Olvi Group’s Half-Year Report, 1 January to 30 June 2021 (6 Months)
OLVI PLC Half-Year Report 12 August 2021 at 9:00 am
Olvi Group’s Half-Year Report, 1 January to 30 June 2021 (6 Months)
Half-year report in brief
Olvi Group’s business development continued on a strong track. Sales volume, net sales, operating profit and net profit all showed good growth on the previous year, and the period under review was the best half-year in Olvi’s history. The Group’s financial standing remains good.
Near-term outlook (updated)
Olvi’s operating profit for fiscal year 2021 is expected to remain on the previous year’s good level or increase slightly (outlook has improved, previously outlook was “remain on the previous year’s good level”). Sales in the summer season have continued on a strong track. There are uncertainties associated with the remainder of the year, and these are described in more detail under Business risks.
Consolidated key ratios
| 4-6/ 2021 | 4-6/2020 | Change % /pp | 1-6/ 2021 | 1-6/ 2020 | Change % /pp | 1-12/ 2020 | |
| Sales volume, Mltr | 249.8 | 229.7 | 8.7 | 413.7 | 382.9 | 8.0 | 765.9 |
| Net sales, MEUR | 132.0 | 121.0 | 9.1 | 217.3 | 205.6 | 5.7 | 414.9 |
| Gross profit*, MEUR | 57.4 | 51.9 | 10.5 | 92.0 | 87.4 | 5.3 | 178.0 |
| % of net sales | 43.5 | 42.9 | 42.4 | 42.5 | 42.9 | ||
| Operating profit, MEUR | 20.6 | 20.2 | 2.0 | 28.7 | 28.0 | 2.2 | 56.4 |
| % of net sales | 15.6 | 16.7 | 13.2 | 13.6 | 13.6 | ||
| Net profit for the period, MEUR | 15.0 | 14.5 | 3.0 | 21.8 | 19.9 | 9.7 | 40.9 |
| % of net sales | 11.4 | 12.0 | 10.1 | 9.7 | 9.9 | ||
| Earnings per share, EUR | 0.72 | 0.69 | 4.3 | 1.05 | 0.95 | 10.5 | 1.96 |
| Investments, MEUR | 9.4 | 9.8 | -4.4 | 17.2 | 19.0 | -9.5 | 32.0 |
| Equity per share, EUR | 12.86 | 12.20 | 5.4 | 12.81 | |||
| Equity to total assets, % | 54.6 | 57.8 | -3.2 | 63.8 | |||
| Gearing, % | -24.7 | -8.6 | 16.1 | -15.5 |
* Due to a change in the presentation of the income statement, gross profit is presented instead of gross margin.
Business development
Lasse Aho, Managing Director:
Olvi Group’s business in the first half of the year developed well, with net profit increasing by 9.7 percent. Sales volume increased by 8.0 percent and net sales by 5.7 percent. In the second quarter, the average price improved as the HoReCa sales channel opened, among other things, and thanks to this, the net sales growth of 9.1 percent outperformed the 8.7 percent increase in sales volume. Warm weather in the beginning of the summer supported the growth in sales volumes and increased demand for smaller package sizes. Operating profit improved steadily, as second-quarter earnings development followed the first-quarter track. The growth in sales volume has caused increased logistics costs, and clearly more effort has been put into marketing compared to the previous year.
Strategic reform proceeds according to plan. The sales of non-alcoholic products have increased substantially in the review period. Geographical expansion goes ahead as the conditional acquisition of the Vestfyen brewery in Denmark is expected to be realised by the end of August. New potential markets are surveyed actively. The Group also makes efforts to develop its business and secure its competitive ability in the future through the promotion of digitalisation and responsibility.
Restrictions to contain the corona pandemic have still had an impact on second-quarter business. The HoReCa sales channel was only partly operative in almost all of Olvi’s operating countries; however, sales opened from May onwards. Cross-border and harbour sales have remained at a low level. Within Olvi Group, this is reflected particularly in the sales volume and profitability of the Estonian company. However, retail sales continued on a strong track, and this compensated the other sales channels. Exports increased as well. Production facilities have operated normally, even though there have been challenges with the availability of raw materials and packaging supplies at times.
Sales in Finland have developed well during the first half of the year. Sales volume, net sales and operating profit have increased on the previous year, also in the second quarter. Olvi has increased its sales volume in every month of the review period in comparison to the previous year. This is attributable to strong brands and a versatile range of packaging. Market shares have improved in several product groups, particularly in beers and mineral waters. Furthermore, the heat wave in June caused a strong and rapid peak in demand, due to which the availability of products has varied, and deliveries have been delayed.
In Estonia, second-quarter business developed well. Sales volume increased by 9.3 percent and net sales by 11.2 percent. Local demand improved towards the summer in retail trade and particularly in the HoReCa channel as it opened up. Strong development of exports continued as well. On the other hand, travel restrictions prevented any substantial improvement in cross-border and harbour sales. Net profit development fell short of the previous year due to substantially increased marketing effort to support the summer season.
