Contents
REPORT BY THE BOARD OF DIRECTORS 2
Non-financial statement 19
Key ratios of the Group 23
CONSOLIDATED
FINANCIAL STATEMENTS* 28
Consolidated Income Statement 29
Consolidated Statement of Comprehensive Income 29
Consolidated Balance Sheet 30
Consolidated Statement of Cash Flows 31
Consolidated Statement of Changes in Equity 32
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS* 33
General information 33
1. Operating result 36
1.1. Revenues from operations 36
1.2. Segment information 37
1.3. Other operating income 39
1.4. Materials and services 39
1.5. Employee benefit expenses 39
1.6. Other operating expenses 40
1.7. Depreciation, amortisation and impairment 40
1.8. Research and development expenditures 40
2. Operative assets and liabilities 41
2.1. Goodwill and other intangible assets 41
2.2. Property, plant and equipment 45
2.3. Leases 47
2.4. Inventories 48
2.5. Contract assets and liabilities (current) 48
2.6. Trade and other receivables (current) 48
2.7. Employee benefit obligations 49
2.8. Trade and other payables 49
2.9. Provisions 50
3. Financial items and capital structure 51
3.1. Finance income and expenses 52
3.2. Financial assets and liabilities 53
3.2.1. Financial assets 53
3.2.2. Financial liabilities 54
3.2.3. Classification and fair values of
financial assets and liabilities 56
3.3. Derivative instruments and hedge accounting 58
3.4. Equity 60
4. Financial and capital risk 62
4.1. Financial risk management 62
4.2. Capital risk management 68
5. Consolidation 69
5.1. General consolidation principles 69
5.2. Subsidiaries 70
5.3. Associated companies and joint arrangements 71
6. Other notes 73
6.1. Income tax expense 73
6.2. Collaterals, commitments and
contingent assets and liabilities 78
6.3. Related party transactions 79
6.4. Share-based payments 80
6.5. Adoption of new or amended IFRS
standards and interpretations 81
6.6. Events after the reporting period 82
PARENT COMPANY
FINANCIAL STATEMENTS* 83
Altia Plc Income Statement (FAS) 83
Altia Plc Balance Sheet (FAS) 84
Altia Plc Statement of Cash Flows (FAS) 86
Notes to Altia Plc Financial Statements 87
BOARD OF DIRECTORS’ PROPOSAL
FOR THE DISTRIBUTION OF PROFITS* 96
THE AUDITORS’ NOTE 96
THE AUDITORS’ REPORT 97
*Part of the Financial Statements
SYMBOLS
Accounting
Critical estimates and
management judgements
For important information for U.S. shareholders, please see
“Important Information” on page 27.
Annual Report 2020
Report by
the Board of
Directors
Annual Report 20203
A
ltia is a leading Nordic alcoholic beverage
brand company operating in the wines
and spirits markets in the Nordic coun-
tries, Estonia and Latvia. Altia produces,
imports, markets, sells and distributes
both own and partner brand beverages. Altia has also
production in Cognac, France. Further, Altia exports al-
coholic beverages to approximately 30 countries.
Last year was exceptional for Altia, with the outbreak
of COVID-19 into a global pandemic and the challenges
it brought to Altia’s business.
In 2020, Altia’s net sales decreased by 4.4% in
constant currencies. The decline was largely driven by
the negative impacts of COVID-19 restrictions on travel
retail, exports and on-trade sales channels and contract
manufacturing volumes. Following these restrictions,
consumers have shifted purchases to the monopolies.
In the Finland & Exports segment, net sales declined
from the previous year due to the sales drop in travel
retail and exports, while Altia’s net sales in the monopoly
Report by the Board of Directors 2020
channel grew, driven by strong spirits sales. In the
Scandinavia segment, net sales grew from the previous
year driven by strong sales in the monopolies offsetting
the decline in on-trade. In Altia Industrial, net sales
declined due to lower contract manufacturing volumes,
while ethanol sales saw demand-driven growth.
In 2020, Altia’s profitability improved from the
previous year with comparable EBITDA increasing
by 17.1% or EUR 7.6 million to EUR 52.4 million. As a
result of this positive development, Altia has reached its
long-term financial target with a comparable EBITDA
margin of 15.3%. The drivers for the exceptionally strong
profitability development were the Altia Industrial
segment, the positive channel mix, and Group-wide cost
savings measures.
Altia’s financial position has been solid throughout the
whole year with good cash flow development and strong
liquidity. Net cash flow from operations improved to
EUR 56.1 (52.6) driven by the positive development of
working capital.
KEY RATIOS
2020 2019 2018
Net sales, EUR million 342.4 359.6 357.3
Comparable EBITDA, EUR million 52.4 44.8 40.0
% of net sales 15.3 12.4 11.2
EBITDA, EUR million 40.3 43.1 34.0
Comparable operating result, EUR million 35.0 26.8 25.6
% of net sales 10.2 7.5 7.2
Operating result, EUR million 22.9 25.1 19.7
Result for the period, EUR million 17.8 18.4 15.1
Earnings per share, EUR 0.49 0.51 0.42
Net cash flow from operating activities, EUR million 56.1 52.6 6.5
Net debt / comparable EBITDA -0.1 0.6 1.2
Average number of personnel 650 682 718
Annual Report 20204
Market development
Nordic monopoly market
The exceptionally high market volumes
in the Nordic monopolies were related
to the channel shift following the
COVID-19 restrictions. During the year,
governments and health authorities
issued travel and social gathering
restrictions, as well as limitations on the
sales of alcoholic beverages and number
of customers in the on-trade outlets.
Following these restrictions, consumers
shifted purchases of alcoholic beverages
from travel retail and the on-trade to the
monopolies.
In 2020, the market volumes in the
Nordic monopolies grew by a total of
17.1%. Spirits market volumes grew by
18.5%, and the channel shift was seen
in premium spirits brands, which are
normally widely sold in travel retail, for
example. Wine market volumes grew by
16.9%, and within wines, the share of
bag-in-boxes grew.
Finland
In 2020, the Finnish retail monopoly’s
spirits and wine sales volumes were up by
13.7% compared with the previous year.
Spirits market volumes grew by 10.4%,
with growth in all categories. The high
growth categories were gin, whiskies, rum
and grape spirits. Wine market volumes
grew by 15.0%. The large red and white
wine categories grew by 15.2% and 17.1%
respectively. Rosé wines grew by 39.7%.
Sweden
In 2020, the Swedish retail monopoly’s
spirits and wine volumes were up by
10.0% compared with the previous year.
Spirits market volumes grew by 18.8%.
The high growth categories were gin,
whiskies, rum and bitters. The aquavit
category declined. Wine market volumes
grew by 9.2%. The large red and white
wine categories grew by 6.8% and 10.0%
respectively. Rosé wines grew by 22.1%.
Norway
In 2020, the Norwegian retail
monopoly’s spirits and wine volumes
were up by 40.4% compared with the
previous year.
Spirits market volumes grew by 32.1%,
with growth in all categories. The high
growth categories were gin, rum, aquavit
and whiskies. Wine market volumes grew
by 41.8%. The large red and white wine
categories grew by 40.3% and 44.2%
respectively. Rosé wines grew by 72.5%.
Strategy and financial targets
Altia’s refined strategy was published in
February 2020. The strategic choices
support Altia’s profitable growth ambitions
and strengthen Altia’s position as one of
the most sustainable spirits companies
and a leading Nordic drinks house:
• Strengthen Nordic market leadership
in grain-based spirits
• Boost Nordic channel excellence
of Altia’s own brands and partner
business execution
• Take Altia’s core spirit brands to new
markets
• Unlock value potential of Altia
Industrial.
Financial targets
Altia’s long-term financial targets have
remained unchanged:
• Comparable EBITDA margin of 15%
in the long-term
• Annual net sales growth of 2 per cent
over time (CAGR)
• The target is to keep reported net
debt in relation to comparable
EBITDA below 2.5x in long-term
Dividend policy
Altia pursues an active dividend policy, and
the result of the period not considered
necessary to grow and develop the Company
will be distributed to the shareholders.
According to the dividend policy, the
Company targets a dividend pay-out ratio of
60% or above of the result for the period.
Key events
Refined strategy
In February, Altia published its refined
strategy, in which the long-term strategic
focus areas and growth ambitions
were reviewed. The refined strategy
strengthens Altia’s position as one of
the most sustainable spirits companies
and a leading Nordic drinks house. The
long-term financial targets remained
unchanged.
Altia and Arcus merger
In 2020, the strategically most important
milestone was the announcement of
the merger between Altia and Arcus.
In September, Altia and Arcus jointly
announced the merger plan to form a
leading Nordic wine and spirits brand
house: Anora Group. Altia’s Extraordinary
General Meeting approved the merger
plan on 12 November 2020.
Customary regulatory approvals are
needed before the completion of the
merger. On 15 December, 21 December
2020 and 8 January 2021, respectively,
Altia published stock exchange releases
about the decisions by the Swedish,
Norwegian and Finnish competition
authorities to move their investigations
into phase II. The possibility of
competition authority investigations
moving into phase II has been considered
DEVELOPMENT OF WINE AND SPIRITS SALES VOLUMES IN THE NORDIC RETAIL MONOPOLIES
% change compared to previous year 2020 2019
Nordic monopolies in total +17.1 +0.1
Spirits +18.5 +1.0
Wine +16.9 -0.1
Finland, total sales +13.7 -2.9
Spirits +10.4 -2.1
Wine +15.0 -3.2
Sweden, total sales +10.0 +1.0
Spirits +18.8 +3.9
Wine +9.2 +0.7
Norway, total sales +40.4 +0.4
Spirits +32.1 +1.6
Wine +41.8 +0.2
Source: Based on sales volumes by litre published by Alko, Systembolaget, Vinmonopolet.
Annual Report 20205
in the expected closing schedule, and
hence Altia and Arcus continue to expect
to obtain the merger control approvals
and to complete the merger during the
first half of 2021.
Successful innovations
During 2020, Altia’s innovations in its
key spirits brands such as Koskenkorva
Vodka, Explorer Vodka and O.P. Anderson
Aquavit were successful in international
competitions. The success culminated
in receiving the “Vodka Producer of the
Year” award from the International Spirits
Challenge. The award further strengthens
Altia’s position as the Nordic innovation
role model in the beverage industry.
Strengthening partnerships
Altia and Brown-Forman renewed the
Finlandia Vodka production agreement.
The renewed agreement runs until 2035
and continues a long-lasting strategic
collaboration between Altia and Brown-
Forman, which began in 2000.
Altia and Distell renewed their contract
for the distribution and marketing of
Distell’s brands in Sweden, Finland, Norway
and travel retail in the Nordics. Distell and
Altia have had a long collaboration with
each other for nearly two decades.
Altia partnered with Underberg to enter
the German market with Koskenkorva
Vodka and O.P. Anderson Aquavit. The
long-term partnership includes the
sales, marketing and distribution of
Koskenkorva Vodka Original and O.P.
Anderson Original Aquavit.
The wine portfolio in Finland was
strengthened with new distribution
agreements with two German wine
producers: F. W. Langguth Erben GmbH
& Co. KG and Leitz Weingut.
Altia Industrial: continuous improvement
A new fuel silo was commissioned at the
Koskenkorva plant, which further increases
the share of renewable energy in the plant’s
energy production. The investment can
help achieve a 20 per cent annual decrease
in carbon dioxide emissions, which takes
Altia one step closer to its target of carbon-
neutral production by 2025.
The Koskenkorva Distillery has run at
full capacity and reached a record-high
volume of grain consumption. Ethanol
production grew significantly. Driven
by the COVID-19 pandemic, technical
ethanol volumes at the Rajamäki technical
ethanol plant were at an exceptionally
high level due to the increased demand
for hand sanitisers.
A de-alcoholisation production
process was implemented at the
Rajamäki alcoholic beverage plant.
Accelerating digital experiences
In 2020, Altia’s digital platforms
viinimaa.fi, folkofolk.se and nordicspirits.
com have reached record-high site
traffic, supported by targeted long-
term development work. Further, driven
by the COVID-19 pandemic, brand
experiences were moved to online
environments and brand activation
focused on digital content such as
tastings as remote events.
Leading the way in sustainable packaging
In 2020, Altia’s first products packed
in rPET bottles that include recycled
plastic were introduced. Altia’s aim
is to increase the content of recycled
plastic in PET bottles to 100% by 2030,
compared with the EU requirement of
30% by 2030.
Sustainability rating
In April, Altia’s sustainability work
was recognised with a Gold Medal
in the EcoVadis Corporate Social
Responsibility rating.
Financial review
Seasonality
There are substantial seasonal
fluctuations in the consumption of
alcoholic beverages impacting net sales
and cash flow of Altia. The company
typically generates large amounts of its
revenue and cash flow during the fourth
quarter of the year, whereas the first
quarter of the year is significantly lower.
In addition, excise taxes related to the
high season at the end of the year are
paid in January, resulting in large cash
outflows at the beginning of the year.
Net sales
In 2020, Altia’s reported net sales
decreased by 4.8% to EUR 342.4 (359.6)
million. In constant currencies, net
sales decreased by 4.4%. The net sales
decline is due to the significant negative
COVID-19 impacts on sales in travel
retail, exports and on-trade channels
as well as on contract manufacturing
volumes. Furthermore, the lower barley
price in Altia Industrial and the business
model change in Denmark (Q2 2019)
have impacted net sales negatively.
Net sales of beverage products
NET SALES BY SEGMENT
EUR million 2020 2019 Change, %
Finland & Exports 117.2 128.6 -8.9
Scandinavia 123.9 120.7 2.7
Altia Industrial 101.2 110.2 -8.2
Total 342.4 359.6 -4.8
NET SALES BY PRODUCT CATEGORY
EUR million 2020 2019 Change, %
Spirits 119.1 121.3 -1.8
Wine 119.5 124.9 -4.4
Other beverages 2.5 3.1 -19.7
Industrial products and services 101.2 110.2 -8.2
Total 342.4 359.6 -4.8
Annual Report 20206
COMPARABLE EBITDA BY SEGMENT
EUR million 2020 2019
Finland & Exports 19.8 20.6
Scandinavia 14.2 12.1
Altia Industrial 17.9 11.4
Other 0.5 0.7
Total 52.4 44.8
% net sales 15.3 12.4
ITEMS AFFECTING COMPARABILITY
EUR million 2020 2019
Comparable EBITDA 52.4 44.8
Net gains or losses from business and assets disposals - 0.1
Cost for closure of business operations and restructurings -0.3 -0.2
Major corporate projects
Costs related to the closed voluntary pension scheme -0.5 -1.6
Costs related to the merger plan of Altia and Arcus -11.4 -
Total items affecting comparability -12.1 -1.7
EBITDA 40.3 43.1
decreased by 2.7% in constant currencies.
Altia’s net sales in all three monopolies
increased supported by the high market
volumes. Spirits sales in the monopolies
grew but this did not offset the decline in
travel retail, exports and on-trade sales
due to COVID-19. In wine, net sales
decreased from last year’s level, driven by
partner portfolio changes in Q2 2020 and
the release of a tax provision (EUR 0.5
million) in Q2 2019. The net sales decline
in Other beverages was due to partner
portfolio changes last year (Q3 2019).
Profitability and result for the period
In 2020, comparable EBITDA, i.e.
EBITDA excluding items affecting
comparability (IAC), was EUR 52.4
(44.8) million, which is 15.3% (12.4%) of
net sales. Items affecting comparability
totalled EUR -12.1 (-1.7) million and
were mainly related to the Altia and
Arcus merger plan. Reported EBITDA
was EUR 40.3 (43.1) million.
In 2020, the improvement in
comparable EBITDA amounted to EUR
7.6 million. The drivers for the solid
profitability development were the Altia
Industrial segment, strong sales and
continued revenue management in the
monopolies, as well as Group-wide cost
savings measures related to COVID-19.
In Altia Industrial, the significant
improvement was related to strong
ethanol sales, supply chain efficiencies
and the lower barley price during the first
nine months of the year.
The release of a tax provision (EUR
0.5 million) in Q2 2019 and the sale
of emission rights (EUR 0.8 million) in
2019 impacts year-on-year comparison
negatively.
Other operating income amounted to
EUR 6.2 (7.6) million, including income
from the sales of emission allowances of
EUR - (0.8) million; income from the sales
of mainly steam, energy and water of EUR
3.3 (3.4) million, and rental income of
EUR 1.4 (1.3) million.
Employee benefit expenses totalled EUR
49.1 (45.9) million, including EUR 38.1
(34.2) million in wages and salaries. Of the
employee benefit expenses EUR 2.0 (-)
million were related to the Altia and Arcus
merger plan and have been classified as
items affecting comparability (IAC) in the
comparable EBITDA calculation.
Other operating expenses amounted
to EUR 66.6 (65.0) million. Of the other
operating expenses EUR 9.3 (-) million
were related to the Altia and Arcus
merger plan and have been classified
as items affecting comparability (IAC)
in the comparable EBITDA calculation.
Cost savings were made in marketing,
travel and representation, and purchased
services due to COVID-19.
Net financial expenses amounted
to EUR 2.9 (2.2) million. The share of
profit in associates and income from
interests in joint operations totalled
EUR 1.2 (1.6) million.
Taxes for the reporting period were
EUR 3.5 (6.2) million corresponding to a
tax rate of 16.5 % (25.1%). The higher tax
rate in the comparison period was related
to a tax provision related to the outcome
of a tax audit in France and to Denmark
where no deferred tax asset was booked
related to the loss from the restucturing
in spring 2019.
The result for the period amounted to
EUR 17.8 (18.4) million, and earnings per
share were EUR 0.49 (0.51).
Cash flow, balance sheet and investments
In 2020, net cash flow from operations
totalled EUR 56.1 (52.6) million. The
improvement of net cash flow from
operations was driven by the positive
development of working capital. The
higher sales to the monopolies impacted
net working capital development
positively due to increased amounts of
sold receivables in Finland and Sweden,
and also due to increased amounts
of excise taxes and VAT payable. The
receivables sold amounted to EUR 91.9
(76.7) million at the end of the period.
At the end of the reporting period, the
Group’s net debt amounted to EUR -3.9
(28.9) million. Cash and cash equivalents
amounted to EUR 130.7 (64.2) million
while the interest-bearing debt amounted
to EUR 126.8 (93.1) million. Gearing
at the end of the reporting period was
-2.5% (19.1%) and the equity ratio was
34.3% (37.8%). The reported net debt to
comparable EBITDA was -0.1 (0.6) times.
The Group has a revolving credit facility
of EUR 60.0 (60.0) million, of which EUR
0.0 (0.0) million was in use at the end of
the reporting period. The nominal value
of commercial papers issued amounted
to EUR 40.0 (0.0) million at the end of the
reporting period. Altia Group’s liquidity
position has been strong throughout the
period due to the positive development of
operational cash flow and the actions to
secure liquidity during the pandemic by
issuing commercial papers.
Annual Report 20207
The total in the consolidated balance
sheet was EUR 455.6 (400.2) million
at the end of the period. The growth of
the total balance sheet is related to the
excess cash position maintained by the
Group following commercial paper issues
and a strong operational cash flow.
In 2020, gross capital expenditure
totalled EUR 7.0 (6.8) million. At the
Rajamäki alcoholic beverage plant
production process investments such as the
de-alcoholisation process were completed.
The investment in a new bag-in-box line
was initiated with expected ramp-up in
Q1 2021. At the Koskenkorva plant, the
investment in a new fuel silo was completed
according to Altia’s long-term plan to
reduce CO
2
emissions. Furthermore, a
number of maintenance and safety related
investments were carried out at the
Rajamäki and Koskenkorva plants.
BALANCE SHEET KEY FIGURES
EUR million 2020 2019
Reported net debt /
comparable EBITDA
-0.1 0.6
Borrowings, EUR million 116.1 82.6
Net debt, EUR million -3.9 28.9
Equity ratio, % 34.3 37.8
Gearing, % -2.5 19.1
Capital expenditure,
EUR million
-7.0 -6.8
Total assets, EUR million 455.6 400.2
Impacts of COVID-19
The COVID-19 restrictions have a
significant impact on Altia’s operating
environment and sales channels.
The predictability is low due to the
continuously shifting restrictions
and hence forecasting is difficult.
The key impacts and uncertainties of
COVID-19 are described below.
Consumer beverages (Finland & Exports
and Scandinavia segments)
• Of Altia’s beverage sales
channels, travel retail, exports and
on-trade are restricted or closed
due to COVID-19 restrictions.
• Despite consumers shifting
purchases of alcoholic beverages
to the sales to monopolies have
not compensated for the shortfall
coming from travel retail, exports
and on-trade.
• The recovery of travel retail,
exports and on-trade depends
on the level and extent of
government restrictions and
recommendations on travelling,
social distancing, restaurant
opening hours and sales of
alcoholic beverages.
• The pace of recovery is difficult
to estimate. It is affected by
changes in consumer behaviour
and expected to vary across sales
channels: on-trade channels could
be expected to recover faster
than travel retail.
• Uncertainty in the sales to the
monopoly channel is related
to 1) the monopoly channel
remaining open and continuing
normal operations which could
be dependent on, for example,
the health of the monopolies’
personnel and political decision-
making, and to 2) Altia’s ability to
deliver products.
Altia Industrial
• Uncertainty is high both in
industrial products and services.
The demand for starch has
weakened due to the decreased
demand for printing paper. The
ethanol market is expected to
stay tight but stable. Due to the
continued increased demand
for ethanol on global markets,
purchase prices for imported
ethanol have increased, lowering
technical ethanol margins. The
impact of COVID-19 on volumes
in industrial services is expected
to continue.
• Uncertainty in Altia’s ability to
deliver to the beverage sales
channels (monopolies and
grocery trade) is related to the
availability of products and raw
materials such as bulk wine, dry
goods and partner goods.
• The risks related to the health
and safety of Altia’s employees
in Altia’s production and logistics
operations remain high. The risk
for supply chain disturbances
continues to be high. Uncertainty
concerning the availability of
machinery spare parts and
the maintenance workforce
continues.
Measures to adjust cost structure
• Close follow-up of sales and
profitability development
continues, and additional cost
savings actions are implemented
when necessary.
Group financial position
• COVID-19 may impact Altia’s
financial position in many ways
and increase the uncertainty
related to the values of its assets.
Due to this Altia has assessed
the impact of the pandemic
on its financial position and
has considered the values of
assets and liabilities that include
critical accounting estimates
and require management
judgement. The identified and
expected effects have been
taken into consideration in the
reported figures and in the
forecasts requiring management
judgement.
• The value of inventory is
monitored on a regular basis also
for slow moving items. COVID-19
has not had a material impact on
the value of inventory.
• The credit risk of trade
receivables and the amount of
bad debt provision have beeen
analysed thoroughly at the
end of reporting period with
the conclusion being there is
sufficient provision in place.
• The strict focus on net working
capital management with issuing
commercial papers ensured that
Altia’s liquidity position was good
throughout the review period.
Annual Report 20208
Business review
Finland & Exports
The Finland & Exports segment comprises the import, sale and marketing of wines, spirits
and other beverages in Finland and the Baltics, as well as exports and travel retail.
2020 2019 Change, %
Net sales, EUR million 117.2 128.6 -8.9
Comparable EBITDA, EUR million 19.8 20.6 -3.7
Comparable EBITDA, % of net sales 16.9 16.0
Average number of personnel 90 89
EUR million 2020 2019 Change, %
Spirits 67.6 75.1 -10.0
Wine 48.3 52.5 -7.9
Other beverages 1.3 1.0 26.3
Total 117.2 128.6 -8.9
Net sales
In 2020, net sales in the Finland &
Exports segment were EUR 117.2
(128.6) million, down by 8.9% from the
previous year. The net sales decline was
due to the sales drop in travel retail,
exports and on-trade where the negative
impact of COVID-19 was signficant.
Spirits sales declined due to travel retail
and exports, and wine sales declined due
to partner portfolio changes in Q2 2020
and the release of a tax provision (EUR
0.5 million) in Q2 2019. In Finland, the
market volumes in the monopoly were
high as consumers shifted purchases
from the restricted sales channels to
the monopoly. Altia’s net sales in the
monopoly grew from the previous year,
driven by strong spirits sales. In the
Finnish grocery trade, net sales grew
steadily driven by new launches and
improved distribution. In the Baltics, the
positive development in the domestic
grocery trade offset the decrease in
harbour and border trade.
Comparable EBITDA
In 2020, comparable EBITDA was EUR
19.8 (20.6) million, 16.9% (16.0%) of net
sales. The positive channel mix, revenue
management and implemented cost savings
have partly offset the negative impact
of lost volumes due to COVID-19 which
drives full-year profitability below last
year’s level. The release of a tax provision
(EUR 0.5 million) in Q2 2019 impacts year-
on-year comparison negatively.
Business events
In 2020, Altia launched several new
innovations in Finland. The Koskenkorva
brand was extended with for example
Koskenkorva 7 Botanicals and
Koskenkorva Espresso, Lemon and Mojito
liqueurs. The Leijona brand was extended
with new mild spirits such as Leijona
Bahama Mango Mojito, and Jaloviina
successfully launched Jaloviina Hanki
liqueur through order assortment. In the
grocery trade, both the Koskenkorva and
Leijona brands were extended with new
products such as the Koskenkorva Green,
the first organic ready-to-drink product
in the Koskenkorva RTD offering. Leijona
RTD offering launched a new packaging
design and three new flavours.
In Q2, Altia partnered with Underberg
to enter the German market with
Koskenkorva Vodka and O.P. Anderson
Aquavit. The long-term partnership
includes the sales, marketing and
distribution of Koskenkorva Vodka Original
and O.P. Anderson Original Aquavit. The
launch was slowed down by the significant
lockdowns in Germany, but in Q4 the
distribution footprint in the retail channel
expanded with a number of new listings.
The wine portfolio in Finland was
strengthened with new distribution
agreements with two German wine
producers: F. W. Langguth Erben GmbH
& Co. KG and Leitz Weingut.
The targeted long-term work, change
in consumer behaviour, and COVID-19
supported a strong development of
Altia’s digital platforms viinimaa.fi and
nordicspirits.com, and visits to both
sites increased significantly. This further
strengthens Viinimaa’s position as a
leading wine marketing platform in
Finland. During 2020, Altia arranged
virtual events such as online tastings for
customers, consumers, journalists and
influencers. The Nordic Spirits site, Altia’s
ecommerce sales channel in Germany,
was further developed and a direct sales
channel in Amazon was opened.
In Finland, Altia has supported its on-
trade customers, that have been hit by
the COVID-19 crisis, through different
campaigning, for example, in social media.
Annual Report 20209
Scandinavia
The Scandinavia segment comprises the import, sale and marketing of wines, spirits and
other beverages in Sweden, Norway and Denmark.
2020 2019 Change, %
Net sales, EUR million 123.9 120.7 2.7
Comparable EBITDA, EUR million 14.2 12.1 18.0
Comparable EBITDA, % of net sales 11.5 10.0
Average number of personnel 74 74
EUR million 2020 2019 Change, %
Spirits 51.5 46.2 11.5
Wine 71.2 72.4 -1.7
Other beverages 1.2 2.1 -42.2
Total 123.9 120.7 2.7
Net sales
In 2020, net sales in the Scandinavia
segment were EUR 123.9 (120.7)
million, up by 2.7% from the previous
year. In constant currencies, net sales
grew by 3.9%. The net sales growth was
supported by the high market volumes
in the monopolies as consumers have
shifted purchases to the monopolies
due to COVID-19. In Sweden, Altia’s net
sales grew driven by strong spirits sales
in the monopoly, while wine sales were
negatively impacted by partner portfolio
changes in Q2 2020. In Norway, net sales
grew in both wine and spirits, driven by
market volumes in the monopoly. The net
sales decline in Other beverages is due
to partner portfolio changes (Q2 2019).
The business model change in Denmark
(Q2 2019) impacted net sales negatively.
Comparable EBITDA
In 2020, comparable EBITDA was EUR
14.2 (12.1) million, 11.5% (10.0%) of
net sales. Profitability improvement was
driven by all three markets. In Sweden
and Norway, the growth in monopoly
sales and revenue management
supported profitability improvement. In
Denmark, the profitability improvement
is related to the business model change
(Q2 2019). Comparable EBITDA was
impacted negatively by the development
of the Norwegian krona.
Business events
In 2020, Altia made several product
launches in Sweden and Norway during
the period. To address the growing gin
category, Altia launched Hernö Pink
Gin, Explorer Pink Gin, and under the
O.P. Anderson brand, an organic dry gin.
Koskenkorva liqueurs such as Koskenkorva
Ginger and Lemon were introduced. The
Xanté brand was extended with Xanté
Rum & Pear and Coconut Cream & Pear
liqueurs. Ahead of the glögg season, new
exciting novelties were launched in the
Blossa offering: the annual Blossa 2020
and a new flavour “Blossa Saffran”.
Altia received reports of few broken
Blossa Sparkling bottles in the fourth
quarter. There were no injuries in
connection with these. Altia’s highest
priority is the high quality and safety of its
products, so as a precautionary measure,
all Blossa Sparkling products were
withdrawn from stores. No other Blossa
products were concerned.
Altia and Distell renewed the contract
for the distribution and marketing of
Distell’s brands in Sweden, Finland,
Norway and travel retail in the Nordics.
Distell and Altia have had a long
collaboration with each other for nearly
two decades.
With COVID-19 and the on-trade
business being hit significantly, Altia
established a scholarship – Altia
krOgfolk-hjälpen – directed at employees
in the restaurant business and those
who have been hit by COVID-19. The
scholarship provides financial support for
professional training.
In 2020, folkofolk.se further
strengthened its position as Sweden’s
leading lifestyle wine and spirits marketing
platform. The site traffic to folkofolk.se
reached an all-time high and visits more
than doubled from the previous year. This
is a result of the targeted development
work on search engine optimisation, user
experience and content.
Annual Report 202010
Altia Industrial
The Altia Industrial segment comprises Koskenkorva plant operations, starch, feed
component and technical ethanol businesses, as well as contract manufacturing
services. It also includes supply chain operations, i.e. production operations in different
countries, customer service, logistics and sourcing.
2020 2019 Change, %
Net sales, EUR million 101.2 110.2 -8.2
Comparable EBITDA, EUR million 17.9 11.4 56.5
Comparable EBITDA, % of net sales 17.6 10.4
Average number of personnel 404 426
Net sales
In 2020, net sales in the Altia Industrial
segment were EUR 101.2 (110.2), down
by 8.2% from the previous year. The net
sales decline was driven by the decrease
of contract manufacturing volumes due
to COVID-19. The demand for technical
ethanol has been strong during the
COVID-19 pandemic, and Altia’s volumes
have been at a higher level compared to
the previous year. Starch was negatively
impacted by lower volumes due to a weak
demand for printing paper and the lower
barley price during the first nine months
of the year.
Comparable EBITDA
In 2020, comparable EBITDA was EUR
17.9 (11.4) million, 17.6% (10.4%) of net
sales. The improvement in profitability
was related to the positive development
of technical ethanol and improved supply
chain efficiencies as well as the lower barley
price during the first nine months of the year.
