Annual Report • Mar 20, 2014
Annual Report
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annual report 2012
| Board of Directors' Report | 3 – 16 |
|---|---|
| Consolidated Financial Statements 2012 (IFRS) | |
| Consolidated Income Statement | 17 |
| Consolidated Balance Sheet | 18 |
| Consolidated Cash Flow Statement | 19 |
| Changes in Consolidated Shareholders' Equity | 20 |
| Consolidated Accounting Policies | 21 – 31 |
| N otes to the Consolidated Financial Statements |
32 – 47 |
| Consolidated Key Ratios 2010 to 2012 | 48 |
| P er-share Ratios |
48 |
| Parent Company's Financial Statements 2012 (FAS) | |
| P arent Company's Income Statement |
49 |
| P arent Company's Balance Sheet |
50 |
| P arent Company's Cash Flow Statement |
51 |
| P arent Company's Accounting Policies |
52 |
| N otes to the Parent Company's Financial Statements |
53 – 58 |
| Shares and Shareholders | 59 – 61 |
| P arent Company's Key Ratios 2010 to 2012 |
62 |
| P er-share Ratios |
62 |
| Calculation of Financial Ratios | 63 |
| Board of Directors' Proposal for the Distribution of Profit | 64 |
| Date and Signatures | 64 |
| Auditor's Note | 64 |
| Olvi plc's Board of Directors | 65 |
Olvi's year 2012 was marked by good profitability and the recovery of OAO Lidskoe Pivo's productivity.
Olvi Group's most essential objectives in 2012 included profitability improvement while maintaining a good overall market position, improving the financial position and developing the product range to also suit selected export markets.
The objectives were well-achieved. Olvi Group set new records for sales volume, net sales and operating profit. The equity to total assets ratio of 54.8 percent was one of the best within decades, and the company's indebtedness declined clearly. Earnings per share doubled on the previous year, and at 18 percent, return on investment was one of the best among listed companies.
Olvi Group's net sales exceeded 300 million euro for the first time, amounting to 312 million euro, and the sales volume increased to 527 million litres. Operating profit improved to 30.5 million euro, which is an all-time high. The performance improvement was substantial, taking into account the fact that it was made in a year when peak-season weather was the rainiest in a century and when excise tax hikes were seen across the entire operating area, which had a negative effect on consumption patterns. The good performance improvement was made possible in particular by the quick recovery of Belarus after the series of devaluations of the local currency that hampered the national economy in the previous year, totalling 179 percent, as well as the earnings improvements in Latvia and Lithuania, which were the best figures posted by the subsidiaries A/S Cēsu Alus and AB Volfas Engelman since 2007. Profit-making capacity in Estonia remained excellent. AS A. Le Coq made its new alltime high in operating profit.
Performance in Finland declined on the previous year due to several factors. Excise taxes were substantially increased in the beginning of the operating year, both in alcoholic and non-alcoholic products. Due to this, customers filled up their stocks with the most essential high-volume products in the end of 2011. This caused a drop in deliveries from our production plant early in the year and an increase in tourist imports of alcoholic products across the entire year.
The weather was very rainy in the year's peak season, due to which the sales of mineral waters and soft drinks in particular declined clearly. The markets continued to decline for the rest of the year after the peak season.
Earnings in Finland also declined due to cost increases, the effects of which could not be fully transferred to prices. Furthermore, the product assortment had become too diverse, which caused loss of efficiency in production as well as internal logistics. Due to this, delivery reliability in the peak season was less than excellent.
In the markets, Olvi performed slightly better than its main competitors. The beer range was supplemented with OLVI Halko, and Olvi ciders went through a successful reform. Angry Birds became a strong soft drink brand for Olvi. Surveys of export markets for Angry Birds soft drinks started during the operating year. Olvi's overall market position improved on the previous year, and domestic sales volume declined only slightly in spite of the substantial 50 million litre decline in the overall market.
The Group's investments were smaller than in the previous year, totalling 29.8 million euro. Investments were focused in Belarus and Finland. In Belarus, the first major phase of investments was completed according to plan. Storage and logistics space was built and modernised, and capacity was increased. Furthermore, production saw the introduction of a new glass bottle line and substantial increases in boiling and fermentation tank capacity. In Finland, canning capacity was doubled, and the capacity and number of fermentation tanks was substantially increased to cater for near-term growth targets and changes in consumption patterns.
Olvi Group initiated a coaching and training programme covering the entire Group. The training was implemented in close co-operation with the University of Tartu. Training was provided first to the companies' top management groups, followed by the managerial level.
In Finland, Olvi made efforts to increase interaction with the entire personnel: the Managing Director addressed the personnel four times a year with information on financial results and guidance to managers, an Info TV system was installed in production premises and staff facilities, and the Intranet system for internal communications was reformed.
Personnel was activated from the viewpoint of developing the company. On the basis of the previous year's personnel survey covering the entire Olvi Group's personnel, all of Olvi's departments made departmental plans for the improvement of well-being at work. Personnel was also encouraged to provide feedback and make initiatives for the further development of operations.
A total of 774.6 million litres of brewery beverages were sold in 2012. Domestic sales of beer, cider, long drinks, mineral waters and soft drinks fell by 51.4 million litres, or 6.2 percent. Such a dramatic fall in sales has never been seen before. Sales of mild alcoholic beverages fell by no less than 7.4 percent on 2011, and sales of nonalcoholic beverages by 4.4 percent. These figures are based on sales statistics compiled by members of the Federation of the Brewing and Soft Drinks Industry.
The alcohol tax on beer, cider and long drinks was increased by 15 percent at the beginning of 2012. At the same time, the tax on soft drinks was raised to 11 cents per litre. A huge fall in sales – 51 million litres – means that the State has lost not only revenue from VAT, but also 53 million euro in alcohol tax and 1.6 million euro in soft drink tax.
"The brewing industry has been hard-pressed by the tax increases of recent years. Last year, an exceptional fall in sales was seen simultaneously in all beverage categories. When devising tax solutions, decision-makers should carefully evaluate whether tax increases will endanger jobs in the industry. The brewing industry provides direct employment for 2,300 and indirect employment for 30,000 people in Finland," said Elina Ussa, Managing Director of the Federation of the Brewing and Soft Drinks Industry in an industry release on 21 February 2013.
In addition to tax increases, sales were burdened by a rainy summer and stores stocking up in 2011 before the tax increases. The consumption of alcoholic beverages has been on the decline for five years running.
"There seems to be a permanent reduction in alcohol consumption, so no tax increases or radical changes in alcohol legislation are required," said Ussa.
A report from the National Institute For Health and Welfare, Price Trends for Alcoholic Beverages in 2011, indicates that the real prices of beer and long drinks have risen since 2000,while real prices for other alcoholic beverages have fallen. In the turn-of-year changes, taxes on brewery beverages were increased more than those on other alcoholic beverages. Finland's beer tax is 53 percent higher than Sweden's. It is also the highest in the EU, and no less than five times higher than Estonia's.
"The State's taxation policy steers consumers towards Estonia, where they can buy beverages for less than half the Finnish price, and Estonia receives all that tax revenue. Travellers have gone from importing alcohol by the bagload to importing it by the vanload. Tax increases no longer generate revenue for the State as they once did, as travellers' private imports have narrowed the tax base," said Ussa.
An increasing volume of beverages is sold to foreign transport companies, such as Estonian ferries. 21.4 million litres of beer were exported to foreign transport companies, and beer exports to ferries rose by 4.5 million litres, or 27 percent, on 2011. 2.5 million litres of cider were exported to foreign transport companies, representing growth of 0.9 million litres, or over 50 percent.
| Beverage | 2012 | 2011 | Change | Change |
|---|---|---|---|---|
| million L million L million Lannual % | ||||
| Beer | 391.9 | 423.0 | -31.1 | -7.4 |
| Cider | 30.7 | 33.2 | -2.5 | -7.8 |
| Long drinks | 41.5 | 43.7 | -2.2 | -5.2 |
| Soft drinks | 247.3 | 260.2 | -12.9 | -5.0 |
| Mineral waters | 63.3 | 67.2 | -3.9 | -5.8 |
| Total sales | 774.6 | 827.4 | -52.8 | -6.4 |
Source: Member companies of the Federation of the Brewing and Soft Drinks Industry. The statistics do not include sales by operators outside the Federation of the Brewing and Soft Drinks Industry, nor private imports of brewery products, which are not statistically recorded. As of the beginning of 2011, the statistics include all members' brands and any private label brands they produce.
Olvi Group's sales volume, net sales and operating profit developed favourably in 2012. The overall market position strengthened in Finland, the Baltic states and Belarus. Earnings per share increased to 1.24 euro. The company's financial position was good.
| 1-12/2012 1-12/2011 Change % | |||
|---|---|---|---|
| Net sales, MEUR | 312.2 | 285.2 | +9.5 |
| Operating profit, MEUR | 30.5 | 26.7 | +14.4 |
| Gross capital | |||
| expenditure, MEUR | 29.8 | 43.2 | -31.0 |
| Earnings per share, EUR | 1.24 | 0.65 | +90.8 |
| Equity per share, EUR | 7.01 | 6.11 | +14.7 |
| Equity to total | |||
| assets, % | 54.8 | 50.6 | |
| Gearing, % | 35.8 | 43.2 |
Olvi Group's total sales volume was an all-time high in spite of very rainy weather in the peak season. Sales increased by 8.6 million litres to 526.8 (518.2) million litres. Sales improved substantially in Belarus. The aggregate sales of companies located in the Baltic states increased slightly. Sales in Finland were on a par with the previous year.
The sales volume in Finland was 148.8 (149.1), in the Baltic states 278.0 (276.3) and in Belarus 141.5 (128.0) million litres. Intra-Group sales increased by 18.1 percent to 41.6 (35.2) million litres.
Net sales improved well and clearly outperformed the sales volume growth, amounting to 312.2 (285.2) million euro. This represents an increase of 27.0 million euro or 9.5 percent. The greatest net sales growth was seen in Belarus. Net sales improved clearly in the Baltic states and somewhat also in Finland.
Domestic net sales amounted to 121.0 (119.8) million euro. The Baltic subsidiaries generated net sales of 150.5 (140.6) million euro, while net sales in Belarus amounted to 59.0 (39.6) million euro. Net sales in Finland increased by 1.2 million euro, and net sales in the Baltic states increased by 9.9 million euro or 7.0 percent. Net sales in Belarus improved substantially by 19.4 million euro or 49.0 percent. The Belarusian figures are still subject to hyperinflationary accounting in accordance with IAS 29.
The operating profit for 2012 stood at 30.5 (26.7) million euro, which was 9.8 (9.4) percent of net sales. The operating profit improved by 3.8 million euro or 14.4 percent.
The previous year's operating profit in Finland included 1.5 million euro of sales gains from the sales of decommissioned production machinery. Operating profit in Finland in 2012 declined by 4.1 million euro to 9.1 (13.2) million euro. Commensurate operating profit declined by 2.7 million euro or 22.9 percent.
Aggregate operating profit in the Baltic states increased clearly by 2.3 million euro to 16.4 (14.1) million euro. Operating profit in Belarus increased very substantially by 4.3 million euro to 5.0 (0.7) million euro. The previous year's result was burdened by heavy devaluation of the Belarusian rouble and hyperinflationary accounting introduced in December 2011.
The Group's profit after taxes in the period under review was 26.2 (13.0) million euro.
Earnings per share calculated from the profit belonging to parent company shareholders stood at 1.24 (0.65) euro per share.
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 season, prevailing weather and environmental conditions, and the characteristics of each country.
According to statistics (by the Finnish Federation of the Brewing and Soft Drinks Industry), the Finnish beverage market declined by 53 million litres or 6 percent in January-December 2012 compared to the previous year. A clear decline in sales was seen in all main product groups. The sales of beers declined by 7 percent, ciders by 8 percent and long drinks by 5 percent. Sales of mineral waters declined by 6 percent and soft drinks by 5 percent. The markets went down because of excise tax hikes and rainy weather in the peak season.
In spite of the clear decline in the beverage industry, the parent company Olvi plc's sales volume was almost on a par on the previous year. Olvi's sales in January-December amounted to 148.8 (149.1) million litres. Sales declined by 0.3 million litres.
In terms of product groups, the best development was seen in soft drinks, where the sales volume increased by 85 percent thanks to the very popular Angry Birds products and other private label soft drinks. The sales of mineral waters increased by 13 percent and ciders by 5 percent. The sales of juice drinks doubled. On the other hand, the sales of beers declined by 11 percent, and long drinks by 8 percent.
According to the statistics by the Federation of the Brewing and Soft Drinks Industry, Olvi's domestic market share in mild alcoholic beverages was on a par with the previous year at approximately 24 percent. The market share in non-alcoholic products increased clearly from approximately 7 percent to almost 9 percent due to good sales development in soft drinks and waters.
Olvi's exports and tax-free sales increased by 50.6 percent to 6.8 (4.5) million litres, mostly attributable to Angry Birds soft drinks. Exports and tax-free sales represented 4.6 (3.0) percent of total sales.
Olvi's net sales increased to 121.0 (119.8) million euro, an increase of 1.2 million euro.
Olvi's operating profit for 2012 stood at 9.1 (13.2) million euro, which was 7.5 (11.1) percent of net sales. The previous year's operating profit included 1.5 million euro of sales gains from the sales of decommissioned production machinery. Olvi's operating profit declined by 4.1 million euro or 31.5 percent on the previous year. Commensurate operating profit declined by 2.7 million euro or 22.9 percent on the previous year. Factors contributing to the operating profit decline included increased depreciation due to substantial investments, as well as cost increases that could not be fully covered due to the downtrend of the beverage industry.
The Estonian company A. Le Coq's sales amounted to 134.0 (133.4) million litres. Sales increased by 0.6 million litres or 0.5 percent.
The Estonian beer and soft drinks markets declined by 4 to 5 percent, and the juice market by almost 9 percent in 2012. Only the sales of ciders increased clearly, by almost 8 percent. The long drink and mineral water markets remained on the previous year's level.
A. Le Coq's market position remained strong in all of the main product groups. A. Le Coq is the market leader in beers, long drinks, ciders and juices. A. Le Coq's market share in beers was 40 (42) percent, in long drinks 55 (56) percent and in ciders 44 (39) percent. Fizz is Estonia's largest cider brand.
The market share in soft drinks at the end of November 2012 was 29 (27) percent, and in mineral waters 16 (15) percent. In the sales of juices and juice drinks, A. Le Coq had a market share of 36 (30) percent in tetrapacks and 30 (50) percent in other packages (all market shares by Nielsen, October-November 2012).
Sales of the company's beers and ciders remained at the previous year's level, while the sales of long drinks declined by 5 percent. Mineral waters were the best-developing product group with an increase of 13 percent. The sales of juices increased by 2 percent, while the sales of soft drinks (including kvass) declined by 7 percent on the previous year.
The company's exports and tax-free sales declined by 13.4 percent on the previous year to 5.1 (5.9) million litres.
A. Le Coq's net sales in 2012 amounted to 80.0 (76.0) million euro, representing an increase of 4.0 million euro or 5.4 percent.
Operating profit was on a par with the previous year at 13.0 (13.0) million euro. The operating profit represented 16.3 (17.1) percent of net sales.
The sales of Cēsu Alus operating in Latvia amounted to 72.4 (75.4) million litres. Sales declined by 3.0 million litres or 4.0 percent.
The Latvian beer market diminished slightly in 2012, and the cider market saw a decline of more than 13 percent. On the other hand, the sales of long drinks saw an uptrend of more than 13 percent.
Due to an increase in the level of profitability in beers, the company's market share in beers declined to 24 (37) percent. However, the company retained its number two position in the beer market. In ciders, Cēsu Alus is the clear number one player with a market share of 51 (54) percent. In the long drink market, the company has a market share of 44 (45) percent. There are two almost equal players in the Latvian long drinks market. In the sales of energy drinks, Cēsu Alus's market share clearly increased from 30 percent to 37 percent (Nielsen, October-November 2012).
77.5 (80.5) of the company's domestic sales is attributable to beer. The sales of beer declined by approximately 12 percent in 2012. The greatest proportional sales growth was seen in energy drinks, 38 percent. The sales of long drinks increased by 22 percent and the sales of soft drinks (including kvass) was on a par with the previous year. The sales of ciders declined by 24 percent, and the sales of juices declined by 25 percent.
The company's net sales stood at 36.2 (35.2) million euro, an increase of 1.0 million euro or 2.8 percent. The company's operating profit increased substantially by 1.0 million euro or 124.4 percent to 1.7 (0.7) million euro, which is 4.6 (2.1) percent of net sales.
The improvement in operating profit was made possible by a clear increase in the average price of net sales and strict control of costs.
The sales of Volfas Engelman operating in Lithuania increased by 4.2 million litres or 6.1 percent to 71.7 (67.5) million litres.
With the exception of long drinks, the Lithuanian beverage markets in 2012 were declining in all main product groups. The beer market declined by 5 percent, ciders by 2 percent and kvass by 16 percent. The sales of long drinks increased by as much as 30 percent.
Volfas Engelman's overall position in the Lithuanian beverage market has become stronger. The company had a market share of 14 (13) percent in beers, which is the largest product group. The company is the market leader in ciders with a market share of 34 (36) percent and in long drinks with a market share of 33 (30) percent. The company is also the clear market leader in the kvass market with a market share of 27 (32) percent (Nielsen, October-November 2012).
The sales of the company's beers increased by 10 percent, and long drinks by 26 percent. The sales of ciders declined by 8 percent. The sales of soft drinks (mostly kvass) declined by 17 percent on the previous year. During 2012, the company's exports increased by 74.0 percent. Exports accounted for 2.3 (1.4) percent of total sales.
The company's net sales stood at 34.2 (29.5) million euro, an increase of 4.7 million euro or 16.1 percent. Growth in net sales clearly outperformed the growth in sales volume thanks to improved average price of net sales.
The company's operating profit increased clearly to 1.8 (0.4) million euro, which is 5.1 (1.4) percent of net sales. The operating profit increased by 1.4 million euro. The improvement in operating profit was attributable to clear increases in the profitability of the product portfolio and the average price of sales, as well as good control of costs.
The economic situation in Belarus has improved, and the competitive ability has become better during the last year. After the devaluations in 2011, the exchange rate of the Belarusian rouble has stabilised and inflation has decelerated. The Belarusian beer market declined by 9 percent and the soft drinks market by almost 7 percent, but on the other hand, the sales of juices increased on the previous year.
The financial reporting of Lidskoe Pivo is subject to the IAS 29 standard "Financial Reporting in Hyperinflationary Economies" for the time being, as long as Belarus is listed as a hyperinflationary economy.
Lidskoe Pivo's operations have developed well in 2012. The company's sales increased by 13.5 million litres or 10.5 percent to 141.5 (128.0) million litres.
The company is a clear market leader in ciders, kvass and juice drinks. Its market share in ciders is 62 (59), in kvass 67 (50) and in juice drinks 33 (31) percent. The market share in beers is 15 (10) percent (Nielsen, October-November 2012).
The sales of beers increased by 4, mineral waters by 36 and soft drinks (including kvass) by 10 percent. There was a 13 percent decline in the sales of juice drinks. Sales of cider were on a par with the previous year.
The company's exports in the reporting period increased by 63.9 percent on the previous year. Exports made 10.1 (6.8) percent of the company's total sales. The main destinations for exports were Russia and Lithuania.
Lidskoe Pivo's net sales increased substantially in 2012. Net sales stood at 59.0 (39.6) million euro, an increase of 19.4 million euro or 49.0 percent. Factors contributing to net sales growth included favourable development of sales volumes and a sustained good average price of net sales.
The company's operating profit for the period improved extremely well and amounted to 5.0 (0.7) million euro, which was 8.4 (1.9) percent of net sales. The operating profit improved by more than six-fold on the previous year with an increase of 4.3 million euro. The operating profit increase was attributable to improved efficiency made possible by the commissioning of substantial investments, improved profitability in all product groups, as well as successful new product launches.
Olvi Group's balance sheet total at the end of December 2012 was 269.2 (253.6) million euro. Equity per share at the end of 2012 stood at 7.01 (6.11) euro. The equity to total assets ratio clearly exceeded Olvi Group's long-term target of 50 percent. The actual figure at the end of December was 54.8 (50.6) percent. The gearing ratio declined clearly on the previous year to 35.8 (43.2) percent. The Group's liquidity also improved clearly in 2012. The current ratio was 1.3 (1.0).
The amount of interest-bearing liabilities at the end of 2012 was 58.5 (59.2) million euro, including current liabilities of 16.0 (28.3) million euro.
Olvi Group's gross capital expenditure in 2012 amounted to 29.8 (43.2) million euro. The parent company Olvi accounted for 14.9 million euro, the Baltic subsidiaries for 4.8 million euro and Lidskoe Pivo for 10.1 million euro of the total.
The largest investments in Finland in 2012 included the commissioning of a new can filling line, the completion of a tank cellar extension, as well as modernisation of beer filtering.
In the Baltic states, A. Le Coq's largest investments comprised extensions to storage facilities and the pressure tank cellar, as well as a labelling machine for glass bottles. Cēsu Alus's major investments were associated with conveyors for the glass bottle line, as well as other production machinery and equipment. Volfas Engelman's investments consisted of a general renovation of the brewery, a glass bottle reform, wine and kvass mixing equipment and other smaller purchases of machinery and equipment.
The first stage of Lidskoe Pivo's extensive investment programme is mainly completed. It included, among other things, storage, filling department and tank cellar buildings, filling line machinery and equipment, an extension to the kvass cellar, a new beer filter and air compressor.
