Olvi Oyj

Interim / Quarterly Report • Apr 21, 2022

OLVI PLC Interim report 21 April 2022 at 9 am

Olvi Group's interim report 1 January to 31 March 2022 (3 months)

Financial performance in brief

Sales volume and net sales developed favourably in all markets during the first quarter. The significant increase in raw material and packaging material prices had not yet been fully transferred to sales prices during the review period. This reduced the operating profit. Olvi has made changes to its segment structure and has determined Finland, the Baltic Sea region and Belarus as its reporting segments. Olvi has classified its business operations in Belarus to assets held for sale. The Group's solvency has remained strong.

Near-term outlook

In its stock exchange release on 5 March 2022, Olvi withdrew its near-term outlook for 2022 because of the uncertainty caused by the war in Ukraine, the end of exports to Russia and Belarus and Olvi's divestment of its business operations in Belarus.

Olvi will publish its near-term outlook for continuing operations, which include its reporting segments in Finland and the Baltic Sea region. Its business operations in Belarus have been classified as discontinued operations/ assets held for sale according to IFRS 5 standard and will not therefore be included in the near-term outlook. Operating profit from continuing operations are expected to remain at a good previous year level.

Compared with the beginning of the year, the operating profit is expected to improve towards the end of the year as the increase in costs will be gradually transferred to the prices of end products. However, business operations continue to involve significant uncertainties due to the availability of raw materials, packaging materials and energy and the increase in costs.

The Group's key ratios (continuing operations)

	1–3/2022	1–3/2021	Change, % /	1–12/2021
			pp
Sales volume, million litres	134.8	112.5	19.8	574.5
Net sales, EUR million	84.7	69.4	22.1	364.8
Gross profit, EUR million	31.3	28.2	11.0	151.7
% of net sales	36.9	40.6		41.6
Operating profit, EUR million	4.6	6.4	-27.5	45.1
% of net sales	5.4	9.2		12.4
Profit for the period, EUR million	3.8	5.5	-29.8	36.7
% of net sales	4.5	7.9		10.1
Earnings per share, EUR	0.19	0.27	-29.6	1.77
Investments, EUR million	8.1	6.1	34.1	26.8
Equity per share, EUR	12.90	12.05	7.0	14.19
Equity ratio, %	56.3	57.1	-0.8	60.7
Gearing, %	-9.8	-19.6	-9.8	-16.6

Key ratios for the Group, including assets held for sale

	1–3/2022	1–3/2021	Change, % /	1–12/2021
			pp
Sales volume, million litres	188.8	163.9	15.2	853.7
Net sales, EUR million	103.9	85.3	21.8	462.2
Operating profit, EUR million	6.0	8.1	-25.0	59.4
% of net sales	5.8	9.4		12.9

Business development Lasse Aho, Managing Director:

An overview of business development in the first quarter

Olvi Group's business operations developed favourably. The sales volume of continuing operations increased by 19.8%, and the net sales of continuing operations grew by 22.1%. Sales increased in all markets, and the company began to implement price increases in response to cost increases. The company's market shares remained strong in beers, and developed favourably in waters and other non-alcoholic products. Sales channel restrictions related to the coronavirus pandemic were lifted in many markets during the first quarter, and sales to the hotel, restaurant and catering (HoReCa) sector, as well as cross-border sales, began to recover, especially in March.

Production costs started to increase during the coronavirus pandemic. Due to the war in Ukraine, costs have continued to increase significantly in raw materials, packaging materials, energy, fuel and freight. There have also been challenges in the availability of materials. At the same time, export sales decreased as Russian exports ended in March. These impacts were already visible at the end of the first quarter, immediately after the beginning of the war, and the operating profit for the reporting period decreased by 27.5% year-on-year. The operating profit, including assets held for sale, was EUR 6.0 million, decreasing by 25% from the previous year.

Impacts of the war in Ukraine

Olvi strongly condemns the Russian attack on Ukraine. In accordance with the stock exchange release issued by Olvi's Board of Directors on 5 March 2022, Olvi has stopped exports to Russia from all its countries of operation, including Belarus, and has started careful planning to divest its business operations in Belarus. The end of exports to Russia, the increase in production and logistics costs caused by the war and the divestment of business operations in Belarus will have a significant impact on the Group's business operations in the future.

Of the Group's total sales volume, exports to Russia amounted to 85.8 million litres, or 10.0% of all litres sold, in 2021. Continuing operations' exports to Russia in 2021 were 20.2 million litres, or 3.5% of the total litres of continuing operations. The end of export sales will have an immediate impact on Olvi's profitability from March onwards. However, Olvi is actively seeking alternative export sales in its current export markets and new export markets, in addition to investing in its competitiveness in local markets.

