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Board of
Directors’ Report
Market outlook 38
Group performance 38
Financial position and cashow 40
Investments 40
Strategy and nancial targets 40
Business segment performance 42
Personnel 44
Information contained in the notes to the nancial statements 44
Governance 44
Shares and shareholders 46
Remuneration 48
Corporate responsibility 48
Risks and uncertainties 49
Seasonality 50
Signicant events after the nancial year 50
Outlook for the nancial year 2023 50
Board of Directors’ proposal for prot
distribution and capital return 50
Financial ratios and alternative performance measures 51
Calculation of nancial ratios and
alternative performance measures 52
Reconciliation of key performance indicators 53
Board of Directors’ Report
for the financial year October 2021 – September 2022
Market outlook
Musti Group operates in the Nordic pet care market, broadly dened as the sale of pet food, treats, products,
services and veterinary care across Finland, Sweden and Norway. The market was estimated to be worth
approximately EUR 3.4 billion (in 2021), with Sweden as the largest market, accounting for approximately EUR
1.4 billion, Finland approximately EUR 1.0 billion and Norway approximately EUR 1.0 billion.
Pet Parenting refers to the tendency of people to treat their pets like family members. As a result
of this trend, people are spending more on higher quality and more premium food, as well as a more
diverse range of products and services. This underlying trend that drives the long-term structural growth
of the pet care market remains robust, shifting spend towards higher quality nutrition, a more diverse
range of accessories and wider adoption of services.
The pet care market was positively aected by the COVID-19 pandemic over 2020 and 2021, mainly
through increased adoption of puppies and kittens and to some extent higher spending on discretionary
categories, such as accessories. Puppy adoption rates began normalizing from these peak levels over
2022, while still above long-term averages. The pandemic period resulted in a step-up of Nordic pet
ownership rates which increases the addressable market size for future years as the pandemic gains are
expected to have a long tail eect.
The pet care market is resilient, underpinned by non-discretionary purchasing behavior. Non-
discretionary categories such as food, cat litter and veterinary services make up approximately 75% of
total market spend and are characterized by repeat purchasing behavior that is consistent through the
cycle. Consumers display willingness to sustain spending on non-discretionary pet care purchases even
while expenditure on alternative categories has been aected.
Group performance
Group key figures
EUR million or as indicated 10/2021–9/2022 10/2020–9/2021 Change %
Net sales 391.1 340.9 14.7%
Net sales growth, % 14.7% 19.9%
LFL sales growth, % 6.7% 11.8%
LFL store sales growth, % 4.2% 8.8%
Online share, % 22.2% 23.1%
Gross margin, % 46.4% 45.7%
EBITDA 65.4 56.9 14.9%
EBITDA margin, % 16.7% 16.7%
Adjusted EBITDA 66.9 58.8 13.7%
Adjusted EBITDA margin, % 17.1% 17.3 %
EBITA 37.3 34.9 6.9%
EBITA margin, % 9.5% 10.2%
Adjusted EBITA 38.8 36.8 5.4%
Adjusted EBITA margin, % 9.9% 10.8%
Operating prot 30.9 28.4 8.8%
Operating prot margin, % 7.9% 8.3%
Prot/loss for the period 22.3 20.9 6.9%
Earnings per share, basic, EUR 0.67 0.62 7.3%
Net cash ow from operating activities 46.1 54.9 -16.0%
Investments in tangible and intangible assets 14.2 12.9 10.4%
Net debt / LTM adjusted EBITDA 2.1 1.9 11.3%
Number of loyal customers, thousands 1,454 1,297 12.2%
Number of stores at the end of the period 335 312 7.4%
of which directly operated 319 280 13.9%
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Group net sales
EUR million 10/2021–9/2022 10/2020–9/2021 Change %
Net sales
Group 391.1 340.9 14.7%
Finland 169.7 152.6 11.2%
Sweden 164.9 147.5 11.8%
Norway 56.5 40.7 38.7%
Group net sales increased by 14.7% to EUR 391.1 million (EUR 340.9 million). The increase was largely
due to the increasing number of customers together with an increased number of directly operated
stores. Like-for-like growth amounted to 6.7% (11.8%). Like-for-like growth was aected by the high
number of new directly operated stores. New stores are calculated in the like-for-like growth after
they have been operating for 12 months. The weakened SEK exchange rate decreased sales by EUR 4.5
million bringing 1.3 %-points headwind to growth, whereas the NOK exchange rate increased sales by
EUR 1.9 million bringing 0.6 %-points tailwind to growth.
Store sales increased by 20.1% to EUR 300.3 million (EUR 250.1 million), driven by an increased
number of stores as we added net 39 directly operated stores year to date to our network. Like-for-like
store sales growth was to 4.2% (8.8%). Online sales increased by 10.6% to EUR 87.0 million (EUR 78.7
million). Online sales accounted for 22.2% (23.1%) of total net sales.
Net sales in Finland increased by 11.2% with like-for-like growth of 2.7%. Opening new stores also
caused some overlapping sales decreasing sales growth by 3 %-points. During the reporting period, six
directly operated stores were opened in Finland. Net sales in Sweden increased by 11.8% considering
3.0%-points headwind from weakening SEK to Sweden’s growth. Like-for-like growth in Sweden
was 8.9%. During the reporting period, ve directly operated stores were opened and 15 stores were
acquired in Sweden. Two directly operated stores were closed and two franchise stores left the chain.
Net sales in Norway increased by 38.7% with strong like-for-like growth of 13.9% and the ramp-up of
the stores opened during the latest twelve months. The NOK rate compared to FY21 had a tailwind of
4.7%-points in Norway’s growth. During the reporting period, 14 directly operated stores were opened
and two stores acquired in Norway.
The number of loyal customers increased by 12.2% to 1,454 thousand (1,297 thousand on 30
September 2021). Rolling 12 months average spend per loyal customer was EUR 181.5 as per 30
September 2022 (EUR 188.3 as per 30 September 2021).
Group result
Group adjusted EBITA increased by 5.4% to EUR 38.8 million (EUR 36.8 million) as a result of a strong
seasonal sales growth and improved gross margin. Adjusted EBITA margin was 9.9% (10.8%).
Gross margin increased to 46.4% (45.7%) mainly due to successful campaign pressure, higher share of
sales of the own and exclusive products and favorable product mix. The positive development was slightly
burdened by increasing freight costs, especially from Asia and outbound freights and general ination.
The share of sales of own and exclusive brands increased to 52.7% (51.0%). The share of employee benet
and other operating expenses as percentage of sales increased to 30.3% (29.6%) driven by focus on
topline growth due to favorable market conditions and still lower eciency in the central warehouse in
Eskilstuna during the beginning of the nancial year, that was driven by both internal and external factors,
like congestion in global supply chain and lling up our inventory levels to maintain high availability.
During the second half of the nancial year, cost development was more favorable.
Depreciation amounted to EUR 28.2 million (EUR 22.0 million) and amortization amounted to EUR 6.4
million (EUR 6.5 million). Main driver is the growing store network via IFRS 16 impact.
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Adjustments to EBITA were EUR 1.5 million (EUR 1.9 million). These were mainly related to our end-to-
end supply chain development project together with other non-recurring structural changes related costs.
Operating prot increased by 8.8% to EUR 30.9 million (EUR 28.4 million).
Prot before taxes was EUR 28.4 million (EUR 26.9 million). The impact of nancial income and
expenses (net) on prot before taxes was EUR 2.4 million negative (EUR 1.5 million negative), mainly due
to interest expenses on leases and unrealized gains on derivative nancial instruments. Prot for the
period was EUR 22.3 million (EUR 20.9 million) and basic earnings per share was 0.67 (0.62).
Musti Group has been subject to a tax audit of Musti Group Oyj, Musti Group Finland Oy and Musti
Group Nordic Oy regarding nancial years 2018–2020. Musti Group Oyj has in October 2021 received a
tax audit report from the Finnish tax authorities. The tax audit report included subsequent taxes and tax
increases amounting to a total of EUR 0.9 million, relating to the VAT deductibility of IPO related costs.
Tax and increases of EUR 0.9 million were booked as receivable and paid in November 2021. The company
disagrees with the interpretation made in the tax audit. The company has been reassessed in accordance
with the interpretations set out in the tax audit report, but the company has led a claim for adjustment
to the Finnish Tax Administration’s Assessment Adjustment Board. There were no repercussions of the tax
audit for the nancial years 2018–2020 of Musti Group Finland Oy’s and Musti Group Nordic Oy’s.
Financial position and cashflow
Net cash ow from operating activities for FY22 amounted to EUR 46.1 million (EUR 54.9 million). Cash
ow used in investing activities amounted to EUR 33.0 million (EUR 23.0 million) for the full year. Cash
and cash equivalents at the end of the period amounted to EUR 10.0 million (30 September 2021: EUR
13.0 million). Total consolidated assets amounted to EUR 371.4 million (30 September 2021: EUR 337.6
million). The increase was due to increased right-of-use assets and property, plant and equipment due
to the increased number of stores and increased goodwill driven by business combinations, as well as
inventories in stores and the central warehouse.
Equity attributable to owners of the parent company totaled EUR 160.3 million (30 September 2021:
EUR 156.9 million). Musti Group acquired no own shares during the nancial year.
Gearing at the end of the reporting period was 89.4% (30 September 2021: 72.2%) and net debt amounted
to EUR 143.4 million (30 September 2021: EUR 113.3 million). At the end of the period, the interest-bearing
loans and commercial papers included in net debt amounted to EUR 74.8 million (30 September 2021: EUR
49.9 million) and lease liabilities EUR 80.7 million (30 September 2021: EUR 76.5 million).
Musti Group focuses on maintaining sucient liquidity in the group. In addition to the cash and
cash equivalents of EUR 10.0 million at the end of the period, Musti Group had an unutilized EUR 10.0
million credit limit, EUR 50 million commercial paper program of which EUR 35 million undrawn and an
undrawn EUR 40.0 million revolving credit facility.
During the rst quarter of the nancial year, Musti Group re-arranged its long-term nancing into a
new bilateral term loan.
On 15 July 2022, Musti Group announced it will diversify and strengthen its nancing base by
establishing EUR 50 million domestic commercial paper program and signing a new EUR 20 million
revolving credit facility. On 17 August 2022, Musti Group announced it has nalized the nancing
package initiated in July 2022 by signing a new committed EUR 20 million revolving credit facility.
Investments
In the nancial year 2022 investments in tangible and intangible assets amounted to EUR 14.2 million
(EUR 12.9 million). Investments were mainly related to new and relocated stores, as well as IT and digital
platform development projects and warehouse development and maintenance investments. During
the nancial year Musti Group acquired 17 pet stores, 15 in Sweden and two in Norway as business
acquisitions.
Strategy and financial targets
Our strategy is to continue developing our value proposition in the Nordic markets to serve existing
customers better and to acquire new customers, with focus on Pet Parents.
Winning new customers
Musti Group is well positioned to continue our track record of winning new customers from the large
and growing Nordic pool of 5.7 million pets.
Succeeding in new customer acquisition, especially acquisition of puppies and kittens, is a key
driver of continued market share gain across our Nordic markets. This is supported by our concept,
our leading brand awareness, and customer focus. The underlying pet parenting trend, favoring Musti
Group’s concept, continues strong.
Financial year 2022 continued with above average pet adoption levels, a trend seen since 2021
driven by the COVID-19 pandemic. This period has led to higher rates of pet ownership, with many new
rst time pet parents. While growth in the number of new puppies and kittens in our society shows
indications of stabilizing, this period of higher pet adoption has a long tail benet as it has expanded our
Nordic market opportunity.
Over the same period, Musti Group has gained share of new puppies. Our share has been
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augmented by two initiatives, new puppy and kitten clubs launched in nancial year 2020 followed by
an upgraded breeder club launched in nancial year 2022. These investments into early stages of the
pet parenting journey are paying o.
The number of loyal customers, Friends of Musti, increased by 12% to 1,454 thousand during the
nancial year 2022 continuing the steady growth of earlier years. Our pet loyalty club is the largest in
the Nordics.
Grow share of wallet
Growing the share of wallet within our base of 1.5 million loyal customers is a clear opportunity for
Musti Group. To deepen the engagement of our customers, Musti is developing an ecosystem approach
for Nordic pet parents with the aim to further increase share of wallet and loyalty, with an ‘All you need
is Musti’ mentality across the pet lifecycle.
Selected initiatives driving increased engagement advanced during the nancial year 2022. Initiatives
included developing our puppy and kitten related concepts, with our recently launched puppy and
kitten clubs ramping up, supported by our newly updated breeder club and adding wider services to
our oering. In addition, Musti Group launched live shopping online events in scal year 2022.
Rolling 12 months average spend per loyal customer was EUR 181.5 in nancial year 2022 (EUR 188.3
on 30 September 2021) stabilizing from the pandemic levels and aected by the unfavorable exchange
rate uctuations.
Expand store network and number of service points
We continue rolling out further stores to win new customers through our strong concept and increased
convenience, attracting customers to switch to the Musti Group platform.
Musti Group has the largest footprint in the Nordic countries, enabling us to gain further market
share in the growing pet care market. Operating through our own stores, complemented by our
omnichannel oering, enables Musti Group to provide its customers with the same award-winning store
experience in any Musti Group store they wish to visit, and online.
Over the nancial years 2021 and 2022, Musti Group has had elevated focus on increasing the coverage
of its directly operated network. This investment comes with longer term benets, as a signicant
share of our network is currently at ramp-us stage. We aim to continue investing in our network at a
more stabilized pace going forward, while continuing to see ample room for expansion especially in the
Norwegian market to support further market share gains by entering new local communities.
The number of directly operated stores increased by net 39 stores during nancial year 2022. This
included new greeneld stores adding convenience to our existing network and acquisitions of 17
stores, mostly formerly operating under franchising agreements in Sweden.
Focusing on driving gross margins through increased
O&E share and leveraging scale
A core element of Musti Group’s strategy is growing the share of sales of own and exclusive products
sold only in Musti Group’s channels. This comes with three main benets of the uniqueness of our
oering, loyalty especially in food and other consumable categories, and higher gross margin prole.
Musti Group has strong historical track record in driving gross margin improvement. Own and
exclusive brands are a cornerstone of our high gross margins as these brands typically carry 10-15
percentage points higher margins compared to global brands. In addition, we focus on leveraging scale
in procurement supported by pricing and category management.
In nancial year 2022, gross margin increased to 46.4% mainly driven by increased share of own
and exclusive brands, ecient campaigning, and favorable product mix developments. Musti Group
continued initiatives to further strengthen both own and exclusive brands and gross margins. Key
initiatives in the nancial year 2022 included ramping up dry food production in our pet food factory in
Lieto (Finland) and launching Smaak line of own pet food and treats.
Share of sales of own and exclusive brands increased to 52.7% (51.0%) during the year.
Leveraging broadly invested platform to drive
operating leverage and scale benefits
Signicant investments to Musti Group’s IT, digital platforms and warehouses are expected to drive
increased operating leverage and scale benets to further increase Musti Group’s protability as topline
growth is expected to continue while xed costs may be spread across larger net sales. In the nancial
year 2022, we were especially pleased with the improved performance of our Eskilstuna central
warehouse operations.
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Financial targets
The long-term nancial targets updated by the Board of Directors on 3 May 2021 are:
Long-term nancial target Outcome in nancial year 2022
Growth
Net sales to reach at least EUR 500 million
by the nancial year 2024 by continuation of
strong customer acquisition momentum and
increasing share of wallet.
Net sales 391 million,
growth 15%.
Protability
Mid- to long-term adjusted EBITA margin of
at least 13 per cent with steadily improving
prole. Margin increase is expected to be
realised through steady gross margin and
improving operating leverage.
Adjusted EBITA margin 9.9%.
Capital structure
Maintain net debt in relation to adjusted
EBITDA below 2.5x in the long term.
Net debt / LTM adjusted EBITDA 2.1.
Dividend policy
To pay a dividend corresponding to 60–80
per cent of net prot. Any potential dividend
shall take into account acquisitions, the
company’s nancial position, cash ow and
future growth opportunities.
The capital return corresponds to
approximately 75%* of the group’s
prot for the nancial year.
The nancial targets are forward-looking statements and are not guarantees of future nancial performance.
*Board of Directors’ proposal to the Annual General Meeting planned to be held on 30 January 2023.
Business segment performance
Musti Group’s reporting segments are based on geographical regions Finland, Sweden and Norway. The
segment structure is based on geographical division where Finland, Sweden and Norway are separated
to individual operating segments based on how the chief operating decision-maker monitors the
business operations. In other items, Musti Group reports the Group functions, including the operations
of the headquarters and the central warehouse.
Finland
Finland is Musti Group’s most mature market. Musti Group holds approximately 31% share of the
total pet food and products market. Musti’s network has nationwide coverage, and a vast majority of
Finnish pet parents are within convenient reach of a Musti store, which are typically located at high
trac locations such as large hypermarkets and popular retail areas. Management continues to see
opportunities in further optimizing the network to meet customer needs mainly through relocations,
uplifts and adding service points, and through improved omnichannel features.
In Finland, Musti Group focus is both on serving existing customers better to increase share of
wallet and to continue winning new customers, both of which support like-for-like growth. Musti’s
brands in Finland include Musti ja Mirri (store and omnichannel) and Peten Koiratarvike (online focus
complemented by select stores).
EUR million or as indicated 10/2021–9/2022 10/2020–9/2021 Change %
Net sales 169.7 152.6 11.2%
Net sales growth. % 11.2% 12.4%
LFL segment sales growth, % 2.7% 10.6%
EBITDA 44.5 44.4 0.2%
EBITDA margin. % 26.2% 29.1%
Adjusted EBITDA 44.5 44.4 0.2%
Adjusted EBITDA margin. % 26.2% 29.1%
EBITA 34.2 36.0 -5.0%
EBITA margin. % 20.2% 23.6%
Adjusted EBITA 34.3 36.1 -5.1%
Adjusted EBITA margin. % 20.2% 23.7%
Number of stores 140 134 4.5%
of which directly operated 140 134 4.5%
Net sales in Finland increased by 11.2% to EUR 169.7 million (EUR 152.6 million). Sales growth was
supported by the stores opened or acquired during the latest 12 months underpinned by healthy inow
of new customers, partly oset by increased uncertainty in the economic environment aecting the
consumer behavior during the year. Like-for-like growth was 2.7%. Opening new stores also caused
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some overlapping sales decreasing sales growth by 3 %-points. Like-for-like growth was also aected
by the higher number of new directly operated stores. New stores are calculated in the like-for-like
growth after they have been operating for 12 months.
EBITA decreased by 5.0% to EUR 34.2 million (EUR 36.0 million). Adjusted EBITA decreased by
5.1% to EUR 34.3 million (EUR 36.1 million). Adjusted EBITA margin was 20.2% (23.7%). The decrease in
protability was mainly due to increased personnel costs and weakened store eciency.
During the reporting period, six directly operated stores were opened.
Sweden
In Sweden, Musti Group’s focus is on further expansion and increasing eciency. Musti is the overall
market leader with approximately 29% market share. Musti Group’s main store and omnichannel brand
in Sweden is Arken Zoo, complemented by Djurmagazinet. Through VetZoo, Musti Group has a strong
online presence in Sweden.
Musti’s goal in Sweden is to continue strong like-for-like growth across all channels through
customer acquisition and gaining share of wallet, continued network expansion and strong margin
improvement. Signicant network expansion has taken place in FY20 to FY22, taking directly operated
store count from 68 at end of FY19 to 113 by end of FY22 and strengthening our position across Swedish
cities. Ramping up newer store cohorts is a key growth and margin driver, along with increasing own
and exclusive brands share of sales towards Finnish levels and cost eciency measures.
EUR million or as indicated 10/2021–9/2022 10/2020–9/2021 Change %
Net sales 164.9 147.5 11.8%
Net sales growth. % 11.8% 19.7%
LFL segment sales growth. % 8.9% 9.2%
EBITDA 37.3 29.7 25.4%
EBITDA margin. % 22.6% 20.2%
Adjusted EBITDA 37.3 30.1 23.8%
Adjusted EBITDA margin. % 22.6% 20.4%
EBITA 26.9 21.4 26.2%
EBITA margin. % 16.3% 14.5%
Adjusted EBITA 26.9 21.7 23.9%
Adjusted EBITA margin. % 16.3% 14.7%
Number of stores 129 128 0.8%
of which directly operated 113 96 17.7%
Net sales in Sweden increased by 11.8% to EUR 164.9 million (EUR 147.5 million) driven by like-for-like
growth of 8.9% and new stores opened or acquired. The sales growth was strong in both stores and
online, driven by the increased number of customers. The weakened SEK exchange rate decreased
sales by EUR 4.5 million.
EBITA increased by 26.2% to EUR 26.9 million (EUR 21.4 million). Adjusted EBITA increased by 23.9%
to EUR 26.9 million (EUR 21.7 million) due to the increased number of directly operated stores. Adjusted
EBITA margin increased to 16.3% (14.7%).
During the reporting period, ve directly operated stores were opened and 15 stores were acquired
in Sweden. Two directly operated stores were closed and two franchise stores left the chain.
Norway
In Norway, Musti Group’s focus is on market share gain through continued customer acquisition
supported by store roll-out, and on increasing country protability. Norway remains a more fragmented
market compared to Finland and Sweden with Musti holding approximately 13% share of the total pet
food and products market. Musti Group’s brands in Norway are Musti (store and omnichannel) and
VetZoo (online).
Musti entered Norway in October 2016, and majority of the 66 stores (at end of FY22) are still in ramp-
up mode. Ramp-up has progressed according to Musti Group’s plans and in line with historical patterns.
Therefore, the maturation of the network continues to be a key driver of growth and country protability.
EUR million or as indicated 10/2021–9/2022 10/2020–9/2021 Change %
Net sales 56.5 40.7 38.7%
Net sales growth. % 38.7% 60.6%
LFL segment sales growth. % 13.9% 30.0%
EBITDA 14.6 10.0 46.2%
EBITDA margin. % 25.8% 24.5%
Adjusted EBITDA 14.6 10.0 45.9%
Adjusted EBITDA margin. % 25.8% 24.6%
EBITA 9.9 6.7 47.8%
EBITA margin. % 17.6% 16.5%
Adjusted EBITA 9.9 6.8 47. 2%
Adjusted EBITA margin. % 17.6% 16.6%
Number of stores 66 50 32.0%
of which directly operated 66 50 32.0%
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Net sales in Norway increased by 38.7% to EUR 56.5 million (EUR 40.7 million), driven by like-for-like
growth of 13.9%. The changes in NOK exchange rate in the reporting period had EUR 1.9 million positive
impact on net sales.
EBITA increased by 47.8% to EUR 9.9 million (EUR 6.7 million). Adjusted EBITA increased by 47.2%
to EUR 9.9 million (EUR 6.8 million). The increase was driven by operating leverage and increased store
eciency, as more stores are reaching the mature phase, or the end of the ramp-up curve and latest
vintages are developing faster towards maturity than before. EBITA was somewhat burdened by salary
ination and increased premise cost compared to the corresponding period previous year. Adjusted
EBITA margin was 17.6% (16.6%).
During the reporting period, 14 directly operated stores were opened and two stores acquired in Norway.