Sales in Latvia have become significantly livelier as sales channel restrictions have been lifted towards the summer. The HoReCa sales channel opened during May. Second-quarter sales volume and net sales increased by 7.1 percent. Operating profit increased by 1.2 percent. The acquisition of the Piebalgas Alus microbrewery was completed, and the business has been a part of Olvi since 1 June 2021. The acquisition strengthens Olvi Group’s offering particularly in premium products. The sales of Piebalgas products has started strongly.
Business development in Lithuania has been good in the first half of the year. Sales volume increased by 2.9 percent and net sales by 5.5 percent. Good net sales development has been supported by a more diversified product portfolio and increased market shares. The company has been particularly successful with strengthening the Volfas Engelman brand. Thanks to good sales development, operating profit increased by 30.3 percent in the first half of the year.
In Belarus, Olvi Group has been able to develop its business well, taking into account the political and economic situation in the country. First-half sales volume increased by 14.5 percent. The weakened exchange rate has impacted the development of net sales and operating profit measured in euro in relation to the volume growth. The local currency has deteriorated by an average of 19 percent in 2021 compared to the previous year. Net sales measured in euro increased by 6.2 percent and operating profit declined by 6.1 percent. However, measured in the local currency, the company’s net sales increased by 26.2 percent and operating profit improved by 10.2 percent.
Investments have been completed as planned during the review period. The amount of investments in the period under review came to 17,2 million euro and was focused on improving production efficiency and capacity. The asset deal concerning a spring water bottling plant in Finland was realised in April.
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 January-June increased by 8.0 percent to 413.7 (382.9) million litres. Olvi Group’s sales volume in April-June increased by 8.7 percent to 249.8 (229.7) million litres.
In the first half of the year, sales volume has increased in all operating countries. The development of sales volume in the second quarter evened out across the operating countries as corona pandemic restrictions were lifted and the weather was warm.
| Sales volume, million litres | 4-6/ 2021 | 4-6/ 2020 | Change % | 1-6/ 2021 | 1-6/ 2020 |
Change % |
| Finland | 72.7 | 70.3 | 3.3 | 127.9 | 118.5 | 8.0 |
| Estonia | 35.1 | 32.1 | 9.3 | 57.6 | 55.0 | 4.7 |
| Latvia | 23.0 | 21.5 | 7.1 | 36.7 | 36.0 | 1.9 |
| Lithuania | 37.0 | 35.1 | 5.4 | 62.1 | 60.4 | 2.9 |
| Belarus | 92.1 | 79.8 | 15.5 | 145.5 | 127.1 | 14.5 |
| Eliminations | -10.0 | -9.0 | -16.2 | -14.0 | ||
| Total | 249.8 | 229.7 | 8.7 | 413.7 | 382.9 | 8.0 |
The Group’s net sales in January-June increased by 5.7 percent and amounted to 217.3 (205.6) million euro. Net sales growth in the second quarter was affected by the opening of the HoReCa sales channel, among other things.
| Net sales, million euro | 4-6/ 2021 | 4-6/ 2020 | Change % | 1-6/ 2021 | 1-6/ 2020 |
Change % |
| Finland | 53.7 | 50.7 | 5.9 | 92.5 | 86.7 | 6.7 |
| Estonia | 22.8 | 20.5 | 11.2 | 36.9 | 35.4 | 4.4 |
| Latvia | 12.0 | 11.2 | 7.1 | 19.0 | 19.0 | 0.4 |
| Lithuania | 17.2 | 15.8 | 8.9 | 28.5 | 27.0 | 5.5 |
| Belarus | 30.2 | 26.6 | 13.6 | 46.5 | 43.8 | 6.2 |
| Eliminations | -4.1 | -3.9 | -6.3 | -6.3 | ||
| Total | 132.0 | 121.0 | 9.1 | 217.3 | 205.6 | 5.7 |
Earnings development
The Group’s operating profit in January-June stood at 28.7 (28.0) million euro, or 13.2 (13.6) percent of net sales. Operating profit in April-June stood at 20.6 (20.2) million euro, which was 15.6 (16.7) percent of net sales. Operating profit improved by 2.2 percent from the beginning of the year, and by 2.0 percent in the second quarter. Operating profit has improved through a better sales margin resulting from increased sales volume, but on the other hand, the costs of logistics and marketing have increased on the previous year and impacted the figure.
| Operating profit, million euro | 4-6/ 2021 | 4-6/ 2020 | Change % | 1-6/ 2021 | 1-6/ 2020 |
Change % |
| Finland | 8.0 | 7.7 | 4.3 | 11.7 | 10.6 | 10.7 |
| Estonia | 4.5 | 4.8 | -5.4 | 6.3 | 6.8 | -7.6 |
| Latvia | 1.4 | 1.4 | 1.2 | 1.6 | 1.9 | -17.3 |
| Lithuania | 1.9 | 1.5 | 28.2 | 2.6 | 2.0 | 30.3 |
| Belarus | 5.1 | 5.2 | -1.4 | 6.8 | 7.3 | -6.1 |
| Eliminations | -0.3 | -0.3 | -0.4 | -0.6 | ||
| Total | 20.6 | 20.2 | 2.0 | 28.7 | 28.0 | 2.2 |
The Group’s January-June profit after taxes amounted to 21.8 (19.9) million euro. Profit for April to June stood at 15.0 (14.5) million euro.
