OLVI PLC                 Interim report 20 April 2023 at 9 am

Olvi Group's interim report January-March 2023

• Net sales were EUR 129.5 (103.9) million. The sales volume increased by 7.6%, and net sales grew by 24.6%.
• The adjusted operating result was EUR 10.0 (6.4) million, and the operating result was EUR -2.2 (6.4) million. The operating result includes an expense of EUR 12.2 million related to a fine imposed on the subsidiary in Belarus.
• A strong balance sheet and a solid financial position, with no net debt, enable investments.

Near-term outlook

Olvi cancelled its guidance by means of a press release on 20 February 2023 because of the uncertainty related to Belarus. The Belarusian company and its operating environment continue to be subject to significant uncertainty. It is therefore not possible to issue reliable guidance at Group level at the time of the interim report.

Business performance is expected to continue at a good level in Finland and the Baltic Sea region. However, expenses will remain high in all Olvi's business segments in 2023. Thanks to Olvi's diverse product portfolio, demand has remained strong in the current market situation, and growth potential can be seen in an increasing number of product categories in current and new markets.

The Group's key ratios

1-3/2023 1-3/2022 Change, % / pp 1-12/2022
Sales volume, Mltr 203.2 188.8 7.6 956.1
Net sales, MEUR 129.5 103.9 24.6 583.7
Gross profit, MEUR 46.9 39.0 20.3 219.9
% of net sales 36.3 37.5 37.7
Adjusted operating result, MEUR 10.0 6.4 55.4 59.8
% of net sales 7.7 6.2 10.2
Items affecting the -12.2 0.0 -37.4
comparability of the operating
result, MEUR
Operating result, MEUR -2.2 6.4 -134.6 22.4
% of net sales -1.7 6.2 3.8
Adjusted profit for the period, 4.5 5.5 -17.7 44.9
MEUR
% of net sales 3.5 5.3 7.7
Profit for the period, MEUR -7.7 5.5 -239.8 7.5
% of net sales -5.9 5.3 1.3
Earnings per share, EUR -0.35 0.26 -233.2 0.39
Investments, MEUR 6.9 8.5 -19.2 37.1
Equity per share, EUR 11.75 12.90 -8.9 13.49
Equity to total assets, % 50.7 56.3 -5.6 57.5
Gearing, % -8.5 -12.4 -3.9 -20.3

Olvi presents the adjusted operating result and the adjusted profit for the period as alternative performance measures to improve comparability between reporting periods. In January-March 2023, the items affecting comparability not included in the adjusted operating result and the profit for the period totalled EUR 12.2 million and were related to the fine imposed on the Belarusian subsidiary.

Business development

CEO Patrik Lundell:

Q1/2023: Demand was strong, but the cost level remained high

Olvi Group's sales volume increased by 7.6% in the first quarter, and its net sales grew by 24.6%. The sales volume increased markedly in HoReCa (hotel, restaurant, catering), where the comparison period was burdened by restrictions related to the coronavirus pandemic. Good retail growth continued. However, exports decreased year-on-year because of the end of Russian exports.  

Purchase prices continued to increase at the beginning of the year, particularly in packaging materials. The prices of raw materials remained at the high level reached in late 2022. Salary increases have been implemented in several markets, and the next significant increases will take place in Finland in the second quarter. Logistics costs remained record high, although the increase in fuel prices stabilised. The cost of sales increased by 27.1%, markedly more than the sales volume. Cost increases could not yet be fully transferred to prices in all markets because of country-, product- and customer-specific contract structures.

The Group's adjusted operating result increased by 55.4% to EUR 10.0 million. There were significant differences between business segments in the development of the operating result. Because of items affecting comparability, the operating result showed a loss of EUR 2.2 million. Comparability was affected by a EUR 12.2 million fine imposed on the Belarusian subsidiary based on an inspection by the Belarusian government.

Olvi's balance sheet continues to be strong, and the company has no net debt. This gives Olvi good opportunities to develop its business operations, invest in Finland and the Baltic Sea region, and seek growth and develop in new markets. The company maintains its plants' good competitiveness by investing in new technologies to ensure production efficiency and environmental friendliness.  

Sustainability work is guided by a Group-wide sustainability programme. Sustainability is one of Olvi Group's values and a key part of its strategic and operational decision-making and day-to-day operations. In the future, we will also report on the progress of our sustainability work in our interim reports.

I would also like to thank Olvi's personnel and partners for the warm welcome and good cooperation. 

Segment-specific business development: Q1/2023

Sales grew in Finland, but profitability was burdened by cost inflation

The sales volume of Finnish operations increased by 5.8%. The growth was strongest in HoReCa, as sales in the comparison period suffered from restrictions on restaurant operations. Retail sales also continued to increase. Net sales increased by 16.2%. At the beginning of the year, price increases were implemented in those sales channels, customers and products in which it was possible. Changes in the price periods of the most significant retail positions took place at the end of March and will not affect net sales until the second quarter.

