Iisalmi, 2017-02-23 07:59 CET (GLOBE NEWSWIRE) -- OLVI PLC FINANCIAL STATEMENTS BULLETIN 23 FEB 2017 at 9:00 am
OLVI GROUP’S FINANCIAL STATEMENTS JANUARY TO DECEMBER 2016
FINANCIAL PERFORMANCE IN BRIEF
Olvi Group’s business developed favourably in 2016. The Group’s sales volume, net sales and operating profit for 2016 improved on the previous year, and the balance sheet became stronger once again.
Full year 2016:
- Olvi Group’s sales volume increased by 5.1 percent to 609.4 (579.9) million litres
- The Group’s net sales increased by 3.5 percent and amounted to 321.5 (310.5) million euro
- The Group’s operating profit increased by 6.0 percent and amounted to 40.4 (38.2) million euro
- Net profit for the period increased by 47.6 percent to 32.8 (22.2) million euro. The profit for the comparison year was burdened by 10.5 million euro of intra-Group unrealised exchange rate losses on Belarusian operations, which were recognised in financial items.
- Olvi Group’s earnings per share stood at 1.57 (1.08) euro per share
- The equity ratio improved again, standing at 62.0 (58.6) percent
October to December 2016:
- Olvi Group’s sales volume increased by 5.2 percent to 134.4 (127.8) million litres
- The Group’s net sales increased by 4.3 percent and amounted to 71.8 (68.8) million euro
- The Group’s operating profit amounted to 5.3 (6.3) million euro
- Net profit for the period amounted to 4.9 (5.0) million euro
- Olvi Group’s earnings per share stood at 0.23 (0.24) euro per share
The Board proposes a dividend of 0.75 (0.70) euro per share.
Olvi estimates that the Group’s sales volume and net sales for 2017 will increase slightly on the previous year. Operating profit for 2017 is estimated to be on a par with the previous year.
CONSOLIDATED KEY RATIOS
| 10-12/ 2016 | 10-12/ 2015 | Change % / pp | 1-12/ 2016 | 1-12/ 2015 | Change % / pp | |
| Sales volume, Mltr | 134.4 | 127.8 | 5.2 | 609.4 | 579.9 | 5.1 |
| Net sales, MEUR | 71.8 | 68.8 | 4.3 | 321.5 | 310.5 | 3.5 |
| Gross margin, MEUR | 10.2 | 10.5 | -2.6 | 59.2 | 54.5 | 8.6 |
| % of net sales | 14.2 | 15.3 | 18.4 | 17.6 | ||
| Operating profit, MEUR | 5.3 | 6.3 | -15.6 | 40.4 | 38.2 | 6.0 |
| % of net sales | 7.4 | 9.2 | 12.6 | 12.3 | ||
| Net profit for the period | 4.9 | 5.0 | -3.6 | 32.8 | 22.2 | 47.6 |
| % of net sales | 6.8 | 7.3 | 10.2 | 7.2 | ||
| Earnings per share, EUR | 0.23 | 0.24 | -4.2 | 1.57 | 1.08 | 45.4 |
| Gross capital expenditure, MEUR | 4.8 | 4.8 | -0.4 | 20.5 | 26.0 | -21.2 |
| Equity per share, EUR | 9.73 | 8.86 *) | 9.8 | |||
| Equity to total assets, % | 62.0 | 58.6 *) | 3.4 | |||
| Gearing, % | 2.1 | 18.4 *) | -16.3 |
*) Change in accounting policies.
BUSINESS DEVELOPMENT
LASSE AHO, MANAGING DIRECTOR:
Olvi Group’s business developed favourably in 2016. The Group’s sales volume, net sales and operating profit improved on the previous year. In the fourth quarter, the Group’s sales volume increased by five percent. Fourth-quarter operating profit fell short of the previous year. This was affected by the fact that most of the increase in sales volume came from low-margin products, and that some non-recurring costs (including the costs of performance-based bonuses for employees) were recognised towards the end of the year. The earnings for 2016 were also burdened by increased depreciation and scrapping costs of reusable packaging compared to previous years.
Business development in 2016 has been positive particularly in Finland. The sales volume increased by 20 percent on the previous year, and the overall market share became stronger. Operating profit in Finland increased by 37 percent during 2016, which can be considered as very good performance. During 2016, we have been able to further develop the efficiency of our production and logistics processes which, together with increased sales volumes, has a positive effect on the company’s earnings development and also allows cost-efficient operations in the future. Sales development was also good in the fourth quarter, with a sales volume increase of 23 percent. Earnings in the final quarter were burdened by greater marketing efforts put into new product launches in comparison to the previous year, as well as the costs of bonuses paid to employees on the basis of good earnings development in 2016.
All in all, the Group’s business operations in the Baltic states developed well in 2016 even though the overall market in the region declined. Profitability in Estonia remained on a very strong level. Operating profit in Latvia improved by 13 percent and the company made the best result in its history. Lithuania also improved its result on the previous year, and it was gratifying that earnings improved also in the final quarter. Positive development in the Baltic states was supported by increased market shares, successful new products and cost-efficiency.
Development in the Baltic states in 2017 may be affected by an exceptionally large additional increase in excise duties on mild alcoholic beverages planned in Estonia as of 1 July 2017. When realised, the change will probably result in a partial transfer of sales to cross-border trading between Estonia and Latvia. Through a decline in harbour and on-board sales in Estonia, some sales volume will also return from Estonia to Finland.
The business environment in Belarus has remained challenging. Consumer purchasing power has declined, which has been reflected as a downturn in the market and also affected the sales and earnings development of Olvi’s Belarusian unit. Attention has been paid to cost control within the company, and this has resulted in a 10 percent improvement in the company’s operating profit measured in the local currency. However, operating profit measured in euro fell short of the previous year because the exchange rate in 2016 was weaker, particularly in the first half of the year.
