Olvi Oyj — Interim / Quarterly Report 2021

Apr 29, 2021

Olvi Group’s Interim Report, 1 January to 31 March 2021 (3 Months)

Olvi Group’s Interim Report, 1 January to 31 March 2021 (3 Months)

OLVI PLC                Interim Report 29 April 2021 at 9:00 am

Olvi Group’s Interim Report, 1 January to 31 March 2021 (3 Months)

Interim Report in brief

Olvi Group’s first-quarter sales volume, net sales and operating profit
increased on the previous year. Easter sales fell into the first quarter and
exports increased; this boosted the Group’s overall development. The Group’s
financial standing remained on a good level.

Near-term outlook

Olvi’s operating profit for fiscal year 2021 is expected to remain on the
previous year’s good level. Second-quarter earnings development will still be
affected by sales channel restrictions due to the corona pandemic, as well as
weather conditions in the upcoming summer season.

Consolidated key ratios

             1–3 / 2021  1–3 / 2020  Change % /pp  1–12 / 2020

Sales volume, 163.9 153.2 7.0 765.9
Mltr
Net sales, MEUR 85.3 84.6 0.9 414.9
Gross profit*, 34.7 35.5 -2.3 178.0
MEUR
% of net sales 40.6 41.9 42.9
Operating 8.1 7.8 2.7 56.4
profit, MEUR
% of net sales 9.4 9.3 13.6
Net profit for 6.9 5.4 27.7 40.9
the period,
MEUR
% of net sales 8.1 6.4 9.9
Earnings per 0.33 0.26 26.9 1.96
share, EUR
Investments, 7.8 9.2 -14.9 32.0
MEUR
Equity per 12.05 12.36 -2.5 12.81
share, EUR
Equity to total 57.1 65.0 -7.9 63.8
assets, %
Gearing, % -21.7 -3.6 18.1 -15.5

* Due to a change in the presentation of the income statement, the previous term
of gross margin was replaced by gross profit.

Business development

Lasse Aho, Managing Director:

Olvi Group’s business development was good in comparison with the previous year.
Sales volume, net sales and operating profit improved, with the strongest boost
coming from Finland. Sales volume increased by 7.0 percent. Factors behind the
growth include consumer demand focusing on retail sales, Easter sales taking
place in March, as well as good development of exports. Net sales increased by
slightly less than one percent. Operating profit increased by 2.7 percent. Olvi
Group put a lot of effort into launching new products for the upcoming season
according to plan.

Restrictions put in place due to the corona pandemic had a substantial impact on
sales channels in Olvi’s market areas in the first quarter. In almost all of
Olvi’s operating countries, the HoReCa sales channel was totally closed or
operated partially. Cross-border and harbour sales remained at a low level.
Within Olvi Group, this is reflected as a loss of sales between Estonia and
Finland. However, retail sales continued on a strong track, and this compensated
the other sales channels. Exports increased as well. Production facilities have
operated normally.

Business in Finland continued on a strong growth track. Sales volume, net sales
and operating profit have clearly increased on the previous year. Olvi has been
successful in increasing the sales volume in Finland despite the corona
pandemic, thanks to its strong brands and versatile range of packaging. The
demand for beer in particular has continued on a strong growth track, but an
upward trend can also be seen in non-alcoholic products such as mineral waters.
Olvi will increase its capacity in the water business by acquiring a spring
water bottling plant and its equipment, which was agreed at the end of the
quarter. Olvi increased its capacity in the water business through an agreement
to acquire a spring water bottling plant and equipment, which was signed at the
end of the quarter. Operating profit improved by 27.3 percent thanks to
increased sales volume and production efficiency.

In Estonia, first-quarter sales volume declined by 1.6 percent due to strict
restrictions associated with the corona pandemic. The restrictions impacted
cross-border and harbour sales as well as the HoReCa market in particular.
However, domestic retail sales improved on the previous year, and there was a
continuing growth trend in exports. Operating profit in proportion to net sales
remained at a high level of 12.8 percent, even though the operating profit in
euros dropped by some 13 percent from the previous year.

