Iisalmi, 2017-08-18 07:59 CEST (GLOBE NEWSWIRE) -- OLVI PLC HALF-YEAR REPORT 18 AUG 2017 at 9:00 am
OLVI GROUP’S HALF-YEAR REPORT, 1 JANUARY TO 30 JUNE 2017 (6 MONTHS)
HALF-YEAR REPORT IN BRIEF
Olvi Group’s business continued to develop favourably in the review period. The Group’s and all of its units’ net sales and operating profit improved on the comparable period in the previous year.
January to June 2017 in brief:
- Olvi Group’s sales volume was 328.6 (306.4) million litres
- The Group’s net sales amounted to 180.1 (160.0) million euro
- The Group’s operating profit amounted to 25.2 (19.9) million euro
- Olvi Group’s earnings per share stood at 0.93 (0.70) euro per share
- The equity to total assets ratio was 57.6 (52.7) percent.
April to June 2017 in brief:
- Olvi Group’s sales volume was 198.2 (189.5) million litres
- The Group’s net sales amounted to 108.9 (97.9) million euro
- The Group’s operating profit amounted to 19.0 (15.5) million euro
- Olvi Group’s earnings per share stood at 0.67 (0.56) euro per share
Olvi upgrades the operating profit outlook for 2017 and estimates that the Group’s sales volume, net sales and operating profit for 2017 will increase slightly compared to the previous year.
CONSOLIDATED KEY RATIOS
| 4-6/ 2017 | 4-6/ 2016 | Change % / pp | 1-6/ 2017 | 1-6/ 2016 | Change % / pp | 1-12/ 2016 | |
| Sales volume, Mltr | 198.2 | 189.5 | 4.6 | 328.6 | 306.4 | 7.3 | 609.4 |
| Net sales, MEUR | 108.9 | 97.9 | 11.3 | 180.1 | 160.0 | 12.5 | 321.5 |
| Gross margin, MEUR | 23.8 | 20.2 | 17.9 | 34.9 | 29.0 | 20.3 | 59.2 |
| % of net sales | 21.9 | 20.6 | 19.4 | 18.1 | 18.4 | ||
| Operating profit, MEUR | 19.0 | 15.5 | 22.2 | 25.2 | 19.9 | 26.3 | 40.4 |
| % of net sales | 17.4 | 15.9 | 14.0 | 12.5 | 12.6 | ||
| Net profit for the period | 13.8 | 11.8 | 17.4 | 19.4 | 14.5 | 33.7 | 32.8 |
| % of net sales | 12.7 | 12.1 | 10.8 | 9.1 | 10.2 | ||
| Earnings per share, EUR | 0.67 | 0.56 | 19.6 | 0.93 | 0.70 | 32.9 | 1.57 |
| Gross capital expenditure, MEUR | 5.5 | 5.4 | 2.7 | 9.9 | 10.9 | -9.3 | 20.5 |
| Equity per share, EUR | 9.71 | 8.62 | 12.6 | 9.73 | |||
| Equity to total assets, % | 57.6 | 52.7 | 4.9 | 62.0 | |||
| Gearing, % | 4.4 | 16.2 | -11.8 | 2.1 |
BUSINESS DEVELOPMENT
LASSE AHO, MANAGING DIRECTOR:
In the first half and second quarter of the year, Olvi Group’s business developed favourably even though cool weather in the review period had a negative impact on the overall market development in May and June. The Group’s and all of its units’ net sales and operating profit improved in comparison to the previous year, both in the second quarter and the half-year period, and the Group’s relative profitability improved. All of the other key ratios improved as well.
In Finland, we have been able to increase our market share, and the sales volume has continued to grow thanks to factors such as our strong brands and successful new product launches. Larger sales volumes have made it possible to utilise production and logistics capacity more efficiently and contributed to positive earnings development.
In the Baltic states, development in the first half of the year has been positive, with half-year aggregate operating profit up 24 percent from the previous year. This year, business in the Baltic states is characterised by the impact of excise tax hikes on the operating environment. The excise tax hike on mild alcoholic beverages that came into effect in Estonia as of 1 July 2017 is reflected in consumers’ purchasing behaviour and therefore also in the timing of Olvi Group’s sales. There was a slight increase in the first half of the year before the tax hike, and we estimate that this will cause somewhat of a sales decline in the third quarter. Preparing for the tax change has also tied up the Group’s working capital temporarily, and this reduced the consolidated operational cash flow in the period under review. Excise tax hikes were also seen in Lithuania in the first half of the year, and this has been reflected in the company’s business as a temporary slowdown in second-quarter domestic sales. Sales in Latvia ad Lithuania were boosted by deliveries to the Estonian unit.
The business in Belarus, and particularly the company’s profitability, have developed well in the first half of the year. Half-year operating profit increased by 41 percent, with a clear increase also in the second quarter even though cool weather in the early summer pushed down the otherwise very positive trend. During the first half, success was evident both in domestic sales within Belarus and exports to Russia.
Predicting the outlook for the rest of the year is more challenging than usual because of the need to estimate the impacts of excise tax hikes. However, we believe that positive development will continue in Finland and Belarus, and that business in the Baltic states will normalise after the effect of the tax change, at the latest during the autumn season.