Costs increased significantly from the first quarter of last year and even from the end of 2022. Costs will continue to increase in 2023 because of salary increases, among other factors. The Finnish operations' operating result was EUR 1.7 million, with a decrease of 36.2% year-on-year. The plan is to continue price increases within the limits of contractual terms and conditions and price periods to restore profitability over the long term.  

Net sales increased in the Baltic Sea region

The sales volume in the Baltic Sea region decreased by 1.9%, mainly because of the impact of the end of Russian exports. However, net sales increased by 20.4%. Sales grew in HoReCa in particular and also in retail.

The operating result increased by 6.6% to EUR 2.5 million. Price increases have largely been sufficient to cover significant cost increases, meaning that profitability has improved. The new CEO of the Danish company is off to a good start with the company's development, aiming for improved profitability and business development towards a more diversified product selection.

A fine of EUR 12.2 million imposed in Belarus burdened the operating result

The State Control Committee of the Republic of Belarus imposed a BYN 35.8 million (EUR 12.2 million) fine on Olvi's subsidiary Lidskoe Pivo. Olvi announced this on 20 February 2023. Lidskoe Pivo has appealed against the fine. The Leninsky District Court in Minsk rejected the appeal on 29 March 2023 and ordered the fine to be paid. Based on this decision, the fine has been recognised as an expense in the first quarter of 2023. Lidskoe Pivo has appealed to a higher court. The process is still in progress. The payment of the fine is expected to take place in the second quarter. The fine has a significant cash flow impact. Olvi has stated to the local authorities that it complies with local and international laws, and has stressed the importance of local operational capability and the maintenance of owners' rights in the current operating environment.

The sales volume increased by 21.6%, and net sales grew by 49.6%. The sales volume increased because of higher market shares in beer in particular. The increase in net sales was driven by price increases and higher sales volumes. The operating result showed a loss of EUR 6.1 million, burdened by the fine imposed by the Belarusian government. The adjusted operating result was EUR 6.1 million, with an increase of 233.3%. The growth was driven by higher sales margins. In addition, the operating result in the comparison period does not include depreciation, which was not recognised during the time that the segment was classified as an asset held for sale. These had an impact of EUR 0.4 million. Net sales in the local currency increased by 39.8%, and the adjusted operating result grew by 192.0%.

Investments

Olvi Group's investments in extensions and replacements were EUR 6.9 (8.5) million in January-March, of which EUR 3.4 million were related to Finland and EUR 3.2 million to subsidiaries in the Baltic Sea region. Replacement investments necessary for the continuity of production have been made in Belarus through income financing, totalling EUR 0.3 million.

Olvi has invested in the production and storage capacity required for business growth especially in Finland, where the collection and storage capacity was improved for the season. The brewhouse investment to increase beer production capacity in Lithuania was completed during the first quarter. The implementation of a new filling line was finalised in Denmark.

Olvi is increasingly focusing on environmental friendliness, improved working conditions and safety. The installation of the carbon dioxide capture and storage equipment at the Iisalmi plant progressed during the first quarter. The company is aiming to achieve carbon-neutral operations at its Iisalmi plant during 2023 and at its other plants in the coming years.

Sustainability

Sustainability is one of Olvi Group's values and a key part of its strategic and operational decision-making and day-to-day operations. Sustainability work is guided by a Group-wide sustainability programme.

Environmental sustainability

In environmental sustainability, Olvi Group focuses on reducing climate emissions in particular. In February, Olvi Group joined the international Science Based Targets initiative (SBTi). Through the initiative, the Group is committed to setting science-based emissions reduction targets, which are currently being prepared for approval by the SBTi in the autumn of 2023. To measure its climate emissions in 2022, Olvi Group is currently collecting annual climate emissions reporting data for the Carbon Disclosure Project (CDP) throughout the value chain (Scopes 1, 2 and 3). To promote these efforts, carbon dioxide capture equipment is currently under construction for Olvi, the parent company, to reduce the need for purchased carbon dioxide. This makes it possible to reduce emissions from both transport and production. 

Olvi Group continues to develop its own criteria for sustainable products. One of the parameters is the circular economy, to which Olvi, the parent company, has contributed by launching products containing excess materials.
These products are KevytOlo Apple-Lime + surplus fruits and KevytOlo Natural Energy Drink Strawberry-Banana & surplus fruits.

