Olvi Oyj Unsp/Adr

Welcome, welcome to our Q4 and full year 25 financial statements. Before we start, let's do the usual disclaimer. So today we'll be referring to our expectations for 26. And of course, any references to the future comes with a degree of uncertainty. Many of you, I hope, have already gotten familiar with us. I've got Tina-Liisa with me, who's our CFO, and I'm Patrick myself. I'll start by summarizing the year, some key highlights, a bit about our history as well in terms of performance over the last couple of years. Then Tin-Liisa will take us through Q4 numbers, full year numbers. Then we'll come to the guidance and then we'll reflect on the key focus areas of 2026. And after this, yes, the questions. We'll have time for questions, and we ask you please to drop them in the chat. Today we're in a studio, we're live, but there's no one here but our assistant, so we'll take the questions and answer as many as we can live right now, and those questions that we won't have time to answer we'll take then in writing later on. Thanks, Tim, Lisa, for reminding me. So indeed, if we look at the full year as a whole, the results are strong. We were able to retain the high level of performance already achieved in 2024. And when I refer to sustainable growth, not only am I referring to the fact that we have been growing our EBIT and our net sales for a number of years already, but I'm also referring to the way in which we've done that. And we're exceptionally proud to be recognized second year in a row by Times Magazine as one of the world's best companies. We're amongst the top 500 leading companies when it comes to sustainable growth. So this is a source of pride for our whole organization and something that both consumers and customers are recognizing. We've also invested in our data, in our processes and competencies, and this is visible in the expanding margins. Of course, our team stands behind everything we do. Our people is a core asset, something we invest in, and we're glad to see that our people power index has retained its high level of AA+. Beyond the people, of course, it's about products. And our products, the portfolio, remains strong. Our brands are performing in our markets. Despite the challenges we've had, partly with weather, partly with some lost sales in Denmark, a much smaller market in Latvia, our shares are strong. We've even taken share in our key categories, and we'll get back to that as well in some of our later remarks. And I want to close on perhaps the largest news of last year, which was towards the end of the year when we announced four acquisitions. Three of these have now closed. And through these acquisitions, we're entering into three new countries and we'll get access to 26 million new consumers in these new home markets. Again, a topic we'll return to in just a bit. Just pausing on the topic of sustainable growth. And 2025 was actually the 10th year, 10th consecutive year of EBIT and net sales growth. And this is something remarkable. I think it's a strong testimony to the work done by previous generations, the strength of our portfolio and our ability to scale up our operations, both from a performance and a capacity perspective. So really, really strong performance. Now let Tina-Liisa talk to us through Q4 and the full year numbers in just a bit. But before that, pausing on the acquisitions. So four acquisitions in total, three have closed. Starting from the left on your screen there with Valmia Muisa. This is a premium brewer in Latvia, one which will open up further Horeca growth for us, will drive the premium part of our portfolio. The Valmia Muisa brands are not only beers, we have premium soft drinks there, so it's a balance between alcohol and non-alcohol. And these products are relevant across the Baltics. We've even seen them present in some of our other markets. So this is a great value add, a premium part of our portfolio. Then the next is about Bosnia, Bosnia-Herzegovina to be specific, bringing us down to the Balkans. We're there in the West Balkans now. If you combine the population of Serbia and Bosnia, we have a significant new consumer base there. If you take the whole of West Balkans, there's more than 20 million consumers there alone. So a very interesting new market opening also brings us closer to the Mediterranean, thinking about the coasts there in Croatia, Albania and so forth, supporting our export efforts, bringing production closer to the point of consumption. And then the third acquisition that also has closed is Brur International. It's company founded in Norway in 1992. They also have operations in Sweden. They import beers and wines. And through this acquisition, we have now access to all channels across Sweden and Norway. And then the final, Värska, a big mineral water producer in Estonia. And this deal we expect to close finally before summer. And this will add to our non-alcoholic volume, roughly 10%, bringing our total portfolio to balance. So we'll have 50% alcoholic beverages and 50% non-alcoholic. So very exciting opportunities across the four acquisitions. So then closing here on the map, this is how our presence now looks like, servicing all of Northern Europe, being able to expand the reach of our own products through our new partners there in Sweden and Norway, offering also access to all of these countries to our branded partners, and then indeed extending our reach down to the Mediterranean, the Western Balkans, through our new friends there in Bosnia and Herzegovina. But with that, let's have a closer look at the numbers and then come back to some of our reflections for 2026. Please, Tinlis.