Earnings per share calculated from the profit belonging to parent company shareholders in January-June was 1.05 (0.95) euro, and the April-June figure was 0.72 (0.69) euro.
Balance sheet, financing and investments
Olvi Group’s balance sheet total at the end of June 2021 was 493.6 (442.6) million euro. Equity per share at the end of June 2021 stood at 12.86 (12.20) euro. The equity ratio was 54.6 (57.8) percent and the gearing ratio was -24.7 (-8.6) percent. The current ratio, which represents the Group’s liquidity, was 1.2 (1.1).
The amount of interest-bearing liabilities amounted to 3.6 (3.4) million euro at the end of June. Current liabilities made up 1.3 (0.8) million euro of all interest-bearing liabilities. Interest-bearing liabilities consist mostly of leasing liabilities.
Olvi Group’s investments in extensions and replacements from January to June amounted to 17.2 (19.0) million euro. The companies in Finland accounted for 6.9 million euro, the Baltic subsidiaries for 7.3 million euro and Lidskoe Pivo in Belarus for 3.0 million euro of the total. Olvi Group has invested in increasing and diversifying its production capacity, the modernisation of production facilities, as well as environmentally friendly operations.
Personnel
Olvi Group’s average number of personnel in January-June was 2,026 (1,908). The Group’s average number of personnel increased by 6.2 percent due to seasonal variation and the Piebalgas acquisition.
Olvi Group’s average number of personnel by country:
|
4-6/ 2021 |
4-6/ 2020 | Change % | 1-6/ 2021 | 1-6/ 2020 |
Change % |
|
| Finland | 437 | 409 | 6.8 | 404 | 382 | 5.8 |
| Estonia | 355 | 329 | 7.9 | 340 | 324 | 4.9 |
| Latvia | 244 | 197 | 23.9 | 220 | 198 | 11.1 |
| Lithuania | 249 | 244 | 2.0 | 246 | 241 | 2.1 |
| Belarus | 845 | 768 | 10.0 | 816 | 763 | 6.9 |
| Total | 2,130 | 1,947 | 9.4 | 2,026 | 1,908 | 6.2 |
Board of Directors and management
There have been no changes in Olvi plc’s Board of Directors or management during the review period.
Other events during the review period
Changes in corporate structure
The Piebalgas Alus company in Latvia has been included in Olvi’s subsidiaries since 1 June 2021. The effects of consolidation are described in more detail in Table 5, Section 12 of the tables attached to this half-year report.
Through a stock exchange release on 12 May 2021, Olvi announced the conditional acquisition of the Bryggeriet Vestfyen brewery company in Denmark. The conditions of sale are expected to be fulfilled by 31 August 2021, which means that the company would become a part of Olvi Group as of 1 September. Because the company will be taken over only towards the end of the accounting period, its effect on the Group’s business in 2021 will be minor.
Share-based payments
Olvi Group’s previous share-based incentive plan for key employees, which was initiated in 2019, expired on 31 January 2021. At its meeting of 1 February 2021, the Board of Directors of Olvi plc decided on three new share-based incentive plans for the Group’s key personnel: a performance-based share plan for 2021–2025, a matching share plan for 2021–2022 and a restricted share plan for 2021–2025. Detailed information on the incentive plans and the associated share repurchases is provided in Table 5, Sections 4 and 5 of the tables attached to this half-year report.
Business risks and their management
The corona pandemic continues to impose risks on business, even though the overall economic impact has been minor. There are uncertainties associated with predicting business development as it is not possible to sufficiently anticipate the various impacts of the corona pandemic. The impacts are associated with sales channel restrictions imposed in order to contain the spreading of the corona pandemic, for example, but also changes in overall demand. Furthermore, as the corona pandemic has continued, there have been challenges in the availability of raw materials and packaging supplies, as well as upward pressure in their prices. Until now, the Group has been able to manage the availability problem through measures such as good production planning. Cost pressure concerns aluminium and plastic in particular, and effort is made to minimise the earnings impact through product development, cost savings and potential clearly focused price increases.
Olvi has drafted several scenarios and made preparations for responding to changing situations through a variety of measures, paying particular attention to the corona pandemic situation. Production has operated almost normally and there has not been any widespread virus exposure among personnel. Olvi has made preparations for production disruptions and drafted contingency plans concerning the availability of personnel and raw materials, among other things. Uncertainty is also caused by potentially continuing fluctuation of the Belarusian exchange rate due to the political and economic situation in the country.
A more detailed description of normal business-related 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.
Events after the review period
There have been no significant reportable events after the review period.