The business in Latvia was substantially impacted by restrictions in the HoReCa
segment. Overall market demand also declined in the first months of the year but
upward signs were seen in March. Increased exports have replaced the drop in
domestic demand to some extent. Sales volume declined by 5.6 percent in the
first quarter. In addition to the drop in litres sold, the corona situation has
made price competition more intense. Due to this, net sales declined by 9.4
percent and operating profit by 66.3 percent. Olvi invested in future
competitive ability in Latvia by acquiring the Piebalgas Alus microbrewery. This
was announced in a release on 8 March 2021. The acquisition improves Cesu Alus’s
position particularly in HoReCa and premium products. According to its 2020
accounts, Piebalgas produced 2.7 million litres and made 4.2 million euro in net
sales. The competition authorities have approved the acquisition, and Piebalgas
will become a part of the Latvian business in the second quarter.

The sales volume and net sales in Lithuania remained almost on a par with the
previous year even though HoReCa sales came to an almost total halt in the first
quarter. Sales have remained profitable through the development of premium
products and package sizes for beers in particular. The market position has also
continued to become stronger. Operating profit developed well, showing growth of
36.1 percent.

In Belarus, business development in the first quarter was good. Sales volume
increased by almost 13 percent, thanks to domestic demand as well as increased
exports. Even though the country imposed no official restrictions due to the
corona pandemic, HoReCa sales have dropped somewhat due to consumer behaviour.
Comparable net sales declined by 5.2 percent due to the weakened exchange rate.
Net sales in the local currency increased by almost 20 percent; this was
achieved through a more versatile product portfolio, among other things.
Operating profit in euros declined by 17.7 percent but in the local currency
there was an increase of some 4 percent.

Investments have been completed as planned during the review period. The amount
of investments amounted to 7.8 million euro and was focused on improving
production efficiency and capacity.

Seasonal nature of the operations

The Group’s business operations are characterised by seasonal variation. The net
sales and operating profit from the reported geographical segments do not
accumulate evenly but vary according to the time of the year and the
characteristics of each season.

Sales development
Olvi Group’s sales volume in January-March increased by 7.0 percent to 163.9
(153.2) million litres.

Sales volume development focused on Finland and Belarus, while consumer demand
in the Baltic states declined due to substantial restrictions associated with
the corona pandemic.

Sales volume, million litres 1–3 / 2021 1–3 / 2020 Change %
Finland 55.2 48.1 14.7
Estonia 22.5 22.9 -1.6
Latvia 13.7 14.5 -5.6
Lithuania 25.1 25.3 -0.6
Belarus 53.4 47.3 12.8
Eliminations -6.1 -5.0
Total 163.9 153.2 7.0

The Group’s net sales in January-March increased by 0.9 percent and amounted to
85.3 (84.6) million euro. Growth was focused on Finland.

Net sales, million euro 1–3 / 2021 1–3 / 2020 Change %
Finland 38.8 36.0 7.9
Estonia 14.2 14.9 -5.0
Latvia 7.0 7.7 -9.4
Lithuania 11.3 11.2 0.7
Belarus 16.3 17.2 -5.2
Eliminations -2.2 -2.4
Total 85.3 84.6 0.9

Earnings development

The Group’s operating profit in January-March stood at 8.1 (7.8) million euro,
or 9.4 (9.3) percent of net sales. In the first quarter, Finland and Lithuania
in particular were able to substantially improve their operating profit in
comparison to the previous year.

Operating profit, million euro 1–3 / 2021 1–3 / 2020 Change %
Finland 3.8 2.9 27.3
Estonia 1.8 2.1 -12.8
Latvia 0.2 0.5 -66.3
Lithuania 0.7 0.5 36.1
Belarus 1.7 2.1 -17.7
Eliminations -0.1 -0.3
Total 8.1 7.8 2.7

The Group’s January-March profit after taxes amounted to 6.9 (5.4) million euro.
The previous year’s result was hampered by exchange rate losses.

Earnings per share calculated from the profit belonging to parent company
shareholders in January-March stood at 0.33 (0.26) euro per share.

Balance sheet, financing and investments

Olvi Group’s balance sheet total at the end of March 2021 was 442.4 (398.5)
million euro. Equity per share at the end of March 2021 stood at 12.05 (12.36)
euro. The equity ratio was 57.1 (65.0) percent and the gearing ratio was -21.7 (
-3.6) percent. The current ratio, which represents the Group’s liquidity, was
1.1 (1.2). The equity ratio was affected by a change in Finnish taxation; the
payment period for excise taxes is now one month later. Also, the dividend
liability arising from the Annual General Meeting was now recognised in March,
not in April as in the previous year. These changes increase the amount of
interest-free current liabilities substantially in comparison to the previous
year.