Social sustainability

In social sustainability, Olvi Group is focusing on its occupational safety culture. The Group's occupational safety team and its leader, who was appointed at the beginning of 2023, are creating the Group's shared vision for safety at work and its development and the definition of occupational accidents. In addition, Olvi Group has started to create an operating model to identify human rights impacts throughout the value chain. To support this work, Olvi Group has joined the UN Global Compact Business & Human Rights programme, which began in February. 

Corporate governance

To promote corporate governance, Olvi Group works to ensure its partners' commitment to compliance with its Code of Conduct for Partners. The Group has focused on updating the Code of Conduct and other guiding principles during the first quarter of the year. 

Olvi Group continues to develop sustainability through a broad-based approach in cooperation with stakeholders and by investing in the digitalisation and reporting of sustainability data. During the first quarter, the Group has been implementing a supplier data management tool, which also collects information related to sustainability. 

Seasonal nature of operations

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

Sales development

Olvi Group's sales volume grew by 7.6% in January-March, totalling 203.2 (188.8) million litres.

Sales volume, Mltr 1-3/2023 1-3/2022 Change, %
Finland 58.8 55.6 5.8
Baltic Sea region 88.3 90.0 -1.9
Belarus 65.9 54.1 21.6
Eliminations -9.7 -10.9
Total 203.2 188.8 7.6

The Group's net sales in January-March increased by 24.6% and were EUR 129.5 (103.9) million.

Net sales, MEUR 1-3/2023 1-3/2022 Change, %
Finland 48.3 41.6 16.2
Baltic Sea region 58.6 48.7 20.4
Belarus 28.8 19.2 49.6
Eliminations -6.2 -5.6
Total 129.5 103.9 24.6

Financial performance

The Group's operating result in January-March was EUR -2.2 (6.4) million, or -1.7% (6.2%) of net sales. The adjusted operating result increased by 55.4% and was EUR 10.0 million. This was mainly due to higher profitability in the Belarusian segment.

Adjusted operating result, MEUR 1-3/2023 1-3/2022 Change, %
Finland 1.7 2.6 -36.2
Baltic Sea region 2.5 2.3 6.6
Belarus 6.1 1.8 233.3
Eliminations -0.3 -0.3
Total 10.0 6.4 55.4

Operating result, MEUR 1-3/2023 1-3/2022 Change, %
Finland 1.7 2.6 -36.2
Baltic Sea region 2.5 2.3 6.6
Belarus -6.1 1.8 -431.0
Eliminations -0.3 -0.3
Total -2.2 6.4 -134.6

The Group's profit after taxes in January-March was EUR -7.7 (5.5) million.

Earnings per share calculated from the profit attributable to the owners of the parent company were EUR -0.35 (0.26) in January-March.

Financial position and the balance sheet

Olvi Group's balance sheet total at the end of March 2023 was EUR 482.8 (480.4) million. Equity per share at the end of March 2023 was EUR 11.75 (12.90). The equity ratio was 50.7% (56.3%), and gearing was -8.5%      (-12.4%). The Group's liquidity indicator, the current ratio, remained at the same level as before, at 1.1 (1.1). Interest-bearing liabilities amounted to EUR 4.1 (6.7) million at the end of March. Of the interest-bearing liabilities, current liabilities accounted for EUR 2.2 (4.9) million.

Olvi Group's balance sheet and financial position are strong. The company has no net debt. The company's ability to invest has remained good.

Cash assets stood at EUR 24.8 million at the end of the review period, with a decrease of EUR 15.4 million year-on-year. Cash flow from operating activities was EUR -27.6 (-13.5) million. The decrease was due to the parent company's decision to discontinue factoring. During the first quarter, the company prepares for the season, meaning that cash assets are tied up in stock and purchases for production. Cash flow from investing activities was EUR -6.9 (-8.8) million, and cash flow from financing activities was EUR -0.8 (4.3) million. 

Personnel

In the first quarter, Olvi Group had an average of 2,302 (2,240) employees, with an increase of 2.8%.

Olvi Group's average number of personnel by country:

1-3/2023 1-3/2022 Change, %
Finland 412 407 1.2
Baltic Sea region 1,042 986 5.7
Belarus 848 847 0.1
Total 2,302 2,240 2.8

Board of Directors and management

The Annual General Meeting of Olvi plc was held on 29 March 2023. Its decisions and impacts on the composition of the Board are discussed below.

The CEO of Olvi plc changed on 1 January 2023. The new CEO is Patrik Lundell. The CEO of the Danish subsidiary changed on 27 February 2023. The new CEO is Jette Andersen. Tomi Vuorinen started as Olvi plc's Production Director and a member of the Management Team, with Lauri Multanen becoming the Group Production Director.

Other events during the review period

Annual General Meeting

Olvi plc's Annual General Meeting (AGM) on 29 March 2023 adopted the financial statements and discharged the members of the Board and the CEO from liability for the financial year that ended on 31 December 2022.

