OLVI PLC PRESS RELEASE 17 AUG 2006 at 09:00 1(8)
OLVI GROUP’S INTERIM REPORT, 1 JANUARY TO 30 JUNE 2006 (6 MONTHS)
Olvi Group achieved the best half-year result in its history and
improved its profitability in all of its operating areas. Olvi Group’s
net sales amounted to 80.3 (71.3) million euro, an increase of 12.7%.
Operating profit stood at 8.0 (4.7) million euro. The increase in
operating profit was mainly attributable to a substantial improvement
in earnings in Finland. The Group’s gross capital expenditure amounted
to 10.6 (14.1) million euro, and its equity to total assets ratio
stood at 43.5 percent (40.1%). Earnings per share amounted to 0.61
(0.28) euro.
OLVI GROUP’S KEY INDICATORS
1-6/2006 1-6/2005 1-12/2005
Net sales, MEUR 80.29 71.27 147.52
Operating profit, MEUR 8.00 4.67 12.96
Gross capital
expenditure, MEUR 10.57 14.09 17.44
Equity to total assets, % 43.47 40.06 47.91
Earnings per share, EUR 0.61 0.28 0.93
Equity per share, EUR 6.65 5.82 6.48
Gearing-% 64.96 81.11 49.56
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 for this interim report takes
into account the effect of Olvi plc’s April 2006 bonus issue on the
previous years’ indicators. Thus the per-share indicators for the
corresponding review period in 2005 and the financial statements 2005
have been adjusted to enable comparison.
The interim report is unaudited.
NET SALES AND EARNINGS
Olvi Group’s sales from January to June amounted to a total of 145.4
(131.7) million litres. Sales increased by 13.8 million litres or 10.5
percent compared to the previous year. In Finland, the parent
company’s sales were on a par with the previous year in January-June
but improved by +12.4 percent in April-June. Promotion activity was
increased in Finland during April-June in preparation for the summer
season.
2(8)
In Olvi Group’s subsidiaries in the Baltic states, strong growth of
sales continued in January-June (+19.7%). The sales improvement in
April-June compared to the previous year was 21.7 percent. 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):
1-6/2006 1-6/2005 1-12/2005
Olvi Group total 145.4 131.7 272.0
Finland 52.7 53.0 106.4
Estonia 62.1 53.6 113.7
Latvia 19.8 15.3 31.5
Lithuania 20.1 16.4 36.4
Sales between segments -9.3 -6.6 -16.0
Consolidated net sales from January to June amounted to 80.3 (71.3)
million euro, representing an increase of 9.0 million euro or 12.7
percent on the previous year. Domestic net sales increased by 1.9
percent in January-June and 7.8 percent in April-June compared to the
previous year.
Net sales in the Baltic states increased by a total of 24.0 percent in
January-June.
In the April-June period, net sales in the Baltic states increased by
26.2 percent on the previous year.
Net sales by geographical segments (million euro):
1-6/2006 1-6/2005 1-12/2005
Olvi Group total 80.29 71.27 147.52
Finland 38.00 36.71 73.51
Estonia 29.10 23.73 50.77
Latvia 8.32 6.18 13.40
Lithuania 8.23 6.83 15.04
Net sales between
segments -3.36 -2.18 -5.20
The Group’s operating profit from January to June amounted to 8.0
(4.7) million euro. This represents an increase of 3.3 million euro or
71.1 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 earnings. Operating profit improved in all
companies within the Group.
3(8)
Operating profit by geographical segments (million euro):
1-6/2006 1-6/2005 1-12/2005
Olvi Group total 8.00 4.67 12.96
Finland 3.05 0.98 4.72
Estonia 4.48 3.78 7.72
Latvia 0.31 -0.08 0.15
Lithuania 0.19 0.07 -0.87
Eliminations -0.03 -0.08 1.24
In the period under review, earnings after taxes improved by 3.4
million euro to 6.3 (3.0) million euro. Earnings per share for the
review period improved by 0.33 euro to 0.61 euro (0.28).