Thank you, Patrik. So we will focus first in quarter four. And there as a total, the net sales continue to increase thanks to the improved average sales price, despite the small decline in the sales volumes. And as we stated lastly in October, it was planned and known that these expenses would be more focused in the second and third quarters of 2025. And therefore, profitability did increase a significant 72.5% in Q4 to 16.1 million euro. This was possible, as said earlier, due to the fact that costs were loaded in the earlier quarters compared to 2024. as well as improved gross profit due to the impact of price and selection changes and production efficiency. Then the segments performance in Q4. Volumes grew in Finland and Belarus. A major part of the decline in Baltic Sea region came from Denmark. From sales channels, Horeca was growing, which was positive to see. The earlier mentioned significant EBIT improvement came from all the segments. Costs were allocated the earlier quarter this year as the major sales and marketing inputs were made during the summer season. But also some cost saving measures were taken to support overall efficiency and the profitability. Then the full year 25. Volume development was affected mainly due to four things. First, change in consumer behavior towards non-alcoholic beverages. Secondly, unfavorable weather in the summer season. Thirdly, the weak development of consumer purchasing power. And then finally, fourthly, the loss of private labor agreements in Denmark. On a positive note related to volumes, non-ALCO product category share of total sales increased according to the strategy and was 43.6%. And most importantly, despite this intensified competition, market shares were maintained or even increased in all main product categories. Profitability was supported by 4.1% cross-profit increase to 41.7% of net sales. And that is thanks to portfolio optimization measures, improved efficiency of our own operations, and then the stabilization of the increase in the cost of goods sold. On the other hand, logistics, sales and marketing expenses were clearly higher level than last year. All this together, EBIT maintained in a good last year level and improved slightly. Then what comes to the segments in full year 2025. In Finland, volumes remained in the last year level. This average sales price growth supported the net sales. In the second year in a row, we saw strong profitability improvement as the EBIT grew 15.4%. Last year, it was 47%, supported by, for example, this improved production efficiency, delivery accuracy, and improved product rates. The biggest EBIT growth during the past two years has come from Finland. Then Baltic Sea region. Volume decline came from Denmark, and that's because of discontinuation of several unprofitable products and the loss of private labor agreements. And then from Latvia, decline of the total market was the main reason. As a result of these market impacts and the greater investments in sales and marketing, as well as increased payroll expenses and logistic costs, EBIT for the Baltic Sea region decreased by 23% to 17.9 million euros. Denmark is still making significant losses and in Latvia and Lithuania increased competition caused by smaller than expected market burdened the profitability. But at the same time, the mentioned investments in brand visibility, campaigns, pricing, health, maintaining and securing always competitive position and the market share. So even though the market has declined, we have kept the market shares. And on a positive note, Estonian market was more resilient than other Baltic countries. Then in Belarus, in non-alcoholic product categories, sales increased in line with the strategic targets. Non-alcoholic beverage categories accounted for 62.9% of the sales volume. That's the highest in the group. In alcoholic products, sales of the largest product category beer remained at the previous year level. And during the reporting period, greater inputs were made in the sales and marketing of these product categories than in the previous year. So EBIT growth was 3.7%. There is no changes in general in Pela's situation, so there is nothing new to report on that one. Then, if we check this full year, other financial KPIs, so equity ratio has remained very strong level. We used 8 million more in investments, almost 29 million was related to Finland. So we were able to finalize the high bay warehouse last year and increase the warehouse capacity. The brew house will be taken in use this year before the summer season and also this inner logistic will be developed further during this year. Then about 16 million of these investments were to subsidiaries in the Baltic Sea region. And in Belarus, these replacement investments were done through the subsidiaries' cash flow financing, totaling about 8 million. Net result improved to 64.8 million, and that increased, of course, the earnings per share. And that was then over the three euros this last year. Then in operating cash flow, there was small decline because of the increased taxes and smaller decrease in the networking capital. In sustainability, as said, recognition from the Time magazine as one of the world's most sustainable growth companies for the second consecutive year was a good accomplishment and demonstrated strong performance by reaching this A- level in the GDP assessment. And additionally, as you can see, our CO2 emissions in scope 1 and 2 decreased by 4%. And then some, of course, good news for the shareholders. The dividend will be distributed during the 26th from the 25th. and the board of directors proposes to have a small increase in the dividends to 1.35 euro per share, and this will be paid in springtime. Yes, in springtime, and then second part will be then done in September. May and September, yes. But I think that was the financial part.

