales gains from tangible and intangible
assets 60 -228 220
Expenditure on other investments -250 0 0
Cash flow from investments (B) -34256 -19540 -31755
Withdrawals of loans 25835 688 5541
Repayments of loans -17502 -8154 -11180
Dividends paid -13537 -10542 -10541
Increase (-) / decrease (+) in current interest-
bearing business receivables -8 0 1
Increase (-) / decrease (+) in long-term
loan receivables 0 16 55
Cash flow from financing (C) -5212 -17992 -16124
Increase (+)/decrease (-) in liquid 380 299 2130
assets (A+B+C)
Liquid assets 1 January 7507 5698 5698
Effect of exchange rate changes -205 -262 -321
Liquid assets 30 Sep/31 Dec 7682 5735 7507
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 2013.
The accounting policies are presented in the Annual Report 2013 which was
published on 20 March 2014. The information disclosed in the interim report is
unaudited.
The information in the interim report 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 and
interpretations in 2014:
-- Amendment to IFRSs 10, 11 and 12 on transition guidance
-- IFRS 10 “Consolidated Financial Statements”
-- IFRS 11 “Joint Arrangements”
-- IFRS 12 “Disclosures of Interests in Other Entities”
-- IAS 27 (Revised 2011) “Separate Financial Statements”
-- IAS 28 (Revised 2011) “Investments in Associates and Joint Ventures"
-- Amendment to IAS 32 “Financial Instruments: Presentation” concerning the
offset of assets and liabilities
-- Amendment to IAS 36 “Impairment of Assets” concerning the disclosure of
recoverable amounts
-- Amendment to IAS 39 “Financial Instruments: Recognition and Measurement”
concerning the novation of derivatives
The above changes in standards and their interpretations have no substantial
effect on the income statement or balance sheet.
Some changes in standards may affect the scope of disclosure of notes.
1. SEGMENT INFORMATION
SALES BY GEOGRAPHICAL SEGMENT (1,000 litres)
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
2014 2013 2014 2013 2013
Olvi Group total 170386 151915 449306 433919 557232
Finland 42287 38904 114716 124028 159909
Estonia 37898 35426 104567 102386 129314
Latvia 20025 24033 63199 63625 79724
Lithuania 23896 21069 62884 53023 69554
Belarus 54103 44658 135228 122422 156523
- sales between segments -7823 -12175 -31288 -31565 -37792
NET SALES BY GEOGRAPHICAL SEGMENT (EUR 1,000)
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
2014 2013 2014 2013 2013
Olvi Group total 99264 86512 258574 257213 327256
Finland 29395 29533 81859 97068 123608
Estonia 23320 22509 64378 64589 81261
Latvia 9367 11137 29298 30284 37571
Lithuania 11389 10294 30140 26281 34139
Belarus 29038 18600 65772 53906 68319
- sales between segments -3245 -5561 -12873 -14915 -17642
OPERATING PROFIT BY GEOGRAPHICAL SEGMENT (EUR 1,000)
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
2014 2013 2014 2013 2013
Olvi Group total 17156 14906 36500 37738 43221
Finland 2300 3873 6468 10985 12844
Estonia 6023 5587 14281 13581 15998
Latvia 831 1033 2153 2666 2458
Lithuania 1268 799 1891 1020 1264
Belarus 6580 3648 12269 9487 10665
- eliminations 154 -34 -562 -1 -8
2. PERSONNEL ON AVERAGE
1-9/ 1-9/ 1-12/
2014 2013 2013
Finland 379 414 401
Estonia 336 317 314
Latvia 219 222 215
Lithuania 214 218 216
Belarus 838 863 853
Total 1986 2034 1999
3. RELATED PARTY TRANSACTIONS
Employee benefits to management
Salaries and other short-term employee benefits to the Board of Directors and
Managing Director
EUR 1,000
1-9/ 1-9/ 1-12/
2014 2013 2013
Managing Director 280 258 340
Chairman of the Board 62 63 85
Other members of the Board 95 97 130
Total 437 418 555
4. SHARES AND SHARE CAPITAL
30.9.2014 %
Number of A shares 17026552 82.0
Number of K shares 3732256 18.0
Total 20758808 100.0
Total votes carried by A shares 17026552 18.6
Total votes carried by K shares 74645120 81.4
Total number of votes 91671672 100.0
Votes per Series A share 1
Votes per Series K share 20
The registered share capital on 30 September 2014 totalled 20,759 thousand euro.