Group functions
The EBITA impact of Group functions was EUR -33.8 million (EUR -29.2 million). Adjusted EBITA was
EUR -32.4 million (EUR -27.8 million). Group functions cost in relation to group net sales remained at the
previous year’s level at 8.6% (8.6%).
Personnel
At the end of the nancial year on 30 September 2022, the number of personnel was 1,587 (1,397), of
whom 664 (616) were employed in Finland, 650 (578) in Sweden and 274 (203) in Norway. Wages and
salaries were in total EUR 56.3 million for the nancial year 2022 (EUR 47.5 million).
Personnel
1 Oct 2021–
30 Sep 2022
1 Oct 2020–
30 Sep 2021
1 Oct 2019–
30 Sep 2020
1 Oct 2018–
30 Sep 2019
1 Oct 2017–
30 Sep 2018
Personnel by
average
1,523 1,284 1,145 1,084 1,004
Personnel by area
30 Sep 2022 30 Sep 2021 30 Sep 2020 30 Sep 2019 30 Sep 2018
Finland 664 616 566 583 537
Sweden 650 578 438 425 415
Norway 274 203 158 112 94
Total 1,587 1,397 1,162 1,120 1,046
Wages and salaries
1 Oct 2021–
30 Sep 2022
1 Oct 2020–
30 Sep 2021
1 Oct 2019–
30 Sep 2020
1 Oct 2018–
30 Sep 2019
1 Oct 2017–
30 Sep 2018
Wages and
salaries total
56,303 47,489 38,042 35,756 33,128
More information on the remunerations is available for reading at the Remuneration Report published
in accordance with the Financial Statements and the Board of Directors’ Report.
Information contained in the notes to the
financial statements
Related party transactions are disclosed in note 6.1.
Governance
Musti Group is committed to good corporate governance through compliance with laws and regulations in
all its operations and to implementing recommendations for good corporate governance. The governance of
the Musti Group complies with the Company’s Articles of Association, Finnish and EU laws and regulations,
the Finnish Companies Act, the Accounting Act, securities markets regulations and other decrees and
regulations relevant to the governance of a public limited liability company. Furthermore, Musti Group’s
operations are guided by values and internal operating principles ratied by the company. In its governance,
Musti Group also complies with the Finnish Corporate Governance Code for listed companies issued by the
Securities Market Association in 2020. If Musti Group deviates from a recommendation of the Code, it will
specify the deviation and justify it. The Code is available at www.cgnland..
The governance of Musti Group is described in more detail in the Corporate Governance Statement
published in accordance with the Financial Statements and the Board of Directors’ Report.
AGM decisions
Musti Group plc's Annual General Meeting was held on 27 January 2022 at 3:00 p.m. at the company's
headquarters in Helsinki, Finland. Shareholders and their proxy representatives could participate
in the Annual General Meeting and exercise shareholder rights only through advance voting and by
making counterproposals and presenting questions in advance. It was not possible to participate at the
meeting venue in person. The Annual General Meeting was arranged in accordance with an exceptional
procedure for the meeting based on the legislative act concerning temporary deviations from the
Finnish Companies Act approved by the Finnish Parliament.
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The Annual General Meeting adopted the nancial statements for the nancial year 1 October 2020 – 30
September 2021, discharged the persons who have acted as members of the Board of Directors and as CEO
during the nancial year from liability and resolved to approve the remuneration report for governing bodies.
The Annual General Meeting decided, in accordance with the proposal of the Board of Directors,
that the prot for the nancial year 1 October 2020 – 30 September 2021 be added to retained earnings
and that no dividend will be paid. In addition, the Annual General Meeting decided that shareholders
will be paid a capital return of EUR 0.44 per share from the invested unrestricted equity reserve, and
that the capital return will be paid in two instalments.
The rst capital return instalment of EUR 0.22 per share was paid to the shareholders who were
registered in the shareholders' register of the company maintained by Euroclear Finland Ltd on the
record date of the rst capital return instalment on 31 January 2022. The rst capital return instalment
was paid on 8 February 2022. The second capital return instalment of EUR 0.22 per share was paid
in August 2022 to shareholders who are registered in the shareholders' register of the company
maintained by Euroclear Finland Ltd on the record date of the second capital return instalment on 10
August 2022. The second capital return instalment will be paid on 18 August 2022. The Annual General
Meeting also authorized the Board of Directors to resolve, if necessary, on a new record date and date
of payment for the second instalment of the capital return, should the rules of Euroclear Finland Ltd or
statues applicable to the Finnish book-entry system change or otherwise so require.
The Annual General Meeting decided, in accordance with the proposal of the Board of Directors that
the members of the Board of Directors be paid the following annual remuneration:
• Chairman of the Board: EUR 65,000; and
• Other members of the Board of Directors: EUR 35,000.
The Annual General Meeting also decided, in accordance with the proposal of the Board of Directors,
that the annual remuneration for the members of the Board of Directors be paid in company shares and
cash so that 50 per cent of the annual remuneration will be used to purchase company shares in the
name and on behalf of the members of the Board of Directors from the market at a price determined
in public trading, and the rest of the annual remuneration will be paid in cash. The shares will be
purchased within two weeks of the publication of the interim report for the period 1 October 2021–31
December 2021 or as soon as possible in accordance with applicable legislation. The company will pay
any costs and transfer tax related to the purchase of company shares. In case the remuneration cannot
be paid in company shares due to legal or other regulatory restrictions or due to other reasons related
to the company or a member of the Board of Directors, the annual remuneration will be paid fully in
cash. A member of the Board of Directors may not transfer the shares received as remuneration before
his/her membership in the Board of Directors has ended.
In addition, members of the Audit Committee and the Remuneration Committee of Board of
Directors will be paid the following annual remuneration:
• Chairman of the Committee: EUR 7,500; and
• Other Committee members: EUR 5,000.
The Annual General Meeting decided that the number of members of the Board of Directors shall be
ve (5). Jerey David, Ingrid Jonasson Blank and Ilkka Laurila were re-elected as members of the Board
of Directors for a term of oce expiring at the end of the next Annual General Meeting. In addition, Inka
Mero and Johan Dettel were elected as new members of the Board of Directors for a corresponding
term of oce.
Ernst & Young Oy, Authorized Public Accountants, was re-elected auditor of the company for a
term of oce ending at the end of the next Annual General Meeting. Ernst & Young Oy has notied
that Johanna Winqvist-Ilkka, Authorized Public Accountant, will act as the auditor with principal
responsibility. It was decided that the remuneration to the auditor shall be paid against a reasonable
invoice approved by the Audit Committee.
The Annual General Meeting authorized the Board of Directors to decide on the repurchase of the
company's own shares and/or on the acceptance as pledge of the company's own shares as follows. The
number of own shares to be repurchased and/or accepted as pledge based on this authorization shall
not exceed 3,185,000 shares in total, which corresponds to approximately 9.5 per cent of all the shares
in the company. However, the company together with its subsidiaries cannot at any moment own and/or
hold as pledge more than 10 per cent of all the shares in the company.
The Annual General Meeting also authorized the Board of Directors to decide on the issuance of
shares as well as the issuance of special rights entitling to shares referred to in chapter 10 section 1 of
the Finnish Companies Act as follows. The number of shares to be issued based on this authorization
shall not exceed 3,185,000 shares, which corresponds to approximately 9.5 per cent of all the shares
in the company. The authorization covers both the issuance of new shares as well as the transfer of
treasury shares held by the company.
Musti Group’s Annual General meeting 2023 is planned to be held on 30 January 2023.
Changes in Group structure
There were no changes in Group structure during October 2021 – September 2022.
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Changes in Group management
On 16 November 2021 Musti Group announced that Tobias Nilsson Vo, Chief Supply Ocer and member
of the Management Team of Musti Group, will leave the company at the end of year 2021.
On 4 March 2022 Musti Group announced changes in the Group Management Team. The following
changes were announced:
Timo Tervo, member of the Group Management Team and Country Director, Finland had resigned
from his position in Musti Group. Tervo’s last working day at Musti Group was 30 June 2022 and he was a
member of the Group Management Team until 31 March 2022.
Daniel Pettersson was appointed as Head of Sweden and Finland (previously Country Director,
Sweden). In his expanded role, Pettersson is responsible for management and the ongoing development
of the company’s store operations in Sweden and Finland commencing 1 April 2022.
Erik Ringen Skjærstad was appointed as Head of Norway and new markets (previously Country
Director, Norway). In his expanded role Ringen Skjærstad is responsible for the continuing development
of Musti Group’s business in Norway as well as leading the development of new initiatives in support of
Musti Group’s growth aspirations commencing 1 April 2022.
Annamaija Hujala was appointed as Head of Pureplay and member of the Group Management Team
(previously Managing Director, Peten Koiratarvike). In her expanded role, Hujala is responsible for the
management and continuing development of the pureplay online business groupwide commencing 1 April 2022.
On 10 June 2022 Musti Group announced, that Pamela Nelimarkka has been appointed Musti Group’s
Chief Operating Ocer as of 9 September 2022, to head the sales and operations process, sourcing and
the end-to-end supply chain in Musti Group. She will be a member of the Group Management Team and
report to CEO David Rönnberg.
Shares and shareholders
Issued shares and share capital
At the end of the reporting period on 30 September 2022, Musti Group’s share capital was EUR
11,001,853.68 and total number of shares outstanding was 33,535,453. The company has one share class.
Each share carries one vote and entitles to the same dividend.
Trading of shares
Trading of Musti Group’s share commenced on the Prelist of Nasdaq Helsinki Ltd on 13 February 2020 and
on the Ocial List on 17 February 2020.
The closing price of the share was EUR 31.00 on 1 October 2021. The closing price of the share on the
last trading day of the reporting period on 30 September 2022 was EUR 17.82. The highest price of the
share during the nancial year was EUR 36.64, the lowest EUR 15.35. The average closing price during
the nancial year was EUR 23.99 and the average volume per day was 64,610 shares.
Musti Group’s market capitalization was EUR 598 million on 30 September 2022.
Own shares
On 30 September 2022 Musti Group held 244,000 (244,000) own shares representing 0.73% (0.73%) of the
total number of shares and votes. During the reporting period Musti Group did not purchase own shares.
Authorizations of the Board of Directors
The Annual General Meeting authorized the Board of Directors to decide on the repurchase of the
company's own shares and/or on the acceptance as pledge of the company's own shares as follows. The
number of own shares to be repurchased and/or accepted as pledge based on this authorization shall
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not exceed 3,185,000 shares in total, which corresponds to approximately 9.5 per cent of all the shares
in the company. However, the company together with its subsidiaries cannot at any moment own and/or
hold as pledge more than 10 per cent of all the shares in the company.
Own shares can be repurchased only using the unrestricted equity of the company at a price formed
in public trading on the date of the repurchase or otherwise at a price determined by the markets. The
Board of Directors decides on all other matters related to the repurchase and/or acceptance as pledge of
own shares. Own shares can be repurchased using, inter alia, derivatives. Own shares can be repurchased
otherwise than in proportion to the shareholdings of the shareholders (directed repurchase).
This authorization cancelled the authorization given by the Annual General Meeting held on 21
January 2021 to decide on the repurchase the company’s own shares and/or to accept the company’s
own shares as pledge. The authorization is eective until the next Annual General Meeting, however, no
longer than until 27 July 2023.
The Annual General Meeting also authorized the Board of Directors to decide on the issuance of
shares as well as the issuance of special rights entitling to shares referred to in chapter 10 section 1 of
the Finnish Companies Act as follows. The number of shares to be issued based on this authorization
shall not exceed 3,185,000 shares, which corresponds to approximately 9.5 per cent of all the shares
in the company. The authorization covers both the issuance of new shares as well as the transfer of
treasury shares held by the company.
The Board of Directors decides on all the conditions of the issuance of shares and of special rights
entitling to shares. The issuance of shares and of special rights entitling to shares may be carried out in
deviation from the shareholders' pre-emptive rights (directed issue).
This authorization cancelled the authorization given by the Annual General Meeting held on 21
January 2021 to decide on the issuance of shares as well as on the issuance of special rights entitling to
shares. The authorization is eective until the next Annual General Meeting, however, no longer than
until 27 July 2023.
Shareholders
At the end of the reporting period, the number of registered shareholders was 11,781. The proportion
of nominee-registered shareholders was 70.48% of the company’s shares. The 20 largest shareholders
registered in the book-entry register maintained by Euroclear Finland Oy held a total of 22.43% of Musti
Group’s shares and votes at the end of the nancial year.
Shareholders, Musti Group, 30 September 2022
Number of
shares
% of shares
1. Varma Mutual Pension Insurance Company 1,415,744 4.22
2. Mandatum Life Insurance Company Limited 1,401,882 4.18
3. Danske Invest Finnish Equity Fund 683,207 2.04
4. Ilmarinen Mutual Pension Insurance Company 682,519 2.04
5. Nordea Finnish Stars Fund 509,643 1.52
6. Elo Mutual Pension Insurance Company 451,000 1.35
7. Evli Finnish Small Cap Fund 437,000 1.30
8. Kaleva Mutual Insurance Company 301,284 0.90
9. Sijoitusrahasto Aktia Capital 260,000 0.78
10. Musti Group Oyj 244,000 0.73
10 shareholders total 6,386,279 19.04
100 largest registered shareholders total 8,505,838 25.36
Nominee registered total 23,634,797 70.48
Number of shares total 33,535,453 100.00
Shareholders by number of shares held, Musti Group, 30 September 2022
Number of shares
Number of
shareholders
% of
shareholders
Number of
shares
% of shares
1–100 8,514 72.27 295,984 0.88
101–500 2,702 22.94 596,834 1.78
501–1,000 304 2.58 228,752 0.68
1,001–5,000 184 1.56 367,860 1.10
5,001–10,000 22 0.19 153,757 0.46
10,001–50,000 26 0.22 542,396 1.62
50,001–100,000 10 0.09 775,503 2.31
100,001–500,000 11 0.09 2,525,108 7.53
500,001–& above 8 0.07 28,049,259 83.64
Total 11,781 100.00 33,535,453 100.00
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Shareholders by sector, Musti Group, 30 September 2022
Shareholders by sector
Number of
shares
% of shares
Public sector 2,640,227 26.67
Financial and insurance corporations 4,610,863 46.57
Households 1,365,233 13.79
Non-nancial corporations 967,642 9.77
Non-prot institutions 306,846 3.10
Rest of the world 9,845 0.10
Total 9,900,656 100.00
Nominee registered 23,634,797 70.50
Number of shares total 33,535,453 100.00
During October 2021–September 2022, Musti Group received the following announcements under
Chapter 9, Section 5 of the Securities Markets Act:
• On 9 December 2021 Musti Group plc received a notication in accordance with Chapter 9, Section 10 of
the Finnish Securities Market Act, according to which the total direct and indirect holdings of Ameriprise
Financial, Inc. had on 9 December 2021 increased above 5 per cent of the company's shares and votes.
According to the notication, the shares are held in portfolios and funds managed on a discretionary basis
by Threadneedle Asset Management Limited, and the shares are held through certain nominee companies.
• On 15 February 2022 Musti Group plc received a notication in accordance with Chapter 9, Section
10 of the Finnish Securities Market Act, according to which the total direct and indirect holdings
of Grandeur Peak Global Advisors, LLC had on 15 February 2022 increased above 5 per cent of the
company's shares and votes.
• On 9 March 2022 Musti Group plc received a notication in accordance with Chapter 9, Section
10 of the Finnish Securities Market Act, according to which the total direct and indirect holdings of
Ameriprise Financial, Inc. had on 9 March 2022 decreased below 5 per cent of the company's shares
and votes. According to the notication, the shares are held in portfolios and funds managed on a
discretionary basis by Threadneedle Asset Management Limited, and the shares are held through
certain nominee companies.
A list of the largest registered shareholders is available on the company’s website at
www.mustigroup.com/investors.
Remuneration
The objective of Musti Group’s remuneration program is to promote the company’s competitiveness
and to support the execution of the company’s strategy. Furthermore, the remuneration programs aim
to retain key persons and the whole sta and create long-term commitment in order to achieve shared
goals and to create shareholder value.
The remuneration in Musti Group is described in more detail in the Remuneration Report published
in accordance with the Financial Statements and the Board of Directors’ Report.
Corporate responsibility
Musti Group is committed to developing its responsibility policies and best practices on a long-term
basis and it is committed to being a responsible forerunner in its industry. Musti Group is the only pet
specialty company to have committed to the United Nations Global Compact. The company has built
a strong responsibility foundation and key performance indicators to measure the results and revises
responsibility program and targets regularly as part of a continuous improvement to stay relevant in the
responsibility work.
Conducting operations in a sustainable, responsible, and environmentally friendly way requires
focused and purposeful actions at all levels of the organization. The basis of all Musti Group’s
responsibility approach is a responsible supply chain, reducing environmental impact as well as
good governance and high ethics. In addition, the company has identied three particular focus
areas, themes, in order to communicate with its stakeholders: pets and their parents, employees
and communities. The most important themes under pets and their parents are high-quality and safe
products and services as well as satised and loyal customers. Under employees, the most important
themes are thriving experts and well-being at work, and under communities, working for the common
good and openness for new inventions.
Musti Group sets high standards for quality, safety and expertise, putting the welfare of pets, people and
the environment rst. The company has already taken concrete actions to this end, having been a member
of amfori Business Social Compliance Initiative (amfori BSCI) since 2017. The company also expects its major
suppliers to commit to Musti Group’s requirements regarding responsible business practices. Following the
Musti Group Supplier Code of Conduct and all national laws and regulations is imperative. The company is
conducting visits to the supplier sites in Europe, also the BSCI visits the company's supplier sites in high-risk
countries. Furthermore, the company has a third-party partner in China who visits and audits the sites in
Asia. The company has initiated more systematic processes for supply chain sustainability, especially in high-
risk countries and in high-risk countries 100% of our tier one suppliers have been audited.
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On 8 June 2022 Musti Group published updated responsibility approach and targets. The updated
targets are available at https://www.mustigroup.com/responsibility/responsibility-targets/.
Musti Group’s Non-Financial Information Report for the nancial year 2022 has been published
together with the Financial Statements and the Board of Directors’ report.
Risks and uncertainties
Musti Group’s risk prole follows the general risk level of the retail and grocery trade. The industry is
not particularly cyclical and not subject to rapid changes. The company regularly monitors changes in
the risks and their impact on the business. The company implements risk management continuously
and systematically according to a scheduled process. The risk management process ensures that risks
related to the Group are identied, estimated, and controlled in a proactive way and the management
of risks is monitored. The company’s risk management includes, among others: identication and
review of risks, risk assessment, determining and implementing control measures for the identied
risks, and monitoring and reporting of risks.
The following describes the risks and uncertainties that are considered signicant for Musti Group.
Risks relating to the macroeconomic environment and inflation
Increasing geopolitical instability could have a signicant impact on the global economy and business
environment. The European economies have been predicted to shrink or drift into a recession in
2022-2023 partly due to the war in Ukraine and energy crises. Although Musti Group sells products, a
recession may have a negative impact on consumer condence and sales.
General cost level has risen in 2022 following price increases in energy, raw materials, and freights.
Musti Group’s cost level has increased accordingly and is reected in higher retail prices to maintain
protability. Higher ination will also contribute to higher interest rates. These may have an impact on
consumer behavior and price competition.
Risks relating to changes in the competitive environment
Pet products and services retail industry has become increasingly competitive. Musti Group's
competitors include large grocery retailers, smaller pet specialist stores, online competitors (including
general online stockists and internet pure plays), home and garden stores, pet service providers, as
well as veterinary clinics. Many are competing for the same customers with similar oerings, and it is
easy to make comparisons between competitors. If Musti Group fails in this competition, its sales and
protability would decrease.
Risks relating to quality of products and services
A failure in product safety control or supply chain quality assurance may result in nancial losses, loss
of customer trust or in the worst case, a health hazard to a pet. Customers or employees may also make
allegations against Musti Group publicly concerning the quality of the company’s product or services.
This could result in a reputational loss for Musti Group.
Risks relating to changes in customer preferences
Customers’ buying patterns may change more rapidly than what the company has anticipated. With the
rising trend of online shopping customers expect a simple and consistent shopping experience and fast
delivery regardless of the sales channel. Brick-and-mortar stores are expected to oer experiences, a
place to meet, and information. Various sustainability aspects in products and services are increasingly
important to customers. If the company fails to address the new purchasing patterns and sustainability
requirements, there is a risk that the investment in assortment, sales channels and services will not
generate the intended results.
Risks relating to sourcing of products
A loss of signicant supplier or an inability to source products from such suppliers that meet Musti
Group's standards and requirements, or a supply reduction or cost increases demanded by suppliers
may have a material adverse eect on the customer relationships and competitive position.
Risks relating to inventories
A lot of the company’s capital may be tied up in carrying the inventory if the company is unable
to forecast accurately customer demand. Operative diculties in managing the inventory and
obsolescence may increase costs of inventory or result in selling the goods at discount which may have a
negative impact on protability.
Risks relating to logistics
The company’s distribution center in Eskilstuna is its distribution hub. Most goods from suppliers are
delivered to Eskilstuna and then distributed to shops and online customers. Collecting the logistics in one
location carries certain risks, for example, disruptions to communications and information technology
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infrastructure, as well as re and strikes, which may result in business discontinuity or lower sales.
Risks relating cybercrimes
The frequency of professional cybercrimes is growing. This has increased the risk relating to business
continuity and loss of critical information. Cyber-attacks may target, for example, data systems critical
for business continuity, or personal data. Cyber-attacks may result in disruptions in sales, personal data
leakages, nancial losses, compensation for damages or reputational damages.
Risks relating to employees
If Musti Group is not perceived as an attractive and sustainable employer brand, the company may
not be able to safeguard skilled and motivated employees. The COVID-19 pandemic has made the
workforce more mobile and lowered the threshold of changing jobs. The prerequisite for execution of
strategy and reaching the set targets is to be able to maintain insightful and motivated employees.
Risks relating to currency fluctuations
As a signicant part of Musti Group’s business is in countries outside the eurozone, Musti Group’s
balance sheet and results are exposed to uctuations in foreign currency exchange rates. The main
transaction exposure currencies are USD and GBP in which Musti Group of companies has outows
related to purchases. Translation exposure arises from subsidiaries reporting in SEK and NOK as results
and balance sheet items are consolidated to Musti Group level.
Seasonality
Musti Group’s business is characterized by a generally limited seasonality eect, with the high share of
recurring food and stable products of net sales translating into low seasonality within years. However,
there are certain intra-year uctuations that aect cash ows, sales and protability, which are made
evident by Musti Group’s nancial year being from 1 October to 30 September. Usually, the period
between July to December has higher sales and protability margins compared to January to June,
driven by higher sales of accessories and other seasonal products.
The volumes and timing of Musti Group’s sales may vary somewhat due to weather conditions, with
sales of pet clothing being primarily impacted. Cold winters and rainy weather generally result in higher
sales of coats and shoes for pets.
Significant events aer the financial year
There were no signicant events after the nancial year.
Outlook for the financial year 2023
The underlying trend of pet parenting that drives the long-term structural growth of the pet care market
remains robust. The pet space has proven to be resilient in economic downturns. Musti Group expects
it is able to continue its performance aligned with strategy and nancial targets focusing on the high-
quality products and services the pet parents seek.
