2016-03-23 08:01:09 CET
2016-03-23 08:01:09 CET
REGULATED INFORMATION
Kotipizza Group Oyj - Company Announcement
Kotipizza Group Oyj: FINANCIAL YEAR ENDED WITH STRONG FOURTH QUARTER, BOARD OF DIRECTORS PROPOSES 0.35 EUROS PER SHARE DISTRIBUTION FROM FUND FOR INVESTED UNRESTRICTED EQUITY
KOTIPIZZA GROUP OYJ FINANCIAL STATEMENTS BULLETIN 1 FEBRUARY 2015 - 31 JANUARY
2016
FINANCIAL YEAR ENDED WITH STRONG FOURTH QUARTER, BOARD OF DIRECTORS PROPOSES
0.35 EUROS PER SHARE DISTRIBUTION FROM FUND FOR INVESTED UNRESTRICTED EQUITY
November 2015-January 2016 (November 2014-January 2015)
* Chain-based net sales of continuing operations grew 15.2% (2.4%)
* Comparable net sales were 14.6 MEUR (12.9). Growth was 13.2%
* Comparable EBITDA was 1.17 MEUR (0.95). EBITDA growth was 22.5%
* Comparable EBIT was 0.85 MEUR (0.79)
February 2015-January 2016 (February 2014-January 2015)
* Chain-based net sales of continuing operations grew 9.7% (0.7%)
* Comparable net sales 56.4 MEUR (52.3). Growth was 7.9%
* Comparable EBITDA was 5.03 MEUR (4.20). Growth was 19.8%
* Comparable EBIT was 4.27 MEUR (3.72)
* Net gearing was 31.8 percent (634.2%)
* Equity ratio was 51.8 percent (9.3%)
Guidance for the fiscal year 2017
The Group estimates for the full financial year that the chain-based net sales
from the continuing operations will grow by over 5 percent as compared to the
previous fiscal year and that comparable EBITDA will grow as compared to the
previous year.
Board of director's proposal for distribution from Fund for invested
unrestricted equity
Board of directors proposes 0.35 Euros per share distribution from Fund for
invested unrestricted equity.
KEY FIGURES, EUR THOUSAND
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11/15-1/16 11/14-1/15 2/15-1/16 2/14-1/15
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Comparable figures
Comparable net sales 14 605 12 899 56 370 52 226
Comparable EBITDA 1 165 951 5 026 4 196
Comparable EBITDA of
8.0% 7.4% 8.9% 8.0%
net sales, %
Comparable EBIT 846 789 4 274 3 718
Reported figures
Chain-based net sales of 20 457 17 752 77 266 70 459
continuing operations
Reported net sales 14 605 12 899 56 370 52 226
Reported EBITDA 1 165 822 4 187 4 272
Reported EBITDA of
8.0% 6.4% 7.4% 8.2%
net sales, %
Reported EBIT 846 660 3 435 3 794
Earnings per share 0.13 0.00 0.05 -0.43
Net cash flows from operating -641 2 933
activities
Net cash used in investment -1 800 -1 084
activities
Net gearing, % 31.8 634.2
Equity ratio, % 51.8 9.3
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Tommi Tervanen, CEO of Kotipizza Group
The fourth quarter of the financial year ended a historic year during which
Kotipizza Group was listed on the Nasdaq OMX Helsinki stock exchange. The growth
of group net sales also continued at a near-historic pace similar to that from
earlier quarters of the financial year.
The sales in the Kotipizza chain continued on a good level, both in terms of
comparable net sales and customer volumes. The chain-based sales of continuing
operations increased 15.2% in November-January, being clearly above the average
growth in the Finnish fast food market.
The growth in net sales is particularly significant considering that the net
amount of Kotipizza restaurants continued to decrease during the review period.
At the end of the period, the number of Kotipizza restaurants was 257 (260). The
decrease in the number of restaurants is due to the consistent closing of non-
profitable restaurants. At the same time, the chain also invests in the opening
of new brick-and-mortar restaurants, so it can be estimated that the number of
restaurants will start growing again during 2016. At the end of the review
period, all Kotipizza restaurants were owned by franchisees apart from one
restaurant used as a product development and training unit of the chain.
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. Part of the same emphasis is the Mexican-style
Chalupa chain started in September, 2015. At the end of the review period, two
brick-and-mortar Chalupa restaurants were operating in Helsinki, and Chalupa
products were available in one Kotipizza lunch restaurant.
Group net sales grew 13.2% in the last quarter of the year and were 14.6 MEUR
(12.9). The chain-based sales of continuing operations increased 15.2% in the
fourth quarter and 9.7% in the whole financial year. Comparable EBITDA was 1.17
MEUR (0.95) in the fourth quarter, a growth of 22.5%. Comparable EBITDA growth
in the whole financial year was 20%. That means we were 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, net gearing was 32 percent and equity ratio 52 percent at the end of the
financial year.
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, surely
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. Some of the contributing factors for the growth were the
ongoing concept renewal in Kotipizza, innovative R&D and sustainable
procurement. We don't see any such structural changes in the market place that
we would not expect our chain based net sales to grow in line with the fast food
market growth in Finland or even to exceed the market growth in 2016.
