Board of
Directors’ Report
Market outlook 42
Group performance 42
Financial position and cashow 44
Investments 44
Strategy and nancial targets 44
Business segment performance 46
Personnel 48
Information contained in the notes to the nancial statements 48
Governance 48
Shares and shareholders 50
Remuneration 52
Corporate responsibility 52
Risks and uncertainties 52
Seasonality 55
Signicant events after the nancial year 55
Outlook for the nancial year 2022 55
Board of Directors’ proposal for prot
distribution and capital return 55
Financial ratios and alternative performance measures 56
Calculation of nancial ratios and
alternative performance measures 58
Reconciliation of key performance indicators 59
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Board of Directors’ Report
for the Financial Year 1 October 2020 – 30 September 2021
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 3.1 billion (in 2020), with Sweden as the largest market, accounting for
approximately EUR 1.3 billion, Finland approximately EUR 1.0 billion and Norway approximately EUR 0.9
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 COVID-19 pandemic has aected
market dynamics since spring 2020 mainly through an increased number of puppies and kittens, in line
with historical evidence of developments during economic downturns, and increased demand in online
channels.
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
10/2020-9/2021 10/2019-9/2020 Change %
Net sales 340.9 284.4 19.9
Net sales growth, % 19.9% 15.3%
LFL sales growth, % 11.8% 11.5%
LFL store sales growth, % 8.8% 7.3%
Online share, % 23.1% 22.5%
Gross margin, % 45.7% 43.8%
EBITA 34.9 25.5 36.6
Adjusted EBITA 36.8 29.8 23.4
Adjusted EBITA margin, % 10.8% 10.5%
Operating prot 28.4 19.6 45.1
Operating prot margin, % 8.3% 6.9%
Prot/loss for the period 20.9 11.8 77.8
Earnings per share, basic, EUR 0.62 0.37 69.0
Net cash ow from operating activities *) 54.9 41.9 31.3
Investments in tangible and intangible assets 12.9 8.9 44.5
Net debt / LTM adjusted EBITDA 1.9 2.0 -2.3
Adjusted EBITDA 58.8 48.1 22.4
Number of loyal customers, thousands 1,297 1,151 12.6
Number of stores at the end of the period 312 293 6.5
of which directly operated 280 231 21.2
* Interest and other nance income received has been reclassied from net cash ow operating activities to net cash ow from
nancing activities
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Group net sales
EUR million
10/2020-9/2021 10/2019-9/2020 Change %
Net sales
Group 340.9 284.4 19.9
Finland 152.6 135.8 12.4
Sweden 147.5 123.2 19.7
Norway 40.7 25.4 60.6
The Group’s net sales increased by 19.9% to EUR 340.9 million (EUR 284.4 million). The increase
was largely due to like-for-like growth in all countries and the increasing number of new customers
and an increased number of directly operated stores. Like-for-like growth amounted to 11.8% (11.5%).
Strengthened SEK exchange rate increased sales by EUR 5.6 million (EUR -0.6 million), whereas
strengthened NOK exchange rate increased sales by EUR 1.2 million (EUR -2.2 million).
Store sales increased by 21.1% to EUR 250.1 million (EUR 206.6 million), driven by an increased
number of stores and strong like-for-like store sales growth. Like-for-like store sales growth increased
to 8.8% (7.3%). Online sales increased by 22.8% to EUR 78.7 million (EUR 64.1 million). Online sales
accounted for 23.1% (22.5%) of total net sales. In FY 2020, online sales growth was positively impacted
by the channel shift towards online sales due to the COVID-19 pandemic and a focus on growth in all
countries.
Net sales in Finland increased by 12.4% driven by like-for-like growth of 10.6% and growth from the
new stores opened and acquired during the latest twelve months. During the nancial year, six directly
operated stores were opened and 17 franchise stores was acquired in Finland. In addition, one directly
operated store was closed. Net sales in Sweden increased by 19.7% driven by good like-for-like growth
of 9.2%. Online sales growth in Sweden was lower due to lower campaign activities in connection with
the warehouse consolidation project in Q1/2021. In addition, the strengthened SEK rate compared to
the corresponding nancial year FY20 had a positive impact on the sales growth. During the nancial
year, seven directly operated stores was opened and ten franchise stores were acquired in Sweden. In
addition, one directly opened store was closed and three franchise agreements were terminated. Net
sales in Norway increased by 60.6% driven by strong like-for-like growth of 30.0% and the ramp-up
of the stores opened during the latest twelve months. The strengthened NOK rate compared to the
corresponding reporting period in FY20 had a positive impact on growth. During the nancial year, ten
directly operated stores were opened and one store was acquired in Norway.
The number of loyal customers increased to 1,297 thousand during the nancial year (1,151 thousand
on 30 September 2020). Rolling 12 months average spend per loyal customer increased to EUR 188.3 as
per 30 September 2021 (EUR 178.5 as per 30 September 2020), driven by an increased average purchase
value.
Net sales by segment FY 2021
Finland, 45%
Sweden, 43%
Norway, 12%
Net sales by channel FY 2021
Store sales, 73%
Online sales, 23%
Other sales*, 4%
*Other sales include franchise fees and wholesale.
Group result
The Group’s adjusted EBITA increased by 23.4% to EUR 36.8 million (EUR 29.8 million). Adjusted EBITA
growth was partially oset by additional costs of EUR 1.5 million during the nancial year due to low
eciency in Eskilstuna driven by the warehouse consolidation project. Adjusted EBITA margin was 10.8%
(10.5%). The improvement was mainly due to an increase in sales and strong gross margin development,
partly oset by additional costs driven by lower eciency in the central warehouse in Eskilstuna due to
the warehouse consolidation project, focus on sales growth in order to utilize the strong momentum and
to develop an ecosystem for pet parents to further increase attractiveness and customer loyalty.
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Gross margin increased to 45.7% (43.8%) due to more ecient marketing campaigns, favourable
product mix and partly oset by higher share of online sales. Share of sales of own and exclusive brands
levelled to 51.0% (50.3%). The share of employee benet and other operating expenses as percentage of
sales increased to 29.6% (28.9%) driven by ecient store operations, partly oset by by additional costs
driven by lower eciency in the central warehouse in Eskilstuna due to the warehouse consolidation
project that was completed in Q1, focus on sales growth and to develop an ecosystem for pet parents to
further increase attractiveness and customer loyalty.
Depreciation amounted to EUR 22.0 million (EUR 18.2 million) and amortisation amounted to EUR 6.5
million (EUR 6.0 million).
Adjustments to EBITA were EUR 1.9 million (EUR 4.3 million). The adjustments related to the
warehouse consolidation project, reorganization of customer services and other non-recurring
structural changes.
Operating prot increased by 45.1% to EUR 28.4 million (EUR 19.6 million) and was 8.3% (6.9%) of net
revenue.
Prot before taxes increased to EUR 26.9 million (EUR 13.7 million). The impact of nancial income
and expenses (net) on prot before taxes was EUR 1.5 million negative (EUR 5.9 million negative), mainly
due to lower impact on foreign exchange gains and losses and lower interest expenses due to the
renancing in connection with the IPO.
Prot for the period was EUR 20.9 million (EUR 11.8 million) and basic earnings per share was 0.62
(0.37). The eective tax rate was 22.3%.
Financial Position and Cashflow
In October 2020–September 2021, net cash ow from operating activities totalled EUR 55.0 million
(EUR 41.9 million). Cash and cash equivalents at the end of the period amounted to EUR 13.0 million
(30 September 2020: EUR 21.6 million). Total consolidated assets amounted to EUR 337.5 million
(30 September 2020: EUR 312.3 million). The increase was due to increased right-of-use assets and
property, plant and equipment due to increased number of stores, increased goodwill driven by
business combinations and stronger SEK exchange rate, as well as inventories in stores and the central
warehouse.
Equity attributable to owners of the parent company totalled EUR 156.9 million (30 September 2020:
EUR 153.1 million). Equity was increased due to the prot of the period, partly oset by the payment of
the capital return of EUR 0.38 per share. During the fourth quarter Musti Group acquired 61.000 own
shares totalling EUR 2.0 million which decreased equity.
Gearing at the end of the nancial year was 72.2% (30 September 2020: 61.8%) and net debt
amounted to EUR 113.3 million (30 September 2020: EUR 94.7 million). The increase was mainly due to
increased lease liabilities. At the end of the period, the lease liabilities included in net debt amounted to
EUR 76.5 million (30 September 2020: EUR 66.5 million).
Musti Group focuses on maintaining sucient liquidity in the group. In addition to the cash and cash
equivalents of EUR 13.0 million at the end of the period, Musti Group has an unutilized EUR 4.0 million
credit limit and an undrawn EUR 10.0 million revolving credit facility.
Investments
In October 2020-September 2021, investments in tangible and intangible assets amounted to EUR 12.9
million (EUR 8.9 million). The investments were mainly related to new and relocated stores, as well as
IT and digital platform development projects. In addition, EUR 4.0 million relates to acquisitions of 16
franchise stores in Finland, two franchise stores in Sweden and acquisition of 100% of the shares of
Celato AS, which operates a pet store in Norway. During the nancial year Musti Group acquired 26
pet stores, 17 in Finland and nine in Sweden as business acquisitions and 100 % of the shares of Calida
AB, Lomiwa AB and Celato AB, which operates pet stores in Sweden and Norway. The acquisitions
correspond to additional EUR 10.3 million. After the acquisition of the Finnish franchise stores all stores
in Finland are directly operated.
Strategy and Financial Targets
Our core strategy is to continue developing our value proposition and to better serve our customers in
the Nordic markets, with focus on Pet Parents.
Winning new customers
Musti Group is well-positioned to continue winning new customers from the large Nordic pet pool of
5.4 million pets.
Financial year 2021 saw an exceptional increase in pet adoption both globally and across Nordics.
This has led to an increased number of pet-owning households which, in turn, expands the market
opportunity for years to come. In parallel, the underlying long term pet parenting trend continues
strong.
Given the strong underlying market development, we utilized the momentum and invested heavily
into initiatives driving customer acquisition. Our investments into early stages of the pet parenting
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journey such as the novel puppy and kitten clubs are paying o, capturing more than our share of new
pet parents. Success in new customer acquisition is a key element in continued market share gains
across all of our markets. This is supported by our concept, leading brand, customer focus – all helping
us benet from the global trend towards pet parenting continuing into nancial year 2022 and beyond.
The number of loyal customers, Friends of Musti, increased by 13% to 1,297 thousand during the
nancial year.
Grow share of wallet
Growing the share of wallet within our base of 1.3 million loyal customers is a clear opportunity for Musti
Group. There is signicant upside from educating many Pet Parents about the nutritional benets of
premium food and encouraging them to conduct most of their pet related purchases at Musti Group.
To widen our reach and further deepen the engagement of our customers, Musti is developing an
ecosystem approach targeting Nordic Pet Parents targeting further increase in spend and customer
loyalty.
Rolling 12 months average spend per loyal customer increased to EUR 188.3 in the nancial year 2021
(EUR 178.5 on 30 September 2020).
Expand store network and number of service points
We aim to 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. Through the largest
footprint in the Nordic countries, Musti Group can continue to gain further market share in the growing
pet care market. Operating through own stores enables Musti Group to provide the customers with the
same award-winning store experience in any Musti Group store they wish to visit. It also improves the
eciency of operations and enables the best possible synergies within Musti Group.
The number of directly operated stores increased by 49 during the nancial year 2021. This included
conveniently located greeneld stores and was supported by the acquisition of all 17 stores operating
under franchising agreement in Finland and 10 stores operating under franchising agreement in Sweden.
Focus 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. Own and exclusive products are of high quality and developed
together with Musti experts. Musti Group has strong historical track record in driving gross margin
improvement and is well-equipped to continue that going forward. Own and exclusive brands typically
have 10-15 percentage points higher gross margins compared to global brands. In addition, we focus on
leveraging scale in procurement, pricing and category management.
In the nancial year 2021, gross margin increased to 45.7% (43.8%) mainly due to favorable changes
in product mix and ecient category management. Musti Group continued to further strengthen its
own and exclusive brands’ selection by for example investing in pet food factory in Lieto, Finland and
agreeing on exclusive distribution for VAFO Group’s biggest brand Brit Care in Sweden. Share of sales
of own and exclusive brands increased to 51.0% (50.3%) during the year.
Leverage 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 can be spread across larger net sales.
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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 2021
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 EUR 341 million,
growth 20%.
Protability
Mid- to long-term adjusted EBITA margin of
at least 13% with steadily improving prole.
Margin increase is expected to be realised
through steady gross margin and improving
operating leverage.
Adjusted EBITA margin 10.8%.
Capital structure
Maintain net debt in relation to adjusted
EBITDA below 2.5x in the long term.
Net debt/ LTM adjusted EBITDA 1.9
.
Dividend policy
To pay a dividend corresponding to 60-80%
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 70%* 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 held on 27 Janury 2022.
Business Segment Performance
Musti Group’s reporting segments are based on geographical regions, and they are 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 country. Musti Group holds 31% of the total pet food and products
market share in Finland. Regardless of the strong market presence in Finland, we continue to see
opportunities to expand both the store network in selected locations, such as high trac hypermarkets,
and online business. Musti’s brands in Finland include Musti ja Mirri and Peten Koiratarvike.
In Finland, Musti Group will continue to focus on rening the concept further and serving existing
customers better in order to increase share of wallet and winning new customers, both of which will
support positive like-for-like development.
EUR million or as indicated
10/2020–10/2021 10/2019–10/2020 Change %
Net sales 152.6 135.8 12.4
Net sales growth, % 12.4% 10.6%
LFL segment sales growth, % 10.6% 7.4%
EBITA 36.0 32.8 9.9
EBITA margin, % 23.6% 24.2%
Adjusted EBITA 36.1 33.0 9.5
Adjusted EBITA margin, % 23.7% 24.3%
Number of stores 134 129 3.9
of which directly operated 134 112 19.6
Net sales in Finland increased by 12.4% to EUR 152.6 million (EUR 135.8 million) driven by like-for-like
growth of 10.6% and growth from the stores opened or acquired during the latest twelve months.
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EBITA increased by 9.9% to EUR 36.0 million (EUR 32.8 million). Adjusted EBITA increased by 9.5% to
EUR 36.1 million (EUR 33.0 million). This was due to growing sales and store eciency continued to be
on a good level. However, July-September 2020 was to some extent positively impacted by cost savings
in relation to the COVID-19 pandemic. Adjusted EBITA margin was 23.7% (24.3%).