The prices of raw materials, especially barley and sugar, are expected to continue to rise. In terms of packaging materials, the market price development of aluminium is affecting the price of cans, and there have been challenges in the availability of glass bottles. The prices of energy have increased overall, and it will affect both transport and production. The company will respond to the increase in costs by continuing price increases until the end of the year. Olvi has been actively seeking alternative suppliers and is working to improve the efficiency of the production operations.

The divestment in Belarus will cause the Group's business operations to reduce significantly. In 2021, Belarus represented 33.2% of the Group's sales volume, 21.1% of its net sales and 24.3% of its operating profit. In addition, the planning and implementation of the divestment will cause non-recurring costs. Olvi stopped investments in Lidskoe Pivo, ended its significant Russian exports immediately and started identifying potential buyers and negotiating the sale. Local and international legislation and employees' well-being will be taken into account during the process. The sales process will take time and involve uncertainties, which are described in more detail in Note 11.

Segment-specific business development

Olvi has adjusted its segment structure and determined Finland, Belarus and the Baltic Sea region (the Baltic countries and Denmark) as its reporting segments. These segments are estimated to constitute a well-balanced whole in terms of the size and nature of the markets. The Belarusian business operations have been transferred to assets held for sale. These operations are therefore not included in the report on continuing operations. The Belarusian operations are discussed separately in Note 11.

Business operations remained at a good level in Finland, although the coronavirus pandemic has had a restrictive impact on the hotel, restaurant and catering (HoReCa) channel in particular. Volumes increased by 0.6%, and net sales grew by 7.2%. In 2022, the Easter season was celebrated in April, which affects the comparison with the previous year. Performance in the first quarter was burdened by non-recurring packaging material costs, and the price increases for the largest retail customer can be implemented during the spring. For these reasons, the operating profit decreased by 30%.

In the Baltic Sea region reporting segment, the sales volume increased by 46.7%, and net sales grew by 50.0%. The sales volume and net sales improved especially in Estonia and Latvia. Denmark is a significant addition to this segment, but the segment's comparable development was also at a good level. Sales to the HoReCa sector increased significantly year-on-year. The end of Russian exports is affecting the Lithuanian business operations in particular, and its impact was already visible in March. Energy costs increased significantly, along with raw material and packaging material costs. The process of integrating Denmark into the segment caused nonrecurring costs. For these reasons, the operating profit decreased by 14.4%.

Seasonal nature of operations

The nature of the Group's business operations involves seasonal fluctuation. The net sales and operating profit of the geographical reporting segments are not accumulated steadily. Instead, they fluctuate in accordance with the special characteristics of the seasons of the year and product seasons.

Sales development (continuing operations)

Olvi Group's sales volume grew by 19.8% in January–March, totalling 134.8 (112.5) million litres. The growth focused on the Baltic Sea region segment, which did not include Denmark in the comparison period.

Sales volume, million litres	1–3/2022	1–3/2021	Change, %
Finland	55.6	55.2	0.6
Baltic Sea region	90.0	61.4	46.7
Eliminations	-10.8	-4.1
Continuing operations, total	134.8	112.5	19.8

The Group's net sales increased by 22.1% in January–March and were EUR 84.7 (69.4) million.

Net sales, EUR million	1–3/2022	1–3/2021	Change, %
Finland	41.6	38.8	7.2
Baltic Sea region	48.7	32.4	50.0
Eliminations	-5.6	-1.8
Continuing operations, total	84.7	69.4	22.1

Financial performance

The Group's operating profit in January–March was EUR 4.6 (6.4) million, or 5.4% (9.2%) of net sales. The operating profit was burdened by rapidly increasing production costs related to energy, raw materials, packaging materials and logistics in particular. In Finland, price increases can only be implemented gradually due to the business models of the central firms in the retail sector. For this reason, the operating profit decreased more in Finland than in the Baltic Sea region.

Operating profit, EUR million	1–3/2022	1–3/2021	Change, %
Finland	2.6	3.8	-30.0
Baltic Sea region	2.3	2.7	-14.4
Eliminations	-0.3	-0.1
Continuing operations, total	4.6	6.4	-27.5

The Group's profit after taxes in January–March was EUR 3.8 (5.5) million.

Earnings per share calculated from the profit attributable to the owners of the parent company were EUR 0.19 (0.27) in January–March.