Interest-bearing liabilities amounted to 3.4 (13.5) million euro at the end of
March. Current liabilities made up 1.0 (11.1) million euro of all interest
-bearing liabilities. Interest-bearing liabilities consist mostly of leasing
liabilities.

Olvi Group’s investments in extensions and replacements from January to March
amounted to 7.8 (9.2) million euro. The companies in Finland accounted for 2.4
million euro, the Baltic subsidiaries for 3.7 million euro and Lidskoe Pivo in
Belarus for 1.7 million euro of the total. Olvi Group has continued investments
according to plan in increasing and diversifying its production capacity, as
well as the modernisation of production facilities.

Personnel

Olvi Group’s average number of personnel in January-March was 1,923 (1,871). The
Group’s average number of personnel increased by 52 people or 2.8 percent.

Olvi Group’s average number of personnel by country:

       1–3 / 2021  1–3 / 2020  Change %

Finland 371 357 3.9
Estonia 324 318 1.9
Latvia 197 199 -1.0
Lithuania 244 238 2.5
Belarus 787 759 3.7
Total 1,923 1,871 2.8

Board of Directors and management

There have been no changes in Olvi plc’s Board of Directors or management during
the review period. The Annual General Meeting was held on 31 March 2021. The
decisions taken and the effects on the composition of the Board of Directors are
described below.

Other events during the review period

Annual General Meeting

Olvi plc’s Annual General Meeting of 31 March 2021 adopted the financial
statements and granted discharge from liability to the members of the Board of
Directors and Managing Director for the accounting period that ended on 31
December 2020.

In accordance with the Board’s proposal, the General Meeting decided that a
dividend of 1.10 (1.00) euro be paid on each A and K share for the accounting
period 2020. The dividend according to the resolution accounts for 56.2 (49.6)
percent of Olvi Group’s consolidated earnings per share. The dividend will be
paid in two instalments. The first instalment of 0.55 euro per share will be
paid on 20 April 2021 to shareholders registered in the register of shareholders
held by Euroclear Finland Ltd on the record date 6 April 2021. The second
instalment of 0.55 euro per share will be paid on 3 September 2021 to
shareholders registered in the register of shareholders held by Euroclear
Finland Ltd on the record date 27 August 2021.

The General Meeting decided that the Board of Directors shall have six (6)
members. Pentti Hakkarainen, Lasse Heinonen, Nora Hortling, Elisa Markula and
Päivi Paltola were re-elected to the Board of Directors. Juho Nummela was
elected as a new member of the Board of Directors.

The authorised public accounting firm Ernst & Young Oy was re-elected the
company’s auditor, with Elina Laitinen, Authorised Public Accountant, as auditor
in charge.

All decisions made at the General Meeting can be found in the bulletin released
on 31 March 2021.

Organisation of the Board of Directors

At its organising meeting held on 31 March 2021, the Board of Olvi plc elected
Pentti Hakkarainen as the Chairman of the Board and Nora Hortling as the Vice
Chairperson of the Board.

The Audit Committee consists of Lasse Heinonen, Nora Hortling and Juho Nummela,
while Pentti Hakkarainen, Elisa Markula and Päivi Paltola are members of the
Remuneration Committee.

Changes in corporate structure

There were no changes in Olvi’s holdings in subsidiaries in January-March 2021.
On 8 March 2021, Olvi announced the acquisition of the entire stock of Piebalgas
Alus, a microbrewery in Latvia. The company will become a subsidiary of Cesu
Alus. The competition authorities approved the acquisition in April, and
Piebalgas will become a part of the Latvian business in the second quarter.

Share-based payments

Olvi Group’s share-based incentive plan for key personnel, the performance
period of which was from 1 February 2019 to 31 January 2021, has expired. At its
meeting of 1 February 2021, the Board of Directors of Olvi plc decided on three
new share-based incentive plans for the Group’s key personnel: a performance
-based share plan for 2021–2025, a matching share plan for 2021–2022 and a
restricted share plan for 2021–2025. Detailed information on the incentive plans
and the associated share repurchases is provided in Table 5, Sections 4 and 5 of
the tables attached to this interim report.