During the nancial year, six directly operated stores were opened and 17 franchise stores were
acquired in Finland. In addition, one directly operated store was closed in Finland.
Sweden
In Sweden, Musti Group’s focus is on further expansion and convergence in eciency towards Finnish
levels. Musti, through its multiple brands, is the overall market leader with a combined 31% market
share (2020). Through VetZoo and Animail, Musti Group has a strong online presence in Sweden. Musti
Group’s store and omnichannel brands in Sweden are Arken Zoo and Djurmagazinet.
Musti’s goal in Sweden is to continue strong like-for-like growth across all channels, store network
expansion and strong margin improvement development. Regarding the store network expansion, focus
will be turned towards store roll-out especially in big cities, where Musti is currently under-represented.
Key growth and margin drivers in Sweden include increasing own and exclusive brands’ share of sales
towards Finnish levels through sta promotion and educational marketing, converging store cost-
eciency towards Finnish levels through store personnel eciency measures and being selective in
network expansion while acquiring selected franchised stores.
EUR million or as indicated
10/2020–10/2021 10/2019–10/2020 Change %
Net sales 147.5 123.2 19.7
Net sales growth, % 19.7% 14.7%
LFL segment sales growth, % 9.2% 13.4%
EBITA 21.4 14.5 47.6
EBITA margin, % 14.5% 11.7%
Adjusted EBITA 21.7 14.9 46.1
Adjusted EBITA margin, % 14.7% 12.1%
Number of stores 128 125 2.4
of which directly operated 96 80 20.0
Net sales in Sweden increased by 19.7% to EUR 147.5 million (EUR 123.2 million) driven by like-for-
like growth of 9.2%. The average SEK rate strengthened compared to the corresponding nancial year
FY20. This had a EUR 5.6 million positive impact on net sales. The sales growth was strong in both
stores and online, driven by the increased number of customers. Online sales were lower due to lower
campaign activities in connection with the warehouse consolidation project.
EBITA increased by 47.6% to EUR 21.4 million (EUR 14.5 million). Adjusted EBITA increased by 46.1%
to EUR 21.7 million (EUR 14.9 million). This was due to operating leverage and more ecient marketing
campaigns, partly oset by the increased share of online sales. Store eciency continued to be on a
high level. Adjusted EBITA margin was 14.7 (12.1%).
During the nancial year, seven directly operated store was opened and ten franchise stores were
acquired in Sweden. In addition, one directly operated store was closed and three franchise agreements
were terminated.
Norway
In Norway, Musti Group’s focus is on store roll-out and on contnuing country protability ramp-up.
Unlike in Finland and Sweden, there are no clear dominant players within the pet specialty segment,
with Musti covering for roughly 11% of the total pet food and products market in 2020. Musti Group’s
brands in Norway are Musti (store and omnichannel) and VetZoo (online).
In Norway, the focus is on continuing the expansion of the store network and store ramp-up in line
with their historical development, as well as on the strong margin improvement development as most
of the stores are still in ramp-up phase. Ramp-up of the Norwegian stores has progressed according to
Musti Group’s plans and the protability development of new stores has followed similar patterns as
observed e.g. in Finland.
EUR million or as indicated
10/2020–10/2021 10/2019–10/2020 Change %
Net sales 40.7 25.4 60.6
Net sales growth, % 60.6% 54.6%
LFL segment sales growth, % 30.0% 33.3%
EBITA 6.7 2.9 132.1
EBITA margin, % 16.5% 11.4%
Adjusted EBITA 6.8 2.9 130.7
Adjusted EBITA margin, % 16.6% 11.5%
Number of stores 50 39 28.2
of which directly operated 50 39 28.2
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Net sales in Norway increased by 60.6% to EUR 40.7 million (EUR 25.4 million), driven by strong
like-for-like growth of 30.0% and ramp-up of the stores opened during the latest twelve months. The
strengthened NOK exchange rate in FY21 compared to FY20 had a EUR 1.2 million positive impact on
net sales.
EBITA increased by 132.1% to EUR 6.7 million (EUR 2.9 million). Adjusted EBITA increased by 130.7% to
EUR 6.8 million (EUR 2.9 million). This 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. Store eciency
continued to be on a good level. Adjusted EBITA margin was 16.6% (11.5%).
During the nancial year, ten directly operated store were opened and one store was acquired in
Norway.
Group functions
The EBITA impact of Group functions was EUR -29.2 million (EUR -24.6 million). Adjusted EBITA was EUR
-27.8 million (EUR -21.0 million). The decrease was mainly due to increased headcount in the head oce,
and higher costs in the central warehouse driven by higher volumes. Musti Group has focused on sales
growth in order to utilize the strong momentum and to develop an ecosystem for pet parents to further
increase attractiveness and customer loyalty. These projects have generated additional costs during Q4
FY21. In addition, lower eciency increased personnel and other costs in Eskilstuna due to the warehouse
consolidation project. Adjusted EBITA margin from the group’s total net sales was -8.2% (-7.4%).
Personnel
At the end of the nancial year on 30 September 2021, the number of personnel was 1,397 (1,162), of
whom 616 (566) were employed in Finland and 781 (597) outside Finland. Wages and salaries were in
total EUR 47.5 million for the nancial year 2021 (EUR 38.0 million).
Personnel
1 Oct 2020 -
30 Sep 2021
1 Oct 2019 -
30 Sep 2020
1 Oct 2018 - 3
0 Sep 2019
1 Oct 2017 -
30 Sep 2018
Personnel by average 1,284 1,145 1,084 1,004
Personnel by area
30 Sep 2021 30 Sep 2020 30 Sep 2019 30 Sep 2018
Finland 583 566 583 537
Sweden 522 438 425 415
Norway 179 158 112 94
Total 1,284 1,162 1,120 1,046
Wages and salaries
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 47,489 38,042 35,756 33,128
More information on the remunerations of the personnel 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 on
the Internet 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.
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AGM decisions
Musti Group plc's Annual General Meeting was held on 21 January 2021 at Musti Group headquarters in
Helsinki, Finland. Shareholders and their proxy representatives could participate in the Annual General
Meeting and exercise their rights only by voting in advance 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 meeting procedure based on the temporary
legislation to limit the spread of the COVID-19 pandemic approved by the Finnish Parliament.
The Annual General Meeting adopted the nancial statements for the nancial year 1 October 2019 –
30 September 2020, discharged the Company's management from liability and resolved to support the
remuneration policy for governing bodies.
The Annual General Meeting decided in accordance with the proposal of the Board of Directors
that shareholders be paid a capital return of EUR 0.38 per share to be distributed from the invested
unrestricted equity reserve. The capital return was paid to the shareholders who were registered in the
shareholders’ register of Musti Group maintained by Euroclear Finland Ltd. on the capital return record
date of 25 January 2021. The capital return payment date was 2 February 2021.
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 60,000;
• Vice-Chairman of the Board: EUR 35,000; and
• Other members of the Board of Directors: EUR 30,000.
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 5,000; and
• Other Committee members: EUR 2,500.
The Annual General Meeting decided that the number of members of the Board of Directors shall be
four. Jerey David, Ingrid Jonasson Blank and Juho Frilander 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. Further, Ilkka
Laurila was elected as the new member 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 responsible auditor. 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 Musti Group’s own shares and/or on the acceptance as pledge of the company's own shares. 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 of the
shares in Musti Group. The authorization is eective until the next Annual General Meeting, however,
no longer than until 21 July 2022.
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 of the shares
in Musti Group. The authorization covers both the issuance of new shares as well as the transfer of own
shares held by the company. The authorization cancels previous unused authorizations 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 21 July 2022.
Musti Group’s Annual General meeting 2022 will be held on 27 January 2022.
Changes in Group Composition
On 1 January 2021, Musti Group acquired Calida AB and Lomiwa AB, which operate two franchise
stores in Sweden. The acquisitions complement Musti Group’s existing Arken Zoo chain in Sweden.
In April 2021, Musti Group sold its ownership in the Swedish subsidiaries Anivet AB, Carnia AB, Tasso
i Malmö AB and ZooZoocom AB.
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 5 July 2021 Musti Group acquired Celato AS, which operate a pet store in Norway. The
acquisition complements Musti Group’s existing Musti chain in Norway. On 14 September 2021 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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Annual Report 2021 49
Changes in Group Management
On 16 April Musti Group announced, that Robert Berglund, CFO and member of the Management Team
of Musti Group, left the Group and his last operational working day in Musti Group was 3 September
2021.
On 2 June Musti Group announced the appointment of Toni Rannikko as a new CFO and member of
the Management Team of Musti Group as of 1 September 2021.
Shares and Shareholders
Issued Shares and Share Capital
At the end of the nancial year on 30 September 2021, 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 20.80 on 1 October 2020. The closing price of the share on
the last trading day of the nancial year on 30 September 2021 was EUR 30.90. The highest price of the
share during the nancial year was EUR 37.22, the lowest EUR 18.41. The average closing price during
the nancial year was EUR 28.06 and the average volume per day was 95,977 shares.
Musti Group’s market capitalization was EUR 1.04 billion on 30 September 2021.
Own shares
On 30 September 2021 Musti Group held 244,000 (0) own shares representing 0.73% (0.00%) of the
total number of shares and votes. During the nancial year Musti Group exercised the authorisation
granted by the AGM on 21 January 2021 to the Board of Directors to acquire own shares.
Authorizations of the Board of Directors
The Annual General Meeting authorized the Board of Directors to decide on the repurchase of the
Musti Group’s own shares and/or on the acceptance as pledge of the company's own shares. 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 of the
shares in Musti Group. 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.
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
Musti Group’s share price development
17 February 2020 – 30 September 2021
2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9
2020 2021
0
10
20
30
40
€
Musti's Year Musti's Direction Corporate GovernanceResponsible Musti Financial StatementsBoard of Directors' Report
Annual Report 2021 50
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 cancels previous unused authorizations to 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 21 July 2022.
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 of the shares
in Musti Group.
The authorization covers both the issuance of new shares as well as the transfer of own 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
cancels previous unused authorizations 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 21 July 2022.
Shareholders
At the end of the nancial year, the number of registered shareholders was 10,889. The proportion
of nominee-registered and foreign shareholders was 71.59% of the company’s shares. The 20 largest
shareholders registered in the book-entry register maintained by Euroclear Finland Oy held a total of
19.80% of Musti Group’s shares and votes at the end of the reporting period.
Shareholders, Musti Group, 30 September 2021
Number of
shares
% of shares
1. Mandatum Life Insurance Company Limited 968,558 2.89
2. Varma Mutual Pension Insurance Company 745,000 2.22
3. OP-Finland Fund 669,640 2.00
4. Ilmarinen Mutual Pension Insurance Company 503,682 1.50
5. Evli Finnish Small Cap Fund 500,000 1.49
6. Nordea Fennia Fund 464,705 1.39
7. OP-Finland Small Firms Fund 326,691 0.97
8. Evli Finland Select Fund 270,000 0.81
9. SEB Finland Small Cap Investment Fund 265,000 0.79
10. Sijoitusrahasto Aktia Capital 260,000 0.78
10 shareholders total 4,973,276 14.84
100 largest registered shareholders total 8,113,211 24.19
Nominee registered total 24,008,517 71.60
Number of shares total 33,535,453 100.00
Major shareholders by sectors, 30 September 2021
Shareholders by sector
Number of
shares
% of shares
Public sector 1,460,691 15.33
Financial and insurance corporations 5,321,191 55.85
Households 1,490,473 15.65
Non-nancial corporations 941,480 9.88
Non-prot institutions 232,838 2.44
Rest of the world 80,263 0.84
Nominee registered 24,008,517 71.60
Number of shares total 33,535,453 100.00
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Shareholders by number of shares held, Musti Group, 30 September 2021
Number of shares
Number of
shareholders
% of
shareholders
Number of
shares
% of shares
1-100 7,800 71.63 277,213 0.83
101-500 2,510 23.05 559,929 1.67
501-1,000 293 2.69 226,105 0.67
1,001-5,000 197 1.81 405,376 1.21
5,001-10,000 24 0.22 184,126 0.55
10,001-50,000 30 0.28 660,151 1.97
50,001-100,000 10 0.09 757,502 2.26
100,001-500,000 18 0.17 4,147,480 12.37
500,001-& above 7 0.06 26,315,571 78.47
Total 10,889 100.00 33,535,453 100.00
During October 2020-September 2021, Musti Group received the following announcement under
Chapter 9, Section 5 of the Securities Markets Act:
• On 16 November 2020 Musti Group plc received a notication according to which Millan Holding
S.à.r.l., a company ultimately owned by EQT and its co-investors, had sold a total number of 1,878,862
company's shares. As a result of the share sale, EQT's indirect holding of the shares and votes of the
Musti Group decreased below 5 percent and totalled to 0 shares and votes in the company.
A list of the largest shareholders is available on the company’s website at www.mustigroup.com/
investors.
Musti Group’s managers’ transactions as of the listing have been published as stock exchange
releases, and they are available on the company’s website at www.mustigroup.com.
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 is in
the process of building a robust responsibility foundation and setting targets and key performance
indicators to measure the results.
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 social responsibility
is a responsible supply chain, diminishing environmental impact as well as good governance and high
ethics. In addition, the company has identied three particular focus areas 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 suppliers to commit to Musti’s requirements on responsible business practices. Following the
Musti Group Supplier Code of Conduct and all national laws and regulations is imperative. The company's
dedicated employee team visits the supplier sites in Europe, and also the BSCI also visits the company's
supplier sites. 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 set the target of having all tier one suppliers in high-risk countries audited.
Musti Group’s Non-Financial Information Report for the nancial year 2021 has been published on
17 December 2021 in accordance with the Financial Statements and 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
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Annual Report 2021 52
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
Musti Group's net sales and operating prot are impacted by general economic conditions, which are
inuenced by many factors beyond Musti Group’s control. As Musti Group’s net sales and operating
prots are generated in Finland, Sweden and Norway, the company is vulnerable to negative economic
developments, including recession and depression, in these core markets. Although the pet care market
has proven to be resilient to economic downturns in the past, and so far during the COVID-19 pandemic,
there can be no assurance that this would be the case in the future. Adverse changes in the Nordic markets
could result from e.g. deterioration in business or consumer condence leading to low customer spending,
uctuations in currency rates, changing customer preferences or employment levels, lower availability of
credit, rising interest rates or ination or changes in taxation or in the local political landscape.