Balance sheet, financing and investments (continuing operations)

Olvi Group's balance sheet total at the end of March 2022 was EUR 480.4 (442.4) million. Equity per share at the end of March 2022 was EUR 12.90 (12.05). The equity ratio was 56.3% (57.1%), and gearing was -9.8% (- 19.6%). The Group's liquidity indicator, the current ratio, remained almost at the same level as before, at 1.0 (1.1).

Interest-bearing liabilities amounted to EUR 6.7 (3.4) million at the end of March. The increase is due to the consolidation of Denmark into the Group's figures. Of the interest-bearing liabilities, short-term liabilities accounted for EUR 4.9 (1.0) million.

Olvi Group's expansion and replacement investments were EUR 8.1 (6.1) million in January–March. Of the investments, EUR 2.7 million were made in Finnish companies and EUR 5.4 million in subsidiaries in the Baltic Sea region. Olvi Group has invested in increasing and diversifying its production and storage capacity and in modernising its production facilities and making them more environmentally friendly. In continuing operations, investments are expected to continue as planned. In addition, improvements in operational reliability, in terms of energy in particular, will be explored.

Personnel

The average number of personnel in Olvi Group's continuing operations was 1,393 (1,136) in January–March. The Group's average number of personnel increased by 22.6%, mainly because of the acquisition of Piebalgas and Vestfyen in 2021.

Olvi Group's average number of personnel by segment:

	1–3/2022	1–3/2021	Change, %
Finland	407	371	9.7
Baltic Sea region	986	765	28.9
Total	1,393	1,136	22.6

Board of Directors and management

No changes took place in Olvi plc's Board of Directors and management during the review period. The Annual General Meeting was held on 30 March 2022. Its decisions and impacts on the composition of the Board are discussed below.

Other events during the review period

Annual General Meeting

Olvi plc's Annual General Meeting (AGM) on 30 March 2022 adopted the financial statements and discharged the members of the Board and the Managing Director from liability for the financial year that ended on 31 December 2021.

In accordance with the Board's proposal, the AGM decided to pay a dividend of EUR 1.20 (1.10) for Series A and Series K shares for the 2021 financial year. This dividend is 51.9% (56.2%) of Olvi Group's earnings per share. The dividend will be paid in two instalments. The first instalment (EUR 0.60 per share) will be paid on 20 April 2022 to shareholders registered in the list of shareholders maintained by Euroclear Finland on the record date (1 April 2022). The second instalment (EUR 0.60 per share) will be paid on 2 September 2022 to shareholders registered in the list of shareholders maintained by Euroclear Finland on the record date (26 August 2022).

The AGM decided that the Board of Directors will consist of six (6) members. Pentti Hakkarainen, Lasse Heinonen, Nora Hortling, Elisa Markula, Juho Nummela and Päivi Paltola were re-elected as the members of the Board.

Ernst & Young Oy, Authorised Public Accountants, was re-elected as the company's auditor, with Elina Laitinen, APA, as the principal auditor.

The AGM's decisions were published in a stock exchange release on 30 March 2022.

Organisation of the Board of Directors

At its inaugural meeting on 30 March 2022, the Board of Directors elected Pentti Hakkarainen as its Chair and Nora Hortling as its Vice Chair.

Lasse Heinonen, Nora Hortling and Juho Nummela were elected as the members of the Audit Committee. By decision of the Board of Directors, the Remuneration Committee was replaced with the HR and Responsibility Committee from 28 February 2022. Pentti Hakkarainen, Elisa Markula and Päivi Paltola were elected as the members of the HR and Responsibility Committee.

Changes in the Group structure

No significant changes took place in Olvi's subsidiary holdings during January–March 2022.

Risk management

The war in Ukraine

The war in Ukraine has significantly increased business risks. There have been challenges in the availability of packaging materials because of the coronavirus pandemic, and the war in Ukraine has worsened the situation. There have been problems with the availability of cans and glass bottles in particular. For the time being, there have not been significant losses in sales. In addition, the prices of raw materials have increased rapidly, especially for barley and sugar, and availability has decreased in the market. The prices of electricity and gas have multiplied within a short time. The price of oil has increased fuel prices, which are directly reflected in logistics costs.

The EU's sanctions against Russia and Belarus on products have not directly affected business operations. However, Olvi has decided to end exports to Russia from all its countries of operation, including Belarus. The import of raw materials and packaging materials used by Olvi from Russia and Belarus has not been hindered because of the EU's sanctions or the counter-sanctions, but the sanctions have had an indirect impact on the supply chain. However, Olvi has sought alternative suppliers for the raw materials and packaging materials imported from Russia and Belarus, as well as the materials affected by the sanctions. An import ban on Russian energy, as a result of the sanctions, would affect product operations in the Baltic countries and the availability of some of the materials used in Olvi's production. In the worst case, production may be interrupted temporarily without alternative sources of energy.