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 | ||||||||
| STATEMENT OF COMPREHENSIVE INCOME | |||||||||
| EUR 1,000 | |||||||||
| 4–6 / 2021 | 4–6 / 2020 | 1–6 / 2021 | 1–6 / 2020 | 1–12 / 2020 | |||||
| Gross sales | 303,471 | 290,735 | 514,284 | 493,536 | 1,005,101 | ||||
| Excise taxes and other adjustments | -171,517 | -169,744 | -297,012 | -287,957 | -590,217 | ||||
| Net sales | 131,954 | 120,991 | 217,272 | 205,579 | 414,884 | ||||
| Cost of sales | -74,571 | -69,067 | -125,226 | -118,192 | -236,849 | ||||
| Gross profit | 57,383 | 51,924 | 92,046 | 87,387 | 178,035 | ||||
| Logistics, sales and marketing expenses | -27,734 | -22,728 | -47,394 | -42,943 | -87,300 | ||||
| Administrative expenses | -9,120 | -9,131 | -16,324 | -16,746 | -34,650 | ||||
| Other operating income and expenses | 74 | 125 | 331 | 337 | 350 | ||||
| Operating profit | 20,603 | 20,190 | 28,659 | 28,035 | 56,435 | ||||
| Financial income and expenses | 32 | 291 | 30 | -1,236 | -2,626 | ||||
| Share of profit in associates | 0 | 0 | 0 | 0 | 2 | ||||
| Earnings before tax | 20,635 | 20,481 | 28,689 | 26,799 | 53,811 | ||||
| Income taxes | -5,658 | -5,940 | -6,840 | -6,878 | -12,895 | ||||
| NET PROFIT FOR THE PERIOD | 14,977 | 14,541 | 21,849 | 19,921 | 40,916 | ||||
| Other comprehensive income items that may be subsequently reclassified to profit and loss: | |||||||||
| Translation differences related to foreign subsidiaries | 1,192 | 3,019 | 2,600 | -7,606 | -15,588 | ||||
| Income taxes related to these items | -19 | -73 | -44 | 141 | 263 | ||||
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 16,150 | 17,487 | 24,405 | 12,456 | 25,591 | ||||
| Distribution of profit: | |||||||||
| - parent company shareholders | 14,808 | 14,341 | 21,644 | 19,766 | 40,559 | ||||
| - non-controlling interests | 169 | 200 | 205 | 155 | 357 | ||||
| Distribution of comprehensive income: | |||||||||
| - parent company shareholders | 15,944 | 17,201 | 24,120 | 12,526 | 25,704 | ||||
| - non-controlling interests | 206 | 286 | 285 | -70 | -113 | ||||
| Earnings per share calculated from the profit belonging to parent company shareholders, EUR | |||||||||
| - undiluted | 0.72 | 0.69 | 1.05 | 0.95 | 1.96 | ||||
| - diluted | 0.72 | 0.69 | 1.05 | 0.95 | 1.96 | ||||
| OLVI GROUP | TABLE 2 | ||||||||
| BALANCE SHEET | |||||||||
| EUR 1,000 | 30 June 2021 | 30 June 2020 | 31 December 2020 | ||||||
| ASSETS | |||||||||
| Non-current assets | |||||||||
| Tangible assets | 210,983 | 209,347 | 204,156 | ||||||
| Goodwill | 25,801 | 25,761 | 25,172 | ||||||
| Other intangible assets | 10,015 | 10,313 | 9,925 | ||||||
| Shares in associates | 974 | 1,016 | 994 | ||||||
| Other investments | 880 | 836 | 851 | ||||||
| Loans receivable and other non-current receivables | 2,333 | 2,313 | 1,786 | ||||||
| Deferred tax receivables | 635 | 664 | 1,086 | ||||||
| Total non-current assets | 251,621 | 250,250 | 243,970 | ||||||
| Current assets | |||||||||
| Inventories | 50,591 | 46,337 | 42,278 | ||||||
| Accounts receivable and other receivables | 121,113 | 120,566 | 88,234 | ||||||
| Income tax receivable | 215 | 365 | 773 | ||||||
| Liquid assets | 70,017 | 25,119 | 45,096 | ||||||
| Total current assets | 241,936 | 192,387 | 176,381 | ||||||
| TOTAL ASSETS | 493,557 | 442,637 | 420,351 | ||||||
| SHAREHOLDERS’ EQUITY AND LIABILITIES | |||||||||
| Shareholders’ equity held by parent company shareholders | |||||||||
| Share capital | 20,759 | 20,759 | 20,759 | ||||||
| Other reserves | 1,387 | 1,387 | 1,387 | ||||||
| Treasury shares | -400 | -503 | -1,802 | ||||||
| Translation differences | -56,366 | -51,227 | -58,842 | ||||||
| Retained earnings | 300,914 | 282,244 | 303,465 | ||||||
| 266,294 | 252,660 | 264,967 | |||||||
| Share belonging to non-controlling interests | 3,079 | 3,210 | 3,165 | ||||||
| Total shareholders’ equity | 269,373 | 255,870 | 268,132 | ||||||
| Non-current liabilities | |||||||||
| Financial liabilities | 2,321 | 2,655 | 2,303 | ||||||
| Other liabilities | 4,588 | 4,264 | 4,473 | ||||||
| Deferred tax liabilities | 11,102 | 7,759 | 11,107 | ||||||
| Current liabilities | |||||||||
| Financial liabilities | 1,293 | 755 | 1,333 | ||||||
| Accounts payable and other liabilities | 200,503 | 166,672 | 132,522 | ||||||
| Income tax liability | 4,377 | 4,662 | 481 | ||||||
| Total liabilities | 224,184 | 186,767 | 152,219 | ||||||
| TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES | 493,557 | 442,637 | 420,351 | ||||||
|
OLVI GROUP |
TABLE 3 |
|||||||