The COVID -19 has exposed Musti Group’s risk management to a new challenge. Musti Group is
actively working on minimizing disruptions on a longer term and implementing precautionary measures
to be able to manage diverse future scenarios. To date, the pandemic has not had any signicant
negative impacts on Musti Group, as the company has successfully managed the risks related to e.g.,
disruptions in the logistics chain, suppliers and employees. However, the pandemic can result in long-
term eects with risks related to higher unemployment and recession in the society and in the long-
term have eects with risks related to logistics chains and procurement.
Risks relating to changes in the competitive environment
Pet products and services retail industry is increasingly competitive due to the presence of online
merchandisers and specialty retailers in the pet food and products market. Also, the expansion of pet-
related product oerings by certain grocery stores and other general retail merchandisers has increased
competition. Musti Group competes with a number of other participants in the Nordic pet care market,
which includes pet food, pet products and pet services. Musti Group's competitors are 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.
Risks relating to quality of products and services
Musti Group's brand is an important asset to the company. Maintaining the reputation of, and value
associated with, Musti Group's brand, is central to the success of its business, and Musti Group could
be adversely aected if customers lose condence in the safety and quality of the food, accessories
and services sold or provided by the company. The real or perceived sale of contaminated pet food or
defective accessory products by Musti Group could result in product recalls, product liability claims
against Musti Group or its suppliers, investigations by authorities and loss of customer condence. In
addition, Musti Group may also be subjected to complaints from its customers, employees, competitors
or other third parties in social media channels, alleging injury, health, environmental, safety or
operational concerns, negligence or failure to comply with applicable laws and regulations. Any such
complaints and claims, even if successfully resolved without direct adverse nancial eect, could have a
material adverse eect on Musti Group’s brand and reputation.
Risks relating to changes in customer preferences
Musti Group has identied a mega-trend referred to as Pet Parenting where customers increasingly
treat their pets as family members. The increasing development of the Pet Parenting trend and growth
in spend per pet has opened markets for Musti Group's high-quality food products with high nutritional
value, broader range of products and services with a rising emphasis on wellness. Musti Group's success
depends in part on its ability to identify and respond to evolving customer preference trends in all of its
product areas, and on ability to translate customer preferences into appropriate, sellable merchandise
oerings with appropriate levels of inventory.
Risks relating to sourcing of products
As Musti Group does not operate through own factories, exempt its minority share of one pet food factory in
Finland, it relies on domestic and foreign external suppliers to source its own products. For third-party products,
Musti Group is dependent on its relationships with suppliers of third-party brand products to maintain a broad
product oering and sucient inventories. Musti Group focuses on the authenticity of its sources of supply and
the quality of its products and seeks to maintain high standards of sustainable sourcing of products in its supply
chain. Any loss of signicant suppliers or the 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 could have
a material adverse eect on the customer relationships and competitive position.
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Risks relating warehouse operations
A disruption or malfunction in Musti Group's warehouses or sourcing, diculties in successful managing
of Musti Group's inventory, or diculties in predicting the product demand may raise the costs related to
warehouses and require the selling of products with discounts reducing the protability. Such disruptions or
malfunctions may have an adverse eect on the inventory of Musti Group's and franchisees' stores, and Musti
Group's business could be substantially interrupted. Interruptions may in turn limit Musti Group's ability to
perform its obligations towards its customers, which may result in claims for nancial compensation based on
non-delivery of orders and damage Musti Group's reputation as a reliable trading partner.
Risks relating IT systems
The timely development, implementation and uninterrupted performance of Musti Group's hardware,
network, websites, ordering platforms and other IT systems, including those which may be provided by third
parties or which may be hosted online or in the “cloud”, are critical factors for the smooth functioning of
Musti Group's operations and are, thus, critical to Musti Group's success. Musti Group uses various software
to assist in eciently managing supply ows, orders, customer handling, warehousing, distribution,
replenishment, operational data, customer- and employee-related data as well as other management
and nancial information. Even though Musti Group has recently completed its IT system renewal and is
not expecting any larger upgrades in the near future, any future upgrades of existing IT systems or the
implementation of new IT systems, may cause organizational disruptions within Musti Group.
Musti Group depends on the continuous availability and reliability of its IT platforms, which, in turn,
depend on the functioning of its IT hardware. This includes operational risks, such as the occurrence
of equipment and software failures, power interruptions and unlawful conduct by third parties or
human error. Musti Group's IT systems are also exposed to cyber security risks relating to, for example,
viruses, malware, hacking phishing attacks, penetrating or bypassing security measures in order to gain
unauthorized access to Musti Group's networks and systems.
Musti Group strives to comply with all applicable laws and regulations relating to privacy and data
protection. However, it is possible that such requirements may be interpreted and applied by the
company in a manner that is unforeseeable or may conict with the current interpretations or practices
of the EU or the Finnish authorities. In addition, non-compliance or data breaches through cyber-attacks
or otherwise may result in nes, damages, orders to stop processing personal data as well as damage to
the Company's reputation, and otherwise have a negative impact on the company's business.
Risks relating management and employees
Musti Group’s success is largely dependent upon the continued service, skills and experience of its
existing management team and Board members, having valuable knowledge of the pet products and
services industry. Furthermore, Musti Group relies on its trained and passionate sales personnel in the
stores striving to provide tailored, knowledgeable service and guidance to Musti Group's customers.
Losses of key management or a signicant number of employees could adversely aect the daily
operations of Musti Group as well as its ability to develop its business successfully.
Musti Group’s ability to support its overall strategy may be limited by Musti Group's ability to recruit,
train, motivate and retain qualied sta. As Musti Group relies on skilled personnel, its success depends
partly on its ability to continue to attract, motivate and retain qualied personnel who understand and
appreciate Musti Group’s corporate culture, customers and merchandise, and are able to adequately
and eectively represent this culture.
Risks relating to regulation and compliance
Inadequate compliance with the regulations regarding Musti Group’s operations and products or with
the corporate social responsibility requirements could result in sanctions or harm Musti Group's public
image among its key customer groups.
Musti Group processes customer and employee data and collecting its customer data has a
signicant role in Musti Group’s business and strategy. Therefore, Musti Group's operations are subject
to laws relating to data protection and privacy, including the EU General Data Protection Regulation
((EU) 2016/679, the “GDPR”), which replaced the EU Data Protection Directive (95/46/EC) in May 2018,
as well as other national data protection laws.
Risks relating to taxation
Changing tax legislation, unexpected changes in interpretations of current tax regulations, and
administrative processes related to taxation may cause signicant costs to Musti Group. Musti Group was
subject to a tax audit of Musti Group plc, Musti Group Finland Oy and Musti Group Nordic Oy regarding
nancial years 2018-2020. Musti Group plc received in October 2021 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. The company disagrees with the interpretation
made in the tax audit. The company is to be reassessed in accordance with the interpretations set out in
the tax audit report but the company will le a claim for adjustment to the Finnish Tax Administration’s
Musti's Year Musti's Direction Corporate GovernanceResponsible Musti Financial StatementsBoard of Directors' Report
Annual Report 2021 54
Assessment Adjustment Board. To avoid possible additional tax increases Musti Group plc has in November
2021 paid the EUR 0.9 million subsequent taxes and tax increases. There were no repercussions of the tax
audit for the nancial years 2018-2020 of Musti Group Finland Oy and Musti Group Nordic Oy.
Musti Group’s central warehouse located in Eskilstuna, Sweden, supplies a signicant number of
products to all of Musti Group’s operating countries. This centralized operation generates a signicant
number of intra-group and cross-border transactions. Therefore, interpretations concerning transfer
pricing may have a signicant impact on the group level business results.
Risks relating to currency fluctuations
Musti Group’s results can be aected by uctuations in currency exchange rates as Musti Group is exposed
to foreign exchange rate risks in the form of translation risks and transaction risks arising from uctuations in
currency exchange rates. Musti Group's purchases are primarily conducted in euros, with currency exposure
to Swedish krona (SEK), Norwegian krone (NOK) , British pound (GBP) and US dollar (USD). Transactions risks
relating to Swedish krona, Norwegian krone, British pound and US dollar are partly hedged. Financial items
are subject to translation risks of internal loans and receivables in Swedish krona and Norwegian krone.
Risks relating to interest rate fluctuations
Musti Group’s current loans are subject to variable interest rates and, therefore, exposed to movements
in interest rates. An increase in the interest rate level may have a material adverse eect on the cost
of nancing and Musti Group’s nancial costs. In addition, the interest rate level is dependent on the
covenants of the nancing agreement.
Risks relating to liquidity
Musti Group’s business requires and will require the availability of a sucient funding. Sucient
funding is a condition for the development and expansion of the business through opening of new
stores and possible acquisitions. To mitigate potential liquidity risks Musti Group has an unutilized EUR
4.0 million credit limit and an undrawn EUR 10.0 million revolving credit facility.
Seasonality
Musti Group’s business is characterised 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 somewhat 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 2022
The underlying trend of Pet Parenting that drives the long-term structural growth of the pet care market
remains robust. Musti Group believes 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 on 27 January 2022
that shareholders will be paid a capital return of EUR 0.44 per share to be distributed from the invested
unrestricted equity reserve totalling approximately EUR 14.6 million and that no dividend will be paid for
the nancial year ended 30 September 2021.The capital return corresponds to approximately 70% of the
group’s prot for the nancial year.
The parent company’s distributable funds total EUR 155,078,491.02, of which prot for the nancial
year is EUR 6,799,917.88.
The Board proposes that the capital return is to be paid in two instalments. The rst capital return
instalment of EUR 0.22 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 31 January 2022. The Board of Directors proposes that the rst capital return instalment would
be paid on 8 February 2022. The second capital return instalment of EUR 0.22 per share would be 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
Board of Directors proposes that the second capital return instalment would be paid on 18 August 2022.
Helsinki, 17 December 2021
Board of Directors
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Annual Report 2021 55
Financial ratios and alternative performance measures
EUR million or as indicated
10/2020–9/2021 10/2019–9/2020 10/2018–9/2019
Net sales 340.9 284.4 246.6
Net sales growth, % 19.9% 15.3% 14.1%
LFL sales growth, % 11.8% 11.5% 11.2%
LFL store sales growth, % 8.8% 7.3% 7.8%
Online share of net sales, % 23.1% 22.5% 20.7%
Gross margin, % 45.7% 43.8% 44.3%
EBITDA 56.9 43.8 34.3
EBITDA margin, % 16.7% 15.4% 13.9%
Adjusted EBITDA 58.8 48.1 38.1
Adjusted EBITDA margin, % 17.3% 16.9% 15.4%
EBITA 34.9 25.5 18.1
EBITA margin, % 10.2% 9.0% 7.3%
Adjusted EBITA 36.8 29.8 21.9
Adjusted EBITA margin, % 10.8% 10.5% 8.9%
Operating Prot 28.4 19.6 12.5
Operating Prot margin, % 8.3% 6.9% 5.1%
Prot/loss for the period 20.9 11.8 3.0
Cash ow from operating activities 54.9 42.8 39.5
Investments in tangible
and intangible assets
12.9 8.9 6.4
Net debt 113.3 94.7 133.3
Gearing, % 72.2% 61.8% 135.4%
Net debt / LTM Adjusted EBITDA 1.9 2.0 3.5
Equity ratio % 46.5% 49.1% 35.2%
Nr of loyal customers, thousands 1 297 1 151 1 018
Number of stores at end of period 312 293 277
of which directly operated 280 231 206
Own & Exclusive share, % 51.0% 50.3% 51.7%
EUR million or as indicated
10/2020–9/2021 10/2019–9/2020 10/2018–9/2019
Share performance indicators
Earnings per share, basic, EUR 0.62 0.37 0.10
Earnings per share, diluted, EUR 0.62 0.37 0.10
Equity per share, EUR 4.68 4.57 3.46
Dividend payout per share and capital
return total
0.44 0.38 n.a.
Dividend payout and return of capital, total
of result, %
70.6% 108.4% n.a.
Eective dividend yield, % 1.4% 1.8% n.a.
Price/earnings ratio (P/E) 49.46 56.21 n.a.
Highest share price, EUR 37.22 20.94 n.a.
Lowest share price, EUR 18.41 7.00 n.a.
Share price as at 30 September 2021 30.9 20.80 n.a.
Market capitalisation 1,036.2 697.5 n.a.
Share turnover during the nancial year, % 72.1% n.a. n.a.