The war in Ukraine has significantly changed the business environment in Russia and Belarus. The Board has therefore decided on 5 March 2022 to end its export to Russia and Belarus, stop investments to Belarus and divest Olvi's business operations in Belarus. Olvi has no local business operations in Russia. The business operations of its company in Belarus are affected by the sanctions imposed by the EU and by the end of exports to Russia, which had accounted for a significant portion of the sales volume. The profitability of the Belarusian company will decrease significantly, and the sanctions may affect the purchasing power of local consumers. The exchange rate began to weaken immediately after the war began. The divestment of the business operations in Belarus involves risks, which are discussed in Note 11.

Coronavirus pandemic

There are uncertainties in forecasting the development of business operations, because it has been difficult to predict the spillover effects of the coronavirus pandemic. These effects are related to sales channel restrictions imposed to prevent the spread of the coronavirus pandemic and to travel restrictions, for example, as well as to changes in overall demand. In addition, there have been major challenges in global production and transport chains in terms of availability and cost pressures. During the first quarter of 2022, there have still been significant

sales channel restrictions related to the coronavirus pandemic, but these restrictions have been lifted during

March or will be lifted in April. However, it is difficult to predict the level of recovery, especially HoReCa sector and cross-border trade.

Preparedness

Olvi Group has drawn up several scenarios and is prepared to respond to changing situations through various measures. We are prepared for production disruptions and have drawn up continuity plans related to the availability of labour, raw materials and energy, for example. Olvi is preparing investments to ensure the availability of energy, in case of possible sanctions. The company has also made efforts to ensure the availability of packaging materials.

A more detailed description of the normal risks related to business operations is provided in the Board of Directors' report and the notes to the financial statements and on the company website (Investors > Olvi as an investment > Risks and risk management).

Events after the review period

There are no significant events to report after the review period.

OLVI PLC Board of Directors

More information:

Lasse Aho, Managing Director, Olvi plc, tel. +358 (0)290 00 1050 or +358 (0)400 203 600 Tiina-Liisa Liukkonen, CFO, Olvi plc, tel. +358 (0)290 00 1050 or +358 (0)41 505 4779

TABLES:

• Consolidated statement of comprehensive income, Table 1
• Consolidated balance sheet, Table 2
• Consolidated statement of changes in equity, Table 3
• Consolidated cash flow statement, Table 4
• Notes to the interim report bulletin, Table 5

DISTRIBUTION: NASDAQ OMX Helsinki Ltd Key media outlets www.olvi.fi

OLVI GROUP TABLE 1

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

EUR 1,000

	1–3/2022	1–3/2021	1–12/2021
Gross sales	204,012	185,547	924,637
Excise taxes and other adjustments	-119,279	-116,177	-559,871
Net sales	84,733	69,370	364,766
Cost of sales	-53,456	-41,185	-213,079
Gross profit	31,277	28,184	151,687
Logistics, sales and marketing expenses	-19,013	-15,902	-77,723
Administrative expenses	-7,889	-6,171	-29,954
Other operating income and expenses	233	244	1,070
Operating profit	4,608	6,355	45,080
Financial income	21	8	46
Financial expenses	-58	-28	-302
Share of the profit of associated companies and joint ventures	0	0	44
Profit before tax	4,570	6,335	44,868
Income taxes	-725	-857	-8,198
Profit for the period, continuing operations	3,845	5,478	36,670
Profit for the period, assets held for sale	1,640	1,394	11,691
PROFIT FOR THE PERIOD	5,485	6,872	48,361
Other items of comprehensive income that may
be later reclassified to profit or loss
Translation differences related to foreign subsidiaries	-8,049	1,408	5,366
Income taxes related to these items	122	-25	-85
TOTAL COMPREHENSIVE INCOME FOR
THE PERIOD	-2,442	8,255	53,642
Distribution of the profit for the period:
- Owners of the parent company	5,484	6,836	47,862
- Non-controlling interest	1	36	499
Distribution of comprehensive income for the period:
- Owners of the parent company	-2,190	8,176	52,977
- Non-controlling interest	-252	79	665
Earnings per share calculated from profit
attributable to owners of the parent
company, EUR
- Undiluted, continuing operations	0.19	0.27	1.77
- Diluted, continuing operations	0.19	0.27	1.77
- Undiluted, assets held for sale	0.08	0.06	0.54
- Diluted, assets held for sale	0.08	0.06	0.54