Board of Directors’ proposal for profit distribution and
capital return
The Board of Directors of Musti Group plc proposes to the Annual General Meeting that shareholders
will be paid a capital return of EUR 0.50 per share from the invested unrestricted equity reserve totalling
approximately EUR 16.7 million and that no dividend will be paid for the nancial year that ended on
30 September 2022. The capital return corresponds approximately 75 % of Musti Group’s prot for the
nancial year.
The parent company’s distributable funds total EUR 144,049,079.54 of which the prot for the
nancial year is EUR 3,618,827.84.
The Board of Directors proposes that the capital return be paid in two instalments. The rst
instalment of EUR 0.25 per share would be paid to the shareholders who are registered in the
shareholders' register of the Company maintained by Euroclear Finland Ltd on the record date of the
rst capital return instalment on 1 February 2023. The Board of Directors proposes that the rst capital
return instalment would be paid on 8 February 2023.
The second capital return instalment of EUR 0.25 per share would be paid in August 2023. The
second instalment would be paid to shareholders who are registered in the shareholders' register of
the Company maintained by Euroclear Finland Ltd on the record date of the second capital return
instalment on 22 August 2023. The Board of Directors proposes that the second capital return
instalment would be paid on 29 August 2023.
The Board of Directors also proposes that the Annual General Meeting would authorize the Board
of Directors to resolve, if necessary, on a new record date and date of payment for the second capital
return instalment should the rules of Euroclear Finland Ltd or statues applicable to the Finnish book-
entry system change or otherwise so require.
Helsinki, 15 December 2022
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Financial ratios and alternative performance measures
EUR million or as indicated 10/2021–9/2022 10/2020–9/2021 10/2019–9/2020
Net sales 391.1 340.9 284.4
Net sales growth, % 14.7% 19.9% 15.3%
LFL sales growth, % 6.7% 11.8% 11.5%
LFL store sales growth, % 4.2% 8.8% 7.3%
Online share of net sales, % 14.7% 23.1% 22.5%
Gross margin, % 46.4% 45.7% 43.8%
EBITDA 65.4 56.9 43.8
EBITDA margin, % 16.7% 16.7% 15.4%
Adjusted EBITDA 66.9 58.8 48.1
Adjusted EBITDA margin, % 17.1% 17.3% 16.9%
EBITA 37.3 34.9 25.5
EBITA margin, % 9.5% 10.2% 9.0%
Adjusted EBITA 38.8 36.8 29.8
Adjusted EBITA margin, % 9.9% 10.8% 10.5%
Operating Prot 30.9 28.4 19.6
Operating Prot margin, % 7.9% 8.3% 6.9%
Prot/loss for the period 22.3 20.9 11.8
Cash ow from operating activities 46.1 54.9 42.3
Investments in tangible and intangible
assets
14.2 12.9 8.9
Net debt 143.4 113.3 94.7
Gearing, % 89.4% 72.2% 61.8%
Net debt / LTM Adjusted EBITDA 2.1 1.9 2.0
Equity ratio % 43.2% 46.5% 49.1%
Number of loyal customers, thousands 1,454 1,297 1,151
Number of stores at end of period 335 312 293
of which directly operated 319 280 231
Own & Exclusive share, % 52.7% 51.0% 50.3%
EUR million or as indicated 10/2021–9/2022 10/2020–9/2021 10/2019–9/2020
Share performance indicators
Earnings per share, basic, EUR 0.67 0.62 0.37
Earnings per share, diluted, EUR 0.66 0.62 0.37
Equity per share, EUR 4.78 4.68 4.57
Dividend payout per share and capital
return total
0.50 0.44 0.38
Dividend payout and return of capital, total
of result, %
75.1% 70.6% 108.4%
Eective dividend yield, % 2.8% 1.4% 1.8%
Price/earnings ratio (P/E) 26.6 49.46 56.21
Highest share price, EUR 36.64 3 7.22 20.94
Lowest share price, EUR 15.35 18.41 7.00
Share price as at 30 September 17.82 30.9 20.80
Market capitalisation 597.6 1,036.2 697.5
Share turnover during the nancial year, % 48.7% 72.1% n.a.
Shares outstanding at the end of the period 33,535,453 33,535,453 33,535,453
Shares outstanding at the end
of the period,
diluted
33,623,919 33,576,033 33,722,953
Weighted average adjusted number of
shares during the nancial period,
basic
33,337,805 33,410,411 31,652,469
Weighted average adjusted number of
shares during the nancial period,
diluted
33,578,629 33,655,418 31,730,594
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Calculation of financial ratios and alternative performance
measures
Measure Calculation
Gross prot Net sales - Materials and services
Earnings before interest, taxes, depreciation and
amortisation (EBITDA)
Operating prot + Depreciation, amortisation and
impairment
Adjusted earnings before interest, taxes, depreciation
and amortisation (Adjusted EBITDA)
Operating prot + Depreciation, amortisation and
impairment +adjustments
Earnings before interest, taxes and amortisation (EBITA)
Operating prot + Amortisation and impairment of
intangible assets
Adjusted earnings before interest, taxes and
amortisation (Adjusted EBITA)
Operating prot + Amortisation and impairment of
intangible assets + Adjustments
Net Debt
Interest bearing liabilities - Loan receivables - Derivative
nancial instruments - Cash and cash equivalents
Gearing, %
Net debt
Equity
Net debt/LTM (last twelve months) Adjusted EBITDA
Net debt
LTM adjusted EBITDA
Equity ratio, %
Total equity
Total assets - Advances received
LFL (Like-for-like) sales growth, %
Sales of online channels and stores that have been open
more than 13 months
Sales from corresponding online channels and stores in
the same time period
Measure Calculation
Own & Exclusive share, %
Sales of own and exclusive product sales
Product sales in own channels
Online share, %
Online sales
Net sales
Earnings per share, basic
Prot/loss for the period - Non-controlling interests
Average number of shares
Earnings per share, diluted
Prot/loss for the period - Non-controlling interests
Average diluted number of shares
Equity per share, EUR
Equity attributable to equity holders of the parent
Adjusted number of shares at the balance sheet date
Dividend payout and return of capital, total of result, %
(Dividend/share)+(return of capital/share) x 100
(Earnings/share)
Eective dividend yield, %
(Dividend/share) x 100
Share price at balance sheet date
Market capitalization, EUR million Share price at balance sheet date x Number of shares
Price/earnings ratio (P/E)
Share price at balance sheet date
Earnings per share, basic
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Reconciliation of key performance indicators
EUR million or as indicated 10/2021–9/2022 10/2020–9/2021
Gross prot
Net sales 391.1 340.9 284.4
Material and services -209.6 -185.2 -159.7
Gross prot 181.5 155.6 124.7
Gross margin (%) 46.4% 45.7% 43.8%
Earnings before interest, taxes, depreciation and
amortization (EBITDA)
Operating prot 30.9 28.4 19.6
Depreciation, Amortization and Impairment 34.5 28.5 24.2
Earnings before interest, taxes, depreciation and
amortization (EBITDA)
65.4 56.9 43.8
EBITDA margin (%) 16.7% 16.7% 15.4%
Adjusted earnings before interest, taxes,
depreciation and amortization (Adjusted EBITDA)
Operating prot 30.9 28.4 19.6
Depreciation, amortization and Impairment 34.5 28.5 24.2
Adjustments 1.5 1.9 4.3
Adjusted earnings before interest, taxes,
depreciation and amortization (Adjusted EBITDA)
66.9 58.8 48.1
Adjusted EBITDA margin (%) 17.1% 17.3% 16.9%
Adjustments (EBITDA)
Restructuring related expenses 0.0 0.0 0.0
Acquisition/IPO related expenses 0.0 0.0 3.4
Other items aecting comparability 1.5 1.9 0.9
Adjustments (EBITDA) 1.5 1.9 4.3
Earnings before interest, taxes and amortization
(EBITA)
Operating prot 30.9 28.4 19.6
amortization and impairment 6.4 6.5 6.0
Earnings before interest, taxes and amortization
(EBITA)
37.3 34.9 25.5
EBITA margin (%) 9.5% 10.2% 9.0%
EUR million or as indicated 10/2021–9/2022 10/2020–9/2021
Adjusted earnings before interest, taxes and
depreciation (Adjusted EBITA)
Operating prot 30.9 28.4 19.6
Amortization and impairment of intangible assets 6.4 6.5 6.0
Adjustments 1.5 1.9 4.3
Adjusted earnings before interest, taxes and
depreciation (Adjusted EBITA)
38.8 36.8 29.8
Adjusted EBITA margin (%) 9.9% 10.8% 10.5%
Adjustments (Operating prot)
Restructuring related expenses 0.0 0.0 0.0
Acquisition/IPO related expenses 0.0 0.0 3.4
Other items aecting comparability 1.5 1.9 0.9
Adjustments (Operating prot) 1.5 1.9 4.3
Earnings per share, basic
Prot/loss for the period 22.3 20.9 11.8
Non-controlling interest 0.0 0.0 0.0
Average number of shares 33.3 33.4 31.7
Earnings per share, basic 0.67 0.62 0.37
Earnings per share, diluted
Prot/loss for the period 22.3 20.9 11.8
Non-controlling interest 0.0 0.0 0.0
Average number of shares* 33.6 33.7 31.8
Earnings per share, diluted 0.66 0.62 0.37
*Includes shares from Restricted Share Plan (PSP)
Net debt
Interest-bearing liabilities 155.5 126.3 116.3
Derivative nancial instruments -2.1 0.0 0.0
Cash and cash equivalents 10.1 13.0 21.6
Net debt 143.4 113.3 94.7
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EUR million or as indicated 10/2021–9/2022 10/2020–9/2021
Gearing (%)
Net Debt 143.4 113.3 94.7
Equity 160.4 157.0 153.3
Gearing (%) 89.4% 72.2% 61.8%
Net debt/LTM Adjusted EBITDA
Net debt 143.4 113.3 94.7
LTM adjusted EBITDA 66.9 58.8 48.1
Net debt/LTM adjusted EBITDA 2.1 1.9 2.0
Equity ratio (%)
Total equity 160.4 157.0 153.3
Total assets 371.4 337.5 312.3
Advances received 0.3 0.3 0.2
Equity ratio (%) 43.2% 46.5% 49.1%
LFL sales growth (%)
Net sales 391.1 340.9 284.4
Net sales growth % 14.7% 19.9% 15.3 %
Other growth % 8.1% 8.1% 3.8 %
LFL sales growth (%) 6.7% 11.8% 11.5%
LFL store sales growth (%)
Store sales 300.3 250.1 206.6
Store sales total growth % 20.1% 21.1% 13.2 %
Other growth % 15.9% 12.3% 5.9 %
LFL store sales growth (%) 4.2% 8.8% 7.3%
Net sales
Store sales 300.3 250.1 206.6
Online sales 87.0 78.7 64.1
Other sales 3.8 12.1 13.8
Net sales 391.1 340.9 284.4
Online share (%)
Net sales 391.1 340.9 284.4
Online sales 87.0 78.7 64.1
Online share (%) 22.2% 23.1% 22.5%
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Financial
Statements
Group nancial statements 57
Parent company nancial statements 98
Auditor’s report 107
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4. Net working capital 78
4.1 Inventories 78
4.2 Trade and other receivables 79
4.3 Trade and other payables 79
5. Capital structure and nancial instruments 81
5.1 Financial risk management 81
5.2 Financial assets and liabilities 85
5.3 Commitments and contingencies 91
5.4 Financial income and expenses 92
5.5 Capital Management 92
5.6 Equity 92
6. Other notes 95
6.1 Related party transactions 95
6.2 Taxes 95
6.3 Subsequent events 97
7. Parent company nancial statement, FAS 98
Musti Group plc’s Board of Directors’ proposal to the Annual General
Meeting for the distribution of distributable funds and signing of the
nancial statements and Board of Directors’ review 106
Auditor’s report 107
Musti Group plc Financial Statements 30 September 2022
Table of contents
Group nancial statements, IFRS 57
Consolidated statement of income, IFRS 57
Consolidated statement of comprehensive income, IFRS 57
Consolidated statement of nancial position, IFRS 58
Consolidated statement of changes in equity 59
Consolidated statement of cash ows, IFRS 60
1. Basis of preparation 61
1.1 General information 61
1.2 Accounting principles 61
1.3 Material accounting estimates and determinations based on the
management’s judgement 62
1.4 Group information 62
1.5 New and amended IFRS standards and IFRIC interpretations 63
2. Operating results 64
2.1 Segment reporting and net sales 64
2.2 Other operating income 67
2.3 Other operating expenses 67
2.4 Share-based payments 68
3. Capital expenditures 70
3.1 Business combinations 70
3.2 Intangible assets 72
3.3 Goodwill and impairment testing 73
3.4 Investments in joint ventures 73
3.5 Property, plant and equipment 74
3.6 Leases 76
The report is not ESEF certied.
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EUR thousand
Note 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Net sales 2.1 391,122 340,856
Other operating income 2.2 2,516 2,270
Share of prot of a joint venture 3.4 84 30
Materials and services 4.1 -209,626 -185,239
Employee benet expenses 2.3 -72,592 -61,828
Other operating expenses 2.3 -46,078 -39,147
Depreciation, amortization and impairment
3.2, 3.3,
3.5, 3.6
-34,542 -28,565
Operating prot 30,882 28,377
Financial income 5.4 6,395 5,780
Financial expenses 5.4 -8,837 -7,275
Financial income and expenses, net -2,443 -1,495
Prot before taxes 28,440 26,882
Income tax expense 6.2 -6,109 -5,988
Prot/loss for the period 22,330 20,895
Attributable to:
Owners of the parent 22,328 20,872
Non-controlling interest 2 23
Earnings per share (EUR) for prot
attributable to owners of the parent
Basic EPS (EUR) 0.67 0.62
Diluted EPS (EUR) 0.66 0.62
EUR thousand
Note 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Prot/loss for the period 22,330 20,895
Other comprehensive income
Items that may be reclassied to prot or
loss in subsequent periods:
Translation dierences -6,148 1,138
Tax on items that may be reclassied to
prot or loss
Total comprehensive income 16,695 22,033
Attributable to:
Owners of the parent 16,705 22,006
Non-controlling interest -10 27
Group Financial Statements, IFRS
Consolidated statement of income,
IFRS
Consolidated statement of
comprehensive income, IFRS
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EUR thousand
Note 30 Sep 2022 30 Sep 2021
ASSETS
Non-current assets
Goodwill 3.1, 3.2, 3.3 170,505 157,831
Other intangible assets 3.2 16,896 18,705
Right-of-use assets 3.6 76,227 71,745
Property, plant and equipment 3.5 18,538 15,759
Investments in joint ventures 1.4, 3.4 1,074 990
Deferred tax assets 6.2 4,351 5,008
Other non-current receivables 154 109
Total non-current assets 287,744 270,148
Current assets
Inventories 4.1 61,401 44,297
Trade and other receivables 4.2, 5.1 9,486 9,322
Loan receivables 5.2 0 0
Derivative nancial instruments 5.2 2,135 484
Income tax receivables 6.2 625 281
Cash and cash equivalents 5.2 10,054 13,013
Total current assets 83,702 67,397
TOTAL ASSETS 371,446 337,545
EUR thousand
Note 30 Sep 2022 30 Sep 2021
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 5.6 11,002 11,002
Other reserves 5.6 140,043 154,691
Own shares 5.6 -6,910 -6,910
Translation dierences 5.6 -5,161 975
Retained earnings 21,318 -2,891
Total equity attributable to owners of the parent 160,292 156,867
Equity attributable to non-controlling interest 75 110
Total equity 160,367 156,977
LIABILITIES
Non-current liabilities
Loans from credit institutions 5.2 59,898 49,872
Lease liability 3.6 57,776 56,713
Deferred tax liabilities 6.2 3,265 2,684
Other liabilities 5.2 0 14
Total non-currentliabilities 120,940 109,283
Current liabilities
Commercial papers 5.2 14,950 0
Lease liability 3.6 22,905 19,759
Trade and other payables 4.3 48,571 46,827
Derivative nancial instruments 5.2 73 441
Income tax liabilities 6.2 3,640 4,257
Total current liabilities 90,139 71,285
Total liabilities 211,079 180,567
TOTAL EQUITY AND LIABILITIES 371,446 337,545
Consolidated statement of financial position, IFRS
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Consolidated statement of changes in equity
EUR thousand
Attributable to owners of the parent Non-controlling interest Total equity
Share capital Other reserves Treasury shares Translation dierences Retained earnings Total
Equity at 1 Oct 2020 11,002 167,412 0 -159 -25,132 153,122 157 153,279
Prot/loss for the period 20,872 20,872 23 20,895
Translation dierences 1,134 1,134 4 1,138
Total comprehensive income 0 0 0 1,134 20,872 22,006 27 22,033
Other changes
Capital returns -12,720 -12,720 -12,720
Dividends 0 -74 -74
Acqusition of own shares -6,910 -6,910 -6,910
Share-based incentive plan 1,370 1,370 1,370
Equity at 30 Sep 2021 11,002 154,691 -6,910 975 -2,890 156,867 110 156,977
EUR thousand
Attributable to owners of the parent Non-controlling interest Total equity
Share capital Other reserves Treasury shares Translation dierences Retained earnings Total
Equity at 1 Oct 2021 11,002 154,691 -6,910 975 -2,890 156,867 110 156,977
Prot/loss for the period
Translation dierences
-6,136 -6,136 -13 -6,148
Tax on other comprehensive income 512 512 512
Total comprehensive income 0 0 0 -6,136 22,840 16,705 -10 16,695
Other changes 19 19 -10 9
Capital returns -14,648 -14,648 -14,648
Dividends 0 -15 -15
Acqusition of own shares 0 0 0
Share-based incentive plan 1,349 1,349 1,349
Equity at 30 Sep 2022
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Consolidated statement of cash flows, IFRS
EUR thousand
Note 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Cash ows from operating activities
Prot before taxes 28,440 26,882
Adjustments
Depreciation, amortization and
impairment 34,542 28,565
Financial income and expenses, net 2,443 1,495
Other adjustments 1,296 1,466
Cash ows before changes in working
capital 66,720 58,409
Change in working capital
Increase (-) / decrease (+) in trade and
other receivables 4.2 -764 -2,782
Increase (-) / decrease (+) in inventories 4.1 -16,301 -6,653
Increase (+) / decrease (-) in trade and
other payables 4.3 1,678 5,269
Cash ows from operating activities before
nancial items and taxes 51,333 54,243
Income taxes paid -5,199 706
Net cash from operating activities 46,135 54,950
EUR thousand
Note 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Cash ows from investing activities
Investments in tangible and intangible
assets 3.2, 3.5 -14,216 -12,878
Acquisition of subsidiaries and business
acqusitions, net of cash acquired 3.1 -18,735 -10,330
Increase/decrease in non-current
receivables
Increase/decrease in current receivables 0 10
Net cash from investing activities -32,951 -22,969
Cash ows from nancing activities
Capital returns paid 5.6 -14,630 -12,720
Dividends paid 5.2 -15 -75
Acqusition of own shares 5.2 0 -6,910
Proceeds from non-current loans 60,000 0
Repayments of non-current loans -50,000 0
Issuance of commercial papers 3.6 14,946 0
Repayments of lease liabilities -22,114 -17,297
Interest and other nancial expenses paid -7,089 -5,190
Interest and other nance income received 2,759 1,620
Net cash ow from nancing activities -16,143 -40,573
Net change in cash and cash equivalents -2,959 -8,592
Cash and cash equivalents at start of period 5.1, 5.2 13,013 21,606
Cash and cash equivalents at end of period 10,054 13,013
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Notes to Musti Group plc’s financial statements
1. BASIS OF PREPARATION
This section presents the accounting principles applied by the Group for the part that they are not
presented in other notes. These principles have been applied consistently for all the periods under review,
unless otherwise stated. The notes contain the relevant nancial information as well as a description of
the accounting policies and key estimates and judgements applied for the topics of the individual note.
How should I read the accounting principles of the Musti Group?
The accounting principles used for the nancial statements of Musti Group are described at the
beginning of each note to help understand each area of the nancial statements. The following table
summarizes the notes to each accounting policy and the relevant IFRS standard related to the note.
Accounting principle Note IFRS standard
Segment information and net sales 2.1 Segment information and net sales IFRS 8, IFRS 15
Employee benets and share-based
payments
2.3 Operating expenses
2.4 Share-based payments
IAS 19, IFRS 2
Business combinations 3.1 Business combinations IFRS 3
Intangible assets
3.2 Intangible assets,
3.3 Group goodwill and impairment testing
IAS 36, IAS 38
Joint ventures 3.4 Investments in joint ventures IFRS 11
Property, plant and equipment 3.5 Property, plant and equipment IAS 16, IAS 36
Leases 3.6 Leases IFRS 16
Inventories 4.1 Inventories IAS 2
Financial assets and liabilities 5.2 Financial assets and liabilities IAS 32, IFRS 7, IFRS 9, IFRS 13
Financial risk management 5.1 Financial risk management IAS 32, IFRS 7, IFRS 9, IFRS 13
Operating leases 5.3 Commitments and contingent liabilities IAS 37
Equity 5.6 Shareholders' equity IAS 1
Related party transactions 6.1 Related party transactions IAS 24
Taxes 6.2 Taxes IAS 12
1.1 General information
Furthermore, the Group provides pet wellbeing services in some of its stores, as well as veterinary
services in Sweden. The Group’s parent company is Musti Group plc , domiciled in Helsinki , Finland,
and its registered address is Mäkitorpantie 3 B, FI-00620 Helsinki, Finland . The parent company’s
shares are listed on Nasdaq OMX Helsinki Stock Exchange. A copy of the consolidated nancial
statements is available at the Group’s website www.mustigroup.com or at the company’s headquarters
Mäkitorpantie 3 B, FI-00620 Helsinki, Finland .
The Board of Directors of Musti Group plc has approved the nancial statements for publication on 15
December 2022. Under the Finnish Limited Liability Companies Act, the shareholders may accept or reject
the nancial statement in the Annual General meeting of the shareholders held after the publication. The
Annual General Meeting is also entitled to amend the consolidated nancial statements.
1.2 Accounting principles
Musti Group’s consolidated nancial statements have been prepared in compliance with the
International Financial Reporting Standards (IFRS) adopted in the European Union, including IAS
and IFRS standards and their SIC and IFRIC interpretations in eect on 30 September 2022. In the
Finnish Accounting Act and ordinances based on its provisions, IFRS refer to the standards and their
interpretations adopted for application in the EU in accordance with the procedures as set in regulation
(EC) No 1606/2002. The notes to the consolidated nancial statements also satisfy the requirements of
the Finnish accounting and corporate legislation that complements the IFRS standards.
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Consolidated nancial statements are presented in thousand euros and gures have been rounded
to the nearest thousand, and due to this, the total sum of the presented individual gures may dier
from the presented total sum. The consolidated nancial statements have been prepared based on
initial acquisition costs, except for nancial instruments described later that are measured at fair value
through prot and loss.
The company’s operating currency is euro, which is also the company’s and the Group’s
reporting currency.
Translation of items in foreign currencies
The items in the nancial statements of the Group companies are valued in the currency of each
company’s main economical operating environment (operating currency). The gures presented in the
consolidated nancial statements are in thousand euros, unless stated otherwise.