Parent company Olvi plc
The parent company Olvi plc generated net sales of 38.0 (36.7) million
euro with a total sales volume of 52.7 (53.0) million litres in
January-June. From January to March, the parent company Olvi plc was
much more considerately involved in sales promotions for beer but
promotional activity was increased in a controlled manner from April
to May. Compared with the previous year, net sales improved by 3.5
percent in January-June but as much as 10.4 percent in April-June.
Within Olvi plc’s main product groups, the greatest sales improvement
in January-June was seen in ciders (+16.7%). The sales of beers and
long drinks increased slightly but the sales of mineral waters
declined due to the fact that the predominant package size used for
sales promotions in the market is not included in Olvi’s product
range. In the April-June period, the greatest sales improvement was
seen in beers (24.6%).
According to AC Nielsen, Olvi plc’s grocery-store market share in its
main product groups - beers, ciders and mineral waters - was 17.1
percent on average in January-June.
The parent company Olvi plc’s operating profit in January-June was 3.0
(1.0) million euro or 8.0 (2.7) percent of net sales. The operating
profit improved by 2.1 million euro. The increase in operating profit
was attributable to more balanced distribution of sales between
product groups, improved efficiency of logistics and production, as
well as better control of costs. A controlled increase in promotional
sales just before the most important season of the year also
contributed to the improved operating profit.
4(8)
AS A. Le Coq Tartu Õlletehas
The total sales of the Estonian subsidiary AS A. Le Coq Tartu
Õlletehas increased to 62.1 (53.6) million litres in January-June.
This represents an increase of 8.5 million litres or 15.8 percent.
Sales volumes increased in all product groups but the greatest
proportional growth was seen in ciders and long drinks in which AS
Tartu Õlletehas holds a total market share of approximately one half
in Estonia.
The company’s market share in beers, soft drinks and mineral waters
also continued to increase.
Thanks to favourable development of the sales volume, AS A. Le Coq
Tartu Õlletehas’s net sales in the period under review increased to
29.1 (23.7) million euro, representing an increase of 5.4 million euro
or 22.7 percent.
The Estonian subsidiary’s operating profit for the period under review
was 4.5 (3.8) million euro or 15.4 (15.9) percent of net sales. The
operating profit increased by 0.7 million euro or 18.6 percent
compared to the previous year.
A/S Cesu Alus
The total sales of A/S Cesu Alus operating in Latvia increased to 19.8
(15.3) million litres in January-June, representing an increase of 4.6
million litres or 30.0 percent. Growth was substantial in all product
groups. Beers represent approximately 71 percent of the total sales
volume. The sales of beers increased by some 20 percent on the
previous year. The greatest proportional growth was seen in ciders and
soft drinks. A/S Cesu Alus has increased its market share to
approximately 20 percent in the Latvian beer market.
The net sales of A/S Cesu Alus in January-June amounted to 8.3 (6.2)
million euro. This represents an increase of 34.6 percent. The
company’s operating profit stood at 0.3 (-0.08) million euro, turning
positive.
AB Ragutis
During the review period, the total sales of AB Ragutis operating in
Lithuania increased to 20.1 (16.4) million litres. This represents an
increase of 3.7 million litres or 22.7 percent. The greatest
proportional increase of sales was seen in ciders, long drinks and
juices, in which the sales volume doubled. Beers represent
approximately 70 percent of the total sales volume. The sales of beers
increased by approximately five percent. The company has an
approximate market share of 11 percent in the Lithuanian beer market
and 53 percent in the cider market.
5(8)
In the period under review, AB Ragutis’s net sales amounted to 8.2
(6.8) million euro, representing an increase of 1.4 million euro or
20.5 percent. AB Ragutis’s operating profit improved by 0.1 million
euro on the previous year and amounted to 0.2 million euro.
FINANCING AND INVESTMENTS
Olvi Group’s balance sheet total at the end of the period under review
was 159.1 (151.3) million euro. Equity per share in January-June stood
at 6.65 (5.82) euro. The equity ratio improved from 40.1 percent to
43.5 percent. The amount of interest-bearing liabilities was 47.9
(55.1) million euro, including current liabilities of 18.1 (27.1)
million euro.
