Untitled

Puuilo Plc

Report by the Board of Directors and Financial Statements

31 January 2023

Table of contents

Report by the Board of Directors .......................................................................................................... 4

Key figures ......................................................................................................................................... 24

Financial Statements ......................................................................................................................... 28

Consolidated Statement of Comprehensive Income ........................................................................... 28

Consolidated Balance Sheet .............................................................................................................. 29

Consolidated Statement of Changes in Equity ................................................................................... 29

Consolidated Statement of Cash Flows ............................................................................................. 31

Notes to the Consolidated Financial Statements ................................................................................ 32

1 BASIS OF PREPARATION ............................................................................................................. 33

Note 1.1 Company information ....................................................................................................... 33

Note 1.2 Basis of preparation ......................................................................................................... 33

Note 1.3 Accounting estimates and judgements ............................................................................. 34

2 BUSINESS PERFORMANCE ......................................................................................................... 35

Note 2.1 Revenue .......................................................................................................................... 35

Note 2.2 Segment information ........................................................................................................ 36

Note 2.3 Expenses ......................................................................................................................... 36

Note 2.4 Income taxes .................................................................................................................... 40

3 WORKING CAPITAL....................................................................................................................... 43

Note 3.1 Inventories ....................................................................................................................... 43

Note 3.2 Trade and other receivables ............................................................................................. 43

Note 3.3 Trade and other payables ................................................................................................ 44

4 CAPITAL EMPLOYED .................................................................................................................... 46

Note 4.1 Goodwill ........................................................................................................................... 46

Note 4.2 Intangible assets .............................................................................................................. 47

Note 4.3 Property, plant and equipment ......................................................................................... 48

Note 4.4 Leases ............................................................................................................................. 50

Note 4.5 Provisions ........................................................................................................................ 53

5 CAPITAL STRUCTURE AND FINANCING ..................................................................................... 54

Note 5.1 Capital management and net debt ................................................................................... 54

Note 5.2 Equity ............................................................................................................................... 55

Note 5.3 Earnings per share ........................................................................................................... 56

Note 5.4 Financial risk management .............................................................................................. 56

Note 5.5 Financial assets and liabilities .......................................................................................... 59

Note 5.6 Finance income and costs ................................................................................................ 62

Note 5.7 Contingent liabilities ......................................................................................................... 63

6 OTHER NOTES .............................................................................................................................. 64

Note 6.1 Related parties ................................................................................................................. 64

Note 6.2 Group structure and consolidation .................................................................................... 64

Note 6.3 Significant events after the end of the reporting period ..................................................... 65

Note 6.4 New accounting standards ............................................................................................... 65

Parent company Financial Statements ............................................................................................... 66

Parent company’s income statement ................................................................................................. 66

Parent company’s balance sheet ....................................................................................................... 67

Parent company’s cash flow statement .............................................................................................. 68

Notes to the parent company’s financial statements .......................................................................... 69

Accounting policies ......................................................................................................................... 69

Significant events in the financial period ......................................................................................... 69

Significant events after the end of the reporting period ................................................................... 70

Notes to the income statement ....................................................................................................... 71

Notes to the assets in balance sheet .............................................................................................. 71

Notes to the liabilities in balance sheet ........................................................................................... 72

Notes on auditors’ fees ................................................................................................................... 73

Notes on personnel ........................................................................................................................ 73

Holdings in other companies .......................................................................................................... 73

Signatures.......................................................................................................................................... 74

Auditor's report..................................................................................................................................... 75

Independent Auditor's Reasonable Assurance Report on Puuilo Plc's ESEF Financial Statements... 81

Report by the Board of Directors

Puuilo’s business operations

Puuilo is a Finnish discount retail chain. The strongly growing chain had 37 stores in different parts of

Finland at the end of the financial period that ended on 31 January 2023. In addition, customers are

served through an online store. The product assortment includes building supplies, tools, HVAC and

electrical accessories, pet food and supplies, car accessories, groceries, household products, garden

supplies, free-time and other accessories as well as services. Puuilo is one of the leading discount

retailers in Finland and it serves both consumers and B2B customers in the repair and maintenance as

well as construction sector. The company is known for its affordable prices and extensive product

assortment. During the financial period, new stores were opened in Sastamala, Tornio and Lieto.

Company structure

Puuilo Group’s parent company is Puuilo Plc, which engages in the business operations of selling

management services to the other Group companies. The Group also includes Puuilo Invest II Ltd,

wholly owned by Puuilo Plc, and its wholly owned retail business company Puuilo Tavaratalot Ltd. There

were no changes in the Group structure in the 2022 financial period.

Outlook for the financial year 2023

Puuilo forecasts that net sales and adjusted operating profit (adjusted EBITA) for the financial year 2023

in euros will increase compared to the financial year 2022.

The forecast includes elements of uncertainty arising from the energy crisis, development of the COVID-

19 pandemic, the war in Ukraine, rising interest rates and inflation causing decline in purchasing power.

Puuilo’s long-term targets

There have been no changes in Puuilo’s long-term financial targets or growth expectations,

announced in connection with the listing.

Puuilo’s long-term targets for the financial years 2021–2025:

• Growth: Net sales above EUR 400 million by the end of financial year 2025 with annual organic

growth in excess of 10%.

• Profitability: Adjusted EBITA margin between 17–19% of net sales.

• Dividend policy: Puuilo aims to distribute at least 80% of the net income in dividends for each

financial year, depending on the company’s capital structure, financial position, general

economic and business conditions, and future prospects.

• Leverage: Net debt to adjusted EBITDA below 2.0x.

Significant events

Performance matching share plan for key employees

On 20 April 2022 the Board of Directors of Puuilo Plc decided to launch a new share-based incentive

plan for the key employees of the company. The aim of the plan is to align the objectives of the

shareholders and the key employees in order to increase the value of the company in the long-term.

The Performance Matching Share Plan includes one performance period, spanning approximately

financial years 2022 – 2024. The performance criteria are the Total Shareholder Return of the Puuilo

share (TSR) and the Adjusted EBITA of the Puuilo Group. The target group of the plan consists of a

maximum of 75 persons, including the CEO, members of the Management Team, Store Managers and

other key personnel. Primarily, the rewards from the plan will be paid partly in the company’s shares

and partly in cash by the end of May 2025. The cash proportion is intended to cover taxes and tax-

related costs arising from the reward to the participant. The rewards to be paid on the basis of the plan

correspond to the value of an approximate maximum total of 315,000 Puuilo Plc shares, including the

proportion to be paid in cash. The final number of shares will depend on the participants’ personal share

acquisitions and the achievement of the targets set for the performance criteria.

Change of guidance

On 7 September 2022 Puuilo changed its guidance for the financial year 2022 with a stock exchange

release. According to the updated forecast net sales would increase. However, net sales growth was

forecasted to be below the long-term annual growth target for the current financial year (net sales annual

organic growth in excess of 10%). Puuilo forecasted adjusted EBITA to be EUR 40 – 50 million. Refined

outlook for adjusted EBITA given in connection with Q3/2022 business review was EUR 46-50 million.

With a stock exchange release on 25 May 2022 Puuilo forecasted adjusted EBITA to be EUR 35–45

million.

Repurchase of own shares

On 17 June 2022, Puuilo announced that the company’s Board of Directors had decided to use the

authorization given by the Annual General Meeting held on 17 May 2022 to repurchase the company’s

own shares.

The repurchases started on 22 June 2022 and ended on 30 June 2022. During this period, Puuilo

repurchased 315,000 shares for an average price of EUR 4.9020 per share, corresponding to

approximately 0.37% of the total number of the company’s shares, which is 84,776,953.

The repurchased shares are to be used for pay-outs under the share-based incentive plans of Puuilo

Plc. The shares were repurchased through public trading on Nasdaq Helsinki at the market price

prevailing at the time of repurchase.

Following the repurchases, the company holds a total of 315,000 shares.

Growth strategy

Puuilo’s objective is to continue strengthening its position as one of the leading discount retailers in

Finland by utilising its key strengths: maintaining an attractive and wide product assortment, low prices

and convenient shopping experience.

In line with its growth strategy, the company aims to open approximately four new stores per year and

to continue to increase its like-for-like net sales by further increasing Puuilo’s brand awareness. The

company has an efficient and standardised store opening process, which enables the opening of several

stores each year without negatively affecting other operational activities. New stores are, on average,

profitable after the first full month of opening.

Puuilo aims to continue to develop its value proposition by continuing to provide wide product assortment

satisfying the needs of the customer base always with low prices. Puuilo also aims to continue investing

in the development and growth of its online store to offer its customers a possibility to shop diversely

both in the stores and the online store.

Store network development

During the financial year 2022 Puuilo opened new stores in Sastamala, Tornio and Lieto. Lielahti store

in Tampere was relocated in May 2022. In 2023, new stores will be opened in Vantaa Porttipuisto,

Kerava, Vihti’s Nummela and Vantaa Varisto. In addition, one more store will be opened in the Helsinki

metropolitan area. This store opening will be announced separately closer to the opening. According to

the definition by Puuilo, a store is considered new during the year of openings and the following financial

year. Relocated stores are considered like-for-like stores.

On 31 January 2023, Puuilo had a total of 37 stores (34 stores) across Finland. The current store

network is young, and more than half of the stores have been opened during the last five years. In recent

years, Puuilo has opened an average of 3 – 4 new stores a year.