Transactions conducted in foreign currencies are converted to the operating currency using
exchange rates prevailing on the transaction date. Exchange rate gains and losses arising from
payments related to these transactions and conversion of monetary assets and liabilities nominated
in foreign currencies using the exchange rates prevailing at the end of the period are recognized
through prot and loss.
In the consolidated nancial statements, the prot and loss statements of the foreign subsidiaries
have been converted into euros using the average rate of the nancial year, and the balance sheet
items have been translated using the exchange rates prevailing on the balance sheet date. The
translation dierences arising from subsidiary net investments and non-current subsidiary loans
without agreed settlement dates are recognized through Other Comprehensive Income (OCI) to
cumulative translation adjustments under equity. The Group classied certain intercompany loans
as net investments in the second quarter of the nancial year 2022 and the translation dierences
arising from them are recorded in OCI.
1.3 Material accounting estimates and determinations based on the
management's judgement
The Group’s material accounting principles are mainly described in the note that relates to the matter in
question. Preparation of Musti Group’s consolidated nancial statements requires estimates, judgement
and assumptions that may impact the application of the accounting principles and the amounts
presented in the balance sheet as at its date. In addition, they impact on the amount of income and
costs recognized for the nancial year. The actual amounts may dier from previous estimates and
determinations based on the management’s judgement.
The estimates and determinations based on judgement are reviewed regularly. Changes in
accounting estimates are recognized for the period when the estimate was adjusted, as well as for all
subsequent periods.
Sources of uncertainty and determinations based on the management’s judgement, which have
been identied in the Group and are deemed to satisfy these criteria, are presented in connection
with the items that are deemed to be aected by them. The table below sets forth the most
signicant situations where estimates or the management’s judgement have been applied, as well as
references to their descriptions.
Accounting estimates and management judgement Note
Net sales and contractual liabilities 2.1 and 4.3
Business combinations 3.1
Goodwill impairment testing 3.3
Inventory valuation 4.1
Leases 3.6
1.4 Group information
The following note summarizes the general accounting principles, as well as the principles and
accompanying notes relating to the consolidation of a group. The consolidation package includes notes
to help you understand the overall structure of the group and its computing environment. The notes
provide information on the classication of holdings and the principles of consolidation.
The table below sets forth details of the parent company and the Group’s subsidiaries and associated
companies as of 30 September 2022. Unless stated otherwise, their entire share capital consists of
shares held directly by the Group, and the ownership share corresponds to the voting rights of the
Group. The registration country of the companies is also their main operating area.
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Subsidiaries
Companies controlled by the Group are subsidiaries. Control exists when the Group has more than half
of the voting rights of a subsidiary or otherwise exerts control over the subsidiary. The Group controls
a company when it is exposed, or has rights, to variable returns from its involvement with the company
and can aect those returns through its power over the company. Subsidiaries are consolidated from
the date on which the Group gains control.
Mutual shareholding is eliminated by using the acquisition cost method. The cost of assets acquired
is determined based on the fair value of the acquired assets as at the acquisition date, the issued equity
instruments and liabilities resulting from or assumed on the date of the exchange transaction. The
identiable assets, liabilities and contingent liabilities acquired are measured at the fair value at the
acquisition date, gross of non-controlling interest.
Intragroup transactions, receivables and payables, unrealized prots and internal distributions of
prots are eliminated. The nancial statements of the subsidiaries are adjusted to comply with the
accounting principles applied by the company, if necessary.
Subsidiaries 30 September 2022
Country of origin Group ownership, %
Musti Group Nordic Oy Finland 100.0
Musti ja Mirri Oy Finland 100.0
Peten Koiratarvike Oy Finland 100.0
Arken Zoo Syd AB Sweden 100.0
Arken Zoo Holding AB Sweden 100.0
Arken Zoo AB Sweden 100.0
Zoo Support Scandinavia AB Sweden 100.0
Djurfriskvård Borlänge AB Sweden 100.0
Djurfriskvård Falun AB Sweden 70.0
Musti Norge AS Norway 100.0
Investments in joint ventures
Joint arrangements are arrangements in which the sharing of joint control has been contractually
agreed between two or more parties. Joint control exists only when decisions about the relevant
activities require the unanimous consent of the parties sharing control. A joint venture is a joint
arrangement whereby the parties that have joint control of the arrangement have rights to the net
assets of the arrangement.
Investments in joint ventures are accounted for using the equity method, and on initial recognition,
they are recognized at cost. The cumulative post-acquisition movements are adjusted against the
carrying amount of the investment. The Group’s share of prots or losses of the joint venture is
recognized as a separate item.
Country of origin Group ownership, %
Premium Pet Food Suomi Oy Finland 49.20
1.5 New and amended IFRS standards and IFRIC interpretations
Amendments and annual improvements to IFRS standards
Musti Group has applied amendments and annual improvements to IFRS standards eective from
the beginning of October 2021. The amendments include Interest Rate Benchmark Reform – Phase 2
(Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) and COVID-19-Related Rent Concessions
beyond 30 June 2021 (Amendment to IFRS 16). Amendments and annual improvements have not had a
major impact on the nancial statements.
The Group will apply the new or amended standards as they become eective. Musti Group
estimates that IFRS standards or IFRIC interpretations that are published at the time when these
nancial statements have been prepared and will become eective in the future, will not have a
material impact on the Group’s nancial statements.
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2. OPERATING RESULTS
This section focuses on nancial results of Musti Group. In the notes on the following pages, the
operating prot of the group is explained by component.
Musti Group provides pet food products and accessories to its customers, as well as various welfare
and veterinary services in its specialised stores and pet clinics. Pet food products and accessories are
available in stores and online. Musti Group's chain included 335 stores on 30 September 2022 (30
September 2021: 312), of which own stores amounted to 319 (30 September 2021: 280).
2.1 Segment reporting and net sales
Reporting segment
Musti Group’s reporting segments are based on geographical regions, and they are Finland, Sweden
and Norway. Segments are not combined to reporting segments.
The segment structure is based on geographical division where Finland, Sweden and Norway are
separated to individual operating segments based on how the chief operating decision-maker monitors
the business operations. In other items, Musti Group reports the Group functions, including the
operations of the headquarters and the central warehouse.
Segment information is reported in a manner consistent with the internal reporting provided to the
chief operating decision-maker. The chief operating decision-maker is the Group’s Management Team,
including the CEO. The Management Team is responsible for allocation of resources and reviewing
performance, considering its composition and active involvement in material strategic and operative
decision-making. The net sales of the reporting segments are derived from retail sales, as well as
franchising sales and wholesales in Finland, Sweden and Norway. Online sales of Vetzoo is reported
fully under Sweden.
Country directors of the geographical regions are responsible for their business area, and they are
members of the Group’s Management Team. Decisions on the oering, product pricing and marketing
measures are determined at the country level. The business needs vary among the countries, as their
maturity is very dierent. Finland is a very stable and mature market; Sweden is growing, and Norway is
still in growth phase, and as such, their investment needs and protability dier signicantly from each
other.
The Group’s Management Team reviews the results of the segments based on net sales, adjusted
EBITDA and operating prot before amortisation of intangible assets (EBITA). Transactions outside
the scope of the ordinary course of business is treated as items impacting comparability, and they are
allocated to the segments. For other parts, the management monitors performance in accordance with
IFRS. Financial income and expenses are not allocated to the segments, as the Group Treasury manages
the Group’s cash and cash equivalents and nancial liabilities. Similarly, share of prots in associates
and income taxes are not allocated to the segments. In its reporting, the Group’s Management Team
does not allocate balance sheet items to the segments, and as such, they are not allocated to segments
this Note.
Segments 2022
EUR thousand Finland Sweden Norway
Group
functions
Group
Net sales* 169,704 164,905 56,512 0 391,122
% split of net sales between
segment
43% 42% 14% 0% 100%
EBITDA 44,486 37,273 14,586 -30,920 65,425
Adjustments 39 0 0 1,424 1,463
Adjusted EBITDA 44,525 37,273 14,586 -29,497 66,888
Depreciation and impairment
of right-of use assets and
tangible assets
-10,252 -10,335 -4,644 -2,892 -28,124
EBITA 34,234 26,938 9,941 -33,813 37,300
Adjustments 39 0 0 1,424 1,463
Adjusted EBITA 34,273 26,938 9,941 -32,389 38,763
Amortization and impairment
of intangible assets
-6,418
Operating prot 30,882
Financial income 6,395
Financial expenses -8,837
Prot before taxes 28,440
Income tax expense -6,109
Prot/loss for the period 22,330
*Net sales include sales of products and services to external customers. There are no internal net sales between the segments.
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Segments 2021
EUR thousand Finland Sweden Norway
Group
functions
Group
Net sales* 152,616 147,511 40,730 0 340,856
% split of net sales between
segment
45% 43% 12% 0% 100%
EBITDA 44,375 29,729 9,974 -27,135 56,942
Adjustments 48 389 26 1,428 1,892
Adjusted EBITDA 44,424 30,118 10,000 -25,707 58,834
Depreciation and impairment
of right-of use assets and
tangible assets
-8,326 -8,376 -3,247 -2,101 -22,049
EBITA 36,050 21,352 6,727 -29,236 34,893
Adjustments 48 389 26 1,428 1,892
Adjusted EBITA 36,098 21,741 6,753 -27,808 36,785
Amortization and impairment
of intangible assets
-6,516
Operating prot 28,377
Financial income 5,780
Financial expenses -7,2 75
Prot before taxes 26,882
Income tax expense -5,988
Prot/loss for the period 20,895
*Net sales include sales of products and services to external customers. There are no internal net sales between the segments.
Revenue recognition
Accounting principles
IFRS 15 establishes a ve-step model that is applied to the amount and timing of recognition of sales
revenue. Under the standard, revenue is recognized when the entity satises its performance obligation,
meaning that the customer obtains control of the goods or services. Control is transferred either over
time or at a certain moment, and the revenue is recognized in an amount that reects the consideration
to which the entity expects to be entitled for those goods or services. IFRS 15 principles are applied
using the following ve-step model:
1. Identify the contract with a customer
2. Identify the performance obligations in the contract
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations in the contract
5. Recognise revenue
The standard requires the entity to exercise judgement when applying the ve-step model to contracts
with its customers. When exercising judgement, material facts and circumstances used for determining
if the performance obligation has been satised and the revenue is to be recognized are taken into
consideration.
Significant determinations based on the management's judgement
Musti Group’s management has utilized signicant judgement in connection with the right to return
products and the loyalty club bonuses. The amount of the consideration to which Musti Group expects
to be entitled may vary based on the above-mentioned sub-areas. These sub-areas based on the
management’s judgement are addressed more in detail in the section for recognition on the next page.
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Sales of goods and revenue recognition (stores, online and franchising stores)
Majority of the Group’s sales revenue originates from retail sales of goods in its stores. The goods sold
in the stores comprise pet food and accessories. The sales are mainly carried out in cash or using credit
cards, and the revenue from the sales of goods is recognized at the time of transfer when the customer
gains control of the goods.
Customers may also purchase gift cards and use them for paying goods in the stores. At the time of
selling a gift card, Musti Group recognizes a corresponding liability in its balance sheet. Sales revenue is
recognized when the customer uses the gift card.
Revenue from orders made online and sales to franchising partners is recognized when all
products related to the order have been delivered to the customer or the franchising partner, and
control of the goods is transferred to the buyer at a specic moment of time. A liability is recorded
on the goods in transit delivered from online stores. The provision on goods in transit is included in
the contractual liabilities.
Net sales are measured at the fair value of the consideration received or to be received. Net
sales include proceeds from the sales of goods and franchising fees at the price which the company
expects to receive adjusted with the indirect taxes, actual and estimated product returns, campaign
discounts, Loyalty club bonuses and indirect taxes, as well as translation dierences from sales in
foreign currencies.
Contingent considerations: right to return products
Goods sold directly to consumers in stores and online include a right to return products within a period
of 14 days in Finland and 30 days in Sweden and Norway. Net sales are adjusted by the expected
amount of returns. For more information of the return policy, see Note 4.3 Trade and other liabilities. In
addition, a customer may receive a discount, for example, in the form of campaign discounts.
For the right to return products, Musti Group estimates the amount of the consideration that it is
entitled to receive against the transfer of promised goods to the customer. Musti Group includes in
the transaction price the estimated amount of the contingent consideration only to the extent that it
is very likely that the recognized sales revenue is not required to be reversed signicantly when the
uncertainty related to the contingent consideration ceases to exist at a later moment of time. Musti
Group estimates the contingent consideration based on the most likely amount of money.
Franchising fees
Musti Group carries out franchising operations in Sweden, the franchising fees are based on an upfront
fee and a fee based on the franchising stores net sales. Fees related to franchising agreements are
recognized over time.
Sales of services and revenue recognition
Musti Group provides welfare, veterinary and trimming services. A customer benets from these
services when it is provided, and as such, the revenue is recognized over time when Musti Group
satises its performance obligation.
Net sales by channel
EUR thousand 1 Oct 2021–30 Sep 2022 % 1 Oct 2020–30 Sep 2021 %
Store sales 300,291 76.8 250,118 73.4
Online sales 86,996 22.2 78,669 23.1
Other sales 3,834 1.0 12,068 3.5
Total 391,122 100.0 340,856 100.0
Sales of services are included in the retail store sales. The share of services in the net sales is not
signicant, and as such, it is not presented separately. Other sales items include franchising fees and
wholesales. Franchising fees are recognized over time. Musti Group does not have any individual
customer with a share of over 10 per cent of Musti Group’s total net sales.
Customer loyalty programs
Companies in Finland and Sweden operate a loyalty program where the members accrue bonuses from
their purchases made in the stores. The net sales of these companies are adjusted with the customer
refunds in the loyalty program as a part of the sales transaction. Simultaneously, accrued liability on
bonus is recognized on the balance sheet. Corresponding sales in recognized when the customer
refunds are used, or they expire. The expected refunds of the loyalty program bonuses are based on
historical information. Musti updates the estimate quarterly.
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Contractual amounts recorded in balance sheet
The Groups recognizes in trade receivables the expected considerations to which it is entitled when
goods are transferred, or services provided to a customer before the customer pays the consideration
(see Note 4.2 Trade and other receivables).
Correspondingly, a liability is presented in Note 4.3 Trade and other liabilities when a customer pays
the consideration before the goods are transferred or services provided to the customer. In addition,
the contractual liabilities include liabilities related to gift cards, Loyalty club bonuses, right to return
products and goods in transit.
2.2 Other operating income
Accounting principles
Other operating income includes income that does not relate to the income from regular sales
operations. Other operating income includes, among others, received marketing contributions and
subsidies, insurance compensations, capital gains on xed assets and rental income.
Other operating income
EUR thousand 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Rental income 349 356
Marketing contribution 1,360 1,244
Other received contribution 471 377
Other items 337 293
Total 2,516 2,270
2.3 Other operating expenses
Accounting principles
Other operating expenses include other expenses than cost of goods sold. The main items included in
the other operating expenses relate to personnel costs, sales, marketing and premises.
All Musti Group’s pension plans are dened contribution plans. In dened contribution plans, the
Group pays xed contributions to the pension insurances. The Group does not have legal or factual
obligations to pay any additional amounts, if the insurance does not include sucient assets for paying
to all employees all benets based on their service during the present and previous nancial periods.
The Group’s pension plans in Finland, Sweden and Norway are dened contribution plans.
Number of personnel
Personnel 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Personnel on average 1,523 1,283
Personnel at the end of period 1,587 1,397
Employee benefit expenses
EUR thousand 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Wages and salaries 56,303 47,4 89
Pension costs – dened contribution
plans
12,709 5,111
Share based payments 1,349 1,370
Other employee benet expenses 2,231 7,858
Total 72,592 61,828
Other operating expenses
EUR thousand 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Rental expenses 9,068 6,786
Maintenance, IT and equipment
expense
6,245 5,348
Sales and marketing 15,887 14,274
Travel costs 1,240 683
Voluntary sta expenses 1,731 1,391
Other business expense* 11,907 10,665
Total 46,078 39,147
*Other expenses include, among other, maintenance costs related to the administration of the company and the premises.
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Auditor's fees
EUR thousand 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Ernst & Young
Audit fees 340 340
Tax advisory 83 132
Other services 44 173
Total 466 645
2.4 Share-based payments
The Note below provides information and describes the impacts of the Group’s share-based
incentive plans. More information on share-based incentive plans can be found in the separate
Remuneration statement.
Accounting principles
The fair value of share-based payments is measured on the day which the share-based payment plan is
agreed upon between the counterparties and will be recognized as an expense over the vesting period.
The settlement, if the set targets are met, is a combination of shares and cash. The component settled
in shares is recognized in shareholders’ equity and the payment settled in cash in liabilities. However,
for awards with net settlement features, the cash-settled component for withholding tax payment is
treated as equity-settled and recognized in shareholders’ equity. At each statement of nancial position
date, the Group revises its estimates of the number of shares that are expected to be distributed. The
impact of the revision of the original estimates, are recognized in the statement of income.
Significant determinations based on management’s judgement
At each balance sheet date, the management revises its estimates for the number of shares that
are expected to vest. As part of its evaluation, Musti Group considers the expected turnover of the
personnel beneting from the incentive plan and other pertinent information impacting the number
of shares to be vested. In addition, the measurement of the fair value for the arrangement and the
parameters used in the measurement of the fair value requires judgement from the management.
Share-based commitment and incentive scheme
The Boards of Directors of Musti Group plc decided on 7 May 2020 on two new share-based long-
term incentive plans for the management team and key employees. The primary share-based
compensation plan is the Performance Share Plan (PSP) and the second is a Restricted Share Plan
(RSR) for special situations.
The aim of a share-based compensation plan is to align the objectives of the shareholders and key
employees for increasing the value of the company in the long-term. The plan is also to commit the key
employees to the company and to oer them competitive incentive schemes that are based on earning
and accumulating shares.
The Performance Share Plan consists of three performance periods, covering the nancial years
of 2020–2022, 2021–2023 and 2022–2024. The Board of Directors will decide separately for each
performance period the plan participants, performance criteria, and the related targets, as well as the
minimum, target, and maximum reward potentially payable based on target attainment at the beginning
of a performance period.
The Restrictive Share Plan (RSP) consists of plans on which the vesting period is 12–36 months based
on decisions made by the Board of Musti Group Plc. The possible rewards are paid partly in Musti
Group plc’s shares and partly in cash. As of 30 September 2022, there were no participants added to
the RSP plan.
In the rst performance period, the plan has 11 participants at most and the targets for the
Performance Share Plan (PSP) relates to the Group’s total shareholder return (TSR) and adjusted EBITA.
The maximum number of shares to be paid based on the rst performance period is approximately
250,000 Musti Group plc’s shares, which corresponds to approximately EUR 3.0 million calculated
with the volume weighted average share price on the trading day preceding the Board’s decision.
The number of shares represents gross earning, from which the withholding tax and possible other
applicable contributions are deducted, and the remaining net amount is paid in shares. However, the
company has the right to pay the reward fully in cash under certain circumstances. Potential rewards
from the rst performance period will be paid out during the winter of 2023.
The total expense for the share-based payments is recognized over the vesting period, which
is 29 months in the plan commencing 2020–2022. For the plan commencing 2020–2022, the
compensation is measured during performance period in cash, and only after performance period at
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grant date translated into shares. The expense recognized for 2022 amounted to 796 thousand euros
(947 thousand euros). The cost related to share-based payments is recognized in sta costs. The
share price at the grant date of the PSP was EUR 11.78. The fair value of the share plan at the grant
date was in total EUR 1.6 million. The fair value of the share plan was determined from Musti Group’s
share price at the grant date less the present value of dividends expected to be paid during the
performance period. Performance conditions and service conditions were accounted for by adjusting
the number of instruments.
In the second performance period, the plan has 30 participants at most and the targets for the
Performance Share Plan (PSP) relates to the Group’s total shareholder return (TSR) and adjusted EBITA.
The maximum number of shares to be paid based on the second performance period is approximately
137,600 Musti Group plc’s shares, which corresponds to approximately EUR 2.9 million calculated
with the volume weighted average share price on the trading day preceding the Board’s decision.
The number of shares represents gross earning, from which the withholding tax and possible other
applicable contributions are deducted, and the remaining net amount is paid in shares. However, the
company has the right to pay the reward fully in cash under certain circumstances. Potential rewards
from the second performance period will be paid out during the winter of 2024.
The total expense for the share-based payments is recognized over the vesting period, which is 36
months in the plan commencing 2021–2023. For the plan commencing 2021–2023, the compensation is
measured during performance period in cash, and only after performance period at grant date translated
into shares. The expense recognized for 2022 amounted to EUR 490 thousand (2021: EUR 423 thousand).
The cost related to share-based payments is recognized in sta costs. The share price at the grant date
of the PSP was EUR 21.04. The fair value of the share plan at the grant date was in total EUR 1.4 million.
The fair value of the share plan was determined from Musti Group’s share price at the grant date less the
present value of dividends expected to be paid during the performance period. Performance conditions
and service conditions were accounted for by adjusting the number of instruments.
In the third performance period, the plan has 37 participants at most and the targets for the
performance period relates to company´s total shareholder return (TSR) and adjusted EBITA. The
maximum number of shares to be paid based on the performance period is approximately 104,400
Musti Group plc´s shares. The number of shares represents gross earning, from which the withholding
of tax and possible other applicable contributions are deducted, and the remaining net amount is
paid in shares. However, the company has the right to pay the reward fully in cash under certain
circumstances. Potential rewards from the performance period will be paid out during winter of 2025.
The total expense for the share-based payments is recognized over the vesting period, which is 36
months in the plan commencing 2022–2024. For the plan commencing 2022–2024, the compensation
is measured during performance period in cash, and only after performance period at grant date
translated into shares. The expense recognized for 2022 amounted to EUR 63 thousand. The cost
related to share-based payments is recognized in sta costs. The share price at the grant date of the
PSP was EUR 26.06. The fair value of the share plan at the grant date was in total EUR 0.7 million. The
fair value of the share plan was determined from Musti Group’s share price at the grant date less the
present value of dividends expected to be paid during the performance period. Performance conditions
and service conditions were accounted for by adjusting the number of instruments.
Assumptions applied in determining the fair value of share award
Performance
period FY2020–22
Performance
period FY2021–23
Performance
period FY2022–24
Number of share awards granted,
maximum, pcs*
250,000 137,600 104,400
Number of plan participants at end of
nancial year
10 27 31
Share price at balance sheet date, EUR 17.82 17.82 17.82
Assumed fullment of performance
criteria, %
100.0% 100.0% 15.0%
Estimated number of share awards
returned prior to the end of commitment
period, %
9.0% 11.0% 14.0%
*Gross number of shares from which the applicable withholding tax is deducted, and the remaining net amount is paid in shares.
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3. CAPITAL EMPLOYED
This section describes assets that are needed in business operations, as well as business acquisition
carried out by Musti Group. Information on net working capital is presented in section 4.
The Group’s management has assessed the impacts of COVID-19 and the war in Ukraine by reviewing
the carrying values of the balance sheet items, the review did not indicate need for asset impairments.
3.1 Business combinations
Musti Group utilizes business acquisitions to accelerate the implementation of its strategy. During
2022 Musti Group acquired stores from its franchisees and independent entrepreneurs in Sweden and
Norway as asset deals.