Production volumes and key projects
During 2020, the Rajamäki alcoholic
beverage plant in Finland produced 56.8
(65.8) million litres of spirits and wine.
In 2020, the Koskenkorva Distillery
reached all-time high volume of grain
consumption and significant growth in
ethanol production. The plant has run at
full capacity during the period and 214
(212) million kilos grain was consumed.
Grain spirits production was 23.4 (22.2)
million kilos including technical ethanols,
starch production was 64.1 (65.1) million
kilos, and feed component production
was 66.4 (65.6) million kilos.
A new fuel silo was commissioned at the
Koskenkorva plant which further increases
the share of renewable energy in the plant’s
energy production. At an annual level, the
investment can help Altia achieve a 20 per
cent decrease in carbon dioxide emissions,
which takes Altia one step closer to its target
of carbon-neutral production by 2025.
At the Rajamäki alcoholic beverage plant
a de-alcoholisation production process
was implemented. This new capability
strengthens Altia’s opportunities to launch
new low-alc and non-alc products in line with
our long-term sustainability target.
Altia and Brown-Forman renewed the
Finlandia Vodka production agreement.
The renewed agreement runs until 2035.
Annual Report 202011
Research and development
activities
The Group’s direct research and
development expenditure amounted to
EUR 1.6 (2.3) million and was related to
the product development of alcoholic
beverages.
Governance
Corporate Governance and Remuneration
Statement 2019
Altia’s Corporate Governance Statement
and the Remuneration Statement for
2019 were published together with the
Report by the Board of Directors on 2
March 2020 and are available on the
company’s website.
Annual General Meeting 2020
Altia’s Annual General Meeting was held
in Helsinki on 4 June 2020. The meeting
adopted the financial statements and
discharged the members of the Board of
Directors and the CEO from liability for
the financial year 2019.
The meeting approved the proposal by
the Board of Directors to pay a dividend
of EUR 0.21 per share. The dividend was
paid on 15 June 2020. Further, the AGM
authorised the Board of Directors to
resolve on the payment of dividend up to
EUR 0.21 per share. On 16 November
2020, the Board of Directors decided
based on the authorisation by the AGM
on the payment of a second dividend
instalment of EUR 0.21 per share for the
financial year 2019. The dividend was
paid on 25 November 2020.
The AGM also adopted the
Remuneration Policy for the governing
bodies of the company.
Board of Directors and Board Committees
Based on the proposals by the
Shareholders’ Nomination Board,
the meeting approved the number of
members of the Board of Directors to
be seven. The meeting re-elected Sanna
Suvanto-Harsaae as Chairman of the
Board of Directors and Tiina Lencioni,
Jukka Ohtola, Anette Rosengren and
Torsten Steenholt as members of the
Board of Direcotrs. Jyrki Mäki-Kala and
Jukka Leinonen were elected as new
members. Jyrki Mäki-Kala was further
elected as Vice Chairman of the Board of
Directors.
The term for the members of the Board
of Directors lasts until the end of the next
Annual General Meeting.
Based on the proposal by the
Shareholders’ Nomination Board, the
meeting decided that the remuneration
to the members of the Board of Directors
during the next term consists of a
monthly term of office fee as follows:
• EUR 4 000 per month, Chairman
• EUR 2 500 per month, Vice Chairman
• EUR 2 000 per month, member
In addition to the monthly fee, the
members of the Board of Directors
receive a meeting fee for the Board
of Directors and Board Committee
meetings of EUR 600 per meeting for
Board members residing in Finland
and EUR 1 200 per meeting for Board
members residing abroad. Travel
expenses are reimbursed in accordance
with the company’s travel policy.
Altia’s Board of Directors held its
organisational meeting after the Annual
General Meeting and elected members
of the Audit and Human Resources
Committees as follows:
• Audit Committee: Jyrki Mäki-
Kala (Chairman), Tiina Lencioni,
Torsten Steenholt and Sanna
Suvanto-Harsaae
• Human Resources Committee: Sanna
Suvanto-Harsaae (Chairman), Jukka
Leinonen and Jukka Ohtola
The Board of Directors has assessed that
all members of the Board of Directors
are independent of the company.
Furthermore, all members of the Board
of Directors, with the exception of Jukka
Ohtola, are independent of the company’s
significant shareholders. Jukka Ohtola
holds an office in the Ownership Steering
Department of the Finnish Prime
Minister’s Office and is therefore not
independent of a significant shareholder
of the company.
Auditor
In accordance with the recommendation
by the Audit Committee, the
Annual General Meeting re-elected
PricewaterhouseCoopers Oy as the
company’s auditor for a term that ends
at the close of the next Annual General
Meeting. PricewaterhouseCoopers
Oy has informed the company that
Authorized Public Accountant Ylva
Eriksson continues as the auditor in
charge. The meeting decided that the
auditor’s fees be paid against an invoice
approved by the company.
Amendment of the Articles of Association
The AGM approved the proposal by the
Board of Directors to amend the first
sentence of Article 4 of the company’s
Articles of Association to set the
maximum number of members of the
Board of Directors of the company at
eight members instead of the current
seven members, as follows:
“The company’s Board of Directors
shall comprise a minimum of three (3) and
a maximum of eight (8) members.”
Article 4 of the Articles of Association
remains otherwise unchanged.
Further, the AGM approved that
Article 11 of the company’s Articles
of Association is amended so that the
Annual General Meeting shall decide,
in addition to the items that currently
appear from Article 11, also on the
adoption of the remuneration policy
when necessary, and on the adoption of
the remuneration report. Article 11 of the
Articles of Association remains otherwise
unchanged.
Authorisation of the Board of Directors to
resolve on the repurchase of the company’s
own shares
The AGM approved the Board’s proposal
to authorise the Board of Directors
to resolve on the repurchase of the
company’s own shares. The number
of shares to be repurchased by virtue
of the authorisation shall not exceed
360,000 own shares in the company,
which corresponds to approximately one
percent of all the company’s shares at
the time of the proposal, subject to the
provisions of the Finnish Companies Act
on the maximum amount of shares owned
by the company or its subsidiaries.
The shares may be repurchased in one
or several instalments and either through
Annual Report 202012
a tender offer made to all shareholders
on equal terms or in another proportion
than that of the existing shareholdings of
the shareholders in the company in public
trading at the prevailing market price.
The shares would be repurchased with
funds from the company’s unrestricted
shareholders’ equity.
The shares can be repurchased for the
purpose of implementing the company’s
share-based incentive plans or share
savings plans. The Board of Directors was
authorised to resolve on all other terms
and conditions regarding the repurchase
of the company’s own shares.
The authorisation is valid until the
close of the next Annual General
Meeting, however, no longer than until
30 June 2021.
Amendment of the charter of the
Shareholders’ Nomination Board
The AGM approved the proposal by
the Shareholders’ Nomination Board to
amend section 2 of the charter of the
Shareholders’ Nomination Board so that
the Value Day is the first banking day of
June.
Shareholders’ Nomination Board
In July, Altia announced that its three
largest registered shareholders
(shareholder register maintained by
Euroclear Finland Ltd as per 1 June
2020) have nominated the following
representatives to the Shareholders’
Nomination Board:
• Pekka Hurtola, the Ownership
Steering Department in the Prime
Minister’s Office
• Annika Ekman, Ilmarinen Mutual
Pension Insurance Company
• Hanna Kaskela, Varma Mutual
Pension Insurance Company
In its organising meeting on 1 July 2020
the Nomination Board elected Pekka
Hurtola as its Chairman. The Chairman
of Altia’s Board of Directors, Sanna
Suvanto-Harsaae acts as an expert
member in the Nomination Board.
Extraordinary General Meeting 2020
Altia’s Extraordinary General Meeting
held on 12 November 2020 approved
the merger of Altia and Arcus ASA
in accordance with the merger plan
approved by the Board of Directors of
Altia and Arcus on 29 September 2020.
Pursuant to the Merger Plan, Arcus shall
be merged into Altia through a statutory
cross-border absorption merger so that
all assets and liabilities of Arcus shall
be transferred without a liquidation
procedure to Altia and Arcus will be
dissolved. The merger will result in the
combined company Anora Group Plc.
Group structure
In order to simplify the Group structure,
Altia Oyj’s Finnish subsidiaries excluding
Oy Wennerco Ab were merged to Altia
Oyj and all Swedish subsidiaries to Altia
Sweden AB as of 30 April 2020.
Chief Executive Officer and Group
Management
On 4 May, it was announced that Altia’s
Chief Financial Officer (CFO) and
member of the Executive Management
Team (EMT), Niklas Nylander had
resigned from his position. Niklas
Nylander continued in his position and as
a member of the Executive Management
Team until 19 August 2020. On 31
December 2020, the EMT consisted of
the following members:
• Pekka Tennilä, CEO
• Janne Halttunen, SVP, Scandinavia
• Kari Kilpinen, SVP, Finland & Exports
• Kirsi Lehtola, SVP, HR
• Kirsi Puntila, SVP, Marketing
• Hannu Tuominen, SVP, Altia Industrial
Juhana Jokinen has acted as the interim
CFO and is a member of the extended EMT.
Altia’s share
Altia’s shares are listed on the Nasdaq
Helsinki. All shares carry one vote and
have equal voting rights. The trading code
of the shares is “ALTIA”, and the ISIN code
is FI4000292438.
Share capital and share
At the end of the reporting period, Altia
Plc's share capital amounted to EUR 60
480 378.36 and the number of issued
shares was 36 140 485.
Shareholders and share trading
At the end of December 2020, Altia had
21 083 registered shareholders, and
8 519 390 shares representing 23.6%
of the total number of shares were
nominee-registered. During 2020, the
highest share price was EUR 10.40 and
the lowest EUR 7.01. In total, 10 559 865
shares were traded on Nasdaq Helsinki.
The closing price of Altia’s share on 30
December 2019 was EUR 9.98, and the
market capitalisation was approximately
EUR 360.7 million.
Dividend payments
The Annual General Meeting approved
the proposal by the Board of Directors
to pay a dividend of EUR 0.21 per share.
The dividend was paid on 15 June 2020.
Further, the AGM authorised the Board
of Directors to resolve on the payment of
dividend up to EUR 0.21 per share. On 16
November 2020, the Board of Directors
decided based on the authorisation by
the AGM on the payment of a second
dividend instalment of EUR 0.21 per
share for the financial year 2019. The
dividend was paid on 25 November 2020.
Flagging notifications
In 2020, Altia was informed of the
following changes in ownership:
• On 21 February, Lazard Asset
Management LLC notified of their
ownership falling below the threshold
of 5% with a holding of 4.89% of
which 1.55% are shares with voting
rights attached.
• On 7 October, Lazard Asset
Management LLC notified of their
ownership exceeding the threshold of
5% with a holding of 5.02% of which
1.47% are shares with voting rights
attached.
• On 30 October, Lazard Asset
Management LLC notified of their
ownership falling below the threshold
of 5% with a holding of 4.99% of
which 1.45% are shares with voting
rights attached.
Annual Report 202013
• On 5 November, Lazard Asset
Management LLC notified of their
ownership exceeding the threshold
of 5% with a holding of 5.36% of
which 1.44% are shares with voting
rights attached.
• On 18 December, Valtion kehitysyhtiö
Vake Oy transferred 13 097 481
shares to the State of Finland. Valtion
kehitysyhtiö Vake Oy is a company
fully owned by the State of Finland
and thereby fully controlled by the
State of Finland.
Management’s ownership
On 31 December 2020, the members of
the Board of Directors, the CEO and the
members of the Executive Management
Team, including their controlled
corporations, owned a total of 82 346
shares corresponding to 0.23% of the
total number of shares.
Authorisations, option and share-based
incentive programmes
During 2020, Altia did not have share
option programmes. Altia’s CEO, the
members of the Executive Management
Team and selected key employees
SECTOR DISTRIBUTION 31 DEC 2020*
Sector
Number
of shares
% of
shares
Public sector 15 641 386 43.3
Financial and insurance corporations 8 984 661 24.9
Households 8 213 480 22.7
Non-financial corporations 2 185 942 6.0
Non-profit institutions 779 565 2.2
Rest of the world 335 451 0.9
Total 36 140 485 100.0
DISTRIBUTION BY SIZE OF HOLDING 31 DEC 2020*
Number
of shares
Number of
shareholders
% of
shareholders
Number of
shares
% of
shares
1-100 7 549 35.8 473 808 1.3
101-500 9 618 45.6 2 444 395 6.8
501-1,000 2 350 11.1 1 750 873 4.8
1,001-5,000 1 347 6.4 2 679 716 7.4
5,001-10,000 121 0.6 861 393 2.4
10,001-50,000 72 0.3 1 548 162 4.3
50,001-100,000 9 0.0 678 476 1.9
100,001-500,000 11 0.1 1 744 988 4.8
500,001-& above 6 0.0 23 958 674 66.3
Total 21 083 100.0 36 140 485 100.0
*) Source: Euroclear Finland
LARGEST SHAREHOLDERS 31 DEC 2020*
Number
of shares
Number
of shares
% of
shares
Prime Minister’s Office 13 097 481 36.2
Ilmarinen Mutual Pension Insurance Company 1 113 300 3.1
Varma Mutual Pension Insurance Company 1 050 000 2.9
WestStar Oy 684 085 1.9
Veritas Pension Insurance Company Ltd. 355 530 1.0
FIM Fenno Sijoitusrahasto 207 908 0.6
Säästöpankki Kotimaa 150 000 0.4
Mandatum Life Insurance Company Limited 146 860 0.4
Petter and Margit Forsström´s Foundation 140 200 0.4
Takanen Jorma 122 617 0.3
Total 17 067 981 47.2
Nominee-registered shares 8 519 390 23.6
are part of a share based, long-term
incentive scheme.
Altia’s Board of Directors is authorised
to resolve on the repurchase of the
company’s own shares. The number of
shares to be repurchased by virtue of the
authorisation shall not exceed 360,000
own shares in the company. The shares
could be repurchased for the purpose of
implementing the company’s share-based
incentive plans or share savings plans.
The authorisation is valid until the close
of the next Annual General Meeting,
however, no longer than until 30 June
2021. By the end of December 2020,
the company has not repurchased shares
based on this authorisation.
Personnel
In 2020, Altia Group had an average of 650
(682) employees. On 31 December 2020,
Altia Group had 637 (632) employees,
of whom 378 (381) were in Finland, 115
(110) in Sweden, 4 (4) in Denmark, 23 (21)
in Norway, 34 (31) in Latvia, 58 (60) in
Estonia, and 25 (25) in France.
There were no significant changes in
the number of personnel during the year.
As a measure to mitigate the impacts of
COVID-19, Altia implemented temporary
lay-offs in Finland, Sweden and Norway.
The temporary lay-offs affected
approximately 180 persons.
During the pandemic, the safety of
Altia employees was the highest priority,
and new practices, instructions and ways
of working were implemented.
The Altia Tasting personnel survey
was conducted in January–February
2020. All indices developed in a positive
direction. Based on decided actions,
training, e.g. in leadership development,
teamwork, self-awareness and feedback,
was organised for different teams.
Investment continued in developing
Annual Report 202014
Altia leaders according to revised
leadership principles co-designed during
the previous year. Additionally, a change
leadership programme was launched.
Other training covered e.g. regular
induction sessions for new employees
and training in technical skills and tools.
The holistic Human Factor development
programme to improve safety culture
continued in 2020, with workshops
and training at the Finnish production
facilities. The progamme adopts a
broader perspective on occupational
accidents and the promotion of
occupational safety. Altia aims to achieve
its goal of zero absences attributable to
occupational accidents by 2030.
Incentive programmes
Short-term and long-term incentives
Altia’s salaried, senior salaried employees
and management participate in an
annual performance incentive scheme.
The potential annual reward is based on
both the Group’s and its business units’
targets, as well as on personal targets.
Rewards are paid either once a year or
more frequently as an annual reward
or sales bonus. Workers participate in a
production bonus system. The production
bonuses are based on the targets of each
production unit.
Based on the result for 2020, no
annual performance bonuses were paid.
Other bonuses, including the cash-
based long-term incentive programme
2017-2019, totalled EUR 1.0 (0.5)
million, including social expenses. In
connection with the preparation of the
Altia-Arcus merger, the project team
members were paid an Anora project
bonus of EUR 1.1 million due to the
extraordinary workload.
Share-based incentive scheme
Altia’s CEO, the members of the
Executive Management Team and
selected key employees are part of a
share-based, long-term incentive scheme.
The objectives of the share-based long-
term incentive scheme are to align the
interests of Altia’s management and key
employees with those of the Company’s
shareholders and, thus, to promote
shareholder value creation in the long
term, and to commit the management
and key employees to achieving Altia’s
strategic targets as well as the retention
of Altia’s valuable key resources. The
scheme complements a balanced
incentive structure.
The scheme consists of annually
commencing individual performance
share plans (PSP), each with a three-year
performance period, followed by the
payment of the potentially earned share
reward. The commencement of each
individual plan is subject to a separate
Board approval.
The first plan (PSP 2019–2021)
commenced in the beginning of
2019 and the potential share reward
thereunder will be paid in the spring of
2022, provided that the performance
targets set by the Board of Directors
are achieved. The potential reward will
be paid in listed shares of Altia. Those
eligible to participate in the first plan are
approximately 20 individuals.
If all the performance targets set for
PSP 2019–2021 are fully achieved, the
aggregate maximum number of shares
to be paid based on this first plan is
approximately 250 000 shares.
The second plan (PSP 2020–2022)
commenced in the beginning of
2020 and the potential share reward
thereunder will be paid in the spring
2023, provided that the performance
targets set by the Board of Directors
are achieved. The potential reward will
be paid in listed shares of Altia. Those
eligible to participate in the second plan
are approximately 25 individuals.
If all the performance targets set for
PSP 2020–2022 are fully achieved, the
aggregate maximum number of shares
to be paid based on this second plan is
approximately 271 000 shares.
Sustainability
From the beginning of 2020, Altia has
been guiding it’s responsibilty efforts
according to the Sustainability Roadmap
2030. The roadmap sets ambitious,
numerical targets to the four focus
areas. The key target is to have carbon
neutral production in 2025, without using
compensations.
Altia's sustainability roadmap has
four focus areas, which also include
the cornerstones of the previous plan:
Our Distillery, Our Drink, Our Society
and Our People. The focus areas are
based on selected United Nations
Sustainable Development Goals
(SDGs), Altia’s purpose and strategy,
stakeholder expectations, the company’s
own operating principles and codes of
conduct, as well as the amfori BSCI Code
of Conduct, which in turn is based on
key international agreements protecting
workers’ rights. Altia has joined the
amfori BSCI initiative and aims to
annually increase the traceability and
transparency of product and raw material
supply chains.
More details can be found in the
Non-Financial Statement published in
connection with the Report by the Board
of Directors and in the Annual Report’s
dedicated section on Sustainability.
Health, safety and environment
Occupational health and safety
Occupational safety is a vital part of
Altia’s corporate responsibility. Altia
aims to reduce the number of accidents
and absences caused by accidents and
sickness.
In 2020, the sickness absence was
4.0% (3.7%). The accident frequency
(the number of accidents per one million
working hours, excluding commuting) for
accidents requiring at least one day of
absence was 7 (9). There were no fatal
work-related accidents in 2020 (0).
The environment and energy efficiency
The most significant environmental
impacts of Altia’s operations are energy
consumption, water consumption, waste
water quality, waste generation and the
non-quality costs generated from scrapped
raw materials, packaging materials and end
products. Environmental indicators have
been defined to support the reduction of
these impacts. Annual targets and related
actions were defined for different locations.
Organic loading of wastewater
decreased at Rajamäki, Tabasalu
and Koskenkorva plants during the
reporting period. At Koskenkorva,
wastewater calculations include also
A-Rehu’s amount. A-Rehu operates
on Koskenkorva plant area. Water
Annual Report 202015
consumption relative to production
increased at Rajamäki and decreased at
Tabasalu and Koskenkorva. The waste
utilisation rate for the Altia production
sites in Rajamäki, Koskenkorva and
Tabasalu, was 99.5% (99.5%).
The bioenergy power plant at
Koskenkorva, which uses barley husks
as its primary fuel, has enabled the
Koskenkorva plant to reduce its carbon
dioxide emissions and achieve a 65%
(62%) self-sufficiency rate in fuels for
steam production in the reporting period.
The bioenergy power plant has been
operating at full capacity since January
2015. The use of renewable fuel has
reduced the Koskenkorva plant’s carbon
dioxide emissions by 58% in 2020
compared to the base year 2014 level.
Energy efficiency achieved through
various energy saving measures is
a major development area for the
company both in terms of profitability
and environmental responsibility. Altia
is committed to the Finnish energy
efficiency agreement for the period of
2017–2025, with the target to reduce
energy consumption by 10% by the
year 2025, compared to the base year
2014. As part of the new Sustainability
Roadmap, Altia has also committed to
100% renewable energy by 2025. In
2020, energy use relative to production
volume decreased at the Koskenkorva
plant and increased at the Rajamäki and
Tabasalu plants.
Risks and risk management
Risk management
Altia’s risk management aims to support
the realisation of the company’s strategy,
risk identification, and means to reduce
the likelihood and impact of materialised
risks, as well as to safeguard business
continuity. Risks may be the result of an
internal or external event. The Group’s
risk management policy has been
approved by Altia Plc’s Board of Directors.
The risk management policy describes
the goals, principles and responsibilities
of Altia’s risk management and the
related reporting principles. In line
with this, the Executive Management
Team supports and coordinates risk
management as part of the Group’s
planning and control processes and
reports key risks to the company’s
management and Audit Committee. The
most significant risks and uncertainties
are assessed yearly in the Report of the
Board of Directors.
Altia’s business areas are responsible
for risks related to their operations, as
well as for their identification, prevention
and key limitation methods. The Group’s
finance department manages financial
risks according to the hedging principles
defined in the company’s financial
policy. The management principles of
the Group’s most significant financial
risks are described in more detail
in the Notes to the Consolidated
Financial Statements, under section
4.1. Financial risk management. The
finance department is also responsible
for insurance programmes that cover the
entire Group.
Altia’s risk management process is
based on the ISO 31000 standard and
also includes ERM components, as
applicable. The Corporate Governance
Statement includes information on the
risk management process.
Most significant risks and uncertainties
For reporting and risk assessment
purposes, risks are categorised into
four classes: strategic and business
risks, operational and process-related
risks, damage risks and financial risks.
The Board of Directors and the Audit
Committee assesses these central risks
and the measures aiming to reduce
the likelihood of their materialisation
regularly.
Strategic and business risks relate to
decision-making, resource allocation,
management systems and the capacity
to respond to changes in the operating
environment (Strategy period: long-term,
3–5 years). Strategic risk assesment
comprises also the regulatory framework
and ethically sustainable business practices
that apply to the company’s operations
and industry. Corporate Responsibility
risks related to business operations are
described in the Non-Financial Statement
published in connection with the Report by
the Board of Directors.
Operational risks concern the
implementation of strategy and day-
to-day business operations. Such risks
include deviations in processes, systems
and conduct (Budget period: short-term,
1–2 years).
Hazard risks are errors, malfunctions
and accidents occurring within Altia or
its operating environment, resulting in
damage or loss.
Financial risks pertain to changes in
market prices, the short- and long-term
adequacy of financial assets and the
ability of counterparties to meet their
financial obligations.
RISK
MANAGEMENT
Hazard risks
• Health and safety
• Property
• Environment
• Fires, accidents and
natural catastrophes
Strategic risks
• Business environment
• Technology
• Regulation
• Climate change
• Reputation
• M&A
Financial risks
• Liquidity
• Profitability
• Interest rate, currency
and credit risks
• Taxation risks
• Accounting and reporting
• Capital structure
Operational risks
• Organisation, management
and personnel
• IT and security
• Production and processes
• Business disruption
• Quality
• Contractual and liability risks
• Compliance
Annual Report 202016
The following table contains a summary of key uncertainties with an either positive or negative effect on Altia’s operations:
Risk Description Risk management
Raw material
price risk
The availability of domestic barley and its market price has a significant impact on the profitability
of Altia’s business.
Altia ensures the availability of barley with contract farming and the price of barley in cooperation
with farmers and grain companies.
Risks related
to customers
and consumer
demand
Our customers in Altia’s market areas include Nordic retail monopolies, wholesalers who sell
alcohol, restaurants, retail stores, travel retail, international wine and spirits companies and
importers operating in the export markets. The wide customer base provides Altia with diverse
opportunities for the long-term development of customer cooperation.
Changes in consumer behaviour may, in the long term, shift the emphasis in the demand for
Altia’s products between different product categories.
A strong market position, efficient industrial processes, good quality and well-known brands
improve Altia’s chances to manage the risk.
Changes in consumption patterns and the need to adjust operations are prepared for by investing
in consumer-driven product development.
Product
safety risks
As a wine and spirits company, one major risk is ensuring the quality and safety of the raw
materials and finished goods through the supply chain.
Altia employs modern methods to ensure the safety of production processes and to eliminate
various microbiological, chemical and physical hazards. In ensuring product safety, Altia complies
with the operating methods required by food safety management and quality certificates.
Damage risks Altia has production facilities in Finland, Estonia and France. A fire or other unforeseen event
may interrupt the operations of a production facility.
All of our production facilities have insurance policies for material damage and the interruption
of operations in the Group’s insurance programme. Key production facilities are subject to a risk
survey every 1–2 years. Continuity plans serve to limit any possible loss of profits.
Financial risks The key risks related to finance in Altia’s operations are currency transaction and translation
risks, interest rate risks and refinancing and liquidity risks.
Financial risk management aims to mitigate any impact that price fluctuations and other
uncertainties in the financial markets have on operating results, the balance sheet and cash flow
and to ensure sufficient liquidity. The management principles of the Group’s most significant
financial risks are described in more detail in the Notes to the Consolidated Financial Statements,
under section 4.1. (p. 145) Financial risk management.
Compliance Key compliance risks in Altia’s operations relate to the breach of laws and regulations and
decisions by authorities concerning reporting, permits and licenses, marketing of alcoholic
beverages, competition law and processing of personal data.
Altia aims to manage compliance risks and ensure ethically sustainable business practices with
guidance and regular training. Compliance risk management aims to avoid sanctions, consequences
and official investigations and decisions that may damage the company’s profitability, business
continuity and reputation.
Annual Report 202017
Price risk associated with commodities
Barley
In 2020, Altia consumed approximately
214 (212) million kilos of Finnish grain
to produce ethanol and starch. The
availability of high-quality domestic
barley is ensured through contract
cultivation and cooperation with
farmers and grain handling companies.
The market price of barley fluctuates
significantly year by year as a result of
several factors that affect Finnish barley
supply and demand. The price of barley is
therefore considered to be a significant
risk for Altia during the financial year. The
price risk has not been hedged against
with derivative instruments.
Electricity
A strong increase in the market price of
electricity is a significant risk for Altia.
The risk is managed by following Altia’s
principles for electricity procurement
and by a third-party specialist. These
principles determine the hedging limits
within which the electricity price risk is
hedged against. The hedges are executed
with the OTC-derivatives of Nasdaq OMX
Oslo ASA.
At the end of 2020, the hedging ratio
for deliveries for the next 12 months
was 74.7% (53.7%), in line with the set
targets. In 2020, the average hedging
ratio was 72.1% (66.0%).
Cash flow hedge accounting in
accordance with IFRS 9 is applied to the
hedges against electricity price risk, and
hedge effectiveness is tested quarterly.
All hedging was effective in 2020 as that
was in 2019.
Altia purchases its electricity straight
from the Nord Pool Spot markets as
a delivery tied to the spot price of the
Finnish price area.
Sensitivity to market risks
The table below describes the sensitivity
of the Group’s profit and equity (before
taxes) to changes in electricity prices,
foreign exchange rates and interest rates.
When Altia applies hedge accounting,
the sensitivity is directed at equity. When
hedge accounting is not applied, the
sensitivity is recognised as a potential
impact on profit or loss.
The sensitivity to foreign exchange
rate changes is calculated from the net
currency position resulting from financial
instruments.
The total group floating rate liability
position consists of floating rate
liabilities EUR 65.0 (70.0) million and
floating leg of interest rate swap EUR
20.0 (20.0) million which is netting the
interest rate risk.
An increase of one percentage point
in interest rates would have an effect
of EUR -0.5 (-0.5) million on the income
statement. The effect of the increase
in market interest rates on the Group’s
profit is determined by net interest
expenses.
Short-term risks and uncertainties
The most significant uncertainties in
the company’s operations relate to the
overall economic development and its
impacts on consumption, as well as the
effects of alcohol taxes and legislation on
consumer behaviour. Unexpected and
unforeseen disruptions in production and
deliveries form the major short-term risks
related to operations, as well as sudden
and significant changes in prices of raw
materials, especially related to barley.
Altia Plc’s Board of Directors has
confirmed the Group Risk Management
Policy. Risk management is aimed at
supporting the implementation of Altia
Group’s strategy, the identification of
risks and methods for reducing the
probability and impacts of risks, as well
as ensuring business continuity. Risks
may arise from internal or external
events.
Outlook for 2021
Market outlook
The development of the Group’s business
operations and profitability are affected
by the competitive environment, the
overall economic outlook and changes
in alcohol taxation and regulation.
Uncertainty related to changes in
consumer buying behaviour and
consumer demand continues. In addition,
overall fluctuations of direct product
costs affect the Group’s profitability.
COVID-19 update: Of Altia’s beverage
sales channels, travel retail, exports and
on-trade are restricted or closed due to
COVID-19 restrictions. The recovery of
these channels depend on the level and
extent of government restrictions and
recommendations and how consumer
behaviour changes. The pace of recovery
is difficult to estimate and is expected to
vary across sales channels. Uncertainty in
the economy and operating environment
is high and the risk of an economic
slowdown is high.
Seasonality
There are substantial seasonal
fluctuations in the consumption of
alcoholic beverages impacting the net
sales and cash flow of Altia. The company
typically generates large amounts of its
revenue and cash flow during the fourth
quarter of the year, whereas the first
quarter of the year is significantly lower.
In addition, excise taxes related to the
high season at the end of the year are
paid in January, resulting in large cash
outflows at the beginning of the year.
SENSITIVITY OF FINANCIAL INSTRUMENTS TO MARKET RISKS (BEFORE TAXES)
IN ACCORDANCE WITH IFRS 7
2020 2019
EUR million Income statement Equity Income statement Equity
+/-10% electricity - +/-0.4 - +/-0.2
+/-10% change in EUR/NOK exchange rate -/+0.2 +/-0.3 +/-0.0 +/-0.2
+/-10% change in EUR/SEK exchange rate -/+0.2 +/-2.1 +/-0.2 +/-1.8
+/-10% change in EUR/USD exchange rate +/-0.0 -/+0.4 +/-0.0 +/-0.2
+/-10% change in EUR/AUD exchange rate -/+0.0 -/+0.2 +/-0.0 +/-0.2
+/-1%-points change in interest rates -0.5 +0.2 -0.5 +0.4
Note: +10% increase in EUR/SEK exchange rate would have an EUR -0.2 million effect in income statement.
Other risks with same principle.