In the spring of 2012, A. Le Coq acquired 49.0 percent of the stock of AS Karme. Karme owns the Karks brewery that produces beers, ciders and wine. Thanks to the acquisition, A. Le Coq got access to Karks's wine production capacity for the manufacture of ciders and other fermented beverages.
In May 2012, A. Le Coq acquired 20.0 percent of the water manufacturer Oü Verska Mineraalvee with the aim of gaining a better position in the Estonian mineral water market. Both companies are accounted as associated companies in Olvi's consolidated financial statements.
During the reporting period in January-December, Olvi acquired a total of 407 shares in Cēsu Alus, corresponding to 0.14 percent of the company's share capital.
At the end of December 2012, Olvi's holding in Cēsu Alus was 99.67 percent, in A. Le Coq 100.0 percent, in Volfas Engelman 99.57 percent and in Lidskoe Pivo 91.58 percent.
Research and development includes projects to design and develop new products, packages, processes and production methods, as well as further development of existing products and packages. The R&D costs have been recognised as expenses. The main objective of Olvi Group's product development is to create new products for profitable and growing beverage segments.
Olvi plc complies with the Finnish Corporate Governance Code issued by the Securities Market Association that entered into force on 1 October 2010.
The aim of the Finnish Corporate Governance Code is that Finnish listed companies apply corporate governance practices that are of a high international standard. The purpose of the Code is to harmonise the practices of listed companies as well as the information given to shareholders and other investors. It is also aimed to improve the transparency of administrative bodies, management remuneration and remuneration policies.
In accordance with the implementing provisions of the Finnish Corporate Governance Code, Olvi plc has issued a separate corporate governance statement for its accounting period starting 1 January 2012 in connection with the Board of Directors' report and financial statements for 2012.
Olvi plc's corporate governance statement is publicly available on the company's Web site at www.olvi.fi.
Olvi plc maintains a public and company-specific insider register, as well as project-specific insider registers for individual projects. Public insiders comprise the members of the Board of Directors and Management Group, auditors and their closely related parties.
Olvi Group's human resources strategy plays a central role in achieving the Group's business targets. We are actively developing our management, training and incentive systems in order to improve well-being at work and provide our employees a safe working environment. It is most important to guarantee the attractiveness of Group companies as employers and ensure the availability of personnel and commitment to the Group companies.
Olvi Group's business strategies and objectives are put into practice in the organisation through target cards, appraisal discussions and regular feedback. The competence of personnel is maintained through continuous training and development of operations. Olvi plc issues a separate human resources statement each year for internal use within the company.
Olvi Group has a shared mission statement and vision. The business strategies in all of the operating countries are largely similar and based on the same values. In implementing the strategies, we approve local flexibility in the means used for achieving targets because the operating environments and competitive situations are different.
Olvi is Finnish AS A. Le Coq is Estonian Cēsu Alus is Latvian and creates positive Volfas Engelman is Lithuanian drinking enjoyment. Lidskoe Pivo is Belarusian
Finnish Estonian The most attractive Latvian beverage company. and respected Lithuanian Belarusian
• Efficient, high-quality and environmentally sound operations and a solid economy guarantee the continuity of our business.
Olvi Group's average number of personnel in 2012 was 1,977 (2,032). The Group's average number of personnel decreased by 55 people or 2.7 percent. Personnel decreases were seen in Belarus, while in the other operating areas, the number was either unchanged or increased slightly. The total number of personnel at the end of December 2012 was 1,905 (1,905).
| 2012 | 2011 | 2010 | |
|---|---|---|---|
| Olvi plc, Finland | 401 | 383 | 378 |
| AS A. Le Coq, Estonia | 313 | 311 | 312 |
| A/S Cēsu Alus, Latvia | 217 | 217 | 207 |
| AB Volfas Engelman, Lithuania | 212 | 205 | 195 |
| OAO Lidskoe Pivo |
834 | 916 | 959 |
| Total | 1,977 | 2,032 | 2,051 |
| 2012 | 2011 | 2010 | |
|---|---|---|---|
| Wages, salaries | 31,723 | 30,360 | 31,436 |
| and emoluments | |||
| in the accounting | |||
| period (EUR 1,000) |
In accordance with the implementing provisions of the Finnish Corporate Governance Code, Olvi plc has issued a separate statement of wages, salaries and emoluments for its accounting period starting 1 January 2012 in connection with the Board of Directors' report and financial statements for 2012. The statement has been prepared in accordance with Section 7 (Remuneration), Recommendation 47 of the Code.
Olvi plc's remuneration statement is publicly available on the company's Web site at www. olvi.fi.
Bonuses based on the achievement of earnings and performance targets are an important incentive for personnel and a management tool. Peformance bonus schemes communicate the targets, will and desire set by the company's Board of Directors. Bonuses based on earnings or performance are a sign of achievements that outperform the target level. Basic wages and salary are compensation for work well done.
The overall objectives of bonuses based on target-setting include clarity, fairness and sufficient effect. Bonus schemes must not encourage imprudent risk-taking or negligence.
The objectives for long-term bonuses in particular include increasing shareholder value, supporting profitable growth and relative profitability, and making operational management and key employees committed to the company.
The components of remuneration to management are as follows:
The Board of Directors of Olvi plc decides on the terms of service of the Managing Director. The terms of service of other top management shall be decided by the Board of Directors on the basis of the Managing Director's proposal. The Managing Director and other management executives shall not receive separate remuneration for their work in the management group or other internal management organs within the Group.
Short-term incentives are performance bonus schemes in which the monitoring period is one accounting period. The Board of Directors shall decide upon the basis for definition of the incentives. In 2012, the basis for definition of the performance bonus was operating profit. The entire personnel of Olvi plc is included in the scope of performance bonuses.
All of Olvi Group's subsidiaries also have performance bonus schemes that include either the entire personnel or key employees of the companies.
Long-term incentives are based on programmes confirmed by the company's Board of Directors that are valid for at least two accounting periods. The programmes can be share-based incentive schemes or performance bonus schemes based on Group-level targets. In accordance with policy adopted by the Company's Board of Directors, no stock option plans shall be used for longterm incentives.
The company's Board of Directors confirmed a long-term performance bonus scheme for the vesting period 2011–2012, in which the vesting criterion was the Group's accumulated operating profit for the years 2011 and 2012. The scheme included the Managing Director, the Managing Directors of the subsidiaries, other members of the management groups and approximately 20– 25 other key employees within the Group.
The targets of the performance bonus scheme were not achieved in 2011–2012 to an extent that would have required bonuses to be recognised in the 2012 annual accounts.
The Group's share-based incentive scheme ended at the closing of the year 2010. Olvi's Board of Directors has not decided on any new sharebased incentive schemes.
Olvi plc has an operational personnel fund that covers Olvi plc's entire personnel excluding top management. The basis of making profit-sharing contributions to the personnel fund shall be decided annually by the company's Board of Directors.
Olvi plc's Annual General Meeting held on 11 April 2012 elected the following members to the Board of Directors: Heikki Hortling, M.Sc. (Econ), Iisalmi, Esa Lager, Chief Financial Officer, LL.M., M.Sc. (Econ), Kauniainen, Heikki Sinnemaa, LL.M., Member of the Bar, Iisalmi, Tarja Pääkkönen, Dr.Tech., Helsinki, and Jaakko Autere, M.Sc. (Econ), Helsinki. All of them have been in office during the accounting period. Heikki Hortling has served as Chairman of the Board, while Esa Lager has served as Vice Chairman.
The company's auditor has been PricewaterhouseCoopers Oy, Authorised Public Accountants, with Sami Posti, Authorised Public Accountant, Oulu, as auditor in charge.
Lasse Aho, M.Soc.Sc., has served as Olvi plc's Managing Director.
The total number of Olvi plc shares at the end of December 2012 was 20,758,808, of these 17,026,552 or 82.0 percent being publicly traded Series A shares and 3,732,256 or 18.0 percent Series K shares.
Each Series A share carries one (1) vote and each Series K share carries twenty (20) votes. Olvi held 1,124 of its own Series A shares on 31 December 2012 as treasury shares. Treasury shares held by the company itself are ineligible for voting. Olvi's share capital at the end of December 2012 stood at 20.8 million euro. Detailed information on Olvi's shares, share capital and treasure shares can be found in the notes to the parent company Olvi's financial statements concerning equity, shares and share capital.
The total trading volume of Olvi A shares on Nasdaq OMX Helsinki in 2012 was 1,793,149 (3,208,911) shares, which represented 10.5 (18.8) of all Series A shares. The value of trading was 32.8 (62.3) million euro.
The Olvi A share was quoted on Nasdaq OMX Helsinki (Helsinki Stock Exchange) at 19.65 (14.75) euro at the end of 2012. In January-December, the highest quote for the Series A share was 20.43 (19.86) euro and the lowest quote was 14.75 (13.49) euro.
At the end of December 2012, the market capitalisation of Series A shares was 334.5 (251.1) million euro and the market capitalisation of all shares was 407.9 (306.2) million euro.
The number of shareholders at the end of December 2012 was 9,091 (9,146). Foreign holdings plus foreign and Finnish nominee-registered holdings represented 17.9 (17.5) percent of the total number of book entries and 6.2 (6.1) percent of total votes.
Foreign and nominee-registered holdings and largest shareholders are listed in the notes to the parent company's financial statements concerning equity, shares and share capital.
On 11 April 2012, the General Meeting of Shareholders of Olvi plc decided to authorise the Board of Directors to decide on the acquisition of a maximum of 500,000 of the company's own Series A shares. The shares were to be acquired in deviation from the pro rata principle among shareholders, using the company's unrestricted equity at the market price at time of acquisition in public trading arranged by NASDAQ OMX Helsinki Ltd.
The Annual General Meeting also decided to 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. The new shares can be issued and the treasury shares transferred to the company's shareholders on a pro rata basis in relation to their existing holdings, or a private placing can be executed in deviation from shareholders' pre-emptive rights if a weighty economic reason for this exists from the company's viewpoint, such as financing or execution of corporate acquisitions or arrangements, development of the company's equity structure, improvement of share liquidity or implementation of the company's incentive schemes.
The Board of Directors did not exercise the authorisations granted by the General Meeting during 2012.
The number of Series A shares held by Olvi plc as treasury shares on 31 December 2012 was 1,124, and their aggregate acquisition price was 8.5 thousand euro.
Series A shares held by the company as treasury shares represented 0.005 percent of the share capital and 0.001 percent of the aggregate number of votes. The treasury shares represented 0.007 percent of all Series A shares and associated votes.
During 2012, Olvi received three flagging notices in accordance with Chapter 2, Section 10 of the Securities Markets Act: From The Family Kamprad Foundation on 10 January 2012 and from Ilmarinen Mutual Pension Insurance Company on 11 May 2012 and 13 December 2012.
Olvi plc is strongly committed to procedures and methods that spare the environment, as well as all laws and recommendations related to its business. The objectives of Olvi plc's environmental policy are updated annually.
environmental principles:
In 2009, Olvi plc joined a voluntary energy efficiency agreement system administered by the Finnish Food and Drink Industries' Federation and based on the EU Energy Services Directive. The system is valid until the end of 2016 and replaces the energy-saving agreement that expired at the end of 2007. The system involves agreement on a framework for continuous and systematic improvements in energy efficiency. This shows that Olvi plc is a serious player in our society's joint effort against climate change.
The achievement of environmental targets and related indicators are regularly monitored by top management and designated representatives.
Olvi's environmental permit was granted on 30 September 2003 and is valid until 2014.
Olvi Group companies have not been involved in any legal or administrative proceedings related to environmental issues, and the company is not aware of any environmental risks that would have a significant effect on the Group's financial position.
Risk management is a part of Olvi Group's everyday management and operations. It increases corporate security and contributes to the achievement of operational targets. The objective of risk management is to operate proactively and create operating conditions in which business risks are managed comprehensively and systematically in all of the Group companies and all levels of the organisation. In addition to the company itself, risk management benefits its personnel, customers, shareholders and other related groups.
The objective of risk management is to ensure the realisation of the company's strategy and secure the continuity of business. Olvi Group identifies, assesses, manages and monitors its crucial risks regularly. With regard to identified risks, the effects, scope and probability of realisation are assessed together with the means of eliminating or reducing the risk. Furthermore, risk management aims to identify and utilise any business opportunities that may arise.
Olvi Group's strategic risks refer to risks related to the characteristics of the company's business and strategic choices. The Group's operations are located in several countries that differ substantially in terms of their social and economic situations and the phases and directions of development. For example, strategic risks relate to changes in tax legislation and other regulations, the environment and foreign exchange markets. If realised, strategic risks can substantially hamper the company's operational preconditions. The Group's most substantial identified strategic risks relate to Belarus, particularly the situation in the country's economy and politics.
The Group's most substantial identified operational risks relate to the procurement and quality of raw materials, the production process, markets and customers, personnel, information security and systems, as well as changes in foreign exchange rates.
General economic development and annual fluctuations in crop yield affect the prices and availability of major raw materials used within Olvi Group. Disruptions in raw material deliveries and quality may hamper customer relations and business operations. Purchases of major raw materials are made under procurement contracts standardised at the Group level. The Group aims to secure the predictability of purchase prices for critical raw materials through long-term procurement contracts. The company has a hedging policy concerning raw materials and their prices. All units emphasise the significance of the quality of raw materials and other production factors in the overall production chain.
The aim is to minimise production risks through clear documentation of processes, increasing the degree of automation, compliance with quality management system and the pursuit of clear operating methods in relation to decision-making and supervision. The efficiency and applicability of processes and methods are monitored using internal indicators. The monitoring and development of production efficiency includes, among other things, the reliability and utilisation rate of production machinery, development of the working environment and factors related to people's work. The Group has a property and loss-of-profits insurance programme covering all of the operating areas, and its coverage is reviewed annually.
The Group's business operations are characterised by substantial seasonal variation. The net sales and operating profit from the reported geographical segments do not accumulate evenly but vary substantially according to the time of the year and the characteristics of each season.
Negative changes in the economy may impact consumers' purchasing behaviour and hamper the liquidity of hotel and restaurant customers in particular. All Group companies employ efficient credit controls as a major method for minimising credit losses.
Legislative changes and other changes in the operations of authorities, such as changes in excise taxes and marketing restrictions, may affect the demand for the Group's products and their relative competitive position.
Risks related to personnel include, among others, risks in obtaining labour, employment relationship risks, key person risks, competence risks and risks arising from insufficient well-being and accidents at work.
Crucial focal points in HR management include maintaining and developing a good employer image, as well as ensuring the availability and commitment of personnel. Other focal points include maintaining and continuously developing well-being and safety at work, improvement of management systems, construction and maintenance of backup personnel systems, as well as training and incentive schemes.
Olvi Group employs an information security policy pertaining to all of the companies. It defines the principles for implementing information security and provides guidelines for its development.
Risks related to information technology and systems are manifested as operational disruptions and deficiencies, for example. The availability and correctness of data is ensured through the choice of operating methods and various technical solutions. operations in Finland, the Baltic states and Belarus utilise a common enterprise resource planning system. The system was introduced into use in Belarus during the financial year 2012. A risk analysis pertaining to information security and the operation of information systems is carried out annually.
The Group is exposed to several financing risks in its normal course of business: market risk (including foreign exchange risk as well as interest rate risk on cash flow and fair value), credit risk and liquidity risk.
The objective of financing risk management is to minimise the adverse effects of changes in the financial markets on the Group's financial performance, shareholders' equity and liquidity.
The general principles of the Group's risk management are approved by the Board of Directors of the parent company, and the parent company's management together with the management of subsidiaries is responsible for their practical implementation. Responsibility for Olvi Group's financing tasks is centralised in the parent company Olvi plc. The objectives of centralisation include optimisation of cash flows and financing costs, as well as efficient risk management.
Olvi Group operates internationally, and its business involves risks arising from exchange rate fluctuations. Foreign exchange risks arise from commercial transactions, in other words cash flows from purchases and sales, as well as investments in foreign subsidiaries and the conversion of their balance sheet items into euro.
Due to the nature of the business, the time between order and delivery is short, which results in minor operations-related foreign exchange risk. Foreign exchange risk is also reduced by the fact that most of the Group's product sales and purchases of raw materials are denominated in euro.
The Group has investments in foreign subsidiaries in Estonia, Latvia, Lithuania and Belarus. The Estonian currency is the euro, and the Lithuanian LTL is pegged to the euro. With regard to the investments in Latvia and Belarus, the Group is exposed to risk arising from the conversion of the subsidiary investments made in LVL and BYR into the parent company's operating currency. The Latvian, Lithuanian and Belarusian currencies carry a risk of devaluation; if realised, this would result in a decline in Olvi Group's operating profit denominated in euro.
The Group has not engaged in active currency hedging in 2012 or 2011. The need for currency hedging is assessed regularly.
The Group's interest rate risk arises from noncurrent liabilities. Most of the Group's income and operational cash flows are independent of market interest rate fluctuations.
The Group has diversified its borrowing between fixed- and variable-rate loans. Furthermore, the Group uses interest rate swaps to reduce interest rate risk if required by the market conditions. Non-current loans are generally taken out with a variable interest rate and converted to fixed rate using interest rate swaps as necessary, which results in a lower interest rate compared to loans taken out directly with a fixed rate.
The Group aims to limit financing costs to a reasonable amount and to manage interest rate risk using available means.
The Group does not apply hedge accounting in accordance with IAS 39.
The Group's credit risk arises from wholesale and HoReCa (hotel, restaurant, catering) customers with outstanding accounts receivable.
Creditworthiness requirements for the Group's customers are reviewed annually and always when entering into agreements with new customers. The Group only extends credit to businesses with flawless credit ratings. Furthermore, the Group aims to control credit risks through efficient collection of receivables.
The amount of customer-specific accounts receivable is monitored regularly, and the customer's creditworthiness is re-assessed if necessary.
The Group does not have any significant concentrations of credit risk on receivables because its accounts receivable are distributed across a wide and geographically diversified customer base.
Investments related to cash management are made in liquid money market instruments having a fundamentally low risk.
Olvi Group's parent company and subsidiaries prepare monthly rolling cash flow estimates that the Group uses for assessing the amount of financing required for business operations in order to maintain sufficient liquid assets to fund everyday operations and investments, as well as to repay any loans falling due.
The Group aims to secure the availability and flexibility of funding by centralising the management of the Group's liquid assets with the parent company. The Group uses several banks and several forms of financing. The Group aims to secure the availability and flexibility of funding with an account overdraft facility and credit limits.
The Group has access to an account overdraft facility of 5 million euro and credit limits of 24 million euro. Some of the facilities are valid until further notice, while some are renewed annually.
The parent company Olvi plc issued a 20 million euro commercial paper programme in 2002 in order to secure short-term liquidity needs quickly and cost-efficiently.
In order to secure short-term liquidity, operating capital is monitored regularly, and the aim is to reduce the amount of money tied in operating capital. Key factors include monitoring the turnover rate of receivables and improving the efficiency of credit control.
Olvi Group's long-term objective is to generate the highest possible added value on invested capital, taking into account the expectations imposed on the Group by various parties. The main principle of capital management is to maintain Olvi Group's strong financial position and to ensure that the Group's financing needs can be fulfilled cost-efficiently also under critical financial market conditions.
Another objective is to maintain an optimal capital structure in order to manage and reduce the cost of capital.
In order to maintain or change its capital structure, the Group may change the amount of dividends paid to shareholders, repay capital to shareholders, issue new shares, acquire treasury shares and annul them, or sell its assets to reduce debt.
Capital is monitored through the equity to total assets ratio and the gearing ratio.
The financial situation in Europe has become more positive, and it is generally estimated that the euro crisis is becoming a thing of the past. However, an increase in the unemployment rate and the resulting decline in consumer purchasing power may have a negative effect on the demand for the company's products.
The most substantial factor hampering the predictability of Olvi Group's business still relates to Belarus and its economic outlook for the next few years. The IAS 29 standard "Financial Reporting in Hyperinflationary Economies" will probably be applied at least until 2014.
The full-year sales volumes and net sales in 2013 are expected to develop favourably in the current accounting period. The operating profit for 2013 is expected to improve on the previous year.
The parent company Olvi plc had 45.1 (42.9) million euro of distributable funds on 31 December 2012, of which profit for the period accounted for 12.6 (13.1) million euro.
Olvi plc's Board of Directors proposes to the Annual General Meeting that distributable funds be used as follows:
1) A dividend of 0.50 (0.50) euro shall be paid for 2012 on each Series K and Series A share, totalling 10.4 (10.4) million euro. The dividend represents 40.3 (76.9) percent of Olvi Group's earnings per share. The dividend will be paid to shareholders registered in Olvi plc's register of shareholders held by Euroclear Finland Ltd on the record date of the dividend payment, 15 April 2013. It is proposed that the dividend be paid on 22 April 2013. No dividend shall be paid on treasury shares.
2) 34.7 million euro shall be retained in the parent company's non-restricted equity.
Olvi Group's financial statements, Board of Directors' report and Corporate Governance Statement 2012 will be published on 18 March 2013. The notice to convene Olvi plc's Annual General Meeting, which will be held on 10 April 2013 in Iisalmi, will be published on 18 March 2013. The financial statements, Board of Directors' report and notice to convene the AGM will be available on Olvi plc's Web site on the same day.
The following interim reports will be released in 2013:
Interim Report for January-March on 25 April 2013, Interim Report for January-June on 15 August 2013 and Interim Report for January-September on 24 October 2013.