| CHANGES IN SHAREHOLDERS’ EQUITY | ||||||||
| EUR 1,000 | Share capital | Other reserves | Treasury shares reserve | Fair value reserve | Translation differences | Retained earnings | Share of non-controlling interests | Total |
| Shareholders’ equity 1 Jan 2021 |
20,759 | 1,092 | -1,802 | 295 | -58,842 | 303,465 | 3,165 | 268,132 |
| Comprehensive income: | ||||||||
| Net profit for the period | 21,644 | 205 | 21,849 | |||||
| Other comprehensive income items: | ||||||||
| Translation differences | 2,476 | 80 | 2,556 | |||||
| Total comprehensive income for the period | 2,476 | 21,644 | 285 | 24,405 | ||||
| Transactions with shareholders: | ||||||||
| Payment of dividends | -22,771 | -346 | -23,117 | |||||
| Share-based incentives, value of work performed | 296 | 296 | ||||||
| Acquisition of treasury shares | -874 | -874 | ||||||
| Issue of treasury shares to employees | 1,687 | -1,614 | 73 | |||||
| Sales of treasury shares to employees | 589 | 589 | ||||||
| Adjustment to previous periods | -105 | -26 | -131 | |||||
| Total transactions with shareholders | 1,402 | -24,194 | -372 | -23,164 | ||||
| Changes in holdings in subsidiaries: | ||||||||
| Change in share belonging to non-controlling interests | -1 | 1 | 0 | |||||
| Total changes in holdings in subsidiaries | -1 | 1 | 0 | |||||
| Shareholders’ equity 30 Jun 2021 |
20,759 | 1,092 | -400 | 295 | -56,366 | 300,914 | 3,079 | 269,373 |
| EUR 1,000 | Share capital | Other reserves | Treasury shares reserve | Fair value reserve | Translation differences | Retained earnings | Share of non-controlling interests | Total |
| Shareholders’ equity 1 Jan 2020 |
20,759 | 1,092 | -503 | 295 | -43,987 | 282,895 | 3,318 | 263,869 |
| Comprehensive income: | ||||||||
| Net profit for the period | 19,766 | 155 | 19,921 | |||||
| Other comprehensive income items: | ||||||||
| Translation differences | -7,240 | -225 | -7,465 | |||||
| Total comprehensive income for the period | -7,240 | 19,766 | -70 | 12,456 | ||||
| Transactions with shareholders: | ||||||||
| Payment of dividends | -20,710 | -38 | -20,748 | |||||
| Share-based incentives, value of work performed | 293 | 293 | ||||||
| Total transactions with shareholders | -20,417 | -38 | -20,455 | |||||
| Shareholders’ equity 30 Jun 2020 |
20,759 | 1,092 | -503 | 295 | -51,227 | 282,244 | 3,210 | 255,870 |
Other reserves include the share premium account, legal reserve and other reserves.
|
OLVI GROUP |
TABLE 4 | ||
| CASH FLOW STATEMENT | |||
| EUR 1,000 | |||
| 1–6 / 2021 | 1–6 / 2020 | 1–12 / 2020 | |
| Net profit for the period | 21,849 | 19,921 | 40,916 |
| Adjustments: | |||
| Depreciation and impairment | 13,058 | 12,410 | 24,972 |
| Other adjustments | 7,047 | 8,794 | 16,327 |
| Change in net working capital: | |||
| Change in accounts receivable and other receivables | -32,277 | -53,110 | -22,809 |
| Change in inventories | -6,825 | -4,204 | -1,274 |
| Change in accounts payable and other liabilities | 55,330 | 38,572 | 17,339 |
| Interest paid | -186 | -261 | -588 |
| Interest received | 108 | 24 | 260 |
| Dividends received | 2 | 2 | 4 |
| Taxes paid | -1,997 | -1,986 | -9,351 |
| Cash flow from operations (A) | 56,109 | 20,162 | 65,796 |
| Investments in tangible and intangible assets | -16,816 | -17,906 | -31,533 |
| Capital gains on disposal of tangible and intangible assets | 881 | 790 | 1,697 |
| Acquisition of shares from non-controlling interests | 0 | 0 | -6 |
| Acquired shares in subsidiaries, associates and joint ventures | -2,094 | 0 | 0 |
| Expenditure on other investments | -30 | 0 | -15 |
| Dividends received | 21 | 0 | 24 |
| Cash flow from investments (B) | -18,038 | -17,116 | -29,833 |
| Withdrawals of loans | 0 | 15,475 | 15,497 |
| Repayments of loans | -1,295 | -16,194 | -16,917 |
| Acquisition of treasury shares | -874 | 0 | -1,299 |
| Sales of treasury shares to employees | 589 | 0 | 0 |
| Dividends paid | -11,734 | -10,399 | -20,754 |
| Increase (-) / decrease (+) in current interest- bearing business receivables | 0 | 2 | 26 |
| Cash flow from financing (C) | -13,314 | -11,116 | -23,447 |
| Increase (+)/decrease (-) in liquid assets (A+B+C) | 24,757 | -8,070 | 12,516 |
| Liquid assets 1 January | 45,096 | 33,832 | 33,832 |
| Effect of exchange rate changes | 164 | -643 | -1,252 |
| Liquid assets 30 June/31 December | 70,017 | 25,119 | 45,096 |
OLVI GROUP TABLE 5
NOTES TO THE HALF-YEAR REPORT
The half-year report has been prepared in accordance with IAS 34, applying the same accounting policies as for the financial statements of 31 December 2020.