Olvi plc's Series A and Series K shares received a dividend of 0.65 euro per
share for 2013 (0.50 euro per share for 2012), totalling 13.5 (10.4) million
euro. The dividends were paid on 30 April 2014. The Series K and Series A
shares entitle to equal dividend. The Articles of Association include a
redemption clause concerning Series K shares.
5. SHARE-BASED PAYMENTS
Olvi plc's Board of Directors decided on 29 April 2014 on a share-based
incentive scheme for Olvi Group's key personnel. The purpose of the scheme is
to combine the objectives of shareholders and key personnel to improve the
company's value, make key personnel committed to the company and provide them
with a competitive bonus scheme based on earning shares in the company.
The scheme has one vesting period of three calendar years, the years 2014 to
2016. Any bonus from the scheme for the vesting period 2014 to 2016 is based on
the Group's accumulated operating profit (EBIT).
Furthermore, the share-based incentive scheme has a three-year vesting period
starting on 1 July 2014 and ending on 30 June 2017. Receiving a bonus for this
vesting period requires that the key person purchases shares in the company to
the amount decided by the Board of Directors. Furthermore, entitlement to a
bonus is bound to the validity of the key person's employment or service
contract at the time the bonus is paid.
The bonuses for both vesting periods will be paid in 2017 partially in Olvi plc
Series A shares and partially in cash. The purpose of the cash portion is to
cover taxes and other statutory fees levied on the key person due to the bonus.
If the key person's employment or service contract terminates before the
payment of the bonus, the principal rule is that no bonus will be paid.
The members of the company's Management Group must hold one-half of the shares
received on the basis of the vesting period 2014-2016 for the duration of their
employment or service contract.
The target group of the share-based incentive scheme includes approximately 50
people. The total bonuses paid on the basis of the scheme amount to an
approximate maximum of 40,000 Olvi plc Series A shares and the amount of cash
required to pay the taxes and other statutory fees arising from the shares.
Accounting entries related to the vesting period from 1 July 2014 to 30 June
2017 were booked in January-September 2014 for a total of 22.3 thousand euro.
Olvi Group has no warrants or options.
6. TREASURY SHARES
Olvi plc held a total of 1,124 of its own Series A shares on 1 January 2014.
Olvi plc has not acquired more treasury shares or transferred them to others in
January-September 2014, which means that the number of Series A shares held by
the company was unchanged on 30 September 2014. The purchase price of the
Series A shares held as treasury shares totalled 8.5 thousand euro.
Series A shares held by Olvi plc as treasury shares represented 0.005 percent
of the share capital and 0.001 percent of the aggregate number of votes. The
treasury shares represented 0.007 percent of all Series A shares and associated
votes.
On 16 April 2014, the General Meeting of Shareholders of Olvi plc decided to
revoke any unused authorisations to acquire treasury shares and authorise the
Board of Directors of Olvi plc to decide on the acquisition of the company's
own shares using distributable funds. The authorisation is valid for one year
starting from the General Meeting and covers a maximum of 500,000 Series A
shares.
The Annual General Meeting also decided to revoke all existing unused
authorisations for the transfer of own shares and authorise the Board of
Directors to decide on the issue of a maximum of 1,000,000 new Series A shares
and the transfer of a maximum of 500,000 Series A shares held as treasury
shares.
In January-September 2014, the Board of Directors of Olvi plc has not exercised
the authorisations granted by the General Meeting.
7. NUMBER OF SHARES *) 1-9/2014 1-9/2013 1-12/2013
- average 20757684 20757684 20757684
- at end of period 20757684 20757684 20757684
*) Treasury shares deducted.