Therefore, we estimate the group's chain-based net sales from the continuing
operations will during the present financial year grow by over 5% as compared to
the previous financial year, and the comparable gross margin/EBITDA will grow as
compared to the previous financial year.
GROUP NET SALES
November 2015-January 2016
Chain-based net sales of the continuing operations grew 15.2% (2.4%) year on
year in the fourth quarter of the fiscal year and were 20.5 MEUR (17.8). The
chain-based net sales of the continuing operations is the total combined net
sales of the company's franchisees, based on which the company's franchising
fees are invoiced monthly. It also includes sales of the restaurants owned
directly by the group. The chain-based net sales of the continuing operations in
the financial year ending 31 January 2015 do not include the chain-based net
sales of the 55 Burger, Cola, Fries segment divested during the financial year.
Group comparable net sales for the fourth quarter of the financial year were
14.6 MEUR (12.9) and they grew 13.2% compared to same period in the previous
year. Reported net sales were 14.6 MEUR (12.9). Sales growth was mainly based on
Foodstock's increased sales volume to Kotipizza chain and new customers of
Foodstock. The net sales of Foodstock grew 16.4% year on year in the fourth
quarter of the fiscal year. The Kotipizza segment's net sales declined 2.0%
compared to the previous year and were 3.0 MEUR (3.1). The Chalupa segment's net
sales in the fourth quarter of the financial year were 0.2 MEUR (0.0).
The net sales of the discontinued operations were 0.0 MEUR in the fourth
quarter. In the same period of the previous year the net sales of the
discontinued operations were 0.8 MEUR.
February 2015-January 2016
Chain-based net sales of the continuing operations grew 9.7% (0.7%) year on year
in the financial year and were 77.3 MEUR (70.5).
Group comparable net sales for the financial year were 56.4 MEUR (52.2) and they
grew 7.9% compared to same period in the previous year. Reported net sales were
56.4 MEUR (52.2). The sales growth was mainly based on Foodstock's increased
sales volume to the Kotipizza chain. The net sales of Foodstock grew 10.4% year
in the financial year. The Kotipizza segment's net sales were down 3.8% compared
to the previous year and were 11.8 MEUR (12.3). The decline in net sales was
mainly due to the smaller number of restaurants directly owned by the Group. The
restaurants directly owned by the segment are consolidated in full, and due to
this their number may have a material effect on the consolidated figures. The
Chalupa segment's net sales in the financial year were 0.4 MEUR (0.0).
The net sales of the discontinued operations were 0.0 MEUR in the fourth quarter
and they declined 0.8 MEUR as compared to the net sales of 0.8 MEUR for the
twelve months period ending 31 January 2015.
GROUP EBIT
November 2015-January 2016
Comparable EBIT of the Group was 0.85 MEUR (0.79) in the fourth quarter of the
financial year. Reported EBIT was 0.85 MEUR (0.66). Reported EBIT did not
include items affecting comparability. Comparable EBIT for the fourth quarter
includes 0.05 MEUR inventory write downs and 0.05 MEUR of costs related to
relocation of Group headquarters, which have been treated as operational costs.
Operational gearing based on increased sales volumes together with the smaller
number of loss making Kotipizza segment's directly owned restaurants had a
positive impact on EBIT. Increased amount of depreciation (calculational, non-
cash) had a negative impact on EBIT.
February 2015-January 2016
Comparable EBIT of the Group was 4.28 MEUR (3.72) in the financial year.
Reported EBIT was 3.44 MEUR (3.80). Reported EBIT includes 0.84 MEUR of items
affecting comparability. Out of items affecting comparability 0.23 MEUR were due
to nonrecurring costs 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. These items
affecting comparability were cash based. In addition reported EBIT includes
0.12 MEUR non-cash deferral error related to Foodstock's inventory as an item
affecting comparability. Operational gearing based on increased sales volumes
had a positive impact on EBIT. Increased amount of depreciation (calculational,
non-cash) had a negative impact on the EBIT.
SALES AND EBITDA OF THE SEGMENTS
KOTIPIZZA SEGMENT
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EUR THOUSAND 11/15-1/16 11/14-1/15 2/15-1/16 2/14-1/15
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Net sales 3 035 3 096 11 784 12 251
Comparable gross margin/EBITDA 1 379 1 260 5 465 4 170
Internal eliminations related to
discontinued operations 0 0 0 94
Depreciation and impairments -269 -106 -584 -340
Comparable EBIT 1 110 1 154 4 881 3 830
Reported gross margin/EBITDA 1 379 1 148 5 196 4 152
Reported EBIT 1 110 1 042 4 612 3 812
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Olli Väätäinen, COO of Kotipizza Oyj
"The Kotipizza chain continued to reform strongly in the spirit of the fast
casual phenomenon during the review period, modernizing its menu and continuing
a facelift of the restaurant design. Part of the reform was also the continuing
closing of non-profitable restaurants while also investing in the opening of new
ones. At the end of the review period, the number of restaurants was 257 (260).
Particularly strong were the investments made in the development of the online
store. At the end of the review period, orders made through the online store
amounted to nearly a tenth of the net sales in brick-and-mortar restaurants."
November 2015-January 2016
Net sales of Kotipizza for the fourth quarter of the financial year were 3.04
MEUR (3.10) and they declined 2.0% compared to same period in the previous year.
