Olvi Oyj Unsp/Adr

Welcome to our Q2 and a half year report. Before we get going, the usual disclaimer. So we'll be referring to future events and as such there is always some uncertainty with those statements. By now you're familiar with Tiina-Liisa, our CFO and CIO, and myself, Patrik, who has the pleasure to be the CEO of Olvi Group. We want to start by looking at the numbers and then reflect on our performance in further detail. So net sales, profit grew and accelerated during the second quarter. We're pleased with that. The volumes also grew during the whole first half year period and were boosted by the acquisitions, the three acquisitions that are included in H1 numbers. What I want to emphasize when it comes to our performance on both volume, net sales and EBIT or profit growth is that there's an organic element that's important to call out. We grew organically across all our markets except for Denmark. In Denmark the challenges continue as do our focus on improving our operations. We put in a lot of effort in making sure that we run the facility efficiently. We made some changes to our management and we're currently actively seeking more volume to use that excess capacity we have and to make sure that we can cover our overheads. Going back to the broader picture and the overall performance, we're very pleased with the fact that our mix is improving, our novelties have been really well received by consumers across our markets and there's a clear preference for our brands, which means that our shares are staying strong and our performance is solid. I mentioned already on the previous slide that the volume was boosted by acquisitions and by now all four acquisitions have closed. Also the most recent one, Värska, which is included from July numbers onwards. So for the first half it's three of the acquisitions and now for the balance of year we'll see all four companies included in the numbers. so we can expect some support there on net sales and volume from the acquisitions whereas the profit improvement will be more visible than in 27 after the synergies start to materialize this year the first year is all about integration and bringing the teams on board I also want to call out the fact that with these acquisitions, we've entered four new markets. We're now active in Sweden, in Norway, in Bosnia-Herzegovina and in Serbia. So we have our own businesses in these four countries now. And as such, we're able to service 25 million new local consumers. So it's quite a significant reach, improvement of our reach, extension of our reach, if you like. And another aspect I also want to call out is the balance of our portfolio. We are now with these four acquisitions in a position where half of our portfolio is non-alcoholic and the other half is alcoholic. So that gives us a great place from which to build future sustainable growth across our territories and beyond. So with those entry words, I'll hand over to Tiina-Liisa to take us through the numbers.