In accordance with the Board's proposal, the AGM decided to pay a dividend of EUR 1.20 (1.20) for Series A and Series K shares for the 2022 financial year. This dividend is 311.4% (51.9%) of Olvi Group's earnings per share. The dividend will be paid in two instalments. The first instalment (EUR 0.60 per share) will be paid on 20 April 2023 to shareholders registered in the list of shareholders maintained by Euroclear Finland on the record date (31 Match 2023). The second instalment (EUR 0.60 per share) will be paid on 5 September 2023 to shareholders registered in the list of shareholders maintained by Euroclear Finland on the record date (29 August 2023). The AGM decided that the Board of Directors will consist of five (5) members. Lasse Heinonen, Nora Hortling, Juho Nummela and Päivi Paltola were re-elected as the members of the Board. Christian Ståhlberg was elected as a new member of the Board. The authorised public accounting firm Ernst & Young Oy was re-elected as the company's auditor, with Elina Laitinen, Authorised Public Accountant, as the auditor in charge. The AGM's decisions were published in a stock exchange release on 29 March 2023.

Organisation of the Board of Directors

At its organising meeting on 29 March 2023, Olvi plc's Board of Directors elected Nora Hortling as Chair and Lasse Heinonen as Vice Chair of the Board. Lasse Heinonen, Nora Hortling and Juho Nummela were elected as the members of the Audit Committee. Nora Hortling, Päivi Paltola and Christian Ståhlberg were elected as the members of the Personnel and Sustainability Committee.

Changes in the Group structure

No changes took place in Olvi's subsidiary holdings during the first quarter of 2023.

Share-based payments

A share-based incentive plan for key personnel has ended at Olvi Group. The performance period ran from 15 February 2021 to 14 February 2023. The incentive plan was part of the incentive plan for the Group's key personnel approved for 2021-2025. The earning criteria were the Group's cumulative operating result in euros for 2021-2022 and growth in the Group's sales volume of non-alcoholic products in 2021-2022. In accordance with the terms and conditions of the plan, the rewards were paid in both Series A shares in Olvi and in cash. A total of 5,900 Series A shares were transferred as rewards. The target group of the incentive plan consisted of 12 people, including the CEO and the other members of Olvi's Management Team.

Following the end of the previous CEO's employment obligation on 31 December 2022, a net amount of 3,317 Series A shares in Olvi fell due to be paid to the CEO for the 2021-2023 and 2022-2024 performance periods of the share-based incentive plans in accordance with the rules of the incentive plans and by the decision of the Board of Directors. In accordance with the terms and conditions of the plan, the rewards were paid in Series A shares in Olvi and partly in cash. The amount of the share reward was based on the time passed since the beginning of the performance period and the estimated level of achievement of the earning criteria of the performance-based plan.

The incentive plans and the related acquisition of the company's own shares are explained in more detail in items 4 and 5 of Table 5 in the table section of the interim report bulletin.

Business risks and their management

Impacts of the war in Ukraine

The war in Ukraine has significantly increased business risks. There were challenges in the availability of raw materials and packaging materials because of the coronavirus pandemic, and the war in Ukraine has worsened the situation, especially with regard to cans and glass bottles. The prices of packaging materials have continued to increase after the coronavirus pandemic. The prices of raw materials - especially barley malt, sugar and carbon dioxide - are high, and their availability on the market has been more uncertain than normal. The prices of electricity and gas have fluctuated greatly, particularly in the Baltic Sea region segment, which affects production costs. The price of oil has increased fuel prices, which are directly reflected in logistics costs. Olvi will respond to the increase in costs by continuing price increases as far as possible. The company is actively seeking alternative suppliers and improving the efficiency of its production operations.

Consumer prices have risen rapidly, especially in Europe, as a result of the war in Ukraine. General cost inflation may reduce consumers' purchasing power and thereby affect consumer behaviour. Changes in consumer behaviour are already being reflected in a shift in consumption to more affordable product options, and overall consumption may decrease. This may have an impact on the preconditions for business growth and profitability over the long term.

Because of the war in Ukraine, uncertainty is related to the Belarusian business segment and the stability and predictability of the operating environment. Olvi's subsidiary Lidskoe Pivo has been subject to a special inspection, and the related process is still in progress. By the time of this interim report, the process has resulted in a significant fine that undermines business conditions. In addition, the company's shares are subject to a sales ban, as a result of which Olvi has discontinued the process to sell Lidskoe Pivo. Olvi has stated to the local authorities that it complies with local and international laws, and has stressed the importance of local operational capability and the maintenance of owners' rights in the current operating environment. Other uncertainties are related to the development of exchange rates, new sanctions and the functioning of financial transactions with Western countries. Olvi's Belarusian subsidiary operates independently of the parent company's financial support, based on cash flow financing. The fine imposed on Lidskoe Pivo will be paid from local assets. The fine will significantly reduce the company's cash assets, but its operations are expected to continue despite the fine.