Financial development

Seasonality

Puuilo’s business is, in part, seasonal in nature. As such, there are seasonal peaks in Puuilo’s net sales,

operating result and cash flows, although seasonal dependence is relatively low compared to the retail

sector in general. Historically, Puuilo’s most important seasons in terms of net sales have been the

second and third quarter of each financial year. Additionally, Puuilo’s net sales are partly impacted by

exceptional, harsh, or seasonally atypical weather.

Net sales, result and profitability

In financial year 2022, Puuilo's net sales increased by 9.7% (+13.2%) to EUR 296.4 million (270.1). Net

sales of Puuilo's stores were EUR 286.4 million (260.5) and net sales of the online store were EUR 10.0

million (9.6), which corresponded to 3.4% (3.6%) of net sales. Like-for-like store net sales increased by

5.5% (+2.6%). Online store net sales increased by 3.9% (+20.8%).

The development of net sales was positively impacted by the increase in net sales in the like-for-like

stores, new stores as well as the increase in online store net sales and it originated particularly from an

increase in the number of customers but also from an increase of the basket size.

Puuilo's gross profit was EUR 107.2 million (99,6) and the gross margin was 36.2% (36.9%). Gross

margin has remained at good level despite the rising purchase prices caused by inflation. We have

succeeded in passing the increased purchase prices and logistics costs on to the sales prices. In

addition, gross margin level was supported by a positive development in the share of private label

products in net sales, which increased to 20% (18%). Higher level of inventories particularly at the

beginning of the year have increased storage and transportation costs, which has impacted the gross

margin. Puuilo has been able to improve the inventory turnover and thus the inventory levels have

lowered by EUR 2.3 million during the financial year despite three new stores.

Operating expenses were EUR 47.0 million (44.0), which corresponds to 15.9% of net sales (16.3%).

Adjusted operating expenses were EUR 46.4 million (41.2), or 15.7% of net sales (15.2%). The most

significant item in operating expenses was personnel expenses. Personnel expenses were EUR 29.0

million (26.4), which corresponds to 9.8% (9.8%) of net sales.

Operating expenses included EUR 0.6 million items affecting comparability related to tax audit. EUR 0.5

million of the expenses related to listing expenses and EUR 0.1 million to strategic projects. Operating

expenses for the comparison period included EUR 2.9 million items affecting comparability, which were

mainly related to listing expenses. Adjusted EBITA was negatively impacted by EUR 0.7 million

depreciation adjustment of cloud-based IT services resulting from the ifric interpretation.

Adjusted EBITA was EUR 48.8 million (48.4) and the adjusted EBITA margin was 16.5% (17.9%). EBITA

was EUR 48.2 million (45.6) and the EBITA margin was 16.2% (16.9%).

Operating profit was EUR 47.0 million (44.5), which corresponds to an EBIT margin of 15.9% (16.5%).

Net financial expenses were EUR -3.1 million (-4.5). Net financial expenses excluding the effect of IFRS

16 were EUR -1.7 million (-3.2).

Profit before taxes was EUR 43.9 million (39.9). Total income taxes were EUR 8.8 million (8.0). The net

result was EUR 35.1 million (31.9) and earnings per share were EUR 0.41 (0.38). Earnings per share

excluding the effect of listing expenses were EUR 0.42 (0.42).

Balance sheet, financing and cash flow

At the end of the financial year, Puuilo's inventories were EUR 89.9 million (92.2). As sea freight

availability and delivery times have returned to the pre-pandemic level, we have been able to start

preparations for the spring and summer season on a normal schedule, and there has not been a need

to order imported products earlier than usual. However, our aim is to further improve inventory turnover.

Operating free cash flow was EUR 52.7 million (10.8) and it was supported by a good operating profit

and a decrease in working capital.

At the end of the financial year, cash and cash equivalents were EUR 28.8 million (16.5) and the

company’s financial position is stable.

At the end of the financial year, Puuilo's interest-bearing liabilities totalled EUR 123.2 million (114.1), of

which non-current financial loans amounted to EUR 69.9 million (69.8). At the end of the period, the

Group did not have current financial loans (-). Other interest-bearing liabilities consisted of lease

liabilities reported in accordance with IFRS 16. At the end of the reporting period, the ratio of net debt

to adjusted EBITDA was 1.5 (1.7), which is in line with the long-term target.

Investments

Puuilo's investments were EUR 2.6 million (4.4). Investments were mainly related to the furnishing of

new stores and IT-system development. Comparison period investments were mainly related to a new

ERP system implemented in 2021 and to the furnishing of new stores.

Personnel

The number of personnel converted into full-time employees (FTE) was 693 (663). The average number

of personnel was 806 (788). Personnel expenses were EUR 29.0 million (26.4).

Shares and shareholders

Share information and share trading

Puuilo Plc has one class of shares. Each share carries one vote at the company's Annual General

Meeting. The shares have no nominal value. Puuilo Plc's share capital was EUR 80,000 at the end of

the reporting period and the company had 84,776,953 shares.

On the last trading day of the reporting period, 31 January 2023, the closing price of the share was EUR

6.32. The share turnover during the reporting period was EUR 221 million and 38,813,822 shares. The

highest intra-day share price during the reporting period was EUR 8.08 and the lowest intra-day price

was EUR 4.35. At the end of the reporting period, the market value of the shares was EUR 534 million.

The company held 315,000 treasury shares at the end of the reporting period.

Further information on Puuilo's shares and shareholders is available on the investor website at

https://www.investors.puuilo.fi/en/share-information and on the management’s holdings at

https://www.investors.puuilo.fi/en/corporate-governance/management-team.

Shareholders

At the end of the financial year, Puuilo had 36,932 registered shareholders. Through a flagging

notification, Puuilo was in January 2022 informed that Adelis Holding I AB, through Puuilo Invest Holding

AB, has decreased its holding to 24.56% of Puuilo. After the end of the reporting period, on 15 February

2023, the company received a flagging notification that, Adelis Holding I AB’s indirect holdings in shares

fell below the flagging threshold of 20% and was 18.66% after the transaction.

Puuilo has through a flagging notification in August 2022 from The Capital Group Companies, Inc, been

informed that the company’s indirect holdings are 10.03% of Puuilo’s shares.

Major shareholders on 31 January 2023

Number of shares

% of shares

1. Tuomaala Markku Kalevi

4,884,238

5.76%

2. Sijoitusrahasto Danske Invest Suomi Osake

1,670,882

1.97%

3. Sijoitusrahasto Evli Suomi Pienyhtiöt

1,463,346

1.73%

4. Keskinäinen Eläkevakuutusyhtiö Ilmarinen

1,439,000

1.70%

5. Tuomaala Päivi Maria

1,332,521

1.57%

6. Keskinäinen Työeläkevakuutusyhtiö Elo

1,128,000

1.33%

7. Tuomaala Heikki Tapani

950,000

1.12%

8. Säästöpankki Kotimaa -sijoitusrahasto

900,000

1.06%

9. Conficap Oy

888,342

1.05%

10. Tuomaala Henri Aleksi

870,734

1.03%

10 largest total

15,527,063

18.32%

100 largest total

26,907,729

31.74%

Nominee registered total

43,652,626

51.49%

Total

84,776,953

100.00%

Ownership structure on 31 January 2023

Number of shares

% of shares

Public sector

3,494,004

4.12%

Financial and insurance corporations

47,652,212

56.21%

Households

24,588,807

29.00%

Non-financial corporations

5,735,308

6.77%

Non-profit institutions

580,479

0.69%

Rest of the world

2,726,143

3.22%

Total

84,776,953

100.00%

Nominee registered

43,652,626

51.49%

Breakdown by size of holding on 31 January 2023

Number of shares

Number of shareholders

% of shareholders

Number of shares

% of shares

1-100

16,047

43.45%

876,478

1.03%

101-500

14,665

39.71%

3,566,897

4.21%

501-1000

3,452

9.35%

2,618,361

3.09%

1001-5000

2,407

6.52%

4,882,076

5.76%

5001-10000

195

0.53%

1,388,981

1.64%

10001-50000

105

0.28%

2,135,884

2.52%

50001-100000

0.05%

1,423,246

1.68%

100001-500000

0.07%

6,775,934

7.99%

500001-

0.04%

61,109,096

72.08%

Total

36,932

100.00%

84,776,953

100.00%

Management shareholding

On 31 January 2023, Puuilo Plc’s Board members and the CEO owned a total of 6,192,866 Puuilo Plc’s

shares, which corresponds to 7.30% of the company’s shares and votes.

On 31 January 2023, the CEO had 297,712 Puuilo Plc’s shares, which corresponded to 0.35% of the

company’s shares and votes. On 31 January 2023, Puuilo Plc’s management team incl. CEO owned

768,126 Puuilo Plc’s shares, which corresponded to 0.91% of the company’s shares and votes.

Flagging notifications

During the financial year, Puuilo received the following shareholder flagging notifications in

accordance with the Finnish Securities Markets Act:

The Capital Group Companies, Inc.'s indirect holding in Puuilo's shares exceeded the 10% flagging

threshold on 29 August 2022 and was 10.03%.

Further information on Puuilo's shares and shareholders is available on the investor website at

https://www.investors.puuilo.fi/en/share-information and on the management’s holdings at

https://www.investors.puuilo.fi/en/corporate-governance/management-team.