Further information: Lasse Aho, Managing Director, Olvi plc, phone +358 17 838 5200 or +358 400 203 600
OLVI PLC Board of Directors
| N | ote | 1.1. - 31.12.2012 EUR 1,000 |
% | 1.1. - 31.12.2011 EUR 1,000 |
% |
|---|---|---|---|---|---|
| NET SALES | 1 | 312 230 | 100.0 | 285 174 | 100.0 |
| Increase (+)/decrease (-) in inventories of finished and unfinished products Manufacture for own use Other operating income |
3 | -369 107 1 020 |
-0.1 0.0 0.3 |
-2 947 68 522 |
-1.0 0.0 0.2 |
| Materials and services Personnel expenses Depreciation and impairment Other operating expenses |
6 5 4 |
140 717 38 341 21 822 81 571 |
45.1 12.3 7.0 26.1 |
126 852 36 593 18 637 74 052 |
44.5 12.8 6.5 26.0 |
| OPERATING PROFIT | 30 537 | 9.8 | 26 683 | 9.4 | |
| Financial income Financial expenses Financial expenses - net |
8 9 |
4 871 -3 093 1 778 |
1.6 -1.0 0.6 |
8 352 -16 596 -8 244 |
2.9 -5.8 -2.9 |
| PROFIT BEFORE TAXES | 32 315 | 10.3 | 18 439 | 6.5 | |
| Income taxes | 10 | -6 151 | -2.0 | -5 485 | -1.9 |
| NET PROFIT FOR THE PERIOD | 26 164 | 8.4 | 12 954 | 4.5 | |
| Other comprehensive income items: Translation differences related to foreign subsidiaries |
527 | 0.2 | -15 170 | -5.3 | |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD |
26 691 | 8.5 | -2 216 | -0.8 | |
| Distribution of profit: - parent company shareholders - non-controlling interests |
25 668 496 |
8.2 0.2 |
13 506 -552 |
4.7 -0.2 |
|
| Distribution of comprehensive profit: - parent company shareholders - non-controlling interests |
26 229 462 |
8.4 0.1 |
-340 -1 876 |
-0.1 -0.7 |
|
| Earnings per share calculated from the profit belonging to parent company shareholders: |
|||||
| Undiluted earnings per share (EUR ) Diluted earnings per share (EUR ) |
1.24 1.24 |
0.65 0.65 |
The notes constitute on essential part of the financial statements.
| 31.12.2012 | 31.12.2011 | ||||
|---|---|---|---|---|---|
| Note | EUR 1,000 | % | EUR 1,000 | % | |
| ASSETS | |||||
| Non-current assets | |||||
| T angible assets |
12 | 146 749 | 142 443 | ||
| Goodwill | 13 | 17 730 | 16 761 | ||
| O ther intangible assets |
13 | 2 119 | 1 017 | ||
| Interests in associates | 1 077 | 0 | |||
| Financial assets available for sale | 15 | 549 | 548 | ||
| L oan receivables and other |
|||||
| non-current receivables | 16 | 408 | 141 | ||
| Deferred tax receivables | 19 | 83 | 196 | ||
| Total non-current assets | 168 715 | 62.7 | 161 106 | 63.5 | |
| Current assets | |||||
| Inventories | 17 | 40 583 | 35 875 | ||
| A ccounts receivable |
|||||
| and other receivables | 18 | 53 345 | 52 718 | ||
| Income tax receivables | 693 | 0 | |||
| O ther non-current assets |
|||||
| held for sale | 2 | 163 | 56 | ||
| L iquid assets |
20 | 5 698 | 3 836 | ||
| Total current assets | 100 482 | 37.3 | 92 485 | 36.5 | |
| TOTAL ASSETS | 269 197 | 100.0 | 253 591 | 100.0 | |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||||
| Total shareholders' equity held by | |||||
| parent company shareholders | |||||
| Share capital | 21 | 20 759 | 20 759 | ||
| O ther reserves |
1 092 | 1 092 | |||
| Treasury shares | 21 | -8 | -8 | ||
| T ranslation differences |
-17 687 | -18 248 | |||
| R etained earnings |
141 317 | 123 286 | |||
| Total shareholders' equity held by | |||||
| parent company shareholders | 145 473 | 54.1 | 126 881 | 50.1 | |
| Share belonging to non-controlling interests | 1 939 | 0.7 | 1 341 | 0.5 | |
| Total shareholders' equity | 147 412 | 54.8 | 128 222 | 50.6 | |
| Non-current liabilities | |||||
| Financial liabilities | 23 | 42 474 | 30 949 | ||
| O ther liabilities |
250 | 0 | |||
| Deferred tax liabilities | 19 | 3 200 | 2 097 | ||
| Current liabilities | |||||
| Financial liabilities | 23 | 15 996 | 28 266 | ||
| A ccounts payable |
|||||
| and other liabilities | 24 | 58 669 | 63 726 | ||
| Income tax liability Total liabilities |
24 | 1 196 | 331 | ||
| TOTAL SHAREHOLDERS' EQUITY | 121 785 | 45.2 | 125 369 | 49.4 |
The notes constitute an essential part of the financial statements.
| N ote |
2012 EUR 1,000 |
2011 EUR 1,000 |
|---|---|---|
| Cash flow from operations Net profit for the period |
26 164 | 12 954 |
| Adjustments: 27 Depreciation and impairment 5 O ther adjustments |
21 822 7 932 |
18 637 13 893 |
| Change in net working capital: Increase (-) / decrease (+) in current interest-free accounts receivable and other receivables |
-330 | -9 088 |
| Increase (-)/decrease (+) in inventories Increase (+)/decrease (-) in current interest-free liabilities Interest paid |
-4 491 -4 146 -2 077 |
-2 862 8 040 -2 205 |
| Interest received Taxes paid |
315 -4 900 |
151 -5 064 |
| Cash flow from operations (A) | 40 289 | 34 456 |
| Cash flow from investments Investments in tangible and intangible assets Capital gains on disposal of tangible and intangible assets Expenditure on other investments Cash flow from investments (B) |
-23 757 125 -582 -24 214 |
-33 653 130 -2 980 -36 503 |
| Cash flow from financing Withdrawals of loans Repayments of loans Dividends paid Increase (-) / decrease (+) in long-term loan receivables Cash flow from financing (C) |
32 738 -36 179 -10 377 -265 -14 083 |
30 266 -17 103 -10 377 0 2 785 |
| Increase (+)/decrease (-) in liquid assets (A+B+C) | 1 992 | 738 |
| Liquid assets 1 January Effect of exchange rate changes Liquid assets 31 December 20 |
3 836 -130 5 698 |
7 891 -4 793 3 836 |
The notes constitute an essential part of the financial statements.
| SHAREHOLDERS' EQUITY BELONGING TO PARENT COMPANY SHAREHOLDERS | |||||||
|---|---|---|---|---|---|---|---|
| A | B | C | D E | F | G | ||
| EUR 1,000 |
|||||||
| Shareholders' equity 1 Jan 2011 | 20 759 | 1 092 | -222 | -4 402 | 109 750 | 2 277 | 129 254 |
| Adjustments for hyperinflation | 10 672 | 981 | 11 653 | ||||
| Adjusted shareholders' | |||||||
| equity 1 Jan 2011 | 20 759 | 1 092 | -222 | -4 402 | 120 422 | 3 258 | 140 907 |
| Comprehensive income | |||||||
| Net profit for the period | 13 506 | -552 | 12 954 | ||||
| Other comprehensive income items | |||||||
| Translation differences | -13 846 | -1 324 | -15 170 | ||||
| Total comprehensive income for the period | - | - | - | -13 846 | 13 506 -1 876 | -2 216 | |
| Transactions with shareholders | |||||||
| Payment of dividends | -10 659 | -10 659 | |||||
| Transfer of treasury shares Gains from transfer of treasury shares |
214 | -214 216 |
0 216 |
||||
| Total transactions with shareholders | - | - | 214 | - | -10 657 | - | -10 443 |
| Changes in holdings in subsidiaries | |||||||
| Acquisition of shares from non- | |||||||
| controlling interests | 15 | 15 | |||||
| Change in shares held by non- | |||||||
| controlling interests | -41 | -41 | |||||
| Changes in holdings in subsidiaries | |||||||
| total | - | - | - | - | 15 | -41 | -26 |
| Shareholders' equity 31 Dec 2011 | 20 759 | 1 092 | -8 | -18 248 | 123 286 | 1 341 | 128 222 |
| SHAREHOLDERS' EQUITY BELONGING TO PARENT COMPANY SHAREHOLDERS | |||||||
| A | B | C | D E | F | G | ||
| EUR 1,000 |
|||||||
| Shareholders' equity 1 Jan 2012 | 20 759 | 1 092 | -8 | -18 248 | 123 286 | 1 341 | 128 222 |
| Adjustments for hyperinflation | 2 685 | 247 | 2 932 | ||||
| Adjusted shareholders' | |||||||
| equity 1 Jan 2012 | 20 759 | 1 092 | -8 | -18 248 | 125 971 | 1 588 | 131 154 |
| Comprehensive income | |||||||
| Net profit for the period | 25 668 | 496 | 26 164 | ||||
| Other comprehensive income items | |||||||
| Translation differences | 561 | -34 | 527 | ||||
| Total comprehensive income for the period | - | - | - | 561 | 25 668 | 462 | 26 691 |
| Transactions with shareholders | |||||||
| Payment of dividends | -10 379 | -14 | -10 393 | ||||
| Total transactions with shareholders | - | - | - | - | -10 379 | -14 | -10 393 |
| Changes in holdings in subsidiaries | |||||||
| Acquisition of shares from non- | |||||||
| controlling interests | 20 | 20 | |||||
| Change in shares held by non- | |||||||
| controlling interests | 37 | -37 | 0 | ||||
| Reduction of share capital | -60 | -60 | |||||
| Changes in holdings in subsidiaries | |||||||
| total | - | - | - | - | 57 | -97 | -40 |
| Shareholders' equity 31 Dec 2012 | 20 759 | 1 092 | -8 | -17 687 | 141 317 | 1 939 | 147 412 |
| A = Share capital B = Other reserves |
D = Translation differences
E = Retained earnings
F = Share belonging to non-controlling interests
G = Total
Other reserves include the share premium account, legal reserve and other reserves. The notes constitute an essential part of the financial statements.
Olvi plc ("the company") and its subsidiaries (jointly "the Group") manufacture beers, ciders, long drinks, mineral waters, juices, soft drinks, energy drinks, sports beverages, kvass and other beverages. Olvi Group operates in Finland, Estonia, Latvia, Lithuania and Belarus.
The Group's parent company is Olvi plc (Business ID 0170318-9), and its Series A shares are quoted on the Nasdaq OMX Helsinki Ltd Main List. The parent company is headquartered in Iisalmi and its registered address is P.O. Box 16, 74101 Iisalmi.
A copy of the consolidated financial statements is available on the Internet at www.olvi.fi or from the headquarters of the Group's parent company at Olvitie I-IV, 74100 Iisalmi.
The accounting period of all Group companies corresponds to the calendar year and ended on 31 December 2012.
Olvi plc's Board of Directors has approved the disclosure of these financial statements at its meeting on 21 February 2013.
According to the Finnish Companies Act, shareholders have the option to approve or reject the financial statements at a General Meeting of Shareholders to be held after disclosure. The General Meeting of Shareholders may also decide on amending the financial statements.
The consolidated financial statements have been prepared in compliance with the approved International Financial Reporting Standards (IFRS), observing the IAS and IFRS standards as well as SIC and IFRIC interpretations valid on 31 December 2012. In the Finnish Accounting Act and regulations enacted by virtue of the Act, International Financial Reporting Standards refer to the standards approved for use in the European Union in accordance with the procedure specified in the EU regulation (EC) No 1606/2002. The notes to the financial statements are also in compliance with Finnish legislation concerning accounting and corporate law that supplements the IFRS regulations.
The consolidated financial statements have been prepared on the basis of original cost with the exception of financial assets available for sale, financial assets and liabilities recognised at fair value through profit or loss, derivative contracts, as well as share-based transactions settled in cash, which have been recognised at fair value. The financial statement information 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 may cause rounding differences in additions.
Preparation of financial statements in accordance with IFRS standards requires the Group's management to make certain estimates and considerations. Information on considerations made by management with regard to application of the Group's accounting policies that have the most significant effect on the figures presented in the financial statements is presented in the Section "Accounting policies requiring consideration by management and crucial factors of uncertainty associated with estimates".
The consolidated financial statements include the parent company Olvi plc as well as all Finnish and non-Finnish subsidiaries in which the Group directly or indirectly controls more than 50 percent of the voting rights associated with shares or otherwise has the right to define the principles of the entity's finances and business operations in order to gain benefit from its operations.
Intra-Group shareholdings have been eliminated using the purchase method. The consideration given and the acquired entity's identifiable assets and assumed liabilities have been measured at fair value at the time of acquisition.
Acquired subsidiaries are included in the consolidated financial statements as of the date the Group has acquired a position of control, and divested subsidiaries are included until the date the Group's control is discontinued. All intra-Group business transactions, receivables, liabilities, unrealised gains and internal profit distribution are eliminated during the preparation of the consolidated financial statements. Unrealised losses are not eliminated if they are caused by impairment.
The distribution of profit or loss for the financial period between the parent company's shareholders and non-controlling interests is presented in the separate income statement, and the distribution of comprehensive income between the parent company's shareholders and non-controlling interests is presented in connection with the statement of comprehensive income. Comprehensive income is allocated between parent company shareholders and non-controlling interests even if this would lead to a negative share allocated to non-controlling interests. The share of equity belonging to non-controlling interests is presented as a separate balance sheet item under shareholders' equity. Changes in the parent company's holding in a subsidiary that do not lead to loss of control are processed as equity transactions.
Operating segments are reported in a manner consistent with internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible of allocating resources to the operating segments and assessing their performance, is identified to be the Group`s Managing Director making strategic decisions.
The figures indicating the earnings and financial position of Group entities are determined in the currency of each unit's primary operating environment ("functional currency"). The consolidated financial statements are presented in euro, which is the operating and presentation currency of the Group's parent company.
Transactions denominated in foreign currency have been converted into the functional currency at the exchange rate valid on the transaction date. Monetary items in foreign currency have been converted into the functional currency at the exchange rates valid on the closing date of the reporting period. The parent company's receivables and debts denominated in foreign currency have been converted into euro at the mean exchange rate quoted by the European Central Bank on the balance sheet date. Receivables and debts of non-Finnish consolidated companies denominated in foreign currency have been converted at the exchange rate of the country in question on the balance sheet date. Gains and losses originating from business transactions in foreign currency and the conversion of monetary items are recognised through profit and loss. Foreign exchange gains and losses from operations are included in the corresponding items above operating profit. Foreign exchange gains and losses on loans denominated in foreign currency are included in financial income and expenses.
The income and expense items within the income statements of non-Finnish consolidated companies that use a functional currency other than the Group's presentation currency (and that do not operate in an hyperinflationary economy) have been converted into euro at the average exchange rates for the accounting period, which refers to the averages of the mean exchange rates quoted by the European Central Bank on the last day of each month. Balance sheet items have been converted into euro at the mean exchange rate quoted by the European Central Bank on the balance sheet date. The different exchange rates applicable to the conversion of profit or loss on the income statement and balance sheet result in a translation difference recognised in shareholders' equity on the balance sheet, and any change in this difference is recognised in other comprehensive income items. Translation differences arising from the elimination of the acquisition cost of foreign Group companies, as well as translation differences arising from equity items accumulated after the acquisition, are recognised in other comprehensive income items. When a subsidiary is divested in full or in part, accumulated translation differences are recognised in the income statement as part of the sales gain or loss.
Goodwill arising from the acquisition of foreign entities and the fair value adjustments made to the book values of the assets and liabilities of such foreign entities upon acquisition are treated as assets and liabilities belonging to the foreign entities. They are converted into euro at the exchange rates valid on the closing date of the reporting period.
Belarus was listed as a hyperinflationary economy in December 2011. The 2011 and 2012 financial statements of the subsidiary OAO Lidskoe Pivo registered in Belarus have been adjusted in accordance with IAS 29, "Financial Reporting in Hyperinflationary Economies". Items denominated in BYR currency have been adjusted using the Belarusian general consumer price index. Adjustments have been made monthly starting from December 2008.
The adjustment factors applied from December 2008 to December 2012 are as follows:
| 12/2008 | 3.0693 |
|---|---|
| 12/2009 | 2.7940 |
| 12/2010 | 2.5394 |
| 12/2011 | 1.2169 |
| 12/2012 | 1.0000 |
The values do not represent market values, repurchase values or other fair values used in actual transactions. In the conversion of the 2012 financial statements, monetary receivables and liabilities have not been reassessed using a conversion factor but they have been converted into euro using the exchange rate between BYR and euro valid on the closing date of the reporting period. The same procedure has also been applied to other non-monetary balance sheet items measured at fair value. On the other hand, other non-monetary balance sheet items as well as income statement items have been converted using the corresponding conversion factor values.
Monthly averages of the conversion factor have been applied to income statement items. The impact of the inflation factor on the company's monetary net position arising from the procedure has been included in financial income and/or expenses as a profit or loss. A change in tax accruals corresponding to the financial statement adjustments has been recognised in deferred tax liabilities.
The income and expense items within OAO Lidskoe Pivo's income statement, as well as the company's balance sheet, have been converted into euro at the mean exchange rate quoted by the Belarusian Central Bank on the balance sheet date, in accordance with IAS 29.
OAO Lidskoe Pivo's functional currency is hyperinflationary but because its figures are converted to a non-inflationary currency, the euro, the data for comparison must be the same as presented in the financial statements for the earlier year in question (in other words, they shall not be adjusted to correspond to any subsequent changes in price levels or exchange rates).
Property, plant and equipment are recognised in the balance sheet at original cost deducted by accumulated depreciation and impairment losses.
Asset items are depreciated by the straight-line method over their estimated useful life. Depreciation is not booked on land areas. Estimated useful lives are the following:
| Buildings | 20 to 40 years |
|---|---|
| Underground shelter | 4 years |
| Plant machinery and equipment | 7 to 10 years |
| Other fixed assets | 5 years |
The residual value and useful life of asset items are reviewed upon each closing of the accounts and adjusted if necessary to reflect any changes in the expected economic benefit.
Depreciation on a property, plant or equipment item will be discontinued when the item is classified as available for sale in accordance with the standard IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.
Sales gains and losses arising from the decommissioning and transfer of property, plant and equipment items are included in other operating income or other operating expenses.
Borrowing costs attributable to the acquisition, construction or manufacture of an item fulfilling the conditions of the revised IAS 23 standard are capitalised as part of the acquisition cost of that item if the item fulfils said conditions and capitalisation is started on or after 1 January 2009. All borrowing costs were previously recognised as immediate expenses. The Group has not had any capitalised borrowing costs up to date.
All borrowing costs other than those falling under IAS 23 are recognised as expenses in the period during which they have arisen.
Public subsidies such as government grants associated with the acquisition of property, plant and equipment items are recognised as deductions in the book values of property, plant and equipment items. The subsidies will be recognised as income through reduced depreciation over the useful life of the item.
Subsidies received as compensation for realised costs are recognised on the income statement at the same time as the associated costs are recognised as expenses. Such subsidies are presented in other operating income.
Goodwill arising from business combinations is recognised at the amount to which the total of consideration given, the share of non-controlling interests in the acquired entity and any previous holding exceed the fair value of net assets acquired.
Acquisitions carried out between 1 January 2004 and 31 December 2009 have been recognised in accordance with the previous IFRS 3 standard (2004). Goodwill arising from business combinations carried out before 2004 corresponds to book value in accordance with previous accounting standards that has been used as the deemed cost under IFRS.
No regular amortisation is booked on goodwill but it is tested for impairment annually or, if necessary, more frequently. For this purpose, goodwill is allocated to cash generating units that correspond to the management's way of supervising the business and associated goodwill. In the Group, cash generating units correspond to operating segments reported to top management. Goodwill is recognised at original cost deducted by impairment.
Research and development costs are recognised as expenses in the income statement. Development costs arising from the design of new or more advanced products are capitalised as intangible assets in the balance sheet starting from the time the product is technically feasible, it can be utilised commercially, and future economic benefit is expected from the product. Development costs previously recognised as expenses will not be subsequently capitalised. Amortisation is booked on an item starting from the time it is ready for use. An item that is not yet ready for use is tested annually for impairment.
An intangible asset item is recognised in the balance sheet only if its acquisition cost can be reliably determined and it is probable that the expected economic benefit from the item will be to the Group's advantage. Patents, trademarks and licences with a limited useful life are booked in the balance sheet at original cost and recognised as expenses in the income statement by straight-line amortisation over their known or estimated useful life. No amortisation is booked on intangible assets with an unlimited useful life but they are tested annually for impairment. The Group currently has no intangible assets with an unlimited useful life.
The amortisation periods for other intangible assets are the following:
| Computer software | 5 years |
|---|---|
| Others | 5 years |
Leases on tangible assets in which the Group has a significant part of the risks and benefits characteristic of ownership are categorised as finance lease agreements. Asset items acquired on finance lease agreements are recognised in the balance sheet at the fair value of the leased item in the start of the lease period or at a lower present value of minimum rents. Asset items acquired on finance lease agreements are depreciated over the useful life of the item or the lease period, whichever is shorter. Leasing rents payable are divided into financing cost and reduction of debt over the lease period so that the interest rate on the debt remaining in each accounting period is equal. Lease obligations are included in financial liabilities.
Lease agreements in which the risks and benefits characteristic of ownership remain with the lessor are treated as other lease agreements. Leases payable on the basis of other lease agreements are recognised as expenses in the income statement in equal instalments over the lease period.