The decline in net sales was mainly due to the smaller number of restaurants
directly owned by the segment. The restaurants directly owned by the segment are
consolidated in full, and due to this their number may have a material effect on
the consolidated figures. During the fourth quarter of the year the number of
directly owned restaurants averaged one (1) and it averaged five (5) during the
same period in the previous year.
Kotipizza's comparable EBITDA of was 1.38 MEUR (1.26) in the fourth quarter of
the financial year and it grew 9.4% compared to same period in the previous
year. Improvement in comparable EBITDA was mainly due to reduced number of
directly owned loss-making restaurants, restructuring measures implemented in
the segment's operations and favourable development of chain-based net sales in
Kotipizza. Reported EBITDA was 1.38 MEUR (1.15) in fourth quarter of the
financial year. Reported EBITDA in Kotipizza did not include items affecting
comparability in the fourth quarter. The previous year's comparable EBITDA for
the fourth quarter has been adjusted with 0.11 MEUR items affecting
comparability related to restructuring Kotipizza'a Swedish operations.
February 2015-January 2016
Net sales of Kotipizza for the financial year were 11.78 MEUR (12.25) and they
declined 3.8% compared to same period in the previous year. The decline in net
sales was mainly due to the smaller number of restaurants directly owned by the
segment. The restaurants directly owned by the segment are consolidated in full,
and due to this their number may have a material effect on the consolidated
figures. During the fourth quarter of the year the number of directly owned
restaurants averaged one (1) and it averaged eight (8) during the same period in
the previous year.
Kotipizza's comparable EBITDA of was 5.47 MEUR (4.17) in February-October and it
grew 31.1% compared to same period in the previous year. The improvement in
comparable EBITDA was mainly due to reduced number of directly owned loss-making
restaurants, restructuring measures implemented in the segment's operations and
favourable development of chain-based net sales in Kotipizza. On the other hand
comparable EBITDA was burdened by double administration costs during the first
four months of the review period. Kotipizza's reported EBITDA was 5.20 MEUR
(4.15) in the financial year and it grew 25.1% compared to the previous year.
Reported EBIT includes 0.27 MEUR of items affecting comparability. Items
affecting comparability were cash based, nonrecurring costs related to closing
down company's old headquarters in Vaasa. Internal eliminations related to sold
Francount business operations have been returned to the comparable EBITDA as an
item affecting comparability for the previous year. Equivalent costs related to
financial management are the segment's direct costs in the current corporate
structure. The previous year's comparable EBITDA for the fourth quarter has been
adjusted with 0.11 MEUR items affecting comparability related to restructuring
Kotipizza's Swedish operations.
FOODSTOCK SEGMENT
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EUR THOUSAND 11/15-1/16 11/14-1/15 2/15-1/16 2/14-1/15
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Net sales 11 396 9 794 44 096 39 954
Comparable gross margin/EBITDA 218 -144 964 657
Internal eliminations related to
discontinued operations 0 8 0 136
Depreciation and impairments -28 -50 -113 -114
Comparable EBIT 190 -194 851 543
Reported gross margin/EBITDA 218 -136 849 793
Reported EBIT 190 -186 736 679
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Anssi Koivula, CEO of Helsinki Foodstock Oy
"The most significant development of the review period was that the Subway chain
renewed in December its contract with Foodstock for the next five-year period.
In December, Foodstock also entered a co-operation with the Fafa's chain. Within
the Group, Foodstock's operations have been especially affected by the Kotipizza
chain's growing emphasis on the sustainability and local ingredients. Foodstock
has also taken part in the planning of the sourcing of the ingredients for the
Chalupa chain. Chalupa's sourcing has gradually been shifted to us and we are
now responsible for a majority of the chain's sourcing."
November 2015-January 2016
Net sales of Foodstock for the fourth quarter of the financial year were 11.40
MEUR (9.80) and they grew 16.4% compared to same period in the previous year.
The growth in net sales was mainly due to favourable development of Kotipizza
chain-based net sales, which had a positive boost to Foodstock's delivery
volumes for the chain. The positive volume effect of Foodstock's new customers
also started to be visible in the reported numbers.
Foodstock's comparable EBITDA improved and was 0.22 MEUR (-0,14) in the fourth
quarter of the financial year. Foodstock's reported EBITDA was 0.22 MEUR (-
0,14) in the fourth quarter of the financial year. Reported EBITDA did not
include items affecting comparability in the fourth quarter. Internal
eliminations related to sold Francount business operations have been returned to
the comparable EBITDA as an item affecting comparability for the previous year.
Equivalent costs related to financial management are the segment's direct costs
in the current corporate structure.
February 2015-January 2016
Net sales of Foodstock for February-October were 44.10 MEUR (40.00) and they
grew 10.4% compared to same period in the previous year. The growth in net sales
was mainly due to increased sales volume to the Kotipizza chain and new
customers won at the end of the financial year.
Foodstock's comparable EBITDA was 0.96 MEUR (0.66) in the financial year and it
increased 46.7% compared to the same period in the previous year. Foodstock's
reported EBITDA was 0.85 MEUR (0.79) in the financial year and it increased
7.1% from the previous year. Reported EBIT includes 0.12 MEUR non-cash deferral
error related to Foodstock's inventory as an item affecting comparability.