Risks and business uncertainties

Puuilo Group's risk management is based on the risk management policy approved by the Board of

Directors. The purpose of the risk management policy is to define the framework, processes,

governance and responsibilities of risk management in Puuilo.

The primary objective of risk management in Puuilo is to support the company’s strategy execution,

continuity of operations and realization of business objectives by anticipating any risks involved in the

company’s operations and managing them in a proactive manner. Enterprise risk management

emphasizes the role of corporate culture and is an integrated part of Puuilo’s operations, planning and

decision-making.

The Board of Directors is responsible for monitoring and ensuring that the Puuilo’s risk management

process functions are comprehensive. The Board defines the risk appetite and tolerance, according to

the current conditions. The Board of Directors is also responsible for approving enterprise risk

management related company policies. Puuilo’s operative management is responsible for achieving the

set objectives and controlling, managing, and mitigating risks that threaten them. The operative

management is also responsible for the risk management work, and for ensuring the performance of

the risk management process and the availability of sufficient resources.

Risks are assessed regularly and managed comprehensively. The Group's risk map and the most

significant risks and uncertainties are regularly reported to Puuilo's Board of Directors, whereas the most

significant risks and uncertainties are reported to the market in the report of the Board of Directors and

significant changes within them are reported in the business reviews and half-year reports.

Most significant risks and uncertainties in Puuilo

Geopolitical risks

Although Puuilo's business is not exposed to direct risks related to Russia or Ukraine, Russia's military

actions have caused significant uncertainty in Europe. The situation may have an impact on consumer

behaviour and purchasing power and thus on Puuilo’s business. In addition, sanctions related to Russia

may indirectly affect global supply chains. A radical change in China's superpower policy might lead to

significant changes in the supplier environment.

The geopolitical situation and its indirect market effects increase customers’ price awareness. Puuilo

strives to influence consumer behaviour by maintaining a wide range of products, maintaining a

favourable price image and making careful pricing decisions. The risk related to China can be mitigated

by monitoring the situation and by increasing the number of procurement countries.

Changes in customer preferences

Changes in consumer behaviour may occur or purchasing power may change due to inflation or rising

energy prices or interest rates.

Puuilo strives to influence consumer behaviour through advertising, as well as to maintain a favourable

price image and careful pricing decisions.

Disruptions in supply chains

Disruptions in the company's warehousing and logistics chain of suppliers or its own stores as well as

possible strikes in the logistics sector may have an adverse effect on Puuilo's business, financial position,

profit, and cash flows.

Puuilo manages the risk by decentralizing the supply chain and maintaining inventory levels in stores

and central warehouses at an adequate level.

The activities of competitors and the entry of new competitors

The Finnish retail market is competitive, so the actions of competitors and the entry of new competitors

may affect Puuilo's position in the market.

It is possible to react to the various actions of competitors through marketing, pricing, and assortment

management, as well as through a rapid expansion of our store network. In addition, risk is managed

by actively monitoring competitors and evaluating their actions.

Inefficient inventory management

Inefficient inventory management may result in loss or loss of income. If Puuilo is unable to manage its

inventory in line with the customer demand, excessive inventory levels may increase logistic costs.

Insufficient number of seasonal products, in turn, would lead to a loss of net sales and a negative

customer experience.

Puuilo manages the risk related to inventory management by actively updating its product range and

monitoring inventory turnover as well as by centralizing warehouse operations and ensuring sufficient

capacity in a timely manner.

Permanence and availability of personnel

Failure to recruit or retain employees may adversely affect Puuilo.

The company manages the risk by striving to improve the employer image, by paying attention to the

quality of supervisory work, through incentive programs, and by offering meaningful tasks. In addition,

recruitment processes are carried out carefully and suitability assessments are used.

IT risks

The incompetence of the personnel in protecting and processing data may cause data to fall into the

wrong hands or to data breach from outside the company.

The risk is managed by instructing and training personnel on a regular basis.

The company's IT systems may be subject to data breaches and business secrets, or personal data is

stolen or modified for own benefit or to harm the company.

Information security related risks can be managed by developing IT security policies and written

documentation and guidelines as well as by an annual security plan. In addition, the risk can be mitigated

by identifying vulnerabilities and building active control of the components at the interface and

monitoring of vulnerabilities.

Disruptions in the company's IT systems, including cutting off international data connections for terrorist

purposes, may have a significant impact on the company's business. Disruptions can affect the

management of flow of goods, orders, customer data, inventories, distribution, and product

replenishment, as well as the management of business, insider, and personnel information. In addition,

disruptions in company’s IT systems may affect the other management related issues and efficient

management of financial information.

The effects of the potential disruptions in IT systems may be limited by documenting a disruption

management plan for critical processes. In addition, the company has an IT services continuity plan and

recovery plans for critical services. These plans have been documented together with suppliers.

Global pandemic

Global pandemic such as Covid-19 may have a significant adverse effect on Puuilo’s business, including

disruptions in supply chains and reduced opportunities for customers to do business in the company's

stores across the country. Restrictions on tourism may also increase demand in Puuilo's stores and for

Puuilo’s product range.

Puuilo manages the pandemic risk with an extensive store network that protects the company in

situations where closure restrictions are not applied to the entire country. Growing the store network

further supports this. In addition, the risk associated with the pandemic is managed by developing the

online store and its delivery options, further expanding the supplier network and increasing the number

of countries of origin.

Failures to find new locations or in new store openings

It is Puuilo’s principle to operate in leased premises instead of owning the store premises. Puuilo may

face challenges in opening new or relocating stores as well as finding new store lease properties.

Puuilo manages these risks by carefully assessing of the potential of new locations and by actively

searching new store sites.

Puuilo brand and marketing risks

Puuilo's ability to attract customers depends significantly on the strength of its brand, and Puuilo may

not be able to maintain or improve its brand image. Puuilo's advertising and marketing measures may

not generate enough awareness among customers and increase the number of customers. Media

inflation and other changes in the marketing supply chain, as well as rising costs, may have a negative

impact on marketing and lower its effectiveness.

Puuilo brand image can be maintained and improved by carrying out consumer and customer surveys,

testing concepts in control groups, developing the customer experience and measuring advertising. In

addition, the brand can be strengthened by increasingly effective marketing, as well as by marketing

tool development.

Foreign exchange risk

Changes in exchange rates may have a significant impact on Puuilo's business, financial position,

business results and cash flows.

Puuilo manages currency risks by monitoring the development of exchange rates and regularly

assessing the need for currency hedging.

Interest rate risk

Puuilo’s loans from financial institutions have variable interest rates, which exposes the company to

interest rate risk.

Puuilo manages the risk by monitoring interest rate development. If necessary, the interest rates can be

hedged, or additional loan amortisations can be made.

The general principles of Puuilo's risk management are also described on the investor website at

https://www.investors.puuilo.fi/en/corporate-governance/risk-management-and-internal-controls.

Decisions by the Annual General Meeting and the Board of Director’s organisation meeting

Puuilo Plc’s Annual General Meeting was held on 17 May 2022 in Helsinki, Finland. Due to the COVID-

19 pandemic and the uncertainty connected to arranging a physical meeting, the meeting was held

under exceptional meeting procedures based on the legislative act concerning temporary deviations

from the Finnish Companies Act and shareholders and their proxy representatives could not be present

at the meeting venue. Shareholders and their proxy representatives could, however, participate in the

meeting and exercise shareholder rights through voting in advance as well as by making

counterproposals and presenting questions in advance. A total of 116 shareholders representing

57,358,913 shares and votes were represented at the meeting.

The Annual General Meeting adopted the Company's annual accounts and the consolidated financial

statements for the financial year 1 February 2021 – 31 January 2022, discharged the persons who have

acted as members of the Company’s Board of Directors and as CEO from liability and approved all

proposals made to the Annual General Meeting by the Board of Directors. The Annual General Meeting

also approved the Remuneration Policy for the Company’s Governing Bodies presented to it.

Dividend

The Annual General Meeting resolved that an aggregate dividend of EUR 0.30 per share be paid based

on the balance sheet adopted for the financial year ended on 31 January 2022. The dividend will be

paid in two instalments. The first dividend instalment, EUR 0.15 per share, will be paid to shareholders

registered in the Company’s register of shareholders maintained by Euroclear Finland Ltd on the record

date for the first dividend instalment 24 May 2022. The payment date for the first dividend instalment

will be on 31 May 2022. The second dividend instalment, EUR 0.15 per share, will be paid to

shareholders registered in the Company’s register of shareholders maintained by Euroclear Finland Ltd

on the record date for the second dividend instalment 20 October 2022. The payment date for the

second dividend instalment will be on 27 October 2022.

In addition, the Annual General Meeting authorized the Board of Directors to decide, if necessary, on a

new record date and a new payment date for the second dividend instalment if regulations applicable to

the Finnish book-entry system change or otherwise so require.

Composition of the Board of Directors

The number of members of the Board of Directors was confirmed to as six (6). Timo Mänty, Tomas

Franzén, Rasmus Molander, Mammu Kaario and Markku Tuomaala were re-elected, and Bent Holm

was elected as a new member of the Board of Directors for a term ending at the end of the next Annual

General Meeting.

The Annual General Meeting re-elected Timo Mänty as the Chairman of the Board of Directors.