Shares outstanding at the end of the period 33,535,453 33,535,453 28,375,781
Shares outstanding at the end of the period,
diluted
33,576,033 33,722,953 28,375,781
Weighted average adjusted number of
shares during the nancial period, basic
33,410,411 31,652,469 28,375,781
Weighted average adjusted number of
shares during the nancial period, diluted
33,655,418 31,730,594 28,375,781
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Annual Report 2021 56
EUR million or as indicated
10/2020–9/2021 10/2019–9/2020 10/2018–9/2019
Finland
Net sales 152.6 135.8 122.8
Net sales growth, % 12.4% 10.6% 10.8%
LFL sales growth, % 10.6% 7.4% 8.8%
EBITDA 44.4 40.5 36.6
EBITDA margin, % 29.1% 29.8% 29.8%
Adjusted EBITDA 44.4 40.6 36.6
Adjusted EBITDA margin, % 29.1% 29.9% 29.8%
EBITA 36.0 32.8 29.8
EBITA margin, % 23.6% 24.2% 24.2%
Adjusted EBITA 36.1 33.0 29.7
Adjusted EBITA margin, % 23.7% 24.3% 24.2%
Number of stores at end of period 134 129 126
of which directly operated 134 112 108
EUR million or as indicated
10/2020–9/2021 10/2019–9/2020 10/2018–9/2019
Sweden
Net sales 147.5 123.2 107.5
Net sales growth, % 19.7% 14.7% 10.9%
LFL sales growth, % 9.2% 13.4% 12.4%
EBITDA 29.7 21.2 15.1
EBITDA margin, % 20.2% 17.2% 14.1%
Adjusted EBITDA 30.1 21.6 16.0
Adjusted EBITDA margin, % 20.4% 17.5% 14.8%
EBITA 21.4 14.5 9.0
EBITA margin, % 14.5% 11.7% 8.4%
Adjusted EBITA 21.7 14.9 9.9
Adjusted EBITA margin, % 14.7% 12.1% 9.2%
Number of stores at end of period 128 125 121
of which directly operated 96 80 68
EUR million or as indicated
10/2020–9/2021 10/2019–9/2020 10/2018–9/2019
Norway
Net sales 40.7 25.4 16.4
Net sales growth, % 60.6% 54.6% 97.0%
LFL sales growth, % 30.0% 33.3% 30.7%
EBITDA 10.0 5.3 2.2
EBITDA margin, % 24.5% 20.9% 13.7%
Adjusted EBITDA 10.0 5.3 2.4
Adjusted EBITDA margin, % 24.6% 21.0% 14.8%
EBITA 6.7 2.9 0.4
EBITA margin, % 16.5% 11.4% 2.6%
Adjusted EBITA 6.8 2.9 0.6
Adjusted EBITA margin, % 16.6% 11.5% 3.8%
Number of stores at end of period 50 39 30
of which directly operated 50 39 30
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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
10/2020–9/2021 10/2019–9/2020 10/2018–9/2019
Gross prot
Net sales 340.9 284.4 246.6
Material and services -185.2 -159.7 -137.3
Gross prot 155.6 124.7 109.4
Gross margin, % 45.7% 43.8% 44.3%
Earnings before interest, taxes, depreciation and
amortisation (EBITDA)
Operating prot 28.4 19.6 12.5
Depreciation, amortisation and impairment 28.6 24.2 21.8
Earnings before interest, taxes, depreciation and
amortisation (EBITDA)
56.9 43.8 34.3
EBITDA margin, % 16.7% 15.4% 13.9%
Adjusted earnings before interest, taxes,
depreciation and amortisation (Adjusted EBITDA)
Operating prot 28.4 19.6 12.5
Depreciation, amortisation and impairment 28.6 24.2 21.8
Adjustments 1.9 4.3 3.8
Adjusted earnings before interest, taxes,
depreciation and amortisation (Adjusted EBITDA)
58.8 48.1 38.1
Adjusted EBITDA margin, % 17.3% 16.9% 15.4%
Adjustments (EBITDA)
Restructuring related expenses 0.0 0.0 0.3
Acquisition/IPO related expenses 0.0 3.4 2.2
Other items aecting comparability 1.9 0.9 1.3
Adjustments (EBITDA) 1.9 4.3 3.8
Earnings before interest, taxes and amortisation
(EBITA)
Operating prot 28.4 19.6 12.5
Amortisation and impairment of intangible assets 6.5 6.0 5.6
Earnings before interest, taxes and amortisation
(EBITA)
34.9 25.5 18.1
EBITA margin, % 10.2% 9.0% 7.3%
EUR million or as indicated
10/2020–9/2021 10/2019–9/2020 10/2018–9/2019
Adjusted earnings before interest, taxes and
amortisation (Adjusted EBITA)
Operating prot 28.4 19.6 12.5
Amortisation and impairment of intangible assets 6.5 6.0 5.6
Adjustments 1.9 4.3 3.8
Adjusted earnings before interest, taxes and
amortisation (Adjusted EBITA)
36.8 29.8 21.9
Adjusted EBITA margin, % 10.8% 10.5% 8.9%
Adjustments (Operating prot)
Restructuring related expenses 0.0 0.0 0.4
Acquisition/IPO related expenses 0.0 3.4 2.2
Other items aecting comparability 1.9 0.9 1.3
Adjustments (Operating prot) 1.9 4.3 3.8
Earnings per share, basic
Prot/loss for the period 20.9 11.8 3.0
Non-controlling interest 0.0 0.0 0.0
Average number of shares *
)
33.4 31.7 28.4
Earnings per share, basic 0.62 0.37 0.10
* Number of shares before share issue of February 2020 was 28,375,781 and after share issue 33,535,453
Earnings per share, diluted
Prot/loss for the period 20.9 11.8 3.0
Non-controlling interests 0.0 0.0 0.0
Average diluted number of shares *
)
33.7 31.8 28.4
Earnings per share, diluted 0.62 0.37 0.10
* Includes shares from Performance Share Plan (PSP)
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EUR million or as indicated
10/2020–9/2021 10/2019–9/2020 10/2018–9/2019
Net debt
Interest bearing liabilities 126.3 116.3 142.1
Loan receivables 0.0 0.0 0.0
Derivative nancial instruments 0.0 0.0 0.2
Cash and cash equivalents 13.0 21.6 8.6
Net debt 113.3 94.7 133.3
Gearing, %
Net Debt 113.3 94.7 133.3
Equity 157.0 153.3 98.4
Gearing, % 72.2% 61.8% 135.4%
Net debt/LTM Adjusted EBITDA
Net debt 113.3 94.7 133.3
LTM adjusted EBITDA 58.8 48.1 38.1
Net debt/LTM adjusted EBITDA 1.9 2.0 3.5
Equity ratio, %
Total equity 157.0 153.3 98.4
Total assets 337.5 312.3 279.5
Advances received 0.3 0.2 0.1
Equity ratio, % 46.5% 49.1% 35.2%
LFL sales growth, %
Net sales 340.9 284.4 246.6
Net sales growth, % 19.9% 15.3% 14.1%
Other growth, % 8.1% 3.8% 2.9%
LFL sales growth, % 11.8% 11.5% 11.2%
EUR million or as indicated
10/2020–9/2021 10/2019–9/2020 10/2018–9/2019
LFL store sales growth, %
Store sales 250.1 206.6 182.4
Store sales total growth, % 21.1% 13.2% 10.0%
Other growth, % 12.3% 5.9% 2.2%
LFL store sales growth, % 8.8% 7.3% 7.8%
Net sales
Store sales 250.1 206.6 182.4
Online sales 78.7 64.1 51.1
Other sales 12.1 13.8 13.1
Net sales 340.9 284.4 246.6
Online share, %
Net sales 340.9 284.4 246.6
Online sales 78.7 64.1 51.1
Online share, % 23.1% 22.5% 20.7%
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Group nancial statements 63
Parent company nancial statements 107
Auditor’s report 114
Financial
Statements
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4. Net working capital 85
4.1 Inventories 85
4.2 Trade and other receivables 86
4.3 Trade and other payables 87
5. Capital structure and nancial instruments 88
5.1 Financial risk management 88
5.2 Financial assets and liabilities 92
5.3 Commitments and contingencies 98
5.4 Financial income and expenses 99
5.5 Capital Management 99
5.6 Equity 100
6. Other notes 102
6.1 Related party transactions 102
6.2 Taxes 103
6.3 Subsequent events 106
7. Parent company nancial statement, FAS 107
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 113
Auditor’s report 114
Musti Group plc
Financial Statements 30 September 2021
Table of contents
Group nancial statements, IFRS 63
Consolidated statement of income, IFRS 63
Consolidated statement of nancial position, IFRS 64
Consolidated statement of changes in equity 65
Consolidated statement of cash ows, IFRS 66
1. Basis of preparation 67
1.1 General information 68
1.2 Accounting principles 68
1.3 Material accounting estimates and determinations based on the
management’s judgement 68
1.4 Group information 69
1.5 New and amended IFRS standards and IFRIC interpretations 70
2. Operating results 70
2.1 Segment reporting and net sales 70
2.2 Other operating income 73
2.3 Other operating expenses 73
2.4 Share-based payments 74
3. Capital expenditures 76
3.1 Business combinations 76
3.2 Intangible assets 78
3.3 Goodwill and impairment testing 79
3.4 Investments in joint ventures 80
3.5 Property, plant and equipment 81
3.6 Leases 83
3.7 Provisions 84
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EUR thousand
Note 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Net sales 2.1 340,856 284,397
Other operating income 2.2 2,270 1,283
Share of prot of a joint venture 3.4 30 117
Materials and services 4.1 -185,239 -159,717
Employee benet expenses 2.3 -61,828 -48,364
Other operating expenses 2.3 -39,147 -33,924
Depreciation, amortisation and impairment
3.2, 3.3,
3.5, 3.6
-28,565 -24,238
Operating prot 28,377 19,554
Financial income 5.4 5,780 14,420
Financial expenses 5.4 -7,275 -20,314
Financial income and expenses, net -1,495 -5,894
Prot before taxes 26,882 13,661
Income tax expense 6.2 -5,988 -1,907
Prot/loss for the period 20,895 11,754
Attributable to:
Owners of the parent 20,872 11,712
Non-controlling interest 23 42
Earnings per share (EUR) for prot
attributable to owners of the parent
Basic EPS (EUR) 0.62 0.37
Diluted EPS (EUR) 0.62 0.37
EUR thousand
Note 1 Oct 2020–31 Mar 2021 1 Oct 2019–30 Sep 2020
Prot/loss for the period 20,895 11,754
Other comprehensive income
Items that may be reclassied to prot or
loss in subsequent periods:
Translation dierences 1,138 -76
Other comprehensive income, net of tax 1,138 -76
Total comprehensive income 22,033 11,678
Attributable to:
Owners of the parent 22,006 11,635
Non-controlling interest 27 42
Group financial statements, IFRS
Consolidated statement of income,
IFRS
Consolidated statement of
comprehensive income, IFRS
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EUR thousand
Note 30 Sep 2021 30 Sep 2020
ASSETS
Non-current assets
Goodwill 3.1, 3.2, 3.3 157,831 145,434
Other intangible assets 3.2 18,705 20,480
Right-of-use assets 3.6 71,745 62,014
Property, plant and equipment 3.5 15,759 11,304
Investments in joint ventures 1.4, 3.4 990 960
Deferred tax assets 6.2 5,008 5,914
Other non-current receivables 109 345
Total non-current assets 270,148 246,452
Current assets
Inventories 4.1 44,297 36,376
Trade and other receivables 4.2, 5.1 9,322 6,466
Loan receivables 5.2 0 15
Derivative nancial instruments 5.2 484 0
Income tax receivables 6.3 281 1,378
Cash and cash equivalents 5.2 13,013 21,606
Total current assets 67,397 65,840
TOTAL ASSETS 337,545 312,292
EUR thousand
Note 30 Sep 2021 30 Sep 2020
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 5.6 11,002 11,002
Other reserves 5.6 154,691 167,412
Own shares 5.6 -6,910 0
Translation dierences 5.6 975 -159
Retained earnings -2,891 -25,132
Total equity attributable to owners of the parent 156,867 153,122
Equity attributable to non-controlling interest 110 157
Total equit y 156,977 153,279
LIABILITIES
Non-current liabilities
Loans from credit institutions 5.2 49,872 49,781
Lease liability 3.6 56,713 50,538
Deferred tax liabilities 6.2 2,684 2,168
Other liabilities 5.2 14 0
Total non-currentliabilities 109,283 102,486
Current liabilities
Loans from credit institutions 5.2 0 0
Lease liability 3.6 19,759 15,957
Trade and other payables 4.3 46,827 40,264
Derivative nancial instruments 5.2 441 53
Income tax liabilities 6.2 4,257 233
Provisions 3.7 0 20
Total current liabilities 71,285 56,527
Total liabilities 180,567 159,013
TOTAL EQUITY AND LIABILITIES 337,545 312,292
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 Own 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
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 Own shares Translation dierences Retained earnings Total
Equity at 1 Oct 2019 11,002 122,412 0 -83 -35,012 98,319 101 98,420
Prot/loss for the period 11,712 11,712 42 11,754
Translation dierences -76 -76 1 -76
Total comprehensive income 0 0 0 -76 11,712 11,635 42 11,678
Other changes 20 20 13 32
Share issue 45,000 45,000 45,000
Expenses related to the share issue -2,275 -2,275 -2,275
Discount related to the personnel
share issue
Share-based incentive plan 276 276 276
Equity at 30 Sep 2020 11,002 167,412 0 -159 -25,132 153,122 157 153,279
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Consolidated statement of cash flows, IFRS
EUR thousand
Note 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Cash ows from operating activities
Prot before taxes 26,882 13,661
Adjustments
Depreciation, amortisation and
impairment 28,565 24,238
Financial income and expenses, net 1,495 5,894
Other adjustments 1,466 -300
Cash ows before changes in working
capital 58,409 43,493
Change in working capital
Increase (-) / decrease (+) in trade and
other receivables 4.2 -2,782 -693
Increase (-) / decrease (+) in inventories 4.1 -6,653 -3,659
Increase (+) / decrease (-) in trade and
other payables 4.3 5,269 3,486
Cash ows from operating activities before
nancial items and taxes 54,243 42,627
Income taxes paid 706 -762
Net cash from operating activities 54,950 41,864
EUR thousand
Note 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Cash ows from investing activities
Investments in tangible and intangible
assets 3.2, 3.5 -12,878 -8,914
Acquisition of subsidiaries and business
acqusitions, net of cash acquired 3.1 -10,330 -1,361
Investments in joint ventures 3.4 0 -600
Increase/decrease in non-current
receivables
Increase/decrease in current receivables 10 0
Net cash from investing activities -22,969 -10,972
Cash ows from nancing activities
Proceeds from share issues 5.6 0 45,000
Capital returns paid 5.6 -12,720 0
Dividends paid 5.2 -75 0
Costs from share issue recognised in equity 5.2 0 -2,844
Acqusition of own shares 5.2 -6,910 0
Proceeds from non-current loans 0 50,000
Repayments of non-current loans 0 -84,879
Repayments of current loans 0 -5,031
Repayments of lease liabilities -17,297 -14,819
Interest and other nancial expenses paid -5,190 -5,788
Interest and other nance income received 1,620 445
Net cash ow from nancing activities -40,573 -17,915
Net change in cash and cash equivalents -8,592 12,977
Cash and cash equivalents at start of period 5.1, 5.2 21,606 8,629
Cash and cash equivalents at end of period 13,013 21,606
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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
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1.1 General information
Furthermore, the Group provides pet grooming 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 Helsink i, 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 17 December 2021. 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 2021. 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.
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 this and the translation of the equity of the subsidiaries are presented in the
equity as a separate item.
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.
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Accounting estimates and management judgement Note
Net sales 2.1
Business combinations 3.1
Goodwill impairment testing 3.3
Inventory valuation 4.1
Leases 3.6
Contractual liabilities 4.3
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 at 30 September 2021. 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.
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 2021
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 AB (Arken Zoo Nord AB) Sweden 100.0
Arken Zoo Holding 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.
