• Adjusted EBIT Growth: Increased by almost 22% year-over-year.

• EBIT Growth: Increased by 53% compared to the previous period.

• Net Sales in Finland: Grew by almost 4% despite a 3% decrease in volumes.

• Earnings Per Share: Returned to EUR2.6 per share.

• Cash Flow from Operating Activities: Increased by EUR54 million.

• Investment in Finland: Total of EUR27 million, with EUR14 million in Finland.

• Investment in Baltic Sea Region: EUR10 million focused on production line improvements.

• Adjusted Operating Result Guidance: Revised to EUR78 million to EUR84 million for the year.

• Warning! GuruFocus has detected 4 Warning Signs with STU:OVI.

Release Date: October 16, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Olvi Oyj (STU:OVI) has successfully retained its market share across various categories and markets, despite a competitive environment.

• The company has improved its profitability significantly, with adjusted EBIT growing by almost 22% and EBIT by 53% compared to the previous period.

• Operational efficiency improvements have been a major driver of profitability, alongside stabilized raw and packaging material prices.

• Olvi Oyj (STU:OVI) has successfully launched new products, recognized as the most successful in their respective countries.

• The company has benefited from favorable weather conditions, which have helped offset some consumer demand softness.

Negative Points

• Despite improvements, Olvi Oyj (STU:OVI) has not yet returned to pre-COVID profitability levels.

• The company's volumes did not grow over the nine-month period, indicating challenges in expanding market reach.

• Inflation on packaging and raw materials remains historically high, posing ongoing cost challenges.

• The Baltic region faces intensified price competition, impacting volume growth and necessitating strategic adjustments.

• In Belarus, Olvi Oyj (STU:OVI) faces uncertainties due to currency fluctuations and a challenging operating environment.

Q & A Highlights

Q: What is the current status of Olvi Oyj's withdrawal from the Belarus market? A: Patrik Lundell, CEO, explained that the withdrawal process began in 2022 following the war. A law prohibiting sales was enacted later that year. Although new laws now allow sales with a permit, Olvi Oyj has not yet received such a permit, so there is no further progress to report.

Q: How has the change in Finnish law regarding alcohol content affected Olvi Oyj? A: Patrik Lundell, CEO, noted that the law change allowed fermented products with up to 8% alcohol content to be sold in grocery stores. This enabled Olvi Oyj to introduce some of its strong brands to a broader market, resulting in increased volumes. However, this segment represents less than 1% of total volume, so while beneficial, it is not a major change.