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
Sales volume development
Olvi Group’s sales volume in January-June increased by 7.3 percent to 328.6 (306.4) million litres. The sales volume in April-June increased by 4.6 percent to 198.2 (189.5) million litres.
The January–June sales volume increased across all units. Second-quarter sales slowed down slightly due to the impact of cool weather on the general development of the market. Sales development has been positive above all in Finland. In addition to increased intra-Group sales, the sales increase in Latvia was also attributable to a boost in cross-border trade between Latvia and Estonia.
Sales volume development by unit:
| Sales volume, million litres |
4-6/ 2017 |
4-6/ 2016 | Change % |
1-6/ 2017 |
1-6/ 2016 |
Change % |
| Finland (Olvi plc) | 56.7 | 49.9 | 13.8 | 98.7 | 85.0 | 16.1 |
| Estonia (AS A. Le Coq) | 41.5 | 39.3 | 5.7 | 67.2 | 65.2 | 3.1 |
| Latvia (A/S Cēsu Alus) | 23.9 | 21.4 | 12.0 | 42.2 | 34.4 | 22.6 |
| Lithuania (AB Volfas Engelman) | 24.7 | 24.5 | 0.9 | 42.9 | 41.0 | 4.8 |
| Belarus (OAO Lidskoe Pivo) | 60.6 | 61.0 | -0.6 | 95.5 | 90.9 | 5.1 |
| Eliminations | -9.3 | -6.5 | -17.9 | -10.1 | ||
| Total | 198.2 | 189.5 | 4.6 | 328.6 | 306.4 | 7.3 |
Net sales development
The Group’s net sales in January-June increased by 12.5 percent and amounted to 180.1 (160.0) million euro. Net sales in April-June increased by 11.3 percent to 108.9 (97.9) million euro. Net sales increased in all units both in the second quarter and in January-June, reflecting the growth in sales volume and the development of average net sales price.
Net sales development by unit:
| Net sales, million euro |
4-6/ 2017 |
4-6/ 2016 | Change % |
1-6/ 2017 |
1-6/ 2016 |
Change % |
| Finland (Olvi plc) | 37.3 | 33.4 | 11.7 | 64.4 | 57.2 | 12.6 |
| Estonia (AS A. Le Coq) | 27.2 | 25.2 | 7.9 | 43.8 | 41.3 | 6.0 |
| Latvia (A/S Cēsu Alus) | 12.2 | 10.0 | 22.1 | 20.6 | 16.2 | 27.4 |
| Lithuania (AB Volfas Engelman) | 12.1 | 10.3 | 16.8 | 20.6 | 17.1 | 20.0 |
| Belarus (OAO Lidskoe Pivo) | 24.2 | 21.9 | 10.4 | 38.6 | 32.9 | 17.4 |
| Eliminations | -4.1 | -3.0 | -7.9 | -4.7 | ||
| Total | 108.9 | 97.9 | 11.3 | 180.1 | 160.0 | 12.5 |
EARNINGS DEVELOPMENT
The Group’s operating profit in January-June stood at 25.2 (19.9) million euro, or 14.0 (12.5) percent of net sales. Operating profit in April-June stood at 19.0 (15.5) million euro, which was 17.4 (15.9) percent of net sales. Operating profit increased across all units in the second quarter as well as in the half-year period, and the Group’s relative profitability improved.
Operating profit development by unit:
| Operating profit, million euro | 4-6/ 2017 | 4-6/ 2016 | Change % |
1-6/ 2017 |
1-6/ 2016 |
Change % |
| Finland (Olvi plc) | 4.7 | 3.9 | 19.5 | 6.3 | 5.1 | 22.5 |
| Estonia (AS A. Le Coq) | 7.0 | 6.1 | 15.1 | 9.5 | 8.5 | 12.0 |
| Latvia (A/S Cēsu Alus) | 1.8 | 1.2 | 42.8 | 2.4 | 1.6 | 47.7 |
| Lithuania (AB Volfas Engelman) | 1.4 | 0.7 | 92.7 | 1.7 | 0.8 | 103.0 |
| Belarus (OAO Lidskoe Pivo) | 4.1 | 3.5 | 16.8 | 5.3 | 3.7 | 41.5 |
| Eliminations | 0.0 | 0.0 | 0.0 | 0.1 | ||
| Total | 19.0 | 15.5 | 22.2 | 25.2 | 19.9 | 26.3 |
The Group’s profit after taxes in January-June increased by 33.7 percent on the previous year, amounting to 19.4 (14.5) million euro. Profit in April-June increased by 17.4 percent to 13.8 (11.8) million euro.
Earnings per share calculated from the profit belonging to parent company shareholders improved. In January-June it stood at 0.93 (0.70) euro, and the April-June figure was 0.67 (0.56) euro.
BALANCE SHEET, FINANCING AND INVESTMENTS
Olvi Group’s balance sheet total at the end of June 2017 was 351.6 (341.7) million euro. Equity per share at the end of June 2017 stood at 9.71 (8.62) euro. The equity ratio was 57.6 (52.7) percent and the gearing ratio was 4.4 (16.2) percent.