Investments in joint ventures
Country of origin Group ownership, %
Premium Pet Food Suomi Oy Finland 49.20
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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 2020. The amended standards are: IFRS 3 Business Combinations, IFRS 9
Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement, IFRS 7 Financial
Instruments: Disclosures, IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies,
Changes in Accounting Estimates, IFRS 16 Leases and The Conceptual Framework for Financial Reporting.
Amendments and annual improvements have not had a major impact on the nancial statements.
New and amended standards to be applied
At the date of authorisation of these nancial statements, Musti Group has not applied the following
new and revised IFRS Standards that have been issued but are not yet eective for the nancial year
beginning 1 Oct 2021.
• Interest Rate Benchmark Reform – Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
• Reference to the Conceptual Framework – Amendments to IFRS 3
• Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16
• Onerous Contracts – Costs of Fullling a Contract – Amendments to IAS 37
• AIP IFRS 1 First-time Adoption of International Financial Reporting Standards – Subsidiary as a rst-
time adopter
• AIP IFRS 9 Financial Instruments – Fees in the ’10 per cent’ test for derecognition of nancial
liabilities
• IFRS 17 Insurance Contracts
• Classication of Liabilities as Current or Non-current - Amendments to IAS 1
• Denition of Accounting Estimates – Amendments to IAS 8
• Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS
12
• Sale or Contribution of Assets between and investor and its Associate or Joint Venture –
Amendments to IFRS 10 and IAS 28
The adoption of the standards listed above is not expected to have a signicant impact on Musti
Group’s nancial statements in future periods.
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 312 stores on 30 September 2021 (30
September 2020: 293), of which own stores amounted to 280 (30 September 2020: 231).
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. In addition, the segments include
ecommerce sales, which are targeted to the sales of the country where the ecommerce products are
ordered. The Finnish franchise customers part of the external net sales and attributable direct costs are
allocated from Sweden to the Finnish segment.
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 a strong ramp-up phase, and as such, their investment needs and protability dier signicantly
from each other.
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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 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
Amortisation and impairment
of intangible assets
-6,516
Operating prot 28,377
Financial income 5,780
Financial expenses -7,275
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.
Segments 2020
EUR thousand Finland Sweden Norway
Group
functions
Group
Net sales * 135,795 123,244 25,358 0 284,397
% split of net sales between
segment
48% 43% 9% 0% 100%
EBITDA 40,472 21,181 5,301 -23,161 43,792
Adjustments 162 419 29 3,656 4,266
Adjusted EBITDA 40,633 21,600 5,329 -19,505 48,058
Depreciation and impairment
of right-of use assets and
tangible assets
-7,677 -6,716 -2,403 -1,448 -18,244
EBITA 32,795 14,465 2,898 -24,610 25,548
Adjustments 162 419 29 3,656 4,266
Adjusted EBITA 32,957 14,884 2,927 -20,953 29,814
Amortisation and impairment
of intangible assets
-5,994
Operating prot 19,554
Financial income 14,420
Financial expenses -20,314
Prot before taxes 13,661
Income tax expense -1,907
Prot/loss for the period 11,754
* Net sales include sales of products and services to external customers. There are no internal net sales between the segments.
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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 below.
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 credits
cards, and the revenue from the sales of goods is recognized at the time of transfer when the customer
gains control on 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 on
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 Finland and 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.
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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 2020–30 Sep 2021 % 1 Oct 2019–30 Sep 2020 %
Store sales 250,118 73.4 206,552 72.6
Online sales 78,669 23.1 64,059 22.5
Other sales 12,068 3.5 13,786 4.8
Total 340,856 100.0 284,397 100.0
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 the Musti ja Mirri chain in Finland and companies in the Arken Zoo chain in Sweden
operate a loyalty program where the members accrue bonuses from their purchases made in the stores
and online. The net sales of these companies are adjusted with the customer refunds in the loyalty
program as a part of the sales transaction. 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.
Similar loyalty programs are not available in other group companies in Finland and Sweden, or in
Norway.
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.
During the third quarter of 2020 Musti Group received some COVID-19 related nancial assistance
under governmental scheme in Sweden and Norway. However, the amount of the assistance was not
material from a Group perspective.
Other operating income
EUR thousand 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Rental income 356 216
Marketing contribution 1,244 660
Received contributions and benets
for personnel
377 260
Other items 293 407
Total 2,270 1,543
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.
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Number of personnel
Personnel 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Personnel on average 1,283 1,145
Personnel at the end of period 1,397 1,162
Employee benefit expenses
EUR thousand 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Wages and salaries 47,489 38,042
Pension costs - dened contribution
plans
5,111 4,098
Share based payments 1,370 276
Other employee benet expenses 7,858 5,948
Total 60,458 48,364
Other operating expenses
EUR thousand 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Rental expenses 6,786 5,498
Maintenance, IT and Equipment
expense
5,348 4,628
Sales and marketing 14,274 12,071
Travel costs 683 904
Voluntary sta expenses 1,391 1,150
Other business expense * 10,665 9,673
Total 39,147 33,924
* Other expenses include, among other, maintenance costs related to the administration of the company and the premises
Auditor´s fees
EUR thousand 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Ernst & Young
Audit fees 340 468
Tax advisory 132 240
Other services 173 1,484
Other companies
Audit fees 0 0
Other services 0 0
Total 645 2,192
2.4 Share-based payments
The Note below provides description and information on eects of the Group’s share-based incentive
plans. More information on share-based personnel bonus 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.
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Share-based commitment and incentive scheme
The Boards of Directors of Musti Group plc decided on 7 May 2020 on two 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 2021, 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 autumn of 2022.
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 grant date
translated into shares. The expense recognized for 2021 amounted to 947 thousand euros (276 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 autumn of 2023.
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 2021 amounted to 423 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 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.
Assumptions applied in determining the fair value of share award
Performance period
FY2020 PSP
Performance period
FY2021 PSP
Number of share awards granted, maximum, pcs 250,000 137,600
Number of plan participants at end of nancial year 11 30
Share price at balance sheet date, EUR 30.90 30.90
Assumed fullment of performance criteria, % 50.0% 50.0%
Estimated number of share awards returned prior to
the end of commitment period, %
15.0% 15.0%
* 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 EXPENDITURES
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 COVID-19 impacts 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. In the
nancial year 2021 and 2020 Musti Group carried out share deals and asset deals where it acquired
stores from franchisees.
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 2020-30 Sep 2021
Musti Group’s subsidiary Arken Zoo AB (former Arken Zoo Nord 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 nancial year 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
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 nancial year 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 nancial year ended 30 September 2021 if the
acquisitions had been consolidated from the beginning of the nancial year.
Acquisitions 1 Oct 2019-30 Sep 2020
During the nancial year 2020 Musti Group acquired pet stores, two in Finland and three in Sweden.
The total purchase price of the stores was approximately EUR 1.4 million and the resulting goodwill EUR
1.2 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 2.4 million and increased
operating prot by EUR 0.4 million for the period 1 October 2019 – 30 September 2020. The eect on
the Group’s net sales would have been approximately EUR 3.8 million and on the operating prot EUR
0.6 million for the period ended September 30, 2020 if the acquisitions had been consolidated from the
beginning of the nancial year.
Musti Group also increased its ownership in the joint venture Premium Pet Food Suomi Oy during the
reporting period from 40.0 % to 49.2 % by converting a capital loan of 0.6 million to new shares.
Sales 1 Oct 2020-30 Sep 2021
In April 2021 the Group has sold four subsidiaries in Sweden: Anivet AB, Carnia AB, ZooZoocom AB and
Tasso i Malmö AB. The sales were not material to the Group.
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Sales 1 Oct 2019-30 Sep 2020
During the nancial year 2020 the Group has sold one subsidiary, Djurfriskvård Västerås AB in Sweden.
The sale was not material to the Group.
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.
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 5-10 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
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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EUR thousand Goodwill
Other
intangible
assets
Advance
payments
Total
2020
Cost 1 Oct 2019 144,315 35,530 478 180,323
Business combinations 0
Additions 1,244 2,938 1,006 5,188
Disposals and closing of stores -58 0 -58
Reclassications -220 -220
Exchange dierences 295 107 1 402
Cost 30 Sep 2020 145,796 38,354 1,485 185,635
Accumulated amortisation and impairment
at 1 Oct 2019
-320 -13,340 0 -13,660
Amortisation -5,994 -5,994
Impairment and closing of stores -19 -19
Reclassications 22 22
Exchange dierences -23 -47 -70
Accumulated amortisation and impairment
at 30 Sep 2020
-362 -19,358 0 -19,720
Net book value at 1 Oct 2019 143,995 22,190 478 166,664
Net book value at 30 Sep 2020 145,434 18,995 1,485 165,914
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 on the basis of value-in-use
calculations requiring estimates. The calculations use cash ow projections based on budgets
and nancial estimates approved by management covering a four-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 four years, and cash ows beyond the four-year period
are extrapolated using the estimated growth rates stated above. The growth rates are based on the
management’s estimates on future growth in the business. Management tests the impacts of changes in
signicant estimates used in forecasts by sensitivity analyses as described above 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 four-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 2021 30 Sep 2020
Finland 94,486 93,840
Sweden 60,801 50,437
Norway 2,545 1,158
Total 157,831 145,434
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 four-year forecast period.
The projections have been prepared to reect the past performance and expectations for the future
considering the Group’s market position and the general economic environment. Cash ows beyond the
four-year period are extrapolated using the estimated growth rates of 1% (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
8.2% (2020: 8.1%), in Sweden 7.9 % (2020: 7.5%) and in Norway 8.1% (2020: 7.6%).
As result of the impairment tests performed no impairment loss has been recognized for any period
presented. In 2021 the recoverable amount calculated on the basis on value-in use exceeded the
carrying value by EUR 183.1 million in Finland, EUR 134.0 in Sweden and EUR 163.6 million in Norway
(2020: EUR 113.9 million in Finland, EUR 69.5 million in Sweden and 43.3 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
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of developments of cost and revenue. 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 the both parties, are treated as joint ventures due to their nature. The Group has one joint
venture Premium Pet Food Suomi Oy, domiciled in Paimio, which produces pet foods. Musti Group
increased its ownership in the joint venture Premium Pet Food Suomi Oy during the nancial year 2020
from 40% to 49.2% by converting a capital loan of 0.6 million to new shares. The book value of the
investments is EUR 990 thousand on 30 September 2021 (30 September 2020: EUR 960 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
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.
Summarised balance sheet
EUR thousand 30 Sep 2021 30 Sep 2020
Total non-current assets 8,033 4,222
Current assets
Cash 86 1,512
Other current assets 1,250 749
Total current assets 1,336 2,261
Total assets 9,369 6,483
Non-current liabilities
Financial liabilities 6,688 4,200
Other non-current liabilities 100 600
Total non-current liabilities 6,788 4,800
Current liabilities
Financial liabilities 512 58
Other liabilities 735 803
Total current liabilities 1,246 861
Total liabilities 8,035 5,661
Equity 1,335 822
Group’s share of equity 654 403
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Summarised statement of profit or loss
EUR thousand 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Net sales 4,177 3,455
Depreciation and amortisation -519 -100
Financial income and expenses -194 -44
Prot before tax -87 389
Appropriations 98 -17
Income tax expense 0 -81
Prot (loss) for the year 11 291
Group’s share of prot for the year 5 143
Dividends received 0 76
Changes in the carrying amount of the joint venture:
EUR thousand 30 Sep 2021 30 Sep 2020
Book value at the beginning of the
nancial year
960 320
Additions 0 600
Share of prot 30 117
Dividends received 0 -76
Book value at the end of the
nancial year
990 960
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.
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.
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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
EUR thousand
Machinery and
equipment
Other tangible
assets
Advance
payments
Total
2020
Cost 1 Oct 2019 12,451 7,286 24 19,761
Business combinations 0
Additions 1,507 3,628 25 5,160
Disposals -118 -118
Reclassications -172 393 221
Exchange dierences -56 -255 0 -312
Cost 30 September 2020 13,730 10,934 49 24,713
Accumulated depreciation
at 1 Oct 2019
-7,406 -2,747 0 -10,153
Depreciation -1,748 -1,581 -3,329
Impairment 0
Disposals 0
Reclassications 27 -38 -11
Exchange dierences 32 52 84
Accumulated depreciation
at 30 Sep 2020
-9,095 -4,314 0 -13,409
Net book value at 1 Oct 2019 5,045 4,539 24 9,608
Net book value at 30 Sep
2020
4,635 6,620 49 11,304
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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 below).
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
on the date when the lease agreement comes into eect. The value of the lease liability on the date
when the lease agreement comes into eect 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.
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 group also negotiated some rent reductions during the second and third quarter of 2020 for
which the group didn’t apply the IFRS 16 COVID-19 amendment.
The tables set forth the amounts of right-of-use assets in the balance sheet and their impact on the
prot and loss statement.
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Right-of-use assets
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
EUR thousand
Buildings and
structures
Machinery and
equipment
Total
2020
Net book value at 1 Oct 2019 46,816 481 47,296
New contracts 13,329 194 13,522
Contracts terminated prematurely -1,601 -25 -1,625
Revaluations and modications 18,245 16 18,260
Exchange rate dierences -529 5 -524
Depreciation -14,743 -173 -14,915
Net book value at 30 Sep 2020 61,516 498 62,014
Lease liability
EUR thousand 30 Sep 2021 30 Sep 2020
Lease liability at 1 Oct 66,494 51,982
Net increases 27,385 29,354
Rent expenses -19,679 -17,237
Interest expense 2,272 2,395
Lease liability at 30 Sep 76,472 66,494
EUR thousand 30 Sep 2021 30 Sep 2020
Non-current lease liability 56,713 50,538
Current lease liability 19,759 15,957
Total 76,472 66,494
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 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Expenses from short-term rental agreements, leasing
agreements with minor value and variable rental
costs, that are not included in the lease liability
-1,470 -1,697
Depreciation of right of use assets -17,620 -14,915
Interest expenses from lease liability * -2,272 -2,395
Total -21,362 -19,008
* Included in the Note for nancial expenses, see Note 5.4 Financial income and expenses
Repayments of lease liabilities amounted to EUR 17,297 for the nancial year 2021 and 14,819 thousand
for the nancial year 2020.
The weighted average interest used in the calculation of interest expenses was 3.0% (3.6%).