Business risks and their management

The corona pandemic still imposes uncertainty on business operations. Business
development is difficult to predict as the scope and time of government-imposed
restrictions to contain the corona pandemic cannot be sufficiently estimated. In
addition to overall demand, such restrictions have an effect on the distribution
of sales between different channels. Olvi has drafted several scenarios and made
preparations for responding to changing situations through a variety of
measures, for example if the crisis is prolonged.

The crisis has brought challenges in the availability of some production items
such as beverage cans. There is also global upward pressure in the prices of raw
materials, including packaging. However, the production materials required at
Olvi are currently in good supply. Production has operated almost normally and
there has not been any widespread virus exposure among personnel. Olvi has made
preparations for production disruptions and drafted contingency plans concerning
the availability of personnel and raw materials, among other things. In Belarus,
further uncertainty is present due to potential continuation of the exchange
rate downtrend; this is associated with the political and economic situation in
the country.

A more detailed description of normal business-related risks is provided in the
Board of Directors’ report and the notes to the financial statements, as well as
in the Investors/Corporate Governance section of the company’s Web site.

Events after the review period

There have been no significant reportable events after the review period.

OLVI PLC
Board of Directors

Further information: Lasse Aho, Managing Director, Olvi plc, phone +358 290 00
1050 or +358 400 203 600

TABLES:
- Statement of comprehensive income, Table 1
- Balance sheet, Table 2
- Changes in shareholders’ equity, Table 3
- Cash flow statement, Table 4
- Notes to the interim report bulletin, Table 5

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

OLVI GROUP TABLE 1

STATEMENT OF COMPREHENSIVE INCOME
EUR 1,000
1–3 / 1–3 / 1–12 / 2020
2021 2020

Gross sales 210,813 202,801 1,005,101
Excise taxes and other adjustments -125,495 -118,213 -590,217

Net sales 85,318 84,588 414,884

Cost of sales -50,655 -49,125 -236,849
Gross profit 34,663 35,463 178,035

Logistics, sales and marketing expenses -19,660 -20,215 -87,300
Administrative expenses -7,204 -7,615 -34,650
Other operating income and expenses 257 212 350
Operating profit 8,056 7,845 56,435

Financial income and expenses -2 -1,527 -2,626
Share of profit in associates 0 0 2
Earnings before tax 8,054 6,318 53,811

Income taxes -1,182 -938 -12,895
NET PROFIT FOR THE PERIOD 6,872 5,380 40,916

Other comprehensive income items that may be
subsequently reclassified to profit and loss:

Translation differences related to foreign 1,408 -10,625 -15,588
subsidiaries
Income taxes related to these items -25 214 263
TOTAL COMPREHENSIVE INCOME 8,255 -5,031 25,591
FOR THE PERIOD

Distribution of profit:
- parent company shareholders 6,836 5,425 40,559
- non-controlling interests 36 -45 357

Distribution of comprehensive income:
 - parent company shareholders 8,176 -4,675 25,704
 - non-controlling interests 79 -356 -113

Earnings per share calculated from the profit
belonging to parent company shareholders, EUR
-   undiluted 0.33 0.26 1.96
-   diluted 0.33 0.26 1.96

OLVI GROUP TABLE 2

BALANCE SHEET
EUR 1,000 31 March 2021 31 March 2020 31 December 2020
ASSETS
Non-current assets
Tangible assets 206,515 203,465 204,156
Goodwill 25,269 25,516 25,172
Other intangible assets 9,581 10,623 9,925
Shares in associates 994 1,016 994
Other investments 851 836 851
Loans receivable and 1,849 1,793 1,786
other non-current
receivables
Deferred tax receivables 616 578 1,086
Total non-current assets 245,675 243,827 243,970

Current assets
Inventories 47,702 48,321 42,278
Accounts receivable and 89,585 83,049 88,234
other receivables
Income tax receivable 1,298 941 773
Liquid assets 58,167 22,368 45,096
Total current assets 196,752 154,679 176,381
TOTAL ASSETS 442,427 398,506 420,351

SHAREHOLDERS’ EQUITY AND
LIABILITIES
Shareholders’ equity held
by
parent company
shareholders
Share capital 20,759 20,759 20,759
Other reserves 1,387 1,387 1,387
Treasury shares -989 -503 -1,802
Translation differences -57,502 -54,087 -58,842
Retained earnings 285,875 288,467 303,465
249,530 256,023 264,967
Share belonging to non 3,202 2,924 3,165
-controlling interests
Total shareholders’ 252,732 258,947 268,132
equity