The Group’s other financial indicators have developed very well in 2016. Profit for the accounting period has increased by 47.6 percent on the previous year, and the consolidated balance sheet became stronger in 2016. The equity ratio improved to 62.0 percent while the gearing ratio dropped to 2.1 percent. Cash flow from operations remained strong and totalled 61.2 million euro.
Olvi Group has made active efforts towards developing its operations, among other things by utilising the Lean management philosophy in business control and development. Olvi’s determined work was recognised through the second prize in the annual national competition “Lean work of the year 2016” arranged by the Lean Association of Finland. In addition to the recognition, our effort is shown as positive development in profitability, which enables us to produce increasing sales volumes smoothly while making further cuts on our environmental footprint. Development work has been done in all of the Group’s units and different operations. In addition to Lean, another theme for development within the Group has been responsibility and associated reporting, and this effort will continue in 2017.
The company’s strong financial condition, the investments and operational developments in recent years combined with a good market position and strong appreciation of our brands provide a solid foundation for the new year and make it possible to persistently develop the company’s operations and shareholder value.
SEASONAL NATURE OF THE OPERATIONS
The Group’s business operations are characterised by seasonal variation. The net sales and operating profit from the reported geographical segments do not accumulate evenly but vary according to the time of the year and the characteristics of each season.
SALES DEVELOPMENT
Olvi Group’s sales volume in 2016 made an all-time high of 609.4 (579.9) million litres. This represents an increase of 29.5 million litres or 5.1 percent on the previous year.
The increase in the Group’s sales volume originated from Finnish operations, which showed an increase of 20.3 percent. The sales volume in the Baltic states declined slightly, reflecting overall market decline. The sales volume in Belarus was almost on a par with the previous year.
The Group’s fourth-quarter sales volume increased by 5.2 percent. In the fourth quarter, sales improved in Finland and Belarus.
| Sales volume, million litres | 10-12/ 2016 | 10-12/ 2015 | Change % | 1-12/ 2016 | 1-12/ 2015 | Change % |
| Finland (Olvi plc) | 45.5 | 37.1 | 22.6 | 178.0 | 148.0 | 20.3 |
| Estonia (AS A. Le Coq) | 24.4 | 27.1 | -9.9 | 121.5 | 123.9 | -1.9 |
| Latvia (A/S Cēsu Alus) | 13.6 | 13.6 | 0.5 | 67.2 | 68.1 | -1.3 |
| Lithuania (AB Volfas Engelman) | 16.9 | 18.1 | -6.6 | 81.8 | 84.9 | -3.6 |
| Belarus (OAO Lidskoe Pivo) | 36.1 | 34.6 | 4.3 | 178.3 | 175.1 | 1.8 |
| Eliminations | -2.2 | -2.8 | -17.5 | -20.1 | ||
| Total | 134.4 | 127.8 | 5.2 | 609.4 | 579.9 | 5.1 |
The Group’s net sales in 2016 increased by 3.5 percent and amounted to 321.5 (310.5) million euro. Net sales improved particularly in Finland (15.6 percent), reflecting the increase in sales volume.
The Group’s net sales continued to grow also in the fourth quarter.
| Net sales, million euro | 10-12/ 2016 | 10-12/ 2015 | Change % | 1-12/ 2016 | 1-12/ 2015 | Change % |
| Finland (Olvi plc) | 29.3 | 26.0 | 12.7 | 118.9 | 102.9 | 15.6 |
| Estonia (AS A. Le Coq) | 15.2 | 16.3 | -6.7 | 76.9 | 75.8 | 1.5 |
| Latvia (A/S Cēsu Alus) | 6.4 | 6.4 | -0.3 | 31.8 | 31.2 | 2.1 |
| Lithuania (AB Volfas Engelman) | 7.9 | 7.4 | 7.5 | 35.3 | 35.8 | -1.4 |
| Belarus (OAO Lidskoe Pivo) | 14.1 | 14.0 | 0.8 | 66.8 | 73.6 | -9.2 |
| Eliminations | -1.2 | -1.3 | -8.3 | -8.7 | ||
| Total | 71.8 | 68.8 | 4.3 | 321.5 | 310.5 | 3.5 |
EARNINGS DEVELOPMENT
The Group’s operating profit for January-December increased by 6.0 percent and amounted to 40.4 (38.2) million euro, or 12.6 (12.3) percent of net sales. Operating profit improved in Finland and the Baltic states.
The Group’s fourth-quarter operating profit amounted to 5.3 (6.3) million euro.
| Operating profit, million euro | 10-12/ 2016 | 10-12/ 2015 | Change % | 1-12/ 2016 | 1-12/ 2015 | Change % |
| Finland (Olvi plc) | 1.2 | 1.9 | -38.0 | 10.7 | 7.8 | 37.0 |
| Estonia (AS A. Le Coq) | 2.4 | 3.2 | -22.9 | 15.9 | 15.9 | 0.1 |
| Latvia (A/S Cēsu Alus) | 0.5 | 0.5 | 3.6 | 3.4 | 3.0 | 13.1 |
| Lithuania (AB Volfas Engelman) | 0.5 | 0.3 | 54.9 | 2.7 | 2.6 | 3.6 |
| Belarus (OAO Lidskoe Pivo) | 0.7 | 0.4 | 74.9 | 7.5 | 8.8 | -15.5 |
| Eliminations | 0.1 | 0.1 | 0.2 | -0.0 | ||
| Total | 5.3 | 6.3 | -15.6 | 40.4 | 38.2 | 6.0 |
The Group’s net profit for 2016 increased by 47.6 percent and amounted to 32.8 (22.2) million euro. The Group’s fourth-quarter net profit remained on a par with the previous year and amounted to 4.9 (5.0) million euro.