Internal eliminations related to sold Francount business operations have been
returned to the comparable EBITDA as an item affecting comparability for the
previous year. Equivalent costs related to financial management are the
segment's direct costs in the current corporate structure.
CHALUPA SEGMENT
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EUR THOUSAND 11/15-1/16 11/14-1/15 2/15-1/16 2/14-1/15
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Net sales 165 0 443 0
Comparable gross margin/EBITDA 1 0 -66 0
Internal eliminations related to
discontinued operations 0 0 0 0
Depreciation and impairments -9 0 -18 0
Comparable EBIT -8 0 -84 0
Reported gross margin/EBITDA 1 0 -66 0
Reported EBIT -8 0 -84 0
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Iman Gharagozlu, Creative Director of Chalupa Oy
"The first restaurant of the Chalupa chain was opened in September 2015, and our
experiences since then have been a testament to our faith in fast casual
concepts, that is, that Finns prefer fresh and responsibly produced, reasonably-
priced food to industrial fast food. At the end of the review period, two
Chalupa restaurants operated in Helsinki, and Chalupa products were available at
one Kotipizza lunch restaurant. From the point of view of the future of the
chain, the period's most important task was the refining, testing and
documentation of the Chalupa concept so that the chain can start expanding on a
franchising basis."
November 2015-January 2016
Chalupa's net sales were 0.17 MEUR (0.00) in the fourth quarter of the financial
year and comparable EBITDA together with reported EBITDA was 0.00 MEUR (0.00).
After the review period, Chalupa opened a new restaurant in Kauniainen and
signed a rental agreement to open a new restaurant in Tampere in March-April
2016. The completion of the franchising prospectus is on schedule and it is
expected that first franchisee entrepreneurs will start operations in the spring
2016.
February 2015-January 2016
Chalupa's net sales were 0.44 MEUR (0.00) in the financial year and comparable
EBITDA together with reported EBITDA was -0.07 MEUR (0.00). Chalupa commenced
its true business operations during the third quarter of the financial year due
to delay in building permit process for the first restaurant.
OTHERS-SEGMENT
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EUR THOUSAND 11/15-1/16 11/14-1/15 2/15-1/16 2/14-1/15
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Net sales 9 9 47 21
Comparable gross margin/EBITDA -433 -165 -1 337 -631
Internal eliminations related to
discontinued operations 0 -25 0 -42
Depreciation and impairments -13 -6 -37 -24
Comparable EBIT -446 -171 -1 374 -655
Reported gross margin/EBITDA -433 -190 -1 792 -673
Reported EBIT -446 -196 -1 829 -697
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Others segment includes mainly operations of the group headquarters.
November 2015-January 2016
Net sales of the Others segment were 0.00 MEUR (0.00) in the fourth quarter of
the financial year. Comparable EBITDA was -0.43MEUR (-0.17). Reported EBITDA was
-0.43 MEUR (-0.19). Reported EBITDA did not include items affecting
comparability. Internal eliminations related to sold Francount business
operations have been returned to the comparable EBITDA as an item affecting
comparability for the previous year. Equivalent costs related to financial
management are the segment's direct costs in the current corporate structure.
February 2015-January 2016
Net sales of the Others segment were 0.05 MEUR (0.02) in the financial year.
Comparable EBITDA was
-1.34 MEUR (-0.63). Comparable EBITDA was still burdened by double
administration costs. Kotipizza's old headquarters in Vaasa was closed down on
31 May 2015. Reported EBITDA was -1.79 MEUR
(-0.67). Reported EBITDA includes 0.46 MEUR of items affecting comparability.
Out of items affecting comparability 0.23 MEUR were related to nonrecurring
costs related to listing of company's shares to Nasdaq OMX Helsinki stock
exchange and 0.23 MEUR nonrecurring costs related to closing down Kotipizza's
Vaasa office. All items affecting comparability were on cash bases. Internal
eliminations related to sold Francount business operations have been returned to
the comparable EBITDA as an item affecting comparability for the previous year.
Equivalent costs related to financial management are the segment's direct costs
in the current corporate structure.
FINANCIAL ITEMS AND RESULT
Finance costs of the Group were 3.01 MEUR (3.27). In addition to the normal
finance costs 0.90 MEUR nonrecurring cost related to early redemption of the
company's 30 MEUR unsecured bond on 11 August 2015 has been booked to the
finance costs.
Group taxes were -0.12 MEUR (-0.18) in the financial year.
The result of the period was -0.33 MEUR (0.38) in the financial year.
Earnings per share were 0.05 EUR (-0.43) in the financial year.
THE GROUP'S FINANCIAL POSITION
Kotipizza Group's balance sheet total as of 31 October 2015 was 56.5 MEUR
(52.4). The Group's non-current assets as at 31 January 2016 amounted to 40.0
MEUR (38.5), and current assets amounted to 16.5 MEUR (13.8).
The Group's net cash flow from operating activities for the financial year was
-0.6 MEUR (2.9). Working capital was released the amount of EUR 0.05 MEUR
(released 0.50).
The net cash flow from investment activities for the period was -1.8 MEUR (-
1.1). Investments in tangible and intangible assets for the period amounted to
-2.0 MEUR (-1.2), and proceeds from sales of tangible assets were 0.17 MEUR
(0.15).
The net cash flow from financing activities was 5.3 MEUR (0.10).