Remuneration of the members of the Board of Directors

The Annual General Meeting resolved that the annual remuneration to the members of the Board of

Directors will be paid as follows: to the Chairman of the Board of Directors EUR 60,000 and to the other

members EUR 30,000 each. In addition, the Annual General Meeting resolved that the annual

remuneration to the members of the Audit Committee will be paid as follows: to the Chairman of the

Audit Committee EUR 5,000 and to the other members of the Audit Committee EUR 2,500.

Auditor

PricewaterhouseCoopers Oy, a firm of authorized public accountants, was re-elected as auditor of the

Company for the financial year 1 February 2022 – 31 January 2023. Enel Sintonen, APA, acted as the

auditor with principal responsibility until September 2022. Since September 2022, Mikko Nieminen, APA,

has acted as a principal responsibility.

The auditor’s remuneration is paid against an invoice approved by the Company.

Authorization for the Board of Directors to resolve on the repurchase and/or on the acceptance

as pledge of the Company’s own shares

The Annual General Meeting authorized the Board of Directors to resolve on the repurchase and/or on

the acceptance as pledge of an aggregate maximum of 8,477,695 Company's own shares provided,

however, that the number of shares held by the Company at any time does not exceed 10 per cent of

the total number of shares in the Company. Own shares can be repurchased only using the unrestricted

equity of the Company at a price formed in public trading on the date of the repurchase or otherwise at

a price determined by the markets. The Board of Directors decides on all other matters related to the

repurchase and/or on the acceptance as pledge of own shares. Own shares can be repurchased using,

inter alia, derivatives. Own shares can be repurchased otherwise than in proportion to the shareholdings

of the shareholders (directed repurchase). The authorization cancels the authorization granted on 1

June 2021 to decide on the repurchase of the Company’s own shares. The authorization is effective

until the beginning of the next Annual General Meeting, however, no longer than until 31 July 2023.

Authorization for the Board of Directors to decide on the issuance of shares as well as the

issuance of special rights entitling to shares

The Annual General Meeting decided to authorize the Board of Directors to resolve on the issuance of

shares and the issuance of special rights entitling to shares. The aggregate number of new shares to

be issued may not exceed 8,477,695 shares, which corresponds to approximately 10 per cent of all of

the shares in the Company. The Board of Directors decides on all other 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). The

authorization cancels the authorization granted on 1 June 2021 to decide on the repurchase of the

Company’s own shares. The authorization is effective until the beginning of the next Annual General

Meeting, however, no longer than until 31 July 2023.

Establishment of the Shareholders' Nomination Board

The Annual General Meeting decided to establish a Shareholders' Nomination Board to prepare

proposals for the election and remuneration of the members of the Board of Directors and the

remuneration of the members of the Board Committees for the next Annual General Meetings and for

any Extraordinary General Meetings. In addition, the General Meeting approved the charter of the

Shareholders' Nomination Board.

According to the decision of the General Meeting, the Shareholders' Nomination Board will be composed

of representatives appointed by the three largest shareholders of the Company. The Chairman of the

Board of Directors acts as a person with expertise in the Shareholders' Nomination Board. The

Chairman of the Board of Directors does not participate in the decision-making of the Shareholders'

Nomination Board.

The three shareholders with the largest number of votes for all shares of the Company on the 1st

business day of October of the calendar year preceding the Annual General Meeting have the right to

nominate the members representing the shareholders. The nomination right is determined in

accordance with the shareholder register maintained by Euroclear Finland Ltd. If a shareholder presents

a written request to the Chairman of the Board of Directors by last business day of September of the

year preceding the Annual General Meeting, into the holdings of the shareholder shall be calculated

also holdings of a person equivalent to the shareholder that need to be taken into account when

evaluating the requirement to flag changes in the holdings under the Finnish Securities Markets Act.

The Chairman of the Board of Directors shall request the three largest shareholders to appoint one

member each to the Shareholders' Nomination Board in accordance with the above described right of

appointment. If a shareholder does not wish to exercise the right of appointment, the right is transferred

to the next largest shareholder who would not otherwise have the right of appointment.

The Shareholders' Nomination Board is established until further notice until the General Meeting decides

otherwise. The term of office of the members of the Shareholders' Nomination Board expires each year

when a new Shareholders' Nomination Board is appointed. The members of the Shareholders'

Nomination Board shall not be entitled to any remuneration on the basis of their membership in the

Nomination Board. The members’ travel expenses shall be reimbursed in accordance with the

Company’s travel policy. When necessary, the Shareholders' Nomination Board may in order to carry

out its duties use external experts at a cost approved by the Company.

Antti Ihamuotila, attorney-at-law, chaired the meeting.

The minutes of the Annual General Meeting are available on the Puuilo investor website at

https://www.investors.puuilo.fi/en/corporate-governance/general-meeting.

Decisions by the Board of Director’s organisation meeting

No changes were made to the composition of the Company's Audit Committee. The Audit Committee

consists of Mammu Kaario (Chairman), Rasmus Molander ja Markku Tuomaala.

Proposal for profit distribution

The Board of Directors of Puuilo Plc proposes for the Annual General Meeting to be held on 16 May

2023 that a dividend of EUR 0.34 per share be paid for the financial year 1 February 2022 – 31 January

2023 based on the adopted balance sheet on shares held outside the company. The remaining

distributable assets will remain in equity. The Board of Directors proposes that the dividend be paid in

two instalments.

The first instalment, EUR 0.17 per share, will be paid to shareholders registered in the company’s

The board proposes that the first dividend instalment payment date be 30 May 2023.

The second instalment, EUR 0.17 per share, will be paid to shareholders registered in the company’s

The board proposes that the second instalment payment date be 26 October 2023. The Board proposes

it be authorised to decide, if necessary, on new dividend payment record dates and pay dates for the

second instalment, if the rules and statutes of the Finnish book-entry system change or otherwise so

require.

As at the date of the proposal for the distribution of profit, 29 March 2023, a total of 84,461,953 shares

were held outside the company, and the corresponding total amount of dividends was EUR

28,717,064.02.

The distributable assets of Puuilo Plc total EUR 102,738,190.57 of which profit for the financial year is

EUR 41,297,199.63. The proposed dividend corresponds to approximately 82% of Puuilo Group’s net

income for the financial year.

Annual General Meeting

Puuilo’s Annual General Meeting will be held on 16 May 2023.

Significant events after the end of the reporting period

Flagging Notification

On 15 February 2023 Puuilo received a notification in accordance with Chapter 9, Section 6 and 7 of

the Finnish Securities Markets Act. According to the notification, Adelis Holding I AB’s indirect holdings

in shares fell below the flagging threshold of 20% and was 18.66% after the transaction.

Proposal of the Shareholders’ Nomination Board

The shareholders’ Nomination Board of Puuilo Plc proposes that current members of the Board of

Directors Bent Holm, Mammu Kaario, Rasmus Molander and Markku Tuomaala will be re-elected. The

Nomination Board also proposes that Lasse Aho and Tuomas Piirtola will be elected as new members

to the Board of Directors. Current members of the Board of Directors Tomas Franzén and Timo Mänty

have notified that they are no longer available to be elected as members of the Board of Directors. The

Nomination Board proposes to the Annual General Meeting that Lasse Aho will be elected as a

Chairman of the Board of Directors.

The Nomination Board proposes that the remunerations of the members of the Board of Directors fees

are same as the current remuneration fees.

Statement of non-financial information

Puuilo’s operating model

Puuilo operates in the Finnish discount store market, which is part of the total retail market in Finland.

The discount store market trends in Finland and other Nordic countries include an increase in the price-

awareness.

Our successful store concept has enabled Puuilo to become one of the leading players on the Finnish

discount store market. Measured by net sales, Puuilo is one of Finland’s largest store chains focusing

on consumer goods.

Puuilo’s main product categories are building supplies, tools, HVAC and electrical accessories, pet food

and supplies, car accessories, groceries, household products, garden supplies, free-time and other

accessories as well as services.

Sustainability principles and material perspectives

Puuilo is committed to developing its operating instructions and practices concerning social

responsibility. Operating in a sustainable and responsible manner is a key aspect of Puuilo’s operations,

overall quality of what the company does, and its value base. The company recognises corporate

responsibility as a theme the promotion of which throughout the value chain is an obligation, but which

also brings value to the business operations as a whole. This requires precise and goal-oriented

measures on all levels of the company.

In 2021, Puuilo started to create structures for more systematic sustainability work, including goals and

metrics. For this purpose, a materiality analysis was carried out with the representatives of our key

stakeholders, and this analysis was used as a basis for the further measures. In the financial year 2022,

we have updated the emphases of our sustainability topics and continued our responsibility work

towards achieving the objectives. With regard to sustainability work, the following have been identified

as our most significant stakeholders: customers, personnel, shareholders, the authorities, financers,

and the media. The measures aim to serve the stakeholders with the best possible quality, while taking

the sustainability perspectives into consideration. The material sustainability themes were categorised

into three focus areas: ‘A responsible retailer’, ‘A good place to work’ and ‘More sustainable

consumption’. A responsible retailer covers the activities of Puuilo’s personnel and the operations of the

supply chain. A good place to work means competent and motivated personnel and a workplace where

the employees enjoy working and to which they can commit. More sustainable consumption means

tangible savings and streamlining measures with regard to the environment.