Consolidated cash flow from operations totalled 20.9 (30.4) million euro. The reduction in cash flow was affected by a temporary increase in working capital due to preparations for the tax change in Estonia.
The amount of interest-bearing liabilities dropped substantially and amounted to 17.4 (42.7) million euro at the end of June. Current liabilities made up 8.4 (25.7) million euro of all interest-bearing liabilities.
Olvi Group’s gross capital expenditure in January-June amounted to 9.9 (10.9) million euro. The parent company Olvi accounted for 3.6 million euro, the Baltic subsidiaries for 4.0 million euro and Lidskoe Pivo in Belarus for 2.3 million euro of the total.
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.
NEW PRODUCTS
No new products were launched in Finland in the second quarter. New introductions in the first quarter were published in the January-March interim report.
In Estonia, A. Le Coq launched A. Le Coq Kvass with cherry flavour. The Limpa range of juices saw the introduction of water + juice products in two flavours, cherry and blueberry, with no added sugar.
In Latvia, Cēsu Alus complemented its Cēsu Premium range with a non-alcoholic alternative in cans. In ciders, Cēsu Light Crispy Apple and the semi-dry Dārza (Orchard Cider) in rhubarb flavour ere introduced, with no added sugar. The range of radlers was complemented with Cēsu Radler Mango-Chili.
In Lithuania, Volfas Engelman expanded its Horn beer brand with the Disel Gold version. The kvass Smetoniska Gira received a new, sweeter SmaliŽių variant. The new price fighter energy drink Energy Beat was introduced. In soft drinks, the new brand Sakmé was introduced. It is more natural, contains less sugar and comes with added vitamin C.
In Belarus, Lidskoe Pivo launched a new beer Lidskoe 50 to celebrate the 50th anniversary of the Lidskoe brand. FIZZ Lime&Mint is this summer’s seasonal variety of cider. The Vitamineral well-being beverage was complemented with the Balance and Isotonic variants.
Detailed information on new products can be found on each company’s Web site.
PERSONNEL
The Group’s average number of personnel decreased in January-June by 90 people, ending at 1,801 (1,891). The Group’s average number of personnel decreased by 77 people in Belarus and 24 people in the Baltic states. The average number of personnel in Finland increased by 11 people.
Olvi Group’s average number of personnel by country:
| 4-6/ 2017 | 4-6/ 2016 | Change % | 1-6/ 2017 | 1-6/ 2016 | Change % | |
| Finland | 359 | 357 | 0.6 | 334 | 323 | 3.4 |
| Estonia | 343 | 367 | -6.5 | 335 | 344 | -2.6 |
| Latvia | 222 | 226 | -1.8 | 206 | 214 | -3.7 |
| Lithuania | 227 | 241 | -5.8 | 228 | 235 | -3.0 |
| Belarus | 708 | 773 | -8.4 | 698 | 775 | -9.9 |
| Total | 1,859 | 1,964 | -5.3 | 1,801 | 1,891 | -4.8 |
MANAGEMENT AND AUDITORS
The company’s Board of Directors consists of Chairman Pentti Hakkarainen, 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), Esa Lager, M.Sc. (Econ), LL.M., and Heikki Sirviö, Honorary Industrial Counsellor, M.Sc. (Engineering).
The company’s auditor is the authorised public accounting firm PricewaterhouseCoopers Oy, with Juha Toppinen, 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, Public Relations 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.
GROUP STRUCTURE
In January–June, Olvi Group acquired 980 shares in its subsidiary OAO Lidskoe Pivo. There were no other changes in Olvi’s holdings in subsidiaries in January-June 2017.
Olvi’s holdings in the subsidiaries are:
| 30 June 2017 |
31 Dec 2016 |
Change | |
| AS A. Le Coq, Estonia | 100.00 | 100.00 | - |
| A/S Cēsu Alus, Latvia | 99.88 | 99.88 | - |
| AB Volfas Engelman, Lithuania | 99.58 | 99.58 | - |
| OAO Lidskoe Pivo, Belarus | 95.87 | 94.57 | 1.30 |
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 June 2017 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 half-year report, in Table 5, Section 4.
The total trading volume of Olvi A shares on Nasdaq OMX Helsinki in January-June 2017 was 505,835 (511,767) shares, which represented 3.0 (3.0) percent of all Series A shares. The value of trading was 14.4 (12.1) million euro.
The Olvi A share was quoted on Nasdaq OMX Helsinki (Helsinki Stock Exchange) at 30.64 (25.25) euro at the end of June 2017. In January-June, the highest quote for the Series A share was 32.00 (27.10) euro and the lowest quote was 25.05 (20.30) euro. The average price in January-June was 28.42 (23.73) euro.
At the end of June 2017, the market capitalisation of Series A shares was 520.2 (429.6) million euro and the market capitalisation of all shares was 634.6 (523.9) million euro.
The number of shareholders at the end of June 2017 was 10,237 (9,914). Foreign holdings plus foreign and Finnish nominee-registered holdings represented 24.5 (23.4) percent of the total number of book entries and 5.5 (5.3) percent of total votes.