During the period under review, Olvi Group’s gross capital expenditure
amounted to 10.6 million euro (14.1 million euro). The parent company
Olvi plc accounted for 0.8 million euro and the subsidiaries in the
Baltic states for 9.8 million euro of the total. The Group’s largest
investment in 2006 is the construction of a logistics centre for the
Estonian brewery near Tartu. Other larger 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
made additional contributions to the share capital of 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.
During the early summer and summer 2006, Olvi plc has launched several
new products. Strong ciders with an alcohol content of 5.4% vol. were
introduced to the product range of Alko outlets under the product
names FIZZ Original Light Perry and FIZZ Strawberry. In August-
September, Olvi plc will be the first brewery to introduce a coffee-
flavoured cider, FIZZ Cappuccino.
The energy drink TEHO launched in the spring last year is now
complemented by a new light flavour by the name TEHO Kevyt Kola (Light
Cola), and Olvi’s new soft drink range MAKU will get a new flavour,
Vanilla Cola, in September.
In May 2006, Olvi plc and Heineken signed an agency agreement
concerning the Finnish market. The agreement covers the sales,
marketing and distribution of Heineken bottled and keg beers in
Finland. This means that the co-operation with Heineken covers the
entire operating area of Olvi Group.
6(8)
In early August 2006, Olvi plc and Sony BMG Music Entertainment
Finland signed a licence agreement concerning LORDI COLA and LORDI
COLA light soft drinks. Under the agreement, Olvi plc will have an
exclusive right to produce, sell, market and distribute LORDI COLA and
LORDI COLA light beverages in the Finnish market as of 1 September
2006.
The Baltic companies have invested a lot of effort in the development
of new flavours and product packages for ciders, mineral waters, soft
drinks and beers.
PERSONNEL
The Group’s average number of personnel during the period under review
was 1,109 (1,118), 336 (339) of them in Finland, 393 (401) in Estonia,
191 (191) in Latvia and 189 (187) in Lithuania. At the end of the
period under review, the total number of personnel was 1,230 (1,161).
The average number of personnel decreased by 9 people or 0.8 percent
on the corresponding period last year.
CHANGES IN OLVI PLC’S CORPORATE STRUCTURE
In April 2006, the Estonian company AS A. Le Coq Group, a wholly owned
subsidiary of Olvi plc, increased its holding in the Lithuanian
company AB Ragutis. AS A. Le Coq Group now holds 98.96 percent of AB
Ragutis.
In April 2006, AS A. Le Coq Group also increased its holding in the
Latvian brewery company A/S Cesu Alus. AS A. Le Coq Group now holds
97.89 percent of A/S Cesu Alus.
INCREASE OF SHARE CAPITAL BY BONUS ISSUE
Olvi plc’s Annual General Meeting on 4 April 2006 adopted the Board of
Directors’ proposal and decided to increase the company’s share
capital by means of a bonus issue in which all shareholders will
receive one new A share per each existing A share and one new K share
per each existing K share free of charge. The bonus issue comprised
933,064 new K shares and 4,256,638 new A shares. The nominal value of
each share is two (2) euro. 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 is now 20,758,808 euro and the
total number of shares is 10,379,404. The number of K shares is
1,866,128 and the number of A shares is 8,513,276. The new shares have
been traded together with the old shares since 10 April 2006. The new
shares entitle to full dividend for the financial period that started
on 1 January 2006, and to all other rights associated with the share
since 7 April 2006.
7(8)
Each K share carries 20 votes at the General Meeting of Shareholders,
while each A share carries one vote. The shares entitle to equal
dividend. Olvi plc’s Articles of Association include a redemption
clause concerning K shares.
The effects of the bonus issue on Olvi Group’s per-share indicators
for the previous year have been taken into account in order to
maintain comparability of the figures.