3.7 Provisions
Accounting principles
A provision is recognized when the Group has a legal or factual obligation based on a previous event,
the realisation of a payment obligation is probable, and the amount of the obligation can be reliably
estimated. The amount of the provisions is measured on each closing date and modied according
to the best estimate at the time of assessment. Changes in provisions are recognized in the income
statement at the same amount as the initial recognition of the provision. The Group’s provisions are
mainly related to the warranties granted to the products sold by the Group and restructuring provisions,
as well as unprotable leases.
A restructuring provision is recognized when the Group has compiled a detailed restructuring plan
and launched its implementation or has disclosed the plan. A warranty provision is recognized when a
product covered by warranty provisions is sold.
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EUR thousand
Restructuring
provisions
Other
provisions
Total
2021
1 Oct 2020 0 20 20
New provisions 0
Used provisions 0 -20 -20
Exchange dierences 0
30 Sep 2021 0 0 0
Short-term 0 0 0
EUR thousand
Restructuring
provisions
Other
provisions
Total
2020
1 Oct 2019 -129 0 -129
New provisions 0 20 20
Used provisions 129 0 129
Exchange dierences 0
30 Sep 2020 0 20 20
Short-term 0 0 20
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 2021 30 Sep 2020
Net working capital
Inventories 44,297 36,376
Trade and other receivables 9,322 6,466
Excluding nancial items in other receivables 0 0
Trade and other payables -46,827 -40,264
Excluding nancial items in other liabilities 256 249
Total 7,048 2,826
Change of net working capital in the balance sheet -4,222 -744
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 *
56 -122
Change of net working capital in the cash ow
statement **
-4,166 -866
* 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.
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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 2021 30 Sep 2020
Finished goods 39,580 34,720
Advance payments 4,717 1,656
Total 44,297 36,376
Inventories recognised as expenses, for which the
carrying amount of inventories was reduced to the
net relisable value
4,867 4,068
EUR thousand 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
The amount of inventories recognized as an expense
during the period
186,465 137,488
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 course of ordinary 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 course of the
Group’s ordinary 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 below set forth the items included in the trade and other receivables:
Trade and other receivables
EUR thousand 30 Sep 2021 30 Sep 2020
Trade receivables * 3,597 3,483
Prepayments and accrued income 4,615 1,663
Other receivables 1,110 1,319
Total 9,322 6,466
* Credit card receivables are included in the trade receivables.
Of the trade receivables, a total of EUR 79 thousand has been recognized as a credit loss in the
statement of prot and loss in 2021. During 2020 there was a positive eect of EUR 75 thousand as a
result of the decrease in the credit loss reservation.
The credit loss risk is described in more detail in the Note 5.1 Financial risk management.
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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 amortised cost using the eective interest rate method. Trade
and other payables are classied as other nancial liabilities and measured at amortised 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.
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 2021 30 Sep 2020
Trade payables 23,794 20,730
Advances received 269 232
Other liabilities 9,261 9,456
Accrued expenses 13,503 9,846
Total 46,827 40,264
Material items included in accrued expenses
EUR thousand 30 Sep 2021 30 Sep 2020
Personnel related costs 9,020 7,129
Accrued interests 256 249
Other items 4,227 2,468
Total 13,503 9,846
Material items included in other liabilities
EUR thousand 30 Sep 2021 30 Sep 2020
VAT liabilities 5,967 6,283
Payroll taxes 2,133 1,526
Loyalty program 1,131 1,641
Other items 30 6
Total 9,261 9,456
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 quarterly bonuses accrued to the loyal customer account (see Note 2.1 Segment reporting
and net sales) less the estimated expiration date of the bonuses based on historical information.
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5. CAPITAL STRUCTURE AND FINANCIAL INSTRUMENTS
5.1 Financial risk management
This Note describes Musti Group’s exposure to nancial risks and how these risks may in the future
impact Musti Group’s nancial results. Information on the result for the period is presented in relevant
parts as background for the matter in hand.
The focus of the Group’s general risk management program is on the poor visibility of the nancial
markets, with the aim to minimise the unfavourable impact on the Group’s nancial results. Certain risks
are hedged using derivatives.
Financial risk management aims to protect the company from unfavourable changes in nancial
markets, thereby contributing to safeguarding the company’s prot performance and shareholders’
equity and to ensure sucient sources of nance. The nancial administration is responsible for the
Group’s risk management according the instructions issued by the Board of Directors. The nancial
administration identies, estimates and hedges nancial risks in cooperation with the Group’s business
units.
Exchange rate risk
Foreign exchange risk means the uncertainty in cash ows and nancial performance arising from
exchange rate uctuations. The Group’s most signicant transaction currency risks arise from Swedish
krona (SEK), Norwegian krone (NOK), US dollar (USD) and British pound (GBP).
International purchasing and foreign currency nancing of subsidiaries expose the Group to
transaction risks in dierent currencies. The exchange rate risk related to the subsidiaries outside
the Euro zone arises mainly from the trade receivables and liabilities against these subsidiaries in
connection with the business operations of the Group companies. The risk is managed commercially,
for example by transferring exchange rate changes to sales prices. Subsidiaries report their own
currency positions to Group Finance on a monthly basis.
As regards to exchange rate risk, the Group has hedged some of its purchases in Norwegian krones,
US dollars and British pounds in Sweden using exchange rate derivatives against the Swedish krona.
Signicant appreciation of Norwegian krone, US dollar and British pound will have a negative impact
on the company’s purchases, meaning that the euro value of the purchases will increase. The group has
also hedged some of its sales in Norwegian krones in Sweden against Swedish krones. Exchange rate
hedges are classied as derivatives that are measured at fair value through prot and loss.
The Group’s foreign currency positions (in euros) at the end of the
reporting period
EUR thousand 30 Sep 2021 30 Sep 2020
Trade payables 1,980 2,338
Forecasted purchases in the neext 6 months 21,551 19,591
Cash and cash equivalents 0 0
Total 23,531 21,929
Currency derivatives * 13,961 -889
Poistion, total 37,492 21,041
* The Group has 1 October 2020 renewed the currency derivative agreements. The Group hedges Swedish krona and Norwegian
krone as well as British pounds and US dollars.
This Group level currency exposure is the basis for the sensitivity analysis of foreign exchange risk.
Assuming euro to appreciate or depreciate 10 percent against all other currencies, the impact on cash
ows, net of taxes, would be:
30 Sep 2021
EUR thousand SEK NOK USD GBP
EUR +/- 10 % +/- 4,011 +/- 1,226 +/- 83 +/- 109
30 Sep 2020
EUR thousand SEK NOK USD GBP
EUR +/- 10 % +/- 3,840 +/- 1,058 +/- 26 +/- 144
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 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Items recognised through prot and loss
Net exchange rate gains/losses included in the
nancial income/expenses
1,605 -865
Exchange rate gains/losses recognised in the
result for the period, total (net)
1,605 -865
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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 Swedish krona (SEK) and Norwegian krone (NOK). As on 30 September 2021 the
total non-EUR denominated equity, goodwill and fair value step up of the subsidiaries were EUR 85.2
million (EUR 56.4 million).
The translation risk is not material in relation to the volume of the Group’s operations and the size of
the balance sheet. A change of +/- 10 percent in EUR against other currencies would have an impact of
+/- EUR 8.52 million. Musti Group is currently not hedging any equity exposure.
Interest rate risk
Interest rate risk means the cash ow, nancial performance and balance sheet uncertainty arising from
interest rate uctuations.
In connection with the IPO Musti Group renanced its existing loans with the share issue of EUR
45 million and a new loan agreement of EUR 60 million, which consists of an EUR 50 million term loan
and an EUR 10 million revolving credit facility. The repayment date of the facilities is 14 February 2023.
The renanced liabilities include a variable interest rate linked to EURIBOR and a xed interest rate. At
the negative EURIBOR interest rate as of 30 September 2021, the loans include only the xed interest
component.
During the nancial year ended 30 September 2021, interest rate risk items in the balance sheet
included interest-bearing assets EUR 0 thousand (EUR 15 thousand) and interest-bearing liabilities EUR
127 million (EUR 116 million). Of the interest-bearing liabilities 61% (65%) is denominated in euros.
Sensitivity of interest expenses on changes in market rates has been calculated by assuming
permanent one percentage unit change in market rates 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 0.9
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
and factoring receivables. The Group’s customer base is very diversied, and the Group does not have
signicant credit risk concentrations related to trade receivables. Credit risk arising from liquid assets is
limited as the counterparties are banks with high international credit ratings.
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.
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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 2021 30 Sep 2020 30 Sep 2021 30 Sep 2020 30 Sep 2021 30 Sep 2020
Unmatured 0.5% 1,781 2,323 9 12 1,772 2,311
<30 days 1% 20 41 0 0 20 40
30-60 days 5% 192 69 10 3 182 65
61-180 days 10% 95 3 9 0 85 2
180-360 days 50% -2 101 -1 50 -1 50
over 360 days 100% 45 27 45 27 0 0
Total 2,131 2,563 72 93 2,059 2,469
Credit card receivables 0.5% 1,547 1,019 8 5 1,539 1,014
Total 3,677 3,582 80 98 3,597 3,483
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 risk
Liquidity risk refers to the risk of the Group not being able to full its payment obligations. Musti
Group monitors the Group’s liquidity needs monthly to ensure that sucient funds are available for the
business needs.
The objective of the liquidity risk management is to at all times maintain sucient liquid assets and
credit limits to ensure the adequacy of the Group’s business nancing. In order to manage liquidity risk,
the Group has an undrawn revolving credit facility of EUR 10 million and an undrawn credit limit of EUR
4 million to ensure nancial exibility. At the yearend 30 September 2021, the cash and cash equivalent
totalling EUR 13.0 million (EUR 21.6 million).
The Group can secure external nancing within the limits of its present nancing agreements or use
the bank overdraft, see Section Interest-bearing loans, if the cash ows from operating activities are
not sucient. The covenants included in the external nancing need to be considered in the planning of
the nancing structure. Liquidity risk management aims to ensure that the Group can full its payment
obligations and its nancial position and reputation are not harmed. The Group aims to assess and
monitor the level of nancing required by its business operations in order to ensure that the Group
has sucient amounts of liquid funds for nancing business operations and investments, as well as for
repayment of loans when they mature.
The Group’s nancing agreements contains for the nancial years 2021 and 2020 covenants relating
to gearing and the ratio of net debt to EBITDA (leverage). 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 years 2021 and 2020, all quarterly covenant conditions were either met or
waived.
The table below sets forth the Group’s nancial labilities 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 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
30 Sep 2020
EUR thousand FY2021 FY2022 FY2023 FY2024 FY2025 FY2026- Total
Non-current liabilities
Loans from credit
institutions
49,781 49,781
Lease liability 16,855 14,541 9,893 5,468 3,781 50,538
Other non-current
interest-bearing liabilities
0
Current liabilities
Loans from credit
institutions
0
Lease liability 15,957 15,957
Trade and other payables * 20,730 20,730
Total 36,687 16,855 64,322 9,893 5,468 3,781 137,005
Interest payments 3,044 2,469 1,460 689 333 136 8,131
* Other receivables and other payables include only items classied as nancial assets or liabilities.
The Group’s loans from credit institutions on 30 September 2021 amounted to EUR 49.9 million (EUR
49.8 million). The loans mature on 14 February 2023.
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 2021 or 2020.
Fair value hierarchy
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
Loan receivables 0
Cash and cash equivalents 13,013
Financial assets at fair value through prot and loss
Derivative nancial instruments 484
Total 17,204
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30 Sep 2020
EUR thousand Level 1 Level 2 Level 3
Assets
Financial assets at amortised cost
Other non-curret assets 345
Trade and other receivables * 3,483
Loan receivables 15
Cash and cash equivalents 21,606
Financial assets at fair value through prot and loss
Derivative nancial instruments 0
Total 25,449
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
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
30 Sep 2020
EUR thousand Level 1 Level 2 Level 3
Liabilities
Financial liabilities at amortised cost
Other non-current liablities 0
Loans from credit institutions 49,781
Lease liability 66,494
Trade and other payables * 20,730
Financial assets at fair value through prot and loss
Derivative nancial instruments 53
Total 137,058
* Other receivables and other payables includes 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 amortised 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 amortised cost
Financial assets are classied as nancial assets at amortised 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 amortised 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 amortised 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 amortised 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 amortised cost
II. nancial liabilities at fair value through prot and loss
Financial liabilities at amortised 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.
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 fair value through
other comprehensive income
Financial assets at amortised 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
Loan receivables 0 0 0
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
EUR thousand
Financial assets at fair value
through prot and loss
Financial assets at fair value through
other comprehensive income
Financial assets at amortised cost Book value Fair value
30 Sep 2020
Non-current assets
Other non-current assets 345 345 345
Total 345 345 345
Current assets
Trade and other receivables 3,483 3,483 3,483
Loan receivables 15 15 15
Derivative nancial instruments 0 0 0
Cash and cash equivalents 21,606 21,606 21,606
Total 0 25,103 25,103 25,103
Financial assets, total 0 25,449 25,449 25,449
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Financial liabilities
EUR thousand
Financial liabilities at fair value
through prot and loss
Financial liabilities at fair value
through other comprehensive income
Financial liabilities at amortised 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
Other non-current liabilities 0 0 0
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
EUR thousand
Financial liabilities at fair value
through prot and loss
Financial liabilities at fair value
through other comprehensive income
Financial liabilities at amortised cost Book value Fair value
30 Sep 2020
Non-current liabilities
Loans from credit institutions 49,781 49,781 49,781
Lease liability 50,538 50,538 50,538
Other non-current liabilities 0 0 0
Total 100,318 100,318 100,318
Current liabilities
Loans from credit institutions 0 0 0
Lease liability 15,957 15,957 15,957
Trade and other payables 20,730 20,730 20,730
Derivative nancial instruments 53 53 53
Total 53 36,687 36,740 36,740
Financial liabilities, total 53 137,005 137,058 137,058
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Changes in financial liabilities
EUR thousand 1 Oct 2020 Cash ows New leases
Foreign exchange
movement
Change in fair values
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 0 12,522 126,786
EUR thousand 1 Oct 2019 Cash ows New leases
Foreign exchange
movement
Change in fair values
Other non-cash
movements
30 Sep 2020
Current interest-bearing loans and borrowings
(excluding items listed below)
4,697 -5,031 23 311 0
Current lease liability 14,013 -14,819 2,381 -67 14,449 15,957
Non-current interest-bearing loans and borrowings
(excluding items listed below)
85,374 -34,879 -744 29 49,781
Non-current lease liability 37,969 11,141 -457 1,885 50,538
Derivative nancial instruments 61 -8 53
Total liabilities from nancing activities 142,114 -54,729 13,522 -1,245 -8 16,674 116,328
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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 amortised 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 2021 30 Sep 2020
Cash and cash equivalents 13,013 21,606
Total 13,013 21,606
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. In the beginning of nancial year
2020 the Group utilized derivatives for hedging 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 2021
Forward exchange
contracts
20,332 484 -441 42
Total 20,332 484 -441 42
EUR thousand Nominal value
Receivables
at fair value
Payables
at fair value
Net fair value
30 Sep 2020
Forward exchange
contracts
889 0 -53 -53
Total 889 0 -53 -53
Maturity distribution of derivates (at nominal value)
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
Maturity distribution of derivatives at 30 September 2020
EUR thousand FY2021 FY2022 FY2023 FY2024 FY2025
Forward exchange
contracts
889 0 0 0 0
Total 889 0 0 0 0
Interest-bearing liabilities
Net debt is the total amount of loans from credit institutions and shareholder loans 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.