Annual Report 202018
Short-term outlook
Altia has decided to provide a short-
term outlook but no guidance for
2021, due to the uncertainties
caused by COVID-19 and the low
predictability for the full year 2021.
In the first half of 2021, COVID-19
is expected to impact travel retail,
exports and on-trade. The channel shift
in the monopoly markets is expected
to continue for as long as travel retail
and on-trade continue to be restricted.
The situation is expected to stabilise
earliest after the summer period.
In Altia Industrial, for the first half
of 2021, COVID-19 is expected
to continue to impact contract
manufacturing and industrial products
in a significant way. The increased
prices of imported ethanol puts
pressure on technical ethanol margins.
The barley prices have increased at
the beginning of this year and the price
level is expected to be higher than in
2020 until the new crop.
The recovery of the operating
environment depends largely on
the development of COVID-19, the
progress of vaccinations, and changes
in consumer behaviour.
Financial calendar 2021
The Annual Report 2020 including the
financial statements, Board of Directors'
report, Auditor's report, the Corporate
Governance statement and the
remuneration statement will be published
in English and Finnish on Altia’s website
during week 8 (the week starting on 22
February).
Altia Plc will publish financial reports in
2021 as follows:
• 28 April: Business Review for
January-March 2021
• 18 August: Half-Year Report for
January-June 2021
• 3 November: Business Review for
January-September 2021
Annual General Meeting 2021
Altia Plc’s Annual General Meeting
(AGM) 2021 is planned to be held on 19
March 2021 in Helsinki. The notice to and
instructions for the AGM are published
on Altia’s website.
Dividend proposal
According to the financial statements
on 31 December 2020, the parent
company’s distributable funds amount to
EUR 87630619.27 including profit for
the period of EUR 5873094.86.
There have been no significant
changes to the parent company’s
financial position after the end of the
financial year.
The Board of Directors proposes
to the Annual General Meeting that a
dividend of EUR 0.35 per share be paid
for the financial year 2020.
Arcus’ Board of Directors have
similarly proposed to the Annual
General Meeting of Arcus that an
annual dividend of NOK 1.66 per share
be paid for the financial year 2020,
reflecting the relative value of Altia
and Arcus agreed upon in the merger
plan, meaning that dividends for the
financial year 2020 to be paid by Altia
and Arcus, respectively, will not have
an impact on the agreed valuation of
the companies for the purpose of the
Altia and Arcus merger.
Altia’s Board of Directors also
proposes to the Annual General
Meeting that the dividend authorisation
decided by the Extraordinary General
Meeting 2020 to pay an extra dividend
of EUR 0.40 per share to Altia's
shareholders in connection with and
prior to the closing of the Altia and
Arcus merger be renewed.
Events after the period
On 8 January 2021, it was announced
that the Finnish Competition and
Consumer Authority has moved its
investigation of the combination of Altia
and Arcus into phase II.
On 21 January 2021, the proposals by
Altia’s Shareholders’ Nomination Board
to Altia’s Annual General Meeting 2021
on the number of members, composition
and remuneration of the Board of
Directors were announced.
Helsinki, 24 February 2021
Altia Plc
Board of Directors
Annual Report 202019
Introduction
Sustainability is a key success factor
for Altia and as of 2020, is an integral
part of Altia’s company strategy. With our
Sustainability Roadmap 2030, we want to
support national and international efforts
to mitigate climate change and move
towards a more circular economy. Altia
also promotes a modern and responsible
Nordic drinking culture that consists
of higher quality beverages, produced
in responsible ways, and consumed
moderately.
Altia has reported on the company’s
sustainability efforts for over ten years in
accordance with the model for corporate
responsibility reporting for state-owned
companies
1
and the Global Reporting
Initiative (GRI) guidelines.
This non-financial statement
describes, in accordance with the Finnish
Accounting Act, Altia’s approach to the
management of environmental, social
and employee matters, as well as matters
related to respect for human rights
and anti-corruption and bribery in its
Non-Financial Statement 2020
operations. More detailed information
about our sustainability work and key
performance indicators is provided in a
separate section on Sustainability in this
Annual Report.
Business model
Altia’s business model is based on
offering a strong portfolio of its
own brands and a versatile range of
international partner brands, as well
as providing services to its customers
utilising the company’s production,
packaging and logistics capacity. In
addition, Altia avoids generating waste
and creates value of the by-products
from the production process, which are
sold to industrial customers in other
industries. The integrated operating
model creates significant economies
of scale in sourcing, production and
distribution, and allows the company to
take advantage of its shared operations
– such as consumer research, innovation,
product development and overall know-
how – and use its centralised support
functions efficiently. The Business
Overview section contains a description
of how Altia creates value.
Environmental matters
a. Policies and ways of working (including due
diligence)
Altia’s work on environmental matters
focuses on minimising the environmental
impacts of the company’s own operations,
improving our material and resource
efficiency and in developing our
products and packaging to achieve a
lower environmental impact. In addition,
necessary measures are taken to protect
the groundwater used in Altia’s products.
The environmental aspects relevant
to the company are assessed at three-
year intervals. In the assessment
conducted in 2018, energy consumption,
water consumption, wastewater and
its quality, as well as waste generation,
were identified as the most significant
environmental impacts in Altia’s
own operations. Environmental key
performance indicators and annual
reduction targets were defined to
support the reduction of these impacts.
Plant-specific targets and actions are
set annually, and progress is monitored
monthly.
The standards, policies and principles
relevant to Altia’s environmental work
include:
• Altia Code of Conduct
• Altia Quality, Safety and
Environmental policy
• ISO 14001:2015 Environmental
Management System standard; the
certification covers Altia’s operations
in Finland
b. Principal risks and their management
Environmental risks are assessed
regularly as part of the assessment of
Altia’s environmental impacts and Altia
Group’s risk management.
The principal risks identified include
climate change, natural disasters,
possible leaks to the soil or waterways
(including groundwater areas), overruns
of the waste-water quality limits in
Altia’s environmental permits, and the
costs related to maintaining compliance
with increasingly strict environmental
regulations, as well as the fines and
sanctions resulting from any non-
compliance with the said regulations.
The risks are managed through various
measures, including the maintenance of
an environmental management system
in accordance with the ISO14001:2015
standard, regular monitoring of
wastewater quality, ownership of land
in groundwater areas and monitoring
legislative developments.
1
Government Resolution on State Ownership
Policy 3 November 2011, Annex
Annual Report 202020
KPI 2020 2019 2018
Energy efficiency
(MWh/m
3
of product or
tonne of barley)
Koskenkorva: 0.71
Rajamäki and
Tabasalu: 0.28
Koskenkorva: 0.79
Rajamäki and
Tabasalu: 0.27
Koskenkorva: 0.78
Rajamäki and
Tabasalu: 0.31
Water efficiency
(m
3
/m
3
of product or
tonne of barley)
1
Koskenkorva: 2.33
Rajamäki and
Tabasalu: 2.01
Koskenkorva: 1.88
Rajamäki and
Tabasalu: 1.65
Koskenkorva: 2.82
Rajamäki and
Tabasalu: 1.61
Quality of wastewater
(kg COD/m
3
of product or
tonne of barley)
2
Koskenkorva: 4.09
Rajamäki and
Tabasalu: 2.09
Koskenkorva: 4.24
Rajamäki and
Tabasalu: 2.29
Koskenkorva: 3.86
Rajamäki and
Tabasalu: 3.35
Rate of recycling and reutilisation 99.5% 99.5% 99.7%
Monetary value of environmental fines and
number of non-monetary sanctions
0 0 0
1
Monitoring of the KPI for water efficiency was discontinued at the beginning of 2018 at
the Rajamäki plant of the Industrial Products unit, because the KPI is not material for the operations.
2
The KPI for the quality of wastewater is not monitored at the Tabasalu plant.
KPI 2020 2019 2018
Amount of income taxes
paid and excise taxes
collected
E U R 4 6 9 . 1 m i l l i o n
The full tax
footprint is available
in the section on
Sustainability
EUR 435 million
The full tax
footprint is available
in the section on
Sustainability
EUR 454.2 million
The full tax
footprint is available
in the section on
Sustainability
c. Outcome and KPIs
Our sustainability goal is that by
2023, all of the electricity Altia buys in
Finland comes from renewable sources,
and that by 2025, all of our energy will
be carbon neutral. In Finland, Altia has
joined the voluntary Energy Efficiency
Agreement and commits to reducing
energy consumption by 10% by 2025,
compared to the base year 2014. Energy
consumption relative to production
increased at the Rajamäki plant and
decreased at Koskenkorva in 2020
compared to the previous year.
The limit values for wastewater loads
are specified in Altia’s environmental
permits. Altia aims to diminish the
amount of Altia’s wastewater by 20%
by 2025 (bl 2018). Organic loading
of wastewater relative to production
decreased both at the Rajamäki and
Koskenkorva plants in 2020 compared to
previous year.
The bioenergy power plant at the
Koskenkorva plant enabled Altia to
reduce Koskenkorva plant’s carbon
dioxide emissions by 58 % in 2020,
compared to 2014. The plant’s fuel self-
sufficiency in steam production was 65 %
in 2020 (62%).
2020 saw advances in projects to
reach carbon neutrality including the
launch of the world’s first vodka made
from regeneratively farmed barley.
Regenerative farming methods aim to
convert fields from sources of emissions
into carbon sinks. Other outcomes
include the launch of new rPET bottles
with 25% of recycled plastic. Our aim
is to increase the content of rPET to
50% by 2025 and to 100% by 2030, far
exceeding the goals and pace required
by the EU. The carbon footprint of PET
plastic bottles is much lower than that of
glass, even lower with using recycled PET
(read more about our packaging advances
in Our Drink).
The results of Altia’s key environmental
indicators are summarised in the table
above and discussed in more detail in Our
Distillery in the Sustainability section of
this annual report.
Social and employee matters
Consumer and product related matters
a. Policies and ways of working (including due
diligence)
Product safety is a top priority for Altia.
We market our products responsibly and
in compliance with applicable marketing
laws and provide consumer information
as required.
The key processes related to product
quality and safety have been defined and
the relevant instructions are maintained
in Altia’s management system. Key
performance indicators regarding quality,
targets included, have been set and are
monitored monthly. The KPIs concern
quality costs, customer feedback and the
proportions of deviating batches. Plant-
specific targets and actions are also set
annually and monitored monthly.
Altia’s Rajamäki plant has FairTrade
certification. Altia Brunna also has the Fair
for Life certification. The Koskenkorva
distillery, the Rajamäki alcoholic beverage
plant and the distillery in Sundsvall are
certified for organic production.
The standards, policies and principles
relevant to the safety, quality, marketing
and consumption of Altia’s products
include:
• Altia Code of Conduct
• ISO 9001:2015 Quality Management
standard; the certification covers
Altia’s operations in Finland as well as
the Tabasalu plant in Estonia
• FSSC22000 v 4.1. Food Safety
Management standard; the certification
covers Altia’s Rajamäki plant
• Altia Quality, Safety and
Environmental Policy
• Altia Marketing Guidelines
• Altia Employee Alcohol Policy
b. Principal risks and their management
The risks are assessed as part of quality
and safety risk assessments and as part
of Altia Group’s risk management. The
principal risks identified include failure to
comply with hygiene requirements, lack
of consistency in the quality of products,
any contamination of products, as well as
defects in raw materials or packaging. Such
incidents can lead to product recalls or
make the company subject to legal claims.
As the alcohol business is highly regulated,
stricter regulation regarding the marketing
and advertising of alcoholic beverages or
their taxation, for example, could have an
impact on the company’s operations.
To manage risks of this type, Altia
maintains quality and food safety
management systems in accordance
with international standards. Quality
Annual Report 202021
is monitored continuously during
production by means of line inspections
and testing, as well as the analysis of end
products. Instructions and process are
maintained in view of possible recalls
and situations are practised regularly
by way of phantom testing. Applicable
legislation and any developments therein
are reviewed regularly.
c. Outcome and KPIs
Altia’s Rajamäki plant received the FSSC
22000 v.4.5. food safety certificate in
the beginning of 2020. Altia also has
specified instructions and processes for
food fraud mitigation and food defence.
Plant-specific targets and actions are
set annually, and progress is monitored
monthly.
Altia’s tax footprint is significant
compared to company net sales, due to
excise duty.
Employee matters
a. Policies and ways of working (including due
diligence)
Altia is committed to building a culture
with a motivating and supportive working
environment based on safety, openness,
equality and trust.
Altia wants to ensure safe and healthy
working conditions for all its employees
and people whose workplace or work
conditions the company can affect. This
has been particularly relevant in 2020
amidst the global pandemic. The goal is
to reduce sickness absences, the number
of accidents and the number of absences
caused by accidents. Plant-specific
targets and actions are reviewed and
set annually, and progress is monitored
monthly. At the beginning of 2020,
the occupational health and safety
management system of Finnish Altia
units was awarded the ISO 45001:2018
Occupational Health and Safety standard
certification, one of the first Finnish
companies, to receive this certification.
ISO 45001:2018 replaces our previous
OHSAS 18001 standard.
The standards, policies and principles
relevant to employee matters include:
• Altia Code of Conduct
• Altia Behaviours
• ISO 45001:2018 Occupational
Health and Safety standard; covers
Altia’s operations in Finland
• Altia Quality, Safety and
Environmental Principles
• amfori BSCI Code of Conduct
b. Principal risks and their management
The risks are assessed as part of
Altia Group’s risk management. The
principal risks relate to Altia’s ability to
recruit, develop, motivate and retain
the right know-how and succeed in
daily leadership, the maintenance
of good collaboration practices with
employees and their unions, as well as the
occurrence of accidents. To manage the
risks, Altia develops its employer value
proposition, recruitment, and retention,
conducts the employee satisfaction
survey Altia Tasting on an annual basis,
and maintains frequent collaboration
with unions.
c. Outcome and KPIs
One of the key focus areas in personnel
development in 2020 continued to
be work safety. However, workshops
and trainings on the Human Factor
programme, aiming to enhance safety at
Rajamäki plant had to be put on hold due
to the pandemic.
Altia’s annual employee survey (Altia
Tasting) was organised in January 2020.
All indices were improved from 2019.
Leadership had still room for improvement,
and a change leadership programme was
launched to better support team leaders
in their role as change drivers- particularly
relevant with the coming merger.
The results of the indicators for
occupational health and safety are
presented in the table below. There were
no fatal work-related accidents during
the year.
KPI 2020 2019 2018
Sickness absence, % 4 3.7 3.4
Accident absence rate without commuting, LTIF 7 9
1
12
1
Accident absence, % 0.09 0.07 0.07
Number of accidents 8 11
1
15
1
1
2018 and 2019 LTIF and number of accidents is reported without commuting.
KPI 2020 2019 2018 2017
Share of purchases from risk countries as identified
in amfori BSCI risk country classification
2% 2% 3% 4%
Number of grievances related to human rights
reported through the whistleblowing channel
0 0 0 0
The whistleblowing channel was launched in October 2017, due to which the first full year figure concerns 2018.
Respect for human rights
a. Policies and ways of working (including due
diligence)
Altia is committed to respecting and
promoting human rights and international
labour standards in accordance with
the United Nation’s (UN) Universal
Declaration of Human Rights and the
key conventions of the International
Labour Organization (ILO) and expects
the same from its suppliers, partners and
subcontractors.
Altia’s most relevant human rights impacts
are related to the sourcing of wines, spirits
and raw materials. In 2017, Altia joined
amfori BSCI and amfori BSCI’s Sustainable
Wine Programme to develop responsible
sourcing. As a participant Altia is committed
to furthering the principles of the amfori
BSCI Code of Conduct in its supply chains.
Altia’s due diligence process is currently
composed of mapping the supply chains
of Altia's products and their components,
using a questionnaire to gather
information about Altia's suppliers’ and
partners’ responsibility work, contractual
obligations as well as participation in
and utilisation of the tools offered by
amfori BSCI, including third party audits.
Altia has a whistleblowing channel open
to all stakeholders, maintained by an
independent third party.
The standards, policies and principles
relevant to Altia’s work with human
rights matters include:
• Altia Code of Conduct
• amfori BSCI Code of Conduct
• Altia Code of Conduct for Suppliers
and Subcontractors
Annual Report 202022
b. Principal risks and their management
The principal risks are related to Altia’s
business relationships and primarily
concern labour and human rights
in the wine, spirits and raw material
supply chains. Altia’s customers have
expectations of social compliance within
supply chains, and any human or labour
right violation by Altia’s suppliers, sub-
suppliers or partners could lead to
customers ending purchases of a given
product. The risks are managed with
the due diligence process explained
above and human rights are part of Altia
Group’s risk management.
c. Outcome and KPIs
No amfori BSCI audits were conducted
in 2020 due to the pandemic. In 2019, 6
amfori BSCI audits (full audits or follow-
up audits) were conducted at Altia’s
suppliers, partners or their sub-suppliers.
Anti-corruption and -bribery
matters
a. Policies and ways of working (including due
diligence)
Altia has zero tolerance towards
bribery and corruption. The company is
committed to operating fairly and to not
offering improper benefits to any party.
Altia also expects its representatives,
consultants, agents, subcontractors and
other business partners to unconditionally
refrain from corruptive behaviour when
performing services for Altia or on its
behalf. Altia does not support, either
directly or indirectly, political parties or
organisations. Nor does the company
participate in financing election campaigns
of individual candidates.
Altia’s Code of Conduct describes
the company’s commitment to ethical
business conduct. Every Altia employee
is familiarised with the Altia Code of
Conduct, including the company’s anti-
bribery and corruption activities. Altia
has a whistleblowing channel maintained
by an independent third party, open
to all Altia employees and external
stakeholders. All concerns raised, whether
KPI 2020 2019 2018
Communication and training on
anti-corruption policies
New employees have completed on-line
course. Internal communications done for
all employees.
Online course on Altia's Anti-Bribery
and -Corruption Policy organised for the
entire personnel. Internal communication
on ethical business conduct.
Online course on the Altia Code of
Conduct organised for the entire
personnel.
Number of anti-corruption and
bribery incidents reported through
the whistleblowing channel
0 0 0
through the channel or through other
means, are investigated in accordance
with an established process to ensure
accuracy, anonymity, and fairness.
The standards, policies and principles
relevant to anti-corruption and -bribery
matters include:
• Altia Code of Conduct
• Anti-Bribery and Corruption Policy
• Whistleblowing channel
b. Principal risks and their management
The risks are assessed as part of Altia
Group’s risk management. The principal
risks associated with anti-corruption and
bribery matters include a reputational
risk caused by any act of corruption or
bribery, especially related to Altia’s key
persons and business partners. Given
that alcohol is a highly regulated business,
obtaining and maintaining the necessary
licenses and permits are associated with
a risk of corruption or bribery, especially
in countries high on the corruption
index. These risks are managed through
contractual obligations, third party due
diligence inspections concerning suppliers
and distributors where necessary, as well
as internal training on Altia’s Anti-Bribery
and Corruption Policy.
c. Outcome and KPIs
In 2020, Altia’s new employees conducted
an online course on Altia's Anti-Bribery
and Corruption Policy. The course was
available also to the entire personnel
and there were communications on the
topic. The whistleblowing channel has
been in use since 2017. No reports were
submitted through the whistleblowing
channel in 2020.
Annual Report 202023
Key ratios of the Group
2020 2019 2018 2017 2016
Income statement
Net sales EUR million 342.4 359.6 357.3 359.0 356.6
Comparable EBITDA EUR million 52.4 44.8 40.0 42.4 40.8
(% of net sales) % 15.3 12.4 11.2 11.8 11.5
EBITDA EUR million 40.3 43.1 34.0 40.3 60.8
Comparable operating result (EBIT) EUR million 35.0 26.8 25.6 28.2 26.4
(% of net sales) % 10.2 7.5 7.2 7.8 7.4
Operating result EUR million 22.9 25.1 19.7 26.1 46.3
Result before taxes EUR million 21.3 24.6 18.6 25.0 45.0
Result for the period EUR million 17.8 18.4 15.1 18.3 36.1
Items affecting comparability EUR million -12.1 -1.7 -6.0 -2.1 19.9
Balance sheet
Cash and cash equivalents EUR million 130.7 64.2 42.0 52.4 68.0
Total equity EUR million 156.3 151.2 150.1 136.8 191.3
Borrowings EUR million 116.1 82.6 89.4 100.1 72.8
Invested capital EUR million 272.4 233.8 239.5 236.9 264.0
Profitability
Return on equity (ROE) % 11.6 12.2 10.5 11.1 20.0
Return on invested capital (ROI) % 7.7 8.5 7.0 8.0 14.4
2020 2019 2018 2017 2016
Financing and financial position
Net debt EUR million -3.9 28.9 47.4 47.7 4.7
Gearing % -2.5 19.1 31.6 34.9 2.5
Equity ratio % 34.3 37.8 38.4 34.3 44.2
Net cash flow from operating activities EUR million 56.1 52.6 6.5 37.6 29.4
Net debt/comparable EBITDA -0.1 0.6 1.2 1.1 0.1
Share-based key ratios
Earnings / share (Basic and diluted) EUR 0.49 0.51 0.42 0.51 1.00
Equity / share EUR 4.33 4.18 4.15 3.80 5.32
Dividend per share EUR 0.75* 0.42 0.38 - -
Dividend/earnings % 152.2* 82.6 91.2 - -
Effective dividend yield % 7.5* 5.1 5.4 - -
Price/Earnings 20.3 16.1 17.0 - -
Closing share price on the last day of trading EUR 9.98 8.18 7.07 - -
Highest EUR 10.40 8.22 9.50 - -
Lowest EUR 7.01 7.08 7.015 - -
Market value of shares at the end of period EUR million 360.7 295.6 255.5 - -
Number of shares outstanding at the end of period 36 140 485 36 140 485 36 140 485 35 960 000 35 960 000
Personnel
Average number of personnel 650 682 718 762 829
*Board's dividend proposal for the financial year 2020 EUR 0.35 per share and an
authorisation for an extra dividend EUR 0.40 per share.
Annual Report 202024
RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASURES (APM) TO IFRS
FIGURES AND ITEMS AFFECTING COMPARABILITY (IAC)
EUR million 2020 2019
Items affecting comparability
Net gains or losses from business and assets disposals - 0.1
Cost for closure of business operations and restructurings -0.3 -0.2
Major corporate projects
Costs related to the closed voluntary pension scheme -0.5 -1.6
Costs related to the merger plan of Altia and Arcus -11.4 -
Total items affecting comparability -12.1 -1.7
Comparable EBITDA
Operating result 22.9 25.1
Less:
Depreciation, amortisation and impairment 17.4 17.9
Total items affecting comparability 12.1 1.7
Comparable EBITDA 52.4 44.8
% of net sales 15.3 12.4
Comparable EBIT
Operating result 22.9 25.1
Less:
Total items affecting comparability 12.1 1.7
Comparable EBIT 35.0 26.8
% of net sales 10.2 7.5
Altia presents alternative performance
measures as additional information
to financial measures presented in
the consolidated income statement,
consolidated balance sheet and
consolidated statement of cash flows
prepared in accordance with IFRS. In
Altia’s view, alternative performance
measures provide significant additional
information on Altia’s results of
operations, financial position and cash
flows to management, investors, analysts
and other stakeholders.
Alternative performance measures
should not be viewed in isolation or
as a substitute to the IFRS financial
measures. All companies do not calculate
alternative performance measures in
a uniform way, and therefore Altia’s
alternative performance measures may
not be comparable with similarly named
measures presented by other companies.
The alternative performance measures
are unaudited.
Annual Report 202025
THE DEFINITIONS AND REASONS FOR THE USE OF FINANCIAL KEY INDICATORS
Key figure Definition Reason for the use
Operating margin, % Operating result / Net sales Operating result shows result generated by the operating activities.
EBITDA
EBITDA margin, %
Operating result before depreciation and amortization
EBITDA / Net sales
EBITDA is the indicator to measure the performance of the Group.
Comparable operating result
Comparable operating margin, %
Comparable EBITDA
Comparable EBITDA margin, %
Items affecting comparability
Operating result excluding items affecting comparability
Comparable operating result / Net sales
EBITDA excluding items affecting comparability
Comparable EBITDA / Net sales
Material items outside normal business, such as net gains or losses
from business and assets disposals, impairment losses, cost for closure
of business operations and restructurings, major corporate projects
including direct transaction costs related to business acquisitions,
voluntary pension plan change and costs related to other corporate
development.
Comparable EBITDA, comparable EBITDA margin, comparable operating result and comparable
operating margin are presented in addition to EBITDA and operating result to reflect the underlying
business performance and to enhance comparability from period to period. Altia believes that
these comparable performance measures provide meaningful supplemental information by
excluding items outside normal business, which reduce comparability between the periods.
Comparable EBITDA is an internal measure to assess performance of Altia and key performance
measure at segment level together with net sales.
Comparable EBITDA margin is also one of Altia’s financial targets. Comparable EBITDA is
commonly used as a base for valuation purposes outside the Company and therefore important
measure to report regularly.
Invested capital Total equity + Borrowings Base for ROI measure.
Return on equity (ROE), % Result for the period / Total equity (average of reporting period and
comparison period)
This measure can be used to evaluate how efficiently Altia has been able to generate results in
relation to the equity of the Company.
Return on invested
capital (ROI), %
(Result for the period + Interest expenses) / (Total equity + Non-current
and current borrowings) (average of reporting period and comparison
period)
This measure is used to evaluate how efficiently Altia has been able to generate net results in
relation to the total investments made to the Company.
Annual Report 202026
Key figure Definition Reason for the use
Borrowings
Net debt
Non-current borrowings + Current borrowings
Borrowings + Non-current and current lease liabilities - Cash and cash
equivalents
Net debt is an indicator to measure the total external debt financing of the Group.
Gearing, % Net debt / Total equity Gearing ratio helps to show financial risk level and it is a useful measure for management to
monitor the level of Group’s indebtedness. Important measure for the loan portfolio.
Equity ratio, % Total equity / (Total assets – Advances received) Equity / assets ratio helps to show financial risk level and it is a useful measure for management
to monitor the level of Group’s capital used in the operations.
Net debt / Comparable EBITDA Net debt / Comparable EBITDA The level of Net debt / Comparable EBITDA is one of Altia’s financial targets.
Earnings / share Result for the period attributable to shareholders of the parent company/
Share-issue adjusted number of shares during the period
Equity/share Equity attributable to shareholders of the parent company /Share- issue
adjusted number of shares at the end of period
Dividend/share Dividend distribution for period/Number of shares (basic) at the end of
period
Dividend / earnings % Dividend/share / Earnings/ share
Effective dividend yield % Dividend/share / Price of share at the end of the accounting period
Price / earnings Price of share at the end of accounting period / Earnings/share
Market value of outstanding shares The number of shares at the end of accounting period x the price of the
share at the end of accounting period.
Annual Report 202027
Important information
The securities referred to in this
document in relation to the merger have
not been, and will not be, registered
under the United States Securities Act of
1933, as amended (the “U.S. Securities
Act”), or the securities laws of any state of
the United States (as such term is defined
in Regulation S under the U.S. Securities
Act) and may not be offered, sold or
delivered, directly or indirectly, in or into
the United States absent registration,
except pursuant to an exemption from,
or in a transaction not subject to, the
registration requirements of the U.S.
Securities Act and in compliance with
any applicable state and other securities
laws of the United States. This document
does not constitute an offer to sell or
solicitation of an offer to buy any of
the shares in the United States. Any
offer or sale of new Altia shares made
in the United States in connection with
the merger may be made pursuant to
the exemption from the registration
requirements of the U.S. Securities Act
provided by Rule 802 thereunder.
Altia is a Finnish company and Arcus is
a Norwegian company. The transaction,
including the information distributed
in connection with the merger and the
related shareholder votes, is subject
to disclosure, timing and procedural
requirements of a non-U.S. country, which
are different from those of the United
States. The financial information included
or referred to in this document has been
prepared in accordance with IFRS, which
may not be comparable to the accounting
standards, financial statements or
financial information of U.S. companies or
applicable in the United States.
It may be difficult for U.S. shareholders
of Arcus to enforce their rights and any
claim they may have arising under U.S.
federal or state securities laws, since Altia
and Arcus are not located in the United
States, and all or some of their officers
and directors are residents of non-U.S.
jurisdictions. It may be difficult to compel
a foreign company and its affiliates to
subject themselves to a U.S. court’s
judgment. U.S. shareholders of Arcus
may not be able to sue Altia or Arcus or
their respective officers and directors
in a non-U.S. court for violations of U.S.
laws, including federal securities laws,
or at the least it may prove to be difficult
to evidence such claims. Further, it may
be difficult to compel Altia or Arcus and
their affiliates to subject themselves
to the jurisdiction of a U.S. court. In
addition, there is substantial doubt as to
the enforceability in a foreign country
in original actions, or in actions for the
enforcement of judgments of U.S. courts,
based on the civil liability provisions of
the U.S. federal securities laws.
Arcus’ shareholders should be aware
that Altia is prohibited from purchasing
Arcus’ shares otherwise than under
the merger, such as in open market or
privately negotiated purchases, at any
time during the pendency of the merger
under the Merger Plan.
Annual Report 2020
Financial
Statements
Annual Report 202029
CONSOLIDATED INCOME STATEMENT
EUR million Note
1 Jan – 31 Dec
2020
1 Jan – 31 Dec
2019
NET SALES 1.1. 342.4 359.6
Other operating income 1.3. 6.2 7.6
Materials and services 1.4. -192.5 -213.1
Employee benefit expenses 1.5. -49.1 -45.9
Other operating expenses 1.6. -66.6 -65.0
Depreciation, amortisation and impairment 1.7. -17.4 -17.9
OPERATING RESULT 22.9 25.1
Finance income 3.1. 0.2 3.5
Finance expenses 3.1. -3.1 -5.7
Share of profit in associates and joint ventures
and income from interests in joint operations
RESULT BEFORE TAXES 21.3 24.6
Income tax expense 6.1. -3.5 -6.2
RESULT FOR THE PERIOD 17.8 18.4
Result for the period attributable to:
Owners of the parent 17.8 18.4
Earnings per share for the result attributable to owners of the
parent, EUR
Basic and diluted 3.4. 0.49 0.51
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR million Note
1 Jan – 31 Dec
2020
1 Jan – 31 Dec
2019
Result for the period 17.8 18.4
OTHER COMPREHENSIVE INCOME
Items that will not be reclassified to profit or loss
Remeasurements of post-employment benefit obligations 0.2 -0.2
Related income tax 6.1. -0.0 0.0
Total 0.2 -0.2
Items that may be reclassified to profit or loss
Cash flow hedges 0.2 -1.3
Translation differences 3.4. 1.8 -2.4
Income tax related to these items 6.1. -0.0 0.3
Total 2.0 -3.5
Other comprehensive income for the period, net of tax 2.2 -3.6
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 20.0 14.8
Total comprehensive income attributable to:
Owners of the parent 20.0 14.8
The notes are an integral part of the consolidated financial statements.
