OLVI PLC PRESS RELEASE 26 OCT 2006 1(7)
OLVI GROUP’S INTERIM REPORT, 1 JANUARY TO 30 SEPTEMBER 2006 (9 MONTHS)
The Olvi Group achieved the best third-quarter result in its history,
improving profitability in all operating areas. Olvi Group’s net sales
for the first 9 months amounted to 130.6 (112.9) million euro, an
increase of 15.7%. The operating profit stood at 16.7 (11.6) million
euro. The increase in operating profit was mostly attributable to a
significant earnings improvement in Finland. The Group's gross capital
expenditure amounted to 14.6 (16.7) million euro, and its equity to
total assets ratio stood at 50.0 percent (48.1%). Earnings per share
amounted to 1.32 (0.86) euro.
OLVI GROUP’S KEY INDICATORS
1-9/2006 1-9/2005 1-12/2005
Net sales, MEUR 130.6 113.0 147.6
Operating profit, MEUR 16.7 11.6 12.9
Gross
capital expenditure, MEUR 14.6 16.7 17.4
Equity to total assets, % 50.0 48.1 47.9
Earnings per share, EUR 1.32 0.86 0.95
Equity per share, EUR 7.36 6.39 6.48
Gearing-% 47.8 60.1 49.6
IFRS REPORTING
Olvi plc adopted the International Financial Reporting Standards
(IFRS) as of 1 January 2005. This interim report has been prepared in
accordance with IFRS recognition and measurement principles. The
interim report has not been prepared in compliance with all of the
requirements in the standard IAS 34, Interim Financial Reporting. The
accounting policies used for the preparation of this interim report
are the same as those used for the annual financial statements 2005.
The calculation of per-share indicators in this interim report takes
into account the effect that Olvi plc’s bonus issue implemented in
April 2006 has on the previous years’ indicators. This means that the
per-share figures for the corresponding period in 2005 and the year-
end financial statements 2005 have been converted to comparable
format.
The interim report is unaudited.
NET SALES AND EARNINGS
Olvi Group’s sales in January-September amounted to a total of 233.4
(208.0) million litres. This represents an increase of 25.5 million
litres (12.2 percent) on the previous year. Sales in July-September
increased by 11.7 million litres (15.3 percent) compared to the
previous year.
In Finland, the parent company’s sales in January-September amounted
to a total of 84.9 (81.2) million litres. This represents an increase
of 3.7 million litres or 4.6 percent. From July to September, domestic
sales increased by 4.0 million litres or 14.1 percent.
2 (7)
In the Baltic states, Olvi’s subsidiares continued to increase their
sales with strong growth in January-September compared to the
corresponding period last year (+18.1%). In July-September, sales
increased by 15.5 percent on the previous year. The increase in sales
volumes in the Baltic states was made possible by investments carried
out to increase capacity in the subsidiaries, as well as beverage
markets that are still developing.
Sales volumes by market area (million litres):
1-9/2006 1-9/2005 1-12/2005
Olvi Group total 233.4 208.0 272.0
Finland 84.9 81.2 106.4
Estonia 98.9 87.3 113.7
Latvia 33.0 24.6 31.5
Lithuania 32.5 27.4 36.4
Sales between segments -15.9 -12.5 -16.0
Consolidated net sales from January to September amounted to 130.6
(112.88) million euro, representing an increase of 17.7 million euro
or 15.7 percent on the corresponding period. Finnish net sales
increased by 8.2 percent in January-September and 17.1 percent in July-
September compared to the corresponding periods last year.
The total increase in the net sales of Olvi’s Baltic subsidiaries in
January-September was 24.5 percent. In July-September, the Baltic net
sales increased by 25.3 percent on the previous year.
Net sales by geographical segments (million euro):
1-9/2006 1-9/2005 1-12/2005
Olvi Group total 130.6 112.9 147.5
Finland 60.9 56.3 73.5
Estonia 47.5 38.9 50.8
Latvia 14.1 10.4 13.4
Lithuania 13.8 11.4 15.0
Net sales between
segments -5.7 -4.0 -5.2
The Group’s operating profit from January to September amounted to
16.7 (11.6) million euro. This represented an increase of 5.1 million
euro or 43.9 percent on the corresponding period last year. Above all,
the increase in operating profit was due to substantial improvement in
the parent company Olvi plc’s operating profit. All companies within
the Group posted a positive operating profit.