Accounting principles
Acquired subsidiaries and businesses are consolidated in the consolidated nancial statements from the
date when Musti Group gained control over the acquired entity. Acquisition cost method is applied to the
business combinations. The consideration transferred in the acquisition of a subsidiary includes the fair
value of the transferred assets, incurred liabilities towards the previous owners of the acquired entity and
the shares issued by the Group. Transferred consideration also includes the fair value of the asset or liability
resulting from a contingent consideration arrangement. Identiable assets acquired and identiable
liabilities assumed in business combinations are initially valued at the fair value on the acquisition date.
The identiable assets include both tangible and intangible assets, such as customer relations, brands
and technology.
Expenses related to the acquisitions are recognized when they incur, and they are presented in the
prot and loss statement in the other operating expenses.
Accounting estimates and the management’s judgement
Net assets acquired in business combinations are measured at fair value. The fair value of acquired net
assets is determined based on the market value of similar assets (tangible xed assets) or an estimate
of the expected cash ows (intangible assets). The valuation is based on the current repurchase
values, expected cash ows or estimated selling prices, and it requires management’s judgement
and assumptions. The management believes that the estimates and assumptions used are suciently
reliable for determination of the fair value.
Acquisitions 1 Oct 2021–30 Sep 2022
During the period 1 October 2021 – 30 September 2022 Musti Group acquired 15 pet stores in Sweden
and 2 in Norway as business acquisitions. The total purchase price of the stores was approximately
EUR 18.7 million and the resulting goodwill EUR 17.5 million. Goodwill is based on synergies from the
acquisitions. The resulting goodwill is deductible in taxation. The store acquisitions increased the
Group's net sales by EUR 10.9 million and increased operating prot by EUR 1.8 million for the period 1
October 2021 – 30 September 2022. The eect on the Group's net sales would have been approximately
EUR 18.3 million and on the operating prot EUR 3.0 million for the period ended 30 September 2022 if
the acquisitions had been consolidated from the beginning of the nancial year.
Acquisitions 1 Oct 2020–30 Sep 2021
Musti Group’s subsidiary Arken Zoo AB acquired the entire capital stock of Calida AB and Lomiwa AB,
which operate two franchise stores in Sweden, on 1 January 2021. The acquisitions complement Musti
Group’s existing Arken Zoo chain in Sweden. The nal consideration paid was EUR 1.2 million in cash,
and the amount of cash and cash equivalents obtained was EUR 0.2 million. According to the acquisition
cost calculation the assets acquired amounted to EUR 0.4 million, liabilities amounted to EUR 0.3 million
and goodwill amounted to EUR 1.1 million.
Musti Group’s subsidiary Musti Norge AS acquired the entire capital stock of Celato AS, which
operates a pet stores in Norway, on 5 July 2021. The acquisitions complement Musti Group’s existing
Musti chain in Norway. The nal consideration paid was EUR 1.4 million in cash, and the amount of
cash and cash equivalents obtained was EUR 0.1 million. According to the preliminary acquisition cost
calculation the assets acquired amounted to EUR 0.3 million, liabilities amounted to EUR 0.2 million and
goodwill amounted to EUR 1.3 million.
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The table below sets forth the purchase prices paid for Calida AB, Lomiwa AB and Celato AS, values of
the acquired assets and assumed liabilities on the acquisition date, as well as the
cash ow impact of the acquired business operations:
Business combinations
EUR thousand
Calida AB and Lomiwa
AB stores
Celato AS store Total
Purchase price
Purchase price paid in cash 1,216 1,356 2,573
Fair value of net identiable assets
acquired
Non-current assets
Machinery and equipment 6 8 15
Deferred tax assets 0 0 0
Current assets
Inventories 160 173 333
Deferred tax assets 21 21
Trade and other receivables 53 5 59
Cash and cash equivalents 188 88 276
Total assets 408 295 704
Current liabilities
Trade and other payables 302 200 503
Total liabilities 302 200 503
Total net assets acquired 106 95 201
Goodwill 1,110 1,261 2,372
Cash ow impact
Purchase price paid in cash -1,216 -1,356 -2,573
Cash and cash equivalents of the
acquired company
188 88 276
Expenses related to the acquisition 0 0 0
Impact on cash ows -1,028 -1,268 -2,296
The acquisitions of Calida AB, Lomiwa AB and Celato AS increased the Group’s net sales by EUR 1.8
million and increased operating prot by EUR 0.3 million for the period 1 January 2021 – 30 September
2021. The eect on the Group's net sales would have been approximately EUR 3.4 million and on the
operating prot EUR 0.5 million for the period ended 30 September 2021 if the acquisitions had been
consolidated from the beginning of the nancial year.
During the period 1 October 2020 – 30 September 2021 Musti Group acquired 26 pet stores, 17
in Finland and nine in Sweden as business acquisitions. The total purchase price of the stores was
approximately EUR 9.1 million, of which EUR 3.8 million was for business acquisitions during Q4 2021,
and the resulting goodwill EUR 3.0 million. Goodwill is based on synergies from the acquisitions. The
resulting goodwill is deductible in taxation. The store acquisitions increased the Group's net sales by
EUR 5.2 million and increased operating prot by EUR 1.1 million for the period 1 October 2020 – 30
September 2021. The eect on the Group's net sales would have been approximately EUR 15.0 million
and on the operating prot EUR 3.1 million for the period ended 30 September 2021 if the acquisitions
had been consolidated from the beginning of the nancial year.
Mergers 1 Oct 2020–30 Sep 2021
On 30 April 2021 Musti Group’s Swedish subsidiaries Calida AB, Lomiwa AB and VetZoo AB were
merged into Musti Group’s Swedish subsidiary Arken Zoo AB (former Arken Zoo Nord AB).
On 10 June 2021 Musti Group’s Swedish subsidiaries Aeris Hund & Häst AB, Animail AB,
Djurintressenterna i Sverige AB and Grizzly Zoo AB were merged into Musti Group’s Swedish subsidiary
Arken Zoo Syd AB.
On 14 September 2021 Musti Group’s Norwegian subsidiary Celato AS was merged into Musti
Group’s Norwegian subsidiary Musti Norge AS.
On 30 September 2021 Musti Group’s Finnish subsidiary Musti Group Finland Oy was merged into
Musti Group plc.
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3.2 Intangible assets
The tables below set forth the changes in intangible assets during the nancial years covered by the
nancial statements.
Accounting principles
Goodwill
Goodwill arises from the acquisition of subsidiaries, and it corresponds to the amount that the
acquisition consideration exceeds the fair value of identiable net assets.
Goodwill acquired in business combinations is allocated for impairment testing to the cash
generating units that are expected to gain benet from the synergies created by the combination.
Goodwill is allocated to the unit at the company’s lowest level where the goodwill is monitored
internally for the management purposes.
Goodwill is reviewed for impairment annually or whenever events or changes in circumstances
indicate to a possible impairment. The carrying amount of the cash-generating unit including goodwill
is compared to the recoverable amount that is higher of the value in use or the fair value net of selling
expenses. Possible impairment is recognized as an expense with immediate eect, and it will not be
reversed later.
Other intangible assets
Other intangible assets include developments costs related to webstores, software and information
technology, as well as licenses and customer relations. Intangible assets are recorded in the balance
sheet when the accounting requirements of IAS 38 standard are satised. Intangible assets with a
limited useful life are valued in the original acquisition cost and they are amortised with the straight-
line method over their estimated useful life. Intangible assets are amortised over 3–10 years. Intangible
assets with indenite useful life are not amortised but tested annually for impairment. Except for
goodwill, Musti Group does not have intangible assets with indenite useful life.
EUR thousand Goodwill
Other
intangible
assets
Advance
payments
Total
2022
Cost 1 Oct 2021 158,318 43,540 1,165 203,023
Business combinations 0
Additions 17,541 5,231 -351 22,420
Disposals and closing of stores 0 0
Reclassications 0 0 0 0
Exchange dierences -5,236 -1,006 -9 -6,251
Cost 30 Sep 2022 170,623 47,765 805 219,192
Accumulated amortisation and impairment
at 1 Oct 2021
-487 -26,000 0 -26,486
Amortisation -6,425 -6,425
Impairment and closing of stores 0 0
Reclassications 0 0 0
Exchange dierences 369 751 0 1,120
Accumulated amortisation and impairment
at 30 Sep 2022
-117 -31,674 0 -31,792
Net book value at 1 Oct 2021 157,831 17,540 1,165 176,536
Net book value at 30 Sep 2022 170,505 16,090 805 187,401
2021
Cost 1 Oct 2020 145,796 38,354 1,485 185,635
Business combinations 0
Additions 10,568 4,873 -322 15,119
Disposals and closing of stores -124 -124
Reclassications 0 -78 0 -78
Exchange dierences 1,954 515 2 2,471
Cost 30 Sep 2021 158,318 43,540 1,165 203,023
Accumulated amortisation and impairment
at 1 Oct 2020
-362 -19,358 0 -19,720
Amortisation -6,543 -6,543
Impairment and closing of stores 0 0
Reclassications 0 185 185
Exchange dierences -124 -283 -407
Accumulated amortisation and impairment
at 30 Sep 2021
-487 -26,000 0 -26,486
Net book value at 1 Oct 2020 145,434 18,995 1,485 165,914
Net book value at 30 Sep 2021 157,831 17,540 1,165 176,536
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3.3 Goodwill and impairment testing
Accounting estimates and determinations based on the management's judgement
The management uses signicant estimates and determinations based on judgement for deciding the
level where goodwill is allocated, as well as for determining whether there are indications of impairment
of goodwill.
The recoverable amount of a cash generating unit is determined based on value-in-use calculations
requiring estimates. The calculations use cash ow projections based on budgets and nancial
estimates approved by management covering a three-year period. Cash ow forecasts are based on the
Group’s actual results and the management’s best estimates on future sales, cost development, general
market conditions and applicable tax rates. Cash ows estimates include budgets and rolling estimates
for a period of three years, and cash ows beyond the three-year period are extrapolated using the
estimated growth rates stated below. The growth rates are based on the management’s prudent
estimates on future growth in the business. Management tests the impacts of changes in signicant
estimates used in forecasts by sensitivity analyses as described in this Note.
To carry out impairment testing, the management monitors goodwill at the level of Finland,
Sweden and Norway as the cash generating units (CGU). The CGU level is based on how the
management follow the operative business. The recoverable amount of cash generating units have
been determined based on value in-use calculations using the projected discounted cash ows. These
calculations use cash ow projections based on the budgets and forecasts approved by management
covering a three-year period.
The table below sets forth the allocation of consolidated goodwill to the Group’s cash generating
units:
Goodwill from business combinations
EUR thousand 30 Sep 2022 30 Sep 2021
Finland 94,486 94,486
Sweden 71,397 60,801
Norway 4,622 2,545
Total 170,505 157,831
Key assumptions in the projections are the development of net sales and key cost items, the discount
rate used in the calculation as well as the cash ow growth rate after the three-year forecast period.
The projections have been prepared to reect the past performance and conservative expectations
for the future considering the Group’s market position and the general economic environment. Cash
ows beyond the three-year period are extrapolated using the estimated growth rates of 2% (1%). The
discount rate used in the impairment testing is weighted average cost of capital (WACC). The discount
rate reects the total cost of equity and debt and the market risks related to the Group. Discount rate
applied in Finland was 10.7% (2021: 8.2%), in Sweden 9.6% (2021: 7.9%) and in Norway 9.6% (2021: 8.1%).
As result of the impairment tests performed no impairment loss has been recognized for any
period presented. In 2022 the recoverable amount calculated on the basis on value-in use exceeded
the carrying value by EUR 72.8 million in Finland, EUR 52.9 million in Sweden and EUR 95.9 million
in Norway (2021: EUR 183.1 million in Finland, EUR 134.0 million in Sweden and EUR 163.6 million in
Norway).
Sensitivity analysis
The management of Musti Group has estimated that it is unlikely that a somewhat possible change in
key assumptions will cause the carrying amount of the cash-generating unit to exceed its recoverable
amount. The key assumptions are based on past experience and reects the management’s perception
of developments of cost and revenue. The average revenue growth used for the forecast period has
been 10.4%. The long-term EBITDA margin assumption used for the impairment testing of goodwill
is based on past experience about EBITDA margins and reects the management’s perception of
developments in sales prices and sales volumes during the forecast period.
3.4 Investments in joint ventures
Companies controlled by the Group together another party and where signicant decisions require
the consent of both parties, are treated as joint ventures due to their nature. The Group has one joint
venture, Premium Pet Food Suomi Oy, which produces pet foods. The book value of the investments
is EUR 1,074 thousand on 30 September 2022 (30 September 2021: EUR 990 thousand). The nancial
statements of the joint venture are prepared according to Finnish Accounting Standards and the
joint venture is consolidated in the consolidated nancial statements with the equity method. If the
nancial statements of the joint venture were prepared in accordance with IFRS, the consolidation
would not result in a material dierence compared to the consolidation with FAS. Musti Group is
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entitled to Premium Pet Food Suomi Oy’s net assets based on the shareholder agreements and the
legal form of the company.
The investment in Premium Pet Food Suomi Oy involves a risk relating to the raw material supply.
However, Musti Group estimates that this risk is not material, and the risk has not changed signicantly.
Premium Pet Food Suomi Oy’s nancial year ends at 30 June, which diers from Musti Group’s
nancial year that ends at 30 September. Consolidation with the Group’s nancial statements has been
carried out using the gures in Premium Pet Food Suomi Oy’s nancial statements for the nancial
period ended on 30 June, as the Group’s estimates that the dierence is not signicant as compared
to carrying out the consolidation on the basis of actual gures on 30 September. The tables below
summarize Premium Pet Food Suomi Oy’s balance sheet and prot and loss statement as at 30 June.
Summarized balance sheet
EUR thousand 30 Sep 2022 30 Sep 2021
Total non-current assets 8,903 8,033
Current assets
Cash -67 86
Other current assets 2,703 1,250
Total current assets 2,636 1,336
Total assets 11,539 9,369
Non-current liabilities
Financial liabilities 7,927 6,688
Other non-current liabilities 0 100
Total non-current liabilities 7,927 6,788
Current liabilities
Financial liabilities 600 512
Other liabilities 1,335 735
Total current liabilities 1,935 1,246
Total liabilities 9,862 8,035
Equity 1,677 1,335
Group’s share of equity 822 654
Summarized statement of profit or loss
EUR thousand 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Net sales 7,672 4,177
Depreciation and amortisation -707 -519
Financial income and expenses -199 -194
Prot before tax 536 -87
Appropriations -119 98
Income tax expense -69 0
Prot (loss) for the year 348 11
Group’s share of prot for the year 171 5
Dividends received 0 0
Changes in the carrying amount of the joint venture
EUR thousand 30 Sep 2022 30 Sep 2021
Book value at the beginning of the
nancial year
990 960
Share of prot 84 30
Book value at the end of the
nancial year
1,074 990
3.5 Property, plant and equipment
The tables below set forth changes in property, plant and equipment during the nancial years covered
by the nancial statements.
Musti Group’s machinery and equipment mainly comprise store and oce equipment. Other
tangible assets mainly include refurbishment costs of leased premises. The right-of-use items based on
lease agreements and recognized under IFRS 16 are included in the tangible assets in the balance sheet.
The right-of-use items and accounting principles applied to them are presented in the Note 3.6 Leases.
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Accounting principles
Property, plant and equipment are presented at acquisition cost less depreciation and potential
impairment losses. Subsequent costs are included in the carrying amount when they can be measured
reliably, and there is an economic benet to the company.
Signicant leasehold improvements are included in the asset’s carrying amount or are separated as
a separate asset when it is probable that they will be economically useful in the future and the costs
incurred can be distinguished from normal repair and maintenance costs.
Machinery and equipment as well as other tangible assets are depreciated over their useful
lives. Useful lives are based on estimates of the period over which the assets will generate revenue.
Depreciation is recognized on a straight-line basis based on the cost of the assets and estimated useful
lives. Impairment tests for depreciable non-current assets are performed if there are indications of
impairment at the balance sheet date.
Useful lives of the asset’s categories are:
• Machinery and equipment 3–7 years
• Right-of-use assets (IFRS 16 Leases) 3–15 years
• Renewal and refurbishment investments in lease premises 5–10 years
The Group estimates on each balance sheet date, if there is any indication that an asset may be
impaired. If such indication exists, the relevant asset is tested for impairment. The impairment test
estimates the asset’s recoverable amount.
The recoverable amount is higher of the asset’s fair value after selling costs or the use value based on
cash ow. If the recoverable amount cannot be determined on the asset level, the need for impairment
is estimated at the level of the smallest cash generating unit that is for its main parts independent from
other units and has cash ows that can be separated from the cash ows of other similar units.
EUR thousand
Machinery and
equipment
Other tangible
assets
Advance
payments
Total
2022
Cost 1 Oct 2021 17,765 15,881 89 33,736
Business combinations 0
Additions 3,283 6,515 -29 9,770
Disposals -70 -70
Reclassications 0 0 0
Exchange dierences -542 -924 0 -1,467
Cost 30 September 2022 20,507 21,403 60 41,969
Accumulated depreciation
at 1 Oct 2021
-11,344 -6,633 0 -17,977
Depreciation -2,826 -3,334 -6,159
Impairment 0
Disposals 65 65
Reclassications 0
Exchange dierences 357 281 638
Accumulated depreciation
at 30 Sep 2022
-13,813 -9,620 0 -23,433
Net book value at 1 Oct 2021 6,421 9,248 89 15,758
Net book value at 30 Sep
2022
6,694 11,783 60 18,536
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EUR thousand
Machinery and
equipment
Other tangible
assets
Advance
payments
Total
2021
Cost 1 Oct 2020 13,730 10,934 49 24,713
Business combinations 0
Additions 3,868 4,483 40 8,391
Disposals 0
Reclassications -131 -17 -148
Exchange dierences 298 481 0 779
Cost 30 September 2021 17,765 15,881 89 33,736
Accumulated depreciation
at 1 Oct 2020
-9,095 -4,314 0 -13,409
Depreciation -2,195 -2,193 -4,388
Impairment 0
Disposals 0 0
Reclassications 131 17 148
Exchange dierences -185 -143 -328
Accumulated depreciation
at 30 Sep 2021
-11,344 -6,633 0 -17,977
Net book value at 1 Oct
2020
4,635 6,620 49 11,304
Net book value at 30 Sep
2021
6,421 9,248 89 15,758
3.6 Leases
The Group has leased store premises and oce and warehouse spaces with lease agreements that are
included in the scope of IFRS 16 Leases. In addition, the Group has leased parking spaces, vehicles, IT
and other equipment and advertising spaces. The lease agreements have a xed term, or they can be
terminated with a notice. The Group does not have service agreements containing commodities that
should be recognized as right-of-use assets under IFRS 16.
Accounting principles
Right-of-use assets
Musti Group recognizes a right-of-use asset and a lease liability on the date when the agreement comes
into eect, excluding short-term lease agreements and leases of low value assets (see the next page).
The right-of-use asset is initially measured at cost, and it includes the initial valuation of the lease
liability, the lease amounts paid by the date when the agreement comes into eect net of any incentives
received in connection with the lease agreement, any initial direct costs incurred to Musti Group
and an estimate on costs that will incur to Musti Group from reversal and removal of the asset or the
remediation of the premises to the condition dened in the lease agreement.
Lease liability
Musti Group determines the value of the lease liability on the date when the lease agreement comes
into eect. The value of the lease liability includes payments that have not been paid on the date when
the lease agreement comes into eect, including xed payments, variable rents linked to an index or a
price level, execution price of an call option, it is reasonably certain that Musti Group will exercise the
option, and payment of sanctions resulting from termination of the lease, if the term of the lease takes
into account that Musti Group will exercise the option to terminate the lease.
Musti Group uses the minimum rents specied in the lease agreement for estimating the xed
payments. The non-lease components are separated from the lease payments when they can be
determined reliably. Musti Group also has lease agreements that include variable payments determined
based on net sales. Only minimum payments have been included in the lease liability for such
agreements, and variable payments based on the net sales are measured as a cost in the prot and loss
statement for the period when they incur.
Lease liability is remeasured when the lease term or lease payments are amended. Musti Group uses
the interest rate for additional loans for determining the interest rate of the lease liability, as no internal
interest rates for the lease agreements are available.
Short-term agreements and leases of low value assets
Musti Group recognizes in its prot and loss statement any lease payments on short-term leases with
a term of 12 months or less, as well as on lease agreements where leased asset is of low value. Leases
for low value assets are agreements where the leased asset would cost less than EUR 5,000 if it were
purchased as new. The expenses from such agreements are presented in this Note below.
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Sublease agreements
Musti Group has subleased intra-group commodities relating to store premises and xtures. They have
no impact on the consolidated gures.
Accounting estimates and management judgment
The management uses judgement for estimating the term of lease agreements with an option for
extension, termination or acquisition. When Musti Group is reasonably certain that the option for
extension, termination or acquisition will be exercised, the option is considered in the determination
of the lease period. If the exercise of the option is uncertain, the option is not included in the
determination of the lease term, right-of-use asset and lease liability.
The management uses judgement for estimating the term of lease agreements in eect until
further notice. The management’s estimates are based on the company’s strategic situation and
market conditions, as well the costs that would incur if the leased commodity would be replaced by
another commodity.
Determination of the interest rate for additional credit also requires management’s judgement. The
interest rate for additional credit is determined based on the Group’s nancing agreements taking into
account the uctuation of interest rates for riskless assets in each country. The company applies single
discounting rate for the portfolio comprising lease agreements with similar characteristics.
The tables set forth the amounts of right-of-use assets in the balance sheet and their impact on the
prot and loss statement.
Right-of-use assets
EUR thousand
Buildings and
structures
Machinery and
equipment
Total
2022
Net book value at 1 Oct 2021 71,225 520 71,745
New contracts 21,778 417 22,195
Contracts terminated prematurely -1,396 -70 -1,466
Revaluations and modications 8,715 63 8,778
Exchange rate dierences -3,029 -29 -3,058
Depreciation -21,688 -278 -21,966
Net book value at 30 Sep 2022 75,604 623 76,227
EUR thousand
Buildings and
structures
Machinery and
equipment
Total
2021
Net book value at 1 Oct 2020 61,516 498 62,014
New contracts 13,140 203 13,343
Contracts terminated prematurely -1,274 -4 -1,278
Revaluations and modications 13,286 56 13,342
Exchange rate dierences 1,925 18 1,943
Depreciation -17,370 -251 -17,620
Net book value at 30 Sep 2021 71,225 520 71,745
Lease liability
EUR thousand 30 Sep 2022 30 Sep 2021
Lease liability at 1 Oct 76,472 66,494
Net increases 26,173 27,385
Rent expenses -24,197 -19,679
Interest expense 2,233 2,272
Lease liability at 30 Sep 80,681 76,472
EUR thousand 30 Sep 2022 30 Sep 2021
Non-current lease liability 57,776 56,713
Current lease liability 22,905 19,759
Total 80,681 76,472
The maturity distribution of lease liabilities is presented in Note 5.1 Financial risk management.
Lease contracts in the income statement
EUR thousand 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Expenses from short-term rental agreements, leasing
agreements with minor value and variable rental
costs, that are not included in the lease liability
-1,181 -1,470
Depreciation of right of use assets -21,966 -17,620
Interest expenses from lease liability* -2,233 -2,272
Total -25,380 -21,362
*Included in the Note for nancial expenses, see Note 5.4 Financial income and expenses.