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 ratios are calculated from exact amounts in euros. The information disclosed in the half-year report is unaudited.
|
1. SEGMENT INFORMATION |
|||||||
| NET SALES BY SEGMENT 1–6/2021 | |||||||
| EUR 1,000 | Finland | Estonia | Latvia | Lithuania | Belarus | Elimi-nations | Group |
| INCOME | |||||||
| External sales | 92,070 | 34,790 | 17,181 | 27,370 | 45,861 | 0 | 217,272 |
| Beverage sales | 91,613 | 34,790 | 17,181 | 27,370 | 45,861 | 0 | 216,815 |
| Equipment services | 457 | 0 | 0 | 0 | 0 | 0 | 457 |
| Internal sales | 443 | 2,157 | 1,849 | 1,160 | 675 | -6,284 | 0 |
| Total net sales | 92,513 | 36,947 | 19,030 | 28,530 | 46,536 | -6,284 | 217,272 |
| NET SALES BY SEGMENT 1–6/2020 | |||||||
| EUR 1,000 | Finland | Estonia | Latvia | Lithuania | Belarus | Elimi-nations | Group |
| INCOME | |||||||
| External sales | 86,174 | 32,211 | 17,819 | 25,659 | 43,716 | 0 | 205,579 |
| Beverage sales | 85,675 | 32,211 | 17,819 | 25,659 | 43,716 | 0 | 205,080 |
| Equipment services | 499 | 0 | 0 | 0 | 0 | 0 | 499 |
| Internal sales | 504 | 3,185 | 1,142 | 1,384 | 98 | -6,313 | 0 |
| Total net sales | 86,678 | 35,396 | 18,961 | 27,043 | 43,814 | -6,313 | 205,579 |
|
2. 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 / 2021 | 1–6 / 2020 | 1–12 / 2020 |
| Managing Director | 758 | 370 | 550 |
| Chairman of the Board | 36 | 37 | 74 |
| Other members of the Board | 86 | 90 | 172 |
| Total | 880 | 497 | 796 |
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3. SHARES AND SHARE CAPITAL |
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| 30 June 2021 | % | |
| Number of A shares | 16,989,976 | 82.0 |
| Number of K shares | 3,732,256 | 18.0 |
| Total | 20,722,232 | 100.0 |
| Total votes carried by A shares | 16,989,976 | 18.5 |
| Total votes carried by K shares | 74,645,120 | 81.5 |
| Total number of votes | 91,635,096 | 100.0 |
| Votes per Series A share | 1 | |
| Votes per Series K share | 20 |
The registered share capital on 30 June 2021 totalled 20,759 thousand euro.
Olvi plc’s shares will receive a dividend of 1.10 euro per share for 2020 (1.00 euro per share for 2019), totalling 22.8 (20.7) million euro. The dividend will be paid in two instalments. The first instalment of 0,55 euro per share was paid on 20 April 2021. The second instalment of 0,55 euro per share will be paid on 3 September 2021. The Series K and Series A shares entitle to equal dividend. The Articles of Association include a redemption clause concerning Series K shares.
4. SHARE-BASED PAYMENTS
Olvi Group’s share-based incentive plan for key personnel, the performance period of which was from 1 February 2019 to 31 January 2021, has expired. The target group of the plan included approximately 60 people, and in accordance with the terms and conditions of the plan, rewards were paid in Olvi plc Series A shares and partially in cash. A total of 36,200 Series A shares were handed over as share-based rewards.
At its meeting of 1 February 2021, the Board of Directors of Olvi plc decided on the terms and conditions of three new share-based incentive plans for the Group’s key personnel: a performance-based share plan for 2021–2025, a matching share plan for 2021–2022 and a restricted share plan for 2021–2025. Among these incentive plans, the performance-based share plan for the performance periods 2021–2022 and 2021–2023 started on 15 February 2021. The target groups include approximately 18 people, including the Managing Director of the Group, the Managing Directors of the subsidiaries outside Finland, the members of Olvi plc’s Management Group and the Sales Directors of subsidiaries outside Finland. The rewards are based on the Group’s accumulated operating profit in euros and the increase of non-alcoholic sales volume. Net rewards payable for the performance period 2021–2022 amount to an approximate maximum of 6,100 Olvi plc Series A shares, and for the performance period 2021–2023, approximately 10,000 Olvi plc Series A shares.