Preparedness

Olvi Group has prepared several scenarios related to the development of the business environment and is prepared to respond to changing situations. Preparations have been made for production disruptions and continuity plans have been drawn up related to the availability of labour, raw materials and energy, for example. Investments have been made to secure energy availability. The company has also made efforts to ensure the availability of raw materials and packaging materials.

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

Events after the review period

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

OLVI PLC
Board of Directors
Webcast

Olvi plc and its CEO will hold a press conference, which can be followed at https://olvi.videosync.fi/q1-2023 (https://olvi.videosync.fi/q1-20223) . The press conference will be held in Finnish.

A recording of the webcast will become available on the company's website at https://www.olvigroup.fi/en/releases-and-publications/financial-releases/

More information:
Patrik Lundell, CEO, Olvi plc, tel. +358 290 00 1050
Tiina-Liisa Liukkonen, CFO, Olvi plc, tel. +358 29 000 1050

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

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

OLVI GROUP TABLE 1
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
EUR 1,000
1-3/2023 1-3/2022 1-12/2022

Gross sales 278,853 233,755 1,253,782
Excise taxes and other adjustments -149,389 -129,847 -670,079
Net sales 129,463 103,908 583,703

Cost of sales -82,515 -64,898 -363,816
Gross profit 46,948 39,011 219,887

Logistics, sales and marketing expenses -26,941 -24,052 -120,997
Administrative expenses -10,182 -8,803 -42,415
Other operating income and expenses -12,043 256 -34,111
Operating result -2,218 6,412 22,364

Financial income 42 444 1,593
Financial expenses -337 -303 -5,628
Share of the profit of associated companies 0 0 45
and joint ventures
Profit before tax -2,513 6,553 18,374

Income taxes -5,154 -1,068 -10,848
PROFIT FOR THE PERIOD -7,667 5,485 7,526

Other items of comprehensive income that may
be later reclassified to profit or loss:
Translation differences related to foreign -3,827 -8,049 1,638
subsidiaries
Income taxes related to items 0 122 0
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD -11,494 -2,442 9,164

Distribution of the profit for the period:
- Owners of the parent company -7,299 5,484 7,977
- Non-controlling interest -368 1 -451

Distribution of comprehensive income for the
period:
- Owners of the parent company -10,979 -2,190 9,674
- Non-controlling interest -515 -252 -510

Earnings per share calculated from profit
attributable to owners of the parent company,
EUR
- Undiluted -0.35 0.26 0.39
- Diluted -0.35 0.26 0.39

OLVI GROUP TABLE 2
BALANCE SHEET
EUR 1,000 31 Mar 2023 31 Mar 2022 31 Dec 2022
ASSETS
Non-current assets
Tangible assets 205,418 226,978 208,165
Goodwill 22,204 25,482 22,204
Other intangible assets 11,184 12,440 10,972
Holdings in associated 1,028 980 1,025
companies and joint
ventures
Other investments 1,042 888 1,046
Loans receivable and 1,870 2,067 1,377
other long-term
receivables
Deferred tax assets 2,461 1,509 2,569
Total non-current assets 245,208 270,344 247,358

Current assets
Inventories 80,704 67,549 70,891
Accounts receivable and 130,196 101,982 109,712
other receivables
Income tax receivables 1,863 319 506
Cash and cash equivalents 24,815 40,179 61,207
Total current assets 237,577 210,029 242,316
TOTAL ASSETS 482,785 480,373 489,674

EQUITY AND LIABILITIES
Equity attributable to
owners of the parent
company
Share capital 20,759 20,759 20,759
Other reserves 1,092 1,092 1,092
Fair value reserve 295 295 295
Treasury shares -1,255 -438 -1,079
Translation differences -55,627 -61,402 -52,030
Retained earnings 277,687 306,804 310,194
242,951 267,110 279,231
Non-controlling interest 1,816 3,137 2,514
Total equity 244,767 270,247 281,745

Non-current liabilities
Financial liabilities 1,968 1,813 1,983
Other liabilities 3,714 3,980 3,667
Deferred tax liabilities 13,203 13,818 13,466

Current liabilities
Financial liabilities 2,155 4,881 2,164
Accounts payable and 216,814 185,138 186,362
other payables
Income tax liability 163 496 287
Total liabilities 238,018 210,126 207,929
TOTAL EQUITY AND 482,785 480,373 489,674
LIABILITIES