Annual Report 202030
CONSOLIDATED BALANCE SHEET
EUR million Note 31 Dec 2020 31 Dec 2019
ASSETS
Non-current assets
Goodwill 2.1. 81.4 80.1
Other intangible assets 2.1. 20.7 25.2
Property, plant and equipment 2.2. 58.9 60.9
Right-of- use assets 2.3. 10.2 10.4
Investments in associates, joint ventures and interests in joint operations 5.3. 9.1 8.8
Financial assets at fair value through other comprehensive income 3.2.1. 1.4 1.4
Deferred tax assets 6.1. 1.4 0.9
Total non-current assets 183.2 187.7
Current assets
Inventories 2.4. 92.3 92.0
Contract assets 2.5.
Trade and other receivables 2.6. 46.8 54.4
Current tax assets 2.4 1.6
Cash and cash equivalents 3.2.1. 130.7 64.2
Total current assets 272.3 212.4
TOTAL ASSETS 455.6 400.2
EUR million Note 31 Dec 2020 31 Dec 2019
EQUITY AND LIABILITIES
Equity attributable to owners of the parent 3.4.
Share capital 60.5 60.5
Invested unrestricted equity fund 1.2 1.2
Fair value reserve 0.6 0.6
Legal reserve 0.1 0.1
Hedge reserve -0.9 -1.0
Translation differences -20.5 -22.1
Retained earnings 115.3 111.9
Total equity 156.3 151.2
Non-current liabilities
Deferred tax liabilities 6.1. 16.8 16.7
Borrowings 3.2.2. 69.6 76.1
Lease liabilities 3.2.2. 7.0 7.1
Employee benefit obligations 2.7. 1.1 1.4
Total non-current liabilities 94.5 101.3
Current liabilities
Borrowings 3.2.2. 46.5 6.5
Lease liabilities 3.2.2. 3.7 3.4
Trade and other payables 2.8. 152.6 134.7
Contract liabilities 2.5. 0.5 0.5
Current tax liabilities 1.5 2.5
Total current liabilities 204.8 147.6
Total liabilities 299.2 249.0
TOTAL EQUITY AND LIABILITIES 455.6 400.2
The notes are an integral part of the consolidated financial statements.
Annual Report 202031
EUR million Note
1 Jan – 31 Dec
2020
1 Jan – 31 Dec
2019
CASH FLOW FROM OPERATING ACTIVITIES
Result before taxes 21.3 24.6
Adjustments
Depreciation, amortisation and impairment 1.7. 17.4 17.9
Share of profit in associates and joint ventures and income from
investments in joint operations
5.3. -1.2 -1.6
Net gain on sale of non-current assets 1.3. -0.0 -0.0
Finance income and costs 3.1. 2.9 2.2
Other adjustments 0.4 -0.8
Change in working capital
Change in inventories, increase (-) / decrease (+) 0.2 7.4
Change in contract assets, trade and other receivables,
increase (-) / decrease (+)
Change in contract liabilities, trade and other payables,
increase (+) / decrease (-)
Change in working capital 24.7 16.5
Interest paid 3.1. -1.6 -1.6
Interest received 3.1. 0.1 0.2
Other finance income and expenses paid 3.1. -1.4 -1.7
Income taxes paid 6.1. -6.4 -3.1
Financial items and taxes -9.3 -6.1
NET CASH FLOW FROM OPERATING ACTIVITIES 56.1 52.6
EUR million Note
1 Jan – 31 Dec
2020
1 Jan – 31 Dec
2019
CASH FLOW FROM INVESTING ACTIVITIES
Payments for property, plant and equipment and intangible assets 2.1.,2.2. -7.0 -6.8
Proceeds from sale of property, plant and equipment and intangible assets 1.3. 0.3 0.1
Investments in associated companies and joint ventures - -0.2
Interest received from investments in joint operations 5.3. 0.9 0.9
Dividends received 3.1. 0.2 -
NET CASH FLOW FROM INVESTING ACTIVITIES -5.6 -6.0
CASH FLOW FROM FINANCING ACTIVITIES
Changes in commercial paper program 40.0 -
Repayment of borrowings 3.2.2. -6.5 -6.5
Repayment of lease liabilities 3.2.2. -3.7 -3.7
Dividends paid and other distributions of profits 3.4. -15.2 -13.7
NET CASH FLOW FROM FINANCING ACTIVITIES 14.6 -23.9
CHANGE IN CASH AND CASH EQUIVALENTS 65.1 22.7
Cash and cash equivalents at the beginning of the period 64.2 42.0
Translation differences on cash and cash equivalents 1.4 -0.5
Change in cash and cash equivalents 65.1 22.7
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 3.2.3. 130.7 64.2
The notes are an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
Annual Report 202032
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to owners of the parent
EUR million Note
Share
capital
Invested
unrestricted
equity fund
Fair value
reserve
Legal
reserve
Hedge
reserve
Translation
differences
Retained
earnings
Total
equity
Equity at 1 January 2019 60.5 1.2 0.6 - 0.0 -19.6 107.3 150.1
Total comprehensive income
Result for the period - - - - - - 18.4 18.4
Other comprehensive income (net of tax)
Cash flow hedges - - - - -1.0 - - -1.0
Translation differences 3.4. - - - - - -2.5 0.1 -2.4
Remeasurements of post-employment benefit obligations 2.7. - - - - - - -0.2 -0.2
Total comprehensive income for the period - - - - -1.0 -2.5 18.3 14.8
Transactions with owners
Dividend distribution - - - - - - -13.7 -13.7
Share based payment - - - - - - 0.1 0.1
Total transactions with owners - - - - - - -13.6 -13.6
Transfer to reserve - - - 0.1 - - -0.1 0.0
EQUITY AT 31 DECEMBER 2019 60.5 1.2 0.6 0.1 -1.0 -22.1 111.9 151.2
Equity at 1 January 2020 60.5 1.2 0.6 0.1 -1.0 -22.1 111.9 151.2
Total comprehensive income
Result for the period - - - - - - 17.8 17.8
Other comprehensive income (net of tax)
Cash flow hedges - - - - 0.2 - - 0.2
Translation differences 3.4. - - - - - 1.6 0.3 1.8
Remeasurements of post-employment benefit obligations 2.7. - - - - - - 0.2 0.2
Total comprehensive income for the period - - - - 0.2 1.6 18.3 20.0
Transactions with owners
Dividend distribution - - - - - - -15.2 -15.2
Share based payment - - - - - - 0.3 0.3
Total transactions with owners - - - - - - -14.9 -14.9
EQUITY AT 31 DECEMBER 2020 60.5 1.2 0.6 0.1 -0.9 -20.5 115.3 156.3
The notes are an integral part of the consolidated financial statements.
Annual Report 202033
GENERAL INFORMATION
Information on Altia
and aging and production of cognac in France. Altia has high-quality brands of its own and international
brands. In addition, the company represents international brands from all over the world. Altia’s business also
includes industrial products such as starch and feed, technical ethanol and contract services.
Altia’s customers include alcohol retail monopolies, alcoholic beverage wholesale outlets, restaurants,
grocery stores, travel trade, importers in the export markets and industrial customers.
online at www.altiagroup.com or at the Group's headquarters at Kaapeliaukio 1. FI-00180 Helsinki , Finland .
24 February 2021. According to the Finnish Limited Liability Companies Act, shareholders have the right
to approve or reject the financial statements in the Annual General Meeting held after the publication of
the financial statements. The Annual General Meeting also has the right to make a decision to amend the
financial statements.
Basis of preparation
The consolidated financial statements for the year ended 31 December 2020 are prepared in accordance
with International Financial Reporting Standards (IFRS) complying with the SIC and IFRIC interpretations
in force and approved by EU on 31 December 2020. Notes to the consolidated financial statements also
comply with the requirements of the Finnish Accounting Act and Limited Liability Companies Act.
New and amended standards applied in 2020 and future periods are described in Note 6.5.
The consolidated financial statements for the year ended 31 December 2020 has been prepared on
a historical cost basis, except equity investments and derivatives. The consolidated financial statements
are presented in thousands of euros (Annual Reports in millions of euros). The figures are rounded to the
nearest thousand, and therefore the sum of individual figures may deviate from the total presented. If the
figure is EUR 0. it is shown as a hyphen.
Notes to the consolidated
financial statements
Annual Report 202034
Nr. Note Accounting principle
1. Operating result Revenue recognition, operating result
1.2. Segment information Operating segments
2.9. Provisions Provisions
2.7. Employee benefit obligations Employee benefits
2.2. Property, plant and equipment Property, plant and equipment
2.3. Right-of-use assets Leases
2.4. Inventories Inventories
1.6. Other operating expenses Leases
2.2. Property, plant and equipment
2.1. Goodwill and other intangible assets Goodwill
2.1. Goodwill and other intangible assets Intangible assets
3.2.1. Financial assets Financial assets
3.2.3. Financial assets and liabilities- classification and fair value
3.2.2. Financial liabilities Financial liabilities
3.2.3. Financial assets and liabilities- classification and fair value
3.3. Derivative instruments and hedge accounting Derivative contracts and hedge accounting
5.2. Subsidiaries Consolidation principles of subsidiaries
5.2. Subsidiaries Non-controlling interest and transactions with non-
controlling interest
5.3. Associated companies and joint arrangements Associates and joint ventures
6.1. Income tax expense Income and deferred taxes
Refer to the table below to see which notes and accounting principles are related. Accounting policies requiring management judgement
and key sources of estimation uncertainty
The preparation of financial statements requires the use of accounting estimates, which by definition, seldom
equal the actual results. In addition, management makes judgements in applying Altia’s accounting policies.
Estimates made in the preparation of the financial statements, and related assumptions, are based on
the management’s best knowledge at the reporting date. Consequently, the realised results can differ
from the estimates. Any changes in estimates and assumptions are recognised when estimates and
assumptions are corrected.
The Group’s most significant area in which the management has exercised judgement is related to the
revenue recognition (Note 1.1) and impairment provision of trade receivables, and useful lives of intangible
assets and parameters used in impairment testing (Note 2.1.), and parameters used in lease accounting.
Other critical future assumptions and anticipated uncertainties at the reporting date, which pose a
significant risk of resulting in material changes in the carrying amounts of assets and liabilities within the
next financial year, are related to deferred taxes (Note 6.1.) and uncertain tax positions.
Impacts of COVID-19
COVID-19 may impact Altia’s financial position in many ways and increase the uncertainty related to the
values of its assets. Due to this Altia has assessed the impact of the pandemic on its financial position and
has considered the values of assets and liabilities that include critical accounting estimates and require
management judgement. The identified and expected effects have been taken into consideration in the
reported figures and in the forecasts requiring management judgement.
Altia has carried out annual impairment tests for goodwill and for trademarks on 31 October 2020.
The impact of the COVID-19 has been taken into account in forecasted profitability together with other
assumptions used for impairment testing or for evaluating the amortization periods of the intangible assets.
On the basis of the impairment calculations, there has been no need for impairment of goodwill for any CGU
or for trademarks. (See note 2.1)
The value of inventory is monitored on a regular basis also for slow moving items. COVID-19 has not had a
material impact on the value of inventory. (see note 2.4)
The credit risk of trade receivables and the amount of expected credit losses has been analysed at the end
of December 2020. Overdue receivables have been assessed on a customer level and expected default rates
have been taken into consideration in the valuation. Based on the review no material adverse impacts on the
value of trade receivables have been identified. (See note 2.6.)
Annual Report 202035
FINANCIAL RISKS
Altia Group reviewed its financial risks more thoroughly in 2020 due to COVID-19.
The management has analysed the credit risks of trade receivables and the loss allowance for trade
receivables. According to management the loss allowances are sufficient based on the following. The
significant portion of the sales of Finland and Exports and Scandinavia are for monopoly channels. Trade
receivables to Finnish and Swedish monopolies are sold and are derecognized from the balance sheet as
the contractual rights and all the related substantial risks have been transferred outside the Group. The
payment behavior of Altia Industrial segment’s customers has not changed due to COVID-19. Historically
the amount of overdue trade receivables have been low and the amount of overdue receivables have not
materially increased due to COVID-19. The overdue receivables have been assessed on customer level.
After the reporting period, there have been no indications that loss allowances at the reporting period were
not sufficient.
The management has analyzed that the liquidity risk has not increased significantly based on the following
reasons. The reported net debt at 31.12.2020 was EUR -3.9 million and cash and cash equivalents EUR
130.7 million. Group’s liquidity position has been strong throughout the year due to positive development of
operational cash flow and the actions to secure liquidity during the pandemic by issuing commercial papers.
Group also has a EUR 60 million unused revolving credit facility. Group has fulfilled its covenants determined
in the Group’s loan terms.
1. Operating result
1.1. REVENUES FROM OPERATIONS
Revenue recognition
The revenue is recognized at an amount of consideration to which
the Group expects to be entitled in exchange for transferring
promised goods or services to a customer. The transaction price
may include variable considerations such as volume discounts,
bonuses, marketing support, product returns etc. The variable
considerations are estimated using the most likely value method
if not yet realized in the end of reporting period. The revenue is
further adjusted with indirect sales taxes, excise taxes, deposit
and recycling fees and exchange rate differences relating to sales.
Typical contracts with customers include a sale of goods to
a customer with only one performance obligation. In contract
services the contracts essentially include a single performance
obligation, being a series of distinct services such as contract
manufacturing, customer services and logistics. The revenue
recognition occurs at a point in time, when the control of the
goods is transferred to the customer according to the delivery
terms. Revenue from the sale of services is recognised at the time
of delivery of services.
Annual Report 202037
1.2. SEGMENT INFORMATION
Description of segments and principal activities
Altia reports its business operations under the following segments: Finland & Exports, Scandinavia and Altia
Industrial. Finland & Exports and Scandinavia segments comprise importing, sale and marketing of wine,
spirits and other beverage product categories. Within the Finland & Exports segment the Company operates
in Finland, the Baltics and travel retail channels and conducts exports. Scandinavia segment represents the
Company’s operations in Sweden, Norway and Denmark. Altia Industrial segment comprises the Company’s
production of ethanol, starch and feed as well as contract services. These segments comprise both Altia’s
operating and reportable segments.
The Board of Directors of Altia has been determined as the Company’s current chief operative decision
maker, and the reportable segments are based on the Altia’s operating structure and internal reporting to
the CODM used to assess the performance of the segments. For internal reporting purposes, reporting on
the segment profit is based on an internal measure of a comparable EBITDA derived as follows:
• Net sales and direct segment expenses reported within the Comparable EBITDA segment profit
measure are measured on an accrual basis and reported under the same accounting principles as in the
consolidated accounts.
• Expenses allocated to the segments related to shared function costs or business support services
expenses comprise costs such as centralized marketing costs, IT infrastructure related costs, shared
support services, headquarter costs including finance and treasury, communication, legal and human
resource related costs as well as certain warehousing and service fees. For internal reporting purposes
these cost allocations are based on budgeted amounts and variances from budgeted amounts are
presented under column “Unallocated and adjustments” and can result in either incurred overruns or
savings compared to budgeted amounts. All of these variances are not allocated to the segments for
internal reporting purposes.
• The unallocated and adjustments column represents in addition to the budget variances, certain
unallocated headquarter costs.
EUR million 2020 2019
Sales revenues deducted with revenue adjustments 805.0 791.5
Excise tax -462.6 -431.9
Net sales 342.4 359.6
Tax share of sales revenues, % 57.5% 54.6%
The most significant revenue flows are generated by the sale of own products and partner brands. In
addition, revenues are generated by contract manufacturing, as well as the sale of industrial products, such
as starch, feed and technical ethanol. Adjustments to sales and obligations to repurchase certain products
are taken into account in the revenue recognition phase.
In partner supplier agreements, which entitle Group to distribute partners’ products, Altia acts as a
principal towards the end customer having control over the product, discretion in establishing prices and
owning the inventory. Accordingly, revenue recognised is the gross amount to which Altia is entitled to in
these product sales.
The amount of excise tax deducted from sales revenue is significant. The amounts of sales including tax and
excise taxes are presented below:
Annual Report 202038
1 Jan - 31 Dec 2020
EUR million
Finland &
Exports Scandinavia
Altia
Industrial
Unallocated
and
adjustments Group
Net sales, total 117.7 124.4 143.1 385.3
Net sales, Internal -0.5 -0.5 -41.9 -42.9
Net sales, external 117.2 123.9 101.2 342.4
Comparable EBITDA 19.8 14.2 17.9 0.5 52.4
Items affecting comparability
1
-12.1
EBITDA 40.3
Depreciation, amortisation and impairment -17.4
OPERATING RESULT 22.9
1 Jan - 31 Dec 2019
EUR million
Finland &
Exports Scandinavia
Altia
Industrial
Unallocated
and
adjustments Group
Net sales, total 129.0 121.4 149.7 400.1
Net sales, Internal -0.4 -0.7 -39.4 -40.5
Net sales, external 128.6 120.7 110.2 359.6
Comparable EBITDA 20.6 12.1 11.4 0.7 44.8
Items affecting comparability
1
-1.7
EBITDA 43.1
Depreciation, amortisation and impairment -17.9
OPERATING RESULT 25.1
1
Items affecting comparability comprise of material items incurred outside normal business, such as net gains or losses from business and
assets disposals, impairment losses, cost for closure of business operations and restructurings, major corporate projects including direct
transaction costs related to business acquisitions, voluntary pension plan change and costs related to other corporate development. Gains
on sale of property, plant and equipment and intangible assets are presented in Note 1.3 and employee costs related to restructuring in
Note 1.5.
Other entity-wide disclosures
NET SALES BY GEOGRAPHY
Net sales broken down by the location of Altia entity for the years ended 31 December 2020 and 2019 were
as follows:
In Finland & Exports segment, net sales of EUR 81.3 million (2019: EUR 74.9 million) were derived from a
single external customer. In Scandinavia segment, net sales of EUR 86.2 million (2019: EUR 81.8 million)
were derived from a single external customer. In Altia Industrial segment, net sales of EUR 27.9 million
(2019: EUR 43.7 million) were derived from a single external customer. No other single external customer
represented more than 10 per cent or more of Altia’s total net sales for the years ended 31 December 2020
or 2019.
NET SALES BY PRODUCT CATEGORY
Net sales broken down by product category for the years ended 31 December 2020 and 2019 were as follows:
EUR million 2020 2019
Finland 193.5 211.7
Sweden 97.7 97.2
Norway 25.5 22.6
Estonia 9.1 9.3
Latvia 10.8 10.1
Denmark 0.3 2.8
Other countries 5.5 5.9
NET SALES, TOTAL 342.4 359.6
EUR million 2020 2019
Spirits 119.1 121.3
Wine 119.5 124.9
Other beverages 2.5 3.1
Industrial products and services 101.2 110.2
NET SALES BY PRODUCT CATEGORY, TOTAL 342.4 359.6
Segment net sales and results
The following tables set out the segment net sales and Comparable EBITDA as well as the reconciliation of
the Comparable EBITDA to the group’s operating result:
Annual Report 202039
1.4. MATERIALS AND SERVICES
Materials and services consist of cost of material, such as barley, wine, different spirit, liquids, ground
water as well as other ingredients needed for a variety of different drinks, packaging materials,
production costs, changes in inventories, scrapping and obsolescence costs and external services such as
logistics and warehousing.
1.5. EMPLOYEE BENEFIT EXPENSES
In Altia, the total wages and salaries of personnel consists of fixed and variable pay, allowances, short and
long-term incentives and fringe benefits.
The group has recognised the total amount of incentives EUR 5.7 million (2019: EUR 0.4 million) in the
form of cash bonuses. Employee benefit expenses include personnel related restructuring costs of EUR 0.3
million (2019: EUR 0.2 million). The group has recognized the total amount of EUR 0.5 million (2019: EUR
1.6 million) of closed voluntary pension scheme.
NON-CURRENT ASSETS BY GEOGRAPHY
The total of non-current assets other than financial instruments and deferred tax assets broken down by the
location of the assets as at 31 December 2020 and 2019 were as follows:
EUR million 2020 2019
Finland 107.7 110.6
Sweden 47.0 48.2
Norway 0.2 0.5
Estonia 2.3 2.2
Latvia 0.2 0.2
Denmark 5.2 5.9
Other countries 8.8 9.0
NON-CURRENT ASSETS BY GEOGRAPHY, TOTAL 171.3 176.6
EUR million 2020 2019
Gains on sale of property, plant and equipment
and intangible assets
0.0 0.0
Gains on sale of emission allowances - 0.8
Rental income 1.4 1.3
Income from sale of energy, water, steam and carbon dioxide 3.3 3.4
Other income 1.5 2.0
TOTAL 6.2 7.6
EUR million 2020 2019
Wages and salaries 38.1 34.2
Pension expenses
Defined contribution plans 5.9 7.1
Share -based payments 0.3 0.1
Other social expenses 4.7 4.4
TOTAL 49.1 45.9
EUR million 2020 2019
Raw materials, consumables and goods
Purchases during the period 190.5 200.8
Change in inventories -0.2 7.6
Scrapping and obsolescence and revaluation 0.6 3.2
External services 1.6 1.6
TOTAL 192.5 213.1
1.3. OTHER OPERATING INCOME
Other operating income mainly includes gains on the disposal of non-current assets, income from sale of
energy, water, steam and carbon dioxide, gains on sale of emission allowances, rental income and related non-
core business service income and contract termination fees.
Annual Report 202040
The table above presents fees to PricewaterhouseCoopers globally during the year. Non-audit fees to
PricewaterhouseCoopers Oy in 2020 amounted to EUR 0.8 million of which EUR 0.5 million related to the
future issuance and listing of the Altia-Arcus merger consideration shares are booked to accrued income and
at the date of issuance will be recognised directly to equity.
1.7. DEPRECIATION, AMORTISATION AND IMPAIRMENT
Depreciation and amortisation by asset categories is as follows:
Group’s depreciation and amortisation methods and periods are described in Note 2.1. Goodwill and other
intangible assets, Note 2.2. Property, plant and equipment and Note 2.3. Leases.
1.8. RESEARCH AND DEVELOPMENT EXPENDITURES
Operating result includes research and development expenditures amounting to EUR 1.6 million (2019: EUR
2.3 million). The R&D expenditures represents 0.5% of net sales in 2020 (2019: 0.6%).
More information on the Group’s pension plans is presented in Note 2.7.
Information of management remuneration is presented in Note 6.3. related party transactions.
1.6. OTHER OPERATING EXPENSES
Average number of personnel during the period 2020 2019
Workers 256 272
Clerical employees 394 410
TOTAL 650 682
Auditor's fees included in other operating expenses 2020 2019
Audit fees 0.3 0.3
Tax consultation - 0.0
Other fees 0.3 0.2
TOTAL 0.6 0.5
EUR million 2020 2019
Losses on sales and disposals of property, plant and equipment and intangible assets 0.1 -
Rental expenses 1.4 1.6
Short-term lease expenses 0.1 0.2
Expenses for leases of low-value assets 0.1 0.2
Variable lease payments 1.3 1.2
Marketing expenses 9.3 12.3
Travel and representation expenses 0.9 2.7
Outsourcing services 16.0 8.9
Repair and maintenance expenses 7.0 6.8
Energy expenses 7.4 7.4
IT expenses 6.3 6.0
Variable sales expenses 11.4 12.5
Other expenses 6.7 6.9
TOTAL 66.6 65.0
EUR million 2020 2019
Amortisation on intangible assets
Trademarks 3.7 4.1
Software and other intangible assets 2.2 2.0
Total amortisation on intangible assets 5.9 6.1
Depreciation on property, plant and equipment
Buildings 3.2 3.4
Machinery and equipment 4.8 4.7
Other tangible assets 0.0 0.0
Total depreciation on property, plant and equipment 8.0 8.1
Depreciation on right-of-use assets
Buildings 2.5 2.5
Machinery 1.0 1.2
Total depreciation on right-of-use assets 3.5 3.7
TOTAL DEPRECIATION AND AMORTISATION 17.4 17.9
2. Operative assets
and liabilities
2.1. GOODWILL AND OTHER
INTANGIBLE ASSETS
Intangible assets other than goodwill are recorded at historical
costs and depreciated over their useful lives. Intangible assets
include goodwill, trademarks, software and other intangible
assets and prepayments.
Goodwill
Goodwill arising on the business acquisition is recognised as
the excess of the aggregate of the consideration transferred,
the amount of non-controlling interests and any previously held
equity interest in the acquiree, over the fair value of the net
assets acquired. Goodwill is measured at cost less accumulated
impairment losses. Goodwill is not amortised but is tested
annually for impairment.
For the purpose of impairment testing, goodwill is allocated to
the groups of cash-generating units (CGU) that are expected to
benefit from the business combinations in which the goodwill was
generated. Impairment testing is described in more detail later in
this note.
Other intangible assets
Annual Report 202042
Other intangible assets
Other intangible assets include intangible rights, other intangible assets and prepayments for intangible
assets. Intangible assets such as patents and IT-software, with finite useful lives, are recognised in the
balance sheet at the original acquisition cost less accumulated amortisation and possible impairment.
Altia's trademarks have been acquired in connection with business acquisitions and recognised
originally at fair value and are subsequently amortised on a straight-line basis over the estimated useful
lives.
The estimated useful lives of intangible assets are as follows:
Trademarks 10–15 years
IT-development and software 3–5 years
The costs related to the intangible assets are capitalised if it can be demonstrated that the asset will
generate the future economic benefits, the entity controls the asset and the cost of the asset can be
measured reliably. All other expenditure is recognised as an expense as incurred.
Expenditure on research activities is recognised in profit or loss in the period in which it is incurred.
The Group has no projects related to the development activities of new products or processes
qualifying for the identifiability and other criteria regarding capitalisation under IFRS.
Accounting for emission allowances is described in Note 6.2. Emission allowances are presented as
off-balance sheet items.
Critical estimates and management judgements
– Useful lives of trademarks
Altia’s trademarks have been acquired in connection with business acquisitions and recognised
originally at fair value and are subsequently amortised on a straight-line basis over the estimated useful
lives. Management has estimated the useful lives of trademarks to be in a range from 10 to 15 years.
However, the actual useful life may be shorter or longer than the estimated range depending on the
market trends and customer behavior.
Annual Report 202043
EUR million Goodwill Trademarks
Software and other
intangible assets Prepayments
Other intangible
assets total
Acquisition cost at 1 January 2020 128.3 122.8 23.4 2.0 148.1
Additions - 0.0 0.0 1.1 1.2
Disposals - -0.0 - - -0.0
Effect of movement in exchange rates -5.3 1.8 -0.0 - 1.8
Transfers between items - - 1.7 -1.7 0.0
Acquisition cost at 31 December 2020 123.0 124.7 25.0 1.4 151.1
Accumulated amortisation and impairment losses at 1 January 2020 -48.2 -104.5 -18.5 - -123.0
Amortisation - -3.7 -2.2 - -5.9
Accumulated amortisation on disposals and transfers - 0.0 - - 0.0
Effect of movement in exchange rates 6.6 -1.6 -0.0 - -1.6
Accumulated amortisation and impairment losses at 31 December 2020 -41.6 -109.7 -20.7 - -130.4
Carrying amount at 1 January 2020 80.1 18.3 4.9 2.0 25.2
CARRYING AMOUNT AT 31 DECEMBER 2020 81.4 15.0 4.3 1.4 20.7
Acquisition cost at 1 January 2019 128.0 123.8 21.8 1.7 147.3
Additions - 0.1 0.0 1.8 2.0
Disposals - -0.1 - - -0.1
Effect of movement in exchange rates 0.3 -1.1 -0.0 - -1.1
Transfers between items - - 1.6 -1.6 0.0
Acquisition cost at 31 December 2019 128.3 122.8 23.4 2.0 148.1
Accumulated amortisation and impairment losses at 1 January 2019 -47.3 -101.2 -16.5 - -117.8
Amortisation - -4.1 -2.0 - -6.1
Accumulated amortisation on disposals and transfers - 0.1 - - 0.1
Effect of movement in exchange rates -0.9 0.9 0.0 - 0.9
Accumulated amortisation and impairment losses at 31 December 2019 -48.2 -104.5 -18.5 - -123.0
Carrying amount at 1 January 2019 80.7 22.6 5.3 1.7 29.6
CARRYING AMOUNT AT 31 DECEMBER 2019 80.1 18.3 4.9 2.0 25.2
GOODWILL AND OTHER INTANGIBLE ASSETS
The most significant trademarks include Renault, Larsen, Xanté, Blossa, Chill Out, Explorer, Grönstedts, Bröndums, 1-Enkelt and
Arsenitch. Software and other intangible assets are mainly computer software.
Annual Report 202044
Impairment testing
Book value of assets are assessed to determine whether there are any impairment at least at the end of
each financial year. If any evidence of impairment emerges (a triggering event), the assets’ recoverable
amount is estimated. The recoverable amount is determined on the basis of value in use. An impairment
loss is recognised if the carrying amount of an asset exceeds its recoverable amount. The impairment
loss is immediately recognised in profit or loss and the estimated useful life of the asset in question is
reassessed when an impairment loss is recognised. The recoverable amounts of goodwill and intangible
assets not yet available for use are estimated annually. The need for recognising an impairment loss
is assessed at cash-generating unit level. This level is essentially independent from other units with
separate cash flows.
The impairment loss is reversed if there has been such a positive change in the estimates used to
determine the recoverable amount of the asset or cash-generating unit that recoverable amount of the
asset will increase the book value of asset. Impairment losses are only reversed to the extent that the
asset’s carrying amount does not exceed the carrying amount that would have been determined if no
impairment loss had been recognised. An impairment loss on goodwill is never reversed.
Critical estimates and management judgements – Impairment testing:
The preparation of calculations for the impairment testing of goodwill requires estimates regarding the
future. The management’s estimates and related critical uncertainties are related to the components
of the recoverable amount calculation, including the discount rate, the terminal growth rate and
development of the net sales and operating result, including estimated cost levels of main raw materials
and energy. The discount rates reflect current assessments of the time value of money and relevant
market risk premiums reflecting risks and uncertainties for which the future cash flow estimates have
not been adjusted. The discount rates used, expected net sales growth rates and profitability levels,
including sensitivity analyses, are stated below.
Impairment testing of goodwill
ALLOCATION OF GOODWILL
Goodwill is allocated to groups of cash-generating units (CGU) that represent the level on which the
management monitors the goodwill.
Altia reports its business operations under the following segments: Finland & Exports, Scandinavia and
Altia Industrial. Finland & Exports and Scandinavia segments comprise importing, sale and marketing of
wine, spirits and other beverage product categories. Within the Finland & Exports segment the Company
operates in Finland, the Baltics and travel retail channels and conducts exports. Scandinavia segment
represents the Company’s operations in Sweden, Norway and Denmark. Altia Industrial segment comprises
the Company’s production of ethanol, starch and feed as well as contract services. These segments
comprise both Altia’s operating and reportable segments. Goodwill is monitored by management at the
level of the operating segments.
A segment-level allocation of the goodwill at 31 December 2020 and 2019 is presented below:
IMPAIRMENT TESTING
The key assumptions in impairment testing are operating result and discount rate.
The goodwill allocated to the Group’s cash-generating units is tested for impairment annually or when
there is reason to assume that the carrying amount has exceeded the recoverable amount, with the carrying
amount compared to the recoverable amount in the testing. The annual impairment tests have been carried
out on 31 October 2020 and 31 October 2019. At the time of testing, the companies did not have intangible
assets with indefinite useful lives other than goodwill.