Operating profit by geographical segments (million euro):
1-9/2006 1-9/2005 1-12/2005
Olvi Group total 16.7 11.6 12.9
Finland 6.6 3.8 4.7
Estonia 8.1 6.9 7.7
Latvia 0.9 0.4 0.2
Lithuania 1.1 -0.3 -0.9
Eliminations 0.02 0.8 1.2
3 (7)
In the period under review, earnings after taxes improved by 5.0
million euro to 13.7 (8.7) million euro. Earnings per share belonging
to the parent company’s shareholders improved by 0.46 euro to 1.32
euro (0.86).
Parent company Olvi plc
Net sales of the parent company Olvi plc in January-September amounted
to 60.9 (56.3) million euro, with a total volume of 84.9 (81.2)
million litres.
Sales in January-September increased by 3.7 million litres (4.6
percent) compared to the previous year. From July to September, sales
increased by 4.0 million litres or 14.1 percent.
Among Olvi plc’s main product groups, the sales of beers increased by
9.4 percent and the sales of ciders by 15.6 percent over the review
period. The sales of the energy drink TEHO almost doubled. The sales
of mineral waters declined by approximately 17 percent, largely
attributable by the lack of a popular promotional package in Olvi’s
product range.
According to the latest AC Nielsen report published for the period
under review, Olvi plc’s retail market share in its main product
groups (beers, ciders and mineral waters) continued to increase and
stood at 18.9 percent.
From January to September, net sales increased by 8.2 percent on the
previous year, and from July to September the increase was 17.1
percent.
The parent company Olvi plc’s operating profit in January-September
was 6.6 (3.8) million euro or 10.9 (6.8) percent of net sales. The
operating profit improved by 2.8 million euro or 72.8 percent. In July-
September, the parent company’s operating profit improved by 25.7
percent on the previous year. The increase in operating profit was
affected by more balanced sales between product groups, increased
efficiency of logistics and production, and better control of costs.
The warm and dry summer and controlled promotional sales during the
most important season of the year also contributed to the increase in
operating profit.
AS A. Le Coq Tartu Õlletehas
The total sales of the Estonian subsidiary AS A. Le Coq Tartu
Õlletehas increased to 98.9 (87.3) million litres in January-
September. This represents an increase of 11.7 million litres or 13.4
percent. Sales volumes increased in all product groups, but the
greatest proportional increases were seen in ciders, mineral waters
and long drinks. AS A. Le Coq has a 50 percent share of the long drink
market in Estonia and market shares of 30 to 40 percent in other
product groups.
Favourable development of the sales volume boosted AS A. Le Coq Tartu
Õlletehas’s net sales for the review period to 47.5 (38.9) million
euro. This represents an increase of 8.6 million euro or 22.2 percent.
The Estonian subsidiary’s operating profit for the period under review
was 8.1 (6.9) million euro or 17.0 (17.8) percent of net sales. The
operating profit increased by 1.2 million euro or 17.1 percent
compared to the previous year.
4(7)
In July-September, AS A. Le Coq Tartu Õlletehas’s sales increased by
9.5 percent, net sales by 21.4 percent and operating profit by 15.2
percent compared to the previous year.
A/S Cesu Alus
In January-September, the total sales of A/S Cesu Alus operating in
Latvia increased to 33.0 (24.7) million litres, representing an
increase of 8.4 million litres or 33.9 percent. Growth was substantial
in all product groups. Beers represented 72.0 percent of the total
sales volume. The sales of beers increased by 22 percent on the
previous year. Ciders, long drinks and soft drinks created a sales
increase of 63.0 percent. A/S Cesu Alus has increased its market share
to more than 20 percent of the Latvian beer market.
In January-September, A/S Cesu Alus posted net sales of 14.1 (10.4)
million euro. This represents an increase of 3.8 million euro or 36.4
percent. The company’s operating profit increased by 0.5 million euro
to 0.9 (0.4) million euro.
In July-September, A/S Cesu Alus’s sales increased by 40.2 percent,
net sales by 39.2 percent and operating profit by 21.8 percent
compared to the previous year.
AB Ragutis
The total sales of AB Ragutis operating in Lithuania increased to 32.5
(27.4) million litres during the period under review. This represents
an increase of 5.1 million litres or 18.8 per cent. The greatest
proportional increase of sales was seen in ciders, long drinks and
juices, in which the sales volume doubled. Beers represent
approximately 68 percent of the total volume. The sales of beers
increased by 8.0 percent during the period under review. The company
has a market share of 11.0 percent in the Lithuanian beer market and
50.0 percent in the cider market.
