Olvi Oyj Unsp/Adr

The Helsinki Distilling Company.

Welcome. You are in the right place. You might have wondered what was that video about, but we're today sitting here at the Helsinki Distilling Company in the city of Helsinki. And the reason for being here is that this year we're celebrating 10 years of whisky manufacturing in Finland in the first distillery that was opened after the prohibition. So we're quite proud of our heritage and our growing business here. But indeed today we've gathered here to talk about our first quarter results and our interim report for Q1. And thank you for those of you who have joined us here in person today and also for you that are joining online. So before we get to it, let's go through the usual disclaimers. So today, again, as in the past, we will refer to the future and thereby there's intrinsic uncertainty. So whilst we have every faith in the messages we're sharing, there is always that caveat to bear in mind. To most of you, we hope that we're already familiar, but Tina-Liisa is heading our finance and our Digi and IT part, and I'm Patrick, and I have the pleasure of supporting the business overall. But let's get to it, and let's have a look at the first quarter and a few things that stand out. So the performance which we believe many of you have already seen as we released the earnings already online a few hours ago are very much in line with our expectations and based on the initiatives we set in place and thereby we're pleased to see that the results are coming and following in line with our expectations. We also wanted to talk a bit about the operating environment. So of course the environment remains challenging There's all that geopolitical uncertainty prevalent that we're familiar with and reading in the news, unfortunately, on a daily basis. But beyond that, in our operating markets, there's also evolution, as always. And in this case, we're referring mainly to the changing tax environment. So we've seen in some of the Baltic countries already since January increased VAT. We received some news around the same topic in Finland this week, and that seems to be a prevailing trend. Beyond local legislation, we're also preparing for European legislation, be it around the packaging directive or then future evolution in, for instance, soft drinks taxing, which is both regional and local. What's nonetheless really reinsuring and something that we've been stating before and is worth repeating again this quarter is the prevalence, the strength, the resilience of our product portfolio. So having a broad portfolio of strong leading brands really is delivering dividends. So what you see is the performance was slight softness on the volume, good improvement on the profitability and solid demand. So we're not losing our shares, we're not losing the consumers. And this is really paramount as we navigate the year forward. I also wanted to talk briefly about people. So we brought that up before that people is central and our team is central to our performance. We did our biannual people survey in January, late January this year, and we have now received the results and gone through them. And we're really pleased about the increased level of engagement. So our team across the group remain engaged at an exceptional level compared with the industry average. And this has improved from last year's reading. So that's brilliant to see. And then finally, I'll refer to the strategy, which we'll come back to later on. But now we'll move into the figures from where you'll see more precisely what I just shared come to life through the numbers. And Tina-Liisa will take us through this section. Please, Tina-Liisa.

Thank you, Patrik. And welcome to this webcast and this event here on my behalf too. I will have three topics today. We will talk first the scrupleable performance, then segment performance, and then some main KPIs. In a group level, net sales and sales volume grew slightly compared to the first quarter last year. In total, it was a good achievement as the consumption is under pressure due to the lowered consumer purchasing power. But as Patrick said, Olli was able to keep its market shares on a good level. Group-level profitability improved almost 13% as the adjusted EBIT grew to 11.2 million euros. Good development in the profitability was supported by price increases and lowered cost inflation. EBIT grew over 600%. First quarter EBIT last year was affected by fine pating in Belarus. Then segment performance. First, I want to remind you that the first quarter is seasonally small quarter. Net sales represents about 20% and then EBIT about 15% of the whole year figures. In Finland, sales volume decreased slightly due to the planned and gradual portfolio changes, especially in beers. Net sales grew over 5% against the decreased volumes as sales value has improved thanks to the price increases. This helped us more than double our adjusted EBIT. At the same time, we need to remember that the first quarter last year was burdened by high-cost inflation, which we could not reflect on the customer prices back then. In 2023, we were able to start price increases in the second quarter. In the Baltic Sea, sales volumes and net sales remained on the last year level. Unlike in Finland, we were able to carry out the price increases already beginning of the year 23. Therefore, net sales growth against volume is not similar than in Finland. Even though sales volumes and the net sales remained on the previous year level, we were able to increase our EBIT by 13%. Thanks to inflation coming under control, improved production efficiency and targeted price increases. In Belarus, sales volume increased due to promotional sales. In local currencies, net sales grew by 11%, but because of exchange rate, net sales in euro decreased 5.4%. You can see the impact of exchange rate and promotional sales in the development of adjusted EBIT. It decreased by 14%, but in local currency it remained at the previous year level. Then what comes to withdrawal from Belarus markets? We unfortunately do not have new news. Olvi does not have permission to sell the shares. Business is continued standalone basis for now. We also need to remember that the business operations and the financial forecasting in Belarus involves high uncertainty. Then some KPIs from the first quarter. First equity ratio that remained on a good level. Then earnings per share that retained to the more normal level and were 43 cents per share. Last year figure was negatively impacted by fine in Belarus. You can see the same development in cash position or cash change. It returned to the more normal level. Last year figure was affected by change in short-term financing instruments. Cash change is normally negative in the first quarter because of the seasonality and because we are stocking for the summer season. Then investments decreased in the first quarter as we have informed earlier that the large part of the investments will take place in the latter part of the year and we will inform how those projects will continue during the year. Then the number of employees grew slightly and that is in line with our business development. Then in the first quarter, we finalized the calculations to green house gas emissions for full year 23. Related to sustainability, reducing emission is an important part of our planet agenda. We are happy to share that in intensity, which means emissions per liter is reduced 4%, which is more than the absolute value.