THE OLVI PLC SHARE
A total of 1,412,801 Olvi plc A shares changed hands on the Helsinki
Stock Exchange from January to June 2006, totalling 31.5 million euro
in trading volume. The traded shares represented 16.6 percent of the
total number of A shares. As a consequence of the bonus issue, the
market price was cut in half. The average share price was 13.27 euro,
with a low of 10.50 euro quoted in January and a high of 16.89 euro
quoted in April.
PAYMENT OF DIVIDENDS
In accordance with the Board’s proposal, the General Meeting of
Shareholders decided that a dividend of 0.85 euro be paid on each K
and A share for fiscal 2005. The dividend according to the decision
represented 45.8 percent of earnings per share. The dividend payout
totalled 4.4 million euro. The dividend was paid on 18 April 2006 to
all shareholders recorded in the company’s register of shareholders
maintained by the Finnish Central Securities Depository Ltd on the
record date 7 April 2006 at the latest. The payment of dividends will
expire on 18 April 2011.
TREASURY SHARES
Olvi plc’s Annual General Meeting on 4 April 2006 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 Annual General Meeting and covers a maximum
of 245,000 A shares.
On 19 May 2006 Olvi plc’s Board of Directors decided to initiate a
programme for acquiring the company’s own shares. The Board decided to
acquire a maximum of 4,000 Olvi plc A shares.
The shares were acquired in public trading on the Helsinki Stock
Exchange at the market price valid at the time. The acquisition was
carried out between 1 June and 14 June 2006. The company acquired
4,000 shares at prices ranging from 12.90 to 14.20 euro each. The
payment for the shares totalled 53,927.99 euro.
8(8)
The acquired A shares represent 0.04 percent of the share capital and
0.01 percent of the total number of votes associated with all shares.
The acquired shares represent 0.05 percent of all A shares and
associated votes.
During January-June, the Board of Directors has not exercised the
authorisation granted by the General Meeting of Shareholders to
transfer any A shares held by the company, so all of the A shares
acquired by the company are in the company’s possession.
THE OLVI PLC STOCK OPTIONS 2002
In accordance with the Board of Directors’ proposal, Olvi plc’s Annual
General Meeting decided to annul the stock options 2002 granted by the
Annual General Meeting on 4 April 2002. The annulment was recorded in
the Trade Register on 7 April 2006.
SHAREHOLDERS
At the end of the period under review, Olvi plc had a total of 4,759
(4,456) shareholders, 81.58 percent of whom were Finnish (share of
votes 93.71%). Nominee-registered holdings accounted for 11.95 percent
(2.71% of votes), while registered foreign holdings stood at 6.47
percent (3.58% of votes).
OUTLOOK
Olvi Group will continue to focus on improving the profitability of
the entire Group, particularly on efficient utilisation of the large
investments made to increase the capacity of the Baltic companies. At
the same time, the Group is preparing for new tax legislation
concerning the entire package stock of the brewing and beverage
industry, as well as changes imposed by an increase in the use of
single-use packaging.
We estimate that Olvi Group’s full-year net sales in 2006 will
increase on the previous year and that operating profit will be higher
than in the previous 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
30.6.2006 30.6.2005 31.12.2005
ASSETS
Non-current assets
Tangible assets 79636 76983 73679
Goodwill 10531 8706 8706
Intangible assets 2064 2583 2439
Investments available
for sale 254 253 253
Other non-current assets
available for sale 311 86 94
Receivables 44 44 44
Deferred tax receivables 33 0 47
Total non-current assets 92873 88655 85262
Current assets
Inventories 24529 24287 21424
Receivables 38783 33248 27273
Liquid assets 2946 5154 6437