The Group's equity ratio was 51.8% (9.0%). The increase in equity ratio was due
to share issue implemented and transferring company's shareholder loan and
interest related to shareholder loan into equity in accordance with the initial
public offering. Initial public offering costs related to old shares of the
company amounting 0.23 MEUR are booked to P&L having an income effect and costs
related to issued shares adjusted with calculated taxes altogether 1.04 MEUR are
booked into equity.
Interest-bearing debt without contingent considerations measured at fair value
amounted to 17.4 MEUR (36.0), of which current debt accounted for 1.0 MEUR
(0.18). Kotipizza Group Oyj redeem in full its three-year unsecured bond with a
nominal value 30 MEUR on 11 August 2015 with the proceeds from the 4 June 2015
announced and 6 October 2015 implemented Initial Public Offering and the new
17.0 MEUR 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 for the year 2015 and in the company's prospectus released
on 4 June 2015.
INVESTMENTS
The gross investments for the period amounted to -2.0 MEUR (-1.2). The Company's
investments to fixed assets, related mainly to IT systems, amounted to -2.0 MEUR
(-1.2). Gross investments related to acquisitions of subsidiaries amounted to
0.02 MEUR (0.00).
PERSONNEL
On 31 October 2015, Kotipizza Group employed 38 people, all of who worked in
Finland. At the end of the previous financial year 31 January 2015, the Company
employed 33 people, all of who worked in Finland. At the end of the financial
year ending 31 January 2014, the number of personnel was 53 employees, and a
year earlier it was 52 employees.
BUSINESS ARRANGEMENTS
The Group expanded during the review period by establishing a new joint venture.
Kotipizza Group, Chalupa Oy and Think Drinks Oy signed a shareholder agreement
concerning Chalupa Oy on 13 March 2015. Kotipizza Group owns 60 percent of the
joint venture and Think Drinks Oy owns the remaining 40 percent.
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 (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 2015 the number of the shares was 544,275,188. Extraordinary
general meeting of Kotipizza Group Oyj decided on combining shares in accordance
with the Finnish companies act 15 chapter 9 §, after which the number of shares
decreased to 1,251,201. In accordance with the Initial Public Offering
altogether 5,100,000 shares were issued. The Company has one share class and
each share entitles to one vote in the Company's general meeting. All shares
carry equal rights to dividends and other distribution of assets by the Company.
At the end of the period, the Company had 549 (9) 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 and Board of Director and Corporate Management
Board interests can be viewed on the company's website at
www.kotipizzagroup.com.
RESOLUTIONS OF THE GENERAL MEETINGS
Kotipizza Group's extraordinary general meeting held on 2 March 2015 resolved to
change the name of the Company from Frankis Group Oyj to Kotipizza Group Oyj.
Kotipizza Group's extraordinary general meeting held on 28 May 2015 resolved to
change certain sections, like the redemption clause and the consent clause, in
the articles of association, adding company's shares into the book-entry system
and authorizing the Board of directors to decide on share issue in accordance
with the potential Initial Public Offering. New articles of association were
registered to the trade register.
Company's annual general meeting held on 29 May 2015 discussed about company's
financial statements for the period ending 31 January 2015 and verified its P&L
and balance sheet, resolved on distribution of profits, granted discharge from
liability to CEO and the Board of directors, confirmed fees for the members of
the Board of directors and chose auditors. Johan Wentzel, Mikael Autio, Kim
Hanslin, Minna Nissinen, Petri Parvinen and Kalle Ruuskanen were chosen to
continue as members of the Board of directors. Authorised public accountants
firm Earnst & Young Oy with public accountant Mikko Järventausta were elected as
auditors.
Company's extraordinary general meeting held on 3 June 2015 discussed about
company's corrected financial statements for the period ending 31 January 2015
and verified its P&L and balance sheet, resolved on distribution of profits,
granted discharge to CEO and the Board of directors, confirmed fees for the
members of the Board and chose auditors. Johan Wentzel, Mikael Autio, Kim
Hanslin, Minna Nissinen, Petri Parvinen and Kalle Ruuskanen were chosen to
continue as members of the Board. Authorised public accountants firm Earnst &
Young Oy with public accountant Mikko Järventausta were elected as auditors.
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, rent,
entry, building, operating system, training and other 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. 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
Danske Bank A/S announced on March 8, 2016, pursuant to the Finnish Securities
Markets Act chapter 9, section 10, that its holding in Kotipizza Group Oyj had
increased above (5) percent (1/20) of the share capital on March 8, 2016.
OUTLOOK FOR THE FINANCIAL YEAR 2017
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. According to the Group management,
there are currently no such structural changes seen in the market place that the
management would not expect company's chain based net sales to grow in line with
the fast food market growth in Finland or even to exceed the market growth in
2016.
The Company estimates the chain-based net sales of the continuing operations
will grow during the present financial year by over 5 percent as compared to the
previous financial year, and the comparable gross margin (EBITDA) will grow as
compared to the previous financial year.
Board of director's proposal for distribution from Fund for invested
unrestricted equity
Board of directors proposes 0.35 Euros per share distribution from the Fund for
invested unrestricted equity for the financial year 1 February 2015-31 January
2016.