The net sales of AB Ragutis for the period under review amounted to
13.8 (11.4) million euro. This represents an increase of 2.4 million
euro or 20.6 percent. Operating profit stood at 1.1 (-0.3) million
euro, representing an increase of 1.4 million euro.
In July-September, AB Ragutis increased its sales by 12.9 percent and
net sales by 20.7 percent. Operating profit stood at 0.9 million euro,
representing an increase of 1.3 million euro on the previous year.
FINANCING AND INVESTMENTS
Olvi Group’s balance sheet total at the end of the period under review
was 153.1 (138.1) million euro. Equity per share in January-September
stood at 7.36 (6.39) euro. The equity ratio improved from 48.1 percent
to 50.0 percent. The amount of interest-bearing liabilities was 39.1
(43.2) million euro, including current liabilities of 3.2 (8.6)
million euro.
5(7)
During the period under review, Olvi Group’s gross capital expenditure
amounted to 14.6 million euro (16.7 million euro). The parent company
Olvi plc accounted for 1.0 million euro and the subsidiaries in the
Baltic states for 13.6 million euro of the total. The Group’s largest
investment in 2006 is the construction of a logistics centre near
Tartu, shared by the Estonian brewery and juice production plant.
Other major investments included extensions to the tank cellars at the
Latvian and Lithuanian breweries, as well as extensions to the
storehouse and yeast cellar at the Latvian brewery. Olvi plc’s largest
investments concerned the can filling line. In addition to these
investments, AS A. Le Coq Group invested additional share capital in
AB Ragutis and A/S Cesu Alus totalling 10.9 million euro.
PRODUCT DEVELOPMENT AND NEW PRODUCTS
Research and development includes projects to design and develop new
products and packages. The R&D costs have been recognised as expenses.
In the turn of August and September, Olvi plc was the first brewery to
launch a coffee-flavoured cider, FIZZ Cappuccino. In September, the
MAKU soft drink range was supplemented with a new flavour, Vanilla-
Cola.
In the beginning of August 2006, Olvi plc and Sony BMG Music
Entertainment Finland signed a licence agreement regarding LORDI COLA
and LORDI COLA light soft drinks. Under the agreement, Olvi plc has an
exclusive right of manufacturing, selling, marketing and distributing
LORDI COLA and LORDI COLA light drinks in the Finnish market as of 1
September 2006. The sales of Lordi products have started successfully.
The Baltic companies have invested substantial effort in the
development of new flavours and product packaging for ciders, mineral
waters, soft drinks and beers.
Safari Long Drink was successfully launched in Estonia and Latvia. AS
Tartu Õlletehas’s juices carrying the Aura brand were awarded as the
best-quality food products in the Estonian market. Aura Mineral water
containing a wide variety of minerals was introduced to the mineral
waters product group, while Arctic Sport Slim Line was an addition to
the sport drinks group.
PERSONNEL
The Group’s average number of personnel during the period under review
was 1,127 (1,073), 346 (339) of them in Finland, 395 (366) in Estonia,
195 (179) in Latvia and 191 (189) in Lithuania. At the end of the
review period, the total number of personnel was 1,107 (1,069). The
average number of personnel increased by 54 people or 5.0 percent
compared to the corresponding period last year.
6(7)
OLVI PLC’S GROUP STRUCTURE
AS A. Le Coq Group holds 97.89 percent of the Latvian brewery A/S Cesu
Alus and 98.96 percent of the Lithuanian company AB Ragutis. The
company holds the entire stock of AS A. Le Coq Tartu Õlletehas.
INCREASE OF SHARE CAPITAL THROUGH A BONUS ISSUE
In April 2006, Olvi plc increased its share capital through a bonus
issue comprising 933,064 new Series K shares and 4,256,638 new Series
A shares. The increase in share capital, 10,379,404 euro, was recorded
in the Trade Register on 7 April 2006.
Olvi plc’s registered share capital currently stands at 20,758,808
euro, and the total number of shares is 10,379,404. There are
1,866,128 Series K shares and 8,513,276 Series A shares.
The impact of the bonus issue on Olvi Group’s per-share indicators for
the previous year has been taken into account in order to preserve the
comparability of the figures.
OLVI PLC SHARES
A total of 2,249,938 Olvi plc A shares changed hands on the Helsinki
Stock Exchange from January to September 2006, totalling 45.2 million
euro in trading volume. The traded shares represented 26.4 percent of
the total number of A shares. The average share price was 14.02 euro,
with a low of 10.50 euro quoted in January and a high of 17.50 euro
quoted in August. The quotation on the last day of the review period
was 16.89 euro.