OLVI GROUP TABLE 3
STATEMENT OF
CHANGES IN
EQUITY
EUR 1,000 Share Other Fair Reserve Translation Earnings Attributable Total
capital reserves value for differences to non
reserve treasury -controlling
shares interest
Equity 1 Jan 20,759 1,092 295 -1,079 -52,030 310,194 2,514 281,745
2023
Comprehensive
income:
     Profit -7,299 -368 -7,667
for the
period
     Other
items of
comprehensive
income:
          -3,680 -147 -3,827
Translation
differences
Total -3,680 -7,299 -515 -11,494
comprehensive
income for
the period
Business
transactions
with
shareholders:
     Dividend -24,818 -160 -24,978
payment
     Share 274 274
-based
incentives,
value of work
performance
     -604 -604
Acquisition
of treasury
shares
     Issue of 428 -723 -295
treasury
shares to
personnel
     83 59 -23 119
Adjustment
for previous
periods
Business -176 83 -25,208 -183 -25,484
transactions
with
shareholders,
total
Equity 31 Mar 20,759 1,092 295 -1,255 -55,627 277,687 1,816 244,767
2023
EUR 1,000 Share Other Fair Reserve Translation Earnings Attributable Total
capital reserves value for differences to non
reserve treasury -controlling
shares interest
Equity 1 Jan 20,759 1,092 295 -438 -53,728 326,016 3,627 297,624
2022
Comprehensive
income:
     Profit 5,484 1 5,485
for the
period
     Other
items of
comprehensive
income:
          -7,796 -252 8,049
Translation
differences
          122 122
Income taxes
related to
items
Total -7,674 5,484 -251 -2,442
comprehensive
income for
the period
Business
transactions
with
shareholders:
     Dividend -24,855 -7 -24,862
payment
     Share 244 244
-based
incentives,
value of work
performance
     -85 -85
Adjustment
for previous
periods
Business -24,696 -7 -24,703
transactions
with
shareholders,
total
Changes in
holdings in
subsidiaries:
      -232 -232
Acquisition
of shares
from non
-controlling
interest
      Change 232 -232 0
in non
-controlling
interest
Changes in 0 -232 -232
holdings in
subsidiaries,
total
Equity 31 Mar 20,759 1,092 295 -438 -61,402 306,804 3,137 270,247
2022

OLVI GROUP TABLE 4
CASH FLOW STATEMENT
EUR 1,000
1-3/2023 1-3/2022 1-12/2022

Profit for the period -7,667 5,485 7,526
Adjustments:
     Depreciation and impairment 7,245 6,690 64,532
     Other adjustments 5,417 2,080 14,509
Change in net working capital:
     Change in accounts -21,857 -5,324 -9,578
receivable and other receivables
     Change in inventories -10,677 -10,912 -12,349
     Change in accounts payable 3,216 -9,650 16,536
and other liabilities
Interest paid -65 -161 -449
Interest received 32 28 292
Dividends received 0 0 5
Taxes paid -3,266 -1,772 -13,861
Cash flow from operating -27,622 -13,536 67,163
activities (A)

Investments in tangible and -7,033 -8,633 -37,392
intangible assets
Proceeds from the sale of 179 141 976
tangible and intangible assets
Acquisition of shares from non 0 -378 -378
-controlling interest
Expenditure on other investments 0 0 -163
Dividends received 0 38 38
Cash flow from investing -6,854 -8,832 -36,919
activities (B)

Loan withdrawals 1,398 4,708 11,351
Repayment of loans -1,574 -380 -11,674
Acquisition of treasury shares -604 0 -641
Dividends paid 0 -2 -25,268
Cash flow from financing -780 4,326 -26,232
activities (C)

Increase (+) / decrease (-) in -35,256 -18,042 4,012
cash and cash equivalents
(A+B+C)

Cash and cash equivalents 1 Jan 61,207 58,741 58,741
Impact of exchange rate changes -1,136 -520 -1,546
Cash and cash equivalents 31 Mar 24,815 40,179 61,207
/ 31 Dec

OLVI GROUPTABLE 5

NOTES TO THE INTERIM REPORT

The interim report has been prepared in accordance with IAS 34 Interim Financial Reporting, applying the same accounting principles that were applied to the 2022 financial statements (31 December 2022).

The information in the interim report is presented in thousands (1,000) of euros. For presentation, individual figures and totals have been rounded up to full thousands, which causes rounding differences in the totals. Exchange rates obtained from the Central Bank of Belarus have been used as the exchange rate for the Belarusian rouble. The key ratios have been calculated by using accurate euro-denominated figures. The information published in the interim report has not been audited.