Earnings per share calculated from the profit belonging to parent company shareholders increased in January-December and stood at 1.57 (1.08) euro. Fourth-quarter earnings per share amounted to 0.23 (0.24) euro.
The net profit and earnings per share for the comparison year were burdened by unrealised exchange rate losses on an intra-Group loan directed at investments in Belarus, which totalled 10.5 million euro and were recognised in financial items.
BALANCE SHEET, FINANCING AND INVESTMENTS
Olvi Group’s balance sheet total at the end of December 2016 was 328.5 (316.3) million euro. Equity per share at the end of 2016 stood at 9.73 (8.86) euro. The equity ratio improved and stood at 62.0 (58.6) percent. The Group’s interest-bearing net liabilities decreased by 29.8 million euro during 2016 and amounted to 4.3 million euro at year-end (34.1). The gearing ratio declined substantially during 2016 and stood at 2.1 (18.4) percent. Cash flow from operations totalled 61.2 (61.7) million euro. The current ratio, which represents the Group’s liquidity, was 1.0 (1.0).
Olvi Group’s gross capital expenditure in 2016 amounted to 20.5 (26.0) million euro. The parent company Olvi accounted for 6.1 million euro, the Baltic subsidiaries for 10.0 million euro and Lidskoe Pivo in Belarus for 4.4 million euro of the total. Capital expenditure declined on the previous year. The largest individual investment was the warehouse construction in Lithuania.
PRODUCT DEVELOPMENT AND NEW PRODUCTS
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.
Several new products were launched during 2016 both in Finland and by the subsidiaries. New products have been presented in interim reports released during the accounting period, as well as on each company’s Web site.
PERSONNEL
Olvi Group’s average number of personnel in January-December was 1859 (1940). The Group’s average number of personnel decreased by 81 people or 4.2 percent.
The greatest decline in the Group’s average number of personnel was seen in Belarus, where the figure dropped by 80 people.
The number of personnel in the Baltic states increased by a total of 6 people in January-December. The figure in Finland decreased by 7 people in January-December.
Olvi Group’s average number of personnel by country:
| 10-12/ 2016 | 10-12/ 2015 | Change % | 1-12/ 2016 | 1-12/ 2015 | Change % | |
| Finland | 316 | 299 | 5.7 | 329 | 336 | -2.1 |
| Estonia | 317 | 316 | 0.3 | 339 | 336 | 0.9 |
| Latvia | 183 | 204 | -10.3 | 207 | 206 | 0.5 |
| Lithuania | 233 | 228 | 2.2 | 235 | 233 | 0.9 |
| Belarus | 701 | 801 | -12.5 | 749 | 829 | -9.7 |
| Total | 1,750 | 1,848 | -5.3 | 1,859 | 1,940 | -4.2 |
MANAGEMENT AND AUDITORS
The company’s Board of Directors consists of Chairman Esa Lager, M.Sc. (Econ), LL.M., Vice Chairperson Nora Hortling, M.Sc. (Econ), as well as members Jaakko Autere, M.Sc. (Econ), Elisa Markula, M.Sc. (Econ), and Heikki Sirviö, Honorary Industrial Counsellor, M.Sc. (Engineering).
The company’s auditor is the authorised public accounting firm PricewaterhouseCoopers Oy, with Sami Posti, Authorised Public Accountant, as auditor in charge.
MANAGEMENT
The Management Group of Olvi plc consists of Lasse Aho, Managing Director (Chairman), Ilkka Auvola, Sales Director, Olli Heikkilä, Marketing Director, Pia Hortling, Product Development and Purchasing Director, Kati Kokkonen, Chief Financial Officer, Lauri Multanen, Production Director, as well as Marjatta Rissanen, Customer Service and Administrative Director.
The Managing Directors of the subsidiaries are:
AS A. Le Coq, Tartu, Estonia - Tarmo Noop
A/S Cēsu Alus, Cēsis, Latvia - Eva Sietiņsone
AB Volfas Engelman, Kaunas, Lithuania - Marius Horbačauskas
OAO Lidskoe Pivo, Lida, Belarus - Audrius Mikšys
The Managing Directors of the subsidiaries report to Lasse Aho, the Managing Director of Olvi plc. The Board of Directors of each subsidiary consists of Lasse Aho (Chairman), Pia Hortling, Kati Kokkonen and Lauri Multanen. The Management Group of each subsidiary consists of the corresponding Managing Director and two to four sector directors.
OTHER EVENTS DURING THE REVIEW PERIOD
Annual General Meeting
Olvi plc’s Annual General Meeting of 14 April 2016 adopted the financial statements and granted discharge from liability to the members of the Board of Directors and Managing Director for the accounting period that ended on 31 December 2015. In accordance with the Board’s proposal, the General Meeting decided that a dividend of 0.70 (0.65) euro be paid on each A and K share for the accounting period 2015. The dividends were paid on 28 April 2016.
All decisions made at the General Meeting can be found in the bulletin released on 14 April 2016.
Changes in corporate structure
During 2016, Olvi Group acquired 31 shares in the subsidiary A/S Cēsu Alus. There were no other changes in Olvi’s holdings in subsidiaries in January-December 2016.
At the end of the accounting period, Olvi’s shares of holding are:
| 31 Dec 2016 | 31 Dec 2015 | Change | |
| AS A. Le Coq, Estonia | 100.00 | 100.00 | - |
| A/S Cēsu Alus, Latvia | 99.88 | 99.87 | 0.01 |
| AB Volfas Engelman, Lithuania | 99.58 | 99.58 | - |
| OAO Lidskoe Pivo, Belarus | 94.57 | 94.57 | - |
Furthermore, A. Le Coq has a 49.0 percent holding in AS Karme and 20.0 percent holding in Verska Mineraalvee OÜ in Estonia.
SHARES
Olvi’s share capital at the end of December 2016 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 publicly traded Series A shares and 3,732,256 or 18.0 percent Series K shares.