Foreign and nominee-registered holdings are reported in Table 5, Section 9 of the tables attached to this half-year report, and the largest shareholders are reported in Table 5, Section 10.
Treasury shares
Olvi plc’s Annual General Meeting on 21 April 2017 made a decision concerning abandoned or “ghost” shares held in a joint book-entry account. The decision was that the right to a share incorporated in the book-entry system and placed in the joint account, and the rights that the share carries have been forfeited, and authorised the Board of Directors to take all measures called for by the decision. On this basis, 36,576 shares have been transferred from Olvi’s joint account to treasury shares on 18 May 2017.
Before the transfer, Olvi held 11,124 Series A shares as treasury shares. After the transfer, Olvi holds 47,700 Series A shares as treasury shares. The number of treasury shares represents 0.2 percent of the entire stock. 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 half-year report.
Flagging notices
During January-June 2017, Olvi has not received any 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 also be affected to changes in consumer behaviour and the operations of our clientele arising from changes in official regulations. The excise tax hike that became effective 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.
OTHER EVENTS DURING THE REVIEW PERIOD
Annual General Meeting
Olvi plc’s Annual General Meeting of 21 April 2017 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 2016.
In accordance with the Board’s proposal, the General Meeting decided that a dividend of 0.75 (0.70) euro be paid on each A and K share for the accounting period 2016. The dividend according to the resolution accounts for 47.9 (65.1) percent of Olvi Group’s consolidated earnings per share. The dividends were paid on 10 May 2017.
The General Meeting decided that the Board of Directors shall have six (6) members. Jaakko Autere, Nora Hortling, Esa Lager, Elisa Markula and Heikki Sirviö were re-elected as Members of the Board, and Pentti Hakkarainen was elected as a new member.
The authorised public accounting firm PricewaterhouseCoopers Oy was elected the company’s auditor, with Juha Toppinen, Authorised Public Accountant, as auditor in charge.
All decisions made at the General Meeting can be found in the bulletin released on 21 April 2017.
NEAR-TERM OUTLOOK
Olvi estimates that the Group’s sales volume, net sales and operating profit for 2017 will increase slightly on the previous year.
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 half-year report, Table 5
DISTRIBUTION:
NASDAQ OMX Helsinki Ltd
Key media
www.olvi.fi
| OLVI GROUP | TABLE 1 | |||||
| INCOME STATEMENT | ||||||
| EUR 1,000 | ||||||
|
4-6/ 2017 |
4-6/ 2016 |
1-6/ 2017 |
1-6/ 2016 |
1-12/ 2016 |
||
| Net sales | 108908 | 97852 | 180067 | 160015 | 321478 | |
| Other operating income | 361 | 560 | 834 | 1018 | 1582 | |
| Operating expenses | -85461 | -78221 | -146022 | -132041 | -263881 | |
| Depreciation and impairment | -4841 | -4666 | -9695 | -9056 | -18734 | |
| Operating profit | 18967 | 15525 | 25184 | 19936 | 40445 | |
| Financial income | -24 | 333 | 1814 | 904 | 1207 | |
| Financial expenses | -535 | -379 | -2243 | -1764 | -1816 | |
| Share of profit in associates | 0 | 0 | 0 | 0 | 37 | |
| Earnings before tax | 18408 | 15479 | 24755 | 19076 | 39873 | |
| Taxes *) | -4565 | -3685 | -5365 | -4573 | -7079 | |
| NET PROFIT FOR THE PERIOD | 13843 | 11794 | 19390 | 14503 | 32794 | |
| Other comprehensive income items: | ||||||
| Translation differences related to | ||||||
| foreign subsidiaries | -5979 | 1452 | -4918 | -5391 | -74 | |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 7864 | 13246 | 14472 | 9112 | 32720 | |
| Distribution of profit: | ||||||
| - parent company shareholders | 13798 | 11576 | 19288 | 14478 | 32488 | |
| - non-controlling interests | 45 | 218 | 102 | 25 | 306 | |
| Distribution of comprehensive income: | ||||||
| - parent company shareholders | 7949 | 12992 | 14482 | 9216 | 32406 | |
| - non-controlling interests | -85 | 254 | -10 | -104 | 314 | |
| Earnings per share calculated from the profit belonging | ||||||
| to parent company shareholders, EUR | ||||||
| - undiluted | 0.67 | 0.56 | 0.93 | 0.70 | 1.57 | |
| - diluted | 0.67 | 0.56 | 0.93 | 0.70 | 1.57 | |
*) Taxes calculated from the profit for the review period.