Non-current liabilities
Financial liabilities 2,376 2,426 2,303
Other liabilities 4,482 4,263 4,473
Deferred tax liabilities 11,244 7,783 11,107

Current liabilities
Financial liabilities 1,034 11,086 1,333
Accounts payable and 169,969 113,864 132,522
other liabilities
Income tax liability 590 137 481
Total liabilities 189,695 139,559 152,219
TOTAL SHAREHOLDERS’ 442,427 398,506 420,351
EQUITY AND LIABILITIES

OLVI GROUP
TABLE 3
CHANGES IN
SHAREHOLDERS’
EQUITY
EUR 1,000 Share Other Treasury Fair Translation Retained
Share of Total
capital reserves shares value differences earnings
non-
reserve reserve
controlling
int
erests
Shareholders’ 20,759 1,092 -1,802 295 -58,842 303,465
3,165 268,132
equity
1 Jan 2021
Comprehensive
income:
     Net 6,836
36 6,872
profit for
the period
     Other
comprehensive
income items:
         1,340
43 1,383
Translation
differences
Total 1,340 6,836
79 8,255
comprehensive
income for
the period
Transactions
with
shareholders:
     Payment -22,771
-16 -22,787
of dividends
     -874
-874
Acquisition
of treasury
shares
     Share 63
63
-based
incentives,
value of work
performed
     Issue of 1,687 -1613
74
treasury
shares to
employees
     -105
-26 -131
Adjustment to
previous
periods
Total 813 -24,426
-42 -23,655
transactions
with
shareholders
Shareholders’ 20,759 1,092 -989 295 -57,502 285,875
3,202 252,732
equity
31 Mar 2021

EUR 1,000 Share Other Treasury Fair Translation Retained
Share of Total
capital reserves shares value differences earnings
non-
reserve reserve
controlling
int
erests
Shareholders’ 20,759 1,092 -503 295 -43,987 282,895
3,318 263,869
equity
1 Jan 2020
Comprehensive
income:
     Net 5,425
-45 5,380
profit for
the period
     Other
comprehensive
income items:
          -10,100
-311 -10,411
Translation
differences
Total -10,100 5,425
-356 -5,031
comprehensive
income for
the period
Transactions
with
shareholders:
     Payment
-38 -38
of dividends
     Share 147
147
-based
incentives,
value of work
performed
Total 147
-38 109
transactions
with
shareholders
Shareholders’ 20,759 1,092 -503 295 -54,087 288,467
2,924 258,947
equity
31 Mar 2020

Other reserves include the share premium account, legal reserve and other
reserves.

OLVI GROUP TABLE 4

CASH FLOW STATEMENT
EUR 1,000
1–3 / 2021 1–3 / 2020 1–12 / 2020

Net profit for the period 6,872 5,380 40,916
Adjustments:
     Depreciation and impairment 6,465 6,269 24,972
     Other adjustments 1,065 2,815 16,327
Change in net working capital:
     Change in accounts receivable and -1,178 -15,506 -22,809
other receivables
     Change in inventories -5,175 -6,893 -1,274
     Change in accounts payable and 13,934 -4,638 17,339
other liabilities
Interest paid -126 -209 -588
Interest received 65 37 260
Dividends received 0 0 4
Taxes paid -1,008 -984 -9,351
Cash flow from operations (A) 20,914 -13,729 65,796

Investments in tangible and intangible -7,095 -6,904 -31,533
assets
Capital gains on disposal of tangible 387 329 1,697
and intangible assets
Acquisition of shares from non 0 0 -6
-controlling interests
Expenditure on other investments 0 0 -15
Dividends received 0 0 24
Cash flow from investments (B) -6,708 -6,575 -29,833

Withdrawals of loans 0 10,000 15,497
Repayments of loans -355 -414 -16,917
Acquisition of treasury shares -874 0 -1,299
Dividends paid 0 0 -20,754
Increase (-) / decrease (+) in current 0 0 26
interest- bearing business receivables
Cash flow from financing (C) -1,229 9,586 -23,447

Increase (+)/decrease (-) in liquid 12,977 -10,718 12,516
assets (A+B+C)

Liquid assets 1 January 45,096 33,832 33,832
Effect of exchange rate changes 94 -746 -1,252
Liquid assets 31 Mar/31 Dec 58,167 22,368 45,096

OLVI GROUP                                                    TABLE 5

NOTES TO THE INTERIM REPORT

The interim report has been prepared in accordance with IAS 34, applying the
same accounting policies as for the financial statements of 31 December 2020,
with the exception of the presentation of the income statement. From now on, the
income statement is based on the function of expenses. The comparison data has
been adjusted to correspond to the new presentation.