Each Series A share carries one (1) vote and each Series K share carries twenty (20) votes. Series A and Series K shares have equal rights to dividends.
Detailed information on Olvi’s shares and share capital can be found in the tables attached to this financial statements bulletin, in Table 5, Section 4.
The total trading volume of Olvi A shares on Nasdaq OMX Helsinki in 2016 was 881,172 (2,036,830) shares, which represented 5.2 (12.0) percent of all Series A shares. The value of trading was 22.2 (48.4) million euro.
The Olvi A share was quoted on Nasdaq OMX Helsinki (Helsinki Stock Exchange) at 28.00 (22.19) euro at the end of 2016. In January-December, the highest quote for the Series A share was 28.51 (27.20) euro and the lowest quote was 20.30 (20.51) euro. The average share price in 2016 was 25.17 (23.76) euro.
At the end of December 2016, the market capitalisation of Series A shares was 476.4 (377.8) million euro and the market capitalisation of all shares was 580.9 (460.6) million euro.
The number of shareholders at the end of December 2016 was 9,866 (10,108). Foreign holdings plus foreign and Finnish nominee-registered holdings represented 24.1 (22.4) percent of the total number of book entries and 5.5 (5.1) percent of total votes.
Foreign and nominee-registered holdings are reported in Table 5, Section 9 of the tables attached to this financial statements bulletin, and the largest shareholders are reported in Table 5, Section 10.
Treasury shares
During the year 2016, Olvi acquired 5,500 of its own Series A shares. The purchase price was 120,139 euro. At the end of the reporting period, Olvi held a total of 11,124 Series A shares as treasury shares. The total purchase price of treasury shares was 228,162 euro. Treasury shares held by the company itself are ineligible for voting. Detailed information on treasury shares is provided in Table 5, Section 6 of the tables attached to this financial statements bulletin.
Flagging notices
On 11 April 2016, Olvi plc received a flagging notice concerning its shares in accordance with Chapter 9, Section 5 of the Securities Markets Act from the Estate of Heikki Hortling.
According to the notice, shares held by Heikki Wilhelm Hortling have been transferred to the Estate of Heikki Hortling. Shares transferred to the Estate: 99,760 Series A shares representing 0.48 percent of all shares and 0.11 percent of all votes; and 903,488 Series K shares representing 4.35 percent of all shares and 19.29 percent of all votes. Holding, Series A and Series K shares combined: 4.83 percent of all shares and 19.40 percent of all votes.
During January-December 2016, Olvi has not received any other flagging notices in accordance with Chapter 2, Section 10 of the Securities Markets Act.
BUSINESS RISKS AND THEIR MANAGEMENT
Risk management
Risk management is a part of Olvi Group’s everyday management and operations. The objective of risk management is to ensure the realisation of the company’s strategy and secure its financial development and the continuity of business. The task 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.
Business risks and uncertainties in the near term
The most substantial factor hampering the predictability of Olvi Group’s business relates to Belarus and its economic and political outlook for the next few years. Furthermore, negative development of the Russian economy may impose challenges on the Belarusian operating environment.
Operations in Belarus involve foreign exchange risks arising from the cash flows of purchases and sales in foreign currency, as well as the investment in the Belarusian subsidiary and the conversion of its income statement and balance sheet items into euro. The Group’s other foreign exchange risks can be considered minor.
Olvi Group’s operations may be affected to changes in consumer behaviour and the operations of our clientele arising from changes in official regulations. The planned excise tax hike in Estonia as of 1 July 2017 will probably result in a change of focus in volumes and consumption both from Estonia to the Latvian border and also from Estonia back to Finland. The effect of the change on the entire Olvi Group in 2017 is still difficult to estimate because there are several contributing factors, such as the pricing policies of companies doing business in harbours and on board after the excise duty changes, as well as a potential amendment to the Finnish Alcohol Act, the details and timing of which remain open for the time being.
Other short-term risks and uncertainties are related to the development of the general economic circumstances, changes in the competitive situation, as well as the impacts these may have on the company’s operations.
In addition to the risks described above, there have been no significant changes in Olvi Group’s business risks. A more detailed description of the risks is provided in the Board of Directors’ report and the notes to the financial statements, as well as in the Investors/Corporate Governance section of the company’s Web site.
NEAR-TERM OUTLOOK
Olvi estimates that the Group’s sales volume and net sales for 2017 will increase slightly on the previous year. Operating profit for 2017 is estimated to be on a par with the previous year.
BOARD OF DIRECTORS’ PROPOSAL FOR THE DISTRIBUTION OF PROFIT
The parent company Olvi plc had 47.8 (47.7) million euro of distributable funds on 31 December 2016, of which profit for the period accounted for 14.7 (11.7) million euro.
Olvi plc’s Board of Directors proposes to the Annual General Meeting that distributable funds be used as follows:
1) A dividend of 0.75 (0.70) euro shall be paid for 2016 on each Series K and Series A share, totalling 15.6 (14.5) million euro. The dividend represents 47.9 (65.1) percent of Olvi Group’s earnings per share. The dividend will be paid to shareholders registered in Olvi plc’s register of shareholders held by Euroclear Finland Ltd on the record date of the dividend payment, 25 April 2017. It is proposed that the dividend be paid on 10 May 2017. No dividend shall be paid on treasury shares.
2) 32.2 million euro shall be retained in the parent company’s non-restricted equity.
FINANCIAL REPORTS IN 2017
Olvi Group’s Annual Report will be published in week 13. The Annual Report will include the Board of Directors’ report, the consolidated and the parent company’s financial statements and the auditors’ report for the financial year 1 January to 31 December 2016. The Corporate Governance Statement and Remuneration Report for the financial year 2016 will also be published at the same time.