Items leased out by the Group in which a significant part of the risks and benefits characteristic of ownership have been transferred to the lessee are treated as finance lease agreements and recognised as receivables in the balance sheet. The receivable is recognised at present value. The financial income on a finance lease agreement is recognised as income during the lease period so that the remaining net investment will produce the same percentage of yield over the lease period. The Group does not currently have any substantial finance lease agreements as a lessor.
Assets leased out on agreements other than finance lease are included in property, plant and equipment items in the balance sheet. They are depreciated over their useful life just as similar property, plant and equipment items in own use. Lease income is recognised in the balance sheet as equal instalments over the lease period.
The balance sheet values of non-current tangible and intangible assets are assessed for impairment on the balance sheet date and every time there is evidence that the value of an asset may have been impaired. The impairment test estimates the amount recoverable from an asset. Recoverable amount equals to the fair value of an asset deducted by costs arising from its transfer, or value in use if this is higher.
An impairment loss is recognised in the income statement when the book value of an asset exceeds its recoverable amount. If an impairment loss is attributable to a cash generating unit, it is first allocated to reduce the goodwill attributable to the cash generating unit and then to reduce other asset items within the unit on a pro rata basis. An impairment loss will be reversed if there is a change in the circumstances and the amount recoverable from an asset has changed since the recognition of the impairment loss. However, any impairment loss reversal may not exceed the amount that would be the book value of the asset if the impairment loss was not recognised. Impairment losses recognised on goodwill are not to be reversed in any circumstances.
Olvi Group carries out annual impairment testing of goodwill, intangible and tangible assets and net operating capital, and evidence of impairment is evaluated as presented above in the accounting policies. Recoverable amounts from cash generating units are determined through calculations based on value in use. The preparation of these calculations requires the use of estimates.
Cash flow estimates are based on forecasts approved by management covering a three-year period. The crucial variables used for the calculation of value in use are budgeted sales volume, budgeted net sales and operating profit. Estimated sales and production volumes are based on existing fixed assets.
Inventories are recognised at acquisition cost or a lower probable net realisable value. The acquisition cost of raw materials and supplies is determined by the weighted average method. The acquisition cost of finished and unfinished products based on actual costs and production volume comprises raw materials, direct expenses due to work performed, other direct expenses, as well as the proportion of the variable and fixed costs of manufacturing based on actual production volume. Net realisable value refers to estimated sales price available through normal business operations, deducted by estimated costs of finishing the product and costs of sale.
The Group's pension schemes are defined contribution plans. Contributions paid to defined contribution pension plans are recognised in the income statement during the period to which the charge applies.
The Group applies the standard IFRS 2 Sharebased Payments to all share-based business transactions.
Arrangements settled in equity instruments are measured at fair value on the date of granting and recognised as expenses in the income statement in equal instalments over the validity period of the right. Arrangements settled in cash are measured at fair value at each closing of the accounts, and changes in the fair value of the liability are recognised in the income statement. The earnings effect of the arrangement is presented in the income statement under the costs of employee benefits.
The cost determined at the time of granting the share-based bonuses is based on the Group management's estimate of the number of shares that are expected to become vested at the end of the vesting period. The Group updates the expectation of the final number of shares on each balance sheet date. The changes in the estimates are recognised in the income statement.
The Group had one share-based incentive scheme between 1 January 2006 and 31 December 2010, in which the payments were made in both share-based bonuses and cash.
A provision is recognised in the balance sheet when the Group has a legal or factual obligation based on a previous event, it is probable that the fulfilment of the obligation requires payment or causes a financial loss, and the amount of the obligation can be reliably estimated. If there is a possibility to receive compensation for part of the obligation from a third party, the compensation is recognised as a separate asset item but this is only done once the possibility of receiving compensation is practically certain. Provisions are measured at the present value of the costs required to cover the obligation.
A provision is recognised for onerous contracts if the costs necessary for fulfilling the obligations exceed the benefits available from the contract.
A provision for obligations associated with decommissioning and restoration is recognised when the Group has an obligation based on environmental legislation and the Group's environmental responsibility policy that is associated with the decommissioning of a production facility, remedy of environmental damage or transfer of equipment to another location.
No provisions are recognised for costs associated with the Group's continuous operations.
No provisions of the specified types have been recognised in Olvi Group's IFRS financial statements.
The tax expenses in the income statement comprise tax based on the taxable income for the period and change in deferred tax. The tax based on the taxable income for the period is calculated on the basis of taxable income in accordance with the tax rate valid in each country. The tax is adjusted by any taxes associated with previous periods.
Deferred taxes are calculated on all temporary differences between book value and tax base. No deferred tax is recognised on impairment losses on goodwill that are not tax deductible, and no deferred tax is recognised on undistributed accrued profits of subsidiaries to the extent that the difference will probably not be eliminated during the foreseeable future. The most substantial temporary differences arise from depreciation on property, plant and equipment, arrangements settled in equity instruments, as well as the fair valuation of derivative contracts.
Deferred taxes are calculated at tax rates enacted or practically approved by the balance sheet date, which are expected to be applicable when the deferred tax receivable is realised or the deferred tax liability is paid.
Deferred tax receivables are recognised up to the probable amount of taxable income in the future against which the temporary difference can be utilised. The amount of deferred tax receivables and the probability of utilisation are assessed at every closing of the accounts.
Deferred tax receivables and liabilities are presented in the balance sheet as separate items under non-current assets or liabilities.
Net sales consist of consideration received for the sales of beverages and other brewery-related commodities during the course of the Group's ordinary business, measured at fair value. Income is presented less value-added tax, indirect taxes, refunds and discounts, with intra-Group sales eliminated.
Income is recognised when it can be reliably determined and when it is probable that future economic benefit will be gained.
The Group manufactures different kinds of alcoholic and non-alcoholic beverages and sells them, along with other products related to the beverage industry, to customers who have a retail or wholesale licence to sell alcohol for consumption on or off their premises. Product sales are recognised when the Group has delivered the products to the customer and when substantial risks and benefits related to their ownership have been transferred to the customer, and there are no outstanding obligations that could affect the customer's acceptance of the products. Delivery is considered to be realised only once the products have been delivered to the location agreed with the customer, the risk of non-marketability and damage has been transferred to the customer, and the customer has either accepted the products in accordance with the sales contract, the acceptance-related terms and conditions have expired, or the Group has objective proof that all of the acceptance criteria are fulfilled.
The sales of beverages often carry annual discounts, and customers are entitled to return any defective products. Sales are recognised at the price specified in the sales contract less annual discounts and returns of defective products estimated at the time of sale. Discounts are estimated and recognised on the basis of actual purchases and expected annual purchases in accordance with the terms and conditions of the sales contracts.
The Group rents out beverage-serving equipment to its HoReCa customers and coolers to its retailers. Rental income is recognised in equal instalments over the rental period.
Interest income is recognised on the basis of elapsed time using the effective interest method. If a loan receivable or other receivable becomes impaired, its book value is reduced to correspond to the recoverable amount. Interest income from impaired loan receivables is recognised in accordance with original effective interest.
Dividend income is recognised when the right to dividend becomes vested.
Long-term assets held for sale and assets associated with discontinued operations are classified as assets held for sale and measured at book value or a lower fair value deducted by sales costs if the amount corresponding to the book value is going to be accrued mostly from the sale of the asset instead of continuous use. The prerequisites for classification as an item held for sale are considered to be fulfilled when a sale is highly probable and the asset can be immediately sold in its current condition on usual and conventional terms, management is committed to the sale, and it is expected to be carried out within one year of classification. Depreciation of these assets will be discontinued at the time of classification.
The Group's financial assets are classified in accordance with the standard IAS 39 Financial Instruments: Disclosure and Presentation. At present, the Group's financial assets are classified as either loans and receivables or financial assets available for sale. The classification is based on the purpose of acquiring the financial assets and carried out upon original acquisition. All purchases and sales of financial assets are recognised based on the transaction date. Transaction costs are included in the original book value of financial assets.
The group of loans and receivables includes the Group's accounts receivable and other receivables. They are measured at original amortised cost using the effective interest method. On the balance sheet, they are included in current or non-current assets according to their nature. Accounts receivable are originally recognised at fair value and subsequently measured at original amortised cost using the effective interest method, taking any impairment into account. Factors suggesting impairment of an account receivable include the debtor's substantial financial difficulties, a threat of bankruptcy or a payment delay exceeding 60 days.
The Group's other financial assets are classified as financial assets available for sale. Financial assets available for sale may comprise equities and interest-bearing investments. They are recognised at fair value or, if the fair value cannot be determined reliably, at purchase price. Changes in the fair value of financial assets available for sale are booked in the fair value reserve within shareholders' equity, taking the tax effect into account. Changes in fair value are transferred from shareholders' equity to the income statement when the investment is sold or its value has reduced so that an impairment loss must be recognised.
Financial assets are derecognised once the rights to the investment's cash flows have ceased or have been transferred to another party, and the Group has transferred any substantial risks and benefits of ownership.
Financial assets available for sale are included in non-current assets except if the intention is to hold them for less than 12 months from the balance sheet date, in which case they are included in current assets.
Liquid assets comprise cash, bank deposits withdrawable on demand, as well as other short-term very liquid investments. Items classified as liquid assets have a maturity of no more than three months calculated from the date of acquisition. Account overdraft facilities in use are presented under other current liabilities.
On each balance sheet date, the Group estimates whether there is objective evidence that the value of a financial asset item or financial asset group may have been impaired. If there is evidence of potential impairment, the amount of loss is determined as the difference between the book value of the asset and its fair value or the present value of estimated future cash flows discounted at the original effective interest rate. Impairment losses are recognised in financial items through profit or loss.
Financial liabilities are initially recognised at fair value increased by transaction costs arising from the acquisition of debt. Financial liabilities will subsequently be measured at original amortised cost using the effective interest method.
Financial liabilities are divided into non-current and current liabilities on the basis of the period of realisation, and may constitute interest-bearing or interest-free liabilities.
Financial liabilities are derecognised once the liability or a part thereof has ceased to exist – in other words, once the obligation specified in the contract has been fulfilled or annulled or it has ceased to be valid.
Olvi Group treats derivative contracts in the manner prescribed in the standard IAS 39 Financial Instruments: Disclosure and Presentation. All derivatives have been classified as assets held for trading because the Group does not apply hedge accounting in accordance with IAS 39. Derivatives held for trading are interest rate swaps recognised at fair value. The fair value of interest rate swaps is recognised in other current assets or liabilities. Both realised and unrealised gains and losses arising from changes in fair value are recognised in financial items within the income statement for the accounting period during which they arise.
Outstanding Series K and Series A shares are presented as share capital.
Any transaction costs immediately arising from the issuance of new shares or options, after being adjusted for tax effects, are presented in shareholders' equity as a deduction of payments received.
If the Group acquires the company's own shares, the consideration paid and the immediate costs of acquisition are deducted from shareholders' equity until the shares are annulled or re-released to circulation.
If the shares are re-released, the consideration received less immediate transaction costs is included in shareholders' equity.
The dividend proposed by the Board of Directors to the General Meeting of Shareholders has not been recognised in the financial statements. Dividends will only be recognised on the basis of the General Meeting's decision.
The standard IAS 1 Presentation of Financial Statements does not define the concept of operating profit. The Group has defined it as follows: operating profit is the net amount created by adding other operating income to net sales, subtracting purchase costs adjusted by change in inventories of finished and unfinished products and costs of manufacture for own use, and subtracting costs of employee benefits, depreciation and amortisation, any impairment losses and other operating expenses. All income statement items other than the above are presented below operating profit. Exchange rate differences are included in operating profit if they arise from items associated with business operations, otherwise they are recognised in financial items.
Earnings per share is calculated by dividing the profit for the period belonging to the parent company's shareholders by the average weighted number of shares outstanding during the accounting period. When calculating the average, the number of treasury shares in the company's possession is deducted from the number of shares.
The average weighted number of shares used for the calculation of diluted earnings per share includes the dilution effect of options outstanding during the accounting period. The calculation of the dilution effect includes consideration for the number of treasury shares acquired using funds received from the exchange of options. Olvi Group has no warrants or options on 31 December 2012.
Estimates and assumptions regarding the future have to be made during preparation of the financial statements. These are based on previous experience and expectations of future events, but the outcome may differ from the estimates and assumptions. Furthermore, the application of accounting policies requires choice and consideration.
Management consideration associated with the selection and application of accounting policies
Group management makes consideration-based choices with regard to the selection and application of accounting policies. This applies particularly to cases in which valid IFRS standards provide for alternative methods of recognition, measurement or presentation.
The most important sectors in which management has applied said consideration are goodwill testing and deferred tax receivables.
Estimates made in connection with the preparation of financial statements are based on the management's best understanding on the balance sheet date. The background of the estimates includes previous experience and assumptions concerning the future that are deemed most probable on the balance sheet date with regard to issues such as the expected development of the Group's financial operating environment concerning sales and the level of costs. The Group, regularly and jointly with the management of subsidiaries, assesses the realisation of estimates and assumptions, as well as changes in the underlying factors, by applying several sources of information, both internal and external. Any changes in the estimates and assumptions are recognised in the accounting period during which the estimates and assumptions are adjusted and in all subsequent accounting periods.
Those substantial assumptions concerning the future and crucial factors of uncertainty associated with estimates made on the date of closing the accounts that impose a significant risk of substantial changes in the book values of the Group's assets and liabilities during the next accounting period are presented below. The Group's management has considered these sections of the financial statements as being the most crucial because, from the Group's point of view, the applicable accounting policies are the most complex, and their application requires the use of most significant estimates and assumptions in the measurement of assets, for example. Furthermore, it is estimated that the effect of any changes in the assumptions and estimates used in these sections of the financial statements would be the greatest.
Determining the fair value of assets acquired in a business combination In case of substantial business combinations, the Group has used the services of an external advisor for the assessment of fair values of tangible and intangible assets. With regard to tangible assets, comparisons have been made against the market prices of similar assets, estimating the devaluation of the acquired assets due to age, wear and tear and other similar factors. The determination of fair values for intangible assets is based on estimates of cash flows associated with the assets because no information on transactions concerning similar assets has been available from the markets.
The management believes that the estimates and assumptions used are sufficiently accurate to serve as the basis for determining fair value. Furthermore, at least on each closing of the accounts, the Group reviews any indications of impairment of either tangible or intangible assets.
The Group carries out annual impairment testing of goodwill, unfinished intangible and tangible assets and net operating capital, and any evidence of potential impairment is evaluated as presented above in the accounting policies. Recoverable amounts from cash generating units are determined through calculations based on value in use. The preparation of these calculations requires the use of estimates.
Cash flow estimates are based on forecasts approved by management covering a three-year period. The crucial variables used for the calculation of value in use are budgeted sales volume, budgeted net sales and operating profit. Estimated sales and production volumes are based on existing fixed assets. More information on goodwill and impairment testing is provided in Note 14, Impairment testing of goodwill.
The consolidated financial statements have been prepared in accordance with the same accounting policies used in 2011, with the exception of the following new standards, interpretations and revisions to existing standards that are in force as of 1 January 2012.
"Financial Instruments: Disclosures"
concerning transfers of financial assets The purpose of this amendment is to promote transparency in the reporting of transfer transactions and improve users' understanding of the risk exposures relating to transfers of financial assets and the effect of those risks on an entity's financial position, particularly those involving securitisation of financial assets. 1 July 2011.
The Group has applied the revised standard starting from 1 January 2012. The amendment has no substantial effect on the consolidated financial statements.
"First-Time Adoption" concerning fixed dates and hyperinflation The first change relates to replacing a fixed date of 1 January 2004 with "the date of transition to IFRSs" which removes the need for entities adopting IFRSs for the first time to restate derecognition transactions that occurred before the date of transition to IFRSs. The second change includes guidance on how to resume disclosures required by IFRS standards after an entity has not been able to comply with the IFRS requirements if its functional currency was subject to severe hyperinflation. 1 July 2011.
The amendment has no effect on the consolidated financial statements.
The following is a list of standards and interpretations that have been published but will enter into force on a date later than 1 January 2012.
concerning deferred taxes
IAS 12 currently requires an entity to measure the deferred tax relating to an asset depending on whether the entity expects to recover the carrying amount of the asset through use or sale. This amendment therefore introduces an exception to the existing principle for the measurement of deferred tax assets or liabilities arising on investment property measured at fair value. As a result of the amendments, SIC 21, 'Income taxes – recovery of revalued non-depreciable assets', will no longer apply to investment properties carried at fair value. The amendments also incorporate into IAS 12 the remaining guidance previously contained in SIC 21, which is withdrawn. 1 January 2013.
The amendment has no effect on the consolidated financial statements.
Amendment to IAS 1 "Presentation of Financial Statements" concerning other comprehensive income items The main change is a requirement for entities to group items presented in 'other comprehensive income' on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The amendment does not address which items are presented in other comprehensive income. 1 July 2012.
The amendment has no effect on the consolidated financial statements.
Amendment to IAS 19
"Employee Benefits"
This amendment eliminates the corridor approach and calculates finance costs on a net funding basis. All actuarial profits and losses must be accounted for immediately in other comprehensive income. 1 January 2013.
The amendment has no effect on the consolidated financial statements.
"First-Time Adoption" concerning loans received from governments The amendment deals with loans received from governments at a below market rate of interest existing at first-time adoption of IFRSs. At the same time, an exception to retrospective application has been added to the standard, providing first-time adopters the same relief from the requirement added to IAS 20 in 2008 as entities reporting under IFRS before that. 1 January 2013. (not yet endorsed in the EU
The amendment has no effect on the consolidated financial statements.
Amendment to IFRS 7 "Financial Instruments: Disclosures" concerning the offset of assets and liabilities Requirements for notes to the financial statements are increased with the purpose of improving comparability between IFRS and US GAAP. 1 January 2013.
The Group will adopt the amendment in its financial statements 2013. The amendment will not have any effect on the consolidated financial statements.
These amendments provide additional transition relief to IFRSs 10, 11 and 12, limiting the requirement to provide adjusted comparative information to only the preceding comparative period. For disclosures related to unconsolidated structured entities, the amendments will remove the requirement to present comparative information for periods before IFRS 12 is first applied. 1 January 2014.
The Group will adopt the amendments in its financial statements 2014. The amendments will not have any effect on the consolidated financial statements.
Improvements published as a result of the 2009– 2011 round will cause changes to the following standards:
The Group will adopt the amendments in its financial statements 2013. Group management is assessing the effect of the amendments on the consolidated financial statements.
"Consolidated Financial Statements"
The aim is to establish principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. The principles of control are defined, and control is established as the basis for consolidation. The standard sets out how to apply the principle of control to identify whether an investor controls an investee and therefore must consolidate the investee. The standard also sets out the accounting requirements for the preparation of consolidated financial statements. 1 January 2014.
The Group will adopt the standard in its financial statements 2014. Group management is assessing the effect of the standard on the consolidated financial statements.
"Joint Arrangements"
IFRS 11 is a more realistic reflection of joint arrangements. It focuses on the rights and obligations arising from the arrangement rather than its legal form. There are two types of joint arrangement: joint operations and joint ventures. Joint operations arise where a joint operator has rights to the assets and obligations relating to the arrangement and hence accounts for its interest in assets, liabilities, revenue and expenses. Joint ventures arise where the joint operator has rights to the net assets of the arrangement and hence equity accounts for its interest. Proportional consolidation of joint ventures is no longer allowed. 1 January 2014.
The Group will adopt the standard in its financial statements 2014. Group management is assessing the effect of the standard on the consolidated financial statements.
in Other Entities"
IFRS 12 includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. 1 January 2014.
The Group will adopt the standard in its financial statements 2014. Group management is assessing the effect of the standard on the consolidated financial statements.
"Fair Value Measurement"
The purpose of the standard is to increase uniformity and simplify complex procedures. It provides a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements, which are largely aligned between IFRS and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRS or US GAAP. 1 January 2013.
The Group will adopt the standard in its financial statements 2013. Group management is assessing the effect of the standard on the consolidated financial statements.
"Separate Financial Statements"
The revised standard contains requirements pertaining to separate financial statements only. 1 January 2014.
The Group will adopt the revised standard in its financial statements 2014. Group management is assessing the effect of the revised standard on the consolidated financial statements.
The revised standard includes the accounting requirements for both associates and joint ventures. As a consequence of the publication of IFRS 11, the equity method shall apply to both. 1 January 2014.
The Group will adopt the revised standard in its financial statements 2014. Group management is assessing the effect of the revised standard on the consolidated financial statements.
"Stripping Costs in the Production Phase of a Surface Mine"
The interpretation provides guidance on how to account for the costs of removal of mine waste materials (overburden) in the production phase of a surface mine. 1 January 2013.
The interpretation will not have any effect on the consolidated financial statements.
"Financial Instruments: Presentation" concerning the offset of assets and liabilities
The amendments are related to the IAS 32 application guidance. They clarify some of the requirements for offsetting financial assets and financial liabilities on the balance sheet. 1 January 2014.
The Group will adopt the amendments in its financial statements 2014. Group management is assessing the effect of the amendments on the consolidated financial statements.
ments have been made to IFRS 10, IFRS 12 and IAS 27. 1 January 2014 (not yet endorsed in the EU).
The amendments will not have any effect on the consolidated financial statements.
"Financial Instruments"
This is the first standard issued as part of a wider project to replace IAS 39. The standard retains but simplifies the mixed measurement model and establishes two primary measurement categories for financial assets: amortised cost and fair value. The basis of classification depends on the entity's business model and the contractual cash flow characteristics of the financial asset. The guidance in IAS 39 on impairment of financial assets and hedge accounting continues to apply. 1 January 2015 (not yet endorsed in the EU).