Repayments of lease liabilities in the nancing cash ow amounted to EUR 22,114 (17,297) thousand.
The weighted average interest used in the calculation of interest expenses was 2.8% (3.0%).
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4. NET WORKING CAPITAL
This section describes the items included in the net working capital. Net working capital comprises
inventory, trade and other receivables, as well as trade and other payables
EUR thousand 30 Sep 2022 30 Sep 2021
Net working capital
Inventories 61,401 44,297
Trade and other receivables 9,486 9,322
Excluding nancial items in other receivables 0 0
Trade and other payables -48,571 -46,827
Excluding nancial items in other liabilities 29 256
Total 22,345 7,048
Change of net working capital in the balance sheet -15,297 3,700
Items that are not included in the change of net
working capital as presented in the cash ow
statement, with their impact included elsewhere in
the cash ow statement*
-90 -7,865
Change of net working capital in the cash ow
statement**
-15,387 -4,166
*The major items are related to business combinations.
**An increase in the net working capital decreases the cash ow, and a decrease in the net working capital increases the cash ow.
4.1 Inventories
The Group’s inventory mainly consists of purchased pet food and other products. The Group does not
carry out production activities.
Accounting principles
Musti Group’s inventories are measured at the lower of cost and net realisable value. Net realisable
value is the estimated selling price in the ordinary course of business less direct costs necessary to
make the sale.
The acquisition cost of inventory is determined using the FIFO method. The acquisition cost comprises
all costs incurred from delivering the inventory to the location and condition at time of the review.
Inventory is recognized as a cost for the same period when the corresponding sales is recognized.
Impairment and obsolescence of inventory are recorded as costs at the time they incur. In addition,
Musti Group records continuously a provision for losses on the inventory.
A possible reversal of a write-down is recognized in the period in which the change in value is
recognized.
Accounting estimates
The Group regularly reviews inventories for obsolescence and turnover, and for possible reduction of
net realizable value below cost and records an impairment as necessary.
Inventories
EUR thousand 30 Sep 2022 30 Sep 2021
Finished goods 56,785 39,580
Advance payments 4,616 4,717
Total 61,401 44,297
Inventories recognised as expenses, for which the
carrying amount of inventories was reduced to the
net relisable value
3,295 4,867
EUR thousand 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
The amount of inventories recognized as an expense
during the period
224,993 186,465
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4.2 Trade and other receivables
Trade and other receivables comprise trade receivables, other receivables (mainly Value Added Tax
receivables) and deferred receivables. Income tax receivables are presented as a separate item in the
balance sheet.
Payment terms of trade receivables vary according to the customer type and credit rating. In the
online stores, the customers pay their purchases in advance. Impairment of trade and other receivables,
as well as the Group’s exposure to credit risk are described in the Note 5.1.
Accounting principles
Trade receivables are receivables resulting from selling products or providing services to customers
in the ordinary course of business. Receivables that are expected to be paid within one year from the
end of the nancial year are classied as current assets. Otherwise, they are presented as non-current
assets. Trade receivables usually fall due within 14 or 30 days, and as such, all of them are classied as
current assets. Note 5.1 describes principles applied to impairment of trade and other receivables, as
well as other accounting principles applied to them.
Other receivables mainly comprise prepayments and accrued income generated in the ordinary
course of the Group’s business.
The Group’s receivables are nancial assets not included in the derivatives with xed or determined
payments that are not quoted on active markets. They are included in the current assets, except for
items maturing over 12 months after the end of the reporting period. Group’s receivables consist of
‘Trade receivables and other receivables’ and ‘cash at hand’.
The table on right set forth the items included in the trade and other receivables:
Trade and other receivables
EUR thousand 30 Sep 2022 30 Sep 2021
Trade receivables* 2,660 3,597
Prepayments and accrued income 4,214 4,615
Other receivables 2,612 1,110
Total 9,486 9,322
*Credit card receivables are included in the trade receivables.
Of the trade receivables, a total of EUR 84 thousand has been recognized as a credit loss in the
statement of prot and loss in 2022. During 2021 the credit loss in the statement of prot and loss was
EUR 79 thousand.
The credit loss risk is described in more detail in the Note 5.1 Financial risk management.
4.3 Trade and other payables
Accounting principles
Trade payables are payment obligations towards suppliers and service providers arising from products
and services acquired in the ordinary course of business. Trade payables are classied as current liabilities
if they fall due for payment within one year from the balance sheet date. Trade payables are initially
measured at fair value, and subsequently at amortized cost using the eective interest rate method. Trade
and other payables are classied as other nancial liabilities and measured at amortized cost.
Customers are entitled to return their purchases within 14 days in Finland and within 30 days in
Sweden and Norway. For products sold, that have a repayment period at the end of the nancial year,
an obligation is recorded as a corresponding contractual liability. Contractual liability includes all costs
incurred in settling an existing obligation. The management estimates the amount of this liability based
on previous claims and any recent developments indicating that the number of claims may dier from
the previous claims in the future. For online sales, products in transit result in a contractual liability.
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Accounting estimates
Determination of the liability resulting from the right to return products involves uncertainty, as
the actual amount of returned goods may dier from the estimates. Estimates and assumptions are
reviewed quarterly. Dierences between estimated and actual product returns may impact the amount
of future contractual liabilities recorded, in accrued expenses.
The tables below set forth items included in trade and other payables:
Trade and other payables
EUR thousand 30 Sep 2022 30 Sep 2021
Trade payables 24,263 23,794
Advances received 287 269
Other liabilities 10,841 9,261
Accrued expenses 13,180 13,503
Total 48,571 46,827
Material items included in accrued expenses
EUR thousand 30 Sep 2022 30 Sep 2021
Personnel related costs 9,280 9,020
Accrued interests 29 256
Other items 3,871 4,227
Total 13,180 13,503
Material items included in other liabilities
EUR thousand 30 Sep 2022 30 Sep 2021
VAT liabilities 7,005 5,967
Payroll taxes 2,300 2,133
Loyalty program 1,381 1,131
Other items 156 30
Total 10,841 9,261
Trade and other payables comprise trade payables, other payables, advance payments, and accrued
expenses incurring in the ordinary course of business of the Group.
Contractual liabilities comprise rights to return products, as well as products in transit.
The valuation and revenue recognition of the loyalty program requires management’s judgment,
particularly in determining the fair value of bonuses and the expiration of bonuses. The bonus liability
consists of bonuses or stamp card discounts accrued to the loyal customer account (see Note 2.1
Segment reporting and net sales) less the estimated expiration date of the bonuses or discounts based
on historical information.
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5. CAPITAL STRUCTURE AND FINANCIAL INSTRUMENTS
This Note describes Musti Group’s exposure to nancial risks, how these risks may impact Musti
Group’s nancial results and how the management identies and mitigates exposures.
5.1 Financial risk management
The purpose of the risk management is to ensure access to cost ecient funding and to decrease the
negative impacts on the Group’s prot and balance sheet caused by nancial markets.
The nancial risk management of the Group is governed by the Treasury Policy. The Chief Financial
Ocer presents the policy to the Board of Directors for approval. The implementation of the policy
including funding, identication of exposures and hedging is delegated to the Group Treasurer.
Foreign exchange rate risk
Foreign exchange risk is dened as the uncertainty in cash ows, equity and nancial performance
arising from currency exchange rate volatility.
The Group is subject to foreign exchange rate risk arising from subsidiary nancing, commercial
cash ows and intra-group invoicing. The Group’s most signicant transaction currency risks arise from
the Norwegian Krone (NOK), the US dollar (USD) and the British Pound (GBP).
Transaction risk
Transaction risk arises from commercial cashows in foreign denominated currency (purchases and sales)
and balance sheet items in foreign denominated currency (such as loans, deposits, and interest ows).
Forecasted commercial cash ows are hedged up to 12 months in advance. Finnish and Swedish
subsidiaries have hedged forecasted USD and GBP outows using currency derivative agreements.
Additionally, receivables denominated in NOK and purchases in EUR have been hedged in one of
the Swedish subsidiaries. Signicant strengthening of the USD and GBP in relation to EUR and SEK
and weakening of the NOK in relation to SEK has a negative impact on the value of the forecasted
cashows.
Intra-group funding is granted in local currency of the subsidiary and is fully hedged with currency
forward agreements excluding loans classied as net investments in foreign subsidiaries.
The Group's foreign currency positions (in euros) at the end of the
reporting period
30 Sep 2022
EUR thousand SEK NOK USD GBP
Trade payables -203 0 -211 -1,241
Trade receivables 722
Interest-bearing receivables 642
Cash and cash equivalents 130 212 44 -6
Currency derivatives* -2,640 -7,398 5,878 3,817
Position, total -2,071 -6,465 5,711 2,569
30 Sep 2021
EUR thousand SEK NOK USD GBP
Trade payables -1,811 -1 -850 -1,130
Trade receivables 474 18
Interest-bearing receivables 40,724 3,443
Cash and cash equivalents 1,570 -991 44
Currency derivatives* 0 -6,552 7,419 6,542
Position, total 40,484 -3,626 6,587 5,456
*The Group has entered into foreign exchange derivative agreements to hedge forecasted cashows in SEK (vs EUR), NOK, USD
and GBP.
This Group level currency exposure is the basis for the sensitivity analysis of foreign exchange risk.
Assuming euro to appreciate 10% against all other currencies, the impact would be:
30 Sep 2022
EUR thousand SEK NOK USD GBP
EUR +10% 207 646 -571 -257
30 Sep 2021
EUR thousand SEK NOK USD GBP
EUR + 10% -4,048 363 -659 -546
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Assuming euro to depreciate 10% against all other currencies, the impact would be the same magnitude
but opposite. The sensitivity analysis as required by IFRS 7, includes nancial instruments, such as
trade and other receivables, trade and other payables, interest-bearing liabilities, deposits, non-current
receivables, cash and cash equivalents and derivative nancial instruments.
The following items related to exchange rates were recognized for the period through prot and loss:
EUR thousand 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Items recognised through prot and loss
Net exchange rate gains/losses included in the
nancial income/expenses
-3,001 1,605
Exchange rate gains/losses recognised in the
result for the period, total (net)
-3,001 1,605
Translation risk
Translation risk arises when the currency denominated income and balance sheet items of group
companies located outside the euro area are consolidated into euro. The most signicant translation
risk currencies are the Swedish krona (SEK) and the Norwegian krone (NOK). As on 30 September 2022
the total non-EUR denominated equity, goodwill and fair value step up of the subsidiaries was EUR 112.2
million (EUR 85.2 million). In addition, the group had intra-group loans classied as net investments
amounting to EUR 40.6 million (EUR 0.0 million).
Musti Group is currently not hedging any translation exposure.
Interest rate risk
Changes in interest rates impact the average interest rate of the Group’s loan portfolio, nancial
expenditure and hence the protability of the group. The Group is currently hedging interest rate risk
using interest rate derivatives.
During the nancial year ended 30 September 2022, interest-bearing nancial assets were
EUR0thousand (EUR0thousand) and interest-bearing liabilities EUR 156 million (EUR 127 million). Of
the interest-bearing liabilities 64% (61%) is denominated in euros. For all interest-bearing liabilities, the
ratio of xed rate paying liabilities in relation to all interest-bearing liabilities was 71% (60%). Excluding
leasing agreements, the ratio of xed rate paying liabilities was 40% (0%).
Sensitivity of interest expenses has been calculated by assuming a one-o, +1% (100 basis points) increase
in the interest rates of interest-bearing nancial liabilities and assuming no change in the net debt during the
year. The calculated impact on the company’s interest expenses is + EUR 0.5 million (+ EUR 0.5 million).
Credit risk
Credit risk is the risk of nancial loss to the Group if a customer or counterparty to a nancial
instrument fail to meet its contractual obligations. The Group’s credit risks arise principally from trade
receivables and the market value of nancial derivatives. The Group’s customer base is very diversied,
and the Group does not have signicant credit risk concentrations related to trade receivables.
The Group companies analyse solvency of new invoicing customers locally. Payment methods
mitigating credit risk, such as advance payments, are applied to customers with high risk. The maximum
exposure to credit risk corresponds to the book values of the nancial assets presented below.
The procedure under IFRS 9 is applied for credit loss provisions where the amount of the
provision corresponds to the expected credit losses over the whole lifetime of the receivable.
Credit loss provision on the expected credit losses are recognized based on the customers’
payment history and expectations on the credit losses. The Group’s trade receivables have short
maturities and the time value of the money does not have signicant impact when estimating the
amount expected of credit losses.
Counterparty risk relating to nancial assets and derivatives is mitigated by diversication of
exposures between pre-approved, high creditworthy counterparties. The Chief Financial Ocer and
the Group Treasurer review annually the creditworthiness of nancial counterparties using a framework
taking into account credit rating (Moody’s, S&P) and sustainability rating (Sustainalytics ESG).
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EUR thousand Expected credit loss rate Trade receivables (gross) Deduction related to losses Trade receivables (net)
The table below sets forth the maturity distribution of
receivables and provisions for impairment based on
credit risk estimates.
% 30 Sep 2022 30 Sep 2021 30 Sep 2022 30 Sep 2021 30 Sep 2022 30 Sep 2021
Unmatured 0.5% 915 1,781 5 9 910 1,772
<30 days 1% 61 20 1 0 60 20
30–60 days 5% 14 192 1 10 13 182
61–180 days 10% 35 95 3 9 31 85
180–360 days 50% 16 -2 8 -1 8 -1
over 360 days 100% 59 45 59 45 0 0
Total 1,100 2,131 76 72 1,024 2,059
Credit card receivables 0.5% 1,640 1,547 8 8 1,632 1,539
Total 2,740 3,677 84 80 2,656 3,597
The groups other receivables do not contain impaired or delayed items. Based on the credit history
of other groups, the receivables will be paid when they fall due. The Group has no guarantee for
these receivables.
Liquidity and refinancing risk
Liquidity risk refers to the risk of the Group not being able to full its payment obligations and
renancing risk refers to the risk of the Group not being able to renance its maturing liabilities.
The Treasury Policy governs the mitigation of renancing and liquidity risk by setting requirements
on renancing, the amount of committed credit facilities and the level of liquid assets to be kept
available. Group Treasury monitors and forecasts the short and long term needs of the Group and
ensures that sucient liquidity and credit facilities are available.
As of 30 September 2022 the Group’s liquidity and renancing position was good. The amount of
cash and cash equivalent was EUR 10.0 million (EUR 13.0 million) and the Group has EUR 40 million of
undrawn revolving credit facilities (maturing in 2025) in place. Additionally, the Group has a 10 million
EUR cash pool overdraft limit and EUR 50 million commercial paper programme of which 30% was
utilized as of 30 September 2022.
The Group’s nancing agreements contain covenants relating to the net debt to EBITDA (leverage)
ratio. Violation of covenant terms may increase nancial costs or lead to loan termination. The
covenants are reviewed and reported to the bank’s quarterly. During the nancial year 2022, all
quarterly covenant conditions were met.
The table below sets forth the Group’s nancial liabilities under the relevant maturity groups based
on the time remaining until the contractual maturity as at the balance sheet date. The gures presented
in the table are contractual undiscounted amounts.
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Contractual maturities of financial liabilities
30 Sep 2022
EUR thousand FY2023 FY2024 FY2025 FY2026 FY2027 FY2028- Total
Non-current liabilities
Loans from credit
institutions
59,898 59,898
Lease liability 20,577 15,501 8,529 4,966 8,202 57,7 76
Other non-current
interest-bearing liabilities
0
Current liabilities
Commercial papers 14,950 14,950
Lease liability 22,905 22,905
Trade and other payables* 24,386 24,386
Total 62,241 20,577 75,400 8,529 4,966 8,202 179,915
Interest payments 3,076 2,404 1,217 600 364 227 7,890
30 Sep 2021
EUR thousand FY2022 FY2023 FY2024 FY2025 FY2026 FY2027- Total
Non-current liabilities
Loans from credit
institutions
49,872 49,872
Lease liability 19,340 14,903 8,891 4,997 8,582 56,713
Other non-current
interest-bearing liabilities
0 0
Current liabilities
Loans from credit
institutions
0 0
Lease liability 19,759 19,759
Trade and other payables* 23,794 23,794
Total 43,553 69,212 14,903 8,891 4,997 8,582 150,138
Interest payments 2,922 1,932 1,110 668 403 255 7,538
*Other receivables and other payables include only items classied as nancial assets or liabilities.
The Group’s loans from credit institutions on 30 September 2022 amounted to EUR 59.9 million (EUR
49.9 million). The non-current loans from credit institutions mature on 23 December 2024.
Fair value hierarchy
Level 1
Quoted unadjusted prices at the balance sheet date in active markets. The market prices are readily
and regularly available from an exchange, dealer, broker, market information service system, pricing
service or regulatory agency. The quoted market price used for nancial assets is the current bid price.
Level 1 nancial instruments include investments in funds classied as nancial instruments at fair value
through prot and loss. Musti Group does not have Level 1 nancial instruments.
Level 2
The fair value of nancial instruments in Level 2 is determined using valuation techniques. These
techniques utilize observable market data readily and regularly available from an exchange, dealer,
broker, market information service system, pricing service or regulatory agency. Musti Group has
classied derivatives at fair value according to the Level 2.
Level 3
A nancial instrument is categorized into Level 3,if the calculation of the fair value cannot be based on
observable market data. Musti Group had no such nancial instruments in 2022 or 2021.
Fair value hierarchy
30 Sep 2022
EUR thousand Level 1 Level 2 Level 3
Assets
Financial assets at amortised cost
Other non-curret assets 154
Trade and other receivables* 2,660
Cash and cash equivalents 10,054
Financial assets at fair value through prot and loss
Derivative nancial instruments 2,135
Total 15,004
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30 Sep 2021
EUR thousand Level 1 Level 2 Level 3
Assets
Financial assets at amortised cost
Other non-curret assets 109
Trade and other receivables* 3,597
Cash and cash equivalents 13,013
Financial assets at fair value through prot and loss
Derivative nancial instruments 484
Total 17,204
30 Sep 2022
EUR thousand Level 1 Level 2 Level 3
Liabilities
Financial liabilities at amortised cost
Loans from credit institutions 59,898
Commercial papers 14,950
Lease liability 80,681
Trade and other payables* 24,386
Financial assets at fair value through prot and loss
Derivative nancial instruments 73
Total 179,989
30 Sep 2021
Level 1 Level 2 Level 3
Liabilities
Financial liabilities at amortised cost
Loans from credit institutions 49,872
Lease liability 76,472
Trade and other payables* 23,794
Financial assets at fair value through prot and loss
Derivative nancial instruments 441
Total 150,579
*Other receivables and other payables include only items classied as nancial assets and liabilities.
5.2 Financial assets and liabilities
Accounting principles
Musti Group classies nancial assets and liabilities according to IFRS 9 based on the cash ow
properties of the contracts related to them and their original purpose of use in line with the business
model at the time of the acquisition. The classication is changed only if the business model applied
in the investment activities is amended. Financial assets or liabilities are presented as a non-current
item, if the remaining maturity is over 12 months from the end of the period, and as a current item if
the remaining maturity is under 12 months from the end of period. Financial assets and liabilities are
classied as follows:
Under IFRS 9, nancial assets are classied into the following categories:
I. nancial assets at amortized cost
II. nancial assets at fair value through prot and loss
III. nancial assets at fair value through other comprehensive income
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Financial assets
Financial assets and amortized cost
Financial assets are classied as nancial assets at amortized cost if the following criteria are met:
I. the nancial asset is held to generate cash ows based on the business model; and
II. the cash ows are contractual capital returns and interest accrued on the capital.
Financial assets at amortized cost are valued using the eective interest rate method. Impairment is
considered in the valuation. Gains and losses are recognized though prot and loss when the nancial
asset is reclassied or changed or its value decreases. Interest income is recognized in nance income.
Financial assets at amortized cost include term deposits, interest-bearing loans and other
receivables, trade receivables and non-interest-bearing receivables.
Expected credit loss under IFRS 9 impacts the valuation of nancial assets at amortized cost. Musti
Group applies to the valuation of trade receivables the simplied model under IFRS 9 where a provision
for credit losses is recognized in the trade receivables based on the expected credit losses. See Note 5.1
Financial risk management.
Financial assets at fair value through profit and loss
Financial assets at fair value through prot and loss are nancial assets acquired for trading purposes.
Financial assets at fair value through prot and loss are derivatives not eligible for hedge accounting.
Changes in fair value, as well as prot and loss in connection derecognition, are presented in the prot
and loss statement.
Financial assets at fair value through other comprehensive income
Financial assets are classied as nancial assets at fair value through other comprehensive income, if
the following criteria are met:
I. according to the business model, the nancial asset is held to generate cash ows based on a
contract or it is available for sale; and
II. the cash ows are contractual capital returns and interest accrued on the capital.
Financial liabilities
Under IFRS 9, nancial liabilities are classied into the following categories:
I. nancial liabilities at amortized cost
II. nancial liabilities at fair value through prot and loss
Financial liabilities at amortized cost
Musti Group’s loans from nancial institutions, commercial papers and trade and other payables are
recognized at the time on acquisition at fair value net of transaction costs. Loans are subsequently
measured using the eective interest rate method. The interest expenses of the loans are recorded
in the prot and loss statement. Trade and other payables are non-interest-bearing current unpaid
payables.
Financial liabilities at fair value through profit and loss
Financial liabilities at fair value through prot and loss are nancial liabilities acquired for trading
purposes.
Financial liabilities measured at fair value through prot and loss are derivatives not eligible for
hedge accounting. Changes in fair value, as well as prot and loss in connection derecognition, are
presented in the prot and loss statement.