OLVI GROUP TABLE 2

CONSOLIDATED BALANCE SHEET
EUR 1,000	31 Mar 2022	31 Mar 2021	31 Dec 2021
ASSETS
Non-current assets
Tangible assets	193,630	169,661	190,627
Goodwill	22,204	21,749	22,204
Other intangible assets	12,128	9,382	12,355
Shares in associated companies	980	994	1,018
Other investments	888	851	888
Loans receivable and other long-term receivables	1,732	1,554	1,393
Deferred tax assets	1,377	616	1,452
Total non-current assets	232,939	204,807	229,937
Current assets
Inventories	56,069	38,927	47,164
Accounts receivable and other receivables	89,668	77,364	86,270
Income tax receivable	319	1,020	0
Cash and cash equivalents	33,252	52,887	50,640
Total current assets	179,309	170,198	184,075
Non-current assets held for sale	68,125	67,423	76,231
TOTAL ASSETS	480,373	442,427	490,242
EQUITY AND LIABILITIES
Equity attributable to owners of the parent company
Share capital	20,759	20,759	20,759
Other reserves	1,387	1,387	1,387
Treasury shares	-438	-989	-438
Translation differences	-61,402	-57,502	-53,727
Retained earnings	306,804	285,875	326,016
	267,110	249,530	293,997
Non-controlling interest	3,137	3,202	3,627
Total equity	270,247	252,732	297,624
Non-current liabilities
Financial liabilities	1,799	2,376	1,913
Other liabilities	3,980	4,482	3,985
Deferred tax liabilities	13,818	11,062	13,943
Current liabilities
Financial liabilities	4,875	1,001	1,269
Accounts payable and other liabilities	174,625	157,419	158,164
Income tax liability	299	590	872
Liabilities related to non-current assets held for sale	10,730	12,765	12,471
Total liabilities	210,126	189,695	192,617
TOTAL EQUITY AND LIABILITIES	480,373	442,427	490,242

OLVI GROUP TABLE 3

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

EUR 1,000	Share capital	Other reserves	Reserve for treasury shares	Fair value reserve	Translation differences	Earnings	Attributable to non controlling interest	Total
Equity 1 Jan 2022	20,759	1,092	-438	295	-53,728	326,016	3,627	297,624
Comprehensive income:
Profit for the period						5,484	1	5,485
Other items of comprehensive income:
Translation differences					-7,796		-252	8,049
Income taxes related to items					122			122
Total comprehensive income for the period					-7,674	5,484	-251	-2,442
Business transactions with shareholders:
Dividend payment						-24,855	-7	-24,862
Share-based incentives, value of work performance						244		244
Adjustment for previous periods						-85	0	-85
Business transactions with shareholders, total						-24,696	-7	-24,703
Changes in holdings in subsidiaries:
Acquisition of non-controlling interest						-232		-232
Change in non-controlling interest						232	-232	0
Changes in holdings in subsidiaries, total						0	-232	-232
Equity 31 Mar 2022	20,759	1,092	-438	295	-61,402	306,804	3,137	270,247

EUR 1,000	Share capital	Other reserves	Reserve for treasury shares	Fair value reserve	Translation differences	Earnings	Attributable to non controlling interest	Total
Total equity 1 Jan 2021	20,759	1,092	-1,802	295	-58,842	303,465	3,165	268,132
Comprehensive income:
Profit for the period						6,836	36	6,872
Other items of comprehensive income:
Translation differences					1,365		43	1,408
Income tax related to items					-25			-25
Total comprehensive income for the period					1,340	6,836	79	8,255
Business transactions with shareholders:
Dividend payment						-22,771	-16	-22,787
Acquisition of treasury shares			-874					-874
Share-based incentives, value of work performance						63		63
Issue of treasury shares to personnel			1,687			-1,613		74
Adjustment for previous periods						-105	-26	-131
Business transactions with shareholders, total Total equity			813			-24,426	-42	-23,655
31 Mar 2021	20,759	1,092	-999	295	-57,502	285,875	3,202	252,732