| OLVI GROUP | TABLE 2 | ||
| BALANCE SHEET | |||
| EUR 1,000 | |||
| 30 June 2017 | 30 June 2016 | 31 Dec 2016 | |
| ASSETS | |||
| Non-current assets | |||
| Tangible assets | 191915 | 194607 | 196239 |
| Goodwill | 15584 | 15557 | 15978 |
| Other intangible assets | 5062 | 4870 | 5295 |
| Shares in associates | 1183 | 1146 | 1183 |
| Financial assets available for sale | 543 | 549 | 543 |
| Loans receivable and other non-current receivables | 280 | 303 | 280 |
| Deferred tax receivables | 301 | 213 | 265 |
| Total non-current assets | 214868 | 217245 | 219783 |
| Current assets | |||
| Inventories | 37748 | 36633 | 32669 |
| Accounts receivable and other receivables | 90547 | 73820 | 55627 |
| Income tax receivable | 0 | 0 | 129 |
| Other non-current assets held for sale | 0 | 419 | 0 |
| Liquid assets | 8409 | 13560 | 20297 |
| Total current assets | 136704 | 124432 | 108722 |
| TOTAL ASSETS | 351572 | 341677 | 328505 |
| SHAREHOLDERS’ EQUITY AND LIABILITIES | |||
| Shareholders’ equity held by parent company shareholders | |||
| Share capital | 20759 | 20759 | 20759 |
| Other reserves | 1092 | 1092 | 1092 |
| Treasury shares | -228 | -228 | -228 |
| Translation differences | -41828 | -42202 | -37022 |
| Retained earnings | 221304 | 199350 | 217234 |
| 201099 | 178771 | 201835 | |
| Share belonging to non-controlling interests | 1244 | 1297 | 1714 |
| Total shareholders’ equity | 202343 | 180068 | 203549 |
| Non-current liabilities | |||
| Financial liabilities | 9015 | 17046 | 12932 |
| Other liabilities | 27 | 6 | 17 |
| Deferred tax liabilities | 8377 | 7634 | 7749 |
| Current liabilities | |||
| Financial liabilities | 8381 | 25661 | 11708 |
| Accounts payable and other liabilities | 122255 | 110692 | 92328 |
| Income tax liability | 1174 | 570 | 222 |
| Total liabilities | 149229 | 161609 | 124956 |
| TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES | 351572 | 341677 | 328505 |
| OLVI GROUP | TABLE 3 | ||||||||
| CHANGES IN SHAREHOLDERS’ EQUITY | |||||||||
|
EUR 1,000 |
Share capital | Other reserves | Treasury shares reserve | Translation differences | Retained earnings | Share of non-controlling interests | Total | ||
| Shareholders’ equity 1 Jan 2016 | 20759 | 1092 | -108 | -36940 | 200415 | 1447 | 186665 | ||
| Comprehensive income: | |||||||||
| Net profit for the period | 14478 | 25 | 14503 | ||||||
| Other comprehensive income items: | |||||||||
| Translation differences | -5262 | -129 | -5391 | ||||||
| Total comprehensive income for the period | -5262 | 14478 | -104 | 9112 | |||||
| Transactions with shareholders: | |||||||||
| Payment of dividends | -14523 | -42 | -14565 | ||||||
| Acquisition of treasury shares | -120 | -120 | |||||||
| Share-based incentives | 27 | 27 | |||||||
| Change in accounting policies | -1047 | -2 | -1049 | ||||||
| Total transactions with shareholders | -120 | -15543 | -44 | -15707 | |||||
| Changes in holdings in subsidiaries: | |||||||||
|
Acquisition of shares from non-controlling interests |
1 | 1 | |||||||
|
Change in share belonging to non-controlling interests |
-1 | -2 | -3 | ||||||
| Total changes in holdings in subsidiaries | 0 | -2 | -2 | ||||||
| Shareholders’ equity 30 Jun 2016 | 20759 | 1092 | -228 | -42202 | 199350 | 1297 | 180068 | ||
|
EUR 1,000 |
Share capital |
Other reserves |
Treasury shares reserve |
Translation differences |
Retained earnings |
Share of non-controlling interests |
Total |
||
| Shareholders’ equity 1 Jan 2017 | 20759 | 1092 | -228 | -37022 | 217234 | 1714 | 203549 | ||
| Comprehensive income: | |||||||||
| Net profit for the period | 19288 | 102 | 19390 | ||||||
| Other comprehensive income items: | |||||||||
| Translation differences | -4806 | -112 | -4918 | ||||||
| Total comprehensive income for the period | -4806 | 19288 | -10 | 14472 | |||||
| Transactions with shareholders: | |||||||||
| Payment of dividends | -15561 | -35 | -15596 | ||||||
| Share-based incentives | 264 | 264 | |||||||
| Total transactions with shareholders | -15297 | -35 | -15332 | ||||||
| Changes in holdings in subsidiaries: | |||||||||
|
Acquisition of shares from non-controlling interests |
258 | 258 | |||||||
|
Change in share belonging to non-controlling interests |
-179 | -425 | -604 | ||||||
| Total changes in holdings in subsidiaries | 79 | -425 | -346 | ||||||
| Shareholders’ equity 30 June 2017 | 20759 | 1092 | -228 | -41828 | 221304 | 1244 | 202343 | ||
| Other reserves include the share premium account, legal reserve and other reserves. | |||||||||
|
|
|
|
|||||||
| OLVI GROUP | TABLE 4 | ||||||||
| CASH FLOW STATEMENT | |||||||||
| EUR 1,000 | |||||||||
| 1-6/2017 | 1-6/2016 | 1-12/2016 | |||||||
| Net profit for the period | 19390 | 14503 | 32794 | ||||||
| Adjustments to profit for the period | 15612 | 11429 | 25512 | ||||||
| Change in net working capital | -12767 | 4764 | 8828 | ||||||
| Interest paid | -401 | -466 | -777 | ||||||
| Interest received | 168 | 172 | 428 | ||||||
| Dividends received | 2 | 0 | 2 | ||||||
| Taxes paid | -1077 | -12 | -5553 | ||||||
| Cash flow from operations (A) | 20927 | 30390 | 61234 | ||||||
| Investments in tangible and intangible | |||||||||
| assets | -9485 | -11692 | -18520 | ||||||
| Sales gains from tangible and intangible | |||||||||
| assets | 115 | 236 | 744 | ||||||
| Acquisition of shares from non-controlling interests | -345 | -2 | -2 | ||||||
| Expenditure on other investments | 0 | -3 | -35 | ||||||
