Finland: Olvi Group’s net sales increased by 15.7% to €130.6 million in January-September 2006

The Olvi Group achieved the best third-quarter result in its history, improving profitability in all operating areas, the group released October 26. Olvi Group’s net sales for the first 9 months amounted to €130.6 (112.9) million, an increase of 15.7% (in the gapes the same topic year-on-year). The operating profit stood at €16.7 (€11.6) million. The increase in operating profit was mostly attributable to a significant earnings improvement in Finland. The Group's gross capital expenditure amounted to €14.6 (€16.7) million, and its equity to total assets ratio stood at 50.0 percent (48.1%). Earnings per share amounted to €1.32 (€0.86).

Olvi plc adopted the International Financial Reporting Standards (IFRS) as of 1 January 2005. This interim report has been prepared in accordance with IFRS recognition and measurement principles. The interim report has not been prepared in compliance with all of the requirements in the standard IAS 34, Interim Financial Reporting. The accounting policies used for the preparation of this interim report are the same as those used for the annual financial statements 2005. The interim report is unaudited.

Net sales and earnings

Olvi Group’s sales in January-September amounted to a total of 2.33 (2.08) million hl. This represents an increase of 255,000 hl (12.2 percent) on the previous year. Sales in July-September increased by 117,000 hl (15.3 percent) compared to the previous year.

In Finland, the parent company’s sales in January-September amounted to a total of 849,000 (812,000) hl. This represents an increase of 37,000 hl or 4.6 percent. From July to September, domestic sales increased by 40,000 hl or 14.1 percent.

In the Baltic states, Olvi’s subsidiares continued to increase their sales with strong growth in January-September compared to the corresponding period last year (+18.1%). In July-September, sales increased by 15.5 percent on the previous year. The increase in sales volumes in the Baltic states was made possible by investments carried out to increase capacity in the subsidiaries, as well as beverage markets that are still developing.

Sales volumes by market area:

Finland: 849,000 (812,000) hl, Estonia: 989,000 (873,000) hl, Latvia: 330,000 (246,000) hl, Lithuania: 325,000 (274,000) hl. Olvi Group total: 2.330 (2.080) million hl.

Consolidated net sales from January to September amounted to €130.6 (€112.88) million, representing an increase of €17.7 million or 15.7 percent on the corresponding period. Finnish net sales increased by 8.2 percent in January-September and 17.1 percent in July- September compared to the corresponding periods last year.

The total increase in the net sales of Olvi’s Baltic subsidiaries in January-September was 24.5 percent. In July-September, the Baltic net sales increased by 25.3 percent on the previous year.

Net sales by geographical segments: Finland: €60.9 (€56.3) million, Estonia: €47.5 (€38.9) million, Latvia: €14.1 (€10.4) million, Lithuania: €13.8 (€11.4) million. Olvi Group total: €130.6 (€112.9) million.

The Group’s operating profit from January to September amounted to €16.7 (€11.6) million. This represented an increase of €5.1 million or 43.9 percent on the corresponding period last year. Above all, the increase in operating profit was due to substantial improvement in the parent company Olvi plc’s operating profit. All companies within the Group posted a positive operating profit.

Operating profit by geographical segments: Finland: €6.6 (€3.8) million; Estonia: €8.1 (€6.9) million; Latvia: €0.9 (€0.4) million; Lithuania: €1.1 (- €0.3) million.


In the period under review, earnings after taxes improved by €5.0 million to €13.7 (8.7) million. Earnings per share belonging to the parent company’s shareholders improved by €0.46 to €1.32 (€0.86).

Parent company Olvi plc

Net sales of the parent company Olvi plc in January-September amounted to €60.9 (56.3) million, with a total volume of 849,000 (812,000) hl. Sales in January-September increased by 37,000 hl (4.6 percent) compared to the previous year. From July to September, sales increased by 40,000 hl or 14.1 percent.

Among Olvi plc’s main product groups, the sales of beers increased by 9.4 percent and the sales of ciders by 15.6 percent over the review period. The sales of the energy drink TEHO almost doubled. The sales of mineral waters declined by approximately 17 percent, largely attributable by the lack of a popular promotional package in Olvi’s product range.

According to the latest AC Nielsen report published for the period under review, Olvi plc’s retail market share in its main product groups (beers, ciders and mineral waters) continued to increase and stood at 18.9 percent.

From January to September, net sales increased by 8.2 percent on the previous year, and from July to September the increase was 17.1 percent.

The parent company Olvi plc’s operating profit in January-September was €6.6 (€3.8) million or 10.9 (6.8) percent of net sales. The operating profit improved by €2.8 million or 72.8 percent. In July- September, the parent company’s operating profit improved by 25.7 percent on the previous year. The increase in operating profit was affected by more balanced sales between product groups, increased efficiency of logistics and production, and better control of costs.

The warm and dry summer and controlled promotional sales during the most important season of the year also contributed to the increase in operating profit.

AS A. Le Coq Tartu Olletehas

The total sales of the Estonian subsidiary AS A. Le Coq Tartu Olletehas increased to 989,000 (873,000) hl in January- September. This represents an increase of 117,000 hl or 13.4 percent. Sales volumes increased in all product groups, but the greatest proportional increases were seen in ciders, mineral waters and long drinks. AS A. Le Coq has a 50 percent share of the long drink market in Estonia and market shares of 30 to 40 percent in other product groups.

Favourable development of the sales volume boosted AS A. Le Coq Tartu Olletehas’s net sales for the review period to €47.5 (€38.9) million. This represents an increase of €8.6 million or 22.2 percent.