1.  SEGMENT
INFORMATION
SEGMENTS' NET
SALES AND
PROFIT FOR
THE PERIOD
1-3/2023
EUR 1,000 Finland Baltic Sea region Belarus Eliminations Group

INCOME
External 48,115 52,627 28,721 129,463
sales
     Beverage 47,647 52,627 28,721 128,996
sales
     468 0 0 468
Equipment
services
Internal 191 5,983 43 -6,218 0
sales
Total net 48,306 58,611 28,765 -6,218 129,463
sales

Total profit 5,989 1,750 -10,666 -4,740 -7,667
for the
period

SEGMENTS' NET
SALES AND
PROFIT FOR
THE PERIOD
1-3/2022
EUR 1,000 Finland Baltic Sea region Belarus Eliminations Group

INCOME
External 41,281 43,452 19,175 130,908
sales
     Beverage 40,914 43,452 19,175 103,541
sales
     367 0 0 367
Equipment
services
Internal 293 5,215 51 -5,559 0
sales
Total net 41,574 48,667 19,226 -5,559 103,908
sales

Total profit 2,527 1,963 1,120 -125 5,485
for the
period

2.  RELATED PARTY TRANSACTIONS

Management's employee benefits

Board members' and the CEO's salaries and other short-term employee benefits
EUR 1,000 1-3/2023 1-3/2022 1-12/2022
CEO 87 311 594
Chair of the Board 16 18 73
Other Board members 35 43 172
Total 138 372 839

3. SHARES AND SHARE CAPITAL
31 Mar 2023       %

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

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

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

The registered share capital totalled EUR 20,759 thousand on 31 March 2023.

A dividend of EUR 1.20 per share for 2022 (EUR 1.20 per share for 2021), totalling EUR 24.8 (24.9) million, will be paid on shares in Olvi plc. The dividend will be paid in two instalments. The first instalment, EUR 0.60 per share, will be paid on 20 April 2023. The second instalment, EUR 0.60 per share, will be paid on 5 September 2023. Series K shares and Series A shares provide their holders with equal rights to dividends. The Articles of Association include a redemption clause concerning Series K shares.

4. SHARE-BASED PAYMENTS

A share-based incentive plan for key personnel has ended at Olvi Group. The performance period ran from 15 February 2021 to 14 February 2023. The target group of the share plan consisted of 12 people. In accordance with the terms and conditions of the plan, the rewards were paid in Series A shares in Olvi and partly in cash. A total of 5,900 Series A shares were transferred as rewards.

Following the end of the CEO's employment obligation on 31 December 2022, a net amount of 3,317 Series A shares in Olvi fell due to be paid to the CEO for the 2021-2023 and 2022-2024 performance periods of the share-based incentive plans in accordance with the rules of the incentive plans and by the decision of the Board of Directors. In accordance with the terms and conditions of the plan, the rewards were paid in Series A shares in Olvi and partly in cash. The amount of the share reward was based on the time passed since the beginning of the performance period and the estimated level of achievement of the earning criteria of the performance-based plan.

By means of a stock exchange release on 2 March 2023, Olvi plc's Board of Directors announced the terms and conditions and target group of the 2023-2025 performance period of the performance share plan. The 2023-2025 performance period is part of the Group's performance-based incentive plan for key personnel approved by the Board of Directors for 2021-2025. The aim of long-term incentive plans is to support the achievement of Olvi's targets, retain key employees in the company and provide them with incentive plans that are based on earning and accumulating shares.

The 2023-2025 performance share plan consists of one performance period. During the 2023-2025 performance period, the rewards are based on the Group's cumulative operating result in euros, the Group's cumulative sales volume of non-alcoholic products and the reduction of CO2 emissions in the Group's entire value chain compared with the 2021 level. The net amount of rewards to be paid based on the performance period will amount to a maximum of 10,600 Olvi plc Series A shares. During the 2023-2025 performance period, the plan covers 16 people, including the CEO and the other members of Olvi's Management Team.

The costs related to these plans totalled EUR 273.6 thousand in the review period. Olvi Group has no other share or option arrangements in place.

5. TREASURY SHARES

At the beginning of January 2023, Olvi plc held 29,404 treasury shares. At its meeting on 28 February 2023, the Board of Directors of Olvi plc decided to initiate a scheme to acquire treasury shares based on the authorisation issued by the Annual General Meeting on 30 March 2022. On this basis, the Board will repurchase a maximum of 20,000 Series A shares. The acquisition of shares began on 2 March 2023 and ended on 14 March f2023. The shares were acquired for financing or implementing possible acquisitions or other arrangements, for implementing the company's incentive schemes or for other purposes determined by the Board of Directors.