The notice to convene Olvi plc’s Annual General Meeting, which will be held on 21 April 2017 in Iisalmi, will be published in week 13. The financial statements, Board of Directors’ report and notice to convene the AGM will be available on Olvi plc’s Web site on the same day.
The following interim reports will be released in 2017:
Interim report from January to March on 28 April 2017,
Interim report from January to June on 18 August 2017, and
Interim report from January to September on 27 October 2017.
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 financial statements bulletin, Table 5
DISTRIBUTION:
NASDAQ OMX Helsinki Ltd
Key media
| OLVI GROUP | TABLE 1 | |||
| INCOME STATEMENT | ||||
| EUR 1,000 | ||||
| 10-12/2016 | 10-12/2015 | 1-12/2016 | 1-12/2015 | |
| Net sales | 71782 | 68830 | 321478 | 310494 |
| Other operating income | 197 | 434 | 1582 | 1743 |
| Operating expenses | -61754 | -58766 | -263881 | -257732 |
| Depreciation and impairment | -4887 | -4170 | -18734 | -16348 |
| Operating profit | 5338 | 6328 | 40445 | 38157 |
| Financial income | 163 | -18 | 1207 | 281 |
| Financial expenses | 100 | -385 | -1816 | -11641 |
| Share of profit in associates | 37 | 21 | 37 | 21 |
| Earnings before tax | 5638 | 5946 | 39873 | 26818 |
| Taxes **) | -776 | -901 | -7079 | -4598 |
| NET PROFIT FOR THE PERIOD | 4862 | 5045 | 32794 | 22220 |
| Other comprehensive income items: | ||||
| Translation differences related to | ||||
| foreign subsidiaries | 3623 | -1179 | -74 | -14620 |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 8485 | 3866 | 32720 | 7600 |
| Distribution of profit: | ||||
| - parent company shareholders | 4754 | 5069 | 32488 | 22334 |
| - non-controlling interests | 108 | -24 | 306 | -114 |
| Distribution of comprehensive income: | ||||
| - parent company shareholders | 8284 | 3916 | 32406 | 8358 |
| - non-controlling interests | 201 | -50 | 314 | -758 |
| Earnings per share calculated from the profit belonging | ||||
| to parent company shareholders, EUR | ||||
| - undiluted | 0.23 | 0.24 | 1.57 | 1.08 |
| - diluted | 0.23 | 0.24 | 1.57 | 1.08 |
**) Taxes calculated from the profit for the review period.
The notes constitute an essential part of the financial statements.
| OLVI GROUP | TABLE 2 | |
| BALANCE SHEET | ||
| EUR 1,000 | 31 Dec 2016 | 31 Dec 2015 |
| ASSETS | ||
| Non-current assets | ||
| Tangible assets | 196239 | 198258 *) |
| Goodwill | 15978 | 16017 |
| Other intangible assets | 5295 | 4183 |
| Shares in associates | 1183 | 1146 |
| Financial assets available for sale | 543 | 543 |
| Loans receivable and other non-current receivables | 280 | 310 |
| Deferred tax receivables | 265 | 147 |
| Total non-current assets | 219783 | 220604 |
| Current assets | ||
| Inventories | 32669 | 31013 *) |
| Accounts receivable and other receivables | 55627 | 51232 |
| Income tax receivable | 129 | 236 |
| Other non-current assets held for sale | 0 | 421 |
| Liquid assets | 20297 | 12786 |
| Total current assets | 108722 | 95688 |
| TOTAL ASSETS | 328505 | 316292 |
| SHAREHOLDERS’ EQUITY AND LIABILITIES | ||
| Shareholders’ equity held by parent company shareholders | ||
| Share capital | 20759 | 20759 |
| Other reserves | 1092 | 1092 |
| Treasury shares | -228 | -108 |
| Translation differences | -37022 | -36940 |
| Retained earnings | 217234 | 198979 |
| 201835 | 183782 | |
| Share belonging to non-controlling interests | 1714 | 1444 |
| Total shareholders’ equity | 203549 | 185226 *) |
| Non-current liabilities | ||
| Financial liabilities | 12932 | 24179 |
| Other liabilities | 17 | 4 |
| Deferred tax liabilities | 7749 | 6777 |
| Current liabilities | ||
| Financial liabilities | 11708 | 22683 |
| Accounts payable and other liabilities | 92328 | 77387 *) |
| Income tax liability | 222 | 36 |
| Total liabilities | 124956 | 131066 |
| TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES | 328505 | 316292 |
*) Change in accounting policies.
The notes constitute an essential part of the financial statements.
OLVI GROUP TABLE 3
CHANGES IN SHAREHOLDERS’ EQUITY
| Share capital |
Other reserves |
Treasury shares account |
Translation differences |
Retained earnings |
Share of non-controlling interests |
Total | |
| EUR 1,000 | |||||||
| Shareholders’ equity 1 Jan 2015 | 20759 | 1092 | -8 | -22964 | 189972 | 2249 | 191100 *) |
| Comprehensive income: | |||||||
| Net profit for the period | 22334 | -114 | 22220 | ||||
| Other comprehensive income items: | |||||||
| Translation differences | -13976 | -644 | -14620 | ||||
| Total comprehensive income for the period | -13976 | 22334 | -758 | 7600 | |||
| Transactions with shareholders: | |||||||
| Payment of dividends | -13492 | -46 | -13538 | ||||
| Dividends not withdrawn | 109 | 109 | |||||
| Acquisition of treasury shares | -100 | -100 | |||||
| Share-based incentives | 56 | 56 | |||||
| Total transactions with shareholders | -100 | -13327 | -46 | -13473 | |||
| Changes in holdings in subsidiaries: | |||||||
| Acquisition of shares from | |||||||
| non-controlling interests | 0 | 0 | |||||
| Change in shares held by | |||||||
| non-controlling interests | 0 | -1 | -1 | ||||
| Total changes in holdings in subsidiaries | 0 | -1 | -1 | ||||
| Shareholders’ equity 31 Dec 2015 | 20759 | 1092 | -108 | -36940 | 198979 | 1444 | 185226 |
*) Change in accounting policies.