| Cash flow from investments (B) | -9715 | -11461 | -17813 | ||||||
| Withdrawals of loans | 160 | 4327 | 447 | ||||||
| Repayments of loans | -7378 | -7749 | -21835 | ||||||
| Acquisition of treasury shares | 0 | -120 | -120 | ||||||
| Dividends paid | -15562 | -14527 | -14529 | ||||||
| Increase (-) / decrease (+) in current interest- | |||||||||
| bearing business receivables | 14 | 14 | 8 | ||||||
| Increase (-) / decrease (+) in long-term | |||||||||
| loan receivables | 0 | 0 | 23 | ||||||
| Cash flow from financing (C) | -22766 | -18055 | -36006 | ||||||
| Increase (+)/decrease (-) in liquid assets (A+B+C) | -11554 | 874 | 7415 | ||||||
| Liquid assets 1 January | 20297 | 12786 | 12786 | ||||||
| Effect of exchange rate changes | -334 | -100 | 96 | ||||||
| Liquid assets 30 June/31 December | 8409 | 13560 | 20297 | ||||||
OLVI GROUP TABLE 5
NOTES TO THE HALF-YEAR REPORT
The accounting policies used for this half-year report are the same as those used for the annual financial statements 2016. The accounting policies are presented in the Annual Report 2016, which was published on 29 March 2017.
The information in the half-year report is presented in thousands of euros (EUR 1,000). For the sake of presentation, individual figures and totals have been rounded to full thousands, which causes rounding differences in additions. The information disclosed in the half-year report is unaudited.
Olvi will adopt two new IFRS standards in 2018 (IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers), as well as one in 2019 (IFRS 16 Leases). Information on the adoption and estimated effects of the standards can be found below.
IFRS 9 Financial Instruments
Olvi has analysed the effect of the new standard on the consolidated financial statements. The Group has a minor amount of equity investments classified as financial assets available for sale under the standard in force. According to the management’s current opinion, these financial assets will mainly be classified as financial assets measured at fair value through other comprehensive income items. The change in classification is not expected to have any substantial impact on the Group’s earnings.
According to the new standard, the impairment of financial assets must be determined using a model based on expected credit losses. The Group’s most substantial financial assets are accounts payable, and the Group will apply the simplified procedure allowed by the standard, under which a loss will be recognised over its entire validity period using a provision matrix, except to the extent that there is proof warranting the recognition of an individual financial asset item completely as credit loss. The procedure may result in credit losses being recognised somewhat earlier but is not expected to have any substantial effect on the consolidated earnings and balance sheet.
IFRS 15 Revenue from Contracts with Customers
The Group has analysed the effect of the new standard on the consolidated financial statements.
A substantial part of the Group’s customer contracts relates to the sale of beverage products. Control over beverage products passes to the customer in accordance with their delivery terms, usually within the day of delivery. The contracts include volume and annual discounts, the estimated effect of which is currently deducted from net sales on the same period for which the sales income has been recognised, and according to preliminary analysis, the amendment to the standard does not have any effect on the accounting practice.
The Group has analysed the impact of the new standard on the transaction price of a performance obligation and notes that the amendment to the standard will not affect the transaction price or the consolidated income statement with regard to the sales of beverage products. The time of fulfilment of the performance obligation also corresponds to the present time of income recognition for the sales of beverage products.
The Group is involved in minor amounts of beverage equipment rentals and maintenance services included in these. Rents are recognised over the rental period and, in accordance with the terms of the maintenance service agreement, either as equal instalments over the contract period or based on service performed.
Due to the nature of the Group’s business, the amendment to the recognition standard is not expected to have any substantial effect on the consolidated income statement or balance sheet, and it will not impose any changes on business practices. However, the amendment will affect the presentation of the financial statements through the imposed effects on the disclosure of notes.
The Group will adopt the standard by providing additional information non-retroactively.
IFRS 16 Leases
From the lessee’s point of view, the new standard has abandoned the current division between operational leases and finance leases, and according to the standard, in practice all leases result in the recognition of an asset (right to use the leased asset) and a financial liability pertaining to the lease payment obligation. The standard also has effect on the income statement as the total costs are typically higher in the beginning of the lease period and lower towards the end. Furthermore, the lease costs now included in operating expenses will be replaced by interest and depreciation, which will affect crucial indicators such as EBITDA (gross margin). The standard also has an impact on the presentation of the cash flow statement.