At the end of the review period, Olvi plc held a total of 40,187 of its own Series A shares as treasury shares. The total acquisition price of treasury shares was EUR 1,254.8 thousand. The treasury shares do not provide the company with voting rights. The Series A shares held by Olvi plc represent 0.19% of all shares in the company and 0.04% of all votes provided by the shares in the company. The treasury shares account for 0.24% of all Series A shares in the company and 0.17% of the votes provided by all Series A shares in the company.

6. NUMBER OF SHARES 1-3/2023 1-3/2022 1-12/2022

  - Average 20,689,066 20,712,828 20,700,783
  - At the end of the period 20,682,045 20,712,828 20,692,828

7. TRADING IN SERIES A SHARES ON
THE NASDAQ HELSINKI
1-3/2023 1-3/2022 1-12/2022
Trading in Series A shares in Olvi, 462,846 875,076 2,351,044
number of shares
Total value of trading, EUR 1,000 14,297 34,582 82,916
Proportion of the trading out of 2.7 5.2 13.8
the total number of Series A
shares, %

Average share price, EUR 30.89 39.51 35.31
Closing price, EUR 29.90 35.65 33.15
Highest price, EUR 34.95 52.00 52.00
Lowest price, EUR 28.30 29.50 29.40

8. FOREIGN AND
NOMINEE
-REGISTERED
HOLDINGS 31 Mar
2023
Book-entry shares Number of votes Shareholders
number % number % number %
Finnish, total 16,652,797 80.37 87,565,661 95.56 22,202 99.59
Foreign, total 66,832 0.32 66,832 0.07 80 0.36
Nominee 448,229 2.16 448,229 0.49 6 0.03
-registered
(foreign), total
Nominee 3,554,374 17.15 3,554,374 3.88 4 0.02
-registered
(Finnish), total
Total 20,722,232 100.00 91,635,096 100.00 22,292 100.00

9. LARGEST SHAREHOLDERS 31 Mar 2023
Series K Series A Total % Number of %
votes
1 Olvi Foundation        2,363,904 890,613 3,254,517 15.71 48,168,693 52.57
2 The estate of Heikki 903,488 103,280 1,006,768 4.86 18,173,040 19.83
Hortling*                                   
3 Timo Einari Hortling 212,600 49,152 261,752 1.26 4,301,152 4.69
4 Marit Hortling-Rinne     149,064 14,234 163,298 0.79 2,995,514 3.27
5 Nordea Bank Abp, nominee-registered 2,003,490 2,003,490 9.67 2,003,490 2.19
6 Skandinaviska Enskilda Banken Ab (publ), 1,496,015 1,496,015 7.22 1,496,015 1.63
Helsinki branch, nominee-registered
7 Varma Mutual Pension Insurance Company 828,075 828,075 4.00 828,075 0.90
8 Ilmarinen Mutual Pension Insurance Company 683,000 683,000 3.30 683,000 0.75
9 Pia Johanna Hortling 23,388 25,716 49,104 0.24 493,476 0.54
10 Jens Einari Hortling 23,388 16,216 39,604 0.19 483,976 0.53
Other 56,424 10,880,185 10,936,609 52.76 12,008,665 13.10
Total 3,732,256 16,989,976 20,722,232 100.00 91,635,096 100.00
* The shareholding includes shares held by
the shareholder and the entities controlled
by them.

Olvi did not receive any flagging notifications under chapter 2, section 10 of the Securities Markets Act in January-March 2023.

10. PROPERTY, PLANT AND EQUIPMENT
EUR 1,000
1-3/2023   1-3/2022   1-12/2022

Opening balance 208,165 229,356 229,356
Additions 6,255 8,118 37,286
Deductions and transfers -391 388 -152
Depreciation and impairment -6,611 -6,010 -58,206
Exchange rate differences -2,000 -4,874 -119
Total 205,418 226,978 208,165

11. CONTINGENT LIABILITIES
EUR 1000
31 Mar 2023 31 Mar 2022 31 Dec 2022

Pledged assets and contingent liabilities
   On the company's own behalf 2,945 10,004 2,608

Lease and rental liabilities:
   Maturing in less than a year 1,304 1,322 1,337
   Maturing within 1-5 years 1,236 1,438 1,283
Total lease and rental liabilities 2,540 2,760 2,620

Other liabilities 67 60 67

12. CALCULATION PRINCIPLES FOR KEY RATIOS

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

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

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

The Group presents sales volume data in millions of litres as an Alternative Performance Measure that supports net sales. Sales volume is an important and widely used indicator in the industry that describes the scope of operations. To improve comparability between reporting periods, the Group also presents the adjusted operating result and the adjusted profit for the period as Alternative Performance Measures. The adjusted operating result is calculated by deducting significant items affecting comparability from net sales. The corresponding items have been deducted from the profit for the period when calculating the adjusted profit for the period.

Investments consist of increases in fixed assets, excluding increases under IFRS 16.

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

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

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