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Financial assets and liabilities
The table below sets forth the classication of nancial assets and liabilities and their book values:
Financial assets
EUR thousand Financial assets at fair value through prot and loss Financial assets at amortized cost Book value Fair value
30 Sep 2022
Non-current assets
Other non-current assets 154 154 154
Total 154 154 154
Current assets
Trade and other receivables 2,660 2,660 2,660
Derivative nancial instruments 2,135 2,135 2,135
Cash and cash equivalents 10,054 10,054 10,054
Total 2,135 12,714 14,850 14,850
Financial assets, total 2,135 12,869 15,004 15,004
EUR thousand Financial assets at fair value through prot and loss Financial assets at amortized cost Book value Fair value
30 Sep 2021
Non-current assets
Other non-current assets 109 109 109
Total 109 109 109
Current assets
Trade and other receivables 3,597 3,597 3,597
Derivative nancial instruments 484 484 484
Cash and cash equivalents 13,013 13,013 13,013
Total 484 16,611 17,094 17,094
Financial assets, total 484 16,720 17,204 17, 204
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Financial liabilities
EUR thousand Financial assets at fair value through prot and loss Financial assets at amortized cost Book value Fair value
30 Sep 2022
Non-current liabilities
Loans from credit institutions 59,898 59,898 59,898
Lease liability 57,7 76 57,7 76 57,7 76
Total 117,674 117,674 117,674
Current liabilities
Commercial papers 14,950 14,950 14,950
Lease liability 22,905 22,905 22,905
Trade and other payables 24,386 24,386 24,386
Derivative nancial instruments 73 73 73
Total 73 62,241 62,314 62,314
Financial liabilities, total 73 179,915 179,989 179,989
EUR thousand Financial assets at fair value through prot and loss Financial assets at amortized cost Book value Fair value
30 Sep 2021
Non-current liabilities
Loans from credit institutions 49,872 49,872 49,872
Lease liability 56,713 56,713 56,713
Total 106,586 106,586 106,586
Current liabilities
Loans from credit institutions 0 0 0
Lease liability 19,759 19,759 19,759
Trade and other payables 23,794 23,794 23,794
Derivative nancial instruments 441 441 441
Total 441 43,553 43,994 43,994
Financial liabilities, total 441 150,138 150,579 150,579
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Changes in financial liabilities
Changes in liabilities arising from financing activities
EUR thousand 1 Oct 2021 Cash ows New leases
Foreign exchange
movement
Other non-cash
movements
30 Sep 2022
Current interest-bearing loans and borrowings (excluding
items listed below)
0 14,946 0 4 14,950
Current lease liability 19,759 -22,114 5,400 -817 20,677 22,905
Non-current interest-bearing loans and borrowings
(excluding items listed below)
49,872 10,000 26 59,898
Non-current lease liability 56,713 16,795 -2,241 -13,491 57,776
Derivative nancial instruments 441 -441 73 73
Total liabilities from nancing activities 126,786 2,391 22,195 -3,058 7,290 155,603
EUR thousand 1 Oct 2020 Cash ows New leases
Foreign exchange
movement
Other non-cash
movements
30 Sep 2021
Current interest-bearing loans and borrowings (excluding
items listed below)
0 0 0 0 0
Current lease liability 15,957 -17,297 3,167 445 17,487 19,759
Non-current interest-bearing loans and borrowings
(excluding items listed below)
49,781 91 49,872
Non-current lease liability 50,538 10,176 1,499 -5,498 56,713
Derivative nancial instruments 53 -53 441 441
Total liabilities from nancing activities 116,328 -17,350 13,343 1,943 12,522 126,786
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Liquid funds
Deposits with a maturity of up to 3 months from the year end are classied as liquid funds and are
measured at amortized cost. Cash and cash equivalents include readily available cash and bank
deposits, as well as xed-term deposits.
Liquid funds are regularly assessed for impairment, but the risk is limited due to their high credit
rating and short maturity.
Liquid funds
EUR thousand 30 Sep 2022 30 Sep 2021
Cash and cash equivalents 10,054 13,013
Total 10,054 13,013
Derivative financial instruments
Accounting principles
Derivatives are initially recorded at their fair value on the date of the contract, and they are
subsequently valued at their fair value. Derivatives a classied as instruments held for trading and
recorded at fair value through prot and loss.
The Group utilizes derivatives for hedging operative exchange risks and interest rate risk. The
company does not apply hedge accounting.
The nominal and fair values of the derivatives at the end of the
financial period:
EUR thousand Nominal value
Receivables
at fair value
Payables
at fair value
Net fair value
30 Sep 2022
Forward exchange
contracts
19,733 584 -73 511
Interest rate swaps 30,000 1,551 1,551
Total 49,733 2,135 -73 2,062
EUR thousand Nominal value
Receivables
at fair value
Payables
at fair value
Net fair value
30 Sep 2021
Forward exchange
contracts
20,332 484 -441 42
Total 20,332 484 -441 42
Maturity distribution of derivates (at nominal value)
Maturity distribution of derivatives at 30 September 2022
EUR thousand FY2023 FY2024 FY2025 FY2026 FY2027
Forward exchange
contracts
19,733 0 0 0 0
Interest rate swaps 0 0 30,000 0 0
Total 19,733 0 30,000 0 0
Maturity distribution of derivatives at 30 September 2021
EUR thousand FY2022 FY2023 FY2024 FY2025 FY2026
Forward exchange
contracts
18,957 1,375 0 0 0
Total 18,957 1,375 0 0 0
Interest-bearing liabilities
Net debt is the total amount of loans from credit institutions and lease liabilities included in the current
and non-current liabilities less cash and bank deposits. The targeted net debt and the ratio of net debt
to EBITDA are linked to the covenants included in the nancing agreements.
Net debt
EUR thousand 30 Sep 2022 30 Sep 2021
Non-current interest-bearing liabilities 117,674 106,586
Current interest-bearing liabilities 37,928 20,200
Derivative nancial instruments -2,062 -484
Cash and cash equivalents -10,054 -13,013
Net debt 143,487 113,289
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Interest-bearing liabilities
Balance sheet values Fair values
EUR thousand 30 Sep 2022 30 Sep 2021 30 Sep 2022 30 Sep 2021
Loans from credit institutions 59,898 49,872 59,898 49,872
Lease liability 57,7 76 56,713 57,7 76 56,713
Other non-current liabilities 0 0 0 0
Total interest-bearing non-current
liabilities
117,674 106,586 117,674 106,586
Commercial papers 14,950 0 14,950 0
Lease liability 22,905 19,759 22,905 19,759
Derivative nancial instruments 73 441 73 441
Total interest-bearing current
liabilities
37,928 20,200 37,928 20,200
Total interest-bearing liabilities 155,603 126,786 155,603 126,786
5.3 Commitments and contingencies
This Note presents information on items not included in calculations when preparing the nancial
statements, as they do not satisfy accounting requirements yet. These items include guarantees,
pledges and contingent liabilities.
Compliance with covenant conditions
Musti re-arranged its long-term nancing into a new bilateral loan agreement of EUR 60 million during
the nancial year. The loan agreements contain nancial covenant relating to the Group’s leverage (net
debt to EBITDA) which is evaluated quarterly. Violation of covenant terms may increase nancial costs
or lead to loan termination. The covenant has been fullled during the nancial year. Also, during the
nancial year 2021, the covenants relating to the previous nancing arrangement were met.
Other commitments
During the periods presented in the nancial statements, Musti Group has not been involved in legal
proceedings, arbitration or administrative proceedings that could have a signicant impact on the
Group’s nancial position or protability.
EUR thousand 30 Sep 2022 30 Sep 2021
Other guarantees given on own behalf
Guarantees relating to rental payments 4,455 4,619
Other commitments 43 129
Total 4,498 4,748
EUR thousand 30 Sep 2022 30 Sep 2021
Other commitments
Guarantees given on behalf of joint ventures 5,177 2,929
Lease liabilities for leases not recognised in the
balance sheet
1,570 4,984
Total 6,747 7,913
Lease liabilities not recognized in the balance sheet includes the nominal amount of low-value and
short-term lease liabilities and the liability for agreements that will enter into force in the future.
Contingent liabilities
Musti Group has been subject to a tax audit of Musti Group Oyj, Musti Group Finland Oy and Musti
Group Nordic Oy regarding nancial years 2018–2020. Musti Group Oyj has in October 2021 received
a tax audit report from the Finnish tax authorities. The tax audit report included subsequent taxes and
tax increases amounting to a total of EUR 0.9 million, relating to the VAT deductibility of IPO related
costs. Tax and increases of EUR 0.9 million were booked as receivable and paid in November 2021. The
company disagrees with the interpretation made in the tax audit. The company has been reassessed
in accordance with the interpretations set out in the tax audit report, but the company has led a
claim for adjustment to the Finnish Tax Administration’s Assessment Adjustment Board. There were no
repercussions of the tax audit for the nancial years 2018–2020 of Musti Group Finland Oy’s and Musti
Group Nordic Oy’s.
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5.4 Financial income and expenses
This Note presents the Group’s nancial income and expenses. The Group has entered into an interest
rate swap agreement to protect itself from the changes of interest of bank loans with variable interest
rates, as well as exchange rate hedges for its purchases in US Dollar and British Pound in Finland and
Sweden.
EUR thousand 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Financial income
Interest income 31 3
Exchange gains 2,495 5,266
Gain from changes in the fair value of derivatives 2,135 484
Other nancial income 1,733 28
Total 6,395 5,780
Financial expenses
Interest expenses on loans valued to amortized cost -782 -788
Interest expenses from lease liability -2,233 -2,272
Exchange losses -5,496 -3,704
Loss from changes in the fair value of derivatives -73 -441
Other nancial expenses -254 -70
Total -8,837 -7,275
Financial income and expenses, net -2,443 -1,495
The Group’s interest income and other nancial income mainly relate to exchange rate gains and
interest income and changes in the fair value of derivatives. Financial expenses mainly relate to loans
from credit institutions and lease liabilities, and to valuation losses from derivatives and exchange
rate losses.
5.5 Capital Management
The company’s Board of Directors is responsible for the capital management strategy. The aim of
capital management is to maintain sucient equity ratio and to comply with requirements set for
leverage in nancing agreements. Capital sources include operating cash ows, equity nancing from
shareholders and external loans. Covenants included in nancing agreements place requirements
relating to the ratio of net debt to EBITDA (leverage). Other terms and conditions on external capital
are not applied to the Group. In capital management, the Group’s equity consists of equity and
liabilities as presented in the balance sheet.
With capital management, the Group aims to safeguard its continuous operations in order to provide
yield to the shareholders and increase the value of the capital that they have invested. The Group
monitors the adjusted EBITA margin, EBITDA margin-% and the net debt ratio to last twelve months
adjusted EBITDA.
EUR thousand Target level
1 Oct 2021–
30 Sep 2022
1 Oct 2020–
30 Sep 2021
Adjusted EBITA margin, % ≥13% 9.9% 10.8%
Net debt / LTM Adjusted EBITDA <2.5x 2.1 1.9
5.6 Equity
This Note describes items included in the equity of Musti Group.
Accounting principles
The Group’s equity includes instruments that evidences a residual interest in the assets of an entity after
deducting all its liabilities and contains no contractual obligation for the issuer to deliver cash or other
nancial asset to another entity. Costs that relate to the issue or repurchase of own equity instruments
are recognized as a deduction in equity.
All company shares are reported as share capital. Any repurchase of its own shares by the company
is deducted from equity.
The total equity consists of the share capital, the invested unrestricted equity reserve, translation
dierences and accumulated prots.
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Share capital
On 30 September 2022 the share capital of Musti Group amounted to EUR 11,001,853.68 and the
number of shares was 33,535,453. The company has one share class. Each share entitles its holder to
one vote at the general meeting and an equal dividend. The company holds 244,000 own shares.
The Annual General Meeting authorized the Board of Directors to decide on the repurchase of the
company's own shares and/or on the acceptance as pledge of the company's own shares as follows. The
number of own shares to be repurchased and/or accepted as pledge based on this authorization shall
not exceed 3,185,000 shares in total, which corresponds to approximately 9.5 per cent of all the shares
in the company. However, the company together with its subsidiaries cannot at any moment own and/or
hold as pledge more than 10 per cent of all the shares in the company.
Own shares can be repurchased only using the unrestricted equity of the company at a price
formed in public trading on the date of the repurchase or otherwise at a price determined by the
markets. The Board of Directors decides on all other matters related to the repurchase and/or
acceptance as pledge of own shares. Own shares can be repurchased using, inter alia, derivatives.
Own shares can be repurchased otherwise than in proportion to the shareholdings of the
shareholders (directed repurchase).
This authorization cancelled the authorization given by the Annual General Meeting held on 21
January 2021 to decide on the repurchase of the company’s own shares and/or to accept the company’s
own shares as pledge. The authorization is eective until the next Annual General Meeting, however, no
longer than until 27 July 2023.
The Annual General Meeting also authorized the Board of Directors to decide on the issuance of
shares as well as the issuance of special rights entitling to shares referred to in chapter 10 section 1 of
the Finnish Companies Act as follows. The number of shares to be issued based on this authorization
shall not exceed 3,185,000 shares, which corresponds to approximately 9.5 per cent of all the shares
in the company. The authorization covers both the issuance of new shares as well as the transfer of
treasury shares held by the company.
The Board of Directors decides on all the conditions of the issuance of shares and of special rights
entitling to shares. The issuance of shares and of special rights entitling to shares may be carried out
in deviation from the shareholders' pre-emptive rights (directed issue). This authorization cancelled the
authorization given by the Annual General Meeting held on 21 January 2021 to decide on the issuance of
shares as well as on the issuance of special rights entitling to shares. The authorization is eective until
the next Annual General Meeting, however, no longer than until 27 July 2023.
Changes in share capital and invested unrestricted equity reserve
EUR thousand
Number of
outstanding
shares
Own shares
held by
the parent
company
Total number
of shares
Share capital
EUR thousand
Invested
unrestricted
equity
1 Oct 2021 33,535,453 -244,000 33,291,453 11,002 147,781
Capital return 0 0 0 0 -14,648
Acqusition of own
shares
0 0 0 0 0
30 Sep 2022 33,535,453 -244,000 33,291,453 11,002 133,133
1 Oct 2020 33,535,453 0 33,535,453 11,002 167,412
Capital return 0 0 0 0 -12,720
Acqusition of own
shares
0 -244,000 -244,000 0 -6,910
30 Sep 2021 33,535,453 -244,000 33,291,453 11,002 147,781
Earnings per share
The basic earnings per share gure is calculated by dividing the result for the nancial year attributable
to the parent company’s shareholders by the weighted average number of shares outstanding during
the nancial year. When calculating the earnings per share adjusted by dilution, the weighted average
of the number of shares takes into account the diluting eect resulting from changing into shares all
potentially diluting shares.
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Earnings per share
30 Sep 2022 30 Sep 2021
Earnings per share, basic
Net prot attributable to equity owners of the parent
company, EURthousand
22,328 20,872
Weighted average number of shares 33,337,805 33,410,411
Basic earnings per share, EUR 0.67 0.62
Earnings per share, diluted
Net prot attributable to equity owners of the parent
company, EURthousand
22,328 20,872
Weighted average number of shares 33,337,805 33,395,338
Adjustments:
Average number of treasury shares it is possible to
be issued on the basis of the share-based payments
240,824 260,080
Weighted average number of shares for diluted
earnings per share
33,578,629 33,655,418
Diluted earnings per share, EUR 0.66 0.62
Dividend and profit distribution
The Board of Directors of Musti Group plc proposes to the Annual General Meeting that shareholders
will be paid a capital return of EUR 0.50 per share to be distributed from the invested unrestricted
equity reserve totalling approximately EUR 16.7 million and that no dividend will be paid for the nancial
year ended 30 September 2022. For the nancial year 2021 a capital return was paid totalling EUR 14.6
million, no dividend has been distributed from the 2021 results.
Musti Group plc’s distributable funds
EUR thousand 30 Sep 2022
Retained earnings at the end of nancial year 7,298
Unrestricted equity 140,043
Own shares -6,910
Result for the nancial year 3,619
Distributable equity total 144,049
Invested unrestricted equity reserve
Under the Finnish Companies Act, the subscription price of new shares is credited to the share capital,
unless it is provided in the share issue resolution that it is to be credited in full or in part to the invested
unrestricted equity reserve. Contributions to the reserve for invested unrestricted equity can also be
made without share issues.
Translation dierences
Translation dierences arising on the translation of subsidiaries’ nancial statements into euros are
recognized in other comprehensive income and accumulated in equity.
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6. OTHER NOTES
6.1 Related party transactions
Parties are considered to be related if one party has the ability to control or exercise signicant
inuence on the other party, or if the parties exercise joint control in making nancial and operating
decisions. Musti Group’s related parties include its subsidiaries, joint venture, Board of Directors and
the members of the management team, including the CEO, as well as their family members and entities
controlled by these individuals.
The following transactions were carried out with joint ventures:
EUR thousand 30 Sep 2022 30 Sep 2021
Purchases of goods and services 4,430 3,476
Receivables 76 76
Payables 96 160
Other receivables 0 150
Guarantees given 5,177 2,929
Related party transactions are executed with the arm’s length principle, and their terms and conditions
correspond to transactions carried out with independent parties. The management’s remuneration
is presented in the table below. No loans have been granted to the management, and no other
transactions have been conducted with the management.
Management compensation
The CEO and Management Team remuneration
EUR thousand CEO
Management
team
Total 2022 CEO
Management
team
Total 2021
Salaries and other short-term
employee benets
448 1,480 1,928 448 1,687 2,135
Short-term incentives 36 206 242 107 306 413
Pension costs - dened
contribution plans
0 306 306 60 393 453
Total 483 1,992 2,476 614 2,386 3,001
The remuneration of the CEO and the members of the Management Team is presented on accrual
basis. The Group management remuneration is described more in detail in the separate Remuneration
Statement and Note 2.4 Share-based payments.
Remuneration paid to Board of Directors
Paid FY2022 Paid FY2021
EUR thousand 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Jerey David 69 65
Ingrid Jonasson Blank 47 43
Ilkka Laurila (as of January 21, 2021) 40 33
Johan Dettel (as of January 27, 2022) 42 0
Inka Mero (as of January 27, 2022) 40 0
Total 238 140
The remuneration of the Board of the Directors is presented on accrual basis. According to the
decision of the 2022 Annual General Meeting, the annual fees paid to the Board members were:
Chairman of the Board EUR 65,000 and other Board members EUR 35,000. The annual fees paid to
the members of the Committees were: Chairman of the Committee EUR 7,500 and other Committee
members EUR 5,000.
6.2 Taxes
Income taxes
Accounting principles
The taxes recognized in the consolidated income statement include the Group companies’ taxes
on current net prots on an accrual basis, prior period tax adjustments and changes in deferred
taxes. The Group companies’ taxes have been calculated from the taxable income of each company
determined by local jurisdiction. The country of registration of each group company is presented in
Note 1.4 Group information.
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Income tax expenses
EUR thousand 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Current tax:
Current tax on prots for the year -4,837 -4,387
Taxes for prior years -40 -23
Total current tax expense
-4,877
-4,411
Deferred tax:
Change in deferred taxes -1,232 -1,577
Income taxes -6,109 -5,988
Reconciliation of income tax expense and taxes calculated at the
Finnish tax rate 20%
EUR thousand 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Prot before tax 28,440 26,882
Tax calculated at Finnish tax rate 20% -5,688 -5,376
Eect of other tax rates for foreign subsidiaries -112 -243
Expenses not deductible for tax purposes -444 -238
Income not subject to tax 17 6
Utilisation of previously unrecognised tax losses 0 139
Taxes for prior years -40 -23
Change of tax rates 29 0
Other items 130 -252
Taxes in income statement -6,109 -5,988
Deferred tax assets and liabilities
Accounting policy
Deferred tax assets and liabilities are recognized on all temporary dierences arising between the tax
bases and carrying amounts of assets and liabilities. The most signicant temporary dierences arise
from right-of-use assets and corresponding liabilities. Deferred tax liability has not been calculated on
goodwill insofar as goodwill is not tax deductible. Deferred tax on subsidiaries’ undistributed earnings
is not recognized unless a distribution of earnings is probable, causing tax implications. A deferred
income tax asset is recognized to the extent that it is probable that it can be utilized against future
taxable income.
Deferred tax has been determined using the tax rates enacted at the balance sheet date, and as the
rates changed, at the known new rate. A deferred income tax asset is recognized to the extent that
it is probable that it can be utilized against future taxable income. The Group’s deferred income tax
assets and liabilities are oset when they relate to income taxes levied by the same taxation authority.
Deferred taxes relating to IFRS 16 right-of-use assets and lease liabilities have been netted on the
consolidated balance sheet but in the specication of the changes below, the gross amounts to the
deferred taxes have been presented.
Determinations based on the management's judgement
Determining to which extent deferred tax assets can be recognized requires management’s judgement.
The management of Musti Group has used judgement when determining if deferred tax asset is
recognized for an unused tax loss carry forward or unused tax credits. Recognition is done only to
the extent that it is probable that future taxable prots will be available against which the loss or
credit carry forward can be utilized. The Group estimates positions taken in tax return with respect
to situations in which applicable tax regulation is subject to interpretation. If necessary, the booked
amounts are adjusted to correspond to amounts expected to be paid to the tax authorities.
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Changes in deferred taxes during financial year 2022
EUR thousand 1 Oct 2021
Recognized in
prot or loss
Exchange rate
dierences
30 Sep 2022
Deferred tax assets
Tax losses 1,959 -600 -70 1,289
Intangible and tangible
assets
1,056 -174 -36 846
Inventories 986 315 1,301
Lease liability 14,301 1,366 -698 14,969
Other items 12 -1 11
Total 18,314 907 -805 18,416
EUR thousand 1 Oct 2021
Recognized in
prot or loss
Exchange rate
dierences
30 Sep 2022
Deferred tax liabilities
Intangible and tangible
assets
1,735 118 9 1,861
Right-of-use assets 13,306 1,330 -823 13,813
Other items 949 691 16 1,656
Total 15,990 2,139 -798 17,330
Net deferred taxes
30 Sep 2022
-2,325 1,232 7 -1,085
Changes in deferred taxes during financial year 2021
EUR thousand 1 Oct 2020
Recognized in
prot or loss
Exchange rate
dierences
30 Sep 2021
Deferred tax assets
Tax losses 2,892 -1,083 151 1,959
Intangible and tangible
assets
1,175 -166 47 1,056
Inventories 898 88 0 986
Lease liability 12,862 1,001 439 14,301
Other items 11 0 1 12
Total 17,838 -161 637 18,314
EUR thousand 1 Oct 2020
Recognized in
prot or loss
Exchange rate
dierences
30 Sep 2021
Deferred tax liabilities
Intangible and tangible
assets
1,713 -34 55 1,735
Right-of-use assets 11,923 974 409 13,306
Other items 455 475 18 949
Total 14,091 1,416 483 15,990
Net deferred taxes
30 Sep 2021
-3,747 1,577 -155 -2,325
The Group had no temporary dierences on which no deferred tax assets were booked for which
it is uncertain if they will be realized as at 30 September 2022 or 30 September 2021. Most of the
cumulative tax losses for which deferred tax assets have been booked will never expire.
Accrued losses can be used only if the Group generates future taxable income covering the losses.
The Group’s ability to produce taxable income is dependent on the general economic, competitive,
nancial, legislative and other factors that are beyond the Group’s control. The management estimates
that most of the tax losses can be utilized within 1–5 years.
6.3 Subsequent events
There has not been signicant events after the end of the nancial year.