The cash flow estimates used are based on CGU-specific financial plans for the following year approved
by the Group’s management. The forecast period applied for the calculations covers five years, beyond
which the cash flow projections are extrapolated using a constant market-specific growth rate estimate.
The forecasted cash flows for a longer term than this have been estimated by using an annual growth rate
estimate of -0.5%. In the view of the management, these growth estimates represent the development of
business operations in the longer term pursuant to the forecasts.
The COVID-19 pandemic has been taken into consideration in CGU specific financial plans for the year
2020 and its impacts on operating result.
The market-specific WACC estimates are based on external market-specific references. Management
makes judgements regarding the development of assumptions other than WACC based on internal and
external views of the industry’s history and future.
EUR million 2020 % 2019 %
Finland& Exports 46.4 57.0% 46.7 58.3%
Scandinavia 35.0 43.0% 33.4 41.7%
TOTAL 81.4 100.0% 80.1 100.0%
Annual Report 202045
The weighted average costs of capital used as discount rates for the cash flow estimates are presented
in the enclosed table:
The estimated average operating margins used in the calculations are presented in the enclosed table:
Based on the analyses prepared by the company, no reasonably possible change in any of the key
assumptions would cause any of the tested unit's recoverable amount to decrease to be equal to its
carrying amount.
2.2. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment
Property, plant and equipment mainly consist of manufacturing and warehouse buildings, land,
and machinery and equipment used in alcoholic beverage industry. Property, plant and equipment
are measured at historical cost less accumulated depreciation and possible impairment losses. If
parts of an item of property, plant and equipment have different useful lives, they are accounted
for as separate items. The subsequent costs related to the items of property, plant and equipment
are capitalised only if the future economic benefits exceed the originally assessed standard
of performance. All other expenditure, for example ordinary maintenance and repair costs, is
recognised as an expense as incurred. Depreciation is recognised on a straight-line basis over the
estimated useful lives of items of property, plant and equipment. Land is not depreciated.
Projected average pre-tax operating result, %
2020 2019
Finland & Exports 14.9% 13.1%
Scandinavia 9.1% 8.1%
Government grants, for example grants received from the State, are recognised in profit or loss in the
same period in which the related expenses are recognised. Grants that compensate the Group for the
acquisition of property, plant and equipment are deducted from the carrying amount adjusted with the
grant received.
Investment properties are properties held by the Group in order to earn rental income or for
capital appreciation. Investment properties are measured at cost less accumulated depreciation and
impairment losses. Fair values of investment properties are determined based on a valuation carried
out by an external property valuator.
The estimated useful lives of property, plant and equipment are as follows:
Buildings and structures 10–40 years
Machinery and equipment 10 years
Other tangible assets 3–10 years
The estimated useful lives and residual values are reviewed at each financial year-end, and if they
differ substantially from the previous estimates, the depreciation periods are adjusted accordingly.
Impairment loss is recognised in profit or loss to the extent the assets carrying value exceeds its
recoverable amount.
Gains and losses on the disposals of property, plant and equipment are included in other operating
income or expenses.
Covid-19 pandemic has not had significant effect on utilization of fixed assets therefore there were
no need to change the estimated useful lives and no impairment losses were detected.
Used pre-tax discount rate %
2020 2019
Finland & Exports 6.4% 6.4%
Scandinavia 6.0% 6.0%
Annual Report 202046
EUR million
Land and
water areas
Buildings and
structures
Machinery and
equipment
Other
tangible assets
Prepayments
and assets under
construction Total
Acquisition cost at 1 January 2020 3.0 111.3 131.3 0.8 1.6 247.9
Additions - 0.2 0.7 0.0 5.2 6.1
Disposals -0.0 -0.5 -0.9 - - -1.4
Effect of movement in exchange rates - 0.0 0.2 0.0 - 0.2
Transfers between items - 1.6 2.6 - -4.2 0.0
Acquisition cost at 31 December 2020 3.0 112.6 133.9 0.8 2.6 252.9
Accumulated depreciation and impairment losses at 1 January 2020 0.0 -85.8 -101.1 -0.2 - -187.0
Depreciation - -3.2 -4.8 -0.0 - -8.0
Accumulated depreciation on disposals and transfers - 0.3 0.8 - - 1.2
Effect of movement in exchange rates - -0.0 -0.1 - - -0.1
Accumulated depreciation and impairment losses at 31 December 2020 0.0 -88.7 -105.1 -0.2 - -194.0
Carrying amount at 1 January 2020 3.0 25.6 30.2 0.6 1.6 60.9
CARRYING AMOUNT AT 31 DECEMBER 2020 3.0 23.9 28.7 0.6 2.6 58.9
Acquisition cost at 1 January 2019 3.0 109.5 129.8 0.8 1.5 244.6
Additions - 0.1 0.4 - 4.3 4.8
Disposals - - -1.3 -0.0 - -1.3
Effect of movement in exchange rates - -0.0 -0.1 -0.0 - -0.1
Transfers between items - 1.8 2.4 - -4.3 0.0
Acquisition cost at 31 December 2019 3.0 111.3 131.3 0.8 1.6 247.9
Accumulated depreciation and impairment losses at 1 January 2019 0.0 -82.4 -97.4 -0.2 - -179.9
Depreciation - -3.4 -4.7 -0.0 - -8.1
Accumulated depreciation on disposals and transfers - - 0.9 0.0 - 1.0
Effect of movement in exchange rates - 0.0 0.1 - - 0.1
Accumulated depreciation and impairment losses at 31 December 2019 0.0 -85.8 -101.1 -0.2 - -187.0
Carrying amount at 1 January 2019 3.0 27.1 32.4 0.6 1.5 64.6
CARRYING AMOUNT AT 31 DECEMBER 2019 3.0 25.6 30.2 0.6 1.6 60.9
PROPERTY, PLANT AND EQUIPMENT
Annual Report 202047
2.3. LEASES
Leases
Lease is a contract, or a part of a contract that conveys the right to use an asset for a period of time
in exchange for consideration. A contract contains a lease if there is an identified asset and the
contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
Altia mainly acts as the lessee. The Group’s leases are related to normal business operations, such
as leases on facilities, warehouses, vehicles, forklifts and office technology. The new standard removes
the previous distinction between operating and finance leases. In accordance with the new standard,
an asset item (right of use of the leased asset) and a financial liability concerning lease payments have
been recognised for most of Altia’s leases.
The lease liability is measured by discounting the expected lease payments to the current value.
Lease payments include fixed lease payments, expected payments related to residual value guarantees
and the possible exercise price of the purchase option if the use of the option is reasonably certain.
The lease period is the non-cancellable period of the lease. Any extension options are added to the
lease period if it is reasonably certain that the Group will exercise such options.
Lease payments are discounted at the internal rate of return of the lease if that rate can be readily
determined. If an internal rate of return cannot be readily determined, the interest rate for additional
credit is used as the discount rate. The criteria used to determine the discount rate includes the class
of the underlying asset, geographical location, currency, the maturity of the risk-free interest rate and
the lessee’s credit risk premium.
The lease liability is remeasured and adjusted against the right of used asset if the cash flow in
accordance with the original terms and conditions of lease changes; for example, if the lease period
changes or if the lease payments change based on a variable index or interest rate. The lease liability is
divided into current and non-current liability and is presented on a separate line on the balance sheet.
Right-of-use assets are measured at acquisition cost based on the amount of the initial
measurement of the lease liability. Right-of-use assets are depreciated over the lease period or their
useful lives, depending on which is shorter. Right -of use assets related to buildings are depreciated in
2-6 years and right-of -use assets related to machinery and equipment are depreciated in 2-6 years.
Right-of-use assets related to tangible assets are presented on a separate line on the balance sheet.
The IFRS 16 standard includes exemptions concerning leases of less than 12 months and low-value
assets. Altia treats leases with less than 12 months remaining of the lease period at the time of transition
as current underlying asset items that are not recognised on the balance sheet. The selection is made
based on the class of the underlying asset. Exemptions apply to all underlying asset items other than
vehicles and offices, which are recognised on the balance sheet even if their remaining lease period is less
than 12 months at the time of transition. Lease liabilities are not recognised for low-value assets. Altia
considers assets with an acquisition cost of less than EUR 5,000 to be low-value. Finance leases included
in exemptions as short-term or low value were derecognized from balance sheet. Lease expenses related
to leases included in the exemptions are recognised in equal instalments over the lease period.
EUR million Buildings Machinery and
equipment
Total
Acquisition cost at 1 January 2020 10.9 3.1 14.1
Additions 2.1 1.2 3.3
Disposals - -0.2 -0.2
Effect of movement in exchange rates 0.3 0.0 0.3
Acquisition cost at 31 December 2020 13,3 4.1 17.5
Accumulated depreciation at 1 January 2020 -2.6 -1.1 -3.7
Depreciation -2.5 -1.0 -3.5
Accumulated depreciation on disposals - 0.1 0.1
Effect of movement in exchange rates -0.1 -0.0 -0.2
Accumulated depreciation at 31 December 2020 -5.2 -2.0 -7.2
CARRYING AMOUNT AT 31 DECEMBER 2020 8.1 2.1 10.2
EUR million Buildings Machinery and
equipment
Total
Acquisition cost at 1 January 2019 8.6 2.1 10.7
Additions 2.4 1.1 3.5
Disposals - -0.1 -0.1
Effect of movement in exchange rates -0.1 -0.0 -0.1
Acquisition cost at 31 December 2019 10.9 3.1 14.1
Depreciation -2.5 -1.2 -3.7
Accumulated depreciation on disposals - 0.0 0.0
Effect of movement in exchange rates -0.0 -0.0 -0.0
Accumulated depreciation at 31 December 2019 -2.6 -1.1 -3.7
CARRYING AMOUNT AT 31 DECEMBER 2019 8.4 2.0 10.4
RIGHT-OF-USE ASSETS
Annual Report 202048
2.5. CONTRACT ASSETS AND LIABILITIES (CURRENT)
Contract assets represent the amount which Altia has right to receive goods expected to be returned to
inventory with respect to return clauses in the contracts. Contract assets are measured at the former
carrying amount of the inventory less any expected costs to recover the goods and less any impairment
losses.
Contract liabilities represent the amount received or receivable that is expected to be returned as a
refund liability.
2.6. TRADE AND OTHER RECEIVABLES (CURRENT)
Trade and other receivables
Trade receivables are carried at original invoiced amount less any impairment losses. An impairment
loss is recognized immediately in profit and loss. Impairment provisions are recognized based on
lifetime expected credit losses from trade receivables in accordance with IFRS 9. The expected credit
loss model is forward looking and expected default rates are based on historical realized credit losses.
The lifetime expected credit loss provision is calculated using aging of the accounts receivable and
regional portfolios.
Sold trade receivables are derecognised from the balance sheet as soon as the receivable is sold
and the price has been received. At the time of sale, the Group derecognises the trade receivable as
the contractual rights to these cash flows expire and all the related substantial risks and rewards have
been transferred outside the Group. The costs related to the sold receivables are recognised in Other
finance expenses.
2.4. INVENTORIES
Inventories
Inventories are measured at the lower of cost and net realisable value. Self-manufactured products
are measured at standard prices, except cognac products, which are measured at weighted average
cost. Fixed production costs are allocated to the cost of own production.
Raw materials, supplies and trading goods are measured at weighted average cost. Semi-finished
products are measured at weighted average cost, except semi-finished products produced in
Estonia, which are measured at standard prices. Repacked trading goods are measured at standard
cost in repacking plant.
The cost of finished products and work in progress includes raw materials, direct labour costs,
other direct costs as well as an allocable proportion of variable procurement and production costs
and fixed overheads in case of finished products, determined based on normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less the
estimated costs of completion and the estimated costs necessary to make the sale.
EUR million 2020 2019
Materials and supplies 43.9 49.6
Work in progress 9.8 10.5
Finished goods 16.4 13.5
Goods 22.0 18.3
Advance payments 0.2 0.3
TOTAL 92.3 92.0
INVENTORIES
Altia recognised write-downs of inventories amounting to EUR 1.6 million in 2020 (2019: EUR 1.9 million).
COVID-19 has not had a material impact on the value of inventory.
EUR million 2020 2019
Contract assets 0.2 0.2
TOTAL 0.2 0.2
Contract liabilities 0.5 0.5
TOTAL 0.5 0.5
Annual Report 202049
EUR million 2020 2019
Trade receivables not past due 38.0 42.7
Trade receivables past due 1-90 days 2.6 4.8
Trade receivables past due over 90 days 0.3 0.8
Impairment losses -0.3 -0.2
TOTAL 40.5 48.1
AGEING ANALYSIS OF TRADE RECEIVABLES
At the end of the reporting period 2020 the sold trade receivables amounted to EUR 91.9 million (2019:
EUR 76.7 million). Trade receivables from associated companies and joint arrangements are presented in
Note 6.3.
The realized impairment losses recognized on trade receivables during the year 2020 amounted to
EUR 0.1 million (2019: EUR 0.0 million).
The loss allowance for trade receivables is based on the ageing of the accounts receivable and regional
portfolios. The expected loss rate for all trade receivables is 0.1% and in addition receivables more than 120
days due are impaired with 60% expected loss rate. The receivables of the monopolies in Finland and Sweden
are excluded due to the nature of the customer and related credit risk (government entities). Forward
looking macro-economic information has been included in the analysis. Due to the COVID-19 overdue
receivables have been assessed on a customer level.
2.7. EMPLOYEE BENEFIT OBLIGATIONS
Group’s pension arrangements
The Group operates various pension plans in accordance with local conditions and practices in different
countries. In the Finnish companies, statutory pension obligations (TyEL) are arranged through insurance
companies, when the TyEL plan is a defined contribution plan. The defined contribution plans are applied
also in other countries and the foreign subsidiaries manage their pension plans in accordance with local
legislation and established practice.
The Group has defined benefit pension plans for supplementary pension in Norway and France.
In defined benefit pension plans, the amount of the pension benefit at retirement is calculated based
on salary, years of service and life expectancy. The Norwegian and French pension plans cover only few
employees, thus the related pension liabilities are not material for the Group. At the end of the reporting
period 2020 the defined benefit plan obligation amounted to EUR 1.1 million (2019: EUR 1.4 million).
TRADE AND OTHER RECEIVABLES
EUR million 2020 2019
Trade receivables 40.5 48.1
Accrued income 2.7 3.2
Receivables on derivative instruments 0.7 0.4
Other receivables 2.9 2.8
TOTAL 46.8 54.4
2.8. TRADE AND OTHER PAYABLES
EUR million 2020 2019
Current
Trade payables 29.6 25.7
Accruals for wages and salaries and social security contributions 6.0 0.9
Interest liabilities 0.3 0.3
Other accrued expenses 23.2 24.1
Derivative liabilities 1.9 1.7
Excise tax 54.7 47.0
VAT liability 29.4 27.9
Other liabilities 7.6 7.1
TOTAL 152.6 134.7
Annual Report 202050
2.9. PROVISIONS
Provisions
A provision is recognised when the Group has a present legal or constructive obligation as a result
of a past event, and it is probable that an outflow of economic benefits will be required to settle the
obligation and the amount of the obligation can be reliably estimated. The amount recognised as
provision is the management’s best estimate of the costs required to settle the existing obligation at the
end of the reporting period. If part of the obligation may potentially be compensated by a third party,
the compensation is recognised as a separate asset when it is virtually certain that the compensation
will be received.
A provision for restructuring is recognised when a detailed restructuring plan has been prepared, and
the implementation of the plan has either been commenced or the plan has been announced to those
who are affected.
The Group had no provisions at 31 December 2020 or 31 December 2019.
3. Financial items
and capital structure
Annual Report 202052
3.1. FINANCE INCOME AND EXPENSES
FINANCE INCOME
Foreign exchange differences arising from trade receivables and trade payables amounting to EUR 0.4 million
(2019: EUR 0.1 million) and from currency derivatives amounting to EUR -0.7 million (2019: EUR 0.9 million)
are included in operating result.
FINANCE EXPENSES
Interest expenses included finance lease related interest expenses amounting to EUR 0.1 million
(2019: EUR 0.1 million).
To ensure sufficient funding and liquidity reserves following the completion of the planned Altia-Arcus
merger, Altia has obtained certain consents and waivers from the lenders under existing senior facilities
agreement in order for the existing financing arrangements to continue in force and survive the merger. In
addition Altia has received a back up financing commitment for the establishment of the bridge facilities
agreement. These refinancing costs EUR 0.6 million are included in other financial costs.
EUR million
2020 2019
Interest income
Forward points on FX-forwards - 0.0
Loans, receivables and cash and cash equivalents 0.1 0.2
Total interest income 0.1 0.2
Foreign exchange gains
Foreign exchange gains on FX-derivatives - 0.8
Foreign exchange gains on I/C loans and cash pool accounts - 2.5
Total foreign exchange gains - 3.3
Dividend income
Fair value through other comprehensive income 0.2 -
Total dividend income 0.2 -
TOTAL FINANCE INCOME 0.2 3.5
EUR million
2020 2019
Interest expenses
Forward points on FX-forwards - -0.0
Financial liabilities at amortised cost 1.1 1.1
Derivatives under hedge accounting (Interest rate risk) 0.4 0.4
Interest expenses on lease liabilities 0.1 0.1
Other interest expenses, pension liability 0.0 0.0
Total interest expenses 1.7 1.6
Foreign exchange losses
Foreign exchange losses on FX-derivatives 0.0 2.1
Foreign exchange losses on I/C loans and cash pool accounts 0.1 1.2
Total foreign exchange losses 0.1 3.3
Other finance expenses
Other financial expenses 1.4 0.7
Total other finance expenses 1.4 0.7
TOTAL FINANCE EXPENSES 3.1 5.7
Annual Report 202053
3.2. FINANCIAL ASSETS AND LIABILITIES
3.2.1 FINANCIAL ASSETS
According to IFRS 9 the classification is business model driven and there are three classes: fair
value through profit and loss, amortised cost and fair value through other comprehensive income.
Classification is made upon initial recognition based on the purpose of use of the asset. The basis of
classification is reassessed at each reporting date.
All purchases and sales of financial instruments are recognised on the trade date, which is the date
when the Group commits to purchase or sell a financial instrument. Financial assets are recognised
in the balance sheet at original cost which equals their fair value at the acquisition date. If the asset
in question is not measured at fair value through profit or loss, transaction costs are included in the
original cost of the financial asset.
The Group derecognises a financial asset when the contractual rights to the cash flows from the
asset expire, or the Group transfers all the substantial risks and rewards related to the financial asset
outside the Group. Financial assets are included in non-current items of the balance sheet when their
maturity is over 12 months.
Impairment of financial assets
The impairment model requires the recognition of impairment provision based on expected credit
losses. The impairment provision is recognised based on lifetime expected credit losses from trade
receivables and contract assets. More information on the impairment provision on trade receivables
can be found in Note 2.6. Trade and other receivables (current).
The impairment model does not apply to financial assets measured at fair value and investments in
associates and joint ventures and interests in joint operations since those are measured at fair value
which already takes into account expected credit losses.
Financial assets recognised at fair value through profit or loss
This category includes financial assets held for trading purposes or otherwise designated
as financial assets recognised at fair value through profit or loss by Altia Group. Derivative
instruments held for hedging purposes, but not qualifying for the criteria of hedge accounting, are
classified in this category. Items in this category are initially recognised at fair value and subsequently
measured at the fair value of each reporting date, which is the market bid price at the end of the
reporting period determined based on public price quotations in active markets. Realised and
unrealised gains and losses arising from changes in fair values are recognised in profit or loss in
financial items in the period in which they are incurred if they relate to hedging of financial items.
Amortised cost
Loans and receivables arise when money, goods or services are delivered to a debtor, and they are
included in current or non-current financial assets in accordance with their maturity. The assets in
this category are held according to a business model of which objective is to collect contractual cash
flows. In Altia, non-current receivables include loan receivables and other receivables with the maturity
of over one year. Current receivables include trade receivables as well as cash and cash equivalents
presented under current financial assets. Receivables are measured at amortised cost when the related
payments are fixed or determinable and the instruments are not quoted in financial markets. The
exchange rate differences of intra-group foreign currency denominated loan receivables are presented
within financial items as foreign exchange differences related to loans. The exchange rate differences of
foreign currency denominated trade receivables are presented in income statement as adjustments to
sales.
Fair value through other comprehensive income
These assets are non-derivative financial assets which are either designated in this category or not
classified in any other category of financial assets. These are included in non-current assets, unless they
are intended to be held less than 12 months from the end of the reporting period, in which case they are
included in current assets.
Financial assets measured at fair value through other comprehensive income consist of unquoted
shares. Unquoted shares are measured at fair value based on market approach valuation techniques
using information from market transactions involving comparable assets.
Fair value through other comprehensive income
Fair value through other comprehensive income assets consisted of unquoted shares, amounting to EUR
1.4 million (2019: EUR 1.4 million).
Annual Report 202054
3.2.2 FINANCIAL LIABILITIES
Financial liabilities are classified as financial liabilities at fair value through profit or loss and financial
liabilities at amortised cost. Financial liabilities are initially measured at fair value and recognised net of
transaction costs, with the exception of items measured at fair value through profit or loss.
A financial liability (or a part of it) is not derecognised until the obligation specified in the contract is
discharged or cancelled or expires. A financial liability is classified as current, unless the Group has an
unconditional right to defer the settlement of the liability for at least 12 months after the end of the
reporting period.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include derivatives held for hedging purposes
but not qualifying for hedge accounting. Financial liabilities in this category are measured at fair
value, which is determined based on price quotations in active markets at the reporting date. Realised
and unrealised gains or losses arising from the changes in fair values are recognised through profit or
loss in the financial items as incurred.
Financial liabilities at amortised cost
This category includes the Group’s external loans from financial institutions, loans from pension
institutions, commercial paper loans as well as trade payables. These financial liabilities are measured at
amortised cost using the effective interest method. When loans are paid off or refinanced, the related
unamortised costs are recognised in finance expenses. Group overdrafts in use are included in current
borrowings. In addition, Altia has a revolving credit facility and the related fee is amortised on a straight-
line basis in other finance expenses during the term of the facility.
The exchange rate differences arising from foreign currency denominated loans from financial
institutions are disclosed under financial items. The exchange rate differences of intra-group foreign
currency denominated loans are presented within financial items in the foreign exchange differences of
the category financial liabilities at amortised cost.
The fair values of loans from financial institutions and commercial paper loans are determined based
on future cash flows discounted with market interest rate at the reporting date adjusted with Altia’s
credit risk premium. At the reporting date, the carrying amounts of the loans are considered to equal
their fair values because of the stable level of market interest rates. The fair values of lease and finance
lease liabilities are based on discounted future cash flows. The discount rate is internal rate of return of
the lease or interest rate for additional credit.
BORROWINGS AND LEASE LIABILITIES
Interest-bearing non-current loans from financial and pension institutions are measured at amortised cost
using the effective interest method.
All of the Group’s non-current and current loans from financial and pension institutions were nominated in
Euros as at 31 December 2020 and 31 December 2019.
The weighted average effective interest rate (p.a.) of the Group’s loans from financial and pension
institutions as at 31 December 2020 was 1.5% (2019: 1.9%).
The weighted average interest rate (p.a.) of the Group’s lease liabilities as at 31 December 2020 was 1.1%
(2019: 1.2%).
EUR million 2020 2019
Non-current
Loans from financial institutions 59.9 64.8
Loans from pension institutions 9.8 11.3
Lease liabilities 7.0 7.1
TOTAL 76.6 83.2
Current
Loans from financial institutions 5.0 5.0
Loans from pension institutions 1.5 1.5
Commercial papers 40.0 -
Lease liabilities 3.7 3.4
TOTAL 50.1 9.9
Annual Report 202055
NET DEBT
Movements in Net debt the year ended 31 December 2020 and 2019 are presented in the following table:
Derivative instruments
Derivatives are included in financial assets and liabilities at fair value through profit or loss
when they do not meet the criteria of hedge accounting pursuant to IFRS 9. These derivatives are
recognised at fair value on the trade date and they are subsequently measured at fair value at the
reporting date. Derivative instruments and hedge accounting are described in Note 3.3.
The fair values of derivatives equal the amount that the Group would have to pay, or it would receive
from the termination of the derivative contract at the reporting date. The fair values of forward
exchange contracts are determined by using the market prices at the reporting date. The fair values of
interest rate derivatives are determined by discounting the related future cash flows. The valuation of
commodity derivatives is determined based on the fair values received from the financial markets.
EUR million
Cash and cash
equivalents
Loans from financial
and pension
institutions
(non-current)
Loans from financial
and pension
institutions (current)
Lease liabilities
(non-current)
Lease liabilities
(current)
Finance lease
liabilities (non-
current)
Finance lease
liabilities (current) Total
Net debt as at 1 January 2020 64.2 76.1 6.5 7.1 3.4 - - 28.9
Cash flows 65.1 - 33.5 - -3.7 - - -35.3
Translation differences 1.4 - - - - - - -1.4
Other non-cash movement - -6.4 6.5 -0.1 3.9 - - 3.9
NET DEBT AS AT 31 DECEMBER 2020 130.7 69.6 46.5 7.0 3.7 - - -3.9
Net debt as at 1 January 2019 42.0 82.5 6.5 - - 0.2 0.2 47.4
Adoption of IFRS 16 - - - 7.4 3.3 - - 10.7
Cash flows 22.7 - -6.5 - -3.7 - - -32.9
Translation differences -0.5 - - - - - - 0.5
Other non-cash movement - -6.4 6.5 -0.3 3.8 -0.2 -0.2 3.1
NET DEBT AS AT 31 DECEMBER 2019 64.2 76.1 6.5 7.1 3.4 - - 28.9
Annual Report 202056
3.2.3 CLASSIFICATION AND FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES
FAIR VALUES AND THE CARRYING AMOUNTS IN THE CONSOLIDATED BALANCE SHEET FOR EACH FINANCIAL INSTRUMENT BY CLASSES:
2020
EUR million Note
Derivatives, hedge
accounting
Fair value through
profit or loss Amortised cost
Fair value through
other comprehensive
income
Carrying amounts of
items in the balance
sheet Fair value Level
Financial assets
Non-current financial assets
Investments in associates and receivables from interests in joint operations - - 9.1 - 9.1 9.1
Unquoted shares 3.2.1. - - - 1.4 1.4 1.4 3
Current financial assets
Trade and other receivables 2.6. - - 41.9 - 41.9 41.9
Trade and other receivables/Derivative instruments
Forward exchange contracts 2.6. 0.0 0.0 - - 0.0 0.0 2
Commodity derivatives 2.6. 0.6 - - - 0.6 0.6 2
Cash and cash equivalents 4.1. - - 130.7 - 130.7 130.7
TOTAL 0.7 0.0 181.6 1.4 183.8 183.8
Financial liabilities
Non-current financial liabilities
Borrowings 3.2.2. - - 69.6 - 69.6 69.6 2
Lease liabilities 3.2.2. - - 7.0 - 7.0 7.0 2
Current financial liabilities
Borrowings 3.2.2. - - 46.5 - 46.5 46.5 2
Lease liabilities 3.2.2. - - 3.7 - 3.7 3.7 2
Trade and other payables 2.8. - - 29.6 - 29.6 29.6
Trade and other payables/Derivative instruments
Interest rate derivatives 2.8. 1.0 - - - 1.0 1.0 2
Forward exchange contracts 2.8. 0.8 0.2 - - 1.0 1.0 2
TOTAL 1.8 0.2 156.4 - 158.3 158.3
Annual Report 202057
At the reporting date due to short maturity fair value of trade receivables and other short-term receivables
and liabilities equal to their value in the balance sheet.
The table above presents the classification of financial instruments. The levels 1-3 of fair value hierarchy
reflect the significance of inputs used in determining the fair values. In level one, fair values are based on
public quotations of identical financial instruments. In level two, the inputs used in determining the fair
values are based on quoted market rates and prices observable for the asset or liability in question directly
(i.e. price) or indirectly on discounted future cash flows. Fair values of other financial assets and liabilities in
level two reflect their carrying value. In level three, the fair values of assets and liabilities are based on inputs
that are not based on observable market data for all significant variables, and instead are, to a significant
extent, based on management estimates and their use in generally accepted valuation techniques. The
reported fair value level is based on the lowest level of input information that is significant in determining the
fair value.
2019
EUR million Note
Derivatives, hedge
accounting
Fair value through
profit or loss Amortised cost
Fair value through
other comprehensive
income
Carrying amounts of
items in the
balance sheet Fair value Level
Financial assets
Non-current financial assets
Investments in associates and receivables from interests in joint operations - - 8.8 - 8.8 8.8
Unquoted shares 3.2.1. - - - 1.4 1.4 1.4 3
Current financial assets
Trade and other receivables 2.6. - - 49.3 - 49.3 49.3
Trade and other receivables/Derivative instruments
Forward exchange contracts 2.6. 0.0 0.0 - - 0.0 0.0 2
Commodity derivatives 2.6. 0.3 - - - 0.3 0.3 2
Cash and cash equivalents 4.1. - - 64.2 - 64.2 64.2
TOTAL 0.3 0.0 122.3 1.4 124.1 124.1
Financial liabilities
Non-current financial liabilities
Borrowings 3.2.2. - - 76.1 - 76.1 76.1 2
Lease liabilities 3.2.2. - - 7.1 - 7.1 7.1 2
Current financial liabilities
Borrowings 3.2.2. - - 6.5 - 6.5 6.5 2
Lease liabilities 3.2.2. - - 3.4 - 3.4 3.4 2
Trade and other payables 2.8. - - 25.9 - 25.9 25.9
Trade and other payables/Derivative instruments
Interest rate derivatives 2.8. 1.2 - - - 1.2 1.2 2
Forward exchange contracts 2.8. 0.4 0.1 - - 0.5 0.5 2
TOTAL 1.6 0.1 119.0 - 120.7 120.7
Annual Report 202058
3.3. DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING
When the Group applies IFRS 9 hedge accounting to foreign currency, interest rate and electricity
derivatives, the effective portion of the fair value change is recognised in other comprehensive income and
presented within equity in the hedge reserve.
When hedge accounting is applied
In Altia, cash flow hedging is applied to part of the interest rate, foreign currency and electricity
derivatives based on case-by-case assessment. In cash flow hedging, the Group is hedging against
changes in cash flows related to a specific asset or liability recognised in the balance sheet or to
a highly probable future business transaction. Hedge accounting is a method of accounting with
the purpose to allocate one or several hedging instruments so that their fair value changes offset
in full or partly the changes in fair value or cash flow arising from the hedged risk in profit or loss
during the period, for which the hedge is designated. In the beginning of the hedging arrangement,
Altia documents the relationship between each hedging instrument and hedged item, as well as the
objectives of risk management and the strategy in engaging in hedging. IFRS 9 requires that the
effectiveness of hedging instruments is tested prospectively. Effectiveness means the ability of a
hedging instrument to offset the changes in the fair value of the hedged item or changes in the cash
flows of the hedged transaction attributable to the hedged risk. Under IFRS 9 the hedging relationship
is regarded to be highly effective when there is an economic relationship between the hedged item and
the hedging instrument. Hedging ratio is defined as a relationship between the quantity of the hedging
instrument and the quantity of the hedged item. Hedge accounting is discontinued when the criteria
for hedge accounting is no longer met.