Thank you, Patrik. So, let's start going through the final cell performance. And we will start with the Quartal 2, so the latest three months. Volumes were 300 million liters in Quartal 2. Weather was quite normal and supporting that way the season start. So volumes grew 4.2%. If we exclude Denmark from these numbers, the volume grew by 8.4%, so double what we can see in the report. And in Denmark, we have to remember that the previous year's figures included a significant share of the private label production in Denmark, and that is causing the decline of the volumes. In channel-wise, the hotel and restaurant channel and export grew the most. In categories, mild alcoholic beverages grew the most with the emphasis on beer and mixed drinks. and there we have cocktails ready to drinks and also hard seltzer for example. New businesses also contributed and affected to the sales volume by 4.7%. And when we now refer to the new businesses, we are talking about this Latvia, Valmiarmuisa, then the new markets in Sweden, Norway, Bosnia, Herzegovina and Serbia. And as it was mentioned, Värska operating numbers are not included in In two numbers, but from quarter three onwards. Only balance sheet part is combined to quarter two numbers. And overall, the market shares have remained at a good level in this tight price competition. Net sales grew 15% and that's because the average sales price per liter increased through the optimization of our product portfolios, prices and range also. EBIT grew 21%. In gross margin level, profitability improved both in euros and in relative to net sales. So our gross margin percentage is now 42 compared to the 41 last year. And with that, we are covering growing fixed expenses and therefore able to improve the operating result. Successful launches of new products, Price and this product portfolio optimization and improved profitability especially in the Baltic countries and Belarus supported the profitability development. And then when we go to the segment level in Quartal 2. So in Finland we can see that our volume grew 5.8% and net sales 5.6%. So growth focused on the retail trade, while in the Horeca segment, the consumer's modest purchasing behavior continued still in Finland. All these market shares remained strong and also volume growth was achieved both in non-alcohol and in alcohol categories. And we can mention, for example, these hard sell shares where the growth is continuing very strongly and we are a market leader there. And this Jujunö soft drink brand is performing or started very well. So our own brand soft In EBITWISE in Finland, the growth was 1%. The strengthened product portfolio has supported the net sale growth, but increased price competition, higher retail sales weight, Then the impact of the cost inflation also accelerated by Iran war, particularly in freight and packaging materials. Then limited opportunities for price increases and investments in the marketing of own brands have made profit improvement not possible in quarter two. Then rest of the Europe, so volumes grew 2.7%, And then the organic sales volume decreased by 10% or 10.6%. And if we exclude Denmark, the organic sales volume remained at the previous year level. And new businesses increased the segment sales volume by almost by 12%. In net sales, the growth was 18%. And here the organic net sales declined by 2.8%. While excluding Denmark, organic net sales increased by 2.5%. So other companies than Denmark have been able to increase the average sales price. New businesses increased the segment's net sales by 19.2%. So the average price was increased by product portfolio optimization measures in several markets and the higher price point of the brands represented in Sweden and Norway. EBIT in rest of the Europe segment grew almost 11%. Baltic countries has improved significantly and the impact of the new businesses was already clearly positive in the second quarter. But we have to remember that the synergies will begin to materialize mainly in 27. And yes, Denmark is burdening the segment's profitability heavily by making losses. Then Belarus volume grew 5.6% and that its growth driver is there mainly non-alcoholic and soft drinks. Net sales grew 24%. and that is supported by price and product portfolio optimization measures mainly in beer and soft drinks, then successful launches of new products and improved delivery accuracy. EBIT 48% and the improvement in profitability was supported by the increased gross profit due to the improvement in the average price and in net sales as I explained. Then, when we checked the first half of the year in total, we can see that the volume grew totally 3.8% and was more than 500 million liters. The sales volume improved in the second quarter as we saw. The sales volume increased by 4.4% inorganically. and again excluding Denmark, the sales volume grew by 8.1%. Launches of the new products, strong local brands supported the growth in sales and keeping the market shares at the good level. Net sales grew by 13.5% following the new acquisition, improved portfolio mix and better average sales price. EBIT plus 9.6% and the profitability improved in Baltics and in Belarus is the main cause of that one and thanks to the more optimum product portfolio in general. and then shortly the first half of the year in segment wise in Finland we can see that the sales volume and net sales growth has been pretty similar so more than four percent both and EBIT wise the EBIT has been in the same level and that is because of the reasons that was explained when we discussed about the Quartal 2. Then the rest of the Europe, volumes plus 1% and the net sales 16.4%. So the average sales price has grown in many markets and the new businesses are contributing in the net sales more than to the volumes. EBIT decline was mainly due to the Denmark as mentioned before where the operating result is at loss due to the low sales volumes. The low capacity utilization rate and the cost associated with the ongoing development program increased the operating loss. But there are actions going on. On the other hand, profitability has been significantly improved in the Baltic countries through measures such as price and product portfolio optimization. The integration of the new subsidiaries has gone according to the plan, but takeover and Business development costs among other things are burdening profitability in 26. And then we are kind of heading to the 27 with all the developments. In Denmark to improve profitability efforts are focused on securing additional production volume and adapting operations to the changed volume level. Pellaras sales volume 6.7% plus, net sales 22% plus and EBIT 31% plus. What has caused this good development in Pellaras? The stable exchange rate, growing consumer purchasing power and the market growth, especially in non-alcoholic product categories have supported the overall market development. Local company has been able to strengthen also their branded sales and improve profitability in cross-margin level. Then the final is the KPI summary. So we can see that the equity ratio is a little bit lower than last year, but we remember that we have been financing now the Esalmi new brewery with the green loan, and also we have used short and long-term loans to finance our growth and the new acquisitions. Earnings per share a little bit higher than last year. Operating cash flow clearly better than last year and that's because of the better networking capital situation. Investments are in the high level or 24 million. And the main investments are still going in Iisalmi. We are finalizing our warehouse and inner logistic investment. And then we have started also in Lithuania new warehouse investment. So we are also investing in growth. Personal has increased mainly because of the new businesses. and in sustainability we are participating in United Nations Global Combat Beyond Basics program, which then deepens expertise in managing the human rights impacts of procurement. But I think those were the highlights of the finances.

Very good summary. Thank you. So with that, now that the half year is behind us, we're able to update our guidance and narrow the range. So the range that we're communicating and aiming for this year will be between 84 and 90 million in terms of EBIT operating results. But for the balance of year, of course, the year is not over. We're in the middle of August, so we consider it still summer. So summer is still here. We're going to keep pushing the business forward along with our chosen priorities. So this year has been about growth. It's been about development and efficiency. We will keep growing in our new markets and domestically, organically, especially also driven by non-alcoholic categories. These new markets and new consumers and new need states that we'll be approaching more on that later this year will also support our growth. And then we will, of course, focus on our own business, making our operations as efficient as possible, making sure we leave no stone unturned. But with that, we close and open for questions. Thank you. Maybe we start here in the room and then we go online if there are further. Please.