Group management is assessing the effect of the amendments on the consolidated financial statements.
Segment information is presented in accordance with the Group's geographical operating segments. The operating segments are defined on the basis of reports utilised by the Group's top management for strategic decisions.
Net sales in the reported operating segments are mostly generated from the manufacture and wholesale of various beverages. The net sales also include a minor amount of services to licensed restaurants in relation to beverage-serving equipment.
The Group's management assesses the operating segments' performance through operating profit (EBIT). Interest income and expenses are not allocated to segments because responsibility for the Group's financing tasks is centralised in the parent company Olvi plc.
The products and services of geographical segments are produced in a specific economic environment with risks and profitability deviating from the risks and profitability of the economic environment of other geographical segments. Business segments comprise groups of assets and business operations that have risks and profitability associated with their products and services deviating from other business segments.
A segment's assets and liabilities refer to business items that the segment uses in its business operations or that can be allocated to segments on reasonable grounds. Unallocated items include tax and financial items, as well as items common to the entire Group. Investments include increases in property, plant and equipment items and intangible assets that are used during more than one accounting period.
The Group's geographical operating segments are: Finland, Estonia, Latvia, Lithuania and Belarus. In addition to the location of assets, the operating segments are presented in accordance with the location of customers.
Pricing of business transactions between segments is based on market terms. The principal method of transfer pricing is the cost plus method under which the transfer price of a product or service is determined by adding an appropriate mark-up to the costs of production.
| 1,000 litres | Finland | Estonia | Latvia | Lithuania | Belarus | Elimination | Group |
|---|---|---|---|---|---|---|---|
| Sales in 2012 | 148 764 | 134 027 | 72 358 | 71 661 | 141 496 | -41 553 | 526 753 |
| Sales in 2011 | 149 084 | 133 421 | 75 352 | 67 540 | 128 005 | -35 191 | 518 211 |
| Geographical segments 2012 in accordance with asset locations | |||||||
|---|---|---|---|---|---|---|---|
| EUR 1,000 INCOME |
Finland | Estonia | Latvia Lithuania | Belarus | Elimination | Group | |
| External sales | 119 450 | 72 545 | 29 272 | 32 190 | 58 773 | 312 230 | |
| Internal sales | 1 501 | 7 498 | 6 913 | 2 055 | 257 | -18 224 | 0 |
| Total net sales | 120 951 | 80 043 | 36 185 | 34 245 | 59 030 | -18 224 | 312 230 |
| EARNINGS Operating profit for the segment Financial income Financial expenses Income taxes Net profit for the period |
9 066 | 13 017 | 1 654 | 1 753 | 4 979 | 68 | 30 537 4 871 -3 093 -6 151 26 164 |
| OTHER INFORMATION Segment assets Unallocated company-level assets Total consolidated assets |
145 107 | 68 000 | 31 149 | 26 605 | 64 744 | -66 472 | 269 133 64 269 197 |
| Segment liabilities Unallocated company-level liabilities Total consolidated liabilities |
35 660 | 10 560 | 4 723 | 3 253 | 6 394 | 198 | 60 788 60 997 121 785 |
| Investments Unallocated company-level investments |
14 942 | 2 538 | 1 102 | 1 133 | 10 117 | 0 | 29 832 0 |
| Total investments | 29 832 | ||||||
| Depreciation | 7 125 | 4 445 | 3 203 | 2 321 | 4 879 | -151 | 21 822 |
| Geographical segments 2011 in accordance with asset locations | |||||||
| EUR 1,000 INCOME |
Finland | Estonia | Latvia Lithuania | Belarus | Elimination | Group | |
| External sales | 119 370 | 69 994 | 29 272 | 27 448 | 39 090 | 285 174 | |
| Internal sales Total net sales |
417 119 787 |
5 970 75 964 |
5 912 35 184 |
2 048 29 496 |
518 39 608 |
-14 866 -14 866 |
0 285 174 |
| EARNINGS Operating profit for the segment Financial income Financial expenses Income taxes |
13 239 | 12 973 | 737 | 411 | 737 | -1 414 | 26 683 8 352 -16 596 -5 485 |
| Net profit for the period | 12 954 | ||||||
| OTHER INFORMATION Segment assets Unallocated company-level assets Total consolidated assets |
152 827 | 97 253 | 31 887 | 27 031 | 57 267 | -162 188 | 204 077 49 514 253 591 |
| Segment liabilities Unallocated company-level liabilities Total consolidated liabilities |
36 900 | 10 571 | 4 543 | 2 877 | 11 574 | -1 118 | 65 346 60 024 125 369 |
| Investments Unallocated company-level investments Total investments |
11 956 | 4 635 | 880 | 2 057 | 23 702 | 0 | 43 230 0 43 230 |
| Depreciation | 6 116 | 4 306 | 3 517 | 2 352 | 2 413 | -67 | 18 637 |
| Geographical segments 2012 in accordance with customer locations | |||||||
| Others/ | |||||||
| EUR 1,000 External sales Internal sales |
Finland 114 684 1 197 |
Estonia 71 640 5 878 |
29 153 4 247 |
Latvia Lithuania 32 139 6 658 |
Belarus 53 169 244 |
Elimination 11 445 -18 224 |
Group 312 230 0 |
| Total net sales | 115 881 | 77 518 | 33 400 | 38 797 | 53 413 | -6 779 | 312 230 |
| Geographical segments 2011 in accordance with customer locations | |||||||
|---|---|---|---|---|---|---|---|
| Others/ | |||||||
| EUR 1,000 | Finland | Estonia | Latvia | Lithuania | Belarus | Elimination | Group |
| External sales | 116 450 | 68 543 | 29 285 | 28 213 | 36 298 | 6 385 285 174 |
|
| Internal sales | 1 099 | 5 056 | 3 651 | 4 673 | 386 | -14 865 | 0 |
| Total net sales | 117 550 | 73 599 | 32 935 | 32 887 | 36 684 | -8 480 285 174 |
|
| 2. Non-current assets held for sale | |||||||
| EUR 1,000 | 2012 | 2011 | |||||
| Non-current assets held for sale | 163 | 56 | |||||
| Total | 163 | 56 | |||||
| Non-current assets held for sale consist of equipment decommissioned by the parent company Olvi plc and AB | |||||||
| Volfas Engelman. | |||||||
| 3. Other operating income | |||||||
| EUR 1,000 | 2012 | 2011 | |||||
| Sales gains on property, plant and equipment | 57 | 54 | |||||
| Rental income | 129 | 110 | |||||
| Others | 834 | 358 | |||||
| Total | 1 020 | 522 | |||||
| Other operating income consists mostly of project grants and gains from the sales of production waste. | |||||||
| 4. Other operating expenses | |||||||
| EUR 1,000 | 2012 | 2011 | |||||
| Sales losses and scrapping of property, plant and equipment | 172 | 441 | |||||
| Rental costs | 3 113 | 1 949 | |||||
| External services | 43 057 | 37 983 | |||||
| Others | 35 229 | 33 679 | |||||
| Total | 81 571 | 74 052 | |||||
| Other operating expenses consist mostly of energy and repair costs, the costs of administration, marketing and | |||||||
| building maintenance, as well as other indirect personnel costs. | |||||||
| 5. Depreciation and impairment | |||||||
| EUR 1,000 | 2012 | 2011 | |||||
| Depreciation on tangible assets: | |||||||
| Buildings | 3 731 | 3 085 | |||||
| Machinery and equipment | 14 619 | 12 517 | |||||
| Machinery and equipment, finance lease | 969 | 971 | |||||
| Other tangible assets | 1 735 | 1 461 | |||||
| Other tangible assets, finance lease | 230 | 190 | |||||
| Total depreciation on tangible assets | 21 284 | 18 225 | |||||
| Depreciation on intangible assets: | |||||||
| Intangible rights | 145 | 19 | |||||
| Other intangible assets | 393 | 393 | |||||
| Total depreciation on intangible assets | 538 | 412 | |||||
| Total | 21 822 | 18 637 | |||||
| 6. Costs of employee benefits | |||||||
| EUR 1,000 Wages and salaries |
2012 31 723 |
2011 30 360 |
|||||
| Pension costs - defined contribution | 2 760 | 2 826 | |||||
| Other personnel expenses | 3 858 | 3 407 | |||||
| Total | 38 341 | 36 593 | |||||
| Group personnel on average during the period | 2012 | 2011 | |||||
| Finland | 401 | 383 | |||||
| Estonia | 313 | 311 | |||||
| Latvia | 217 | 217 | |||||
| Lithuania | 212 | 205 | |||||
| Belarus | 834 | 916 | |||||
| Total | 1 977 | 2 032 |
Information on employee benefits and loans to management is presented in Note 30, Related party transactions.
The income statement includes 320 thousand euro of R&D costs recognised as expenses in 2012 (289 thousand in 2011), which is 0.1 (0.1) percent of net sales.
| EUR 1,000 2012 2011 Dividend income from investments held as fixed assets 5 3 Interest income from bank deposits 79 102 Adjustment for hyperinflation: effect on the company's monetary net position 4 384 8 197 Other interest and financial income 403 49 Total 4 871 8 352 9. Financial expenses EUR 1,000 2012 2011 Interest expenses on finance lease contracts 85 228 Interest expenses on financial liabilities measured at original amortised cost 1 768 2 043 Net gains (-) / losses (+) from interest derivatives -234 288 Other financial expenses 1 474 14 038 Total 3 093 16 596 10. Income taxes EUR 1,000 Note 2012 2011 Tax based on the taxable income for the period 5 190 4 493 |
|---|
| Deferred taxes, tax on previous losses |
| of AB Volfas Engelman 19 71 44 Deferred taxes, OAO Lidskoe Pivo 19 9 848 Deferred taxes, A/S Cēsu Alus's tax on |
| depreciation difference and retained losses 19 568 0 Deferred taxes, change in the fair value of derivatives 19 57 -68 Deferred taxes, change in depreciation difference 19 265 43 |
| Deferred taxes, internal margin on inventories and fixed assets 19 -15 10 Deferred taxes, share-based bonuses 0 107 |
| Deferred taxes, finance leasin 19 6 6 Total 6 151 5 485 |
Reconciliation between the tax expenses in the income statement and taxes calculated in accordance with the tax rate in the Group's home country 24.5% (26%):
| EUR 1,000 Earnings before tax |
2012 32 315 |
2011 18 439 |
|---|---|---|
| Taxes calculated at the home country's rate | 7 917 | 4 794 |
| Effect of different tax rates for foreign subsidiaries | -1 719 | 659 |
| Tax effect of non-deductible items | 53 | 33 |
| Taxes from previous accounting period | -100 | -1 |
| Taxes in income statement | 6 151 | 5 485 |
Undiluted earnings per share are calculated by dividing the profit for the accounting period belonging to the parent company's shareholders by the weighted average of shares outstanding during the accounting period. When calculating the weighted average, the number of treasury shares in the company's possession is deducted from the number of shares. Olvi plc held a total of 1,124 of its own Series A shares on 31 December 2012. Detailed information on treasury shares can be found in Note 21, Notes concerning shareholders' equity.
| 2012 | 2011 | |
|---|---|---|
| Profit belonging to parent company shareholders (EUR 1,000) | 25 668 | 13 506 |
| Weighted average number of shares during the period (1,000) | 20 759 | 20 759 |
| Effect of treasury shares (1,000) | -1 | -1 |
| Weighted average number of shares for the calculation of EPS (1,000) | 20 758 | 20 758 |
| Undiluted/diluted earnings per share (euro per share) | 1.24 | 0.65 |
In the calculation of earnings per share adjusted for dilution, the weighted average number of shares includes the diluting effect of the conversion of all potential options outstanding during the period. When calculating the weighted average number of shares adjusted for dilution, the number of treasury shares in the company's possession is deducted from the number of shares. The calculation of the dilution effect includes consideration for the number of treasury shares acquired using funds received from the exchange of options. Between 2005 and 2012, Olvi Group has not had options or any other schemes having a diluting effect, which means that undiluted earnings per share and earnings per share adjusted for dilution have been equal during these years.
| EUR 1,000 water properties |
ings | Land and Build- Machinery | Machinery and eqpt, tangible and eqpt finance lease |
Other | Other assets, assets finance lease |
Advance tangible payments and unfinished purchases |
Total |
|---|---|---|---|---|---|---|---|
| Acquisition cost 1 Jan 2012 Adjustment for hyperinflation 0 Increase Transfer to non-current assets classified as held for |
1 863 78 726 708 0 17 488 |
186 651 2 290 31 687 |
4 734 0 3 014 |
14 218 972 2 744 |
1 089 0 239 |
4 015 1 006 |
36 959 324 238 7 986 56 178 |
| sale 0 Decrease 0 Transfers between items 0 Exchange rate differences 0 |
0 0 1 111 -130 |
-411 -723 -3 440 -362 |
0 -308 0 0 |
0 -269 -4 367 -216 |
0 0 0 3 |
0 -1 173 -1 264 |
-411 -33 454 -34 754 -7 868 -1 970 |
| Acquisition cost 31 Dec 2012 |
1 863 97 903 | 215 691 | 7 440 | 13 082 | 1 330 | 6 089 343 399 | |
| Accumulated depreciation and impairment 1 Jan 2012 Adjustment for hyperinflation 0 Depreciation 0 Decrease 0 Accumulated depreciation |
0 36 226 127 3 731 127 |
133 443 789 14 619 918 |
2 247 0 969 -280 |
9 212 319 1 735 -226 |
666 0 230 0 |
0 0 0 |
0 181 795 1 235 21 284 540 |
| on transfers 0 Exchange rate differences 0 |
770 -23 |
-5 366 -88 |
0 0 |
-3 432 -67 |
0 2 |
0 0 |
-8 028 -176 |
| Accumulated depreciation and impairment 31 Dec 2012 |
0 40 959 | 144 316 | 2 936 | 7 542 | 898 | 0 196 650 | |
| Book value 1 Jan 2012 Book value 31 Dec 2012 |
1 863 42 499 1 863 56 944 |
53 207 71 375 |
2 487 4 505 |
5 005 5 540 |
422 432 |
36 959 142 443 6 089 146 749 |
Other tangible assets consist mainly of vehicles, equipment included in equipment service, as well as office furniture.
| EUR 1,000 water properties |
ings | Land and Build- Machinery | Machinery and eqpt, tangible and eqpt finance lease |
Other | Other assets, assets finance lease |
Advance tangible payments and unfinished purchases |
Total |
|---|---|---|---|---|---|---|---|
| Acquisition cost 1 Jan 2011 Adjustment |
1 851 78 514 | 177 334 | 4 959 | 13 811 | 166 | 13 137 289 773 | |
| for hyperinflation Increase 10 Transfer to non-current assets classified as held for |
0 -264 402 |
-845 10 404 |
0 951 |
-478 2 744 |
0 142 |
-1 313 30 749 |
-2 900 45 403 |
| sale Decrease Transfers between items Exchange rate differences |
0 0 0 -106 0 0 2 179 |
-56 -1 345 843 316 |
0 -346 -843 12 |
0 -1 134 -840 114 |
0 0 840 -59 |
0 -5 620 0 7 |
-56 -8 552 0 571 |
| Acquisition cost 31 Dec 2011 |
1 863 78 726 | 186 651 | 4 734 | 14 218 | 1 089 | 36 959 324 238 | |
| Accumulated depreciation and impairment 1 Jan 2011 Adjustment |
0 33 148 | 120 373 | 2 020 | 9 320 | 54 | 0 164 916 | |
| for hyperinflation Depreciation Decrease Accumulated depreciation |
0 -31 0 3 085 0 -9 |
-196 12 517 -179 |
0 971 0 |
-126 1 462 -71 |
0 190 0 |
0 0 0 |
-353 18 225 -259 |
| on transfers Exchange rate differences |
0 0 0 33 |
749 178 |
-749 6 |
-430 -942 |
430 -8 |
0 0 |
0 -733 |
| Accumulated depreciation and impairment 31 Dec 2011 |
0 36 226 | 133 443 | 2 247 | 9 212 | 666 | 0 181 795 | |
| Book value 1 Jan 2011 Book value 31 Dec 2011 |
1 851 45 366 1 863 42 499 |
56 849 53 207 |
3 051 2 487 |
4 491 5 005 |
112 422 |
13 137 124 857 36 959 142 443 |
Other tangible assets consist mainly of vehicles, equipment included in equipment service, as well as office furniture.
| 13. Intangible assets | ||||
|---|---|---|---|---|
| EUR 1,000 | Goodwill | Intangible rights |
Other intangible assets |
Total |
| Acquisition cost 1 Jan 2012 Adjustment for hyperinflation Increase Decrease Transfers between items Exchange rate differences |
21 738 968 0 0 0 1 |
9 657 2 476 0 68 0 |
9 640 0 1 095 0 0 0 |
41 036 969 1 571 0 68 1 |
| Acquisition cost 31 Dec 2012 Accumulated depreciation and impairment 1 Jan 2012 Depreciation |
22 707 4 977 0 |
10 203 9 240 145 |
10 735 9 040 393 |
43 645 23 257 538 |
| Exchange rate differences Accumulated depreciation and impairment 31 Dec 2012 |
0 4 977 |
1 9 386 |
0 9 433 |
1 23 796 |
| Book value 1 Jan 2012 Book value 31 Dec 2012 |
16 761 17 730 |
417 817 |
600 1 303 |
17 778 19 849 |
Intangible rights consist mainly of trademarks.
Other intangible assets consist mainly of computer software.
| Other | ||||
|---|---|---|---|---|
| Intangible | intangible | |||
| EUR 1,000 | Goodwill | rights | assets | Total |
| Acquisition cost 1 Jan 2011 | 22 146 | 9 594 | 9 405 | 41 145 |
| Adjustment for hyperinflation | -412 | 3 | 0 | -408 |
| Increase | 0 | 68 | 266 | 333 |
| Decrease | 0 | -8 | 0 | -8 |
| Exchange rate differences | 4 | 0 | -31 | -26 |
| Acquisition cost 31 Dec 2011 | 21 738 | 9 657 | 9 640 | 41 036 |
| Accumulated depreciation and | ||||
| impairment 1 Jan 2011 | 4 977 | 9 220 | 8 644 | 22 842 |
| Depreciation | 0 | 19 | 393 | 412 |
| Exchange rate differences | 0 | 0 | 3 | 3 |
| Accumulated depreciation and | ||||
| impairment 31 Dec 2011 | 4 977 | 9 240 | 9 040 | 23 257 |
| Book value 1 Jan 2011 | 17 176 | 336 | 617 | 18 130 |
| Book value 31 Dec 2011 | 16 761 | 417 | 600 | 17 778 |
Intangible rights consist mainly of trademarks. Other intangible assets consist mainly of computer software.
The most significant goodwill item is goodwill allocated to the Estonian segment with a book value of 8,146 thousand euro. The book value of goodwill allocated to the Lithuanian segment is 2,241 thousand euro, while 289 thousand euro is allocated to the Latvian segment and 7,054 thousand euro to the Belarusian segment.
The estimated future cash flows used for impairment testing are based on the financial plans of the geographical segments approved by Group management. The cash flow estimates are based on financial plans for the next four years. Cash flow estimates due later than four years are extrapolated using estimated growth rates that do not exceed the estimated long-term growth rates of the cash generating units. The growth rates applied to each segment were as follows: Estonia 2% (2%), Latvia 2% (3%), Lithuania 3% (3%) and Belarus 8,5% (2%). In the assessment of future cash flows, management has also compared previous financial plans with actual development.
The discount rate is weighted average cost of capital (WACC) before taxes: in Estonia 11.60 (11.92 in 2011), in Latvia 11.90 (12.08), in Lithuania 12.01 (12.12) and in Belarus 15.69 (12.98) percent.
In the management's opinion, any reasonably potential change in any of the variables used for assessing each segment's recoverable amount could not lead into a situation in which the segments' recoverable amounts would be lower than their book values.
According to sensitivity analysis applied to impairment testing, there is currently no need for recognition of impairment. The Board of Directors of Olvi plc is actively monitoring the development of the economic situation in the subsidiary countries and any effects this may have.