The gains and losses arising from fair value changes of derivative contracts, to which hedge
accounting is applied, are presented in congruence with the hedged item. Forward points are
included to hedging relationship. The effective portion of the unrealised changes in the fair value of
derivatives designated and qualifying as cash flow hedges are recognised in other comprehensive
income and presented in the hedge reserve in equity. The ineffective portion is immediately
recognized in finance income or expenses in profit or loss. The cumulative gain or loss in equity on
derivative instruments related to commercial items is recognised in profit or loss as an adjustment
to purchases or sales simultaneously with the hedged item in the period in which the hedged item
affects profit or loss. Realised gain or loss on electricity derivatives is included in operating result in
electricity procurement expenses. When a hedging instrument designated as a cash flow hedge no
longer meets the criteria of hedge accounting, the gain or loss accumulated in equity is recognised
through finance income or expenses.
When hedge accounting is not applied
The accounting for gains and losses arising from fair value measurement is dependent on the purpose
of use of the derivative. In Altia, the changes in the fair values of derivative instruments are immediately
recognised in profit or loss in finance income or expense if the derivative in question is related to
hedging of commercial cash flows (purchases and sales) and hedge accounting is not applied. The fair
value changes of other derivative instruments are immediately recognised in profit or loss in finance
income or expense items if hedge accounting is not applied. Derivatives, to which hedge accounting is
not applied, are acquired to minimise the profit and/or cash flow effects related to business operations
or financing.
NOMINAL VALUES OF DERIVATIVE INSTRUMENTS
EUR million 2020 2019
Derivative instruments designated for
cash flow hedging
Interest rate derivatives 20.0 20.0
Forward exchange contracts 29.4 24.4
Commodity derivatives, electricity 3.3 1.3
0.1TWh 0.1TWh
Derivative instruments, non-hedge accounting
Forward exchange contracts 5.0 3.9
Annual Report 202059
EUR million
Interest rate swap 2020 2019
Carrying amount (liability) 1.0 1.2
Notional amount 20.0 20.0
Maturity date 04/2023 04/2023
Hedge ratio 1:1 1:1
Change in discounted value of outstanding hedging instruments since 1 January -0.3 -0.1
Change in value of hedged item used to determine hedge effectiveness 0.3 0.1
Weighted average hedged rate for the year 2.07% 1.99%
EUR million
Commodities - Electricity 2020 2019
Carrying amount (asset) 0.6 0.3
Notional amount 3.3 1.3
TWh 0.1 0.1
Maturity date 2021-2024 2020-2021
Hedge ratio 1:1 1:1
Change in discounted value of outstanding hedging instruments since 1 January 0.3 -1.0
Change in value of hedged item used to determine hedge effectiveness -0.3 1.0
Weighted average hedged price EUR/MWh 28.85 23.91
EUR million
EURAUD EURUSD EURNOK EURSEK
Foreign currency forwards 2020 2019 2020 2019 2020 2019 2020 2019
Carrying amount (asset) 0.0 0.0 - - - - - -
Carrying amount (liability) - - -0.0 -0.0 -0.1 -0.0 -0.6 -0.3
Notional amount 1.7 1.5 2.2 1.4 2.5 1.8 20.7 18.2
Maturity date Feb-Dec 2021 Feb-Dec 2020 Feb-Dec 2021 Feb-Jun 2020 Feb-Dec 2021 Feb-May 2020 Feb-Dec 2021 Feb-Aug 2020
Hedge ratio 1:1 1:1 1:1 1:1 1:1 1:1 1:1 1:1
Change in discounted value of outstanding hedging instruments since 1 January 0.0 0.0 -0.0 -0.1 -0.0 -0.1 -0.3 -0.2
Change in value of hedged item used to determine hedge effectiveness -0.0 -0.0 0.0 0.1 0.0 0.1 0.3 0.2
EFFECTS OF HEDGE ACCOUNTING ON THE FINANCIAL POSITION AND PERFORMANCE
Annual Report 202060
Positive and negative fair values of unrealised derivatives and their net amount are presented below. Interest
and currency derivatives are under netting agreements. The master netting agreements in respect of
derivatives do not meet the criteria for offsetting in the balance sheet owing to legally enforceable right not
existing currently.
OFFSETTING FINANCIAL ASSETS AND LIABILITIES
3.4. EQUITY
Share capital
Altia Plc’s share capital, paid in its entirety and registered in the trade register, was 60,480,378.36 euros at the end
of 2020 and 2019. At the end of the financial period 2020 and 2019 there were 36,140,485 shares outstanding.
All shares issued have been paid in full. The shares have no nominal value. Each share has one vote at the
Annual General meeting and equal rights to dividend and other distribution of assets. The company does not
hold its own shares.
NUMBER OF SHARES
Invested unrestricted equity fund
The amounts paid for issued Personnel Shares in Altia’s listing have been recorded as invested unrestricted
equity fund.
Fair value reserve
The fair value reserve represents the change in the fair value of financial assets measured at fair value
through other comprehensive income
Legal reserve
Legal reserve represents statutory part of the foreign subsidiary’s result.
Hedge reserve
The hedge reserve includes the fair value changes of derivative instruments used for cash flow hedging for
effective hedges.
CASH FLOW HEDGE RESERVE
EUR million 2020 2019
Derivative assets:
Fair value, gross 0.7 0.4
Fair value, under netting agreements -0.0 -0.0
Fair value, net 0.6 0.3
Derivative liabilities:
Fair value, gross 1.9 1.7
Fair value, under netting agreements -0.0 -0.0
Fair value, net 1.9 1.6
EUR million
Currency
forwards
Interest rate
swaps
Commodities Total hedge
reserves
Opening balance 1 January 2019 -0.0 -1.0 1.1 0.0
Change in fair value of hedging instrument recognised in OCI 0.5 0.2 -0.2 0.5
Reclassified from OCI to profit or loss -
included in purchases/sales adjustments
-0.9 - - -0.9
Reclassified from OCI to financial income / expenses - -0.4 - -0.4
Reclassified from OCI to electricity purhases - - -0.5 -0.5
Deferred tax 0.1 0.2 -0.1 0.3
Closing balance 31 December 2019 -0.3 -1.0 0.2 -1.0
Change in fair value of hedging instrument recognised in OCI 0.2 0.4 0.1 0.7
Reclassified from OCI to profit or loss -
included in purchases/sales adjustments
-0.7 - - -0.7
Reclassified from OCI to financial income / expenses - -0.4 - -0.4
Reclassified from OCI to electricity purhases - - 0.3 0.3
Deferred tax 0.2 0.2 -0.1 0.2
Closing balance 31 December 2020 -0.6 -0.8 0.5 -0.9
2020 2019
Number of outstanding shares in the beginning of the financial year 36,140,485 36,140,485
Number of outstanding shares at the end of the financial year 36,140,485 36,140,485
Annual Report 202061
Translation differences
Translation differences comprise all foreign exchange differences arising from the translation of the foreign
subsidiaries’ financial statements. The Group’s accumulated translation differences amounted to negative
EUR 20.5 million at 31 December 2020 (31.12.2019: negative EUR 22.1 million).
Earnings per share
Basic earnings per share is calculated by dividing the result for the period attributable to owners of the
parent company by the weighted average number of shares outstanding during the reporting period.
Diluted earnings per share has been calculated on the same basis as basic earnings per share except that
it reflects the impact of any potential commitments the Group has to issue shares in the future. Altia has not
issued any dilutive instruments during the periods presented.
EARNINGS PER SHARE
Dividend
The Board of Directors proposes to the Annual General Meeting that dividend of EUR 0.35 per share be
distributed for 2020.
Arcus’ Board of Directors have similarly proposed to the Annual General Meeting of Arcus that an annual
dividend of NOK 1.66 per share be paid for the financial year 2020, reflecting the relative value of Altia and
Arcus agreed upon in the merger plan, meaning that dividends for the financial year 2020 to be paid by Altia
and Arcus, respectively, will not have an impact on the agreed valuation of the companies for the purpose of
the Altia and Arcus merger.
Altia’s Board of Directors also proposes to the Annual General Meeting that the dividend authorisation
decided by the Extraordinary General Meeting 2020 to pay an extra dividend of EUR 0.40 per share to Altia's
shareholders in connection with and prior to the closing of the Altia and Arcus merger be renewed.
A dividend for 2019 of EUR 0.21 per share, amounting to a total of EUR 7.6 million, was decided in the
Annual General Meeting on 4 June 2020. The dividend was paid on 14 June 2020. Further, the AGM
authorized the Board of Directors to resolve on the second payment of dividend, not exceeding EUR 0.21
per share. The second dividend instalment was paid on 25 November 2020.
2020 2019
Result attributable to the shareholders of the parent company, EUR million 17.8 18.4
Weighted average number of shares outstanding (1.000 pcs) 36.140 36.140
Basic and diluted earnings per share (EUR) 0.49 0.51
EUR million 31 Dec 2020 31 Dec 2019
Invested unrestricted equity fund 1.2 1.2
Retained earnings 95.7 70.9
Distribution of dividends -15.2 -13.7
Profit for the period 5.9 38.6
TOTAL DISTRIBUTABLE FUNDS 87.6 96.9
ALTIA PLC'S DISTRIBUTABLE FUNDS
4. Financial and capital risk
4.1. FINANCIAL RISK MANAGEMENT
Financial risk management principles
The aim of Altia's financial risk management is to ensure the
Group’s financial stability and availability of sufficient financing
options in different market situations. In addition, the aim is to
support the business operations to identify business-related
financial risks and their management, and to hedge against
material financial risks.
The Group is exposed to various market risks. Changes in
these risks affect the company’s assets, liabilities and anticipated
transactions. The risks are caused by changes in interest rates,
currencies and commodity market prices. Selected derivative
instruments can be used to manage the risks resulting from
these market risks. Altia mainly hedges against risks that
impact the Group’s cash flow, and, if deemed appropriate, also
certain foreign currency denominated items in the balance
sheet. Derivatives are solely used to hedging against the above-
mentioned risks. The principles of IFRS 9 hedge accounting
are applied to certain interest rate, foreign exchange as well as
electricity derivatives. Financial risk management is executed
as part of the Group’s risk management, according to the Risk
Management Principles approved by the Board of Directors.
Altia’s principles aiming towards financial, credit and operational
continuity form the basis for financial risk management.
Annual Report 202063
1. CURRENCY RISK
Altia is exposed to currency risks resulting from export and import, intra-group trade across borders of the
euro-area, as well as internal loans and investments in foreign subsidiaries. The objective of the Group’s
currency risk management is to limit the uncertainties associated with foreign exchange rates and their
effect on the Group’s profit, cash flows and balance sheet.
Transaction risk
Transaction risk is caused by foreign currency denominated items in the balance sheet and future cash flows
related to sales, purchases and return of capital. Transaction risk management aims to hedge the Group’s
profit against the effects of changes in foreign exchange rates.
The objective is to hedge 60-80% of highly probable commercial cash flows. The average hedging ratio has
remained at the target level. Hedging transactions are executed with forward exchange contracts or options
for the following 12 months at the most, predominantly following the pricing periods of customers. Altia
may apply cash flow hedge accounting to foreign exchange derivatives. Intra-group loan arrangements are
hedged by 100% and hedge accounting is not applied to these arrangements.
The two tables below present the Group’s net currency position, first on the basis of financial instruments
recorded on the balance sheet and secondly including on a net basis also the estimated future foreign
currency net cash flows. The currency position resulting from the financial instruments in accordance with
IFRS 7 consists of trade receivables, trade payables, cash and cash equivalents, the Group’s internal and
external loans and derivative instruments.
The net currency risk has been taken into account in the table if the transaction currency is other than the
company’s functional currency.
Risk management process
Special process features related to financing are described below in connection with the descriptions of
market, liquidity and credit risks. The financial risk exposure is regularly reported to the Audit Committee
and Altia’s Board of Directors. The most significant principle decisions concerning risk management are
made by the company’s Board of Directors.
As part of the financial risk management principles, Altia’s Board of Directors has approved a list of
financial instruments, in which the accepted instruments, their purpose and the person who decides on their
use have been specified for different types of financial risks.
Financial risk management organisation
Financial matters are reported regularly to the Group management. On a case-by-case basis, the Board
of Directors processes all substantial financial matters, such as the Group’s internal and external loan
arrangements.
Tasks and responsibilities regarding Altia’s financial operations and financial risk management are
described in the financial risk management principles. The Group Treasury is responsible for securing
financing, identifying risks and, if required, executing hedging transactions with external counterparties. The
business units and subsidiaries are responsible for managing the risks associated with their own operations
and forecasting cash flows.
Risk concentrations
Altia carefully analyses the financial risks and risk concentrations related to its operations. Risk
concentrations identified as a result of this assessment are described in connection with the descriptions of
market and credit risks.
Market risk
Altia defines market risk as a risk where the fair values of financial instruments or future cash flows fluctuate
as a result of changes in market prices. The most significant market risks for the Group are currency risk,
interest rate risk and price risks for barley and electricity.
Annual Report 202064
TABLE 1: THE GROUP’S NET CURRENCY POSITION AT 31 DECEMBER
Translation risk
Translation risk is mainly caused by the parent company’s foreign currency denominated net investments
in foreign subsidiaries, which cause a translation difference in equity in the Group’s balance sheet upon
consolidation. The Group Treasury regularly analyses the translation risk and reports any material issues
to the management. The most significant net investments are denominated in the Swedish and Norwegian
kroner. The translation risk has not been hedged.
2. INTEREST RATE RISK
The objective of interest rate risk management is to minimise the impact of fluctuations arising from interest
rate changes on the Group’s profit. At 31 December 2020 the total nominal amount of loans was EUR 76.3
million (2019: 82.8) and was divided as follows:
• The EUR10.0 million loan matures in January 2022 with annual EUR 5 million instalments. The interest rate
on the loan is based on three –month market rate. Currently these interest payments are not hedged.
• The EUR 55.0 million portion of the loan matures in January 2023. The interest rate on the loan is based
on three-month market rate. Altia has hedged these interest payments to fixed interest rate by using an
interest rate derivative amounting to EUR 20 million. Hedge accounting principles are applied to this
interest rate derivative. The hedge has been regarded as effective.
• The EUR 11.3 million pension loan matures in January 2028. The interest rate is fixed for the whole
loan period.
The maximum amount under Altia’s domestic commercial paper program is EUR 100 million. The amount of
issued commercial papers at 31 December 2020 was EUR 40.0 (2019: 0.0) million.
Altia’s maximum limit for sale of trade receivables amounts to EUR 145 million and is approved by Board of
Directors. The sold trade receivables are derecognised at the time of trade with no obligation to repurchase.
The related costs are recognised in other financial expenses. The trade receivables are current receivables
and the related interest rate risk is not hedged. The amount of the sold trade receivables was EUR 91.9
million at 31 December 2020 (2019: 76.7 million).
3. PRICE RISK ASSOCIATED WITH COMMODITIES
Barley
In 2020, Altia used approximately 214 (212) million kilos of Finnish grain to produce ethanol and starch. The
availability of high-quality domestic barley is ensured with contract cultivation and cooperation with grain
growers and grain handling companies. The market price of barley fluctuates significantly year by year as
a result of various factors that affect the Finnish barley supply and demand and is therefore considered a
significant risk for Altia. The price risk has not been hedged with derivative instruments.
Electricity
Strong increase in the market price of electricity is a significant risk for Altia. The risk is managed by following
Altia’s principles for electricity procurement. These principles determine the hedging limits, within which the
electricity price risk is hedged. The hedges are done with OTC-derivatives of Nasdaq OMX Oslo ASA. The
hedging service for electricity procurement has been outsourced.
Cash flow hedge accounting in accordance with IFRS 9 is applied to the hedges against electricity
price risk, and hedge effectiveness is tested quarterly. The hedged risk is the euro dominated sourcing of
electricity in Finland. To hedge the risk system priced, Finnish price area and price area derivative is used.
With system priced derivatives is hedged Nordic electricity price and with price area derivative is hedged the
price difference between Finnish price area and system price.
At the end of 2020, the hedging ratio for deliveries for the next 12 months was 74.7% (2019: 53.7%), in
line with the set targets. In 2020 the average hedging ratio was 72.1% (66.0%). All hedging was effective in
2020 as it was in 2019.
Altia purchases its electricity straight from the Nord Pool Spot markets as a delivery tied to the spot price
of the Finnish price area.
The Group's net currency position at 31 December including also the hedged
commercial cash flows
EUR million 2020 2019
EUR-SEK 2.4 1.8
EUR-NOK 1.9 0.3
EUR-USD -0.2 0.3
EUR-AUD 0.1 0.2
The net currency position resulting from the financial instruments
in accordance with IFRS 7
EUR million 2020 2019
EUR-SEK -18.3 -16.4
EUR-NOK -0.6 -1.6
EUR-USD 3.8 2.7
EUR-AUD 1.8 1.7
Annual Report 202065
4. SENSITIVITY TO MARKET RISKS
The following table describes the sensitivity of the Group’s profit and equity (before taxes) to changes in
electricity prices, interest and foreign exchange rates. When Altia applies hedge accounting, the sensitivity is
directed at equity. When hedge accounting is not applied, the sensitivity is recognised as a potential impact
on profit or loss.
The sensitivity to foreign exchange rate changes is calculated from the net currency position resulting from
financial instruments.
TABLE 2: SENSITIVITY ANALYSES
At the end of 2020 the total group floating rate liability position consists of floating rate liabilities EUR 65.0
million (2019: EUR 70.0 million) and floating leg of interest rate swap EUR 20.0 million (2019: EUR 20.0
million) which is netting the interest rate risk.
Liquidity risk
The management has analyzed that the liquidity risk has not increased significantly due to COVID-19.
Group’s liquidity position has been strong throughout the year due to the positive development of
operational cash flow and the actions to secure liquidity during the pandemic by issuing commercial papers.
In order to manage the liquidity risk, Altia continuously maintains sufficient liquidity reserves, which at
the end of 2020 comprised Group’s EUR 10 million overdraft facility and a EUR 60 million revolving credit
facility. At the end of December 2020 no revolving credit facility was in use (2019: EUR 0.0 million). The
revolving credit facility matures in January 2023. More detailed information on the Group’s external loans is
provided in the interest rate risk section.
TABLE 3: LIQUIDITY RESERVES
Sensitivity of financial instruments to market risks
(before taxes) in accordance with IFRS 7 2020 2019
EUR million
Income
statement Equity
Income
statement Equity
+/-10% electricity - +/-0.4 - +/-0.2
+/-10% change in EUR/NOK exchange rate -/+0.2 +/-0.3 -/+0.0 +/-0.2
+/-10% change in EUR/SEK exchange rate -/+0.2 +/-2.1 -/+0.2 +/-1.8
+/-10% change in EUR/USD exchange rate +/-0.0 -/+0.4 -/+0.0 -/+0.2
+/-10% change in EUR/AUD exchange rate -/+0.0 -/+0.2 -/+0.0 -/+0.2
+1%-points parallel shift in interest rates -0.5 +0.2 -0.5 +0.4
+10% increase in EUR/SEK exchange rate would have an EUR -0.2 million effect in income statement.
Other risks with same principle.
Cash and cash equivalents and unused committed credit limits
EUR million 2020 2019
Cash and cash equivalents 130.7 64.2
Overdraft facilities 10.0 10.0
Revolving credit line 60.0 60.0
TOTAL 200.7 134.2
Annual Report 202066
TABLE 4: MATURITIES OF FINANCIAL LIABILITIES
Contractual payments on financial liabilities 2020 Cash flows 2021 Cash flows 2022 Cash flows 2023-
EUR million
Total contractual
cash flows
Fixed
rate
Variable
rate Re-payment Fixed rate Variable rate Re-payment Fixed rate Variable rate Re-payment
Non-derivative:
Loans from financial institutions
1
-66.3 - -0.6 -5.0 - -0.6 -5.0 - -0.1 -55.0
Loans from pension institutions
2
-11.8 -0.1 - -1.5 -0.1 - -1.5 -0.3 - -8.3
Lease liabilities -10.7 - - -3.4 - - -3.1 - - -4.1
Trade payables -29.6 - - -29.6 - - - - - -
Derivative:
Currency derivatives, hedge accounting
Inflow 28.9 - - 28.9 - - - - - -
Outflow -29.7 - - -29.7 - - - - - -
Currency derivatives, non-hedge accounting
Inflow 5.0 - - 5.0 - - - - - -
Outflow -5.2 - - -5.2 - - - - - -
Interest rate derivatives, hedge accounting -1.0 -0.4 - - -0.4 - - -0.1 - -
Commodity derivatives, hedge accounting -0.6 - - -0.3 - - -0.2 - - -0.1
TOTAL -120.9 -0.6 -0.6 -40.8 -0.5 -0.6 -9.9 -0.4 -0.1 -67.5
1
Loans from financial institutions mature 2022 and 2023
2
Loans from pension institutions mature 2028
Annual Report 202067
TABLE 4: MATURITIES OF FINANCIAL LIABILITIES
Contractual payments on financial liabilities 2019 Cash flows 2020 Cash flows 2021 Cash flows 2022-
EUR million
Total contractual
cash flows
Fixed
rate
Variable
rate Re-payment Fixed rate Variable rate Re-payment Fixed rate Variable rate Re-payment
Non-derivative:
Loans from financial institutions
1
-72.2 - -0.7 -5.0 - -0.7 -5.0 - -0.8 -60.0
Loans from pension institutions
2
-13.4 -0.1 - -1.5 -0.1 - -1.5 -0.4 - -9.8
Lease liabilities -10.5 - - -3.4 - - -3.0 - - -4.1
Trade payables -25.7 - - -25.7 - - - - - -
Derivative:
Currency derivatives, hedge accounting
Inflow 24.2 - - 24.2 - - - - - -
Outflow -24.6 - - -24.6 - - - - - -
Currency derivatives, non-hedge accounting
Inflow 3.9 - - 3.9 - - - - - -
Outflow -3.9 - - -3.9 - - - - - -
Interest rate derivatives, hedge accounting -1.2 -0.4 - - -0.4 - - -0.5 - -
Commodity derivatives, hedge accounting -0.3 - - -0.2 - - -0.1 - - -
TOTAL -123.8 -0.5 -0.7 -36.3 -0.5 -0.7 -9.6 -0.9 -0.8 -73.9
1
Loans from financial institutions mature 2022 and 2023
2
Loans from pension institutions mature 2028
Annual Report 202068
Credit risk
The objective of Altia’s credit risk management is to minimise the losses if one of the Group’s counterparties
fails to meet its obligations. The principles of credit risk management are described in the Group’s credit policy.
Credit risks are caused by a counterparty not fulfilling its contractual payment obligations or the
counterparty’s credit rating changing in a manner that affects the market value of the financial instruments
it has issued.
Due to the COVID-19 pandemic, Altia reviewed its credit risk more carefully in 2020. The maximum
amount of credit risk is equal to the carrying amount of the Group’s financial assets. No significant risk
concentrations relate to trade receivables. Historically the amount of overdue trade receivables have been
low and the amount of overdue receivables have not materially increased due to COVID-19. The aim is to
minimise credit risks by active credit management and by taking into account customers’ credit rating when
determining the payment term of invoices.
4.2. CAPITAL RISK MANAGEMENT
The target of Altia’s capital management is to secure an effective capital structure that supports the
profitable growth of the operations. The Board of Directors monitors the Group’s capital structure regularly.
Altia monitors its capital based on gearing (the ratio of interest-bearing net liabilities to equity). Interest-
bearing net liabilities consist of the borrowings and lease liabilities less cash and cash equivalents. The
current level of gearing is distinctly lower than the limit determined in the Group’s loan terms.
During the business cycle, the company’s net gearing is likely to fluctuate, and the objective is to retain a
sufficiently strong capital structure to secure the Group’s financing needs. At 31 December 2020 and 31
December 2019 the gearing ratio was as follows:
TABLE 5: GEARING
Gearing as of 31 December, EUR million 2020 2019
Borrowings 116.1 82.6
Lease liabilities 10.7 10.5
Cash and cash equivalents 130.7 64.2
Net debt -3.9 28.9
Total equity 156.3 151.2
GEARING AT 31 DECEMBER -2.5% 19.1%
5. Consolidation
5.1 GENERAL CONSOLIDATION PRINCIPLES
Consolidation
Consolidation, consolidation method and classification of
ownership interests depends on whether the Group has power to
control or jointly control the entity or have significant influence
or other interests in the entity. When the Group has power to
control the entity, it is consolidated as a subsidiary according
to principles described in Note 5.2. Subsidiaries. When the
Group has joint control or significant influence over an entity
but does not have power to control, entity is accounted for by
using the principles set in Note 5.3. Associated companies, joint
ventures and interests in joint operations. If the Group does
not have power to control nor significant influence in the entity,
its ownership interests are classified as Financial assets at fair
value through other comprehensive income and accounted for
according to principles described in Note 3.2.1.
Foreign currency items
The consolidated financial statements are presented in euro, which is the functional and
presentation currency of the parent company. Transactions in foreign currencies are translated
to euro at average foreign exchange rates published by the European Central Bank on banking
days. Monetary assets and liabilities denominated in foreign currencies at the reporting date
are translated to euro at the average exchange rates prevailing at that date. Foreign currency
differences arising on translation are recognised in profit or loss. Foreign exchange gains and losses
related to purchases and sales are recognised in the respective items and included in operating
result. Foreign currency gains and losses arising from loans denominated in foreign currencies are
recognised in finance income and expenses.
Income and expenses for the statements of comprehensive income of foreign subsidiaries that
operate outside the eurozone are translated using the average rates of the European Central
Bank’s exchange rates at the end of the month. The statements of financial position of foreign
subsidiaries are translated using the average exchange rates ruling at the reporting date. Foreign
currency differences arising on the translation of profit or loss for the period with different
exchange rates in the statement of comprehensive income and in the balance sheet are recognised
in other comprehensive income and included in translation differences in equity. Changes in
translation differences are recognised in other comprehensive income.
In the consolidated financial statements, exchange rate differences arising from the translation of
foreign currency denominated loans to foreign subsidiaries, which form a part of net investments
in foreign companies, are recognised in other comprehensive income and included in translation
differences within equity.
Translation differences arising from elimination of the cost of foreign subsidiaries and from
translation of the foreign subsidiaries’ post-acquisition profits and losses are recognised in other
comprehensive income and presented as a separate item within equity. Goodwill and the fair value
adjustments to the carrying amounts of assets and liabilities of foreign units are accounted for as
assets and liabilities of the respective foreign units, which are translated to euro at the exchange
rates prevailing at the reporting date. If these foreign units are entirely or partly disposed of, related
exchange rate differences are recognised in profit or loss as part of the gain or loss on disposal.
5.2. SUBSIDIARIES
Subsidiaries consolidation principles
Consolidated financial statements of Altia include the parent company, Altia Plc, and all subsidiaries.
Subsidiaries are all those in which the parent company exercises control. The Group controls an entity
when it is exposed, or has rights, to variable returns from its involvement with the investee and has
the ability to affect those returns through its power over the investee. The financial statements of
acquired subsidiaries are included in the consolidated financial statements from the date that control
commences until the date that control ceases.
All business combinations are accounted for by using the acquisition method. The consideration
transferred and the identifiable assets acquired and liabilities assumed in the acquired company are
measured at fair value at the acquisition date. The amount exceeding the aggregate of the consideration
transferred, the amount of non-controlling interests and any previously held equity interest in the
acquiree, over the fair value of the net assets acquired is recorded as goodwill.
All acquisition-related costs, with the exception of costs to issue debt or equity securities, are
expensed. The consideration transferred does not include any transactions accounted for separately
from the acquisition. Any contingent consideration is recognised at fair value at the acquisition date and
it is classified as either liability or equity. Contingent consideration classified as a liability is measured at
fair value at each reporting date and any resulting gain or loss is recognised in profit or loss.
Intra-group transactions, receivables, liabilities and unrealised gains, as well as the distribution of
profits within the Group are eliminated in preparing the consolidated financial statements. Unrealised
losses are not eliminated if the loss in question results from impairment.
The Group had no non-controlling interests at 31 December 2020 or 31 December 2019.
Annual Report 202070
Altia Plc had 12 subsidiaries at the end of the reporting period (23 subsidiaries at 31 December 2019). In
order to simplify the Group structure, Altia Oyj’s Finnish subsidiaries A-Beverages Oy, Alpha Beverages
Oy, ExCellar Oy, Harald Zetterström oy /ab and Prime Wines Oy were merged to Altia Oyj and all
Swedish subsidiaries Altia Holding Sweden AB, Altia Sweden Services AB, BevCo AB, Bibendum AB,
Philipson&Söderberg AB and Vinuversum AB to Altia Sweden AB as of 30 April 2020.
Parent company's
share of
ownership (%)
Group's share of
ownership (%)
Country of
incorporation
Altia Eesti AS 100.00 100.00 Estonia
Altia Denmark A/S 100.00 100.00 Denmark
SIA Altia Latvia 100.00 100.00 Latvia
Altia Norway AS 100.00 100.00 Norway
Altia Sweden AB 100.00 100.00 Sweden
Best Buys International AS 100.00 100.00 Norway
Bibendum AS 100.00 100.00 Norway
Interbev AS 100.00 100.00 Norway
Larsen SAS 100.00 100.00 France
Premium Wines AS 100.00 100.00 Norway
Ström AS 100.00 100.00 Norway
Oy Wennerco Ab 100.00 100.00 Finland
5.3. ASSOCIATED COMPANIES AND JOINT ARRANGEMENTS
Associated companies
Associated companies are all entities over which the Group accompanies a shareholding of over 20%
of voting rights or otherwise has significant influence, but not control. Altia has an investment in an
associated company Palpa Lasi Oy.
Associated companies are consolidated by using the equity method. Under the equity method,
the investment is initially recognised at cost and subsequently adjusted with the change in the net
assets of the investee after the acquisition date, consistent with the ownership interest of the Group.
After the acquisition the Group’s share in the associated company’s profit and loss for the period
is separately disclosed after operating result. If the Group’s share in the associated company’s loss
exceeds the carrying amount of the investment, the investment is recognised at zero value in the
consolidated balance sheet and the loss exceeding the carrying amount is not consolidated, unless
the Group has committed to fulfil the company’s obligations. An investment in an associated company
includes goodwill arisen on acquisition. The Group’s share in changes in the associated company’s other
comprehensive income is recognised in consolidated other comprehensive income.
Results from the transactions between the Group and its associates are recognised only to the
extent of unrelated investor’s interests in the associates. The Group determines at each reporting date
whether there is any objective evidence that the investment in the associate is impaired. In case of such
indications, the Group calculates the amount of impairment as the difference between the recoverable
amount of the associate and its’ carrying value. The impairment is recognised in share of results in
associated companies.
Financial statements of associated companies have been changed where necessary to correspond
with the accounting policies adopted by the Group. If financial statements for the period are not
available, the share of the profit is included in the consolidated financial statements based on the
preliminary financial statements or latest available information.