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Net debt
EUR thousand 30 Sep 2021 30 Sep 2020
Non-current interest-bearing liabilities 106,586 100,318
Current interest-bearing liabilities 20,200 16,010
Loan receivables 0 -15
Derivative nancial instruments -484 0
Cash and cash equivalents -13,013 -21,606
Net debt 113,289 94,708
Interest-bearing liabilities
Balance sheet values Fair values
EUR thousand 30 Sep 2021 30 Sep 2020 30 Sep 2021 30 Sep 2020
Loans from credit institutions 49,872 49,781 49,872 49,781
Lease liability 56,713 50,538 56,713 50,538
Other non-current liabilities 0 0 0 0
Total interest-bearing non-current
liabilities
106,586 100,318 106,586 100,318
Loans from credit institutions 0 0 0 0
Lease liability 19,759 15,957 19,759 15,957
Derivative nancial instruments 441 53 441 53
Total interest-bearing current
liabilities
20,200 16,010 20,200 16,010
Total interest-bearing liabilities 126,786 116,328 126,786 116,328
In addition, Musti has entered into a revolving credit facility and bank overdraft agreement. As at the
balance sheet dates, the revolving credit facility amounted to EUR 10 million (EUR 10 million) and the
total amount of the agreed overdraft limit was EUR 4 million (EUR 4 million). At the nancial year ends
the revolving credit facility and bank overdraft were undrawn
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.
In connection with the IPO in February 2020, Musti renanced its existing loans with the share issue
and a new loan agreement of EUR 60 million, which consists of an EUR 50 million term loan and an EUR
10 million revolving credit facility. The repayment date of the facilities is in 2023. The loan agreement
contains two nancial covenants: leverage and gearing. In connection with the repayments of the loans
enterprise mortgages and pledges were released. The EUR 50 million term loan was drawn to renance
the existing loans. The revolving credit facility has not yet been drawn.
Credit Facilities
The Group has a revolving credit facility of EUR 10 million and a bank overdraft of 4 EUR million. At the
balance sheet dates, the facilities have not been utilized.
Compliance with covenant conditions
The Group’s nancing agreements contains for the nancial years 2021 and 2020 covenants relating
to gearing and the ratio of net debt to EBITDA (leverage). 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 years 2021 and 2020, all quarterly covenant conditions were either met or
waived.
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.
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EUR thousand 30 Sep 2021 30 Sep 2020
Other guarantees given on own behalf
Guarantees relating to rental payments 4,619 3,759
Other commitments 129 388
Total 4,748 4,147
EUR thousand 30 Sep 2021 30 Sep 2020
Other commitments
Other guarantees 2,929 2,000
Lease liabilities for leases not recognised in the
balance sheet
4,984 2,009
Total 7,913 4,009
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 was subject to a tax audit of Musti Group plc, Musti Group Finland Oy and Musti Group
Nordic Oy regarding nancial years 2018-2020. Musti Group plc received in October 2021 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. The
company disagrees with the interpretation made in the tax audit. The company is to be reassessed in
accordance with the interpretations set out in the tax audit report but the company will le a claim
for adjustment to the Finnish Tax Administration’s Assessment Adjustment Board. To avoid possible
additional tax increases Musti Group plc has in November 2021 paid the EUR 0.9 million subsequent
taxes and tax increases. There were no repercussions of the tax audit for the nancial years 2018-2020
of Musti Group Finland Oy and Musti Group Nordic Oy.
5.4 Financial income and expenses
This Note presents the Group’s nancial income and expenses. The Group has entered into interest
rate swap agreements 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 dollars and British pounds in Sweden.
EUR thousand 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Financial income
Interest income 3 8
Exchange gains 5,750 14,412
Gain from changes in the fair value of derivatives 0 0
Other nancial income 28 1
Total 5,780 14,420
Financial expenses
Interest expenses on loans valued to amortised cost -788 -2,531
Interest expenses from lease liability -2,272 -2,395
Exchange losses -4,145 -15,277
Loss from changes in the fair value of derivatives 0 0
Other nancial expenses -70 -111
Total -7,275 -20,314
Financial income and expenses, net -1,495 -5,894
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 other loans, as 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 equity and
gearing rates 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 gearing and 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 loans shown in the balance sheet.
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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, % and margin and the net debt ratio to last twelve months
adjusted EBITDA.
EUR thousand Target level
1 Oct 2020–30
Sep 2021
1 Oct 2019–30
Sep 2020
Adjusted EBITA margin, % ≥13% 10.8% 10.5%
Net debt / LTM Adjusted EBITDA <2.5x 1.9 2.0
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.
Share capital
On 30 September 2021 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 owned 244,000 own shares on 30 September
2021.
The shareholders of the company decided by unanimous decision to transform the company form on
23 January 2020 into a public limited company.
Conditional upon the execution of Musti Group’s listing, Musti Group’s Annual General Meeting
(AGM) held on 23 January 2020 resolved to authorise the Board of Directors to amend the company’s
Articles of Association, decide on a share issue without consideration to combine all share classes into
a one share class, decide on the issuance of shares in the IPO as well as other measures in connection
with the listing of the company.
As part of the execution of Musti Group’s initial public oering (IPO) and listing of its shares on the
ocial list of Nasdaq Helsinki Ltd, the Board of Directors of Musti Group resolved on 6 February 2020
on a directed share issue without consideration of 10,511,039 new shares based on the authorisation
granted by Musti Group’s AGM held on 23 January 2020.
In connection with the completion of the IPO, the Board of Directors of the company decided on
12 February 2020 on the execution of the combination of the company’s share classes. In addition,
the Board of Directors resolved on a share issue without consideration of 16,564,005 new A3 share
class shares to the shareholders owning P share class shares prior to the combination of the shares in
deviation from the shareholders’ pre-emptive right to new shares.
As a result of the company’s IPO and personnel issue, the number of shares increased with
32,234,716 in February 2020. All shares have been paid in full.
The AGM held 23 January 2020 resolved to authorise the Board of Directors to decide on a share
issue as well as the issuance of special rights entitling to shares. The Board of Directors may, based on
the authorisation, decide on the issuance of shares and the issuance of special rights entitling to shares
referred to in Chapter 10 Section 1 of the Finnish Companies Act. The authorisation concerns both
the issuance of new shares as well as the transfer of treasury shares. The total number of shares to be
issued shall not exceed 1,500,000 shares. The authorisation will be eective until the end of the next
Annual General Meeting, however no longer than until 23 July 2021.
The AGM held 23 January 2020 resolved to authorise the Board of Directors to decide on the
acquisition of the company’s own shares. Based on the authorisation, the total number of shares to be
acquired may not exceed 1,500,000 shares. The authorisation will be eective until the end of the next
Annual General Meeting, however no longer than until 23 July 2021.
The AGM held 21 January 2021 resolved to authorise the Board of Directors to decide on a share
issue as well as the issuance of special rights entitling to shares. The Board of Directors may, based on
the authorisation, decide on the issuance of shares and the issuance of special rights entitling to shares
referred to in Chapter 10 Section 1 of the Finnish Companies Act. The authorisation concerns both
the issuance of new shares as well as the transfer of treasury shares. The total number of shares to be
issued shall not exceed 3,185,000 shares. The authorisation revokes the previous unused authorisations
for the share issue and the issuance of special rights entitling to shares. The authorisation will be
eective until the end of the next Annual General Meeting, however no longer than until 21 July 2022.
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The AGM held 21 January 2021 resolved to authorise the Board of Directors to decide on the
acquisition of the company’s own shares. Based on the authorisation, the total number of shares to be
acquired may not exceed 3,185,000 shares. The authorisation revokes previous unused authorisations to
acquire and / or pledge the company’s own shares. The authorisation will be eective until the end of
the next Annual General Meeting, however no longer than until 21 July 2022.
Changes in share capital and invested unrestricted equity reserve
Number of
outstanding
shares
Own shares
held by
the parent
company
Total number
of shares
Share capital
Invested
unrestricted
equity
EUR thousand EUR thousand
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
1 Oct 2019 1,300,737 0 1,300,737 11,002 122,412
Share issue 32,065,597 0 32,065,597 0 43,667
Personnel issue 169,119 0 169,119 0 1,333
30 Sep 2020 33,535,453 0 33,535,453 11,002 167,412
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, such as shares from the share-based incentive plan.
Earnings per share
30 Sep 2021 30 Sep 2020
Earnings per share, basic
Net prot attributable to equity owners of the parent
company, EURthousand
20,872 11,712
Weighted average number of shares 33,410,411 31,652,469
Basic earnings per share, EUR 0.62 0.37
Earnings per share, diluted
Net prot attributable to equity owners of the parent
company, EURthousand
20,872 11,712
Weighted average number of shares 33,395,338 31,652,469
Adjustments:
Average number of treasury shares it is possible to
be issued on the basis of the share-based payments
260,080 187,500
Weighted average number of shares for diluted
earnings per share
33,655,418 31,839,969
Diluted earnings per share, EUR 0.62 0.37
Dividend and profit distribution
The Board of Directors of Musti Group plc proposes to the Annual General Meeting on 27 January 2022
that shareholders will be paid a capital return of EUR 0.44 per share to be distributed from the invested
unrestricted equity reserve totalling approximately EUR 14.6 million and that no dividend will be paid for
the nancial year ended 30 September 2021. For the nancial year 2020 a capital return of EUR 0.38 per
share was paid totalling EUR 12.7 million, no dividend has been distributed from the 2020 results.
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Musti Group plc’s distributable funds
EUR thousand 30 Sep 2021
Retained earnings at the end of nancial year 498
Unrestricted equity 154,691
Own shares -6,910
Result for the nancial year 6,800
Distributable equity total 155,078
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.
In connection with the listing, the company carried out an oering which consisted of a public
oering in Finland, an institutional oering to institutional investors in Finland and in accordance with
applicable laws, internationally; and personnel oering to employees of the group. With the share issue,
the company raised gross proceeds of approximately EUR 45,000 thousand that was recognized to the
invested unrestricted equity reserve.
During nancial year 2020, the company has recognized as expenses in connection with the oering
against the received assets of the invested unrestricted equity reserve in total EUR 2,844 thousand, net
of EUR 569 thousand deferred taxes.
Translation dierences
Translation dierences arising on the translation of subsidiaries’ nancial statements into euros are
recognized in other comprehensive income and accumulated in equity.
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. Until
the IPO in February 2020 the related parties also included its owners EQT Mid Market Fund, Vaaka
Partners, Braganza AB and Ludv. G Braathens Rederi AS as well as Musti Group Finland Oy’s (previously
named Musti Group Oy’s) (operating) Board of Directors. After the IPO EQT Mid Market Fund’s indirect
holding was 24.1 % and on 13 August 2020 the indirect holding decreased to 5.6 %. EQT Mid Market
Fund relinquished its ownership on 16 September 2020.
Loans from the owners
EUR thousand 30 Sep 2021 30 Sep 2020
Other non-current interest-bearing liabilities 0 0
The following transactions were carried out with joint ventures:
EUR thousand 30 Sep 2021 30 Sep 2020
Purchases of goods and services 3,476 2,737
Receivables 76 76
Payables 160 145
Guarantees given 2,929 2,000
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.
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Management compensation
The CEO and Management Team remuneration
EUR thousand CEO
Management
team
Total 2021 CEO
Management
team
Total 2020
Salaries and other short-term
employee benets
448 1,687 2,135 419 1,488 1,907
Short-term incentives 107 306 413 171 235 406
Pension costs - dened
contribution plans
60 393 453 64 304 368
Total 614 2,386 3,001 654 2,027 2,681
The remuneration of the CEO and the members of the Management Team is presented according
to accrual basis. The Group management remuneration is described more in detail in the separate
Remuneration Statement and Note 2.4 Share-based payments.
Renumeration paid to Board of Directors
EUR thousand 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Jerey David 65 60
Ingrid Jonasson Blank 43 30
Juho Frilander (as of September 1, 2018) 0 0
Ilkka Laurila (as of January 21, 2021) 33 0
Lisa Farrar (as of December 1, 2018 - January 21,
2021)
0 30
Vesa Koskinen (December 13, 2019 - January 21,
2021)
0 0
Jarkko Murtoaro (until December 31, 2019) 0 0
Erik Lindgren (until December 10, 2019) 0 45
Geir Stormorken (until December 10, 2019) 0 0
Ilari Haataja (September 1, 2018 - June 30, 2019) 0 0
Alex Lindbom (July 1, 2019 - December 31, 2019) 0 0
Total 140 165
The remuneration of the Board of the Directors is presented according to accrual basis. According to
the decision of the 2021 Annual General Meeting, the annual fees paid to the Board members were:
Chairman of the Board EUR 60,000, the Vice-Chairman of the Board EUR 35,000 and other Board
members EUR 30,000. The annual fees paid to the members of the Committees were: Chairman of
the Committee EUR 5,000 and other Committee members EUR 2,500. However, Board members
Juho Frilander and Vesa Koskinen have not been paid any remuneration for their Board activities. The
remunerations for the nancial year 2021 have been paid September 2021. During the nancial year 2021
a total Board fee of EUR 140 thousand, decided by the Annual General Meeting 2020, have been paid.