CONSOLIDATED CASH FLOW STATEMENT

Profit for the period, continuing operations 3,845 5,478 36,670 Profit for the period, assets held for sale 1,640 1,394 11,691 Adjustments: Depreciation and impairment 6,690 6,465 27,006 Other adjustments 2,080 1,065 10,251 Change in net working capital: Change in accounts receivable and other receivables -5,324 -1,178 -5,878 Change in inventories -10,912 -5,175 -8,684 Change in accounts payable and other liabilities -9,650 13,934 28,561 Interest paid -161 -126 -594 Interest received 28 65 268 Dividends received 0 0 3 Taxes paid -1,772 -1,008 -9,687 Cash flow from operating activities (A) -13,536 20,914 89,607 Investments in tangible and intangible assets -8,633 -7,095 -31,213 Capital gains from the sale of tangible and intangible assets 141 387 1,068 Acquisition of shares from non-controlling interest -378 0 0 Acquisition of shares in subsidiaries, associated companies and joint ventures 0 0 -11,121 Expenditure on other investments 0 0 -30 Dividends received 38 0 21 Cash flow from investing activities (B) -8,832 -6,708 -41,275 Loan withdrawals 4,708 0 884 Repayment of loans -380 -355 -12,371 Acquisition of treasury shares 0 -874 -874 Sale of treasury shares to personnel 0 551 Dividends paid -2 0 -23,240 Cash flow from financing activities (C) 4,326 -1,229 -35,050 Increase (+) / decrease (-) in cash and cash equivalents (A+B+C) -18,042 12,977 13,282 Cash and cash equivalents 1 Jan 58,741 45,096 45,096 Impact of exchange rate changes -520 94 363 Cash and cash equivalents 31 Mar / 31 Dec 40,179* 58,167 58,741	1–3/2022	1–3/2021	1–12/2021

* The cash flow statement includes both continuing operations and assets held for sale.

NOTES TO THE INTERIM REPORT

The interim report has been prepared in accordance with IAS 34, applying the same accounting principles that were applied to the 2021 financial statements (31 December 2021), with the exception of IFRS 5 (Non-current Assets Held for Sale and Discontinued Operations), which has been applied as a new standard. In accordance with IFRS 5, the Belarusian operations have been classified as non-current assets held for sale. More detailed information about the impacts of the classification is provided in Note 11.

Olvi has changed its segment reporting in accordance with IFRS 8 (Operating Segments) from 1 January 2022 onwards. The comparison information has been changed accordingly.

The figures in the interim report are presented in thousands (1,000) of euros. For presentation, individual figures and totals have been rounded up to the next full thousand, which causes differences in totals. The key figures have been calculated by using accurate euro-denominated figures. The information published in the interim report has not been audited.

1. SEGMENT INFORMATION

SEGMENTS' NET SALES AND PROFIT 1–3/2022

EUR 1,000	Finland	Baltic Sea region	Eliminations	Group total
INCOME
External sales	41,281	43,452		84,733
Beverage sales	40,914	43,452		84,366
Equipment services	367	0		367
Internal sales	293	5,210	-5,502	0
Total net sales	41,574	48,662	-5,502	84,733
Total profit for the
period	2,527	1,963	-645	3,845

SEGMENTS' NET SALES AND PROFIT 1–3/2021

EUR 1,000	Finland	Baltic Sea region	Eliminations	Group total
INCOME
External sales	38,631	30,738		69,369
Beverage sales	38,414	30,738		69,152
Equipment services	217	0		217
Internal sales	152	1,708	-1,860	0
Total net sales	38,783	32,446	-1,860	69,369
Total profit for the
period	3,418	2,512	-566	5,364

2. RELATED PARTY TRANSACTIONS

Management's employee benefits

Board members' and Managing Director's salaries and other short-term employee benefits

EUR thousand	1–3/2022	1–3/2021	1–12/2021
Managing Director	311	662	939
Chair of the Board	18	18	73
Other Board members	43	41	172
Total	372	721	1,184

3. SHARES AND SHARE CAPITAL

	31 Mar 2022	%
Series A shares, number of shares	16,989,976	82.0
Series K shares, number of shares	3,732,256	18.0
Total	20,722,232	100.0
Total number of votes, Series A shares	16,989,976	18.5
Total number of votes, Series 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 totalled EUR 20,759 thousand on 31 March 2022.

A dividend of EUR 1.20 per share for 2021 (EUR 1.10 per share for 2020), totalling EUR 24.9 (22.8) million, will be paid on shares in Olvi plc. The dividend will be paid in two instalments. The first instalment, EUR 0.60 per share, was paid on 20 April 2022. The second instalment, EUR 0.60 per share, will be paid on 2 September 2022. Series K shares and Series A shares provide their holders with equal rights to dividends. The Articles of Association include a redemption clause concerning Series K shares.

4. TREASURY SHARES

At the beginning of January, Olvi plc held a total of 9,404 Series A shares in the company. No changes took place in the number of treasury shares during the review period. The total acquisition price of treasury shares was EUR 438.0 thousand. The treasury shares do not provide the company with voting rights. The Series A shares held by Olvi plc represent 0.05% of all shares in the company and 0.01% of all votes provided by the shares in the company. The treasury shares account for 0.06% of all Series A shares in the company and the votes provided by all Series A shares in the company.