Annual Report 202071
Joint arrangements
A joint arrangement is an arrangement of which two or more parties have contractually agreed joint
control which exists only when decisions about the relevant activities require the unanimous consent of
the parties sharing control. A joint arrangement is either a joint operation or a joint venture.
Altia has an interest through a receivable in Roal Oy based on the contractual relationship with the
other party to the joint operation. The interest in Roal Oy is accounted for as a joint operation.
Joint ventures are consolidated by using the equity method. Altia has an investment in a joint venture
Von Elk Company.
ASSOCIATED COMPANIES AND JOINT ARRANGEMENTS
2020
Share of
ownership %
2019
Share of
ownership %
Roal Oy, Finland 50.00 50.00
Palpa Lasi Oy, Finland 25.53 25.53
Von Elk Company Oy, Finland 20.00 20.00
Roal Oy engages enzyme business. The joint operation’s other owner is ABF Overseas Ltd.
Altia has joint control over Roal but the option right held by the other shareholder represents in substance
a receivable with a fixed rate of return and Altia does not have a right to 50% of the net assets until the
option lapses. Accordingly, the interest is classified as a joint operation with Altia accounting for its share of
assets as a receivable with the annual minimum dividend accounted for as interest income. The receivable
amounted to EUR 7.6 million as at 31 December 2020 and 31 December 2019.
Palpa Lasi Oy engages in the recycling and re-use of glass beverage packages.
Von Elk Company is a Finnish family enterprise which engages in alcoholic beverage business.
INVESTMENTS IN ASSOCIATED COMPANIES AND JOINT VENTURES
EUR million 2020 2019
At the beginning of the period 1.2 0.3
Additions - 0.2
Share of result for the period 0.3 0.7
At the end of the reporting period 1.5 1.2
FINANCIAL SUMMARY OF ASSOCIATED COMPANIES AND JOINT VENTURES
EUR million 2020 2019
Assets 8.7 8.8
Liabilities 3.3 4.9
Net assets 5.4 3.9
Net sales 16.4 18.5
Result for the period 1.3 2.6
Related party transactions with associated companies and joint arrangements are presented in Note 6.3.
Annual Report 202072
6. Other notes
6.1. INCOME TAX EXPENSE
Income tax expense
The Group’s income tax expense recognised through profit or loss
comprises current tax based on taxable income for the period,
any adjustments to tax payable in respect of previous periods and
deferred taxes. Current income tax based on taxable income is
calculated according to the local tax regulations of each Group
company.
Tax effects related to transactions or other events recognised
in profit or loss are recognised in profit or loss. If the taxes relate
to items of other comprehensive income or transactions or
other events recognised directly in equity, income tax expense
is recognised within the respective items. The Group’s share
of profit or loss in associated companies and joint ventures is
reported as calculated from the net profit and thus including the
income tax effect.
Deferred tax assets and liabilities are principally recognised
for all temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and
the amounts used for taxation purposes. The most significant
temporary differences arise from property, plant and equipment
Annual Report 202074
and intangible assets, carry forward of unused tax losses and fair value allocations on business
combinations. Deferred tax assets are recognised only to the extent that it is probable that future
taxable profits will be available against which they can be utilised. Deferred tax liabilities are recognised
in full. Deferred taxes are calculated using tax rates enacted or substantively enacted at the end of the
reporting period. Deferred tax is recognised for foreign subsidiaries undistributed earnings only when
related tax effects are probable.
Deferred tax assets and liabilities are set off when they are levied by same taxing authority and Altia
has legally enforceable right to set off the balances.
Critical estimates and management judgements – Deferred tax assets
Judgment is required in assessing whether deferred tax assets are recognised on the balance sheet.
Deferred tax assets are recognised only where it is considered more likely than not that they will be
recovered, which is dependent on the generation of sufficient future taxable profits. Assumptions
about the generation of future taxable profits depend on management’s estimates of future cash
flows. These future cash flow estimates depend on estimates of future sales volumes, price levels of
main raw materials, capital expenditure and other components affecting profitability of the operations.
These estimates and assumptions are subject to risk and uncertainty, hence it is possible that
changes in circumstances will alter expectations, which may impact the amount of deferred tax assets
recognised on the balance sheet and the amount of any other tax losses and temporary differences
not yet recognised. Altia’s ability to generate taxable profit is also subject to general economic,
financial, competitive, legislative and regulatory factors that are beyond its control. If Altia generates
lower future taxable profits than what management has assumed in determining the amounts of the
recognised deferred tax assets, the assets would become impaired, either partly or in full. Accordingly,
amounts recognised in balance sheet could potentially be reversed through profit and loss. Changes in
circumstances may also result in recognition of deferred tax assets for tax losses not yet recognised as
an asset.
Uncertain tax positions
The tax positions are evaluated in periodically by the management to identify the situations in which tax
regulation is subject to interpretation. Based on the evaluation uncertain tax positions are recognized
when it is more likely than not that certain tax position will be challenged by tax authorities. The impact
of the uncertainty is measured using either the most likely amount or the expected value method,
depending on which method better predicts the resolution of the uncertainty.
INCOME TAX EXPENSE
EUR million 2020 2019
Current income tax expense 4.4 5.3
Adjustments to taxes for prior periods -0.0 0.7
Deferred taxes:
Origination and reversal of temporary differences -0.8 0.2
Impact of changes in tax rates -0.1 -
TOTAL 3.5 6.2
The reconciliation of the tax expense recognised in profit and loss and the tax expense calculated using Altia
Group's domestic corporate tax rate (20.0%):
EUR million 2020 2019
Result before taxes 21.3 24.6
Income tax using the parent company’s tax rate 4.3 4.9
Effect of tax rates of subsidiaries in foreign jurisdictions -0.0 -0.0
Tax-exempt income -0.2 -0.2
Non-deductible expenses 0.1 0.2
Adjustments to taxes for prior periods -0.0 0.7
Share of profit in associated companies, net of tax -0.1 -0.1
Effect of changes in tax rates -0.1 -
Tax on undistributed earnings 0.1 0.1
Other items -0.6 0.6
TAX EXPENSE IN PROFIT OR LOSS 3.5 6.2
Annual Report 202075
INCOME TAX RECOGNISED IN OTHER COMPREHENSIVE INCOME
2020
EUR million Before tax Tax Net of tax
Cash flow hedges 0.2 -0.0 0.2
Translation differences 1.8 - 1.8
Remeasurements of post-employment benefit obligations 0.2 -0.0 0.2
TOTAL 2.3 -0.1 2.2
2019
EUR million Before tax Tax Net of tax
Cash flow hedges -1.3 0.3 -1.0
Translation differences -2.4 - -2.4
Remeasurements of post-employment benefit obligations -0.2 0.0 -0.2
TOTAL -3.9 0.3 -3.6
Annual Report 202076
DEFERRED TAX ASSETS AND LIABILITIES
Change in deferred tax assets and liabilities during 2020:
EUR million 1 Jan 2020
Recognised in
profit or loss
Recognised in other
comprehensive income
Exchange rate
differences 31 Dec 2020
Deferred tax assets:
Tax losses 0.0 0.6 - 0.0 0.6
Fixed assets 1.7 -0.3 - -0.0 1.3
Pension benefits 0.3 -0.0 -0.0 -0.0 0.2
Internal margin of inventories 0.1 -0.0 - 0.0 0.1
Recognised in hedge reserve 0.3 - -0.0 0.0 0.2
Other temporary differences 0.2 0.0 - -0.0 0.2
Total deferred tax assets 2.5 0.3 -0.1 -0.0 2.7
Offset against deferred tax liabilities -1.6 -1.3
Net deferred tax assets 0.9 1.4
Deferred tax liabilities:
Fixed assets 5.2 -0.6 - 0.0 4.6
Fair value allocation on acquisitions 1.7 -0.3 - 0.1 1.4
Deductable goodwill depreciation 9.6 0.0 - 0.2 9.9
Undistributed profits of foreign subsidiaries 1.8 0.1 - - 1.9
Other temporary differences 0.0 0.2 - - 0.2
Total deferred tax liabilities 18.3 -0.6 - 0.3 18.0
Offset against deferred tax assets -1.6 -1.3
Net deferred tax liabilities 16.7 16.8
Annual Report 202077
Change in deferred tax assets and liabilities during 2019:
EUR million 1 Jan 2019
Recognised in
profit or loss
Recognised in other
comprehensive income
Exchange rate
differences 31 Dec 2020
Deferred tax assets:
Tax losses 0.1 -0.1 - 0.0 0.0
Fixed assets 2.0 -0.3 - 0.0 1.7
Pension benefits 0.3 -0.0 0.0 0.0 0.3
Provisions 0.1 -0.1 - - 0.0
Internal margin of inventories 0.1 0.0 - -0.0 0.1
Recognised in hedge reserve 0.0 - 0.2 -0.0 0.3
Other temporary differences 0.1 0.1 - 0.0 0.2
Total deferred tax assets 2.7 -0.5 0.3 0.0 2.5
Offset against deferred tax liabilities -1.9 -1.6
Net deferred tax assets 0.8 0.9
Deferred tax liabilities:
Fixed assets 5.2 -0.0 - -0.0 5.2
Recognised in hedge reserve 0.0 - -0.0 0.0 0.0
Fair value allocation on acquisitions 2.1 -0.4 - -0.0 1.7
Deductable goodwill depreciation 9.7 0.0 - -0.1 9.6
Undistributed profits of foreign subsidiaries 1.7 0.1 - - 1.8
Other temporary differences 0.0 - - - 0.0
Total deferred tax liabilities 18.8 -0.3 -0.0 -0.1 18.3
Offset against deferred tax assets -1.9 -1.6
Net deferred tax liabilities 16.8 16.7
At 31 December 2020, the Group had EUR 1.0 million (2019: EUR 1.6 million) of tax loss carry forwards for
which no deferred tax was recognised. EUR 0.9 million of these temporary differences expire in two years.
Altia management estimates these losses arise in subsidiaries which have neither indication of future taxable
income nor other convincing evidence that tax losses can be utilised and deferred tax asset be recognised in
balance sheet.
Altia Oyj’s fully owned French subsidiary Larsen SAS has been undergoing a regular audit by the local tax
authorities. In December 2019 the company received the tax assessment decision regarding the outcome
of the audit resulting in a tax claim amounting to EUR 1.1 million relating to the mark-up used in the transfer
pricing for products sold to other Group companies. Based on the tax assessment the company has accrued
for the tax claim in the 2019 financial statements.
Altia Group has however submitted its counter arguments against the claim and case is still ongoing.
Should the French authorities maintain its position, Altia Group will proceed through the Mutual
Agreement Procedure (MAP) with the aim to eliminate a potential double taxation related to the increased
mark-up in France which is to be deducted in the tax jurisdictions where the Altia Group companies buying
the products have been operating. Altia has recorded a EUR 0.4 million tax receivable in respect of the
potential MAP application.
Annual Report 202078
6.2. COLLATERALS, COMMITMENTS AND
CONTINGENT ASSETS AND LIABILITIES
EUR million 2020 2019
Collaterals and commitments
Collaterals given on behalf of Group companies
Mortgages 18.5 18.5
Guarantees 3.8 5.9
TOTAL COLLATERALS 22.3 24.4
Commitments
Short-term and low value lease obligations
Less than one year 0.1 0.2
Between one and five years 0.1 0.1
Total short-term and low value lease obligations 0.2 0.3
Other commitments 19.1 20.8
TOTAL COMMITMENTS 19.4 21.1
Collaterals given on behalf of Group companies all relate to commitments to authorities.
Short-term and low value obligations consists mainly of laptops.
Other commitments include mainly purchase obligations of wine and cognac.
Assets not recognized in the balance sheet, emission allowances
The Group participates in the European Union emission trading scheme, where it has been
granted a certain number of carbon dioxide emission allowances for a certain period of time, free
of charge. Altia Plc discloses its carbon dioxide emission allowances granted free of charge on net
basis. Following from this, the Group does not recognise in the balance sheet the granted emission
allowances, nor the obligation to deliver allowances corresponding to the realised emissions. The
Group does not recognise income or expenses arising from emission allowances through profit
or loss when the emission allowances granted are sufficient to cover the obligation to deliver
allowances corresponding to the amount of emissions made. If the realised emissions exceed the
granted emission allowances, the obligation arising from the excess emissions is recognised at fair
value as a liability in the balance sheet at the reporting date. If the realised emissions fall below the
granted emission allowances, the difference is not recognised in the balance sheet but it is disclosed
in the notes to the financial statements, measured at fair value.
Altia´s actual emissions are below the emission allowances granted. The following table presents changes
in allowances for financial years 2020 and 2019, as well as their fair values:
Emission allowances, kilotons 2020 2019
Emission allowances received 26.4 26.4
Excess emission allowances from the previous period 4.0 30.6
Adjustments related to prior year's estimates - -0.0
Sold emission allowances - -33.0
Realised emissions -19.6 -20.0
EMISSION ALLOWANCES AT 31 DECEMBER 10.9 4.0
Fair value of emission allowances at 31 December, EUR million 0.3 0.1
The emission allowances received during year 2020 and the realised emissions are estimates, which will
be adjusted during the spring 2021. Altia continues to operate within the emission trading system for the
trading period 2021–2030.
Annual Report 202079
6.3. RELATED PARTY TRANSACTIONS
The Company's related parties include the subsidiaries, associated companies, joint ventures and joint
operations. The subsidiaries are presented in Note 5.2 and associated companies, joint ventures and joint
operations in Note 5.3. Related party transactions include such operations that are not eliminated in the
Group´s consolidated financial statements.
Related party also include the Board of Directors, the CEO, the members of the Executive Management
Team and their family members as well as entities controlled or jointly controlled by these persons. Also,
entities that are controlled or jointly controlled by, or are associates of the State, are related parties of Altia.
Altia has applied the exemption to report only material transactions with the government related entities.
Transactions with related parties are entered into on market terms. Altia has related party transactions on
a continuous basis with its major customer Alko. Transactions with Alko have been presented below under
Other companies considered related parties.
THE FOLLOWING TRANSACTIONS HAVE TAKEN PLACE WITH RELATED PARTIES
EUR million 2020 2019
Sales of goods and services
Associates, joint ventures and joint operations 1.0 0.8
Other companies considered related parties 83.1 76.5
TOTAL 84.0 77.3
Purchases of goods and services
Associates, joint ventures and joint operations 1.7 1.9
Other companies considered related parties 1.7 1.2
TOTAL 3.4 3.2
Outstanding balances from sales and purchases of goods and services
Receivables
Other companies considered related parties 0.9 0.9
Payables
Associates, joint ventures and joint operations 0.5 0.2
Other companies considered related parties 0.2 0.1
MANAGEMENT REMUNERATION
EUR million 2020 2019
CEO
Salaries and other short-term employee benefits 0.3 0.3
Performance bonus and the bonuses from long-term incentive plan 0.3 -
Pension benefits 0.1 0.1
TOTAL 0.7 0.4
Members of the Executive Management Team (CEO not included)
Salaries and other short-term employee benefits 1.5 1.2
Bonuses from long-term incentive plan 0.1 -
Pension benefits 0.3 0.2
TOTAL 1.9 1.4
Members and deputy members of the Board of Directors 0.4 0.3
No monetary loans have been granted to the CEO or the members of the Board of Directors, nor any
collaterals or commitments granted on their behalf.
The retirement age of the CEO of the parent company is 63 years.
Annual Report 202080
6.4. SHARE-BASED PAYMENTS
The Group has share-based incentive plan which is settled in shares and in cash. The granted shares are
measured at fair value at a grant date and are recognized as personnel expenses over the vesting period
with corresponding increase in equity. Non-market conditions are not included in fair value of share-
based instruments but in the number of instruments that are expected to vest. At each reporting period
closing date, the estimates about number of instruments are revised and the impact is recognized in
income statement. Also share-based payments to be paid in cash are classified as paid by equity and
recognized in equity measured at fair value at grant date.
The Board of Directors of Altia Plc decided on the establishment of a share-based long-term incentive
scheme for the management and key employees of Altia Group 2019. The objectives of the share-based
long-term incentive scheme are to align the interests of Altia’s management and key employees with those
of the Company’s shareholders and, thus, to promote shareholder value creation in the long term, and to
commit the management and key employees to achieving Altia’s strategic targets as well as the retention of
Altia’s valuable key resources.
PSP 2019-2021 performance period started in the beginning of 2019 and the potential share reward will
be paid in spring 2022 in Altia shares. The performance targets based on which the potential share reward
under PSP 2019-2021 will be paid are the relative total shareholder return (relative TSR) of Altia’s share and
earnings per share (EPS). Approximately 20 individuals are included into the plan.
If all the performance targets set for PSP 2019–2021 are fully achieved, the aggregate maximum number
of shares to be paid based on the plan is approximately 250 000 Altia shares. This number of shares
represents a gross earning, from which the applicable payroll tax is withheld, and the remaining net value is
paid to the participants in shares.
The combined amount of variable compensation paid to an individual participant any given year, including
the long-term incentive scheme and the short-term incentive scheme, may not exceed 120% of the
individual's annual gross base salary.
If the individual’s employment with Altia Group terminates before the payment date of the share reward,
the individual is, as a main rule, not entitled to any reward based on the plan.
Altia applies a share ownership recommendation to the members of its Executive Management Team.
According to this recommendation each member of the Executive Management Team is expected to retain in
his/her ownership at least half of the net shares received under the share-based incentive schemes of Altia
until the value of his/her share ownership in Altia corresponds to at least his/her annual gross base salary.
The Board of Directors of Altia Plc has decided on a new earning period in the share-based long-term
incentive scheme for the management and key employees of Altia Group. The objectives of the share-based
long-term incentive scheme are to align the interests of Altia’s management and key employees with those
of the Company’s shareholders and, thus, to promote shareholder value creation in the long term, and to
commit the management and key employees to achieving Altia’s strategic targets as well as the retention of
Altia’s valuable key resources.
PSP 2020-2022 performance period started in the beginning of 2020 and the potential share reward will
be paid in spring 2023 in Altia shares. The performance targets based on which the potential share reward
under PSP 2020-2022 will be paid are the relative total shareholder return (relative TSR) of Altia’s share and
earnings per share (EPS). Approximately 25 individuals are included into the plan.
If all the performance targets set for PSP 2020–2022 are fully achieved, the aggregate maximum number
of shares to be paid based on the plan is approximately 271 000 Altia shares. This number of shares
represents a gross earning, from which the applicable payroll tax is withheld and the remaining net value is
paid to the participants in shares.
The combined amount of variable compensation paid to an individual participant any given year, including
the long-term incentive scheme and the short-term incentive scheme, may not exceed 120% of the
individual' annual gross base salary.
If the individual’s employment with Altia Group terminates before the payment date of the share reward,
the individual is, as a main rule, not entitled to any reward based on the plan.
Altia applies a share ownership recommendation to the members of its Executive Management Team.
According to this recommendation each member of the Executive Management Team is expected to retain in
his/her ownership at least half of the net shares received under the share-based incentive schemes of Altia
until the value of his/her share ownership in Altia corresponds to at least his/her annual gross base salary.
Annual Report 202081
The following tables summarize the terms and assumptions used in accounting for share-based incentives
during the period 1.1.2020-31.12.2020:
Plan Long-term incentive Plan
2019-2024
Long-term incentive Plan
2019-2024
Type share share
Instrument Performance period 2020-2022 Performance period 2019-2021
Grant date 21/02/2020 28/02/2019
Beginning of earning period 01/01/2020 01/01/2019
End of the earning period 31/12/2022 31/12/2021
Vesting date 31/03/2023 31/03/2022
Vesting conditions Relative TSR and EPS Relative TSR and EPS
Maximum contractual life, years 3.25 3.25
Remaining contractual life, years 2.25 1.25
Number of persons at the end of reporting year 21 17
Payment method Cash and equity Cash and equity
Changes during period Performance period 2020-2022 Performance period 2019-2021
Outstanding in the beginning of the period - 219,000
Granted during the period 251,000 -
Forfeited during the period 17,500 17,500
Outstanding at the end of the period 233,500 201,500
Fair-value determination, valuation parameters
for instruments granted during the period
Share price at grant, € 8.56
Share price at the reporting period end, € 9.98
Expected dividends, € 1.76
Risk free rate, % -0.01
Fair value, € 728,514
EFFECT OF SHARE -BASED INCENTIVES ON THE RESULT:
EUR million 2020 2019
Expenses for the financial year, share based payments paid in equity 0.1 0.0
Expenses for the financial year, share based payments paid in cash 0.2 0.1
Total 0.3 0.1
6.5. ADOPTION OF NEW OR AMENDED IFRS STANDARDS AND
INTERPRETATIONS
Altia has adopted following new accounting standards issued by the International Accounting Standards
Board effective on January 1, 2020:
Amendments to IFRS 3 Business Combinations: The amended definition of a business requires an
acquisition to include an input and a substantive process that together significantly contribute to the ability
to create outputs. The definition of the term ‘outputs’ is amended to focus on goods and services provided
to customers, generating investment income and other income, and it excludes returns in the form of lower
costs and other economic benefits.
Amendments to IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors which use a consistent definition of materiality throughout International
Financial Reporting Standards and the Conceptual Framework for Financial Reporting, clarify when
information is material and incorporate some of the guidance in IAS 1 about immaterial information. The
amendments have no impact on the consolidated financial statements.
Temporary amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark Reform
The IASB has amended the hedge accounting requirements in IFRS 9 and IAS 39, and the related standard
for disclosures, IFRS 7. The amendments modify some specific hedge accounting requirements to provide relief
from potential effects of the uncertainty caused by the IBOR reform. In addition, the amendments require
companies to provide additional information to investors about their hedging relationships which are directly
affected by these uncertainties. The amendments have no impact on the consolidated financial statements.
Amendment to IFRS 16 Leases Covid-19-Related Rent Concessions: The amendment introduces an optional
practical expedient that simplifies how a lessee accounts for rent concessions that are a direct consequence
of the COVID-19 pandemic. A lessee that applies the practical expedient is not required to assess whether
eligible rent concessions are lease modifications when the criteria presented in the amendment are met. The
amendment does not have a significant impact on the consolidated financial statements.
In 2021 or later, the Group will adopt the following new or amended standards issued by the International
Accounting Standards Board:
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase
2: The IASB has issued amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 that address issues
arising during the reform of benchmark interest rates including the replacement of one benchmark rate
with an alternative one. Given the pervasive nature of IBOR-based contracts, the amendments could
affect companies in all industries. The amendments are not expected to have a significant impact on the
consolidated financial statements.
Annual Report 202082
IFRS 17 Insurance Contracts (Originally 1 January 2021,but extended to 1 January 2023) IFRS 17 was
issued in May 2017 as replacement for IFRS 4 Insurance Contracts. It requires a current measurement
model where estimates are re-measured in each reporting period. The overall objective is to provide a
consistent accounting model for insurance contracts. The amendments are not expected to have a significant
impact on the consolidated financial statements.
Classification of Liabilities as Current or Non-current – Amendments to IAS 1:
The narrow-scope amendments to IAS 1 Presentation of Financial Statements clarify that liabilities are
classified as either current or non-current, depending on the rights that exist at the end of the reporting
period. Classification is unaffected by the expectations of the entity or events after the reporting date (eg
the receipt of a waiver or a breach of covenant). The amendments also clarify what IAS 1 means when it
refers to the ‘settlement’ of a liability. The amendments are not expected to have a significant impact on the
consolidated financial statements.
Property, Plant and Equipment: Proceeds before intended use – Amendments to IAS 16: The amendment
to IAS 16 Property, Plant and Equipment (PP&E) prohibits an entity from deducting from the cost of an
item of PP&E any proceeds received from selling items produced while the entity is preparing the asset for
its intended use. It also clarifies that an entity is ‘testing whether the asset is functioning properly’ when it
assesses the technical and physical performance of the asset. The financial performance of the asset is not
relevant to this assessment.
Entities must disclose separately the amounts of proceeds and costs relating to items produced that are
not an output of the entity’s ordinary activities. The amendments are not expected to have a significant
impact on the consolidated financial statements.
Reference to the Conceptual Framework – Amendments to IFRS 3: Minor amendments were made to IFRS
3 Business Combinations to update the references to the Conceptual Framework for Financial Reporting
and add an exception for the recognition of liabilities and contingent liabilities within the scope of IAS 37
Provisions, Contingent Liabilities and Contingent Assets and IFRIC 21 Levies. The amendments also confirm
that contingent assets should not be recognised at the acquisition date. These updates do not change the
accounting requirements for business combinations. The amendments are not expected to have a significant
impact on the consolidated financial statements.
Onerous Contracts – Cost of Fulfilling a Contract Amendments to IAS 37: The amendment to IAS 37
clarifies that the direct costs of fulfilling a contract include both the incremental costs of fulfilling the contract
and an allocation of other costs directly related to fulfilling contracts. Before recognising a separate provision
for an onerous contract, the entity recognises any impairment loss that has occurred on assets used in
fulfilling the contract. The amendments are not expected to have a significant impact on the consolidated
financial statements.
6.6. EVENTS AFTER THE REPORTING PERIOD
On 8 January 2021, it was announced that the Finnish Competition and Consumer Authority has moved its
investigation of the combination of Altia and Arcus into phase II.
On 21 January 2021, the proposals by Altia’s Shareholders’ Nomination Board to Altia’s Annual General
Meeting 2021 on the number of members, composition and remuneration of the Board of Directors were
announced.
Annual Report 202083
Parent Company Financial Statements
EUR million Note
1 Jan - 31 Dec
2020
1 Jan - 31 Dec
2019
NET SALES 1. 197.4 208.7
Increase (+) / decrease (–) in inventories of finished goods and work in progress 3.2 -1.8
Other operating income 2. 13.9 18.4
Materials and services
Raw materials, consumables and goods
Purchases during the period -114.5 -121.2
Change in inventories 0.1 -3.9
External services -0.1 -0.1
Total materials and services -114.4 -125.1
Personnel expenses 3.
Wages and salaries -25.7 -22.5
Indirect employee expenses
Pension expenses -4.7 -6.0
Other indirect employee expenses -0.9 -0.7
Total personnel expenses -31.3 -29.2
Depreciation, amortisation and impairment losses
Depreciation and amortisation according to plan -11.9 -11.8
Total depreciation, amortisation and impairment losses -11.9 -11.8
Other operating expenses 4. -50.4 -46.2
OPERATING RESULT 6.4 13.0
EUR million Note
1 Jan - 31 Dec
2020
1 Jan - 31 Dec
2019
Finance income and expenses
5.
Income from Group companies - 27.7
Income from participating interests 0.9 0.9
Income from other investments held as non-current assets
From others 0.2 -
Other interest and finance income
From Group companies 0.2 0.3
From others than Group companies 0.1 3.0
Interest and other finance expenses
To Group companies -0.1 -0.2
To others than Group companies -2.7 -4.7
Total finance income and expenses -1.4 26.9
RESULT BEFORE APPROPRIATIONS AND TAXES 5.0 39.9
Appropriations
6.
Depreciation difference increase (–) /decrease (+) 2.1 1.1
Income tax expense
7.
Current period taxes -1.3 -2.4
Deferred taxes -0.0 -0.1
Other direct taxes 0.0 0.1
Total income taxes -1.3 -2.5
RESULT FOR THE PERIOD 5.9 38.6
ALTIA PLC INCOME STATEMENT (FAS)
Annual Report 202084
EUR million Note 31 Dec 2020 31 Dec 2019
ASSETS
NON-CURRENT ASSETS
8.
Intangible assets
Intangible rights 6.8 10.0
Goodwill 0.3 -
Other capitalised long-term expenditure 5.7 6.2
Prepayments 1.4 2.0
Intangible assets total 14.1 18.1
Tangible assets
Land and water areas 2.4 2.4
Buildings and structures 19.9 21.0
Machinery and equipment 24.6 26.1
Other tangible assets 0.5 0.5
Prepayments and assets under construction 2.6 1.5
Tangible assets total 50.1 51.6
Investments
Holdings in Group companies 196.5 206.8
Participating interests 8.2 8.2
Other shares and investments 0.8 0.8
Investments total 205.6 215.9
TOTAL NON-CURRENT ASSETS 269.8 285.6
EUR million Note 31 Dec 2020 31 Dec 2019
CURRENT ASSETS
Inventories
9.
Materials and supplies 18.1 17.9
Work in progress 9.6 10.3
Finished goods 13.8 9.8
Advance payments 0.0 0.1
Inventories total 41.5 38.1
Non-current receivables
10.
Receivables from Group companies 5.9 14.8
Deferred tax assets 0.5 0.6
Non-current receivables total 6.3 15.4
Current receivables
11.
Trade receivables 19.4 26.7
Receivables from Group companies 9.7 113.0
Receivables from participating interest undertakings 0.1 0.1
Other receivables - 0.0
Accrued income and prepaid expenses 3.2 3.2
Current receivables total 32.4 143.1
Cash at hand and in banks 129.2 61.0
TOTAL CURRENT ASSETS 209.4 257.6
TOTAL ASSETS 479.2 543.2
ALTIA PLC BALANCE SHEET (FAS)
Annual Report 202085
EUR million Note 31 Dec 2020 31 Dec 2019
EQUITY AND LIABILITIES
Equity
13.
Share capital
60.5 60.5
Invested unrestricted equity fund
1.2 1.2
Hedge reserve
-0.6 -0.9
Retained earnings
80.5 57.1
Profit for the period
5.9 38.6
TOTAL EQUITY 147.5 156.6
Appropriations
14.
Depreciation difference
18.3 20.5
Liabilities
Non-current
15.
Loans from financial institutions
60.0 65.0
Loans from pension institutions
9.8 11.3
Liabilities to Group companies
- 2.0
Other liabilities
4.9 4.9
Non-current liabilities total 74.7 83.2
Current
Loans from financial institutions
45.0 5.0
Loans from pension institutions
1.5 1.5
Trade payables
13.2 13.1
Liabilities to Group companies
16. 110.6 208.4
Other liabilities
44.1 37.2
Accrued expenses and deferred income
17. 24.2 17.8
Current liabilities total 238.7 283.0
TOTAL LIABILITIES 313.3 366.2
TOTAL EQUITY AND LIABILITIES 479.2 543.2
ALTIA PLC BALANCE SHEET (FAS)
Annual Report 202086
EUR million Note
1 Jan - 31 Dec
2020
1 Jan - 31 Dec
2019
CASH FLOW FROM OPERATING ACTIVITIES
Result before taxes 7.2 41.0
Adjustments
Depreciation, amortisation and impairment 11.9 11.8
Gain/loss from disposal of property, plant and equipment and intangible assets - -0.0
Finance income and costs 1.4 -26.9
Change in depreciation difference -2.1 -1.1
Other adjustments 0.2 -0.5
11.4 -16.7
Change in working capital
Change in inventories, increase (-) / decrease (+) -2.5 5.6
Change in trade and other receivables, increase (-) / decrease (+) 6.8 -0.1
Change in trade and other payables, increase (+) / decrease (-) 12.6 1.3
Change in working capital 16.9 6.7
Interest paid -1.5 -1.5
Interest received 0.3 0.5
Other finance income and expenses paid -1.2 -0.6
Income taxes paid -3.0 -0.9
Financial items and taxes -5.4 -2.5
NET CASH FLOW FROM OPERATING ACTIVITIES 30.0 28.6
CASH FLOW FROM INVESTING ACTIVITIES
Payments for property, plant and equipment and intangible assets -6.1 -5.9
Proceeds from sale of property, plant and equipment and intangible assets
2.