TREASURY SHARES
On 4 April 2006, the General Meeting of Shareholders of Olvi plc
decided to authorise the Board of Directors 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 245,000 Series A shares.
On 19 May 2006, Olvi plc’s Board of Directors decided to launch an
acquisition programme concerning the company’s own shares. The Board
of Directors decided to acquire a maximum of 4,000 Olvi plc Series A
shares.
The shares were acquired in public trading on the Helsinki Stock
Exchange for the market price valid at the time of trading. The
acquisition was carried out between 1 and 14 June 2006. 4,000 shares
were bought at prices ranging from 12.90 to 14.20 euro per share. The
total consideration paid for the shares was 53,927.99 euro. The Board
of Directors has not made any decisions concerning treasury shares in
June-September 2006.
7(7)
The acquired Series A shares represent 0.04 percent of the share
capital and 0.01 percent of the aggregate voting rights associated
with all shares. The acquired shares represent 0.05 percent of all
Series A shares and associated voting rights.
In January-September, the Board of Directors has not executed its
right to transfer the company’s own Series A shares as authorised by
the General Meeting of Shareholders. This means that all of the Series
A shares acquired by the company are held by the company itself.
OWNERSHIP STRUCTURE
At the end of the review period, Olvi plc had a total of 4,807 (4,357)
shareholders, 81.37 percent of whom were Finnish (share of votes
93.66%). Nominee-registered holdings accounted for 12.11 percent (2.74
percent of votes), while registered foreign holdings accounted for
6.52 percent (3.60 percent of votes).
FUTURE OUTLOOK
The Olvi Group will continue to focus on improving the overall
profitability of the Group and particularly on efficient utilisation
of the substantial investments made to increase the capacity of the
Baltic companies. In Finland, the Group is preparing for new tax
legislation concerning the entire package stock of the brewing and
beverage industry that will enter into force on 1 January 2008, as
well as the changes imposed by the increased use of single-use
packaging.
We estimate that Olvi Group’s full-year net sales for 2006 will
increase on the previous year. We anticipate that Olvi Group’s
operating profit for the fourth quarter will be approximately on a par
with the corresponding period last year, which means that the full-
year operating profit will be clearly better than last year.
Further information:
Lasse Aho, Managing Director
Phone +358 17 838 5200 or +358 400 203 600
OLVI PLC
Board of Directors
APPENDICES
- Balance sheet, Appendix 1
- Income statement, Appendix 2
- Changes in consolidated shareholders’ equity, Appendix 3
- Cash flow statement, Appendix 4
- Number of shares, personnel and contingent liabilities,
Appendix 5
DISTRIBUTION
Hex Plc
Key media
www.olvi.fi
OLVI GROUP APPENDIX 1
BALANCE SHEET
EUR 1000
30.9.2006 30.9.2005 31.12.2005
ASSETS
Non-current assets
Tangible assets 81228 73767 73679
Goodwill 10531 8706 8706
Intangible assets 1852 2567 2439
Investments available
for sale 254 253 253
Other non-current assets
available for sale 311 61
94
Receivables 44 44 44
Deferred tax receivables 49 0 47
Total non-current assets 94269 85398 85262
Current assets
Inventories 25574 23002 21424
Receivables 30651 26747 27273
Liquid assets 2580 2950 6437
Total current assets 58805 52699 55134
TOTAL ASSETS 153074 138097 140396
SHAREHOLDERS’ EQUITY AND LIABILITIES
Shareholders’ equity held by
parent company shareholders
Share capital 20759 10379 10379
Other reserves 1127 11507 11507
Accrued earnings 40802 35577 35568
Net profit for the period 13656 8860 9808
76344 66323 67262
Minority interest 157 88 0
Total shareholders’ equity 76501 66411 67262
Non-current liabilities
Interest-bearing liabilities 35917 34638 33359
Interest-free liabilities 459 0 0
Deferred tax liabilities 1427 1556 1559
Current liabilities
Interest-bearing liabilities 3223 8603 6872
Interest-free liabilities 35547 26889 31344
Total liabilities 76573 71686 73134
TOTAL SHAREHOLDERS’ EQUITY
AND LIABILITIES 153074 138097 140396
OLVI GROUP APPENDIX 2
INCOME STATEMENT
EUR 1000
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
2006 2005 2006 2005 2005
Net sales 50303 41613 130595 112884 147519
Other operating
income 28 309 381 467 519
Operating expenses -38891 -32375 -106115 -93943 -123269
Depreciation and
impairment -2706 -2591 -8130 -7778 -11807
Operating profit 8734 6956 16731 11630 12962
Financial income 59 50 142 94 159
Financial expenses -401 -353 -1069 -1663 -1885
Profit before
taxes 8392 6653 15804 10061 11236
Taxes *) -1063 -868 -2136 -1374 -1688
Profit/loss
for the period 7329 5785 13668 8687 9548
Distribution:
- parent company
shareholders 7312 5881 13656 8858 9808
- minority 17 -96 12 -171 -260
Ratios calculated
from the profit belonging
to parent company shareholders:
- earnings per share, euro 1.32 0.86 0.93
- average number of shares
adjusted for dilution
from warrants, euro 1.31 0.85 0,92
*) Taxes calculated from the profit for the review period.