On 30 March 2022, Olvi plc's Annual General Meeting (AGM) decided to authorise the Board of Directors to decide, within one year of the AGM, on the acquisition of Series A shares in the company with distributable funds. The authorisation covers up to 500,000 Series A shares and revokes previous unused authorisations to acquire treasury shares.

The AGM also decided to authorise the Board of Directors to decide on the issue of up to 1,000,000 new Series A shares and the transfer of up to 500,000 Series A shares held by the company. This authorisation revokes previous unused authorisations to transfer treasury shares held by the company.

5. NUMBER OF SHARES*	1–3/2022	1–3/2021	1–12/2021
- Average	20,712,828	20,692,394	20,706,610
- At the end of the period	20,712,828	20,701,333	20,712,828

* The treasury shares held by the company have been deducted.

6. TRADING IN SERIES A SHARES ON THE NASDAQ HELSINKI

	1–3/2022	1–3/2021	1–12/2021
Trading in Series A shares in Olvi, number of shares	875,076	536,274	1,812,283
Total value of trading, EUR thousand	34,582	24,461	89,417
Proportion of the trading out of
the total number of Series A shares, %	5.2	3.2	10.7

Average share price, EUR	39.51	45.63	49.35
Closing price, EUR	35.65	48.70	51.20
Highest price, EUR	52.00	49.30	55.70
Lowest price, EUR	29.50	43.10	43.10

7. FOREIGN AND NOMINEE-REGISTERED HOLDINGS 31 MAR 2022

	Book-entry shares		Number of votes		Shareholders
	number	%	number	%	number	%
Finnish, total	16,202,017	78.19	87,114,881	95.06	19,278	99.56
Foreign, total	64,659	0.31	64,659	0.07	75	0.38
Nominee-registered (foreign), total	2,368,796	11.43	2,368,796	2.59	6	0.03
Nominee-registered (Finnish), total	2,086,760	10.07	2,086,760	2.28	5	0.03
Total	20,722,232	100.00	91,635,096	100.00	19,364	100.00

8. LARGEST SHAREHOLDERS 31 MAR 2022

					Number of
	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 Heikki Hortling*	903,488	103,280	1,006,768	4.86	18,173,040	19.83
3 Timo Einari Hortling	212,600	49,152	261,752	1.26	4,301,152	4.69
4 Marit Hortling-Rinne	149,064	14,234	163,298	0.79	2,995,514	3.27
5 Citibank Europe plc, nominee registered 6 Skandinaviska Enskilda Banken Ab (publ),		2,247,081	2,247,081	10.84	2,247,081	2.45
Helsinki branch, nominee-registered		2,043,668	2,043,668	9.86	2,043,668	2.23
7 Varma Mutual Pension Insurance Company		828,075	828,075	4.00	828,075	0.90
8 Ilmarinen Mutual Pension Insurance Company		683,000	683,000	3.30	683,000	0.75
9 Pia Johanna Hortling	23,388	25,366	48,754	0.24	493,126	0.54
10 Jens Einari Hortling	23,388	16,216	39,604	0.19	483,976	0.53
Other	56,424	10,089,291	10,145,715	48.95	11,217,771	12.24
Total	3,732,256	16,989,976	20,722,232	100.00	91,635,096	100.00

* The shareholding includes shares held by the shareholder and the entities controlled by them.

Olvi did not receive any flagging notifications under chapter 2, section 10 of the Securities Markets Act in January–March 2022.

9. PROPERTY, PLANT AND EQUIPMENT

EUR 1,000
	1–3/2022	1–3/2021	1–12/2021
Opening balance	190,627	168,833	168,833
Additions	7,751	5,965	42,203
Deductions and transfers	387	-446	-1,951
Depreciation and amortisation	-5,130	-4,691	-19,458
Exchange rate differences	-5	0	0
Total	193,630	169,661	190,627

10. CONTINGENT LIABILITIES

EUR 1,000
	31 Mar 2022	31 Mar 2022	31 Dec 2021
Pledged assets and contingent liabilities
On the company's own behalf	10,004	1,938	10,007
Lease and rental liabilities:
Maturing in less than a year	1,322	811	1,012
Maturing within 1–5 years	1,438	631	550
Maturing in more than 5 years	0	13	0
Total lease liabilities	2,760	1,455	1,562
Other liabilities	60	60	60

11. NON-CURRENT ASSETS HELD FOR SALE

Classification and accounting principles

At its meeting on 5 March 2022, Olvi plc's Board of Directors decided to divest the company's business operations in Belarus and start preparations to sell Lidskoe Pivo, a subsidiary in which Olvi plc has a holding of 96.36%. The divestment of Lidskoe Pivo is expected to be highly probable within the next 12 months. The classification has required management discretion, because the divestment can be affected by changes in local legislation arising from counter-sanctions. Permission from the local authorities is required for the divestment. This procedure has been the prevailing practice in the country, even before the war.