And then, of course, there's also interest on the future. So the Arnia Thermal Outlook, I'm sure, is a point of curiosity. So indeed, we're providing a range again, as we have done previous years, and the range that we're looking to deliver this coming year, or the year that has already started, is between 84 and 92 million in terms of EBIT. What's important to bear in mind, and hence there's a bit more explanation on this slide than in the past, is the impact of these newly acquired companies. Again, I want to repeat that three of them have closed. The fourth, Värska, we expect to close by summer. So these companies are partly included in the estimates. However, we must remember that this is the first year, so there will be integration costs. And before we can fully benefit from the synergies, some time will have to pass. So we expect a greater impact in 2027 and onwards. This is really the year of integration and making sure that we capture the maximum value of what we have acquired. Hence, we estimate that the EBIT impact of these acquired companies during the year of 2026 will be less than 5%. So it gives you a bit of a guidance on the value of those businesses in the short term. And when it comes to 26 overall, a few themes. We want to continue growing. We intend to keep developing our business and we will seek out efficiencies. So the growth will come both from the non-alcohol part, as we have seen already during 25 and the previous years, strengthening our efforts there, expanding the reach of our own brands across new markets, and then also strengthening the overall portfolio of brands that we represent in our new and current home countries. On the development side, on the other hand, we will continue our journey of learning around everything related to net revenue management and data and analytics, scaling up our competence in that space, and integrations, as mentioned. a key item of focus. We must bring our new family members, of whom there's nearly 500 on board, and make sure that we start all working together towards the same objectives. So therefore, organizations and organizational learning is also a key source of development and focus. Then on the efficiency side, we've made significant investments in ISALM, as Tina-Liisa mentioned, the high bay warehouse, the brew house is almost up and running. They're already doing some test runs there, so in time and on schedule. We must make good use of our investments. So therefore, as we continue to invest in these areas that will drive long-term growth for us, we remain focused on disciplined cost management across the business. Our priority will be to ensure that spend aligns with our strategic objectives and that we continue to identify efficiencies across functions. And all of this will support this sustainable growth that we have already enjoyed for 10 years and intend to enjoy for a long time coming. So with those words, I believe we have covered the key messages we wanted to cover today. So now we'll turn to our support team for questions that you have placed online. But thank you for your attention so far. Please.

Yes, I have a few online questions here. The first question. Can you give any indication of how much you paid for all of these companies?

The purchase prices are not disclosed, so no.

All right, thank you. Next question. Have you included all four acquired companies in your guidance or only the three approved ones?

Thank you. A good clarifying question. So again, three are closed, have closed during January. Integrations are ongoing. One is still to be closed. We have considered all four, but in recognition of the fact that they are not fully on board since January 1 for the full 12 months. Do you want to elaborate on that further?

Basically, the guidance is including the three acquisitions that are closed in the estimation, but then Värska is not closed yet, and the estimation is that that will be closed before the summer. So, naturally, that is not included the whole year in the estimation.

Thank you. Next question. Why was cross-margin up 2.2 percentage points in Q4? Will cross-margin continue to develop like this?

Yes, I think we made references to some of the portfolio changes and we lost some volume. We also walked away from some volume. Then we've been focusing on strengthening our brands and the overall portfolio mix. So this is now flowing through and that's what you see in our margins expanding. So we see it as a permanent improvement in terms of performance.

I think, of course, the intention is to keep this level and gradually to improve our efficiencies as we have been doing the whole time, developing the portfolio, using this net revenue management, see also the premiumization in the portfolio. So there are many things that are affecting that one.

Thank you. Next question. You noted Horeca outperformance in Q4. Is it possible to even deepen your own trade performance and penetration? How sensitive are the Horeca volumes to tourism?

Very good topic. So we've called Horeca Alt as a source of growth in our strategy, and it's something that we are methodologically pursuing across our markets. I mentioned, for instance, the Valmia Moisa acquisition is partly part of this journey where we look to strengthen our presence. This is an opportunity area for us. If you take our beer share across our markets, we're stronger in global market share in each country than we are in Europe. in the Horeca trade, so we see opportunities to continue growing there.