The Group has contracts classified as operational leases under the current standard, and upon adoption of the new standard, these will be recognised in the balance sheet with the exception of minor and short-term contracts. The Group’s leases concern the rental of individual office spaces and logistics premises, as well as machinery and equipment. The amendment is estimated to have some effect on the consolidated financial statements, particularly the consolidated balance sheet total and the balance sheet indicators. The Group is currently reviewing its lease contracts with their terms and conditions, and analysing the impact in euros. However, most of the premises, machinery and equipment used by the company are in its ownership and are already presented in the consolidated balance sheet.
| 1. SEGMENT INFORMATION | |||||
| SALES VOLUME BY GEOGRAPHICAL SEGMENT (1,000 litres) | |||||
|
4-6/ 2017 |
4-6/ 2016 |
1-6/ 2017 |
1-6/ 2016 |
1-12/ 2016 |
|
| Olvi Group total | 198237 | 189516 | 328646 | 306399 | 609375 |
| Finland | 56711 | 49855 | 98725 | 85037 | 178044 |
| Estonia | 41546 | 39298 | 67165 | 65163 | 121467 |
| Latvia | 23946 | 21378 | 42195 | 34429 | 67246 |
| Lithuania | 24742 | 24516 | 42949 | 40995 | 81800 |
| Belarus | 60639 | 61013 | 95540 | 90862 | 178298 |
| - sales between segments | -9347 | -6544 | -17928 | -10087 | -17480 |
|
|
|||||
| NET SALES BY GEOGRAPHICAL SEGMENT (EUR 1,000) | |||||
|
4-6/ 2017 |
4-6/ 2016 |
1-6/ 2017 |
1-6/ 2016 |
1-12/ 2016 |
|
| Olvi Group total | 108908 | 97852 | 180067 | 160015 | 321478 |
| Finland | 37314 | 33403 | 64367 | 57175 | 118876 |
| Estonia | 27215 | 25226 | 43794 | 41303 | 76926 |
| Latvia | 12161 | 9960 | 20622 | 16181 | 31839 |
| Lithuania | 12066 | 10328 | 20561 | 17132 | 35342 |
| Belarus | 24209 | 21921 | 38635 | 32913 | 66776 |
| - sales between segments | -4057 | -2986 | -7912 | -4689 | -8281 |
|
OPERATING PROFIT BY GEOGRAPHICAL SEGMENT (EUR 1,000) |
|||||
|
4-6/ 2017 |
4-6/ 2016 |
1-6/ 2017 |
1-6/ 2016 |
1-12/ 2016 |
|
| Olvi Group total | 18967 | 15525 | 25184 | 19936 | 40445 |
| Finland | 4677 | 3914 | 6253 | 5103 | 10743 |
| Estonia | 7017 | 6095 | 9547 | 8525 | 15926 |
| Latvia | 1755 | 1229 | 2409 | 1631 | 3377 |
| Lithuania | 1438 | 746 | 1709 | 842 | 2702 |
| Belarus | 4096 | 3508 | 5281 | 3733 | 7471 |
| - eliminations | -16 | 33 | -15 | 102 | 226 |
| 2. PERSONNEL ON AVERAGE | ||||||||||
|
4-6/ 2017 |
4-6/ 2016 |
1-6/ 2017 |
1-6/ 2016 |
1-12/ 2016 |
||||||
| Finland | 359 | 357 | 334 | 323 | 329 | |||||
| Estonia | 343 | 367 | 335 | 344 | 339 | |||||
| Latvia | 222 | 226 | 206 | 214 | 207 | |||||
| Lithuania | 227 | 241 | 228 | 235 | 235 | |||||
| Belarus | 708 | 773 | 698 | 775 | 749 | |||||
| Total | 1,859 | 1,964 | 1,801 | 1,891 | 1,859 | |||||
|
|
||||||||||
| 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 | ||||||||||
|
1-6/ 2017 |
1-6/ 2016 |
1-12/ 2016 |
||||||||
| Managing Director | 481 | 202 | 393 | |||||||
| Chairman of the Board | 34 | 34 | 68 | |||||||
| Other members of the Board | 66 | 73 | 137 | |||||||
| Total | 581 | 309 | 598 | |||||||
| 4. SHARES AND SHARE CAPITAL | ||
| 30 June 2017 | % | |
| Number of A shares | 17026552 | 82.0 |
| Number of K shares | 3732256 | 18.0 |
| Total | 20758808 | 100.0 |
| Total votes carried by A shares | 17026552 | 18.6 |
| Total votes carried by K shares | 74645120 | 81.4 |
| Total number of votes | 91671672 | 100.0 |
| Votes per Series A share | 1 | |
| Votes per Series K share | 20 |
The registered share capital on 30 June 2017 totalled 20,759 thousand euro.
Olvi plc’s shares received a dividend of 0.75 euro per share for 2016 (0.70 euro per share for 2015), totalling 15.6 (14.5) million euro. The dividends were paid on 10 May 2017. 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.