Sustainability management and responsibility

In Puuilo, the members of the management team are in charge of sustainability work. The CEO is in

charge of the financial, environmental and social responsibility overall, the Chief Purchasing Officer is

responsible for the supply chain (product responsibility and logistics), and the Chief Human Resources

is in charge of social responsibility with regard to personnel. The management team conducts regular

sustainability reviews in accordance with the annual planning cycle, to verify the progress of plans and

measures as well as the timeliness of the materiality analysis.

Key commitments and policies

Puuilo requires that its suppliers and partners are committed to promoting sustainability. Puuilo is

committed to the ethical operating principles of Amfori BSCI and thus complies with the principles of the

UN Global Compact, as well as the OECD Guidelines for Multinational Enterprises. In addition to

compliance with laws and statutes, Puuilo requires that its suppliers and partners adopt the same or

equivalent approach and encourages them to proactively develop sustainable production and a

sustainable product assortment. In addition, Puuilo has a Supplier Code of Conduct, which is included

in cooperation agreements. The guidelines include the basic principles and expectations regarding the

suppliers.

Social impacts and respect for human rights

The foundation for Puuilo’s sustainability work is laid by the national and international laws and statutes

concerning business activities as well as employer obligations and commitments. The company is

committed to compliance with the aforementioned while also striving to increase the number of voluntary

commitments and sustainability measures and to develop the verification of sustainability in supply

chains. The company pays special attention to the selection of suppliers and has joined the Amfori

Business Social Compliance Initiative (BSCI) as a concrete measure. The objective of the measure is

to promote social responsibility in the international supply chain. The BSCI’s system is based on

international treaties, such as the human rights principles of the ILO, UN and OECD. The BSCI has a

diverse impact on the development of responsible working conditions in supply chains by means of

information, training, advocacy and audits. Approximately 44% of the foreign suppliers used in 2022,

are committed to BCSI or equivalent principles. Purchases from these suppliers accounted for

approximately 70% of Puuilo’s foreign purchases. Puuilo’s objective is that by the end of the financial

year 2025, 80% of the suppliers of its private labels will have been BSCI-audited.

In addition, Puuilo has a Supplier Code of Conduct, which is included in cooperation agreements. The

company continues to include the Code of Conduct as part of agreements that are renewed, and the

Code will be attached to all new agreements. At the end of the reporting period, 82% of Puuilo’s active

suppliers, whose annual purchases exceed EUR 100 thousand, were covered by the commitment.

Puuilo’s objective is that the commitment will be part of the agreement in 80 per cent of the agreements

by the end of the financial year 2025. An agreement template including Supplier Code of Conduct has

also been prepared for foreign suppliers.

Personnel and occupational safety

The number of personnel continues to grow as a result of the expansion of the chain and in the financial

year 2022, Puuilo opened three new stores. At the end of the financial year 2022, the number of

personnel converted into full-time employees (FTE) was 693 (663). Puuilo supports its personnel in

learning and career advancement, provides safe working conditions and fair employment terms and

conditions and treats everyone equally. The company promotes personnel retention. Almost 80% of

Puuilo’s employment relationships are permanent and full-time, and the company aims to maintain this

level in future as well. Puuilo works systematically to ensure personnel well-being and conducts an

annual personnel satisfaction survey to measure its performance. Puuilo pays all employees salaries at

least in accordance with the collective labour agreement, the employees have the right to belong to a

union, and employee representatives have been elected per each personnel group.

Employees are provided with occupational health services with medical care coverage. A functioning

model of cooperation is in place with the occupational health service: shared objectives and monitoring

their realisation are used to prevent risks.

All Puuilo employees take the annual occupational safety training, which is also incorporated in the

orientation of new employees. Puuilo closely monitors the realisation of occupational safety through the

occupational safety committee, which supports the supervisors by actively promoting matters

concerning safety in the daily activities. We measure accident frequency in a systematic manner.

Personnel reports hazardous situations and near miss situations through an internal reporting system,

and the relevant supervisor reviews the reported cases. The occupational safety committee monitors

the number of reports and the measures taken. The system also provides information on the

assessments of hazards and risks and includes an action plan for occupational safety and health.

Puuilo has an equality, non-discrimination and personnel development plan that sets framework to our

work. Puuilo’s objective is to be a successful company whose employees have equal opportunities to

perform well and develop in their jobs. The goal is to be a work community where employees treat each

other equally and do not discriminate. The company has operating models in place for addressing

bullying, harassment and unprofessional treatment. Discrimination on the basis of a person’s gender,

age, origin, nationality, language, religion, belief, opinion, political activity, union activity, family

relationships, health, disability, sexual orientation or other personal characteristic is not permitted.

Environmental perspectives

Puuilo wants to operate in a resource-wise manner and ensure that the environment is clean and life-

sustaining in the future as well. The company pays special attention to the recycling rate in waste

generation as well as the monitoring and management of its carbon footprint. Puuilo succeeded in

reducing the amount of mixed waste by increasing the sorting of plastic and the energy waste. The

measurement of waste generation enables store managers to monitor waste generation on the level of

a specific store and the entire chain. Personnel received training in more effective sorting, and waste

management equipment was renewed and increased.

Puuilo’s waste management operations are carbon neutral. The carbon dioxide emissions generated

were compensated by planting forests and thus creating permanent carbon sinks. Puuilo also strived to

improve the reuse of the waste it generates. In the financial year 2022, the waste generation totalled

1,156 tonnes (1,213 tonnes) and the recycling rate was 69% (68%). The goal is to increase the recycling

rate to at least 73% by the end of 2025 and to annually slow down the increase in the total amount of

waste and in the carbon footprint.

The electricity we purchase ourselves comes 100% from renewable sources of energy. We take the

responsibility for the electricity procurement whenever it is possible in order to be able to measure and

to promote sustainable energy consumption. In the financial year 2022, the comparable electricity

consumption decreased by 81,653 kWh (64,385 kWh), or approximately by 2% compared to previous

year (-2% in FY2021). Reductions in electricity consumption have been achieved by replacing the

lighting in old stores and by optimising the consumption of energy. More than half of Puuilo’s stores are

no more than five years old, which is why their building engineering solutions are by default modern and

energy efficient.

Puuilo aims to decrease the greenhouse gas emissions in comparable terms of the transport it has

control over by working in close cooperation with its main logistics partners. We monitor emissions, and

in the financial year 2022, the measurable greenhouse gas emissions generated in transport were 1,639

tonnes (3,217 tonnes). We cooperate with a well-known international operator in transport. In 2023, we

will continue to assess the climate impacts of transport and develop measurability together with our

logistics partner.

Prevention of corruption and bribery

Puuilo has zero tolerance for any kind of corruption and bribery. Puuilo is committed to combating

corruption and operating ethically and requires the same from its partners. Anti-corruption activities are

also included in the Supplier Code of Conduct. Puuilo bears its responsibility by investigating each

situation and taking corrective measures in cooperation with the other members of the chain. An internal

code of conduct was prepared during the financial year 2022.

A whistleblowing channel, open to everyone, is available on Puuilo’s website. Anyone can use the

channel to anonymously report a violation of Supplier Code of Conduct, such as corruption or other

unethical behaviour, or suspicions thereof to Puuilo’s management. A team established by the

management will review the reports, take corrective measures and communicate their decision to the

person who reported the issue. In the financial year 2022, there were no reported cases of discrimination

or suspected misconduct.

EU taxonomy

The purpose of the EU classification system for sustainable financing, the taxonomy, is to help

companies and investors to assess whether economic activities can be considered environmentally

sustainable. The taxonomy defines a set of criteria for business operations which can be used to assess

the extent to which a company’s operations support the achievement of environmental and climate

objectives.

Puuilo’s business operations consist of retail activities to private consumers and B2B customers. The

sales of goods are not included in the taxonomy, and it does not generate taxonomy-eligible turnover.

The share of revenue from products or services associated with Taxonomy-aligned economic activities

in 2022:

Substantial contribution

criteria

DNSH criteria

Taxonomy-

aligned

share of

net sales

Economic activities

Code(s)

Net sales

Share of net sales

Climate change mitigation

Climate change adaption

Water and marine resources

Circular economy

Biodiversity and ecosystems

Climate change mitigation

Climate change adaption

Water and marine resources

Circular economy

Biodiversity and ecosystems

Minimum safeguards

2022

2021

Category

EUR

million

Y/N

E/T

TAXONOMY-ELIGIBLE ACTIVIES

Taxonomy-aligned activities

OpEx of taxonomy-aligned activities

Taxonomy-non-aligned activities

OpEx of Taxonomy-non-aligned

activities

Total Taxonomy-eligible activities

TAXONOMY-NON-ELIGIBLE

ACTIVITIES

OpEx of Taxonomy-non-eligible activities

3.4

100

Total Taxonomy-eligible and non-

eligible OpEx

3.4

100

Key figures

EUR million

1 Feb 2022 -

31 Jan 2023

1 Feb 2021 -

31 Jan 2022

1 Feb 2020 -

31 Jan 2021

Net sales

296.4

270.1

238.7

Net sales development (%)

9.7%

13.2%

40.0%

Like-for-like store net sales development (%)

5.5%

2.6%

24.4%

Online store net sales development (%)

3.9%

20.8%

127.5%

Gross profit

107.2

99.6

87.1

Gross margin (%)

36.2%

36.9%

36.5%

Adjusted EBITA*

48.8

48.4

43.2

Adjusted EBITA margin (%)*

16.5%

17.9%

18.1%

EBITA*

48.2

45.6

42.6

EBITA margin (%)*

16.2%

16.9%

17.9%

EBIT

47.0

44.5

41.5

EBIT margin (%)

15.9%

16.5%

17.4%

Net income

35.1

31.9

28.8

EPS (EUR)

0.41

0.38

0.36

EPS excl. listing expenses (EUR)

0.42

0.36

Operating free cash flow

52.7

10.8

38.8

Net debt / adjusted EBITDA

1.5

1.7

2.4

Number of stores at the end of period

Number of personnel converted into full-time employees

(FTE)

693

663

595

* Operating profit before the amortisation of Puuilo trademark

Earnings per share has been calculated for all periods presented considering the free-of charge share issue (split) executed during the

financial year 2021.