8. TRADING OF SERIES A SHARES ON THE HELSINKI STOCK
EXCHANGE
1-9/2014 1-9/2013 1-12/2013
Trading volume of Olvi A shares 1579911 1820943 2601699
Total trading volume, EUR 1,000 41009 43038 63938
Traded shares in proportion to
all Series A shares, % 9.3 10.7 15.3
Average share price, EUR 25.98 23.58 24.26
Price on the closing date, EUR 23.95 25.89 28.60
Highest quote, EUR 29.90 27.93 28.75
Lowest quote, EUR 23.30 19.70 19.70
9. FOREIGN AND NOMINEE-REGISTERED HOLDINGS ON 30 SEPTEMBER 2014
Book entries Votes Shareholders
qty % qty % qty %
Finnish total 16609633 80.01 87522497 95.47 9917 99.34
Foreign total 444713 2.14 444713 0.49 58 0.58
Nominee-registered (foreign) 14044 0.07 14044 0.01 3 0.03
total
Nominee-registered (Finnish) 3690418 17.78 3690418 4.03 5 0.05
total
Total 20758808 100.00 91671672 100.00 9983 100.00
10. LARGEST SHAREHOLDERS ON 30 SEPTEMBER
2014
Series Series A Total % Votes %
K
1. Olvi Foundation 2363904 890613 3254517 15.68 48168693 52.54
2. Hortling Heikki 903488 103280 1006768 4.85 18173040 19.82
Wilhelm *)
3. The Heirs of Hortling 187104 25248 212352 1.02 3767328 4.11
Kalle Einari
4. Hortling Timo Einari 165824 35308 201132 0.97 3351788 3.66
5. Hortling-Rinne Laila 102288 2100 104388 0.50 2047860 2.23
Marit
6. Pohjola Bank plc, nominee 1902900 1902900 9.17 1902900 2.08
register
7. Nordea Bank Finland plc, 1212215 1212215 5.84 1212215 1.32
nominee register
8. Ilmarinen Mutual Pension 849218 849218 4.09 849218 0.93
Insurance Company
9. Varma Mutual Pension Insurance 788075 788075 3.80 788075 0.86
Company
10. Skandinaviska Enskilda Banken Ab (Publ)
Helsinki branch, nominee register 522652 522652 2.52 522652 0.57
Others 9648 10694943 10704591 51.56 10887903 11.88
Total 3732256 17026552 20758808 100.00 91671672 100.00
*) The figures include the shareholder's own holdings and shares held by parties
in his control.
11. PROPERTY, PLANT AND EQUIPMENT
EUR 1,000
1-9/2014 1-9/2013 1-12/2013
Increase 30729 20147 34509
Decrease -8469 -1082 -1087
Total 22260 19065 33422
12. CONTINGENT LIABILITIES
EUR 1,000
30.9.2014 30.9.2013 31.12.2013
Pledges and contingent liabilities
For own commitments 2397 4991 2715
Leasing and rental liabilities:
Due within one year 1171 1135 1238
Due within 1 to 5 years 1290 668 637
Due in more than 5 years 5 6 6
Leasing and rental liabilities total 2466 1809 1881
Package liabilities 2133 2813 2781
Other liabilities 2000 2000 2000
13. CALCULATION OF FINANCIAL RATIOS
Equity to total assets, % = 100 * (Shareholders' equity held by parent company
shareholders + non-controlling interests) / (Balance sheet total - advances
received)
Earnings per share = Profit belonging to parent company shareholders / Average
number of shares during the period, adjusted for share issues
Equity per share = Shareholders' equity held by parent company shareholders /
Number of shares at end of period, adjusted for share issues
Gearing, % = 100 * (Interest-bearing debt - cash in hand and at bank) /
(Shareholders' equity held by parent company shareholders + non-controlling
interests)
Lasse Aho, Managing Director, Olvi plc
Phone +358 290 00 1050 or +358 400 203 600
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