APPENDIX 3
OLVI GROUP
CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY
EUR 1000
A B C D E F G H I
Shareholders' equity
1.1.2005 10028 10481 127 0 143 0 38828 260 59867
Subscription
of shares 351 755 1106
Change in
translation diff. 8 8
Payment of
dividends -3259 -3259
Profit
for the period 8860 8860
Change in
minority interest -172 -172
Shareholders' equity
30.9.2005 10379 11236 127 0 143 8 44429 88 66411
EUR 1000
A B C D E F G H I
Shareholders' equity
1.1.2006 10379 11236 127 0 143 0 45377 0 67262
Bonus issue 10379 -10379 0
Effect of
share capital
increases in
subsidiaries
on minority
interest -145 -145 0
Acquisition
of own
shares -54 -54
Change in
translation diff. 37 37
Payment of
dividends -4411 -4411
Profit
for the period 13668 13668
Change in
minority interest -12 12 0
Shareholders' equity
30.9.2006 20758 858 127 -54 143 37 54475 157 76501
A = Share capital B = Share premium account
C = Legal reserve D = Treasury shares reserve
E = Other reserves F = Translation differences
G = Accrued earnings H = Minority interest
I = Total
OLVI GROUP APPENDIX 4
CASH FLOW STATEMENT
EUR 1000
1-9/2006 1-9/2005 1-12/2005
Net profit for the period 13668 8687 9548
Adjustments to profit
for the period 11689 10721 14649
Change in net
working capital -4911 -1810 1772
Interest paid -991 -2240 -1732
Interest received 141 94 159
Taxes paid -1051 -2416 -1763
Cash flow from
operations (A) 18545 13036 22633
Investments -17166 -10845 -13988
Disposals of
fixed assets 0 84 122
Cash flow from
investments (B) -17166 -10761 -13866
Increase in
share capital 0 0 1106
Withdrawals of loans 9750 21000 4000
Repayments of
loans -10521 -21502 -8613
Acquisition of
own shares -54 0 0
Dividends paid -4411 -3259 -3259
Cash flow from
financing (C) -5236 -3761 -6766
Increase (+)/
decrease (-) in
liquid assets (A+B+C) -3857 -1486 2001
Liquid assets 1 January 6437 4436 4436
Liquid assets
30.6./31.12. 2580 2950 6437
OLVI GROUP APPENDIX 5
NUMBER OF SHARES
1-9/2006*) 1-9/2005**) 1-12/2005**)
- at end of period 10375404 10379404 10379404
- average 10377707 10263624 10292806
- average number of shares
adjusted for dilution
from warrants
10426826 10406982 10378178
*) Treasury shares deducted.
**) Effect of bonus issue taken into account, figures converted to
comparable format.
PERSONNEL ON AVERAGE
1-9/2006 1-9/2005 1-12/2005
Finland 346 339 333
Estonia 395 366 379
Latvia 195 179 180
Lithuania 191 189 182
Olvi Group total 1127 1073 1074
CONTINGENT LIABILITIES
EUR 1000
30.9.2006 30.9.2005 31.12.2005
Pledges and
contingent liabilities
- for own commitments 1135 1135 1135
- for others 1035 0 1278
Leasing liabilities:
- due within one
year 1009 1321 1240
- due within 1 to 5
years 1005 1670 1471
Total leasing liabilities 2014 2991 2711
Package liabilities 4880 4170 5442
Other liabilities 1980 1980 2016
Debts for which mortgages have been given as collateral
Loans from financial institutions
- for own commitments 3091 3863 3864
- for others 2062 4724 4125
Company Address: Olvi plc, Olvitie I-IV, 74100 IISALMI, FINLAND
Website URL: http://www.olvi.fi