The information in the interim report is presented in thousands of euros (EUR
1,000). For the sake of presentation, individual figures and totals have been
rounded to full thousands, which causes rounding differences in additions. The
ratios are calculated from exact amounts in euros. The information disclosed in
the interim report is unaudited.

1.  SEGMENT
INFORMATION
NET SALES
BY SEGMENT
1–3/2021
EUR 1,000 Finland Estonia Latvia Lithuania Belarus Elimi Group
-nations

INCOME
External 38,631 13,416 6,432 10,890 15,949 85,318
sales
     38,414 13,416 6,432 10,890 15,949 85,101
Beverage
sales
     217 0 0 0 0 217
Equipment
services
Internal 152 741 565 402 359 -2,219 0
sales
Total net 38,783 14,157 6,997 11,292 16,308 -2,219 85,318
sales

Total net 3,418 1,862 143 507 1,542 -600 6,872
profit
for the
period

NET SALES
BY SEGMENT
1–3/2020

EUR 1,000 Finland Estonia Latvia Lithuania Belarus Elimi Group
-nations

INCOME
External 35,702 14,021 7,171 10,535 17,159 0 84,588
sales
     35,327 14,021 7,171 10,535 17,159 0 84,213
Beverage
sales
     375 0 0 0 0 0 375
Equipment
services
Internal 248 875 549 681 41 -2,394 0
sales
Total net 35,950 14,896 7,720 11,216 17,200 -2,394 84,588
sales

Total net 3,334 2,142 462 317 -706 -169 5,380
profit
for the
period

2.  RELATED
PARTY
TRANSACTIONS

Employee
benefits to
management
Salaries and
other short
-term
employee
benefits to
the Board of
Directors and
Managing
Director
EUR 1,000  1–3  1–3 / 2020  1–12 / 2020
/ 2021

Managing 662 275 550
Director
Chairman of 18 18 74
the Board
Other members 41 41 172
of the Board
Total 721 334 796

1. SHARES AND SHARE CAPITAL
   31 March 2021       %

Number of A shares 16,989,976 82.0
Number of K shares 3,732,256 18.0
Total 20,722,232 100.0

Total votes carried by A shares 16,989,976 18.5
Total votes carried by K shares 74,645,120 81.5
Total number of votes 91,635,096 100.0

Votes per Series A share 1
Votes per Series K share 20

The registered share capital on 31 March 2021 totalled 20,759 thousand euro.

Olvi plc’s shares will receive a dividend of 1.10 euro per share for 2020 (1.00
euro per share for 2019), totalling 22.8 (20.7) million euro. The dividend will
be paid in two instalments. The first instalment of 0,55 euro per share will be
paid on 20 April 2021. The second instalment of 0,55 euro per share will be paid
on 3 September 2021. The Series K and Series A shares entitle to equal dividend.
The Articles of Association include a redemption clause concerning Series K
shares.

1. SHARE-BASED PAYMENTS

Olvi Group’s share-based incentive plan for key personnel, the performance
period of which was from 1 February 2019 to 31 January 2021, has expired. The
target group of the plan included approximately 60 people, and in accordance
with the terms and conditions of the plan, rewards were paid in Olvi plc Series
A shares and partially in cash. A total of 36,200 Series A shares were handed
over as share-based rewards.

At its meeting of 1 February 2021, the Board of Directors of Olvi plc decided on
the terms and conditions of three new share-based incentive plans for the
Group’s key personnel: a performance-based share plan for 2021–2025, a matching
share plan for 2021–2022 and a restricted share plan for 2021–2025. Among these
incentive plans, the performance-based share plan for the performance periods
2021–2022 and 2021–2023 started on 15 February 2021. The target groups include
approximately 18 people, including the Managing Director of the Group, the
Managing Directors of the subsidiaries outside Finland, the members of Olvi
plc’s Management Group and the Sales Directors of subsidiaries outside Finland.
The rewards are based on the Group’s accumulated operating profit in euros and
the increase of non-alcoholic sales volume. Net rewards payable for the
performance period 2021–2022 amount to an approximate maximum of 6,100 Olvi plc
Series A shares, and for the performance period 2021–2023, approximately 10,000
Olvi plc Series A shares.