ACCOUNTING POLICIES
Kotipizza Group's unaudited financial statements bulletin for the twelve-month
period ending 31 January 2016, including the audited comparison figures for the
twelve-month period ending 31 January 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
11/15-1/16 11/14-1/15 2/15-1/16 2/14-1/15
-------------------------------------------
000 € 000 € 000 € 000 €
Continuing operations
Net sales 14 605 12 899 56 370 52 226
Other income 58 20 126 65
Change in inventory of raw
materials and finished goods
(+/-) -285 -188 458 -239
Raw materials and finished goods
(-) -11 292 -10 089 -45 106 -40 670
Employee benefits/expenses (-) -839 -818 -3 605 -2 787
Depreciations (-) -302 -147 -735 -463
Impairments (-) -17 -15 -17 -15
Goodwill impairment (-) 0 0 0 0
Contingent consideration (-) 0 0 0 0
Other operating expenses (-) -1 082 -1 002 -4 056 -4 323
-------------------------------------------
Operating profit 846 660 3 435 3 794
Finance income 9 10 28 35
Finance costs -191 -830 -3 011 -3 265
-------------------------------------------
Loss / profit before taxes from
continuing operations 664 -160 452 564
Income taxes 145 -6 -124 -181
-------------------------------------------
Loss / profit for the period
from continuing operations 809 -166 328 383
-------------------------------------------
Discontinued operations
Loss after tax for the period
from discontinued operations 0 -734 -113 -918
-------------------------------------------
Loss / profit for the period 809 -900 215 -535
-------------------------------------------
Earnings per share, EUR:
Basic, profit for the period
attributable to ordinary equity
holders of the parent (no
dilutive instruments) 0,13 0,00 0,05 -0,43
Earnings per share for continuing operations, EUR:
Basic, profit for the period
attributable to ordinary equity
holders of the parent (no
dilutive instruments) 0,13 0,00 0,08 0,31
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
11/15-1/16 11/14-1/15 2/15-1/16 2/14-1/15
------------------------------------------
000 € 000 € 000 € 000 €
Profit (loss) for the period) 809 -900 215 -535
Other comprehensive income:
Other comprehensive income to be
reclassified to profit or loss in
subsequent periods:
Cash flow hedges -367 0
Exchange differences on translation
of foreign operations 0 1 0 -9
Net other comprehensive income to be -71 1 -367 -9
reclassified to profit or loss in ------------------------------------------
subsequent periods
Other comprehensive income for the -57 1 -294 -9
period, net of tax ------------------------------------------
Total comprehensive income for the
period, net of tax 752 -899 -79 -544
------------------------------------------
Attributable to:
Owners of the company 756 -899 -45 -544
Non-controlling interest -4 0 -34 0
------------------------------------------
752 -899 -79 -544
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31.1.2016 31.1.2015
Assets 000 € 000 €
Non-current assets
Property, plant and equipment 1 002 808
Goodwill 35 819 35 819
Intangible assets 2 118 1 229
Non-current financial assets 2 2
Non-current receivables 783 574
Deferred tax assets 289 90
--------------------
40 013 38 522
Current assets
Inventories 3 385 2 938
Trade and other receivables 4 945 5 449
Current tax receivables 58 230
Prepayments 0 0
Cash and cash equivalents 8 099 5 201
--------------------
16 487 13 818
Assets classified as held for sale 19 82
Total Assets 56 519 52 422
--------------------
31.1.2016 31.1.2015
--------------------
000 € 000 €
Equity and liabilities
Share capital 80 80
Translation differences 0 0
Fund for invested unrestricted equity 29 818 5 362
Retained earnings -624 -579
Non-controlling interests -14 0
--------------------
Total equity 29 260 4 863
Non-current liabilities
Interest bearing loans and borrowings 16 363 35 860
Financial liabilities at fair value through profit or loss 367 179
Other non-current liabilities 2 462 3 850
Deferred tax liabilities 54 85
--------------------
19 246 39 974
Non-current liabilities
Interest bearing loans and borrowings 1 041 183
Trade and other payables 6 882 7 307
Provisions 90 0
Current tax liabilities 0 10
--------------------
8 013 7 500
Liabilities related to assets held for sale 0 85
Total liabilities 27 259 47 559
--------------------
Total shareholders' equity and liabilities 56 519 52 422
--------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to owners of the company
-------------------------------------------------------------
Fund for Retai- Trans-
invested ned lation Non-
Share unrestricted earn- differ- controlling Total
EUR THOUSAND capital equity ings rences interest equity
1 February 2015 80 5 362 -579 0 0 4 863
Result for the
period 0 0 249 0 -34 215
Other
comprehensive
income 0 0 -294 0 0 -294
-------------------------------------------------------------
Total
incomprehensive
income for the
period 0 0 -45 0 -34 -79
Share issue 0 25 501 0 0 20 25 521
Initial public
offering costs -1 045 0 0 0 -1 045
Other change 0 0 0 0 0 0
Dividends 0 0 0 0 0 0
31 January 2016 80 29 818 -624 0 -14 29 260
-------------------------------------------------------------
Equity attributable to owners of the company
-------------------------------------------------------------
Fund for Retai- Trans-
invested ned lation Non-
Share unrestricted earn- differ- controlling Total
EUR THOUSAND capital equity ings rences interest equity
1 February 2014 80 5 362 -55 16 0 5 403
Result for the
period 0 0 -535 0 0 -535
Other
comprehensive
income 0 0 0 -9 0 -9
-------------------------------------------------------------
Total
incomprehensive
income for the
