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Profitability Improvement: Increased by almost 20% due to improved production efficiency and higher average sales price.
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Volume Decrease: Volumes decreased by 5.7% in Finland due to a strike and timing of Easter.
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Beer Market Share in Finland: More than 50% despite lower volumes.
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Denmark Volume Decline: Decreased by 40% due to portfolio changes and preparation costs for summer.
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Belarus Sales Growth: Volumes and net sales increased, particularly in non-alcoholic categories.
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Equity Ratio: Remained strong despite withdrawing a EUR15 million green loan.
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Investments: EUR11 million in Q1, with EUR8 million in Finland for high-bay warehouse and brew house construction.
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Operating Cash Flow: Negative due to stocking for summer season.
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Profit Guidance: Expected to be between EUR82 million and EUR90 million for the year.
Release Date: April 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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Olvi Oyj (STU:OVI) was recognized by Time Magazine as one of the world's best companies for leading sustainable growth.
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The company introduced 90 new products to the market during Q1, showcasing innovation and expansion in their product portfolio.
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Despite weak demand, Olvi Oyj (STU:OVI) maintained or grew market share in certain categories, particularly in non-alcoholic beverages and the Holika Channel.
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The high-bay warehouse in Finland is operational, with 8,000 pallets of products in storage, ensuring readiness for the summer season.
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Profitability in Finland improved by almost 20% due to enhanced production efficiency and higher average sales prices.
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Q1 volumes decreased by 5.7% in Finland, impacted by a strike and the timing of Easter.
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The Baltic region faced weak consumer purchasing power and intensified price competition, affecting demand.
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Denmark experienced a significant decline in volumes and profits due to portfolio changes and increased costs for summer preparations.
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The geopolitical situation in Belarus remains volatile, with restrictions on dividend distribution and no permit to sell shares.
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The effective tax rate increased to 25%, reflecting a more realistic level compared to the previous year's exceptionally low rate.
Q: In Q1, your tax rate was quite high at 25% compared to last year. Could you elaborate on this, or is this the normal level going forward? A: Yes, the comparison period taxes were exceptionally low, so this tax rate is more reflective of the current reality.
Q: You mentioned the timing of Easter and a strike in Finland that impacted your volumes negatively. Could you quantify these impacts? A: It's difficult to give a precise numeric answer. Once April is completed, we'll have more specific insights. The strike did impact deliveries, but we performed better than the market average.
Q: The investments in Q1 were EUR11 million. How should we view the level of investments for the full year 2025? A: We have communicated that our major investments in Finland total about EUR45 million, with the busiest year being 2025. The majority of investments will occur this year.
Q: Can you quantify how much of the volume drop in Finland and the Baltics was due to portfolio changes? A: It's challenging to provide an exact number due to factors like the Easter effect and increased excise duties. However, Denmark's portfolio changes significantly impacted the Baltic Sea region.
Q: Regarding Belarus, do you anticipate any changes in the dividend restrictions or potential tariffs affecting profitability? A: The dividend limitation is in force for 2024 and 2025. We expect to return to normality once these restrictions are lifted, and we haven't received any contrary signals.
Q: How has the start of Q2 been with the favorable weather and Easter now in Q2? A: While weather impacts are acknowledged, the Easter effect is more significant for Q2. We anticipate the usual seasonality with increased sales in Q2 and Q3.
Q: Are there any M&A opportunities given the current market environment? A: We are considering both organic and inorganic growth within Europe, and we will communicate details in due time.
Q: Can you discuss your raw material outlook, particularly for malt barley, aluminum, and glass? A: Barley prices have come down, and aluminum prices have decreased from historic highs, though they remain higher than pre-COVID levels. The market remains volatile due to geopolitical factors.
Q: How do you view the competition in retail, and what is your outlook on price mix across different markets? A: Competition is intense, particularly in grocery retail. We are focusing on campaigns that protect profitability and market share. We see growth potential in non-alcoholic beverages and other categories.
Q: What is your anticipation regarding potential changes in Finnish alcohol laws, and how will you respond if wines are allowed in grocery stores? A: We remain agile and prepared for any changes. We will adapt as necessary, similar to how we responded to previous changes in alcohol laws.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