Olvi plc initiated a new matching share plan for key personnel, the performance period of which is from 15 April 2021 to 14 April 2023. The plan is directed to approximately 55 people. In accordance with the share-based incentive plan, Olvi plc sold a total of 12,295 treasury shares to the target group members by the end of June for a price of 589,299.35 euro.
The objective of long-term rewards is to support the achievement of the company’s targets, make key personnel committed to the company and offer incentive plans based on earning the company’s shares. The rewards are payable partially in Olvi plc’s 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 employees involved. As a rule, no reward will be paid if employment or service ends before the reward payment. Under the scheme, the target group is able to earn Olvi plc Series A shares based on performance. The Board of Directors shall decide on the earning criteria and the targets for each of these at the beginning of the performance period. Any rewards from the scheme shall be paid after the end of each performance period.
The Board of Directors has set an upper limit for the gross total rewards payable to each person in a calendar year. The limit applies to all gross rewards payable under long-term incentive schemes. Any member of Olvi’s Management Group has to hold at least one-half of the shares received as net rewards from the new incentive plans until the value of the member’s holding in the company equals at least one-half of their annual salary for the previous year. These Olvi plc Series A shares have to be held for as long as the person is a member of the Management Group.
In the period under review, costs associated with the plans were recognised for a total of 295.5 thousand euro. Olvi Group does not have any other share-based plans or option plans.
5. TREASURY SHARES
At the beginning of January 2021, Olvi plc held 11,549 of its own shares as treasury shares. Olvi plc continued its share repurchase plan in January. The plan started on 5 November 2020 and ended on 15 January 2021. The shares shall be acquired for the purpose of financing or executing any upcoming corporate acquisitions or other arrangements, implementing the company’s incentive schemes or for other purposes decided upon by the Board of Directors.
On 19 February 2021, the Board of Directors of Olvi plc decided to initiate a scheme of acquiring treasury shares based on the authorisation issued by the Annual General Meeting on 8 April 2020. On this basis, the Board will repurchase a maximum of 10,000 Series A shares. The repurchase of treasury shares is based on the new share-based incentive plan for the Group’s key personnel announced on 2 February 2021. The acquisition of shares started on 25 February 2021 and ended on 1 March 2021.
In accordance with the share-based incentive plan, Olvi plc has transferred a total of 11,495 treasury shares to the target group members of the matching share plan for a price of 551,456.38 euro.
At the end of the review period, Olvi plc holds a total of 9,404 of its own Series A shares. The total purchase price of treasury shares was 438,006.77 euro. Treasury shares held by the company itself are ineligible for voting. Series A shares held by Olvi plc as treasury shares represent 0.05 percent of all shares and 0.01 percent of the aggregate number of votes. The treasury shares represent 0.06 percent of all Series A shares and associated votes.
On 31 March 2021, the General Meeting of Shareholders of Olvi plc decided to revoke any unused authorisations to acquire treasury shares and authorise the Board of Directors of Olvi plc to decide on the acquisition of the company’s own shares using distributable funds. The authorisation is valid for one year starting from the General Meeting and covers a maximum of 500,000 Series A shares.
The Annual General Meeting also decided to revoke all existing unused authorisations for the transfer of own shares and authorise the Board of Directors to decide on the issue of a maximum of 1,000,000 new Series A shares and the transfer of a maximum of 500,000 Series A shares held as treasury shares.
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6. NUMBER OF SHARES *) |
1–6 / 2021 | 1–6 / 2020 | 1–12 / 2020 |
| - average | 20,700,288 | 20,710,683 | 20,708,331 |
| - at end of period | 20,712,828 | 20,710,683 | 20,683,672 |
| *) Treasury shares deducted. | |||
| 7. TRADING OF SERIES A SHARES ON THE HELSINKI STOCK EXCHANGE | |||
| 1–6 / 2021 | 1–6 / 2020 | 1–12 / 2020 | |
| Trading volume of Olvi A shares | 1,146,330 | 904,556 | 1,474,892 |
| Total trading volume, EUR 1,000 | 54,729 | 35,390 | 60,470 |
| Traded shares in proportion to | |||
| all Series A shares, % | 6.7 | 5.3 | 8.7 |
| Average share price, EUR | 47.77 | 39.15 | 41.03 |
| Price on the closing date, EUR | 50.70 | 42.20 | 48.50 |
| Highest quote, EUR | 55.50 | 43.00 | 50.00 |