period 0 0 -535 -9 0 -544
Dividends 0 0 0 0 0 0
Other change 0 0 11 -7 0 4
31 January 2015 80 5 362 -579 0 0 4 863
-------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
2/15-1/16 2/14-1/15
Operating activities 000 € 000 €
Profit before tax 452 564
Loss for discontinued operations -140 -1039
Adjustments to reconcile profit before tax to net cash
flows
Depreciation of property, plant and equipment 278 190
Depreciation and impairment of intangible assets 474 288
Depreciation and write-downs of discontinued operations 0 478
Contingent considerations 0 0
Gain on disposal of property, plant and equipment -50 0
Finance income -28 -35
Finance costs 3011 3265
Change in working capital
Change in trade and other receivables (+/-) 578 835
Change in inventories (+/-) -428 325
Change in trade and other payables (+/-) -50 728
Change in provisions (+/-) 90 -31
Interest paid (-) -5 058 -2640
Interest received 28 35
Income tax paid (-) 172 -30
--------------------
Net cash flows from operating activities -671 2933
Investing activities
Acquisition of subsidiaries 20 0
Investments for tangible assets (-) -611 -592
Investments for non-tangible assets (-) -1364 -638
Repayment for loan assets 0 0
Proceeds from sale of assets-held-for-sale 0 0
Sale of property, plant and equipment 185 146
--------------------
Net cash flows used in investing activities -1770 -1084
Financing activities
Funds received from the share issue 24194 0
Loans withdrawal 17000 0
Loans repayments (-) -36074 0
Finance lease payments (+/-) 219 97
Net cash flow used in financing activities 5339 97
Net change in cash and cash equivalents 2898 1946
Cash and cash equivalents at 1 February 5201 3255
--------------------
Cash and cash equivalents at 31 Octoberl 8099 5201
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1. SEGMENT INFORMATION
Reported segment information of the Group has been changed due to establishing
the new Chalupa segment. Franchising and Kotipizza segments in the previous
audited financial statements have been combined to the Kotipizza segment and
Wholesale segment is now reported as the Foodstock segment. In addition to these
operational segments a new operational Chalupa segment has been established.
Business administration segment in the previous audited financial statements is
now reported as Others segment.
KOTIPIZZA-SEGMENT
-------------------------------------------------------------------------------
EUR THOUSAND 11/15-1/16 11/14-1/15 2/15-1/16 2/14-1/15
-------------------------------------------------------------------------------
Net sales 3 035 3 096 11 784 12 251
Comparable gross margin/EBITDA 1 379 1 260 5 465 4 170
Internal eliminations related to
discontinued operations 0 0 0 94
Depreciation and impairments -269 -106 -584 -340
Comparable EBIT 1 110 1 154 4 881 3 830
Reported gross margin/EBITDA 1 379 1 148 5 196 4 152
Reported EBIT 1 110 1 042 4 612 3 812
-------------------------------------------------------------------------------
FOODSTOCK-SEGMENT
-------------------------------------------------------------------------------
EUR THOUSAND 11/15-1/16 11/14-1/15 2/15-1/16 2/14-1/15
-------------------------------------------------------------------------------
Net sales 11 396 9 794 44 096 39 954
Comparable gross margin/EBITDA 218 -144 964 657
Internal eliminations related to
discontinued operations 0 8 0 136
Depreciation and impairments -28 -50 -113 -114
Comparable EBIT 190 -194 851 543
Reported gross margin/EBITDA 218 -136 849 793
Reported EBIT 190 -186 736 679
-------------------------------------------------------------------------------
CHALUPA-SEGMENT
-------------------------------------------------------------------------------
EUR THOUSAND 11/15-1/16 11/14-1/15 2/15-1/16 2/14-1/15
-------------------------------------------------------------------------------
Net sales 165 0 443 0
Comparable gross margin/EBITDA 1 0 -66 0
Internal eliminations related to
discontinued operations 0 0 0 0
Depreciation and impairments -9 0 -18 0
Comparable EBIT -8 0 -84 0
Reported gross margin/EBITDA 1 0 -66 0
Reported EBIT -8 0 -84 0
-------------------------------------------------------------------------------
OTHERS SEGMENT
-------------------------------------------------------------------------------
EUR THOUSAND 11/15-1/16 11/14-1/15 2/15-1/16 2/14-1/15
-------------------------------------------------------------------------------
Net sales 9 9 47 21
Comparable gross margin/EBITDA -433 -165 -1 337 -631
Internal eliminations related to
discontinued operations 0 -25 0 -42
Depreciation and impairments -13 -6 -37 -24
Comparable EBIT -446 -171 -1 374 -655
Reported gross margin/EBITDA -433 -190 -1 792 -673
Reported EBIT -446 -196 -1 829 -697
-------------------------------------------------------------------------------
ALL SEGMENTS TOGETHER
-------------------------------------------------------------------------------
EUR THOUSAND 11/15-1/16 11/14-1/15 2/15-1/16 2/14-1/15
-------------------------------------------------------------------------------
Net sales 14 605 12 899 56 370 52 226
Comparable gross margin/EBITDA 1 165 951 5 026 4 196
Internal eliminations related to
discontinued operations 0 -17 0 188
Depreciation and impairments -319 -162 -752 -478
Comparable EBIT 846 789 4 274 3 718
Reported gross margin/EBITDA 1 165 822 4 187 4 272
Reported EBIT 846 660 3 435 3 794
-------------------------------------------------------------------------------
NOTE 2. NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS
The non-current assets held for sale and discontinued operations relate 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.