Other financial assets consist mostly of unquoted equity investments contributing to the Group company's operations, as well as shares in a housing corporation. Financial assets available for sale are recognised at fair value. If fair value cannot be reliably determined, the assets are recognised at original cost.
| EUR 1,000 Book value 1 January Increase |
Note | 2012 548 1 |
2011 545 3 |
|---|---|---|---|
| Book value 31 December | 26 | 549 | 548 |
| 16. Non-current receivables | |||
| EUR 1,000 | Note | 2012 | 2011 |
| Loans receivable | 26 | 265 | 14 |
| Other non-current receivables | 143 | 127 | |
| Total | 408 | 141 |
Other non-current receivables consist mainly of bank guarantee deposits.
| 2011 | |
|---|---|
| 28 141 | 26 336 |
| 2 119 | 1 890 |
| 9 577 | 7 299 |
| 746 | 349 |
| 40 583 | 35 875 |
| 2012 |
Non-marketability deductions on inventories have been booked for 754 thousand euro in 2012 (1,014 thousand euro in 2011).
| 18. Accounts receivable and other receivables | |||
|---|---|---|---|
| EUR 1,000 | Note | 2012 | 2011 |
| Accounts receivable | 26 | 49 058 | 48 179 |
| Prepayments and accrued income | 26 | 3 378 | 2 668 |
| Other receivables | 26 | 909 | 1 871 |
| Total | 53 345 | 52 718 |
Essential items included in prepayments and accrued income are associated with the accruals of rents and the costs of marketing and sales, insurance and administration, as well as discounts and marketing subsidies. During the accounting period, the Group has recognised 264 thousand euro of credit losses on accounts receivable (216 thousand euro in 2011). There are no significant credit risk concentrations associated with receivables.
| Maturity distribution of accounts receivable | ||||||||
|---|---|---|---|---|---|---|---|---|
| EUR 1,000 Not due Overdue |
2012 42 560 |
2011 43 302 |
||||||
| Less than 30 days 31 to 60 days 61 to 90 days 91 to 120 days More than 120 days |
5 728 428 195 14 133 |
3 182 1 191 47 369 88 |
||||||
| Total | 49 058 | 48 179 | ||||||
| Accounts receivable by currency | ||||||||
| 2012 | 2012 | 2011 | 2011 | |||||
| Foreign 1,000 | EUR 1,000 | Foreign 1,000 | EUR 1,000 | |||||
| EUR | 34 355 | 34 355 | 35 426 | 35 426 | ||||
| LVL | 2 114 | 3 030 | 2 674 | 3 823 | ||||
| LTL | 13 556 | 3 926 | 14 731 | 4 266 | ||||
| BYR | 87 642 695 | 7 729 | 50 342 472 | 4 661 | ||||
| RUB | 723 | 18 | 110 | 3 |
| Changes in deferred taxes during 2012: | |||||
|---|---|---|---|---|---|
| Recognised | Recognised | ||||
| through | in shareholders' | Translation | |||
| Deferred tax receivables EUR 1,000 |
31.12.2011 | profit and loss | equity | differences | 31.12.2012 |
| Fair valuation of derivatives | 115 | -57 | 0 | 0 | 57 |
| Confirmed losses of AB Volfas Engelman |
77 | -71 | 0 | 0 | 6 |
| Internal margin on inventories | |||||
| and fixed assets | 5 | 15 | 0 | 0 | 20 |
| Total | 196 | -113 | 0 | 0 | 83 |
| Recognised | Recognised | ||||
| through | in shareholders' | Translation | |||
| Deferred tax liabilities EUR 1,000 |
31.12.2011 | profit and loss | equity | differences | 31.12.2012 |
| Property, plant and equipment | 1 781 | 265 | 206 | 0 | 2 252 |
| Deferred tax for OAO Lidskoe Pivo |
307 | 9 | 0 | 49 | 365 |
| A/S Cēsu Alus's tax on depreciation | |||||
| difference and retained losses | 0 | 568 | 0 | 0 | 568 |
| Finance leasing Total |
9 2 097 |
6 848 |
0 206 |
0 49 |
15 3 200 |
The Group's unused fiscal losses for which no tax receivable has been recognised amounted to 5,882 thousand euro at the end of the accounting period (11,206 thousand euro in 2011). Fiscal losses in Latvia are subject to a 8-year limitation period. There is no limitation period for losses in Lithuania.
Of the deferred tax liabilities, 2,252 thousand euro is attributable to deferred tax on property, plant and equipment. No deferred tax liability has been recognised on the undistributed earnings of AS A. Le Coq, 88,294 thousand euro in 2012, as the criteria under IAS 12, 39 are fulfilled.
| Deferred tax receivables EUR 1,000 |
31.12.2010 | Recognised through profit and loss |
Recognised in shareholders' equity |
Translation differences |
31.12.2011 |
|---|---|---|---|---|---|
| Share-based bonuses to management | 107 | -107 | 0 | 0 | 0 |
| Fair valuation of derivatives | 47 | 68 | 0 | 0 | 115 |
| Confirmed losses of | |||||
| AB Volfas Engelman | 121 | -44 | 0 | 0 | 77 |
| Deferred tax for OAO Lidskoe Pivo |
1 392 | -1 392 | 0 | 0 | 0 |
| Internal margin on inventories | 15 | -10 | 0 | 0 | 5 |
| Total | 1 682 | -1 486 | 0 | 0 | 196 |
| Deferred tax liabilities EUR 1,000 |
31.12.2010 | Recognised through profit and loss |
Recognised in shareholders' equity |
Translation differences |
31.12.2011 |
|---|---|---|---|---|---|
| Property, plant and equipment | 1 844 | -63 | 0 | 0 | 1 781 |
| Deferred tax for OAO Lidskoe Pivo |
0 | 307 | 0 | 0 | 307 |
| Finance leasing | 3 | 6 | 0 | 0 | 9 |
| Total | 1 847 | 250 | 0 | 0 | 2 097 |
| EUR 1,000 | Note | 2012 | 2011 |
|---|---|---|---|
| Cash and bank accounts | 26 | 5 698 | 3 836 |
| Total | 5 698 | 3 836 |
The liquid assets presented in the cash flow statement comprise cash and bank deposits.
The following is a reconciliation of numbers of shares:
| Number of K | Number of A | Share | ||||
|---|---|---|---|---|---|---|
| shares | shares | Share | premium | Treasury | ||
| EUR 1,000 | -1000 | -1000 | capital | account | shares | Total |
| 1.1.2011 | 1 866 | 8 502 | 20 759 | 857 | -223 | 21 393 |
| Free issue (split) | 1 866 | 8 523 | 0 | |||
| Transfer of treasury shares | 214 | 214 | ||||
| 31.12.2011 | 3 732 | 17 025 | 20 759 | 857 | -9 | 21 607 |
| Transfer of treasury shares | 0 | |||||
| 31.12.2012 | 3 732 | 17 025 | 20 759 | 857 | -9 | 21 607 |
The maximum number of shares is 6.0 million K shares and 24.0 milloin A shares (6.0 million K shares and 24.0 million A shares in 2011). The minimum number of K shares is 1.5 million. The Group´s maximum share capital is 60.0 million euro (60.0 million euro in 2011) and the minimum share capital is 15.0 (15.0) million euro. All issued shares have been paid in full.
The following is a description of reserves in shareholders' equity:
The share premium account comprises any subscription price in excess of the par value of shares upon share issues.
The legal reserve originates from reserve transfers made due to an obligation formerly included in the Articles of Association.
The Translation differences reserve includes translation differences arising from the conversion of the financial statements of foreign subsidiaries.
Olvi plc held a total of 1,124 of its own Series A shares on 1 January 2012.
Olvi plc has not acquired more treasury shares or transferred them to others in January-December 2012, which means that the number of Series A shares held by the company was unchanged on 31 December 2012.
The purchase price of the Series A shares held as treasury shares totalled 8.5 thousand euro.
Series A shares held by Olvi plc as treasury shares represented 0.005 percent of the share capital and 0.001 percent of the aggregate number of votes. The treasury shares represented 0.007 percent of all Series A shares and associated votes.
On 11 April 2012, 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 Series A 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 decided to revoke all existing unused authorisations for the transfer of own shares and authorise Olvi plc's 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.
In January-December 2012, the Board of Directors of Olvi plc has not exercised the authorisations granted by the General Meeting.
After the balance sheet date, the Board of Directors has proposed a dividend of 0.50 euro per share for both Series K and Series A shares for 2012, totalling 10.4 million euro. Dividends for 2011 were paid at 0.50 euro per share, totalling 10.4 million euro. The dividends were paid on 23 April 2012.
Olvi Group had a share-based bonus scheme in 2006-2010. The scheme was a part of the incentive and commitment scheme for the Group's key personnel and its purpose was to combine the objectives of shareholders and key personnel to improve the company's value.
The last share-based bonuses for the vesting period 2006-2010 were paid in April 2011.
Olvi plc's Board of Directors has not decided on any new share-based incentive schemes for Olvi Group's key personnel.
Olvi Group has no warrants or options.
| 23. Financial liabilities | |||||
|---|---|---|---|---|---|
| Balance | Balance | ||||
| sheet values |
Fair values |
sheet values |
Fair values |
||
| EUR 1,000 | Note | 2012 | 2012 | 2011 | 2011 |
| Non-current liabilities | |||||
| Loans from financial institutions | 26 | 38 994 | 37 397 | 29 436 | 25 468 |
| Finance lease liabilities | 26 | 3 464 | 3 464 | 1 497 | 1 497 |
| Other liabilities | 26 | 16 | 16 | 15 | 15 |
| Total | 42 474 | 40 878 | 30 949 | 26 981 | |
| Current liabilities | |||||
| Loans from financial institutions | 26 | 14 750 | 14 750 | 27 039 | 27 039 |
| Finance lease liabilities | 26 | 1 246 | 1 246 | 1 226 | 1 226 |
| Total | 15 996 | 15 996 | 28 266 | 28 266 |
The Group's financial liabilities on 31 December 2012 consist of loans from financial institutions, as well as finance lease liabilities. Typical finance lease contracts extend over a period of 36 to 48 months and have a fixed instalment throughout the contract period.
32.7 million euro of the liabities have a fixed interest rate or are converted to fixed rate through interest rate swaps. The amount of variable-rate loans was 21.0 million euro.
The fair value of non-current loans is determined by discounting estimated future cash flows to the present using the interest rate at which the Group could get a similar loan on the balance sheet date. Market rates on the balance sheet date stood at 0.111% to 0.549%, and a company-specific margin has been added for discounting.
The book value of current financial liabilities and finance lease liabilities corresponds to their fair value.
| Ranges of interest rates on financial liabilities | 2012 | 2011 |
|---|---|---|
| Loans from financial institutions | 0.46% - 3.55% | 1.42% - 3.55% |
| Interest rate swaps | 0.61% - 2.00% | 1.27% - 2.93% |
| Finance lease liabilities | 2.20% - 6.50% | 2.50% - 6.50% |
| Other liabilities | 0.15% - 0.27% | 0.74% - 1.05% |
| Maturities of finance lease liabilities | ||
| EUR 1,000 Note |
2012 | 2011 |
| Finance lease liabilities - total of minimum rents | ||
| Due within one year | 1 246 | 1 226 |
| Within more than one but less than five years | 2 116 | 1 497 |
| After more than five years | 1 348 | 0 |
| 26 | 4 710 | 2 724 |
| Finance lease liabilities - present value of minimum rents | ||
| Due within one year | 1 246 | 1 226 |
| Within more than one but less than five years | 2 116 | 1 497 |
| After more than five years | 1 348 | 0 |
| 26 | 4 710 | 2 724 |
| Total amount of finance lease liabilities 26 |
4 710 | 2 724 |
| The Group's other interest-bearing liabilities will fall due as follows: | ||
| EUR 1,000 | 2012 | 2011 |
| in 2012 | 27 039 | |
| in 2013 | 18 393 | 6 890 |
| in 2014 | 9 742 | 6 390 |
| Total | 53 760 | 56 491 |
|---|---|---|
| Later | 2 213 | 2 445 |
| in 2017 | 5 328 | 2 445 |
| in 2016 | 8 842 | 5 390 |
| in 2015 | 9 242 | 5 890 |
| 24. Accounts payable and other liabilities | |||
|---|---|---|---|
| EUR 1,000 Current |
Note | 2012 | 2011 |
| Accounts payable | 30 469 | 34 097 | |
| Accrued expenses | 26 | 7 236 | 9 834 |
| Other liabilities | 22 160 | 20 126 | |
| Total | 59 865 | 64 057 |
Essential items included in accrued expenses are associated with subsequent remuneration and salary obligations.
| 2012 | 2012 | 2011 | 2011 | |
|---|---|---|---|---|
| EUR 1,000 | Foreign 1,000 | EUR 1,000 | Foreign 1,000 | EUR 1,000 |
| EUR | 24 864 | 24 864 | 28 583 | 28 583 |
| LVL | 1 380 | 1 978 | 579 | 828 |
| LTL | 4 868 | 1 410 | 5 429 | 1 572 |
| USD | 12 | 9 | 28 | 22 |
| CHF | 114 | 94 | 12 | 10 |
| BYR | 23 970 295 | 2 114 | 33 248 337 | 3 079 |
| GBP | 0 | 0 | 1 | 1 |
| SEK | 0 | 0 | 14 | 2 |
The Group is exposed to several financing risks in its normal course of business: market risk (including foreign exchange risk as well as interest rate risk on cash flow and fair value), credit risk and liquidity risk.
The objective of financing risk management is to minimise the adverse effects of changes in the financial markets on the Group's financial performance, shareholders' equity and liquidity.
The general principles of the Group's risk management are approved by the Board of Directors of the parent company, and the parent company's management together with the management of subsidiaries is responsible for their practical implementation. Responsibility for Olvi Group's financing tasks is centralised in the parent company Olvi plc. The objectives of centralisation include optimisation of cash flows and financing costs, as well as efficient risk management.
Olvi Group operates internationally, and its business involves risks arising from exchange rate fluctuations. Foreign exchange risks arise from commercial transactions, in other words cash flows from purchases and sales, as well as investments in foreign subsidiaries and the conversion of their balance sheet items into euro.
Due to the nature of the business, the time between order and delivery is short, which results in minor operations-related foreign exchange risk. Foreign exchange risk is also reduced by the fact that most of the Group's product sales and purchases of raw materials are denominated in euro. The Group's ordinary operations made 1,421 thousand euro of exchange rate losses in 2012 (13,713 thousand euro in 2011). Financial income includes 4,556 thousand euro of exchange rate gains (8,201 thousand euro in 2011).
The Group has investments in foreign subsidiaries in Estonia, Latvia, Lithuania and Belarus. The Estonian currency is the euro, and the Lithuanian LTL is pegged to the euro. With regard to the investments in Latvia and Belarus, the Group is exposed to risk arising from the conversion of the subsidiary investments made in LVL and BYR into the parent company's operating currency. The Latvian, Lithuanian and Belarusian currencies carry a risk of devaluation; if realised, this would result in a decline in Olvi Group's operating profit denominated in euro.
The Group has not engaged in active currency hedging in 2012 or 2011. The need for currency hedging is assessed regularly.
The Group's interest rate risk arises from non-current liabilities. Most of the Group's income and operational cash flows are independent of market interest rate fluctuations.
The Group has diversified its borrowing between fixed- and variable-rate loans. Furthermore, the Group uses interest rate swaps to reduce interest rate risk if required by the market situation. Noncurrent loans are generally taken out with a variable interest rate and converted to fixed rate using interest rate swaps as necessary, which results in a lower interest rate compared to loans taken out directly with a fixed rate.
On the balance sheet date, fixed-rate loans accounted for 60.9 percent (36.4 in 2011) of interestbearing loans. Variable-rate loans accounted for 39.1 (63.6) percent of all interest-bearing loans. The principal-weighted average maturity of interest-bearing loans was 4.4 (5.3) years.
The amount of payment obligations under finance lease contracts on 31 December 2012 was 4.7 million euro (2.7 million euro in 2011).
The Group aims to limit financing costs to a reasonable amount and to manage interest rate risk using available means.
The Group does not apply hedge accounting in accordance with IAS 39.
The following assumptions have been used when preparing the interest rate risk analysis: The sensitivity analysis represents the pre-tax net earnings effect of a reasonably potential change (= +/- 2%). The effect of a change in the interest rate level is calculated on the amount of interestbearing variable-rate debt at year-end, in other words, net debt is assumed to remain at the yearend level for the entire accounting period.
Variable-rate net debt on 31 December 2012 amounted to 21,015 thousand euro (33,493). A change of two (2) percent in the interest rate level would cause a change of +/- 420 thousand euro in financial expenses. The change does not have any essential effect on consolidated net profit before tax or the consolidated balance sheet.
The Group's most substantial identified operational risks relate to the procurement and quality of raw materials, the production process, markets and customers, personnel, information security and systems.
General economic development and annual fluctuations in crop yield affect the prices and availability of major raw materials used within Olvi Group. Disruptions in raw material deliveries and quality may hamper customer relations and business operations. Purchases of
major raw materials are made under procurement contracts standardised at the Group level. The Group aims to secure the predictability of purchase prices for critical raw materials through longterm procurement contracts. The company has a hedging policy concerning raw materials and their prices. All units emphasise the significance of the quality of raw materials and other production factors in the overall production chain.
The aim is to minimise production risks through clear documentation of processes, increasing the degree of automation, compliance with quality management systems and the pursuit of clear operating methods in relation to decision-making and supervision.
The efficiency and applicability of processes and methods are monitored using internal indicators. The monitoring and development of production efficiency includes, among other things, the reliability and utilisation rate of production machinery, development of the working environment and factors related to people's work. The Group has a property and loss-of-profits insurance programme covering all of the operating areas, and its coverage is reviewed annually.
The Group's business operations are characterised by substantial seasonal variation. The net sales and operating profit from the reported geographical segments do not accumulate evenly but vary substantially according to the time of the year and the characteristics of each season.
Negative changes in the economy may impact consumers' purchasing behaviour and hamper the liquidity of hotel and restaurant customers in particular. All Group companies employ efficient credit controls as a major method for minimising credit losses.
Legislative changes and other changes in the operations of authorities, such as changes in excise taxes and marketing restrictions, may affect the demand for the Group's products and their relative competitive position.
Risks related to personnel include, among others, risks in obtaining labour, employment relationship risks, key person risks, competence risks and risks arising from insufficient well-being and accidents at work.
Crucial focal points in HR management include maintaining and developing a good employer image, as well as ensuring the availability and commitment of personnel. Other focal points include maintaining and continuously developing well-being and safety at work,
improvement of management systems, construction and maintenance of backup personnel systems, as well as training and incentive schemes.
Olvi Group employs an information security policy pertaining to all of the companies. It defines the principles for implementing information security and provides guidelines for its development.
Risks related to information technology and systems are manifested as operational disruptions and deficiencies, for example. The availability and correctness of data is ensured through the choice of operating methods and various technical solutions. The Group's
operations in Finland, the Baltic states and Belarus utilise a common enterprise resource planning system. The system was introduced into use in Belarus during the financial year 2012. A risk analysis pertaining to information security and the operation of information systemsis carried out annually.
The Group's credit risk arises from wholesale and HoReCa (hotel, restaurant, catering) customers with outstanding accounts receivable.
Creditworthiness requirements for the Group's customers are reviewed annually and always when entering into agreements with new customers. The Group only extends credit to businesses with flawless credit ratings. Furthermore, the Group aims to controlcredit risks through efficient collection of receivables.
The amount of customer-specific accounts receivable is monitored regularly, and the customer's creditworthiness is re-assessed if necessary.
The Group does not have any significant concentrations of credit risk on receivables because its accounts receivable are distributed across a wide and geographically diversified customer base. Investments related to cash management are made in liquid money market instruments having a fundamentally low risk.
The largest customer accounts for 14.3 percent (14.4 in 2011) of the Group's total sales. The amount of credit losses recognised in 2012 was 264 (216) thousand euro.
The maturity distribution of accounts receivable is presented in Note 18, Accounts receivable and other receivables.
Olvi Group's parent company and subsidiaries prepare monthly rolling cash flow estimates that the Group uses for assessing the amount of financing required for business operations in order to maintain sufficient liquid assets to fund everyday operations and investments, as well as to repay any loans falling due.
The Group aims to secure the availability and flexibility of funding by centralising the management of the Group's liquid assets with the parent company. The Group uses several banks and several forms of financing. The Group aims to secure the availability and flexibility of funding with an account overdraft facility and credit limits.
The Group has access to an account overdraft facility of 5 million euro and credit limits of 24 million euro. Some of the facilities are valid until further notice, while some are renewed annually. On the balance sheet date, 10 million euro of the limits was binding and valid for 2 years,14 million euro was unbinding.
The parent company Olvi plc issued a 20 million euro commercial paper programme in 2002 in order to secure short-term liquidity needs quickly and cost-efficiently. At the time of closing the accounts, Olvi plc had 5 million euro of short-term loans withdrawn under the commercial paper programme.
In order to secure short-term liquidity, operating capital is monitored regularly, and the aim is to reduce the amount of money tied in operating capital. Key factors include monitoring the turnover rate of receivables and improving the efficiency of credit control.
The Group had 5,698 thousand euro of liquid assets on 31 December 2012 (3,836 thousand euro in 2011). The Group's liquidity on the balance sheet date was good. The current ratio on 31 December 2012 was 1.3 (1.0 in 2011).
Note 23, Financial liabilities, specifies the maturity distribution of financial liabilities.
Olvi Group's long-term objective is to generate the highest possible added value on invested capital, taking into account the expectations imposed on the Group by various parties. The fundamental principle of capital management is to maintain Olvi Group's strong financial position and ensure that the Group's financing needs can be fulfilled cost-efficiently also in critical financial market situations.
Another objective is to maintain an optimal capital structure in order to manage and reduce the cost of capital.
In order to maintain or change its capital structure, the Group may change the amount of dividends paid to shareholders, repay capital to shareholders, issue new shares, acquire treasury shares and annul them, or sell its assets to reduce debt.
Capital is monitored through the equity to total assets ratio and the gearing ratio. Olvi Group's equity to total assets ratio in 2012 stood at 54.8 (50.6) percent and the gearing ratio was 35.8 (43.2) percent.
The fair values of Olvi Group's financial assets and liabilities do not substantially deviate from their book values. The face value of interest rate swaps was 31.3 million euro in 2012 and 22.1 million euro in 2011.
Unquoted equity investments are recognised at purchase price as they cannot be recognised at fair value using the valuation methods. The original book value of receivables corresponds to their fair value.