| Share capital |
Other reserves |
Treasury shares account |
Translation differences |
Retained earnings |
Share of non-controlling interests |
Total | |
| EUR 1,000 | |||||||
| Shareholders’ equity 1 Jan 2016 | 20759 | 1092 | -108 | -36940 | 198979 | 1444 | 185226 |
| Comprehensive income: | |||||||
| Net profit for the period | 32488 | 306 | 32794 | ||||
| Other comprehensive income items: | |||||||
| Translation differences | -82 | 8 | -74 | ||||
| Total comprehensive income for the period | -82 | 32488 | 314 | 32720 | |||
| Transactions with shareholders: | |||||||
| Payment of dividends | -14523 | -42 | -14565 | ||||
| Acquisition of treasury shares | -120 | -120 | |||||
| Share-based incentives | 290 | 290 | |||||
| Total transactions with shareholders | -120 | -14233 | -42 | -14395 | |||
| Changes in holdings in subsidiaries: | |||||||
| Acquisition of shares from | |||||||
| non-controlling interests | 1 | 1 | |||||
| Change in shares held by | |||||||
| non-controlling interests | -1 | -2 | -3 | ||||
| Total changes in holdings in subsidiaries | 0 | -2 | -2 | ||||
| Shareholders’ equity 31 Dec 2016 | 20759 | 1092 | -228 | -37022 | 217234 | 1714 | 203549 |
Other reserves include the share premium account, legal reserve and other reserves.
The notes constitute an essential part of the financial statements.
| OLVI GROUP | TABLE 4 | |
| CASH FLOW STATEMENT | ||
| EUR 1,000 | ||
| 1-12/2016 | 1-12/2015 | |
| Net profit for the period | 32794 | 22220 |
| Adjustments to profit for the period | 25512 | 28684 |
| Change in net working capital | 8828 | 14169 |
| Interest paid | -777 | -1113 |
| Interest received | 428 | 228 |
| Dividends received | 2 | 0 |
| Taxes paid | -5553 | -2520 |
| Cash flow from operations (A) | 61234 | 61668 |
| Investments in tangible and intangible | ||
| assets | -18520 | -25100 |
| Sales gains from tangible and intangible | ||
| assets | 744 | 249 |
| Expenditure on other investments | -37 | -16 |
| Cash flow from investments (B) | -17813 | -24867 |
| Withdrawals of loans | 447 | 20360 |
| Repayments of loans | -21835 | -35250 |
| Acquisition of treasury shares | -120 | -64 |
| Dividends paid | -14529 | -13514 |
| Increase (-) / decrease (+) in current interest- | ||
| bearing business receivables | 8 | -8 |
| Increase (-) / decrease (+) in long-term | ||
| loan receivables | 23 | 26 |
| Cash flow from financing (C) | -36006 | -28450 |
| Increase (+)/decrease (-) in liquid assets (A+B+C) | 7415 | 8351 |
| Liquid assets 1 January | 12786 | 4382 |
| Effect of exchange rate changes | 96 | 53 |
| Liquid assets 31 December | 20297 | 12786 |
| The notes constitute an essential part of the financial statements. | ||
OLVI GROUP TABLE 5
NOTES TO THE FINANCIAL STATEMENTS
The financial statements for 1 January to 31 December 2016 have been prepared in compliance with the International Financial Reporting Standards (IFRS), observing the IAS and IFRS standards as well as the official SIC and IFRIC interpretations valid on 31 December 2016.
Preparation of financial statements in accordance with the IFRS standards requires the company's management to make estimates and assumptions that have an effect on the amount of assets and liabilities on the balance sheet at the closing date as well as the amounts of income and expenses for the accounting period. In addition, the management must exercise its judgment regarding the application of accounting policies. Since the estimates and assumptions are based on the views on the date of the financial statements, they include risks and uncertainties. The actual results may differ from the estimates and assumptions.
The accounting policies used for the financial statements 2016 are the same as those used for the annual financial statements 2015, except for the changes stated below.
The Group has adopted the following new or revised standards and interpretations in 2016:
- Annual improvements to the IFRS 2012–2014
- Disclosure Initiative – amendments to IAS 1 Presentation of Financial Statements
The above changes in standards do not have any substantial effect on the income statement or balance sheet. Some changes in standards may affect the scope of information disclosed in the notes.
Other changes in accounting policies as of 1 January 2016 *)
As of 1 January 2016, Olvi Group adopts the general industry practice of presenting recyclable beverage packages in tangible assets when they meet the criteria of IAS 16. This means that starting from 1 January 2016, property, plant and equipment includes not only the recyclable packages in inventory but also Olvi plc’s share of the package stock in accordance to shares determined by the Ekopulloyhdistys association, as well as packages held by the clients of subsidiaries, which the Group is obliged to repurchase. The repurchase obligation related to packaging used by clients is presented as a current liability on the balance sheet. The balance sheet for the comparison year has been adjusted to correspond to the new accounting policies. As a result of the change, property, plant and equipment for the comparison year has increased by 13.0 million euro, inventories have decreased by 11.2 million euro, accruals and deferred income have increased by 3.2 million euro and shareholders’ equity has decreased by 1.4 million euro. The indicators and notes for the comparison period have also been adjusted to correspond to the changes stated above. The change in accounting policies does not have any substantial effect on consolidated operating profit or net profit for the period.