During the nancial year 2020 a total Board fee of EUR 146 thousand, decided by the Annual General
Meeting 2019, and a total Board fee of EUR 80 thousand, decided by the Annual General Meeting, 2018,
have been paid.
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.
Income tax expenses
EUR thousand 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Current tax:
Current tax on prots for the year -4,387 -900
Taxes for prior years -23 135
Total current tax expense -4,411 -765
Deferred tax:
Change in deferred taxes -1,577 -1,142
Income taxes -5,988 -1,907
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Reconciliation of income tax expense and taxes calculated at the
Finnish tax rate 20%
EUR thousand 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Prot before tax 26,882 13,661
Tax calculated at Finnish tax rate 20% -5,376 -2,732
Eect of other tax rates for foreign subsidiaries -243 -53
Expenses not deductible for tax purposes -238 -401
Income not subject to tax 6 39
Utilisation of previously unrecognised tax losses -139.1 1,108
Taxes for prior years -23 135
Other items -251.8 -2
Taxes in income statement -5,988 -1,907
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 taxable losses. 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.
Musti Group was subject to a tax audit of Musti Group plc, Musti Group Finland Oy and Musti
Group Nordic Oy regarding nancial years 2018-2020. Musti Group plc received in October 2021 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.
The company disagrees with the interpretation made in the tax audit. The company is to be reassessed
in accordance with the interpretations set out in the tax audit report but the company will le a claim
for adjustment to the Finnish Tax Administration’s Assessment Adjustment Board. To avoid possible
additional tax increases Musti Group plc has in November 2021 paid the EUR 0.9 million subsequent
taxes and tax increases. There were no repercussions of the tax audit for the nancial years 2018-2020
of Musti Group Finland Oy and Musti Group Nordic Oy.
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Changes in deferred taxes during financial year 2021
EUR thousand 1 Oct 2020 Recognised in prot or loss Recognised in equity Business acqusitions 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 0 0 637 18,314
EUR thousand 1 Oct 2020 Recognised in prot or loss Recognised in equity Business acqusitions 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 0 0 483 15,990
Net deferred taxes 30 Sept 2021 -3,747 1,577 0 0 -155 -2,325
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Changes in deferred taxes during financial year 2020
EUR thousand 1 Oct 2019 Recognised in prot or loss Recognised in equity Business acqusitions Exchange rate dierences 30 Sep 2020
Deferred tax assets
Tax losses 4,156 -1,071 -124 -69 2,892
Intangible and tangible assets 1,319 -160 15 1,175
Inventories 785 113 0 898
Lease liability 10,891 2,089 -118 12,862
Other items 34 -22 -1 11
Total 17,185 949 -124 0 -173 17,838
EUR thousand 1 Oct 2019 Recognised in prot or loss Recognised in equity Business acqusitions Exchange rate dierences 30 Sep 2020
Deferred tax liabilities
Intangible and tangible assets 1,669 25 19 1,713
Right-of-use assets 9,914 2,124 -115 11,923
Other items 510 -58 3 455
Total 12,093 2,091 0 0 -92 14,091
Net deferred taxes 30 Sept 2020 -5,092 1,142 124 0 80 -3,747
On 30 September 2021, the Group had no temporary dierences on which no deferred tax assets were
booked (30 September 2020: EUR 83 thousand), for which it is uncertain if they will be realized. Most of
the unrecognized deferred tax assets were related to cumulative tax losses. The cumulative tax losses
on 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
No signicant events after the nancial year.
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7. PARENT COMPANY FINANCIAL STATEMENT, FAS
Musti Group plc income statement
EUR thousand Note
1 Oct 2020–
30 Sep 2021
1 Oct 2019–
30 Sep 2020
Other operating income 7.2 14,578 20,609
Employee benet expenses 7.3 -1,509 -913
Depreciation, amortisation and impairment 0 0
Other operating expenses 7.4 -6,928 -23,217
Operating prot/loss 6,142 -3,521
Financial income 7.5 4,345 1,578
Financial expenses 7.5 -2,449 -843
Prot/loss before appropriations and taxes 8,038 -2,786
Appropriations 7.6 0 2,660
Income tax expense 7.7 -1,238 -3
Prot/loss for the period 6,800 -129
Musti Group plc balance sheet
EUR thousand Note 30 Sep 2021 30 Sep 2020
ASSETS
Non-current assets
Intangible assets 7.8 0 16
Investments 7.9 132,410 109,049
Total non-current assets 132,410 109,065
Current assets
Long-term receivables 7.10 44,252 24,552
Short-term receivables 7.10 57,613 113,720
Cash and cash equivalents 12,152 1
Total current assets 114,017 138,272
TOTAL ASSETS 246,427 247,337
EUR thousand Note 30 Sep 2021 30 Sep 2020
EQUITY AND LIABILITIES
Equity
Share capital 7.11 11,002 11,002
Other reserves 7.11 154,691 167,412
Own shares 7.11 -6,910 0
Retained earnings 7.11 498 626
Prot/loss for the scal period 6,800 -129
Total equity 166,080 178,911
Liabilities
Non-current liabilities 7.12 49,872 49,781
Current liabilities 7.13 30,475 18,645
Total current liabilities 80,347 68,425
TOTAL EQUITY AND LIABILITIES 246,427 247,337
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Musti Group plc cash flow statement
EUR thousand 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Cash ows from operating activities
Prot before appropriations and taxes 8,038 -2,786
Depreciations 0 0
Finance income and expenses -1,896 -735
Other adjustments -907 -49
Operating prot before change in working capital 5,235 -3,570
Change in working capital
Increase (-) / decrease (+) of current receivables 9,335 -22,099
Increase (+) / decrease (-) of current non-interest
bearing liabilities
-11,612 18,396
Cash ows from operating activities before
nancial items and taxes
2,958 -7,273
Interests paid and other nance costs -755 -515
Interests received 2,141 1,532
Direct income taxes paid 0 -171
Net cash from operating activities 4,344 -6,427
Cash ows from investing activities
Purchases of property, plant, equipment and
intangible assets
0 -16
Long-term receivables, increase (-)/decrease (+) -19,178 -96
Net cash fom investing activities -19,178 -112
EUR thousand 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Cash ows from nancing activities
Capital returns paid -12,720 0
Acqusition of own shares -6,910 0
Proceeds from non-current liabilities 0 45,000
Proceeds from equity issues 0 50,000
Repayments of non-current loans 0 0
Change in internal bank account receivables/
liabilities
43,956 -88,461
Received group contributions 2,660 0
Net cash fom nancing activities 26,986 6,539
Change in cash and cash equivalents 12,152 1
Cash and cash equivalents at the beginning of the period 0 0
Cash and cash equivalents at the end of the period 12,152 1
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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
investments value has declined permanently.
Receivables
Receivables are recognized either at the acquisition cost or at current market value if the current market
value is lower than the acquisition cost.
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.
Notes to Musti Group plc financial statements
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 transaction date.
7.2 Other operating income
EUR thousand 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Service fee's from group companies 13,356 20,490
Merger prot 1,032 0
Other income from group companies 190 119
Total 14,578 20,609
7.3 Employee benefit expenses
EUR thousand 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Salaries and fees -1,212 -751
Social security costs -236 -102
Pension costs -54 -57
Other social security costs -6 -2
Total -1,509 -913
Salary and bonus expenses of Chief Executive
Ocer and Members of the Board of Directors
Chief Excecutive Ocer 555 590
Board of Directors 140 110
Personnel on average 2 2
7.4 Other operating expenses
EUR thousand 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Expenses related to the share issue 0 -4,593
Administration -6,848 -16,815
Other expenses -80 -1,809
Total -6,928 -23,217
Auditors' fees
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EUR thousand 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Authorised Public Accountants E&Y
Audit 213 67
Tax consultation 132 91
Other services 0 0
Total 345 158
7.5 Financial income and expenses
EUR thousand 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Other interest and nancial income
From Group companies
Interest income 2,114 1,240
From others
Other nancial income 2,231 339
Total 4,345 1,578
Interest and other nancial expenses
To Group companies
Interest expenses 0 0
To others
Interest expenses -692 -411
Other nancial expenses -1,757 -432
Total -2,449 -843
Financial income and expenses total 1,896 735
7.6 Approriations
EUR thousand 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Group contributions received 0 2,660
Total 0 2,660
7.7 Income taxes
EUR thousand 1 Oct 2020–30 Sep 2021 1 Oct 2019–30 Sep 2020
Income tax for the nancial year -1,238 0
Income tax for prior nancial years 0 -3
Total -1,238 -3
7.8 Intangible assets
EUR thousand 30 Sep 2021 30 Sep 2020
Intangible rights
Acquisition cost 1 Oct 16 0
Additions 0 16
Disposals -16 0
Acquisition cost 30 Sep 0 16
Accumulated amortisation 1 Oct 0 0
Amortisations for the nancial year 0 0
Accumulated amortisation 30 Sep 0 0
Book value 30 Sep 0 16
7.9 Investments
EUR thousand 30 Sep 2021 30 Sep 2020
Investments in Group companies
Acquisition cost 1 Oct 109,049 109,049
Increases 132,410 0
Decreases -109,049 0
Acquisition cost 30 Sep 132,410 109,049
Group companies 30 Sep 2021 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.
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7.10 Receivables
Long-term receivables
Receivables from Group companies
EUR thousand 30 Sep 2021 30 Sep 2020
Loan receivables 44,168 24,456
Total 44,168 24,456
Receivables from others
EUR thousand 30 Sep 2021 30 Sep 2020
Other receivables 85 96
Total 85 96
Long-term receivables total 44,252 24,552
Short-term receivables
Receivables from Group companies
EUR thousand 30 Sep 2021 30 Sep 2020
Trade receivables 212 10,965
Group contribution receivables 0 2,660
Group bank account receivables 44,835 88,821
Prepayments and accrued income 12,418 10,451
Total 57,465 112,897
Receivables from others
EUR thousand 30 Sep 2021 30 Sep 2020
Prepayments and accrued income
Income taxes 0 126
Value added tax receivables 0 568
Other 147 129
Total 147 823
Short-term receivables total 57,613 113,720
7.11 Equity
EUR thousand Share capital
Unrestricted
equity
reserve
Treasury
shares
Retained
earnings
Equity total
Equity 1 Oct 2020 11,002 167,412 0 498 178,911
Capital return -12,720 -12,720
Acqusition 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
Equity 1 Oct 2019 11,002 122,412 0 626 134,040
Share issue 45,000 45,000
Result for the nancial year -129 -129
Equity 30 Sep 2020 11,002 167,412 0 498 178,911
Distibutable equity
EUR thousand 30 Sep 2021 30 Sep 2020
Reserve for invested unrestricted equity 154,691 167,412
Treasury shares -6,910 0
Retained earnings 498 626
Net result for the nancial period 6,800 -129
Total 155,078 167,909
7.12 Non-current liabilities
Liabilities to others
EUR thousand 30 Sep 2021 30 Sep 2020
Loans from nancial institutions 49,872 49,781
Total 49,872 49,781
Non-current liabilities total 49,872 49,781
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7.13 Current liabilities
Liabilities to Group companies
EUR thousand 30 Sep 2021 30 Sep 2020
Trade payables 184 11,838
Group bank account payables 23,152 0
Other liabilities 5,008 5,940
Total 28,345 17,778
Liabilities to others
EUR thousand 30 Sep 2021 30 Sep 2020
Trade payables 55 190
Other liabilities
Value added tax payables 74 161
Other liabilities total 74 161
Accruals and deferred income
Employee benet expenses 596 265
Interest liabilities 256 249
Incom tax payables 1,135
Other accruals and deferred income 14 3
Accruals and deferred income total 2,001 516
Total 2,130 867
Current liabilitites total 30,475 18,645
7.14 Collaterals
EUR thousand 30 Sep 2021 30 Sep 2020
Pledges given on behalf of group companies
Pledges given on behalf of group companies 23 0
Total 23 0
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.
Contingent liabilities
Musti Group was subject to a tax audit of Musti Group plc, Musti Group Finland Oy and Musti Group
Nordic Oy regarding nancial years 2018-2020. Musti Group plc received in October 2021 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. The
company disagrees with the interpretation made in the tax audit. The company is to be reassessed in
accordance with the interpretations set out in the tax audit report but the company will le a claim
for adjustment to the Finnish Tax Administration’s Assessment Adjustment Board. To avoid possible
additional tax increases Musti Group plc has in November 2021 paid the EUR 0.9 million subsequent
taxes and tax increases. 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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Musti Group plc’s distributable funds on 30 September 2021 amounts to EUR 155,078,491.02, of which
prot for the nancial year 2021 is EUR 6,799,917.88.
The Board of Directors of Musti Group plc proposes to the Annual General Meeting on 27 January
2021 that a capital return of EUR 0.44 per share will be distributed from the invested unrestricted equity
reserve totalling approximately EUR 14.6 million and that no dividend will be paid for the nancial year
ended 30 September 2021.
There have been no material changes in the company’s nancial position since 30 September 2021.
The liquidity of the company remains good, and the proposed capital return does not risk the solvency
of the company.
Helsinki, 17 December 2021
Jerey David
Juho Frilander Ilkka Laurila
David Rönnberg
CEO
Ingrid Jonasson Blank
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
The Auditor’s note
Our auditor’s report has been issued
today
Helsinki, 17 December 2020
Ernst & Young Oy
Authorized Public Accountant Firm
Johanna Winqvist-Ilkka
Authorized Public Accountant
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Report on the Audit of the Financial Statements To the Annual
General Meeting of Musti Group plc
Report on the Audit of the Financial Statements
Opinion
We have audited the nancial statements of Musti Group plc (business identity code 2659161-1) for the
year ended 30 September 2021. 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 practice are further described in the
Auditor’s Responsibilities for the Audit of
Financial Statements
section of our report.
Auditors report (Translation of
the Finnish original)
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 157.8 million euros,
representing 47% of total assets
and 101% 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
We refer to the Group’s
accounting policies and the note
2.1.
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 340.9 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
We refer to the Group’s
accounting policies and the note
4.1.
The total value of inventories
at the date of the nancial
statements amounted to 44.3
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.
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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.
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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 four years. Musti Group plc 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 17.12.2021
Ernst & Young Oy
Authorized Public Accountant Firm
Johanna Winqvist-Ilkka
Authorized Public Accountant
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Musti Group Head Oce
Mäkitorpantie 3
00620 Helsinki
Finland
www.mustigroup.com
@MustiGroup
/musti-group
/mustigroup