Calculation of alternative performance measures and other key figures

Puuilo uses alternative performance measures to reflect the changes in business performance and

profitability. These indicators should be examined together with the IFRS-compliant performance key

indicators.

Like-for-like store net sales development is used to reflect the changes in Puuilo’s business volume

between periods. The indicator reflects the change in the net sales excluding the impact of new stores.

Like-for-like stores include the stores that have existed during both the reporting period and the

comparison period.

Adjusted profit and profitability indicators are used to improve the comparability of operational

performance between periods. Items affecting comparability include unusual material items outside the

ordinary course of the business. These unusual expenses are related to listing expenses, strategic

development projects and administration.

Alternative performance measures, adjusted for the effect of IFRS 16, are used to monitor the

achievement of financial targets. EBITDA excluding the effect of IFRS corresponds to EBITDA before

the adoption of IFRS 16.

In addition, financial performance indicators for the group have been presented as alternative

performance measures. The management uses these indicators to monitor and analyse business

performance, profitability and financial position.

Key figure

Definition

Like-for-like store net sales

development (%)

Like-for-like store net sales development is calculated as the net sales

development of the comparable stores that are not considered new or

closed stores.

A store is considered a new store during the opening year and the

following financial year after the opening. Relocated stores are considered

as like-for-like stores.

Online net sales

development (%)

Change in online store net sales for the period divided by online store net

sales for the previous period

Gross profit

Net sales – materials and services

Gross margin (%)

Gross profit as percentage of net sales

EBITA

Operating profit before the amortisation of Puuilo trademark

EBITA margin (%)

EBITA as percentage of net sales

Adjusted EBITA

EBITA adjusted with items affecting comparability

Adjusted EBITA margin (%)

Adjusted EBITA as percentage of net sales

EBIT (operating profit)

Profit before income taxes and finance income and finance costs (operating

profit)

EBIT margin (%)

EBIT as percentage of net sales

Earnings per share (basic

and diluted) (EUR)

Earnings per share have been calculated by dividing the profit for the period

according to the consolidated income statement by the weighted average

number of shares issued.

Earnings per share have been calculated for all periods presented

considering the free-of-charge share issue executed during the reporting

period.

Earnings per share excluding

listing expenses (EUR)

Earnings per share have been calculated by dividing the profit for the period

excluding the listing expenses recognised in profit and loss according to the

consolidated income statement by the weighted average number of shares

issued.

Earnings per share have been calculated for all periods presented

considering the free-of-charge share issue executed during the reporting

period.

Operating free cash flow

Adjusted EBITDA – depreciation of right-of-use assets – change in net

working capital in cash flow statement – net capital expenditure

Net debt / Adjusted EBITDA

Interest-bearing liabilities (loans from financial institutions + lease liabilities)

– cash and cash equivalents divided by annualised adjusted EBITDA

EBITDA

Operating profit before depreciation, amortisation, and impairment

Adjusted EBITDA

EBITDA before items affecting comparability

Reconciliation of certain alternative performance measures

EUR million

1 Feb 2022 -

31 Jan 2023

1 Feb 2021 -

31 Jan 2022

1 Feb 2020 -

31 Jan 2021

Items affecting comparability

Strategic projects

0.1

0.5

Administration

0.0

0.1

Listing costs

0.5

2.8

Items affecting comparability

0.6

2.9

0.6

Gross profit

Net sales

296.4

270.1

238.7

Materials and services

189.3

170.6

151.6

Gross profit

107.2

99.6

87.1

EBITA and adjusted EBITA

Operating profit

47.0

44.5

41.5

Trademark amortisation

1.1

EBITA

48.2

45.6

42.6

Items affecting comparability

0.6

2.9

0.6

Adjusted EBITA

48.8

48.4

43.2

EBITDA and Adjusted EBITDA

Operating profit

47.0

44.5

41.5

Depreciation, amortisation and impairments

13.5

11.5

9.7

EBITDA

60.6

55.9

51.2

Items affecting comparability

0.6

2.9

0.6

Adjusted EBITDA

61.2

58.8

51.8

Operating free cash flow

Adjusted EBITDA

61.2

58.8

51.8

Net capital expenditure

-2.6

-4.4

-2.6

Depreciation on right-of-use assets

-9.8

-8.7

-7.4

Changes in working capital

3.9

-34.9

-3.0

Operating free cash flow

52.7

10.8

38.8

Net debt / Adjusted EBITDA

Net debt

94.4

97.6

121.8

Adjusted EBITDA

61.2

58.8

51.8

Net debt / Adjusted EBITDA

1.5

1.7

2.4

Financial Statements

Consolidated Statement of Comprehensive Income

EUR million

Note

1 Feb 2022

- 31 Jan

2023

1 Feb 2021

- 31 Jan

2022

Net sales

296.4

270.1

Other operating income

2.1

0.4

Materials and services

2.3

-189.3

-170.6

Personnel expenses

2.3

-29.0

-26.4

Other operating expenses

2.3

-18.0

-17.6

Depreciation, amortisation and impairments

4.1-4.4

-13.5

-11.5

Operating profit

47.0

44.5

Finance income

5.6

0.0

Finance costs

5.6

-3.1

-4.5

Total finance income and costs

-3.1

-4.5

Profit before taxes

43.9

39.9

Current income tax

2.4

-9.2

-8.1

Deferred income tax

2.4

0.4

0.0

Total income tax expense

-8.8

-8.0

Profit for the period

35.1

31.9

Total comprehensive income for the period

35.1

31.9

Profit for the period attributable to:

Owners of the parent

35.1

31.9

Profit for the period

35.1

31.9

Earnings per share for profit attributable to owners of the parent

Basic and diluted earnings per share (EUR)

5.3

0.41

0.38

The Notes are an integral part of these financial statements.

Consolidated Balance Sheet

EUR million

Note

31 Jan 2023

31 Jan 2022

ASSETS

Non-current assets

Goodwill

4.1

33.5

Intangible assets

4.2

17.4

19.4

Property, plant and equipment

4.3

2.6

2.3

Right-of-use assets

4.4

53.0

44.4

Deferred tax assets

2.4

0.7

0.5

Total non-current assets

107.2

100.2

Current assets

Inventories

3.1

89.9

92.2

Trade receivables

3.2, 5.5

4.1

4.0

Other receivables

3.2

1.3

1.4

Cash and cash equivalents

28.8

16.5

Total current assets

124.1

114.1

Total assets

231.3

214.3

EUR million

31 Jan 2023

31 Jan 2022

Equity and liabilities

Equity

Share capital

5.2

0.1

Reserve for invested unrestricted equity

5.2

29.0

Retained earnings

12.0

6.8

Profit for the period

35.1

31.9

Total equity attributable to owners of the parent

76.1

67.8

Total equity

76.1

67.8

Liabilities

Non-current liabilities

Loans from financial institutions

5.4, 5.5

69.9

69.8

Lease liabilities

4.4

43.5

36.3

Provisions

4.5

0.8

0.7

Deferred tax liabilities

2.4

3.0

3.2

Total non-current liabilities

117.1

110.0

Current liabilities

Lease liabilities

4.4

9.9

8.0

Trade payables

3.3, 5.5

16.1

13.2

Advances received

2.1

0.3

Income tax liabilities

2.0

4.1

Other current liabilities

3.3, 5.5

9.9

11.0

Total current liabilities

38.0

36.5

Total liabilities

155.1

146.5

Total equity and liabilities

231.3

214.3

The Notes are an integral part of these financial statements.

Consolidated Statement of Changes in Equity

Attributable to owners of the parent

EUR million

Note

Share capital

Reserve for

invested

unrestricted

equity

Own

Retained

earnings

Total

equity

Equity on 1 Feb 2022

0.1

29.0

38.8

67.8

Profit for the period

35.1

Total comprehensive

income for the period

35.1

Dividends

5.2

-25.4

Repurchase of own shares

5.2

-1.5

Share-based payments

5.2

0.2

Total transactions with owners

-1.5

-25.2

-26.8

Equity on31 Jan 2023

0.1

29.0

-1.5

48.6

76.1

Attributable to owners of the parent

EUR million

Note

Share capital

Reserve for

invested

unrestricted

equity

Own

Retained

earnings

Total

equity

Equity on 1 Feb 2021

0.0

6.9

Profit for the period

31.9

Total comprehensive

income for the period

31.9

Increase in share capital

5.2

0.1

-0.1

0.0

Share issue

5.2

29.0

Total transactions with owners

0.1

29.0

-0.1

29.0

Equity on 31 Jan 2022

0.1

29.0

38.8

67.8

The Notes are an integral part of these financial statements.