The information in the financial statements bulletin 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 ratios are calculated from exact amounts in euros. The information disclosed in the financial statements bulletin is unaudited.
| 1. SEGMENT INFORMATION | ||||
| SALES VOLUME BY GEOGRAPHICAL SEGMENT (1,000 litres) | ||||
| 10-12/2016 | 10-12/2015 | 1-12/2016 | 1-12/2015 | |
| Olvi Group total | 134424 | 127774 | 609375 | 579901 |
| Finland | 45521 | 37141 | 178044 | 148029 |
| Estonia | 24444 | 27144 | 121467 | 123871 |
| Latvia | 13626 | 13557 | 67246 | 68122 |
| Lithuania | 16911 | 18103 | 81800 | 84877 |
| Belarus | 36104 | 34619 | 178298 | 175129 |
| - sales between segments | -2182 | -2790 | -17480 | -20127 |
| NET SALES BY GEOGRAPHICAL SEGMENT (EUR 1,000) | ||||
| 10-12/2016 | 10-12/2015 | 1-12/2016 | 1-12/2015 | |
| Olvi Group total | 71782 | 68830 | 321478 | 310494 |
| Finland | 29315 | 26018 | 118876 | 102869 |
| Estonia | 15200 | 16282 | 76926 | 75790 |
| Latvia | 6395 | 6413 | 31839 | 31188 |
| Lithuania | 7932 | 7378 | 35342 | 35843 |
| Belarus | 14137 | 14031 | 66776 | 73550 |
| - sales between segments | -1197 | -1292 | -8281 | -8746 |
| OPERATING PROFIT BY GEOGRAPHICAL SEGMENT (EUR 1,000) | ||||||
| 10-12/2016 | 10-12/2015 | 1-12/2016 | 1-12/2015 | |||
| Olvi Group total | 5338 | 6328 | 40445 | 38157 | ||
| Finland | 1164 | 1877 | 10743 | 7839 | ||
| Estonia | 2443 | 3168 | 15926 | 15913 | ||
| Latvia | 498 | 481 | 3377 | 2987 | ||
| Lithuania | 482 | 312 | 2702 | 2610 | ||
| Belarus | 686 | 392 | 7471 | 8838 | ||
| - eliminations | 65 | 98 | 226 | -30 | ||
| 2. PERSONNEL ON AVERAGE | 10-12/2016 | 10-12/2015 | 1-12/2016 | 1-12/2015 |
| Finland | 316 | 299 | 329 | 336 |
| Estonia | 317 | 316 | 339 | 336 |
| Latvia | 183 | 204 | 207 | 206 |
| Lithuania | 233 | 228 | 235 | 233 |
| Belarus | 701 | 801 | 749 | 829 |
| Total | 1,750 | 1,848 | 1,859 | 1,940 |
| 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 | ||
| 1-12/2016 | 1-12/2015 | |
| Managing Director | 393 | 350 |
| Chairman of the Board | 68 | 83 |
| Other members of the Board | 137 | 150 |
| Total | 598 | 583 |
|
4. SHARES AND SHARE CAPITAL |
||
| 31 Dec 2016 | % | |
| 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 31 December 2016 totalled 20,759 thousand euro. | |
Olvi plc’s shares received a dividend of 0.70 euro per share for 2015 (0.65 euro per share for 2014), totalling 14.5 (13.5) million euro. The dividends were paid on 28 April 2016. 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 Group has share-based incentive plans for key employees. The aim of the share-based incentive plans is to combine the objectives of the shareholders and the key employees in order to increase the value of the company, to make the key employees committed to the company, and to offer them a competitive reward plan based on earning the company’s shares.
At the end of fiscal 2016, an incentive plan based on the Group’s cumulative operating profit in the years 2014 to 2016 expired. Its target group included approximately 50 people. In accordance with the terms and conditions of the plan, rewards would have been paid in Olvi plc Series A shares and in cash. The targets of the plan were not met, which means that the plan will lapse. No costs arising from the plan have been recognised in the consolidated financial statements.
The Group has an active share-based incentive plan with one three-year performance period, beginning on 1 July 2014 and ending on 30 June 2017. In accordance with the terms and conditions of the plan, rewards will be paid in Olvi plc Series A shares and partially in cash.
The cash proportion is intended to cover taxes and tax-related costs arising from the rewards to the key employees. The prerequisite for receiving a reward for this performance period is that a key employee purchases the company’s Series A shares up to the maximum number determined by the Board of Directors. Furthermore, entitlement to a reward is tied to the continuance of employment or service upon reward payment. From January to December 2016, accounting entries associated with the performance period from 1 July 2014 to 30 June 2017 were recognised for a total of 91.3 thousand euro.
On 24 February 2016, Olvi plc’s Board of Directors decided on a new share-based incentive plan for the Group’s key personnel. The performance period for the share-based incentive plan is two years. The prerequisite for receiving reward is that a key employee purchases the company’s Series A shares up to the maximum number determined by the Board of Directors. Furthermore, entitlement to a reward is tied to the continuance of employment or service upon reward payment. Rewards will be paid partly in the company’s Series A shares and partly in cash in 2018. The cash proportion is intended to cover taxes and tax-related costs arising from the rewards to the key employees. The Board of Directors may decide that the share proportion be paid fully or partially in cash. The plan is directed to approximately 50 people. The rewards to be paid on the basis of the plan are in total an approximate maximum of 36,280 series Series A shares in Olvi plc and a cash payment needed for taxes and tax-related costs arising from the shares. The costs of the plan will be recognised over the performance period from 1 July 2016 to 30 June 2018. From January to December 2016, costs associated with the plan based on the 24 February 2016 decision were recognised for a total of 363.8 thousand euro.
Olvi Group does not have any other share-based plans or option plans.
6. TREASURY SHARES
During the year 2016, Olvi acquired 5,500 of its own Series A shares. The purchase price was 120,139 euro. At the end of the reporting period, Olvi held a total of 11,124 Series A shares as treasury shares. The total purchase price of treasury shares was 228,162 euro. Treasury shares held by the company itself are ineligible for voting.