The Group has an active share-based incentive plan expiring at the end of June 2017, 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 June 2017, accounting entries associated with the performance period from 1 July 2014 to 30 June 2017 were recognised for a total of 50.2 thousand euro.
The Group has an active share-based incentive plan for key personnel started in 2016. 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 June 2017, costs associated with the plan established on 24 February 2016 were recognised for a total of 369.8 thousand euro.
Olvi Group does not have any other share-based plans or option plans.
6. TREASURY SHARES
Olvi plc’s Annual General Meeting on 21 April 2017 made a decision concerning abandoned or “ghost” shares held in a joint book-entry account. The decision was that the right to a share incorporated in the book-entry system and placed in the joint account, and the rights that the share carries have been forfeited, and authorised the Board of Directors to take all measures called for by the decision. On this basis, 36,576 shares have been transferred from Olvi’s joint account to treasury shares on 18 May 2017.
Before the transfer, Olvi held 11,124 Series A shares as treasury shares. After the transfer, Olvi holds 47,700 Series A shares as treasury shares.
The total purchase price of treasury shares was 228,162 euro. Olvi has not acquired any treasury shares by any other means during the review period. Treasury shares held by the company itself are ineligible for voting.
Series A shares held by Olvi plc as treasury shares represented 0.23 percent of all shares and 0.05 percent of the aggregate number of votes. The treasury shares represented 0.28 percent of all Series A shares and associated votes.
On 21 April 2017, 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 a maximum of 500,000 Series A 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 *) | 1-6/2017 | 1-6/2016 | 1-12/2016 |
| - average | 20738793 | 20747800 | 20747742 |
| - at end of period | 20711108 | 20747684 | 20747684 |
| *) Treasury shares deducted. | |||
| 8. TRADING OF SERIES A SHARES ON THE HELSINKI STOCK EXCHANGE | |||
| 1-6/2017 | 1-6/2016 | 1-12/2016 | |
| Trading volume of Olvi A shares | 505835 | 511767 | 881172 |
| Total trading volume, EUR 1,000 | 14383 | 12146 | 22162 |
| Traded shares in proportion to | |||
| all Series A shares, % | 3.0 | 3.0 | 5.2 |
| Average share price, EUR | 28.42 | 23.73 | 25.17 |
| Price on the closing date, EUR | 30.64 | 25.25 | 28.00 |
| Highest quote, EUR | 32.00 | 27.10 | 28.51 |
| Lowest quote, EUR | 25.05 | 20.30 | 20.30 |
| 9. FOREIGN AND NOMINEE-REGISTERED HOLDINGS ON 30 JUNE 2017 | ||||||
|
|
||||||
| Book entries | Votes | Shareholders | ||||
| qty | % | qty | % | qty | % | |
| Finnish total | 15674244 | 75.51 | 86587108 | 94.45 | 10172 | 99.36 |
| Foreign total | 386814 | 1.86 | 386814 | 0.42 | 56 | 0.55 |
| Nominee-registered (foreign) total | 96980 | 0.47 | 96980 | 0.11 | 3 | 0.03 |
| Nominee-registered (Finnish) total | 4600770 | 22.16 | 4600770 | 5.02 | 6 | 0.06 |
| Total | 20758808 | 100.00 | 91671672 | 100.00 | 10237 | 100.00 |
| 10. LARGEST SHAREHOLDERS ON 30 JUNE 2017 | |||||||||
| 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 | 2153674 | 2153674 | 10.37 | 2153674 | 2.35 | ||||
| 6. Hortling-Rinne Laila Marit | 102288 | 3380 | 105668 | 0.51 | 2049140 | 2.24 | |||
| 7. Nordea Bank AB (publ), Finnish Branch, nominee reg. | 1781568 | 1781568 | 8.58 | 1781568 | 1.94 | ||||
| 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. Skandinaviska Enskilda Banken AB (publ) Helsinki branch, nominee register | 613572 | 613572 | 2.96 | 613572 | 0.67 | ||||
| Others | 9648 | 9741616 | 9751264 | 46.98 | 9934576 | 10.84 | |||
| 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 | |||
| 1-6/2017 | 1-6/2016 | 1-12/2016 | |
| Opening balance | 196239 | 185240 | 198258 |
| Additions | 9646 | 23217 | 19750 |
| Deductions and transfers | -1155 | -879 | -3769 |
| Depreciation | -9159 | -8450 | -17452 |
| Exchange rate differences | -3656 | -4521 | -548 |
| Total | 191915 | 194607 | 196239 |
| 12. CONTINGENT LIABILITIES | |||
| EUR 1,000 | |||
| 30 June 2017 |
30 June 2016 |
31 Dec 2016 |
|
| Pledges and contingent liabilities | |||
| For own commitments | 2659 | 2352 | 1886 |
| Leasing and rental liabilities: | |||
| Due within one year | 1450 | 1307 | 1540 |
| Due within 1 to 5 years | 1865 | 1465 | 1396 |
| Due in more than 5 years | 2 | 3 | 2 |
| Leasing and rental liabilities total | 3317 | 2775 | 2938 |
| Other liabilities | 2000 | 2000 | 2000 |
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)