The objective of long-term rewards is to support the achievement of the
company’s targets, make key personnel committed to the company and offer
incentive plans based on earning the company’s shares. The rewards are payable
partially in Olvi plc’s Series A shares and partially in cash. The cash
proportion is intended to cover taxes and tax-related costs arising from the
rewards to the employees involved. As a rule, no reward will be paid if
employment or service ends before the reward payment. Under the scheme, the
target group is able to earn Olvi plc Series A shares based on performance. The
Board of Directors shall decide on the earning criteria and the targets for each
of these at the beginning of the performance period. Any rewards from the scheme
shall be paid after the end of each performance period.

The Board of Directors has set an upper limit for the gross total rewards
payable to each person in a calendar year. The limit applies to all gross
rewards payable under long-term incentive schemes. Any member of Olvi’s
Management Group has to hold at least one-half of the shares received as net
rewards from the new incentive plans until the value of the member’s holding in
the company equals at least one-half of their annual salary for the previous
year. These Olvi plc Series A shares have to be held for as long as the person
is a member of the Management Group.

In the period under review, costs associated with the plan were recognised for a
total of 63.5 thousand euro. Olvi Group does not have any other share-based
plans or option plans.

1. TREASURY SHARES

At the beginning of January 2021, Olvi plc held 11,549 of its own shares as
treasury shares. Olvi plc continued its share repurchase plan in January. The
plan started on 5 November 2020 and ended on 15 January 2021. The shares shall
be acquired for the purpose of financing or executing any upcoming corporate
acquisitions or other arrangements, implementing the company’s incentive schemes
or for other purposes decided upon by the Board of Directors.

On 19 February 2021, the Board of Directors of Olvi plc decided to initiate a
scheme of acquiring treasury shares based on the authorisation issued by the
Annual General Meeting on 8 April 2020. On this basis, the Board will repurchase
a maximum of 10,000 Series A shares. The repurchase of treasury shares is based
on the new share-based incentive plan for the Group’s key personnel announced on
2 February 2021. The acquisition of shares started on 25 February 2021 and ended
on 1 March 2021.

At the end of the review period, Olvi plc holds a total of 20,899 of its own
Series A shares. The total purchase price of treasury shares was 988,962.12
euro. Treasury shares held by the company itself are ineligible for voting.
Series A shares held by Olvi plc as treasury shares represent 0.10 percent of
all shares and 0.02 percent of the aggregate number of votes. The treasury
shares represent 0.12 percent of all Series A shares and associated votes.

On 31 March 2021, the General Meeting of Shareholders of Olvi plc decided to
revoke any unused authorisations to acquire treasury shares and authorise the
Board of Directors of Olvi plc to decide on the acquisition of the company’s own
shares using distributable funds. The authorisation is valid for one year
starting from the General Meeting and covers a maximum of 500,000 Series A
shares.

The Annual General Meeting also decided to revoke all existing unused
authorisations for the transfer of own shares and authorise the Board of
Directors to decide on the issue of a maximum of 1,000,000 new Series A shares
and the transfer of a maximum of 500,000 Series A shares held as treasury
shares.

1. NUMBER OF  1–3 / 2021  1–3 / 2020  1–12 / 2020
   SHARES *)

- average 20,692,394 20,710,683 20,708,331
  - at end of 20,701,333 20,710,683 20,683,672
period
*) Treasury
shares
deducted.

1. TRADING OF
   SERIES A SHARES
   ON THE HELSINKI
   STOCK EXCHANGE

            1–3 / 2021   1–3 / 2020   1–12 / 2020
   

   Trading volume 536,274 446,370 1,474,892
   of Olvi A
   shares
   Total trading 24,461 17,190 60,470
   volume, EUR
   1,000
   Traded shares
   in proportion
   to
   all Series A 3.2 2.6 8.7
   shares, %

Average share 45.63 38.53 41.03
price, EUR
Price on the 48.70 36.60 48.50
closing date,
EUR
Highest quote, 49.30 42.95 50.00
EUR
Lowest quote, 43.10 30.25 30.25
EUR

1. FOREIGN AND
   NOMINEE
   -REGISTERED
   HOLDINGS ON 31
   March 2021

               Book entries           Votes          Shareholders
                   qty       %         qty       %     qty       %
   