Thank you. What worked well in your pricing and product mix actions? What products were successful in each market? And also, what gains do you expect from these actions in 2026?

That's a good question. Thank you. And it's a broad question and perhaps also quite detailed question. We should bear in mind that our group represents more than 5,000 SKUs. So I won't be able to go into detail, obviously, on each. But I'll call out some territories, some spaces. One is the non-alcohol part. It's been a part of focus for a long while. We need to remember that. In Finland, for instance, we launched the first non-alcoholic beverages already in the 1800s. So it's not a new thing for us, it's a theme that's been constant on our journey. That's why we call ourselves a multi-beverage operator. So continuing to drive growth there is one part of the... And then the other really links in with our strategy of being multi-local. We are really pushing to have the strongest local partnerships, the most relevant brands. We know our consumers, we know our customers, and this is a part of our strength that we're building on. And it's showing to be working really well in us keeping our market shares, us growing more on our branded side than on the store-owned brand side. So our portfolio balance is shifting in a healthier direction from a gross profit perspective. I believe I have answered the question.

Yeah. Thank you.

Thank you.

Next, here's a question. This is also a long one. What worked well in your pricing and product? Oh, that was already here. Can you comment anything about the profitability levels on your recent acquisition? Where do you expect to gain synergies from?

Okay, again, a good question, maybe touching on some of the obvious ones in terms of logistics and customer management. Then I want to call out that we're talking about significantly different types of business. On one hand, we're talking about mineral water. On the other hand, we're talking about brewing. And on the third hand, we're talking about distribution business. So the margins and the contributions will be different. I don't know if we can go in much further detail on

Yeah, I think that we can then kind of discuss this more during this year when we are also kind of closing the integration plans and going forward. But I think that, as Patrick said, that these are a little bit different type type of acquisitions so those which are add-ons in the countries businesses like in estonia and latvia of course the synergies are a little bit different it comes from the product portfolio it comes from the logistics and different kind of things but then when we come to the new market so that's kind of different kind of synergies so of course we want to expand our reach, as it was said earlier. And hopefully we can then utilize our portfolio and the new part of the portfolio in our current markets and vice versa. So there are different kind of synergies, naturally. And we think that especially these new countries are also the platforms for the future development then.

Thank you. Next question. When did the private label exits happen? When are we on normal comparison figures? What is the plan to stabilize Denmark and recover Baltic Sea region's profitability?

Sure, good. Broad question. On private label, then I'll zoom in on Denmark. The situation is stabilized. Now we're looking for growth, and we're also happy to work with the trade partners in Denmark on appropriate opportunities there under their brands. So that's been done, if you want to look at it from that perspective. Then in the Baltics, we need to recall some of the messages that we've shared during Q2 and Q3 results reviews. We went into summer strong. We had really strong plans, both on marketing and product placement in store. Some of which then were a bit too heavy versus the market that followed. We had challenging weather over summer and then in terms of the Latvian consumption, the market simply was much smaller. So that was a costly exercise. So therefore, we're going into this year with a more balanced plan. And that in itself will, of course, support. Not to forget the acquisitions. We're getting new customers, new streams of revenue, new team members. They will always energize us and help us push for the next level of performance.

And I think that in general, for the 26, what comes with the Baltic Sea region, as Patrik said, of course, we kind of expect to have more stable year maybe in what comes to the market, maybe changes and our own kind of performance. But I also want to highlight that these add-ons, we bought this Biebalkas business three, four years ago. and it has been a very good add-on there. So, with this kind of development, we can improve the whole kind of situation in the market in total.

Thank you. Next question. What is your consideration about the share buyback you started? Is this a signal that you will use share buybacks more actively in distribute profits going forward?

Maybe you want to take it? It was quite clearly spelled out in the announcement.

Yeah, I think this payback approval that board gave to the management, that is targeted. And that is targeted for these SERP performance programs that we have. So that is the reason for this payback.

And the amounts are small and it's not a strategic shift.

It's something that we've done before. 80,000 in total. So it's for our own rewarding program you use.

Thank you. I think that's all the question we received now.

Wonderful. Well, thank you for your activity. Thank you for your interest. Thank you for being here. And we'll see you in a couple of months time.

Yes. Thank you.

All the best.