| Lowest quote, EUR | 43.10 | 30.25 | 30.25 |
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8. FOREIGN AND NOMINEE-REGISTERED HOLDINGS ON 30 June 2021 |
||||||
| Book entries | Votes | Shareholders | ||||
| qty | % | qty | % | qty | % | |
| Finnish total | 16,237,449 | 78.36 | 87,150,313 | 95.11 | 16,462 | 99.53 |
| Foreign total | 64,248 | 0.31 | 64,248 | 0.07 | 66 | 0.40 |
| Nominee-registered (foreign) total | 324,925 | 1.57 | 324,925 | 0.35 | 6 | 0.04 |
| Nominee-registered (Finnish) total | 4,095,610 | 19.76 | 4,095,610 | 4.47 | 5 | 0.03 |
| Total | 20,722,232 | 100.00 | 91,635,096 | 100.00 | 16,539 | 100.00 |
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9. LARGEST SHAREHOLDERS ON 30 June 2021 |
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| Series K | Series A | Total | % | Votes | % | |
| 1. Olvi Foundation | 2,363,904 | 890,613 | 3,254,517 | 15.71 | 48,168,693 | 52.57 |
| 2. The Estate of Hortling Heikki *) | 903,488 | 103,280 | 1,006,768 | 4.86 | 18,173,040 | 19.83 |
| 3. Hortling Timo Einari | 212,600 | 49,152 | 261,752 | 1.26 | 4,301,152 | 4.69 |
| 4. Hortling-Rinne Marit | 149,064 | 14,699 | 163,763 | 0.79 | 2,995,979 | 3.27 |
| 5. OP Custody Ltd, nominee register | 2,000,187 | 2,000,187 | 9.65 | 2,000,187 | 2.18 | |
| 6. Skandinaviska Enskilda Banken Ab (publ) Helsinki branch, nominee register | 1,044,347 | 1,044,347 | 5.04 | 1,044,347 | 1.14 | |
| 7. Nordea Bank Abp, nominee register | 1,015,387 | 1,015,387 | 4.90 | 1,015,387 | 1.11 | |
| 8. Varma Mutual Pension Insurance Company | 828,075 | 828,075 | 4.00 | 828,075 | 0.90 | |
| 9. Ilmarinen Mutual Pension Insurance Company | 699,213 | 699,213 | 3.37 | 699,213 | 0.76 | |
| 10. Hortling Pia Johanna | 23,388 | 25,366 | 48,754 | 0.24 | 493,126 | 0.54 |
| Others | 79,812 | 10,319,657 | 10,399,469 | 50.18 | 11,915,897 | 13.01 |
| Total | 3,732,256 | 16,989,976 | 20,722,232 | 100.00 | 91,635,096 | 100.00 |
| *) The figures include the shareholder’s own holdings and shares held by parties in his control. | ||||||
During January-June 2021, Olvi has not received any flagging notices in accordance with Chapter 2, Section 10 of the Securities Markets Act.
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10. PROPERTY, PLANT AND EQUIPMENT |
|||
| EUR 1,000 | |||
| 1–6 / 2021 | 1–6 / 2020 | 1–12 / 2020 | |
| Opening balance | 204,156 | 208,701 | 208,701 |
| Additions | 18,260 | 18,660 | 31,923 |
| Deductions and transfers | -1,348 | -1,074 | -2,294 |
| Depreciation | -11,862 | -11,268 | -22,625 |
| Exchange rate differences | 1,777 | -5,672 | -11,549 |
| Total | 210,983 | 209,347 | 204,156 |
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11. CONTINGENT LIABILITIES |
|||
| EUR 1,000 | |||
| 30 June 2021 | 30 June 2020 | 31 December 2020 | |
| Pledges and contingent liabilities | |||
| For own commitments | 1,938 | 1,938 | 1,938 |
| Leasing and rental liabilities: | |||
| Due within one year | 805 | 775 | 788 |
| Due within 1 to 5 years | 637 | 326 | 398 |
| Leasing and rental liabilities total | 1,442 | 1,101 | 1,186 |
| Other liabilities | 60 | 60 | 60 |
12. BUSINESS COMBINATIONS
Olvi’s Latvian subsidiary AS Cesu Alus is a leading player in the Latvian beverage market. Cesu Alus acquired the entire stock of Piebalgas Alus, a widely known and appreciated microbrewery in the Vidzeme province of Latvia. The acquisition brings more strength to our product portfolio in premium craft beers and kvass in the retail and HoReCa markets. The Piebalgas brewery was established in 1989. It is devoted to traditional manufacturing methods and high-quality raw materials.
Piebalgas Alus has been consolidated in Olvi Group since the beginning of June 2021. In Olvi Group’s segment reporting, the business operations of Piebalgas Alus are included in the Latvian figures. The company’s effect on the consolidated figures is minor.
The following tables present a summary of the acquisition price and the fair value of the assets acquired and liabilities assumed at the time of acquisition. The balance sheet has been prepared in its essential parts in accordance with IFRS and Olvi Group’s accounting policies. The acquisition is recognised as preliminary in the half-year report.
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Acquisition price |
|||
| EUR 1,000 | |||
| Paid in cash | 2,126 | ||
| Total acquisition price (100%) | 2,126 | ||
| Amounts recognised for assets acquired and liabilities assumed (100%) | |||
| EUR 1,000 | |||
| Tangible assets | 1,540 | ||
| Intangible assets | |||
| Trademarks | 584 | ||
| Other intangible assets | 1 | ||
| Inventories | 771 | ||
| Accounts receivable and other receivables | 609 | ||
| Liquid assets | 32 | ||
| Non-current liabilities | 631 | ||
| Current liabilities | 1,236 | ||
| Identifiable net assets total | 1,671 | ||
| Goodwill | 455 | ||
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.
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).