The fair values of interest rate swaps have been determined using the method of present value of future cash flows, supported by market interest rates and other market information on the balance sheet date. The fair values of loans from financial institutions, finance lease liabilities, accounts payable and other liabilities do not substantially deviate from their balance sheet values.
| 27. Adjustments to business cash flows | ||
|---|---|---|
| EUR 1,000 Transactions with no associated payment: Depreciation Unrealised foreign exchange gains and losses Financial income |
2012 21 822 1 268 -4 871 |
2011 18 637 7 148 -8 352 |
| Adjustment for hyperinflation Financial expenses Income taxes Other adjustments Total |
1 568 3 093 6 151 723 29 754 |
-7 684 16 596 5 485 700 32 530 |
| 28. Other lease contracts | ||
| The Group as a lessee EUR 1,000 |
2012 | 2011 |
| Minimum rents receivable on the basis of other non-cancellable leases: |
||
| Due within one year Within more than one but less than five years After more than five years Total |
1 119 580 7 1 706 |
836 974 20 1 830 |
The Group has leased operating premises and storage terminal facilities in different parts of Finland, as well as production machinery and equipment.
| EUR 1,000 | 2012 | 2011 |
|---|---|---|
| Minimum rents receivable on the basis of other | ||
| non-cancellable leases: | ||
| Due within one year | 1 031 | 1 093 |
| Total | 1 031 | 1 093 |
The Group rents out beverage distribution and refrigeration equipment to its customers. The amount of rental income received is not significant to the Group's overall business.
| 29. Collateral and contingent liabilities | ||
|---|---|---|
| EUR 1,000 | 2012 | 2011 |
| Pledges and contingent liabilities | ||
| For own commitments | 7 415 | 4 632 |
| For others | 0 | 130 |
| Package liabilities | 2 265 | 4 208 |
| Other liabilities | 2 000 | 1 980 |
The package liability corresponds to Olvi plc's share of the entire stock of recyclable beverage packages in accordance with proportions determined by Ekopulloyhdistys ry, deducted by packages in Olvi plc's inventory on 31 December 2012.
Ekopulloyhdistys ry administers the stock of refillable beverage packages. Every member in the system maintains a stock of packages required for the requirement declared to Ekopulloyhdistys ry for each type of package it uses.
The Group's parent and subsidiary relationships are the following:
| Holding (%) | Share of voting rights (%) |
|
|---|---|---|
| Parent company Olvi plc, Iisalmi, Finland | ||
| A S A. Le Coq, Tartu, Estonia |
100,00 | 100,00 |
| Karme AS, Karksi vald, Estonia | 49,00 | 49,00 |
| Verska Mineraalvee OÜ, Värska vald, Estonia | 20,00 | 20,00 |
| A/S Cēsu Alus, Cēsis, Latvia | 99,67 | 99,67 |
| AB Volfas Engelman, Kaunas, Lithuania | 99,57 | 99,57 |
| OAO Lidskoe Pivo, Lida, Belarus |
91,58 | 91,58 |
| Transactions with associated companies, as well as receivables from and liabilities to associated companies: |
|||
|---|---|---|---|
| EUR 1000 | 2012 | 2011 | |
| Sales | 445 | 0 | |
| Purchases | 300 | 0 | |
| Receivables | 297 | 0 | |
| Liabilities | 526 | 0 |
A list of associated companies is presented in Note 32, Investments in associated companies.
Salaries and other short-term employee benefits to the Board of Directors and the Managing Directors of Group companies
| EUR 1,000 | 2012 | 2011 |
|---|---|---|
| Managing Directors | 931 | 1 017 |
| Chairman of the Board | 84 | 150 |
| Other members of the Board | 125 | 125 |
| Total | 1 140 | 1 292 |
No loans have been granted to management.
| 31. Costs arising from audit | ||
|---|---|---|
| EUR 1,000 | 2012 | 2011 |
| Fees for statutory audit | 91 | 160 |
| Other services | 116 | 15 |
| Total | 207 | 176 |
Information on group´s associated companies, their assets, liabilities, net sales and net profit/loss:
| EUR 1000 Karme AS, Karksi vald, Estonia |
Group´s holding (%) 49.00 |
2012 |
|---|---|---|
| Current assets Non-current assets Current liabilities Non-current liabilities |
474 801 458 74 |
|
| Net sales Net profit/loss for the period Other comprehensive income items Total comprehensive income for the period |
1 612 -28 0 0 |
|
| Verska Mineraalvee OÜ, Värska vald, Estonia Current assets Non-current assets Current liabilities Non-current liabilities |
20.00 | 138 488 333 169 |
| Net sales Net profit/loss for the period Other comprehensive income items Total comprehensive income for the period |
57 0 0 0 |
| EUR 1,000 | 2012 IFRS |
2011 IFRS |
2010 IFRS |
|---|---|---|---|
| Net sales | 312 230 | 285 174 | 267 509 |
| Change, % | 9.5 | 6.6 | 9.6 |
| Operating profit | 30 537 | 26 683 | 30 485 |
| % of net sales | 9.8 | 9.4 | 11.4 |
| Financial income and expenses | 1 778 | -8 244 | -1 317 |
| Profit before tax | 32 315 | 18 439 | 29 168 |
| % of net sales | 10.3 | 6.5 | 10.9 |
| Balance sheet total | 269 197 | 253 591 | 236 142 |
| Cash flow ratio, % | 15.4 | 11.1 | 16.4 |
| Return on investment, % (ROI) | 18.0 | 19.3 | 17.7 |
| Return on equity, % (ROE ) |
19.0 | 10.1 | 20.9 |
| Equity to total assets, % | 54.8 | 50.6 | 54.7 |
| Current ratio | 1.3 | 1.0 | 1.3 |
| Gearing, % | 35.8 | 43.2 | 29.5 |
| Gross capital expenditure on fixed assets | 29 832 | 43 230 | 24 479 |
| % of net sales | 9.6 | 15.2 | 9.2 |
| Net investments in fixed assets | 29 351 | 42 868 | 23 998 |
| % of net sales | 9.4 | 15.0 | 9.0 |
| Average number of personnel: | |||
| Olvi plc | 401 | 383 | 378 |
| Personnel in Estonia, Latvia, | |||
| Lithuania and Belarus | 1 576 | 1 649 | 1 673 |
| Total employees | 1 977 | 2 032 | 2 051 |
| PER-SHARE RATIOS | |||
| 2012 | 2011 | 2010 | |
| IFRS | IFRS | IFRS | |
| Earnings per share (EPS), euro | 1.24 | 0.65 | 1.21 |
| EPS adjusted for dilution | |||
| from warrants, euro | 1.24 | 0.65 | 1.21 |
| Equity per share, euro | 7.01 | 6.11 | 6.13 |
| *) Pay-out ratio, % | 40.44 | 76.82 | 41.54 |
| Price/Earnings ratio (P/E) | 15.9 | 22.7 | 12.8 |
The ratios for previous years have been adjusted for the effect of the free issue (split) in 2011 that doubled the number of shares.
*) The amount of nominal dividend has been adjusted for the effect of the free issue. The amount of dividend used for calculating the 2012 ratios is the Board of Directors' proposal to the Annual General Meeting.
| Note | 1.1. - 31.12.2012 EUR 1,000 |
% | 1.1. - 31.12.2011 EUR 1,000 |
% | |
|---|---|---|---|---|---|
| NET SALES | 1 | 120 951 | 100.0 | 119 788 | 100.0 |
| Increase (+)/decrease (-) in inventories of finished and unfinished products Manufacture for own use Other operating income |
2 | 802 111 460 |
0.7 0.1 0.4 |
-428 70 1 878 |
-0.4 0.1 1.6 |
| Materials and services Personnel expenses Depreciation and impairment Other operating expenses |
3 4 8 9 |
47 899 19 187 6 557 39 677 |
39.6 15.9 5.4 32.8 |
46 116 19 943 5 497 36 592 |
38.5 16.6 4.6 30.5 |
| OPERATING PROFIT | 9 004 | 7.4 | 13 160 | 11.0 | |
| Financial income and expenses | 10 | 6 380 | 5.3 | 3 138 | 2.6 |
| PROFIT BEFORE APPROPRIATIONS AND TAXES |
15 384 | 12.7 | 16 298 | 13.6 | |
| Appropriations Income taxes |
11 12 |
-1 085 -1 700 |
-0.9 -1.4 |
-166 -3 028 |
-0.1 -2.5 |
| NET PROFIT FOR THE PERIOD | 12 599 | 10.4 | 13 103 | 10.9 |
| Note | 31.12.2012 EUR 1,000 |
% | 31.12.2011 EUR 1,000 |
% | |
|---|---|---|---|---|---|
| ASSETS | |||||
| FIXED ASSETS Intangible assets T angible assets Shares in Group companies Other investments TOTAL FIXED ASSETS |
13 13 14 14 |
1 452 38 629 58 411 540 99 031 |
53.5 | 742 33 781 76 261 535 111 318 |
62.8 |
| CURRENT ASSETS Inventories N on-current receivables Current receivables Cash in hand and at bank TOTAL CURRENT ASSETS |
16 17 17 |
13 999 43 679 28 069 422 86 170 |
46.5 | 11 279 25 761 27 830 1 022 65 892 |
37.2 |
| TOTAL ASSETS | 185 201 | 100.0 | 177 210 | 100.0 | |
| EQUITY AND LIABILITIES | |||||
| SHAREHOLDERS' EQUITY Share capital Share premium account Legal reserve Retained profit Net profit for the period TOTAL SHAREHOLDERS' EQUITY |
18 | 20 759 857 127 32 522 12 599 66 863 |
36.1 | 20 759 857 127 29 797 13 103 64 643 |
36.5 |
| ACCUMULATED APPROPRIATIONS | 19 | 9 039 | 4.9 | 7 953 | 4.5 |
| LIABILITIES N on-current liabilities Current liabilities TOTAL LIABILITIES |
20 | 58 506 50 793 109 299 |
59.0 | 41 963 62 651 104 614 |
59.0 |
| TOTAL EQUITY AND LIABILITIES | 185 201 | 100.0 | 177 210 | 100.0 |
| Note | 2012 EUR 1,000 |
2011 EUR 1,000 |
|---|---|---|
| Cash flow from operations Profit before extraordinary items Adjustments: Depreciation according to plan and impairment 8 Financial income and expenses 10 O ther adjustments |
15 384 6 557 -6 380 18 |
16 298 5 497 -3 138 -769 |
| Cash flow before change in working capital Change in net working capital: Increase (-)/decrease (+) in current interest-free accounts receivable and other receivables Increase (-)/decrease (+) in inventories Increase (+)/decrease (-) in current interest-free liabilities Interest paid Interest received Dividents received Taxes paid Cash flow from operations (A) |
15 580 4 573 -2 720 -991 -1 505 66 7 031 -2 667 19 368 |
17 887 -5 172 1 252 -789 -2 096 100 5 049 -3 020 13 210 |
| Cash flow from investments Investments in tangible and intangible assets Capital gains on disposal of tangible and intangible assets Expenditure on other investments Cash flow from investments (B) |
-12 557 77 -35 -12 514 |
-10 424 1 080 -3 062 -12 405 |
| Cash flow from financing Withdrawals of loans Repayments of loans Acquisition / transfer of treasury shares 18 Dividends paid 18 Increase (-)/decrease (+) in non-current loans receivable Cash flow from financing (C) |
39 422 -33 142 0 -10 360 -3 372 -7 453 |
32 500 -16 735 193 -10 360 -8 402 -2 805 |
| Increase (+)/decrease (-) in liquid assets (A+B+C) | -599 | -2 000 |
| Liquid assets 1 January Liquid assets 31 December Change in liquid assets |
1 022 422 -599 |
3 021 1 022 -2 000 |
Olvi plc's accounting period extends from 1 January to 31 December. The financial statements have been prepared in accordance with the Finnish Accounting Standards (FAS).
Intangible and tangible assets have been recognised on the balance sheet at their direct acquisition cost deducted by accumulated depreciation according to plan. Depreciation according to plan has been calculated on a straight-line basis over the expected economic life of the asset item concerned.
Depreciation periods according to plan: Buildings 20 years Underground shelter 4 years Plant machinery and equipment 8 years Other fixed assets 5 years
Inventories have been valued in accordance with the FIFO principle at acquisition cost or, if lower, at probable net realisable value. The acquisition cost of raw materials and supplies is determined by the weighted average method. The value of finished and unfinished products includes variable costs and the appropriate proportion of the overheads of acquisition and manufacturing.
Research and development costs are recognised as expenses in the income statement. Development costs arising from the design of new or more advanced products are capitalised as intangible assets in the balance sheet starting from the time the product is technically feasible, it can be utilised commercially, and future economic benefit is expected from the product. Development costs previously recognised as expenses will not be subsequently capitalised. Amortisation is booked on an item starting from the time it is ready for use.
Pension cover for personnel has been arranged through a statutory TEL (EPA) insurance policy with an external pension insurance company. Pension insurance contributions have been allocated to match the salaries booked on an accrual basis in the annual accounts.
The parent company's derivative contracts are interest rate swaps measured at fair value. Changes in fair value are recognised in financial items within the income statement.
A deferred tax liability or asset has been calculated on temporary differences between taxation and the financial statements using the tax rate for upcoming years confirmed by the balance sheet date. The balance sheet includes deferred tax liabilities in their entirety and deferred tax assets up to the estimated probable amount.
Transactions denominated in foreign currency have been recognised during the accounting period at the exchange rate on the transaction date, and any foreign currency receivables and liabilities outstanding on the balance sheet date have been recognised at the mean exchange rate on the balance sheet date.
Acquired treasury shares are recognised as a reduction in retained earnings.
| 1. Net sales by market area | 2012 | 2011 |
|---|---|---|
| Finland Estonia Other exports |
114 395 3 740 2 816 |
116 185 676 2 927 |
| Total | 120 951 | 119 788 |
| 2. Other operating income | 2012 | 2011 |
| Capital gains on disposals of fixed assets Others Total |
63 397 460 |
762 1 116 1 878 |
| 3. Materials and services | 2012 | 2011 |
| Materials and supplies (goods): Purchases during the year Change in stocks Outsourced services Total |
46 942 -1 918 2 875 47 899 |
42 833 824 2 459 46 116 |
| 4. Personnel expenses | 2012 | 2011 |
| Wages, salaries and emoluments Pension expenses Other personnel expenses Total |
15 526 2 708 954 19 187 |
16 086 2 826 1 031 19 943 |
| 5. Management salaries and emoluments | 2012 | 2011 |
| Managing Director Chairman of the Board Other members of the Board Total |
351 84 125 560 |
510 150 125 786 |
| 6. Parent company's personnel on average during the period | 2012 | 2011 |
| Full-time clerical employees workers Part-time clerical employees workers Total |
129 191 0 81 401 |
126 177 0 80 383 |
| 7. Auditors' fees | 2012 | 2011 |
| Fees for statutory audit Other services Total |
54 35 89 |
91 1 92 |
| 8. Depreciation and impairment | 2012 | 2011 |
| Planned depreciation on tangible and intangible assets Total |
6 557 6 557 |
5 497 5 497 |
| 9. Other operating expenses | 2012 | 2011 |
| Sales freights Costs of marketing and sales Other operating expenses Total |
13 762 12 217 13 697 39 677 |
13 338 11 106 12 149 36 592 |
| 10. Financial income and expenses | 2012 | 2011 |
|---|---|---|
| Dividend income from Group companies Total income from long-term |
7 168 | 5 049 |
| investments Other interest and financial income |
5 | 3 |
| From Group companies From others |
529 234 |
396 97 |
| Total | 763 | 493 |
| Total dividend income and other interest | ||
| and financial income | 7 936 | 5 545 |
| Interest expenses and other financial expenses | ||
| Payable to Group companies Payable to others |
384 1 172 |
279 2 129 |
| Total | 1 556 | 2 407 |
| Total financial income and expenses | 6 380 | 3 138 |
| 11. Appropriations | 2012 | 2011 |
| Difference between depreciation according to plan | ||
| and depreciation applied in taxation | 1 085 | 166 |
| Total | 1 085 | 166 |
| 12. Income taxes | 2012 | 2011 |
| Income tax on business operations | 1 742 | 2 989 |
| Taxes from previous accounting periods Change in deferred tax |
-100 57 |
-1 39 |
| Total | 1 700 | 3 028 |
| Intangible assets | |||||
|---|---|---|---|---|---|
| Formation costs |
Intangible rights |
Development costs |
Other intangible assets |
Total | |
| Acquisition cost 1 Jan 2012 | 6 | 8 774 | 1 | 8 816 | 17 598 |
| Increase | 0 | 0 | 0 | 1 126 | 1 126 |
| Decrease | 0 | 0 | 0 | 0 | 0 |
| Acquisition cost 31 Dec 2012 | 6 | 8 774 | 1 | 9 943 | 18 725 |
| Accumulated depreciation and | |||||
| impairment 1 Jan 2012 | 6 | 8 774 | 1 | 8 075 | 16 857 |
| Depreciation | 0 | 0 | 0 | 416 | 416 |
| Accumulated depreciation 31 Dec 2012 | 6 | 8 774 | 1 | 8 491 | 17 273 |
| Book value 1 Jan 2012 | 0 | 0 | 0 | 742 | 742 |
Book value 31 Dec 2012 0 0 0 1 452 1 452
| Tangible assets | Advance payments | |||||
|---|---|---|---|---|---|---|
| Land and water properties |
Buildings | Machinery and eqpt |
Other tangible assets |
and unfinished purchases |
Total | |
| Acquisition cost 1 Jan 2012 Increase Decrease |
1 088 0 0 |
25 435 3 329 0 |
89 673 13 398 -96 |
59 0 0 |
7 239 1 557 -7 199 |
123 493 18 284 -7 295 |
| Acquisition cost 31 Dec 2012 | 1 088 | 28 764 | 102 976 | 59 | 1 597 | 134 482 |
| Accumulated depreciation and | ||||||
| impairment 1 Jan 2012 | 0 | 19 059 | 70 653 | 0 | 0 | 89 712 |
| Depreciation Accumulated depreciation |
0 | 975 | 5 167 | 0 | 0 | 6 141 |
| 31 Dec 2012 | 0 | 20 034 | 75 819 | 0 | 0 | 95 854 |
| Book value 1 Jan 2012 | 1 088 | 6 376 | 19 020 | 59 | 7 239 | 33 781 |
| Book value 31 Dec 2012 | 1 088 | 8 729 | 27 156 | 59 | 1 597 | 38 629 |
| Book value of production machinery and equipment on 31 December |
31.12.2012 25 229 |
31.12.2011 17 409 |
| Shares in Group companies |
Other shares |
Total investments |
|
|---|---|---|---|
| Acquisition cost 1 Jan 2012 Increase Decrease Acquisition cost 31 Dec 2012 |
76 261 30 -17 880 58 411 |
535 5 0 540 |
76 796 35 -17 880 58 951 |
| Book value 31 Dec 2012 | 58 411 | 540 | 58 951 |
| Group's holding % |
Parent company's holding % |
|
|---|---|---|
| AS A. Le Coq, Tartu, Estonia Karme AS, Karksi vald, Estonia Verska Mineraalvee OÜ, |
100.00 49.00 |
100.00 0.00 |
| Värska vald, Estonia A/S Cēsu Alus, Cēsis, Latvia |
20.00 99.67 |
0.00 99.67 |
| AB Volfas Engelman, Kaunas, Lithuania | 99.57 | 99.57 |
| OAO Lidskoe Pivo, Lida, Belarus |
91.58 | 91.58 |
| 16. Inventories | 2012 | 2011 |
| Materials and supplies | 10 380 | 8 463 |
| Unfinished products Finished products/goods |
808 2 810 |
657 2 160 |
| Total | 13 999 | 11 279 |
| 17. Receivables | 2012 | 2011 |
| Non-current receivables | ||
| Loans receivable from Group companies | 43 536 | 25 637 |
| Deposits pledged as collateral | 123 | 104 |
| Prepayments and accrued income | 20 | 20 |
| Total non-current receivables | 43 679 | 25 761 |
| Current receivables | ||
| Receivables from Group companies | ||
| Accounts receivable | 608 | 193 |
| Prepayments and accrued income | 343 | 206 |
| Receivables from Group companies | 951 | 399 |
| Receivables from non-Group companies | ||
| Accounts receivable Other receivables |
25 060 4 |
26 446 5 |
| Prepayments and accrued income | 1 996 | 866 |
| Deferred tax receivables | 57 | 115 |
| Total | 27 118 | 27 431 |
| Total current receivables | 28 069 | 27 830 |
| Total receivables | 71 748 | 53 592 |
| Deferred tax receivables | ||
| Deferred tax receivables 1 January | 115 | 154 |
| Fair valuation of derivatives, | ||
| change in deferred tax Deferred tax receivables 31 December |
-57 57 |
-39 115 |
| 18. Shareholders' equity | 2012 | 2011 |
|---|---|---|
| Share capital 1 January Increase of share capital Share capital 31 December |
20 759 0 20 759 |
20 759 0 20 759 |
| Share premium account 1 January Bonus issue Share premium account 31 December |
857 0 857 |
857 0 857 |
| Legal reserve 1 January and 31 December | 127 | 127 |
| Retained profit 1 January Dividend distribution Acquisition / transfer of treasury shares Retained profit 31 December |
42 901 -10 379 0 32 522 |
39 726 -10 367 438 29 797 |
| Net profit for the period | 12 599 | 13 103 |
| Total shareholders' equity | 66 863 | 64 643 |
| 2012 qty |
2012 EUR 1,000 |
2012 votes |
2011 qty |
2011 EUR 1,000 |
2011 votes |
|
|---|---|---|---|---|---|---|
| Series K (20 votes/share), | ||||||
| registered | 3 732 256 | 3 732 | 74 645 120 | 1 866 128 | 3 732 | 37 322 560 |
| Series K total | 3 732 256 | 3 732 | 74 645 120 | 1 866 128 | 3 732 | 37 322 560 |
| Series A (1 vote/share), | ||||||
| registered | 17 026 552 | 17 027 | 17 026 552 | 8 513 276 | 17 027 | 8 513 276 |
| Series A total | 17 026 552 | 17 027 | 17 026 552 | 8 513 276 | 17 027 | 8 513 276 |
| Total 31 December | 20 758 808 | 20 759 | 91 671 672 | 10 379 404 | 20 759 | 45 835 836 |
| Votes per Series A share | 1 | |||||
| Votes per Series K share | 20 |
The registered share capital on 31 December 2012 totalled 20,759 thousand euro.