Series A shares held by Olvi plc as treasury shares represented 0.054 percent of the share capital and 0.012 percent of the aggregate number of votes. The treasury shares represented 0.065 percent of all Series A shares and associated votes.
On 14 April 2016, 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 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.
| 7. NUMBER OF SHARES *) | 1-12/2016 | 1-12/2015 |
| - average | 20747742 | 20757645 |
| - at end of period | 20747684 | 20753184 |
| *) Treasury shares deducted. | ||
| 8. TRADING OF SERIES A SHARES ON THE HELSINKI STOCK EXCHANGE | ||
| 1-12/2016 | 1-12/2015 | |
| Trading volume of Olvi A shares | 881172 | 2036830 |
| Total trading volume, EUR 1,000 | 22162 | 48413 |
| Traded shares in proportion to | ||
| all Series A shares, % | 5.2 | 12.0 |
| Average share price, EUR | 25.17 | 23.76 |
| Price on the closing date, EUR | 28.00 | 22.19 |
| Highest quote, EUR | 28.51 | 27.20 |
| Lowest quote, EUR | 20.30 | 20.51 |
| 9. FOREIGN AND NOMINEE-REGISTERED HOLDINGS ON 31 DECEMBER 2016 | ||||||
| Book entries | Votes | Shareholders | ||||
| qty | % | qty | % | qty | % | |
| Finnish total | 15762632 | 75.93 | 86675496 | 94.55 | 9806 | 99.39 |
| Foreign total | 370354 | 1.78 | 370354 | 0.40 | 51 | 0.52 |
| Nominee-registered (foreign) total | 99425 | 0.48 | 99425 | 0.11 | 3 | 0.03 |
| Nominee-registered (Finnish) total | 4526397 | 21.81 | 4526397 | 4.94 | 6 | 0.06 |
| Total | 20758808 | 100.00 | 91671672 | 100.00 | 9866 | 100.00 |
| 10. LARGEST SHAREHOLDERS ON 31 DECEMBER 2016 | ||||||
| Series K | Series A | Total | % | Votes | % | |
| 1. Olvi Foundation | 2363904 | 890613 | 3254517 | 15.68 | 48168693 | 52.54 |
| 2. The Estate of Hortling Heikki *) | 903488 | 103280 | 1006768 | 4.85 | 18173040 | 19.82 |
| 3. The Estate of Hortling Kalle Einari | 187104 | 25248 | 212352 | 1.02 | 3767328 | 4.11 |
| 4. Hortling Timo Einari | 165824 | 36308 | 202132 | 0.97 | 3352788 | 3.66 |
| 5. OP Corporate Bank plc, nominee register | 2153672 | 2153672 | 10.37 | 2153672 | 2.35 | |
| 6. Hortling-Rinne Laila Marit | 102288 | 3380 | 105668 | 0.51 | 2049140 | 2.24 |
| 7. Nordea Bank AB (publ), Finnish Branch, nominee register | 1890440 | 1890440 | 9.11 | 1890440 | 2.06 | |
| 8. Ilmarinen Mutual Pension Insurance Company | 849218 | 849218 | 4.09 | 849218 | 0.93 | |
| 9. Varma Mutual Pension Insurance Company | 828075 | 828075 | 3.99 | 828075 | 0.90 | |
| 10. AC Invest Oy | 460000 | 460000 | 2.22 | 460000 | 0.50 | |
| Others | 9648 | 9786318 | 9795966 | 47.19 | 9979278 | 10.89 |
| 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 | ||
| 1-12/2016 | 1-12/2015 | |
| Opening balance | 198258 | 205167 *) |
| Additions | 19750 | 25495 |
| Deductions and transfers | -3769 | -390 |
| Depreciation | -17452 | -15495 |
| Exchange rate differences | -548 | -16519 |
| Closing balance | 196239 | 198258 |
|
*) Change in accounting policies. |
||
| 12. CONTINGENT LIABILITIES | ||
| EUR 1,000 | ||
| 31 Dec 2016 | 31 Dec 2015 | |
| Pledges and contingent liabilities | ||
| For own commitments | 1886 | 2352 |
| Leasing and rental liabilities: | ||
| Due within one year | 1540 | 1402 |
| Due within 1 to 5 years | 1396 | 1179 |
| Due in more than 5 years | 2 | 4 |
| Leasing and rental liabilities total | 2938 | 2585 |
| Package liabilities | 0 | 0 *) |
| Other liabilities | 2000 | 2000 |
*) Change in accounting policies.
13. CALCULATION OF FINANCIAL RATIOS
In the summary of financial indicators (page 1), the Group presents figures directly derived from the consolidated income statement: net sales, operating profit and profit for the period, the corresponding percentages in proportion to net sales, as well as the earnings per share ratio. (Earnings per share = Profit belonging to parent company shareholders / Average number of shares during the period, adjusted for share issues).
In addition to the consolidated financial statements prepared in accordance with IFRS, Olvi Group presents Alternative Performance Measures that describe the financial development of its business and provide a commensurate overall view of the company’s profitability, financial position and liquidity.
The Group has applied the ESMA (European Securities and Markets Authority) new guidelines on Alternative Performance Measures that entered into force on 3 July 2016 and defined APMs as described below.
As an APM supporting net sales, the Group presents sales volumes in millions of litres. Sales volume is an important indicator of the extent of operations generally used in the industry.
The definition of gross margin is operating profit plus depreciation and impairment.
Gross capital expenditure consists of total expenditure on fixed assets, including the effect of any corporate acquisitions.
Equity per share = Shareholders’ equity held by parent company shareholders / Number of shares at end of period, adjusted for share issues
Equity to total assets, % = 100 * (Shareholders’ equity held by parent company shareholders + non-controlling interests) / (Balance sheet total)
Gearing, % = 100 * (Interest-bearing debt – cash in hand and at bank) / (Shareholders’ equity held by parent company shareholders + non-controlling interests)