Liquidation of the Russian company was completed on 29 October 2014.
31/01/16 31/01/15
2016 2015
------------------
000 € 000 €
Net sales 32 824
Other operating income 0 16
Depreciation 0 -57
Expenses -144 -1240
Operating loss (EBIT) -112 -457
Finance costs 0 -8
Capital loss related to discontinued operations -28 -574
------------------
Loss for the period from a discontinued operation before tax -140 -1039
Tax impact 27 121
------------------
Loss for the period from the discontinued operations -113 -918
Earnings per share for discontinued operations, EUR:
Basic, profit for the period attributable to ordinary equity
holders of the parent
(no dilutive instruments) -0,0271 -0,7337
The major classes of assets and liabilities related to
discontinued operations: 31/01/16 31/01/15
2016 2015
------------------
Assets 000 € 000 €
Inventories 0 19
Trade receivable and other receivables 19 63
------------------
Assets related to discontinued operations 19 82
Liabilities
Received collaterals 0 15
Other liabilities 0 11
Accrued expenses 0 59
Liabilities related to discontinued operations 0 85
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
2/15-1/16 94 3
2/14-1/15 41 0
Other related
parties
2/15-1/16 0 614 30 228 8
2/14-1/15 120 392 90 217 63
Controlling
entities
2/15-1/16 156
2/14-1/15 292
Companies
controlled by
the members
of the Board
2/15-1/16 3 0
2/14-1/15 102 0
2/15-1/16 2/14-1/15
Salaries Pension expenses Salaries Pension expenses
----------------------------------------------------
000 € 000 € 000 € 000 €
Management and key
personnel of the Group: 710 135 1033 186
The salaries of the Group's management and key personnel include car and
telephone benefits, and there are no other benefits. No benefits are applied
after service, and the Group has not paid any share-based payments. Key
management personnel have not been granted a loan, and the Group has not
guaranteed loans to the management personnel.
2/15-1/16 2/14-1/15
Managing director and
board members: Salaries Pension expenses Salaries Pension expenses
----------------------------------------------------
000 € 000 € 000 € 000 €
Tommi Tervanen, CEO 218 41 205 36
Johan Wentzel, Chairman of
the Board 7 0 6 0
Rabbe Grönblom, Board
member until 10 September
2014 0 0 4 0
Kim Hanslin, Board member 24 0 8 0
Olli Väätäinen, Board
member until 23 January
2015 0 0 8 0
Minna Nissinen, Board
member from 1 January 2015 24 0 2 0
Petri Parvinen, Board
member from 1 January 2015 24 0 2 0
Kalle Ruuskanen, Board
member from 1 January 2015 24 0 2 0
Mikael Autio, Board member
from 1 February 2015 7 0 0 0
NOTE 4. EMPLOYEE BENEFITS EXPENSE
All employee benefits expenses are included in administrative (fixed) expenses.
2/15-1/16 2/14-1/15
--------------------
000 € 000 €
Wages and salaries 2 981 2 265
Social security costs 103 103
Pension costs (defined contribution plans) 521 419
--------------------
Total employee benefits expense 3 605 2 787
NOTE 5. CONTINGENT LIABILITIES
Commitments 31/01/16 31/01/15
000 € 000 €
Leasing commitments 158 353
Secondary commitments 0 6
Rental guarantees 644 604
Bank guarantees 420 800
Rental commitments for premises 3 073 3 236
Loans from financial institutions 16 813 17 000
Guarantees for other than Group companies 422 432
Guarantees
Pledged deposits 352 352
Business mortgages 17 500 18 500
Guarantees 20 520
Pledged shares, book value 29 637 25 391
General guarantee for other Group companies unlimited
In Helsinki on 23 March 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
CALCULATION OF KEY FIGURES
Adjusted operating profit Operating profit adjusted with non-recurring sales
profit and loss and with expenses from
restructuring of the Company's operations and
personnel reductions
Adjusted operating profit % Adjusted operating profit / Net sales * 100
Reported operating profit from the continuing
Operating profit operations
Operating profit, % Operating profit / Net sales * 100
Return on equity Net result / Equity * 100
Equity ratio Equity / Total assets * 100
Earning per share Loss / profit for the period / Number of shares
(Interest-bearing debt - liquid assets) / Own
Net gearing assets * 100
where Own assets = Equity in the balance sheet +
Voluntary provisions + Equity's subordinated loans
EBITDA adjusted with non-recurring sales profit
and loss and with expenses from restructuring of
Adjusted EBITDA the Company's operations and personnel reductions
Adjusted EBITDA % Adjusted EBITDA / Net sales * 100
Net sales + Other income +/- Change in inventory
of raw materials and finished goods - Raw
materials and finished goods - Employee
benefits/expenses - Other operating expenses
EBITDA
EBITDA % EBITDA / Net sales * 1000
[HUG#1996873]
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