The Estonian subsidiary’s operating profit for the period under review was €8.1 (€6.9) million or 17.0 (17.8) percent of net sales. The operating profit increased by €1.2 million or 17.1 percent compared to the previous year.

In July-September, AS A. Le Coq Tartu Olletehas’s sales increased by 9.5 percent, net sales by 21.4 percent and operating profit by 15.2 percent compared to the previous year.

A/S Cesu Alus

In January-September, the total sales of A/S Cesu Alus operating in Latvia increased to 330,000 (24.7) hl, representing an increase of 84,000 hl or 33.9 percent. Growth was substantial in all product groups. Beers represented 72.0 percent of the total sales volume. The sales of beers increased by 22 percent on the previous year. Ciders, long drinks and soft drinks created a sales increase of 63.0 percent. A/S Cesu Alus has increased its market share to more than 20 percent of the Latvian beer market.

In January-September, A/S Cesu Alus posted net sales of €14.1 (€10.4) million. This represents an increase of €3.8 million or 36.4 percent. The company’s operating profit increased by €0.5 million to €0.9 (€0.4) million.

In July-September, A/S Cesu Alus’s sales increased by 40.2 percent, net sales by 39.2 percent and operating profit by 21.8 percent compared to the previous year.

AB Ragutis

The total sales of AB Ragutis operating in Lithuania increased to 325,000 (274,000) hl during the period under review. This represents an increase of 510,000 hl or 18.8 per cent. The greatest proportional increase of sales was seen in ciders, long drinks and juices, in which the sales volume doubled. Beers represent approximately 68 percent of the total volume. The sales of beers increased by 8.0 percent during the period under review. The company has a market share of 11.0 percent in the Lithuanian beer market and 50.0 percent in the cider market.

The net sales of AB Ragutis for the period under review amounted to €13.8 (€11.4) million. This represents an increase of €2.4 million or 20.6 percent. Operating profit stood at €1.1 (- €0.3) million, representing an increase of €1.4 million.

In July-September, AB Ragutis increased its sales by 12.9 percent and net sales by 20.7 percent. Operating profit stood at €0.9 million, representing an increase of €1.3 million on the previous year.

Financing and investments

Olvi Group’s balance sheet total at the end of the period under review was €153.1 (€138.1) million. Equity per share in January-September stood at €7.36 (€6.39). The equity ratio improved from 48.1 percent to 50.0 percent. The amount of interest-bearing liabilities was €39.1
(€43.2) million, including current liabilities of €3.2 (€8.6) million.

During the period under review, Olvi Group’s gross capital expenditure amounted to €14.6 million (€16.7 million). The parent company Olvi plc accounted for €1.0 million and the subsidiaries in the
Baltic states for €13.6 million of the total. The Group’s largest investment in 2006 is the construction of a logistics centre near Tartu, shared by the Estonian brewery and juice production plant.

Other major investments included extensions to the tank cellars at the Latvian and Lithuanian breweries, as well as extensions to the storehouse and yeast cellar at the Latvian brewery. Olvi plc’s largest investments concerned the can filling line. In addition to these investments, AS A. Le Coq Group invested additional share capital in AB Ragutis and A/S Cesu Alus totalling €10.9 million.

The Group’s average number of personnel during the period under review was 1,127 (1,073), 346 (339) of them in Finland, 395 (366) in Estonia, 195 (179) in Latvia and 191 (189) in Lithuania. At the end of the review period, the total number of personnel was 1,107 (1,069). The average number of personnel increased by 54 people or 5.0 percent compared to the corresponding period last year.

Olvi plc’ group structure

AS A. Le Coq Group holds 97.89 percent of the Latvian brewery A/S Cesu Alus and 98.96 percent of the Lithuanian company AB Ragutis. The company holds the entire stock of AS A. Le Coq Tartu Olletehas.

In April 2006, Olvi plc increased its share capital through a bonus issue comprising 933,064 new Series K shares and 4,256,638 new Series A shares. The increase in share capital, €10.379.404, was recorded in the Trade Register on 7 April 2006.

Olvi plc’s registered share capital currently stands at €20.758.808, and the total number of shares is 10.379.404. There are 1.866.128 Series K shares and 8.513.276 Series A shares. The impact of the bonus issue on Olvi Group’s per-share indicators for the previous year has been taken into account in order to preserve the comparability of the figures.


A total of 2.249.938 Olvi plc A shares changed hands on the Helsinki Stock Exchange from January to September 2006, totalling €45.2 million in trading volume. The traded shares represented 26.4 percent of the total number of A shares. The average share price was €14.02, with a low of €10.50 quoted in January and a high of €17.50 quoted in August. The quotation on the last day of the review period was €16.89.

Ownership structure

At the end of the review period, Olvi plc had a total of 4,807 (4,357) shareholders, 81.37 percent of whom were Finnish (share of votes 93.66%). Nominee-registered holdings accounted for 12.11 percent (2.74 percent of votes), while registered foreign holdings accounted for 6.52 percent (3.60 percent of votes).

Future outlook

The Olvi Group will continue to focus on improving the overall profitability of the Group and particularly on efficient utilisation of the substantial investments made to increase the capacity of the Baltic companies. In Finland, the Group is preparing for new tax legislation concerning the entire package stock of the brewing and beverage industry that will enter into force on 1 January 2008, as well as the changes imposed by the increased use of single-use packaging.

Olvi Group estimates that it’s full-year net sales for 2006 will increase on the previous year. It anticipates that group’s operating profit for the fourth quarter will be approximately on a par with the corresponding period last year, which means that the full- year operating profit will be clearly better than last year.

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