Consolidated Statement of Cash Flows

EUR million

Note

1 Feb

2022 - 31

Jan 2023

1 Feb

2021 - 31

Jan 2022

Cash flows from operating activities

Profit for the period

35.1

31.9

Adjustments for:

Depreciation, amortisation and impairments

4.1-4.4

13.5

11.5

Gains/losses on disposal of property, plant and equipment

0.0

Other non-cash adjustments

0.2

0.1

Finance income and costs

5.6

3.1

4.5

Income tax expense

2.4

8.8

8.0

Changes in working capital

Change in trade and other receivables

3.2

0.0

-0.1

Change in inventories

3.1

2.3

-33.7

Change in trade and other current non-interest-bearing liabilities

3.3

1.6

-1.1

Interests paid

-1.1

-2.0

Interests of lease liabilities

-1.4

-1.3

Interests received

0.0

Arrangement fee for loans from financial institutions and other financial costs

-0.3

-0.6

Income taxes paid

-11.4

-7.4

Net cash flows generated from operating activities

50.4

9.7

Cash flows from investing activities

Payments for intangible assets

4.2

-0.8

-3.1

Payments for property, plant and equipment

4.3

-1.8

-1.3

Proceeds from sale of property, plant and equipment

4.3

0.0

Net cash used in investing activities

-2.6

-4.4

Cash flows from financing activities

Share issue

28.6

Proceeds from borrowings

5.1

8.0

70.0

Repayments of loans from financial institutions

5.1

-8.0

-91.0

Principal elements of lease liabilities

5.1

-8.6

-7.6

Dividends

5.2

-25.4

Acquisition of own shares

-1.5

Net cash used in financing activities

-35.6

0.0

Net increase (+)/(-) decrease in cash and cash equivalents

12.3

5.4

Cash and cash equivalents at the beginning of the period

16.5

11.2

Cash and cash equivalents at the end of the period

28.8

16.5

The Notes are an integral part of these financial statements.

Notes to the Consolidated Financial Statements

1 Basis of preparation

2 Business performance

3 Working capital

4 Capital employed

5 Capital structure and financing

6 Other notes

1 BASIS OF PREPARATION

Note 1.1 Company information

Puuilo Group is a Finnish retailer company. On 31 January 2023, the fast-growing Group had a total of

37 stores (34 stores) across Finland. In addition, the online store serves customers. The product

assortment includes building supplies, tools, HVAC and electrical accessories, pet food and supplies,

car accessories, groceries, household products, garden supplies, free-time and other accessories as

well as services. Puuilo is one of the leading discount retailers in Finland and it serves both consumers

and B2B customers in the repair and maintenance as well as construction sector. The company is known

for its low prices and wide range of products.

The Group’s parent company is Puuilo Plc, domiciled in Helsinki, Finland. The company’s registered

address is Pakkalankuja 6, 01510 Vantaa, and its Business ID is 2726573-8. Puuilo Plc is listed on

Nasdaq Helsinki. The Consolidated Financial Statements are available on Puuilo’s investor pages at

www.investors.puuilo.fi and from the company’s headquarters at Pakkalankuja 6, 01510 Vantaa.

These Consolidated Financial Statements contain the consolidated financial statements of Puuilo Plc

(“the company”) and its subsidiaries (“the Group” or “Puuilo”). These Consolidated Financial Statements

include the consolidated statement of comprehensive income, consolidated balance sheet, consolidated

statement of changes in equity and consolidated statement of cash flows as well as notes for the

reporting period that ended on 31 January 2023 and comparison information for the financial year ended

on 31 January 2022. The company’s Board of Directors approved these Financial Statements on 13

April 2023.

Puuilo issues an XHTML Financial Statements complying with the ESEF requirements on Puuilo’s

investor website. The Audit firm PricewaterhouseCoopers Oy has provided to company an independent

auditor’s reasonable assurance report in accordance with ISAE 3000 (Revised) on Puuilo’s ESEF

Financial Statements.

The company’s reporting period begins on 1 February and ends on 31 January. The reporting period

2022 comprises the period 1 February 2022–31 January 2023 and the comparison period 2021 the

period 1 February 2021–31 January 2022.

Note 1.2 Basis of preparation

Puuilo’s Consolidated Financial Statements have been prepared in accordance with International

Financial Reporting Standards (IFRS) approved for adoption by the European Union. They comply with

the effective IAS and IFRS standards and the respective SIC and IFRIC interpretations. The notes to

the Consolidated Financial Statements also include requirements in accordance with Finnish accounting

and limited liability company legislation.

The notes to the Consolidated Financial Statements have been grouped into sections based on their

nature. The basis of preparation of the financial statements is described as part of the note Accounting

Policies, while the accounting policies directly related to a specific note are presented as part of the note

in question. The notes of each area contain the relevant financial information, the accounting policies

as well as the key estimates and discretionary solutions.

The financial statements have been prepared on the basis of initial cost, with the exception of lease

liabilities and right-of-use assets which are discounted at the present value.

The figures in the Consolidated Financial Statements are presented in millions of euros, unless

otherwise stated. The figures have been rounded to the nearest million, and therefore the sum of

individual figures may deviate from the total presented. The presentation currency of the financial

statements is euro, which is also the functional currency of the company and the Group.

Note 1.3 Accounting estimates and judgements

The preparation of Consolidated Financial Statements requires management to make estimates and

assumptions that affect the application of accounting policies and the recognised amounts of assets,

liabilities, income and expenses. The following areas include management’s estimates and

assumptions:

• Share-based payments (Note 2.3)

• Measurement of inventories (Note 3.1)

• Goodwill impairment test (Note 4.1)

• Measurement of the Puuilo trademark (Note 4.2)

• Measurement of lease liabilities and right-of-use assets (Note 4.4)

• Restoration obligation (Note 4.5)

• Expected credit loss (Note 5.5)

These areas are explained in more detail in the individual notes.

According to Puuilo’s management, the Covid-19 pandemic or geopolitical situation (Russian military

actions in Ukraine) have not had a significant impact on the above-mentioned estimates or judgements

made by the management.

The realisation of the estimates and judgements made is regularly evaluated. The estimates and

judgements are based on historical data and other factors, including expectations on future events that

may have a financial impact on the entity and that are assumed to be reasonable under the

circumstances.

2 BUSINESS PERFORMANCE

Note 2.1 Revenue

Accounting policy

Puuilo’s retail chain and online store sell building supplies, tools, HVAC and electrical accessories, pet

food and supplies, car accessories, groceries, household products, garden supplies, free-time and other

accessories as well as services. Its net sales are primarily generated by the sales of goods and

recognised when the control of the product is transferred to the customer, in other words, when the

product is relinquished.

The products sold by the Group have a right of return. Based on experience, the quantity of the returned

goods is considered to be insignificant compared to the company’s net sales.

Puuilo sells gift cards to customers. The Company recognises a liability on these prepayments. The

liability is presented in the balance sheet as a separate line item Advances received. The liability is

derecognised, and net sales are recognised when customer purchases goods with the gift card. After

the gift card has been used, Puuilo is considered to have fulfilled its performance obligations.

Sales are paid mainly in cash or by credit card. Financing offered to consumers is arranged by an

external partner and does not create a performance obligation to Puuilo. Therefore, the arrangement

does not affect the revenue recognition. The payment time for invoiced sales offered to B2B customers

is typically 14–30 days. As the payment term is less than 12 months, the transaction prices are not

adjusted with the time value of money.

Puuilo’s contracts with customers do not contain separate performance obligations recognised at

different times. The product warranties offered by the Company are treated as assurance type

warranties, because they do not include additional services to the customer. In most cases, the

Company charges the warranty costs from the supplier.

In other operating income, Puuilo presents lease income, gains on disposals of tangible assets, and

other income that are not directly related to the Company’s ordinary business operations. Lease income

consists of income received from places of sales.

Net sales

EUR million

31 Jan 2023

31 Jan 2022

Stores

286.4

260.5

Online store

10.0

9.6

Net sales total

296.4

270.1

Contract liabilities (advances received)

EUR million

31 Jan 2023

31 Jan 2022

0.3

Other income

EUR million

31 Jan 2023

31 Jan 2022

Lease income

0.3

0.2

Gains on disposal of tangible assets

0.0

Other

0.1

0.2

Total

0.4

Note 2.2 Segment information

Due to the nature of Puuilo’s operations, the Group has one reportable operating segment. The

individual stores and the online store are considered to be the distribution channels of Puuilo’s products

and all of them operate under the Puuilo trademark. The Group primarily operates in Finland but has an

online store in Sweden. The share of the Swedish online store in Puuilo’s net sales is insignificant. The

operations, such as financial administration, IT management, marketing as well as purchasing and

logistics are centralised at the Group level.

The Board of Directors is the highest operating decision-maker at Puuilo, as it is responsible for resource

allocation in the Group and assesses the performance of the operations. Puuilo’s Board of Directors

regularly monitors financial information of the Group. The performance metric Puuilo uses internally to

monitor and assess the operations is the Group-level adjusted EBITA, which corresponds to profit before

interest, taxes and amortisation of the trademark, adjusted by items affecting comparability.