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7. PARENT COMPANY FINANCIAL STATEMENT, FAS
Musti Group plc income statement
EUR thousand Note
1 Oct 2021–
30 Sep 2022
1 Oct 2020–
30 Sep 2021
Other operating income 7.2 12,528 14,578
Employee benet expenses 7.3 -1,353 -1,509
Other operating expenses 7.4 -6,398 -6,928
Operating prot/loss 4,777 6,142
Financial income 7.5 7,900 4,345
Financial expenses 7.5 -8,145 -2,449
Prot/loss before appropriations and taxes 4,532 8,038
Income tax expense 7.6 -913 -1,238
Prot/loss for the period 3,619 6,800
Musti Group plc balance sheet
EUR thousand Note 30 Sep 2022 30 Sep 2021
ASSETS
Non-current assets
Investments 7.8 132,410 132,410
Total non-current assets 132,410 132,410
Current assets
Long-term receivables 7.10 40,787 44,252
Short-term receivables 7.10 56,953 57,613
Cash and cash equivalents 9,218 12,152
Total current assets 106,958 114,017
TOTAL ASSETS 239,368 246,427
EUR thousand Note 30 Sep 2022 30 Sep 2021
EQUITY AND LIABILITIES
Equity
Share capital 7.11 11,002 11,002
Other reserves 7.11 140,043 154,691
Own shares 7.11 -6,910 -6,910
Retained earnings 7.11 7,298 498
Prot/loss for the scal period 3,619 6,800
Total equity 155,051 166,080
Liabilities
Non-current liabilities 7.12 59,898 49,872
Current liabilities 7.13 24,418 30,475
Total current liabilities 84,317 80,347
TOTAL EQUITY AND LIABILITIES 239,368 246,427
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Musti Group plc cash flow statement
EUR thousand
1 Oct 2021–
30 Sep 2022
1 Oct 2020–
30 Sep 2021
Cash ows from operating activities
Prot before appropriations and taxes 4,532 8,038
Unrealised foreign exchange gains and losses 2,836 0
Finance income and expenses -2,591 -1,896
Other adjustments 0 -907
Operating prot before change in working capital 4,777 5,235
Change in working capital
Increase (-) / decrease (+) of current receivables 867 9,335
Increase (+) / decrease (-) of current non-interest
bearing liabilities
-2,453 -11,612
Cash ows from operating activities before nancial
items and taxes
3,191 2,958
Interests paid and other nance costs -1,267 -755
Interests received 2,079 2,141
Direct income taxes paid -1,141 0
Net cash from operating activities 4,804 4,344
Cash ows from investing activities
Long-term receivables, increase (-)/decrease (+) 0 -19,178
Net cash fom investing activities 0 -19,178
Cash ows from nancing activities
Capital returns paid -14,648 -12,720
Acqusition of own shares 0 -6,910
Proceeds from non-current loans 60,000 0
Repayments of non-current loans -50,000 0
Commercial papers issued 14,977 0
Change in internal bank account receivables -16,125 43,956
Received group contributions 0 2,660
Net cash from operating activities -5,797 26,986
Change in cash and cash equivalents -2,934 12,152
Cash and cash equivalents at the beginning of the period 12,152 0
Cash and cash equivalents at the end of the period 9,218 12,152
Notes to Musti Group plc financial statements
7.1 Accounting principles
Basis of preparation
Musti Group plc is the parent company of Musti Group, domiciled in Helsinki, Finland. The nancial
statements of Musti Group plc have been prepared in euros in accordance with the relevant acts and
regulations in force in Finland (Finnish Accounting Standards, FAS).
When preparing the nancial statements, the management of the company needs to make estimates
and assumptions that aects the nancial statements valuations. Actual gures may dier from the
estimates made.
Valuation and accruing principles and methods
Non-current assets
Intangible assets are recognized at the acquisition cost less the depreciation according to plan.
Acquisition costs consists of direct costs of the acquisition. The depreciation has been calculated straight-
line basis over the nancial use of the asset. The depreciation period of intangible assets is 5 years.
Investments in subsidiaries are recognized either at acquisition cost or at net realizable value if the
value of the investments has declined permanently.
Pension plans
The statutory pension liability of the Finnish personnel and any additional pensions have been arranged
through a pension insurance company.
Income tax expense
Income tax includes tax calculated on the prot for the current nancial year as well as tax adjustments
for previous nancial years. No deferred taxes have been booked in the parent company.
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Foreign currency items
Foreign currency business transactions are booked using the exchange rate of the transaction date. At
the end of the scal year all open foreign currency transactions are valued using the exchange rate of
the closing date.
Financial instruments
Financial instruments are valued at fair value in accordance with the chapter 5, paragraph 2a of
the Finnish Accounting Act. The company classies nancial instruments based on the cash ow
properties of the contracts related to them and their original purpose of use in line with the business
model at the time of the acquisition. The classication is changed only if the business model applied
in the investment activities is amended. Financial assets or liabilities are presented as a non-current
item, if the remaining maturity is over 12 months from the end of the period, and as a current item if
the remaining maturity is under 12 months from the end of period. Financial assets and liabilities are
classied as follows:
Financial assets are classied into the following categories:
I. nancial assets at amortized cost
II. nancial assets at fair value through prot and loss
Financial assets
Financial assets at amortized cost
Financial assets are classied as nancial assets at amortized cost if the following criteria are met:
I. the nancial asset is held to generate cash ows based on the business mode; and
II. the cash ows are contractual capital returns and interest accrued on the capital.
Financial assets at amortized cost are valued using the eective interest rate method.
Impairment is considered in the valuation. Gains and losses are recognized though prot and loss
when the nancial asset is reclassied or changed or its value decreases. Interest income is recognized
in nance income.
Financial assets at amortized cost include term deposits, interest-bearing loans and other
receivables, trade receivables and non-interest-bearing receivables.
Financial assets at fair value through profit and loss
Financial assets at fair value through prot and loss are nancial assets acquired for trading purposes.
Financial assets at fair value through prot and loss are derivatives not eligible for hedge accounting.
Changes in fair value, as well as prot and loss in connection derecognition, are presented in the prot
and loss statement.
Financial liabilities
Financial liabilities are classied into the following categories:
I. nancial liabilities at amortized cost
II. nancial liabilities at fair value through prot and loss
Financial liabilities at amortized cost
Musti Group’s loans from nancial institutions and trade and other payables are recognized at the
time on acquisition at fair value net of transaction costs. Loans are subsequently measured using the
eective interest rate method. The interest expenses of the loans are recorded in the prot and loss
statement. Trade and other payables are non-interest-bearing current unpaid payables.
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Financial liabilities at fair value through profit and loss
Financial liabilities at fair value through prot and loss are nancial liabilities acquired for trading
purposes.
Financial liabilities measured at fair value through prot and loss are derivatives not eligible for
hedge accounting. Changes in fair value, as well as prot and loss in connection derecognition, are
presented in the prot and loss statement.
Derivatives are initially recorded at their fair value on the date of the contract, and they are
subsequently valued at their fair value. Derivatives a classied as instruments held for trading and
recorded at fair value through prot and loss.
The Company utilizes derivatives for hedging interest rate risk. The company does not apply hedge
accounting.
7.2 Other operating income
EUR thousand 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Service fee's from group companies 11,552 13,356
Merger prot 0 1,032
Other income from group companies 976 190
Total 12,528 14,578
7.3 Employee benefit expenses
EUR thousand 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Salaries and fees -1,085 -1,212
Social security costs -168 -236
Pension costs -99 -54
Other social security costs -2 -6
Total -1,353 -1,509
Salary and bonus expenses of Chief Executive
Ocer and Members of the Board of Directors
Chief Excecutive Ocer 626 555
Board of Directors 238 140
Personnel on average 2 2
7.4 Other operating expenses
EUR thousand 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Administration -6,313 -6,848
Other expenses -84 -80
Total -6,398 -6,928
Auditors' fees
EUR thousand 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Authorised Public Accountants E&Y
Audit 80 76
Tax advisory 83 132
Total 163 208
7.5 Financial income and expenses
EUR thousand 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Other interest and nancial income
From Group companies
Interest income 2,049 2,114
From others
Other nancial income 5,851 2,231
Total 7,900 4,345
Interest and other nancial expenses
To others
Interest expenses -615 -692
Other nancial expenses -7,530 -1,757
Total -8,145 -2,449
Financial income and expenses total -245 1,896
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7.6 Income taxes
EUR thousand 1 Oct 2021–30 Sep 2022 1 Oct 2020–30 Sep 2021
Income tax for the nancial year -907 -1,238
Income tax for prior nancial years -6 0
Total -913 -1,238
7.7 Intangible assets
EUR thousand 30 Sep 2022 30 Sep 2021
Intangible rights
Acquisition cost 1 Oct 0 16
Additions 0 0
Disposals 0 -16
Acquisition cost 30 Sep 0 0
Accumulated amortisation 1 Oct 0 0
Amortisations for the nancial year 0 0
Accumulated amortisation 30 Sep 0 0
Book value 30 Sep 0 0
7.8 Investments
EUR thousand 30 Sep 2022 30 Sep 2021
Investments in Group companies
Acquisition cost 1 Oct 132,410 109,049
Increases 0 132,410
Decreases 0 -109,049
Acquisition cost 30 Sep 132,410 132,410
Group companies 30 Sep 2022 Share of parent company %
Musti Group Nordic Oy 100
The Group’s subsidiaries and investments in associates are presented in Note 5.2 in the Consolidated
Financial Statements.
7.9 Fair value hierarchy
30 Sep 2022
EUR thousand Level 1 Level 2 Level 3
Assets
Financial assets at amortised cost
Other non-curret assets 129
Trade and other receivables* 43,127
Loan receivables 41,300
Cash and cash equivalents 9,218
Financial assets at fair value through prot and loss
Derivative nancial instruments 1,551
Total 95,325
30 Sep 2021
EUR thousand Level 1 Level 2 Level 3
Assets
Financial assets at fair value through prot and loss
Other non-curret assets 85
Trade and other receivables* 45,048
Loan receivables 44,168
Cash and cash equivalents 12,152
Financial assets at fair value through prot and loss
Derivative nancial instruments 0
Total 101,452
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30 Sep 2022
EUR thousand Level 1 Level 2 Level 3
Liabilities
Financial assets at fair value through prot and loss
Other non-current liablities 0
Loans from credit institutions 59,898
Commercial papers 14,950
Trade and other payables* 5,198
Financial assets at fair value through prot and loss
Derivative nancial instruments 0
Total 80,047
30 Sep 2021
EUR thousand Level 1 Level 2 Level 3
Liabilities
Financial liabilities at amortised cost
Other non-current liablities 0
Loans from credit institutions 49,872
Trade and other payables * 23,391
Financial assets at fair value through prot and loss
Derivative nancial instruments 0
Total 73,263
*Other receivables and other payables includes only items classied as nancial assets and liabilities.
Level 1
Quoted unadjusted prices at the balance sheet date in active markets. The market prices are readily
and regularly available from an exchange, dealer, broker, market information service system, pricing
service or regulatory agency. The quoted market price used for nancial assets is the current bid price.
Level 1 nancial instruments include investments in funds classied as nancial instruments at fair value
through prot and loss. Musti Group does not have Level 1 nancial instruments.
Level 2
The fair value of nancial instruments in Level 2 is determined using valuation techniques. These
techniques utilize observable market data readily and regularly available from an exchange, dealer,
broker, market information service system, pricing service or regulatory agency. Musti Group has
classied derivatives at fair value according to the Level 2.
Level 3
A nancial instrument is categorized into Level 3,if the calculation of the fair value cannot be based on
observable market data. Musti Group had no such nancial instruments in 2022 or 2021.
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7.10 Receivables
Long-term receivables
Receivables from Group companies
EUR thousand 30 Sep 2022 30 Sep 2021
Loan receivables 40,658 44,168
Total 40,658 44,168
Receivables from others
EUR thousand 30 Sep 2022 30 Sep 2021
Other receivables 129 85
Total 129 85
Long-term receivables total 40,787 44,252
Short-term receivables
Receivables from Group companies
EUR thousand 30 Sep 2022 30 Sep 2021
Loan receivables 642 0
Trade receivables 233 212
Group bank account receivables 42,894 44,835
Prepayments and accrued income 10,391 12,418
Total 54,161 57,465
Receivables from others
EUR thousand 30 Sep 2022 30 Sep 2021
Prepayments and accrued income
Value added tax receivables 133 0
Other 2,659 147
Total 2,793 147
Short-term receivables total 56,953 57,613
7.11 Equity
EUR thousand Share capital
Unrestricted
equity
reserve
Treasury
shares
Retained
earnings
Equity total
Equity 1 Oct 2021 11,002 154,691 -6,910 7,298 166,080
Capital return -14,648 -14,648
Acqusition of own shares 0 0
Result for the nancial year 3,619 3,619
Equity 30 Sep 2022 11,002 140,043 -6,910 10,916 155,051
Equity 1 Oct 2020 11,002 167,412 0 498 178,911
Capital return -12,720 -12,720
Acquisition of own shares -6,910 -6,910
Result for the nancial year 6,800 6,800
Equity 30 Sep 2021 11,002 154,691 -6,910 7,298 166,080
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Distributable equity
EUR thousand 30 Sep 2022 30 Sep 2021
Reserve for invested unrestricted equity 140,043 154,691
Own shares -6,910 -6,910
Retained earnings 7,298 498
Net result for the nancial period 3,619 6,800
Total 144,049 155,078
7.12 Non-current liabilities
Liabilities to others
EUR thousand 30 Sep 2022 30 Sep 2021
Loans from nancial institutions 59,898 49,872
Total 59,898 49,872
Non-current liabilities total 59,898 49,872
7.13 Current liabilities
Liabilities to Group companies
EUR thousand 30 Sep 2022 30 Sep 2021
Trade payables 1 184
Group cash pool payables 5,085 23,152
Other liabilities 3,140 5,008
Total 8,226 28,345
Liabilities to Group companies
EUR thousand 30 Sep 2022 30 Sep 2021
Commercial papers 14,950 0
Trade payables 112 55
Other liabilities
Value added tax payables 0 74
Other liabilities total 0 74
Accruals and deferred income
Employee benet expenses 167 596
Interest liabilities 29 256
Incom tax payables 907 1,135
Other accruals and deferred income 27 14
Accruals and deferred income total 1,130 2,001
Total 16,192 2,130
Current liabilitites total 24,418 30,475
7.14 Commitments and contingent liabilities
EUR thousand 30 Sep 2022 30 Sep 2021
Pledges given on behalf of group companies
Pledges given on behalf of group companies 23 23
Total 23 23
Musti Group plc has given letter of guarantees for the following group companies:
Zoo Support Scandinavia AB, Arken Zoo AB and Arken Zoo Holding AB.
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Musti Group plc’s Board of Directors’ proposal to the Annual General Meeting for
the distribution of distributable funds and signing of the financial statements and
Board of Directors’ review
Musti Group plc’s distributable funds on 30 September 2022 amounts to EUR 144,049,079.54, of which
prot for the nancial year 2022 is EUR 3,618,827.84.
The Board of Directors of Musti Group plc proposes to the Annual General Meeting that a capital
return of EUR 0.50 per share will be distributed from the invested unrestricted equity reserve totalling
approximately EUR 16.7 million and that no dividend will be paid for the nancial year ended 30
September 2022.
There have been no material changes in the company’s nancial position since 30 September 2022.
The liquidity of the company remains good, and the proposed capital return does not risk the solvency
of the company.
Helsinki, 16 December 2022
Jerey David Ingrid Jonasson Blank
Johan Dettel Ilkka Laurila
Inka Mero David Rönnberg
CEO
The Auditor’s note
Our auditor’s report has been issued today
Helsinki, 16 December 2022
Ernst & Young Oy
Authorized Public Accountant Firm
Johanna Winqvist-Ilkka
Authorized Public Accountant
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Auditor’s report (Translation of the Finnish original)
To the Annual General Meeting of Musti Group Oyj
Report on the Audit of the Financial Statements
Opinion
We have audited the nancial statements of Musti Group Oyj (business identity code 2659161-1) for the
year ended 30 September 2022. The nancial statements comprise the consolidated balance sheet,
income statement, statement of comprehensive income, statement of changes in equity, statement
of cash ows and notes, including a summary of signicant accounting policies, as well as the parent
company’s balance sheet, income statement, statement of cash ows and notes.
In our opinion
• the consolidated nancial statements give a true and fair view of the group’s nancial position
as well as its nancial performance and its cash ows in accordance with International Financial
Reporting Standards (IFRS) as adopted by the EU.
• the nancial statements give a true and fair view of the parent company’s nancial performance and
nancial position in accordance with the laws and regulations governing the preparation of nancial
statements in Finland and comply with statutory requirements.
Our opinion is consistent with the additional report submitted to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities
under good auditing practices are further described in the Auditor’s Responsibilities for the Audit of
Financial Statements section of our report.
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 fullled
our other ethical responsibilities in accordance with these requirements.
In our best knowledge and understanding, the non-audit services that we have provided to the
parent company and group companies are in compliance with laws and regulations applicable in
Finland regarding these services, and we have not provided any prohibited non-audit services referred
to in Article 5(1) of regulation (EU) 537/2014. The non-audit services that we have provided have been
disclosed in note 2.3 to the consolidated nancial statements.
We believe that the audit evidence we have obtained is sucient and appropriate to provide a basis
for our opinion.
Key Audit Maers
Key audit matters are those matters that, in our professional judgment, were of most signicance in our
audit of the nancial statements of the current period. These matters were addressed in the context
of our audit of the nancial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
We have fullled the responsibilities described in the
Auditor’s responsibilities for the audit of the
section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the nancial statements. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the accompanying
nancial statements.
We have also addressed the risk of management override of internal controls. This includes
consideration of whether there was evidence of management bias that represented a risk of material
misstatement due to fraud.
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Key Audit Matter
How our audit addressed
the Key Audit Matter
Key Audit Matter
How our audit addressed
the Key Audit Matter
Key Audit Matter
How our audit addressed
the Key Audit Matter
Valuation of Goodwill
We refer to the notes 3.2 and 3.3.
The value of goodwill at the
date of the nancial statements
amounted to 170.5 million euros,
representing 46% of total assets
and 106% of equity.
Valuation of goodwill is based
on management’s estimates
about the value-in-use
calculations of cash generating
units. There are a number of
underlying assumptions used to
determine the value-in-use of
cash generating units, including
the development of revenue
and protability as well as the
discount rate applied on cash
ows.
The estimated value-in-use of
cash generating units may vary
signicantly when the underlying
assumptions change. Changes in
the above-mentioned individual
assumptions may result in an
impairment of goodwill.
The valuation of goodwill was
a key audit matter because the
assessment process includes
judgment, and it is based on
assumptions relating to market or
economic conditions extending
to the future and because the
amount of goodwill is signicant
to the nancial statements.
Valuation of goodwill was also a
signicant risk of
material misstatement referred
to in EU Regulation No 537/2014,
point (c) of Article 10(2).
To address the risk of material
misstatement regarding the
valuation of goodwill our audit
procedures included among
others:
• involving EY valuation
specialists to assist us in
evaluating the methodologies,
impairment calculations
and underlying assumptions
applied by management in
impairment testing;
• comparing the principles
applied by management
in the impairment tests to
the requirements set in the
standard IAS 36 Impairment of
assets;
• ensuring the mathematical
accuracy of the impairment
calculations; and
• comparing the key
assumptions applied by
management in the impairment
tests to approved budgets
and long-term forecasts,
information available in
external sources, as well as
our independently calculated
industry averages for example
in the case of the weighted
average cost of capital used in
discounting cashows.
In addition, we compared the
outcome of management’s
impairment test to Musti Group
Plc’s market capitalization.
We also assessed the Group’s
disclosures in respect of
impairment testing.
Revenue Recognition
Musti Group’s revenue is
generated from sales of products
and services in retail stores and
in online platforms as well as
from sales to franchise stores.
The Group’s net sales amounted
to 391.1 million euros.
Revenue recognition was a key
audit matter due to the high
volume of transactions, the
management judgement involved
in accounting for right of return
and loyalty club bonus, and the
extensive network of stores. In
addition, the Group focuses on
revenue as a key performance
measure which could create
an incentive for revenue to be
recognized before the control of
goods or services has transferred
to the customer.
Revenue recognition was also
a signicant risk of material
misstatement referred to in EU
Regulation No 537/2014, point (c)
of Article 10(2).
To address the risk of material
misstatement regarding revenue
recognition our audit procedures
included among others:
• assessing the Group’s
accounting policies over
revenue recognition, including
principles relating to right of
return accounting and loyalty
club bonuses in relation
to applicable accounting
standards;
• testing revenue, product
returns, loyalty club bonuses
and margins with data
analytics;
• testing selected samples
of sales transactions by
comparing them to payments
received;
• reviewing the sales processes
and reconciliation routines
for cash and payment card
transactions in selected retail
stores;
• analyzing the timing of revenue
recognition of online sales
based on delivery lead times;
and
• comparing selected accounts
receivable balances to
conrmations received from
counterparties.
We also assessed the Group’s
disclosures in respect of
revenues.
Valuation of inventories
The total value of inventories
at the date of the nancial
statements amounted to 61.4
million euros.
Musti Group’s inventories are
valued at the lower of cost or net
realizable value. Inventories are
presented net of an impairment
loss recognized for obsolete and
slow-moving inventories.
Valuation of inventories was a
key audit matter because the
carrying value of inventories
is material to the nancial
statements and because
valuation of inventories and the
level of allowance for obsolete
and slow-moving inventories
requires management judgment
relating to the future sales of the
goods.
Valuation of inventories was
also a signicant risk of material
misstatement referred to in EU
Regulation No 537/2014, point (c)
of Article 10(2).
To address the risk of material
misstatement regarding
valuation of inventories our audit
procedures included among
others:
• assessing the Group’s
accounting policies regarding
inventories, including
compliance with applicable
accounting standards;
• attending physical stock
takings in selected stores and
central warehouses in order to,
among other things, observe
the potential obsolescence of
goods;
• comparing unit prices of
selected inventory items to
latest purchase invoices and to
sales prices; and
• testing slow-moving inventory
items as well as exceptional
values in inventory accounting
with data analytics.
We also assessed the Group’s
disclosures in respect of
inventory.
108Annual Report 2022
Musti's Year Musti's Direction Corporate GovernanceResponsible Musti Financial StatementsBoard of Directors' Report
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
nancial statements that give a true and fair view in accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU, and of nancial statements that give a true and fair view in
accordance with the laws and regulations governing the preparation of nancial 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 nancial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the nancial 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 going concern, disclosing, as
applicable, matters relating to going concern and using the going concern basis of accounting. The nancial
statements are prepared using the going concern basis of accounting unless there is an intention to liquidate
the parent company or the group or 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 on whether the nancial 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 aggregate, they could reasonably be expected to inuence the economic decisions of users taken on
the basis of the nancial 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 nancial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sucient 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
eectiveness 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 signicant 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 nancial 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 nancial statements, including the
disclosures, and whether the nancial statements represent the underlying transactions and events
so that the nancial statements give a true and fair view.
• Obtain sucient appropriate audit evidence regarding the nancial information of the entities or
business activities within the group to express an opinion on the consolidated nancial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and signicant audit ndings, including any signicant deciencies 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 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 signicance in the audit of the nancial 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 benets of such
communication.
109Annual Report 2022
Musti's Year Musti's Direction Corporate GovernanceResponsible Musti Financial StatementsBoard of Directors' Report
Other Reporting Requirements
Information on our audit engagement
We were rst appointed as auditors by Annual General Meeting on 29 March 2018, and our
appointment represents a total period of uninterrupted engagement of ve years. Musti Group Oyj has
been a public interest entity (PIE) since initial public oering on February 13 2020.
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 nancial statements and our auditor’s report thereon.
Our opinion on the nancial statements does not cover the other information.
In connection with our audit of the nancial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the nancial 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 nancial statements and 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, we conclude that there is a material misstatement of the
other information, we are required to report that fact. We have nothing to report in this regard.
Helsinki, 15 December 2022
Ernst & Young Oy
Authorized Public Accountant Firm
Johanna Winqvist-Ilkka
Authorized Public Accountant
110Annual Report 2022
Musti Group Head Oce
Mäkitorpantie 3
00620 Helsinki
Finland
www.mustigroup.com
Our annual report is available in electronic format and is published
annually. To reduce the usage of printing materials, the report is
available only in digital format.
@MustiGroup /musti-group /mustigroup