- 0.0
Investments in participating interest companies - -0.2
Repayment of loan receivables 9.0 1.0
Dividends received
5.
1.1 0.9
NET CASH FLOW FROM INVESTING ACTIVITIES 3.9 -4.2
ALTIA PLC STATEMENT OF CASH FLOWS (FAS)
EUR million Note
1 Jan - 31 Dec
2020
1 Jan - 31 Dec
2019
CASH FLOW FROM FINANCING ACTIVITIES
Changes in commercial paper program 40.0 -
Proceeds from current borrowings 16. 17.9 17.9
Repayment of current borrowings 16. -2.0 -1.6
Repayment of non-current borrowings 15. -6.5 -6.5
Dividends paid and other distributions of profits 13. -15.2 -13.7
Group contributions paid - -0.0
NET CASH FLOW FROM FINANCING ACTIVITIES 34.2 -3.9
CHANGE IN CASH AND CASH EQUIVALENTS 68.1 20.5
Cash and cash equivalents at the beginning of the period 61.0 40.6
Change in cash and cash equivalents 68.1 20.5
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 129.2 61.0
Annual Report 202087
NOTES TO ALTIA PLC FINANCIAL STATEMENTS
Accounting policies for financial statements
The financial statements of the parent company are prepared in accordance with the Finnish accounting
legislation.
NON-CURRENT ASSETS AND DEPRECIATIONS
Non-current assets are recognised in the balance sheet at acquisition cost less depreciations. The
depreciation periods for non-current assets are:
Trademarks 10–15 years
IT- development and software 3–5 years
Buildings and structures 10–40 years
Machinery and equipment 10 years
Other tangible assets 3–10 years
Holdings in Group companies and other shares and investments included in non-current assets are
measured at acquisition cost or fair value, if lower.
INVENTORIES
Inventories are measured at the lower of cost and net realisable value. Self-manufactured products are
measured at standard prices, except cognac products, which are measured at weighted average cost. Fixed
production costs are allocated to the cost of own production. Raw materials, supplies and trading goods are
measured at weighted average cost. Repacked trading goods are measured at standard cost in repacking
plant.
The cost of finished products and work in progress includes raw materials, direct labour costs, other direct
costs as well as an allocable proportion of variable procurement and production costs and fixed overheads
in case of finished products, determined based on normal operating capacity. Net realisable value is the
estimated selling price in the ordinary course of business, less the estimated costs of completion and the
estimated costs necessary to make the sale.
PENSION PLANS
The pension plans of the parent company are arranged through pension insurance companies. Pension
expenses are accrued to correspond to the performance-based salaries in the financial statements.
CASH POOL
The Group has applied the so called cash pool arrangement, which enables efficient management of the
parent company's and subsidiaries' cash and cash equivalents.
LEASES
All lease payments are recognised as rental expenses.
FINANCIAL DERIVATIVES
Fair value measurement compliant with Chapter 5, section 2a of the Accounting Act is applied to the
accounting treatment of financial derivatives.
Derivatives are included in financial assets and liabilities at fair value through profit or loss when they
do not meet the criteria of hedge accounting. These derivatives are recognised at fair value on the trade
date and they are subsequently measured at fair value at the reporting date. The fair values of derivatives
equal the amount that Altia Plc would have to pay or it would receive from the termination of the derivative
contract at the reporting date. The fair values of forward exchange contracts are determined by using the
market prices at the reporting date. The fair values of interest rate derivatives are determined by discounting
the related future cash flows. The valuation of commodity derivatives is determined based on the fair values
received from the financial markets.
All derivatives for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy level 1–3. The levels of fair value hierarchy reflect the significance of inputs
used in determining the fair values. In level one, fair values are based on public quotations of identical
financial instruments. In level two, the inputs used in determining the fair values are based on quoted market
rates and prices observable for the asset or liability in question directly (i.e. price) or indirectly on discounted
future cash flows. Fair values of other financial assets and liabilities in level two reflect their carrying value.
In level three, the fair values of assets and liabilities are based on inputs that are not based on observable
market data for all significant variables, and instead are, to a significant extent, based on management
estimates and their use in generally accepted valuation techniques.
The fair values of the financial instruments are determined by using the market prices on the closing date
of the reporting period.
HEDGE ACCOUNTING
The parent company applies hedge accounting when the change in fair value is recognised in the hedge
reserve under equity. In Altia Oyj, cash flow hedging is applied to part of the interest rate, foreign currency
and electricity derivatives based on case-by-case assessment. In cash flow hedging, Altia Oyj is hedging
against changes in cash flows related to a specific asset or liability recognised in the balance sheet or to
Annual Report 202088
a highly probable future business transaction. In the beginning of the hedging arrangement, company
documents the relationship between each hedging instrument and hedged item, as well as the objectives
of risk management and the strategy in engaging in hedging. Effectiveness means the ability of a hedging
instrument to offset the changes in the fair value of the hedged item or changes in the cash flows of the
hedged transaction attributable to the hedged risk. The hedging relationship is regarded to be highly
effective when there is an economic relationship between the hedged item and the value of the hedging
instrument and the value of the hedged item moves to the opposite direction due to same risk. Hedge
accounting is discontinued when the criteria for hedge accounting is no longer met.
The gains and losses arising from fair value changes of derivative contracts, to which hedge accounting is
applied, are presented in congruence with the hedged item. The effective portion of the unrealised changes
in the fair value of derivatives designated and qualifying as cash flow hedges are recognised in the hedge
reserve in equity. The ineffective portion is immediately recognised in profit or loss in finance income or
expense.
The cumulative gain or loss in equity on derivative instruments related to commercial items is recognised
in profit or loss as an adjustment to purchases or sales simultaneously with the hedged item in the period
in which the hedged item affects profit or loss. Realised gain or loss on electricity derivatives is included in
operating result in electricity procurement expenses. When a hedging instrument designated as a cash flow
hedge expires, is sold or no longer meets the criteria of hedge accounting, the gain or loss accumulated in
equity is recognised through profit or loss either as an adjustment to purchases or sales when hedging is
effective or as finance income or expense when hedge accounting criteria is not met.
RESEARCH AND DEVELOPMENT EXPENDITURE
Research and development expenditure is recognised as an annual expense as incurred.
FINANCIAL SECURITIES
Financial securities are recognised at acquisition cost or lower.
RECEIVABLES
Receivables are measured at acquisition cost or probable value, if lower.
SALE OF TRADE RECEIVABLES
The sold receivables are derecognised when the receivable has been sold and the sales price for it has been
received. The related costs are recognised in other financial expenses.
NON-CURRENT FINANCIAL LIABILITIES
Non-current financial liabilities are recognised at acquisition cost.
INCOME TAXES
Income taxes in the income statement include taxes calculated for the financial year based on Finnish tax
legislation, adjustments to taxes in previous financial years and the change in deferred taxes.
FOREIGN CURRENCY DENOMINATED ITEMS
Foreign currency denominated receivables and liabilities are translated to Finnish currency at the rates of
the closing date of the reporting period.
Annual Report 202089
EUR million 2020 2019
Net sales by business areas
Alcohol beverages 104.7 105.0
Industrial services 92.7 103.4
Other - 0.3
TOTAL 197.4 208.7
Net sales by geographic areas
Finland 151.5 157.0
Europe 44.4 50.3
Rest of the world 1.4 1.4
TOTAL 197.4 208.7
1. NET SALES
EUR million 2020 2019
Rental income 1.1 1.1
Income from energy sales 3.3 3.4
Proceeds from disposal of non-current assets - 0.0
Service income 8.4 11.6
Other income 1.2 2.4
TOTAL 13.9 18.4
2. OTHER OPERATING INCOME
EUR million 2020 2019
Wages and salaries 25.7 22.5
Pension expenses 4.7 6.0
Other social expenses 0.9 0.7
TOTAL 31.3 29.2
EUR million 2020 2019
Fringe benefits (taxable value) 0.6 0.7
The average number of personnel during the reporting period
2020 2019
Workers 194 210
Clerical employees 201 208
TOTAL 395 418
Management remuneration, EUR million
2020 2019
CEO 0.3 0.3
Board members 0.4 0.3
3. NOTES RELATED TO PERSONNEL
Pension commitments of the Board and CEO
The retirement age of the CEO of the company is 63 years.
EUR million 2020 2019
Rental expenses 1.7 2.0
Marketing expenses 3.7 5.9
Energy expenses 7.2 7.2
Travel and representation expenses 0.3 1.1
Repair and maintenance expenses 6.3 6.0
IT expenses 6.0 5.6
Outsourcing services 13.7 5.4
Variable sales expenses 5.3 5.5
Other expenses 6.2 7.4
TOTAL 50.4 46.2
Auditor's fees
Audit fees 0.1 0.2
Tax consultation - 0.0
Other fees 0.8 0.2
TOTAL 1.0 0.4
4. OTHER OPERATING EXPENSES
Environmental expenses
The Company's environmental expenses did not have a significant impact on the result for the period and on
the financial position.
Annual Report 202090
EUR million 2020 2019
Dividend income
From Group companies - 27.7
From participating interest undertakings 0.9 0.9
From others 0.2 -
Total dividend income 1.1 28.6
Interest income
From Group companies 0.2 0.3
From others 0.1 0.2
Total interest income 0.3 0.5
Other finance income
From others 0.0 2.7
Total other finance income 0.0 2.7
TOTAL FINANCE INCOME 1.4 31.9
Interest expenses
To Group companies 0.1 0.2
To others 1.5 1.4
Total interest expenses 1.5 1.6
Other finance expenses
To others 1.2 3.3
Total other finance expenses 1.2 3.3
TOTAL FINANCE EXPENSE 2.8 4.9
TOTAL FINANCE INCOME AND EXPENSES -1.4 26.9
The following items are included in finance items of the
income statement from fair value hedges:
Other finance income
Fair value changes of derivatives -0.0 -0.0
5. FINANCE INCOME AND EXPENSES
EUR million 2020 2019
Difference between depreciations according to plan
and depreciations made in taxation:
Intangible rights 1.1 0.1
Other intangible assets -0.0 -
Buildings and structures 0.8 0.8
Machinery and equipment 0.3 0.2
Other tangible assets -0.0 -0.0
TOTAL 2.1 1.1
6. APPROPRIATIONS
EUR million 2020 2019
Income taxes from current period -1.3 -2.4
Income taxes from previous periods 0.0 0.1
Change in deferred tax assets -0.0 -0.1
TOTAL -1.3 -2.5
7. INCOME TAX EXPENSE
Annual Report 202091
EUR million 2020 2019
Intangible assets
Intangible rights
Acquisition cost at 1 January 34.3 32.7
Additions 0.1 0.1
Additions, Group internal structural changes 0.0 -
Transfers between items 0.2 1.5
Acquisition cost at 31 December 34.6 34.3
Accumulated amortisation at 1 January -24.3 -20.7
Accumulated amortisation, Group internal structural changes -0.0 -
Amortisation for the period -3.5 -3.7
Accumulated amortisation at 31 December -27.8 -24.3
CARRYING AMOUNT AT 31 DECEMBER 6.8 10.0
Goodwill
Acquisition cost at 1 January 17.6 17.6
Additions, Group internal structural changes 1.1 -
Acquisition cost at 31 December 18.7 17.6
Accumulated amortisation at 1 January -17.6 -17.6
Accumulated amortisation, Group internal structural changes -0.7 -
Amortisation for the period -0.1 -
Accumulated amortisation at 31 December -18.4 -17.6
CARRYING AMOUNT AT 31 DECEMBER 0.3 -
Other intangible assets
Acquisition cost at 1 January 24.3 24.3
Additions 0.1 -
Transfers between items 1.3 -
Acquisition cost at 31 December 25.8 24.3
Accumulated amortisation at 1 January -18.2 -16.6
Amortisation for the period -1.9 -1.6
Accumulated amortisation at 31 December -20.1 -18.2
CARRYING AMOUNT AT 31 DECEMBER 5.7 6.2
Prepayments in intangible assets
Acquisition cost at 1 January 2.0 1.7
Additions 0.9 1.8
Transfers between items -1.4 -1.5
CARRYING AMOUNT AT 31 DECEMBER 1.4 2.0
EUR million 2020 2019
Tangible assets
Land and water areas
Acquisition cost at 1 January 2.4 2.4
CARRYING AMOUNT AT 31 DECEMBER 2.4 2.4
Buildings and structures
Acquisition cost at 1 January 97.8 95.9
Additions 1.4 1.1
Transfers between items 0.1 0.7
Disposals -0.3 -
Acquisition cost at 31 December 99.0 97.8
Accumulated depreciation at 1 January -76.8 -74.0
Accumulated depreciation on disposals and transfers 0.2 -
Depreciation for the period -2.6 -2.7
Accumulated depreciation at 31 December -79.1 -76.8
CARRYING AMOUNT AT 31 DECEMBER 19.9 21.0
Machinery and equipment
Acquisition cost at 1 January 118.3 116.2
Additions 1.3 1.3
Disposals -0.2 -0.0
Transfers between items 1.1 0.8
Acquisition cost at 31 December 120.5 118.3
Accumulated depreciation at 1 January -92.2 -88.4
Accumulated depreciation on disposals and transfers 0.2 0.0
Depreciation for the period -3.9 -3.8
Accumulated depreciation at 31 December -95.9 -92.2
CARRYING AMOUNT AT 31 DECEMBER 24.6 26.1
Other tangible assets
Acquisition cost at 1 January 0.5 0.5
Acquisition cost at 31 December 0.5 0.5
CARRYING AMOUNT AT 31 DECEMBER 0.5 0.5
Prepayments and assets under construction
Acquisition cost at 1 January 1.5 1.5
Additions 2.4 1.5
Transfers between items -1.3 -1.5
CARRYING AMOUNT AT 31 DECEMBER 2.6 1.5
CARRYING AMOUNT OF MACHINERY AND EQUIPMENT
USED IN PRODUCTION AT 31 DECEMBER
24.1 25.6
8. SPECIFICATION OF NON-CURRENT ASSETS
Annual Report 202092
EUR million 2020 2019
Investments
Holdings in Group companies
Acquisition cost at 1 January 358.3 358.3
Additions - 103.2
Disposals -10.3 -103.2
Acquisition cost at 31 December 348.0 358.3
Accumulated impairment at 1 January -151.5 -151.5
Accumulated impairment at 31 December -151.5 -151.5
CARRYING AMOUNT AT 31 DECEMBER 196.5 206.8
Participating interests
Acquisition cost at 1 January 8.2 8.0
Additions - 0.2
CARRYING AMOUNT AT 31 DECEMBER 8.2 8.2
Other shares and investments
Acquisition cost at 1 January 0.8 0.8
CARRYING AMOUNT AT 31 DECEMBER 0.8 0.8
EUR million 2020 2019
Receivables from Group companies
Trade receivables 4.5 3.2
Loan receivables* - 103.2
Cash Pool receivables - 0.5
Other receivables 3.1 4.6
Derivatives 0.5 0.2
Accrued income and prepaid expenses 1.6 1.4
Total 9.7 113.0
Receivables from participating interest undertakings
Trade receivables 0.1 0.1
Total 0.1 0.1
Receivables from others
Trade receivables ** 19.4 26.7
Other receivables - 0.0
Accrued income and prepaid expenses 3.2 3.2
Total 22.6 29.9
TOTAL CURRENT RECEIVABLES 32.4 143.1
Accrued income and prepaid expenses
Significant items in accrued income and prepaid expenses:
Derivatives 0.7 0.4
Taxes 0.8 -
Others 1.7 2.9
Total 3.2 3.2
9. INVENTORY
There is no significant difference between the repurchase price and cost of inventories.
11. CURRENT RECEIVABLES
*relates to Group internal structural changes
**Does not include the sold trade receivables
10. NON-CURRENT RECEIVABLES
EUR million 2020 2019
Receivables from Group companies
Loan receivables 5.9 14.8
Deferred tax assets
Recognised in hedge reserve 0.2 0.2
Fixed assets deferred depreciations 0.3 0.4
Deferred tax assets total 0.5 0.6
TOTAL NON-CURRENT RECEIVABLES 6.3 15.4
Annual Report 202093
EUR million 2020 2019
Fair value
31 Dec
Changes in the fair value
recognised in the income
statement
Changes in the fair value
recognised in fair value
reserve
Fair value
31 Dec
Changes in the fair value
recognised in the income
statement
Changes in the fair value
recognised in fair value
reserve
Derivative instruments
Interest rate derivatives (level 2) -1.0 - -1.0 -1.2 - -1.2
Foreign exchange derivatives (level 2) -0.5 -0.0 -0.4 -0.2 -0.0 -0.2
Commodity derivatives (level 2) 0.6 - 0.6 0.3 - 0.3
TOTAL -0.8 -0.0 -0.8 -1.1 -0.0 -1.1
12. DISCLOSURES ON FAIR VALUES (DERIVATIVES)
13. EQUITY
EUR million 2020 2019
Restricted equity
Share capital at 1 January 60.5 60.5
Share capital at 31 December 60.5 60.5
Hedge reserve at 1 January -0.9 0.0
Additions and disposals 0.3 -0.9
Hedge reserve at 31 December -0.6 -0.9
Total restricted equity 59.9 59.6
Unrestricted equity
Invested unrestricted equity fund 1.2 1.2
Retained earnings at 1 January 95.7 70.9
Distribution of dividends -15.2 -13.7
Profit for the period 5.9 38.6
Total unrestricted equity 87.6 96.9
TOTAL EQUITY 147.5 156.6
Distributable unrestricted equity
Calculation of distributable equity
Invested unrestricted equity fund 1.2 1.2
Retained earnings 95.7 70.9
Distribution of dividends -15.2 -13.7
Profit for the period 5.9 38.6
TOTAL DISTRIBUTABLE UNRESTRICTED EQUITY 87.6 96.9
Company’s share capital:
Number of shares outstanding at the end of the period 36 140 485 36 140 485
14. APPROPRIATIONS
EUR million 2020 2019
Depreciation difference
Intangible rights 1.4 2.6
Other intangible assets 0.2 0.1
Buildings and structures 1.9 2.7
Machinery and equipment 14.8 15.1
Other tangible assets -0.0 -0.0
TOTAL 18.3 20.5
15. LIABILITIES
EUR million 2020 2019
Non-current
Loans from financial institutions 60.0 65.0
Loans from pension institutions 9.8 11.3
Liabilities to Group companies - 2.0
Other liabilities 4.9 4.9
TOTAL 74.7 83.2
Annual Report 202094
16. LIABILITIES TO GROUP COMPANIES 18. COLLATERALS AND COMMITMENTS
EUR million 2020 2019
Trade payables 0.6 0.7
Liabilities to Group companies 1.0 103.2*
Cash Pool liabilities 107.2 102.1
Derivative instruments 0.0 0.0
Other accrued expenses 1.8 2.4
TOTAL 110.6 208.4
* relates to Group internal structural changes
17. ACCRUED EXPENSES AND DEFERRED INCOME
EUR million 2020 2019
Significant items under accrued expenses:
Holiday pay and other wages and salaries 9.1 5.1
Contract discount 0.5 0.7
Procurement expenses and other accrued expenses 12.7 9.6
Taxes - 0.8
Derivative instruments 1.9 1.7
TOTAL 24.2 17.8
EUR million 2020 2019
Collaterals given on behalf of the Group companies
Mortgages 18.5 18.5
Guarantees 3.8 5.9
TOTAL COLLATERALS 22.3 24.4
Commitments and other contingencies
Operating and finance lease obligations
Not later than one year 0.6 0.6
Later than one year 0.7 0.7
Total 1.3 1.2
Lease obligations
Not later than one year 0.6 0.6
Later than one year 2.1 0.8
Total 2.7 1.5
Other obligations
Not later than one year 3.2 5.1
Total 3.2 5.1
TOTAL COMMITMENTS 7.2 7.8
Annual Report 202095
VAT liability for real estate investments
The company is liable to review VAT deductions made for real estate investments completed in 2012–2020
if the use subject to VAT decreases during the review period. The maximum liability is EUR 1.3 million and the
last year to review is 2029.
Derivative contracts 2020 2019
EUR million
Electricity derivatives
Fair value 0.6 0.3
Nominal value 3.3 1.3
Amount (TWh) 0.1 0.1
Parent company's external forward exchange contracts
Fair value -0.9 -0.4
Nominal value 34.4 28.3
Parent company's internal forward exchange contracts
Fair value 0.5 0.2
Nominal value 14.8 13.8
Interest rate derivatives
Fair value -1.0 -1.2
Nominal value 20.0 20.0
Emission allowances (kilotons) 2020 2019
Emission allowances received 26.4 26.4
Excess emission allowances from the previous year 4.0 30.6
Adjustments related to prior year's estimates - -0.0
Sold emission allowances - -33.0
Realised emissions -19.6 -20.0
EMISSION ALLOWANCES AT 31 DECEMBER 10.9 4.0
Fair value of the remaining emission allowances, EUR million 0.3 0.1
The received emission allowances and the realised emission of the year 2020 are estimates which will be
adjusted during spring 2021. Altia continues to operate within the emission trading system for the trading
period 2021-2030.
19. RELATED PARTY TRANSACTIONS
Related party transactions are carried out at market value. More information about related party
transactions is presented in Group Note 6.3. Management remuneration is presented in Altia Plc
Note 3.
Annual Report 202096
Board of Directors’ proposal for the distribution of profits
According to the balance sheet at 31 December 2020, Altia Plc’s distributable earnings amount to EUR
87,630,619.27 including profit for the period of EUR 5,873,094.86.
There have been no significant changes to the parent company’s financial position at the end of the financial year.
The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.35 per share be
paid for the financial year 2020.
Arcus’ Board of Directors have similarly proposed to the Annual General Meeting of Arcus that an annual
dividend of NOK 1.66 per share be paid for the financial year 2020, reflecting the relative value of Altia and
Arcus agreed upon in the merger plan, meaning that dividends for the financial year 2020 to be paid by Altia
and Arcus, respectively, will not have an impact on the agreed valuation of the companies for the purpose of
the Altia and Arcus merger.
Altia’s Board of Directors also proposes to the Annual General Meeting that the dividend authorisation
decided by the Extraordinary General Meeting 2020 to pay an extra dividend of EUR 0.40 per share to Altia's
shareholders in connection with and prior to the closing of the Altia and Arcus merger be renewed.
Signatures to the Board of Directors’ Report and to the financial statements
Helsinki, 24 February 2021
Sanna Suvanto-Harsaae
Chairman
Jukka Leinonen Tiina Lencioni Jyrki Mäki-Kala
Jukka Ohtola Anette Rosengren Torsten Steenholt
Pekka Tennilä
CEO
The Auditors’ Note
An auditor´s report concerning the performed audit has been given to date.
Helsinki, 24 February 2021
PricewaterhouseCoopers Oy
Authorised Public Accountants
Ylva Eriksson
Authorised Public Accountant
Annual Report 202097
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Opinion
In our opinion
• the consolidated financial statements give a true and fair view of the group’s financial position and
financial performance and cash flows in accordance with International Financial Reporting Standards
(IFRS) as adopted by the EU
• the financial statements give a true and fair view of the parent company’s financial performance and
financial position in accordance with the laws and regulations governing the preparation of the financial
statements in Finland and comply with statutory requirements.
Our opinion is consistent with the additional report to the Audit Committee.
WHAT WE HAVE AUDITED
We have audited the financial statements of Altia Oyj (business identity code 1505555-7) for the
year ended 31 December 2019. The financial statements comprise:
• the consolidated balance sheet, income statement, statement of comprehensive income, statement of
changes in equity, statement of cash flows and notes, including a summary of
• significant accounting policies the parent company’s balance sheet, income statement, statement of cash
flows and notes.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under
good auditing practice are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Auditor's Report (Translation of the Finnish Original)
To the Annual General Meeting of Altia Oyj
INDEPENDENCE
We are independent of the parent company and of the group companies in accordance with the ethical
requirements that are applicable in Finland and are relevant to our audit, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, the non-audit services that we have provided to the parent
company and to the group companies are in accordance with the applicable law and regulations in Finland
and we have not provided non-audit services that are prohibited under Article 5(1) of Regulation (EU) No
537/2014. The non-audit services that we have provided are disclosed in note 1.6 to the Financial Statements.
Our Audit Approach
OVERVIEW
MATERIALITY
GROUP
SCOPING
KEY AUDIT
MATTERS
MATERIALITY
• Overall group materiality: € 3,3 million
GROUP SCOPING
• The group audit included the parent company
and all significant subsidiaries covering the vast
majority of net sales, assets and liabilities.
KEY AUDIT MATTERS
• Revenue recognition
• Valuation of inventories
•
Annual Report 202098
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in
the financial statements. In particular, we considered where management made subjective judgements; for
example, in respect of significant accounting estimates that involved making assumptions and considering
future events that are inherently uncertain.
MATERIALITY
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance whether the financial statements are free from material misstatement. Misstatements
may arise due to fraud or error. They are considered material if individually or in aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of the financial
statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall group materiality for the consolidated financial statements as set out in the table below.
These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the financial
statements as a whole.
Overall group materiality € 3,3 million
How we determined it 1 % of net sales
Rationale for the materiality
benchmark applied
We chose net sales as the benchmark because it provides a consistent
year-on-year basis for determining materiality. In addition, it is a
benchmark against which the performance of the group is commonly
measured by users.
We used 1 % of net sales, which is within the range of acceptable
quantitative materiality thresholds in auditing standards.
HOW WE TAILORED OUR GROUP AUDIT SCOPE
We tailored the scope of our audit, taking into account the structure of the group, the accounting processes
and controls, and the size, complexity and risks of individual subsidiaries. Altia Group has operations in the
Nordic countries, Baltics and France. The main accounting areas for subsidiaries in the Nordic countries are
handled centrally in Finland.
We performed group audit procedures on all significant account balances covering the vast majority of the
group’s net sales, assets and liabilities. In addition, we performed analytical procedures at group level of the
remaining balances.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the financial statements of the current period. These matters were addressed in the context of our audit
of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
As in all of our audits, we also addressed the risk of management override of internal controls, including
among other matters consideration of whether there was evidence of bias that represented a risk of material
misstatement due to fraud.
Annual Report 202099
Key audit matter in the audit of the group How our audit addressed the key audit matter
REVENUE RECOGNITION
Refer to note 1.1 in the consolidated financial statements
Altia’s revenue flows are generated by the sale of own products and partner brands, contract
manufacturing and sale of industrial products.
The transaction price may include variable considerations such as volume discounts, bonuses,
marketing support and product returns.
Due to a variety of contractual terms, the calculation of period’s variable components is a complex
accounting area that include management judgement. We have accordingly considered the risk that
revenue is not recorded in the correct period to be a key audit matter.
Our audit procedures included e.g. the following:
• We gained an understanding of the nature of the revenue flows and different contractual terms used.
• We compared the accounting treatment of a sample of sales transactions and variable consideration to
the terms of underlying contracts.
• We assessed the Group’s accounting policies over revenue recognition.
• We tested a sample of sales transactions against incoming cash.
• We tested a sample of sales invoices recorded in December 2020 and January 2021 to evaluate that
revenue had been recognised in the right period.
• For selected revenue and accounts receivable balances we obtained customer confirmations.
VALUATION OF INVENTORY
Refer to note 2.4 in the consolidated financial statements
Inventory forms a significant part of the Group’s assets, amounting to EUR 92,3 million as of 31
December 2020.
Inventories are measured at the lower of cost and net realisable value. Self-manufactured products are
measured at standard prices or weighted average cost. Fixed production costs are allocated to the cost
of own production.
Management exercises judgement and applies assumptions when estimating the need for an
obsolescence provision. This includes identification of slow moving and seasonal products, changes in
product portfolio and consideration of sales forecasts.
Given the factors described above, we have considered valuation of inventory to be a key audit matter.
Our audit procedures included e.g. the following:
• We gained an understanding of the controls established in relation to inventory valuation.
• We assessed the adequacy of the obsolescence provision and checked adherence to the Group’s
accounting policy.
• We tested, on a sample basis, the accuracy of cost for self-manufactured products by comparing the
actual production costs to market and other price data.
• We tested a sample of inventory items to confirm whether they are held at the lower of cost and net
realisable value, through comparison to vendor invoices and sales prices.
• For a sample of warehouses, we attended the physical stock-take counting or reconciled third party
confirmations with the accounting records.
We have no key audit matters to report with respect to our audit of the parent company financial statements.
There are no significant risks of material misstatement referred to in Article 10(2c) of Regulation (EU) No
537/2014 with respect to the consolidated financial statements or the parent company financial statements.
Annual Report 2020100
Responsibilities of the Board of Directors and the
Managing Director for the Financial Statements
The Board of Directors and the Managing Director are responsible for the preparation of consolidated
financial statements that give a true and fair view in accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU, and of financial statements that give a true and fair view in
accordance with the laws and regulations governing the preparation of financial statements in Finland and
comply with statutory requirements. The Board of Directors and the Managing Director are also responsible
for such internal control as they determine is necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors and the Managing Director are responsible
for assessing the parent company’s and the group’s ability to continue as a going concern, disclosing, as
applicable, matters relating to going concern and using the going concern basis of accounting. The financial
statements are prepared using the going concern basis of accounting unless there is an intention to liquidate
the parent company or the group or to cease operations, or there is no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with good auditing practice will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
As part of an audit in accordance with good auditing practice, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the parent company’s or the group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.
• Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s use of the going
concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the parent company’s or the
group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the parent company or the group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events so
that the financial statements give a true and fair view.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the group to express an opinion on the consolidated financial statements. We
are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
Annual Report 2020101
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
OTHER REPORTING REQUIREMENTS
Appointment
We were first appointed as auditors by the annual general meeting on 29 March 2016. Our appointment
represents a total period of uninterrupted engagement of 5 years.
Other Information
The Board of Directors and the Managing Director are responsible for the other information. The other
information comprises the report of the Board of Directors and the information included in the Annual
Report, but does not include the financial statements and our auditor’s report thereon. We have obtained the
report of the Board of Directors prior to the date of this auditor’s report and the Annual Report is expected
to be made available to us after that date.
Our opinion on the financial statements does not cover the other information.
In connection with our audit of the financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. With respect to the report of the Board of Directors, our responsibility also includes considering
whether the report of the Board of Directors has been prepared in accordance with the applicable laws and
regulations.
In our opinion
• the information in the report of the Board of Directors is consistent with the information in the financial
statements
• the report of the Board of Directors has been prepared in accordance with the applicable laws and
regulations.
If, based on the work we have performed on the other information that we obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
Helsinki 24 February 2021
PricewaterhouseCoopers Oy
Authorised Public Accountants
Ylva Eriksson
Authorised Public Accountant (KHT)