Olvi plc's Series A and Series K shares received a dividend of 0.50 euro per share for 2011 (0.50 euro per share for 2010), totalling 10.4 (10.4) million euro. The dividends were paid on 23 April 2012.
The Series K and Series A shares entitle to equal dividend. The Articles of Association include a redemption clause concerning Series K shares.
Olvi plc held a total of 1,124 of its own Series A shares on 1 January 2012.
Olvi plc has not acquired more treasury shares or transferred them to others in January-December 2012, which means that the number of Series A shares held by the company was unchanged on 31 December 2012. The purchase price of the Series A shares held as treasury shares totalled 8.5 thousand euro.
Series A shares held by Olvi plc as treasury shares represented 0.005 percent of the share capital and 0.001 percent of the aggregate number of votes. The treasury shares represented 0.007 percent of all Series A shares and associated votes.
On 11 April 2012, 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 Series A 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 decided to revoke all existing unused authorisations for the transfer of own shares and authorise Olvi plc's 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.
In January-December 2012, the Board of Directors of Olvi plc has not exercised the authorisations granted by the General Meeting.
Accumulated appropriations consist of accumulated depreciation difference.
| 20. Liabilities | 2012 | 2011 |
|---|---|---|
| Non-current liabilities Loans from financial institutions |
38 980 | 29 422 |
| Other liabilities | 29 | 29 |
| Total | 39 009 | 29 451 |
| Liabilities to Group companies: Other liabilities |
19 496 | 12 512 |
| Total | 19 496 | 12 512 |
| Total non-current liabilities | 58 506 | 41 963 |
| Current liabilities | ||
| Loans from financial institutions | 14 750 | 24 629 |
| Accounts payable | 17 240 | 16 895 |
| Accrued expenses | 3 923 | 6 689 |
| Other liabilities | 14 686 | 14 228 |
| Total | 50 599 | 62 441 |
| Liabilities to Group companies: | ||
| Accounts payable | 194 | 210 |
| Total | 194 | 210 |
| Total current liabilities | 50 793 | 62 651 |
| Total liabilities | 109 299 | 104 614 |
| Accrued expenses | ||
| Provisions for personnel costs | 3 037 | 4 651 |
| Provision for interest on loans Other accrued expenses |
291 596 |
696 1 342 |
| Total accrued expenses | 3 923 | 6 689 |
| Interest-free liabilities 31 December | 36 043 | 38 022 |
| Liabilities falling due later than five years from now: Loans from financial institutions |
2 243 | 7 541 |
| 21. Share-based payments |
Olvi Group had a share-based bonus scheme in 2006-2010. The scheme was a part of the incentive and commitment scheme for the Group's key personnel and its purpose was to combine the objectives of shareholders and key personnel to improve the company's value.
The last share-based bonuses for the vesting period 2006-2010 were paid in April 2011.
Olvi plc's Board of Directors has not decided on any new share-based incentive schemes for Olvi Group's key personnel.
Olvi Group has no warrants or options.
| 22. Pledges, contingent liabilities and other commitments | 2012 | 2011 |
|---|---|---|
| Pledges and contingent liabilities For own commitments Mortgages on land and buildings |
1 336 | 1 336 |
| Other off-balance sheet liabilities Package liabilities Rental liabilities on business premises and land areas Other liabilities |
2 265 392 6 003 |
4 208 473 3 477 |
| Total pledges, contingent liabilities and other commitments | 9 996 | 9 493 |
| 23. Leasing liabilities | 2012 | 2011 | ||
|---|---|---|---|---|
| Due within one year | 713 | 916 | ||
| Due later | 517 | 1 022 | ||
| Total | 1 230 | 1 938 | ||
| 24. Derivative contracts | 2012 | 2011 | ||
| Nominal value | Market value N | ominal value | Market value | |
| Derivatives | 31 329 | -234 | 22 057 | -468 |
The business significance of the derivative contracts is minor. The derivative contracts are interest rate swaps on loans and will reach maturity in 2014, 2015 and 2017.
| Shares | % | Votes | % | |
|---|---|---|---|---|
| Series K shares, registered | 3 732 256 | 18.0 | 74 645 120 | 81.4 |
| Series A shares, registered | 17 026 552 | 82.0 | 17 026 552 | 18,6 |
| Total | 20 758 808 | 100.0 | 91 671 672 | 100.0 |
| Registered share capital, EUR 1,000 |
20 759 |
Olvi plc's Series A and Series K shares received a dividend of 0.50 euro per share for 2011 (0.50 euro per share for 2010), totalling 10.4 (10.4) million euro. The dividends were paid on 23 April 2012.
Votes per Series A share 1 Votes per Series K share 20
The Series K and Series A shares entitle to equal dividend. The Articles of Association include a redemption clause concerning Series K shares.
| Largest shareholders on 31 December 2012 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Series K | Series A | Total | % | Votes | % | ||||
| 1. Olvi Foundation | 2 363 904 | 890 613 | 3 254 517 | 15.68 | 48 168 693 | 52.54 | |||
| 2. Hortling Heikki Wilhelm *) | 901 424 | 159 194 | 1 060 618 | 5.11 | 18 187 674 | 19.84 | |||
| 3. The Heirs of | |||||||||
| Hortling Kalle Einari | 187 104 | 25 248 | 212 352 | 1.02 | 3 767 328 | 4.11 | |||
| 4. Hortling Timo Einari | 165 824 | 34 608 | 200 432 | 0.97 | 3 351 088 | 3.66 | |||
| 5. Hortling-Rinne Marit | 102 288 | 2 100 | 104 388 | 0.50 | 2 047 860 | 2.23 | |||
| 6. Pohjola Bank plc, | |||||||||
| nominee register | 1 902 700 | 1 902 700 | 9.17 | 1 902 700 | 2.08 | ||||
| 7. Nordea Bank Finland plc, | |||||||||
| nominee register | 880 016 | 880 016 | 4.24 | 880 016 | 0.96 | ||||
| 8. Ilmarinen Mutual Pension | |||||||||
| Insurance Company | 779 026 | 779 026 | 3.75 | 779 026 | 0.85 | ||||
| 9. Nasdaq OMXBS/ | |||||||||
| Skandinaviska Enskilda | |||||||||
| Banken Ab, nominee register | 461 809 | 461 809 | 2.22 | 461 809 | 0.50 | ||||
| 10. Oy Autocarrera Ab | 460 000 | 460 000 | 2.22 | 460 000 | 0.50 | ||||
| 11. Varma Mutual Pension | |||||||||
| Insurance Company | 412 899 | 412 899 | 1.99 | 412 899 | 0.45 | ||||
| 12. Fondita Nordic Micro Cap mutual fund | 392 000 | 392 000 | 1.89 | 392 000 | 0.43 | ||||
| 13. Evli Finland Select mutual fund | 231 028 | 231 028 | 1.11 | 231 028 | 0.25 | ||||
| 14. Laakkonen Hannu Markus | 216 072 | 216 072 | 1.04 | 216 072 | 0.24 | ||||
| 15. Aktia Capital mutual fund | 196 000 | 196 000 | 0.94 | 196 000 | 0.21 | ||||
| 16. Pensionsförsäkringsaktiebolaget Veritas | 185 300 | 185 300 | 0.89 | 185 300 | 0.20 | ||||
| 17. Lahti Ari | 180 000 | 180 000 | 0.87 | 180 000 | 0.20 | ||||
| 18. OP-Finland Small Cap Fund | 159 457 | 159 457 | 0.77 | 159 457 | 0.17 | ||||
| 19. Aktia Secura mutual fund | 152 000 | 152 000 | 0.73 | 152 000 | 0.17 | ||||
| 20. Odin Finland | 151 296 | 151 296 | 0.73 | 151 296 | 0.17 | ||||
| Others | 11 712 | 9 155 186 | 9 166 898 | 44.16 | 9 389 426 | 10.22 | |||
| Total | 3 732 256 | 17 026 552 | 20 758 808 | 100.00 | 91 671 672 100.00 |
*) The figures include the shareholder's own holdings and shares held by parties in his control.
Olvi plc had 9,091 (9,146) shareholders registered in the book-entry system on 31 Decemer 2012, 8 (9) of them nominee-registered.
Olvi plc adopted the insider guidelines drawn up and recommended by the Nasdaq OMX Helsinki Stock Exchange on 1 September 2005.
The members of the Board of Directors and the Managing Director of Olvi plc held a total of 901,424 K shares and 170,994 A shares on 31 December 2012, which represent 5.2 percent of the total number of shares and 19.9 percent of the votes.
The company's management does not hold any warrants or options.
| Number of | Number of | % of | Number of book |
% of book |
Voting | % of |
|---|---|---|---|---|---|---|
| shares | shareholders shareholders | entries | entries | rights | votes | |
| 1 - 1000 | 7 661 | 84.27 | 2 088 473 | 10.06 | 2 098 201 | 2.29 |
| 1 001 - 10 000 | 1 299 | 14.29 | 3 451 381 | 16.63 | 3 589 093 | 3.92 |
| 10 001 - 500 000 | 126 | 1.39 | 7 347 407 | 35.39 | 16 032 383 | 17.49 |
| 500 001 - 999 999 999 999 | 5 | 0.05 | 7 832 443 | 37.73 | 69 873 675 | 76.22 |
| On waiting list | 2 064 | 0.01 | 41 280 | 0,05 | ||
| In collective book-entry account | 37 040 | 0.18 | 37 040 | 0,04 | ||
| Total | 9 091 | 100.00 20 758 808 | 100.00 | 91 671 672 100.00 |
| Number of of share- shareholders |
% holders |
Number of book entries |
% of book entries |
Nominee- registered Number of book entries |
% of book entries |
Voting rights |
% of votes |
|
|---|---|---|---|---|---|---|---|---|
| Businesses | 415 | 4.56 | 4 862 842 | 23.43 | 4 029 | 0.02 | 49 781 047 | 54.30 |
| Financial institutions | ||||||||
| and insurance companies | 37 | 0.41 | 1 636 011 | 7.88 | 3 289 565 | 15.85 | 4 925 576 | 5.37 |
| Public sector organisations | 8 | 0.09 | 1 478 941 | 7.12 | 1 478 941 | 1.61 | ||
| Non-profit organisations | 106 | 1.17 | 585 149 | 2.82 | 585 149 | 0.64 | ||
| Households | 8 482 | 93.30 | 8 441 473 | 40.66 | 32 457 473 | 35.41 | ||
| Non-Finnish shareholders | 43 | 0.47 | 420 148 | 2.02 | 1 546 | 2 365 166 | 2.58 | |
| On waiting list | 2 064 | 0.01 | 41 280 | 0.05 | ||||
| In collective book-entry account | 0.00 | 37 040 | 0.18 | 37 040 | 0.04 | |||
| Total | 9 091 100.00 17 463 668 | 84.13 | 3 295 140 | 15.87 | 91 671 672 100.00 | |||
| Number of shareholders |
% of shareholders |
Number of book entries |
% of book entries |
Voting rights |
% of votes |
|
|---|---|---|---|---|---|---|
| Foreign total | 41 | 0.45 | 420 148 | 2.02 | 2 363 620 | 2.58 |
| Nominee-registered (foreign) total | 2 | 0.02 | 1 546 | 0.01 | 1 546 | 0.00 |
| Nominee-registered (Finnish) total | 6 | 0.07 | 3 293 594 | 15.87 | 3 293 594 | 3.59 |
| Total | 49 | 0.54 | 3 715 288 | 17.90 | 5 658 760 | 6.17 |
Olvi A share vs OMX All-Share Index 2009-2012
• Olvi A Share avarage price in review period 2012: EUR 18.26 (16.68) • Trading volume 1,793,149 (3,208,911) shares
| EUR 1,000 | 2012 | 2011 | 2010 |
|---|---|---|---|
| Net sales | 120 951 | 119 788 | 110 989 |
| Change, % | 1.0 | 7.9 | 6.2 |
| Operating profit | 9 004 | 13 160 | 11 629 |
| % of net sales | 7.4 | 11.0 | 10.5 |
| Financial income and expenses | 6 380 | 3 138 | -591 |
| Profit before extraordinary items | 15 384 | 16 298 | 11 039 |
| % of net sales | 12.7 | 13.6 | 9.9 |
| Profit before provisions and taxes | 15 384 | 16 298 | 11 039 |
| % of net sales | 12.7 | 13.6 | 9.9 |
| Balance sheet total | 185 201 | 177 210 | 160 784 |
| Cash flow ratio, % | 16.7 | 15.7 | 12.5 |
| Return on investment, % (ROI) | 11.7 | 14.4 | 10.2 |
| Return on equity, % (ROE ) |
19.0 | 19.2 | 12.7 |
| Equity to total assets, % | 39.8 | 39.9 | 41.8 |
| Current ratio | 0.8 | 0.6 | 0.9 |
| Gearing, % | 98.8 | 92.8 | 70.7 |
| Gross capital expenditure on fixed assets | 12 246 | 11 562 | 4 776 |
| % of net sales | 10.1 | 9.7 | 4.3 |
| Net investments in fixed assets | 12 089 | 11 243 | 4 619 |
| % of net sales | 9.9 | 9.4 | 4.2 |
| Average number of personnel | 401 | 383 | 378 |
| PER-SHARE RATIOS | 2012 | 2011 | 2010 |
| Earnings per share (EPS), euro | 0.66 | 0.64 | 0.41 |
| Equity per share, euro | 3.55 | 3.40 | 3.24 |
| *) Nominal divident per share, euro | |||
| 0.50 | 0.50 | 0,50 | |
| *) Effective dividend yield, % | 2.54 | 3.39 | 3.26 |
| *) Pay-out ratio, % | 75.8 | 78.2 | 121.3 |
| Price/Earnings ratio (P/E) | 29.8 | 23.1 | 37.3 |
| Price of Series A share | |||
| - at year-end, euro | 19.65 | 14.75 | 15.35 |
| - high, euro | 20.43 | 19.86 | 15.73 |
| - low, euro | 14.75 | 13.49 | 12.01 |
| - average price, euro | 18.26 | 16.68 | 14.03 |
| Trading volume of A shares | 1 793 149 | 3 208 911 | 1 628 258 |
| % of all A shares outstanding | 10.5 | 18.8 | 19.1 |
| Market capitalisation of A shares 31 Dec, MEUR | 334.6 | 251.1 | 261.4 |
| Market capitalisation of K shares 31 Dec, MEUR Total market capitalisation, MEUR |
73.3 407.9 |
55.1 306.2 |
57.3 318.6 |
| Number of shares | |||
| - year's average number, | |||
| adjusted for share issues **) | 20 757 684 | 20 751 392 | 20 734 008 |
| - average number of shares adjusted for dilution from warrants **) - number at year-end, |
20 757 684 | 20 751 392 | 20 734 008 |
The ratios for year 2010 have been adjusted for the effect of the free issue (split) in 2011 that doubled the number of shares. Also the numbers of shares have been adjusted for comparability.
*) The amount of nominal dividend has been adjusted for the effect of the free issue. The amount of dividend used for calculating the 2012 ratios is the Board of Directors' proposal to the Annual General Meeting.
**) Treasury shares held by Olvi plc deducted.
| Operating profit+depreciation+financial income and expenses+extraordinary income and expenses-taxes |
||
|---|---|---|
| Cash flow ratio, % N |
= 100* | et sales |
| Return on investment, % (ROI) | = 100 * | Profit before taxes+interest and other financial expenses |
| Balance sheet total - interest-free liabilities (average) | ||
| Return on equity, % (ROE ) |
= 100* | Profit before taxes - taxes |
| Shareholders' equity+non-controlling interests+voluntary provisions and depreciation difference deducted by deferred tax liability (average during the year) |
||
| Shareholders' equity+non-controlling interests+voluntary provisions and depreciation difference deducted by deferred tax liability |
||
| Equity to total assets, % | = 100 * | Balance sheet total-advance payments received |
| L Current ratio |
= | iquid assets+inventories |
| Current liabilities | ||
| Gearing, % | = 100 * | Interest-bearing liabilities+advance payments received+cash and other liquid assets |
| Shareholders' equity+voluntary provisions and depreciation difference deducted by deferred tax liability |
||
| Earnings per share (EPS) | = | Profit before taxes - taxes +/- non-controlling interests |
| A | verage number of shares during the year, adjusted for share issues |
|
| Shareholders' equity+voluntary provisions and depreciation difference deducted by deferred tax liability and non-controlling interests |
||
| Equity per share N |
= | umber of shares on 31 December, adjusted for share issues |
| L | ast trading price of the year, adjusted for share issues | |
| Price/Earnings ratio (P/E) E |
= | arnings per share |
| Pay-out ratio, % | = 100* | Dividend per share |
| E | arnings per share | |
| Market capitalisation at year-end |
N = P |
umber of shares at year-end, adjusted for share issues * rice of Series A share at year-end |
The parent company Olvi plc had 45.1 million euro of distributable funds on 31 December 2012, of which profit for the period accounted for 12.6 million euro.
The company's Board of Directors proposes to the Annual General Meeting that distributable funds be used as follows:
• A dividend of 0.50 euro shall be paid for 2012 on each Series K and Series A share, totalling 10.4 million euro. The dividend represents 40.3 percent of Olvi Group's earnings per share.
It is proposed that the dividend be paid to shareholders registered in Olvi plc's register of shareholders held by Euroclear Finland Ltd on the record date of the dividend payment, 15 April 2013. It is proposed that the dividend be paid on 22 April 2013.
• 34.7 million euro shall be retained in the parent company's non-restricted equity.
Date and Signatures
Signed in Iisalmi, this 21st day of February 2013
Heikki Hortling Esa Lager Chairman Vice Chairman of the Board of the Board
Tarja Pääkkönen Heikki Sinnemaa Member of the Board Member of the Board
Jaakko Autere Lasse Aho
Member of the Board Managing Director
A report of the audit has been submitted today.
Signed in Iisalmi, this 15th day of March 2013
PricewaterhouseCoopers Oy
Sami Posti Authorised Public Accountant
Heikki Hortling Born 1951 Master of Science (Economics) Chairman of the Board since 1998 Vice Chairman of Olvi plc's Board of Directors 1987–1997
Vice Chairman of the Board of Ponsse Plc Member of the Board of Puhelinosuuskunta IPY (telecom co-operative)
Several positions in Olvi plc, including marketing and materials management.
Esa Lager Born 1959 Master of Laws Master of Science (Economics) Chief Financial Officer of Outokumpu Oyj Member of Olvi plc's Board of Directors since 2002 Chairman of Olvi plc's Board of Directors 14 April 2004 to 2 September 2004 Vice Chairman of Olvi plc's Board of Directors Important positions in other organisations: Member of the Board of Ilkka-Yhtymä
Oyj since 2011
Work experience in brief: Outokumpu Oyj, Director of Finance and Administration Outokumpu Oyj, Chief Financial Officer
Kansallis-Osake-Pankki, various positions in international operations.
Heikki Sinnemaa Born 1949 Master of Laws trained on the bench Member of Olvi plc's Board of Directors since 2004
Member of the Board of Olvi Foundation Chairman of the Board of Puhelinosuuskunta IPY (telecom co-operative) Member of the Board of T. Makkonen Oy
Member of the Board of Iisalmen Osuuspankki co-operative bank (1987 - 1995)
Chairman of the Board of Iisalmen Osuuspankki co-operative bank (1995 - 2000)
Heikki Sinnemaa Attorney's office, attorney-at-law from 1975 to 2012. Jaakko Autere Born 1963 Master of Science in Economics Work experience in brief:
2009 - 2011 President, Fiskars Home Business Area, CEO of Iittala Group Oy Ab
2005 - 2009 Managing Director, Orkla AS, Biscuit Division (Göteborgs Kex, Saetre, Kantolan) 2004 - 2005 Managing Director, L'Oreal Norway 2000 - 2005 Managing Director, General Manager, L'Oreal Sweden
1997 - 2000 Marketing Manager, Kellogg's Marketing & Sales Company UK & ROI Ltd 1991 - 1997 Marketing Manager, Product Manager Nordisk Kellogg's, Denmark 1989 - 1991 Product Group Manager, Olvi, Iisalmi.
Born 1962
Doctor of Technology (Business strategy) Master of Science in Engineering (Construction) Studies in international marketing Boardman Oy, partner, shareholder and member
of the Board since 2010
Member of Olvi plc's Board of Directors since 2010
Member of the Board of Panostaja/Flexim Security Oy since 2011
Member of the Board of Idean Oy since 2011 Member of the Board of Spinverse Oy since 2011 Founder and Chairman of the Board of the software company Sunduka Oy since 2010 Member of the Board of HYY Group since 2008
Member of the Board of Itella and Director of the corporate sales and marketing unit
Nokia Corporation, member of the management group of Nokia Mobile Phones and service in several global Senior Vice President positions in Europe, the USA and Japan
Mecrastor Oy (Price Waterhouse Coopers), Management Consultant
Kienbaum GmbH, Germany, Management Consultant
BE & K, USA, Marketing & Business Manager.
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