   Finnish total 15,892,683 76.70 86,805,547 94.73 15,518 99.61
   Foreign total 62,641 0.30 62,641 0.07 50 0.32
   Nominee 319,500 1.54 319,500 0.35 6 0.04
   -registered
   (foreign) total
   Nominee 4,447,408 21.46 4,447,408 4.85 5 0.03
   -registered
   (Finnish) total
   Total 20,722,232 100.00 91,635,096 100.00 15,579 100.00

2. LARGEST SHAREHOLDERS ON 31 March
   2021

                                   Series K    Series A       Total       %
   

   Votes %
   1. Olvi Foundation        2,363,904 890,613 3,254,517 15.71
   48,168,693 52.57
   2. The Estate of Hortling Heikki 903,488 103,280 1,006,768 4.86
   18,173,040 19.83
   *)
   3. Hortling Timo Einari 212,600 49,152 261,752 1.26
   4,301,152 4.69
   4. Hortling-Rinne Marit     149,064 14,699 163,763 0.79
   2,995,979 3.27
   5. OP Custody Ltd, nominee register 2,319,109 2,319,109 11.19
   2,319,109 2.53
   6. Nordea Bank Abp, nominee register 1,043,312 1,043,312 5.03
   1,043,312 1.14
   7. Skandinaviska Enskilda Banken Ab
   (publ) Helsinki branch, nominee
   register
   1,037,962 1,037,962 5.01 1,037,962 1.13
   8. Varma Mutual Pension Insurance 828,075 828,075 4.00
   828,075 0.90
   Company
   9. Ilmarinen Mutual Pension Insurance 675,000 675,000 3.26
   675,000 0.74
   Company
   10. Hortling Pia Johanna 23,388 25,066 48,454 0.23
   492,826 0.54
   Others 79,812 10,003,708 10,083,520 48.66
   11,599,948 12.66
   Total 3,732,256 16,989,976 20,722,232 100.00
   91,635,096 100.00
   *) The figures include the
   shareholder’s own holdings and shares
   held by parties in his control.

During January-March 2021, Olvi has not received any flagging notices in
accordance with Chapter 2, Section 10 of the Securities Markets Act.

1. PROPERTY, PLANT AND EQUIPMENT
   EUR 1,000
    1–3 / 2021  1–3 / 2020  1–12 / 2020

Opening balance 204,156 208,701 208,701
Additions 7,696 8,881 31,923
Deductions and transfers -442 -404 -2,294
Depreciation -5,878 -5,697 -22,625
Exchange rate differences 983 -8,016 -11,549
Total 206,515 203,465 204,156

1. CONTINGENT
   LIABILITIES
   EUR 1,000
   31 March 2021 31 March 2020 31 December 2020

Pledges and
contingent
liabilities
   For own 1,938 1,988 1,938
commitments

Leasing and rental
liabilities:
   Due within one 811 769 788
year
   Due within 1 to 631 323 398
5 years
   Due in more 13 0 0
than 5 years
Leasing and rental 1,455 1,092 1,186
liabilities total

Other liabilities 60 60 60

1. CALCULATION OF FINANCIAL RATIOS

In the summary of financial indicators (page 1), the Group presents figures
directly derived from the consolidated income statement: net sales, operating
profit and profit for the period, the corresponding percentages in proportion to
net sales, as well as the earnings per share ratio. (Earnings per share = Profit
belonging to parent company shareholders / Average number of shares during the
period, adjusted for share issues.)

In addition to the consolidated financial statements prepared in accordance with
IFRS, Olvi Group presents Alternative Performance Measures that describe the
financial development of its business and provide a commensurate overall view of
the company’s profitability, financial position and liquidity.

The Group has applied the ESMA (European Securities and Markets Authority) new
guidelines on Alternative Performance Measures that entered into force on 3 July
2016 and defined APMs as described below.

As an APM supporting net sales, the Group presents sales volumes in millions of
litres. Sales volume is an important indicator of the extent of operations
generally used in the industry.

Equity per share = Shareholders’ equity held by parent company shareholders /
Number of shares at end of period, adjusted for share issues.
Equity to total assets, % = 100 * (Shareholders’ equity held by parent company
shareholders + non-controlling interests) / (Balance sheet total).

Gearing, % = 100 * (Interest-bearing debt – cash in hand and at bank) /
(Shareholders’ equity held by parent company shareholders + non-controlling
interests).

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