Total current assets 66258 62689 55134
TOTAL ASSETS 159131 151344 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 35581 35568
Net profit for the period 6344 2977 9808
69032 60444 67262
Minority interest 140 185 0
Total shareholders’ equity 69172 60629 67262
Non-current liabilities
Interest-bearing liabilities 29782 27993 33359
Interest-free liabilities 270 0 0
Deferred tax liabilities 1457 1669 1559
Current liabilities
Interest-bearing liabilities 18100 27063 6872
Interest-free liabilities 40350 33990 31344
Total liabilities 89959 90715 73134
TOTAL SHAREHOLDERS’ EQUITY
AND LIABILITIES 159131 151344 140396
OLVI GROUP APPENDIX 2
INCOME STATEMENT
EUR 1000
4-6/ 4-6/ 1-6/ 1-6/ 1-12/
2006 2005 2006 2005 2005
Net sales 48399 41152 80292 71271 147519
Other operating
income 226 57 353 158 519
Operating expenses -39950 -34766 -67224 -61568 -123269
Depreciation and
impairment -2693 -2571 -5424 -5187 -11807
Operating profit 5982 3872 7997 4674 12962
Financial income 36 18 83 44 159
Financial expenses -347 -808 -668 -1310 -1885
Earnings before
tax 5671 3082 7412 3408 11236
Taxes *) -627 -370 -1073 -506 -1688
Minority interest 5 -4 5 75 260
Net profit
for the period 5049 2708 6344 2977 9808
Distribution:
- parent company
shareholders 5044 2712 6339 2902 9548
- minority 5 -4 5 75 260
Ratios calculated
from the profit belonging
to parent company shareholders:
- earnings per share, euro 0,61 0.28 0.93
- average number of shares
adjusted for dilution
from warrants, euro 0.61 0.28 0.92
*) Taxes calculated on 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
transl. diff. 12 12
Dividend
payment -3259 -3259
Profit
for the period 2977 2977
Change in
minority interest -75 -75
Shareholders' equity
30.6.2005 10379 11236 127 0 143 12 38546 185 60628
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
Acquisition
of own
shares -54 -54
Change in
transl. diff. 31 31
Dividend
payment -4411 -4411
Profit
for the period 6344 6344
Change in
minority interest -140 140 0
Shareholders' equity
30.6.2006 20759 857 127 -54 143 31 47170 140 69172
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
1-6/2006 1-6/2005 1-12/2005
Net profit
for the period 6344 2977 9808
Adjustments to
earnings 7355 6876 14389
Change in
working capital -5620 -1989 1772
Interest paid -713 -1310 -1732
Interest received 83 44 159
Taxes paid -1052 -2252 -1763
Cash flow from
operations (A) 6397 4346 22633
Investments -13080 -11842 -13988
Disposals of
fixed assets 0 65 122
Cash flow from
investments (B) -13080 -11777 -13866
Increase in
share capital 0 0 1106
Withdrawals of loans 9500 16000 4000
Repayments of
loans -1843 -4592 -8613
Acquisition of
own shares -54 0 0
Dividends paid -4411 -3259 -3259
Cash flow from
financing (C) 3192 8149 -6766
Increase (+)/decrease (-)
in liquid assets
(A+B+C) -3491 718 2001
Liquid assets 1.1. 6437 4436 4436
Liquid assets
30.6./31.12. 2946 5154 6437
OLVI GROUP APPENDIX 5
NUMBER OF SHARES
1-6/2006*) 1-6/2005**) 1-12/2005**)
- at end of period 10375404 10379404 10379404
- average 10378878 10204774 10292806
- average number of shares
adjusted for dilution
from warrants 10452964 10305326 10378178
*) Treasury shares deducted.
**) Effects of bonus issue accounted for, figures adjusted for
comparison.
PERSONNEL ON AVERAGE
1-6/2006 1-6/2005 1-12/2005
Finland 336 339 333
Estonia 393 401 379
Latvia 191 191 180
Lithuania 189 187 182
Olvi Group total 1109 1118 1074
CONTINGENT LIABILITIES
EUR 1000
30.6.2006 30.6.2005 31.12.2005
Pledges and
contingent liabilities
- for own commitments 1135 1135 1135
- for others 1278 0 1278
Leasing liabilities:
- due within one year 1050 1369 1240
- due within 1-5 years 1148 1757 1471
Total leasing liabilities 2198 3126 2711
Package liabilities 5489 2786 5442
Other liabilities 1980 2080 2016
Debts for which mortgages have been given as collateral
Loans from financial institutions
- for own commitments 3091 4636 3864
- for others 2826 5424 4125