In the interim report for January–March 2022 (31 March 2022), Lidskoe Pivo has been classified in discontinuing operations/ assets held for sale in accordance with IFRS 5 (Non-current Assets Held for Sale and Discontinued Operations). The non-current assets held for sale consist in full of the Belarus segment. The business operations in Belarus have been classified to assets held for sale at their current balance sheet value, which the management considers to correspond to, at least, the probable sales price. In connection with the divestment, translation differences related to Belarus of around EUR 60 million will be recognised and will have a negative impact on the operating result. The recognition of translation differences will not affect equity or cash flow.

Income statement, assets held for sale

EUR 1,000
	1–3/2022	1–3/2021	1–12/2021
Net sales	19,175	15,949	97,464
Expenses	-17,371	-14,248	-83,105
Operating profit	1,804	1,701	14,359
Financial items	179	19	-115
Profit before tax	1,983	1,720	14,244
Income taxes	-343	-326	-2,553
Profit for the period, assets held for sale	1,640	1,394	11,691

Olvi's sales volume in Belarus increased by 1.4% in the first quarter, and its net sales grew by 17.9%. However, cost increases in the industry and the impacts of the war are reflected in the operating profit, which decreased by 15.3%. The company started adjustment measures after it had decided to end its Russian exports, which

were significant for the company. Russian exports have accounted for around 25% of the company's total volume.

The local currency has weakened by 14% since the beginning of the year. The weaker exchange rate and the sanctions against Belarus will have a negative impact on the full-year operating profit.

Balance sheet, assets held for sale

EUR 1,000
	1–3/2022	1–3/2021	1–12/2021
Consolidated goodwill	3,278	3,521	3,762
Intangible assets	309	199	341
Tangible assets	33,396	36,854	38,729
Loans receivable and other long term receivables	335	295	338
Deferred tax assets	131	0	36
Inventories	11,480	8,775	11,445
Current receivables	12,269	12,499	13,479
Cash in hand and at bank	6,927	5,280	8,101
Non-current assets held for sale	68,125	67,423	76,231

EUR 1,000
	1–3/2022	1–3/2021	1–12/2021
Non-current financial liabilities	14	0	0
Deferred tax liabilities	0	182	0
Current financial liabilities	6	33	3
Accounts payable and other payables	10,710	12,550	12,468
Liabilities related to non-current assets held for sale	10,730	12,765	12,471

Other information concerning assets held for sale

1,000 euros/1,000 litres
	1–3/2022	1–3/2021	1–12/2021
Sales volume	54,070	51,379	279,197
Average number of personnel	847	787	832
Earnings per share, EUR, undiluted	0.08	0.06	0.54
Earnings per share, EUR, diluted	0.08	0.06	0.54
Cash flow from operating activities	-266	1,188	12,847
Cash flow from investing activities	-375	-1,474	-5,043
Cash flow from financing activities	-14	-30	-5,569

12. CALCULATION OF FINANCIAL RATIOS

In its summary of key ratios (page 1), the Group presents key ratios directly derived from the consolidated income statement (net sales, operating profit, profit for the period and their proportions of net sales, as well as earnings per share). (Earnings per share = Profit for the period attributable to owners of the parent company / Average number of shares during the period, adjusted for share issues).

In addition to its IFRS-based consolidated financial statements, Olvi plc presents Alternative Performance Measures that describe the financial performance of its business operations and provide a comparable overview of the company's profitability, solvency and liquidity.

The Group has applied the European Securities and Markets Authority's (ESMA) new guidelines (effective since 3 July 2016) on Alternative Performance Measures and has determined such measures as follows:

The Group presents sales volume data in millions of litres as an alternative performance measure that supports net sales. Sales volume is an important and widely used indicator in the industry that describes the scope of operations.

Earnings per share = Equity attributable to owners of the parent company / Number of shares at the end of the period, adjusted for share issues.

Equity ratio, % = 100 * (Equity attributable to owners of the parent company + non-controlling interest) / (Balance sheet total).

Gearing, % = 100 * (Interest-bearing debt – Cash in hand and at bank) / (Equity attributable to owners of the parent company + Non-controlling interest).