Due to the large number of customers and the nature of the business, sales to any individual customer

have not exceeded 10 percent in the financial period that ended on 31 January 2023 or the comparison

period.

Note 2.3 Expenses

Materials and services and other operating expenses

Accounting policy

Materials and services consist of the acquisition cost of goods sold during the financial period and the

services directly related to the goods sold. Other operating expenses include expenses other than the

cost of goods sold, such as administration costs, property maintenance costs, marketing and IT costs

as well as sales freight and credit card commissions. Other operating expenses also include potential

losses on the disposal of property, plant and equipment and intangible assets.

Foreign exchange differences arising from purchases are recognised in the appropriate line item above

operating profit.

Materials and services

EUR million

1 Feb 2022 - 31 Jan 2023

1 Feb 2021 - 31 Jan 2022

Purchases during the reporting period

187.2

204.1

Changes in inventories

1.7

-33.9

External services

0.4

Total

189.3

170.6

Other operating expenses

EUR million

1 Feb 2022 - 31 Jan 2023

1 Feb 2021 - 31 Jan 2022

Administration expenses

2.1

4.1

Property maintenance expenses

3.4

2.8

Marketing expenses

5.5

IT costs

2.2

1.8

Sales freights and credit card fees

2.1

1.8

Other

2.7

1.6

Total

18.0

17.6

Auditors' fees

EUR million

1 Feb 2022 - 31 Jan 2023

1 Feb 2021 - 31 Jan 2022

Statutory audit fees

0.1

Other services

0.0

1.0

Total

0.1

1.1

* Includes the fees related to the company’s IPO

Employee benefits

Accounting policy

Short-term benefits

Wages and salaries mainly comprise of fixed monthly salaries and hourly wages paid to employees.

Other indirect employee costs include pension expenses and other social security expenses. Employee

benefits are recognised for work completed up to the balance sheet date in other liabilities and measured

at the amount that is expected to be paid when the liabilities are settled.

Post-employment benefits

The pension plan of Puuilo is a defined contribution plan. The payments of a defined contribution

pension plan are made to pension insurance companies, after which the Group does not have any other

payment obligations. Payments made on the defined contribution pension plan are recognised as

expenses in the income statement for the financial period they are attributed to.

Employee benefit expenses

EUR million

1 Feb 2022 - 31 Jan 2023

1 Feb 2021 - 31 Jan 2022

Wages and salaries

24.0

21.7

Pension costs

4.2

3.8

Social security costs

0.9

Total

29.0

26.4

Personnel on average and at the end of reporting period:

1 Feb 2022 - 31 Jan 2023

1 Feb 2021 - 31 Jan 2022

Number of employees at the end of the

period, full-time equivalent

693

663

Personnel on average

806

788

Management remuneration

The management consists of the Board of Directors, the CEO and the other management team. The

Board of Directors makes the decision on the remuneration of the CEO and the other management team.

The remuneration of the CEO and the management team consists of a fixed monthly salary, customary

fringe benefits and a share-based incentive plan for the key employees (see section Share-based

payments). The CEO or the other members of the management team do not belong to any short-term

incentive programme.

The company’s CEO and the other members of the management team are entitled to a statutory pension

benefit. The company does not have in place current additional pensions or collateral arrangements for

the CEO and the other members of the management team.

The CEO is entitled to statutory pension, and their retirement age is determined in accordance with the

legislation in effect. The period of notice of the CEO is six months and they are entitled to receive salary

for the period of notice. The period of notice of the other members of the management team is three

months. The members of the management team are entitled to their respective monthly salaries for the

period of notice.

In accordance with the Finnish Limited Liability Companies Act, the decision on the remuneration

payable to the members of the company’s Board of Directors is made by the shareholders in the Annual

General Meeting. The Board prepares a proposal on the remuneration of the Board members to the

Annual General Meeting. The remuneration of the Board of Directors is monetary. The Board of

Directors’ remuneration is based on an annual fee, and the members are not paid separate meeting

fees in addition to this. Travel expenses incurred by the Board meetings are reimbursed in accordance

with the company’s travel expense policy. Pension payments are not included in the remuneration of

the Board of Directors.

Management remuneration:

EUR million

1 Feb 2022 - 31 Jan 2023

1 Feb 2021 - 31 Jan 2022

CEO

Salary, other remuneration and benefits

0.2

Pension costs

0.0

Total

0.2

Group management team excl. CEO

Salary, other remuneration and benefits

0.8

Pension costs

0.1

Total

1.0

0.9

The Board of Directors

Timo Mänty, Chairman of the Board of Directors

0.1

0.0

Gustav Bard*

0.0

Tomas Franzén

0.0

Bent Holm**

0.0

Rasmus Molander

0.0

Markku Tuomaala

0.0

Total

0.2

0.1

Total management team and the Board of

Directors

1.4

1.2

*Member of the Board until 17 May 2022

** Member of the Board from 17 May 2022

Share-based payments

Accounting principle

The fair value of share-based payments is measured on the day which the share-based payment plan

is agreed upon the counterparties. Fair value of share-based payments is recognised as an expense

over the vesting period. The settlement, if the set targets are met, is a combination of shares and cash.

Share-based payments to be settled in shares are recognised in equity and the payments to be settled

in cash are recognised as a liability. Such cash-settled share-based payments for which the employer

shall deduct, on behalf of the employee, from the share award such number of shares which covers

taxes and tax-like charges paid in cash, shall be classified in their entirety as equity-settled share-based

payments and thus, are recognised in equity.

Accounting estimates and judgements

The number of the shares to be granted are estimated at the end of each reporting period. The

evaluation considers the turnover of persons and other factors affecting the number of shares to be

granted. In addition, the measurement of the fair value of the plan and the parameters used in the

measurement require management judgement.

Share-based incentive plan

On 20 April 2022, decided to launch a new share-based incentive plan for the key employees of the

company. The aim of the plan is to align the objectives of the shareholders and the key employees in

order to increase the value of the company in the long-term. The plan is intended to encourage key

employees to personally invest in the company’s shares, to steer them toward achieving the company’s

strategic objectives, to retain them at the company, and to offer them a competitive reward plan that is

based on acquiring, earning and accumulating Puuilo shares.

The Performance Matching Share Plan 2022—2024 includes one performance period, spanning

approximately financial years 2022—2024. The performance criteria are the Total Shareholder Return

of the Puuilo share (TSR) and the Adjusted EBITA of the Puuilo Group. The achievement of the targets

set for the performance criteria will determine the proportion out of the maximum reward that will be paid

as reward to participants. The prerequisite for participation in the plan and receiving reward on the basis

of the plan is that a participant personally has acquired Puuilo shares up to the number determined by

the Board of Directors. Furthermore, payment of reward is based on the participant´s valid employment

or service upon reward payment.

Primarily, the rewards from the plan will be paid partly in the company’s shares and partly in cash by

the end of May 2025. The cash proportion is intended to cover taxes and tax-related costs arising from

the reward to the participant. As a rule, no reward will be paid, if a participant´s employment or service

terminates before the reward payment. The CEO and other members of the Management Team are

obliged to keep the shares paid as a reward for twelve (12) months after the reward payment.

The target group of the plan consisted of a maximum of 75 persons, including the CEO, members of the

Management Team, Store Managers and other key personnel. The rewards to be paid on the basis of

the plan correspond to the value of an approximate maximum total of 315,000 Puuilo Plc shares,

including also the proportion to be paid in cash. The final number of shares will depend on the

participants’ personal share acquisitions and the achievement of the targets set for the performance

criteria.

The total cost of the share plan is recognised over the performance period, which is 34 months. The

Performance period of 2022-2024. The impact of the share-based compensation plans on the profit for

the financial year 2022 was EUR 0.2 million (-). At the end of the reporting period, the amount to be

recognised as expense for the financial years 2022−2024 is estimated at a total of EUR 0.7 million. The

actual amount may differ from the estimate.

Assumptions applied in determining the fair value of share award:

Grant date and fair value of share-based payments

Performance period 2022-2024

Grant date

3 June 2022

Grant date fair value of the share award, EUR

4.43

Grant date share price, EUR

5.34

Performance period start date

3 June 2022

Performance period end date

31 March 2025

Commitment period start date

3 June 2022

Commitment period end date (Management Team)

31 March 2026

Commitment period end date (Other)

31 March 2025

Assumptions applied in determining the fair value of share award:

Performance period 2022-2024

Maximum number of share awards to be granted (pcs)*

315,000

Number of plan participants at the end of the reporting period

Share price at the end of the reporting period

6.32

Assumed fulfilment of the performance criteria

82.5%

Forfeiture rate

* Gross number of shares netted with the applicable withholding tax. The net amount will be paid in shares.

Note 2.4 Income taxes

Accounting policy

Income tax comprises of the current income taxes and deferred taxes for the financial period. The

income tax is recognised in the income statement. The tax effect of the items recognised directly in

equity is, correspondingly, recognised as a part of equity.

The current taxes consist of the expected tax payable on the taxable income for the financial period,

based on the tax rates enacted or in practice enacted by the closing of the accounts and any taxes

payable for the previous year.

Deferred tax is calculated based on temporary differences between the carrying amounts and the

carrying value of assets and liabilities, as well as on confirmed losses to the extent that it is probable

that these can be utilised against future taxable income. Deferred tax is determined using tax rates (and

laws) which have been enacted or in practice enacted by the end of the financial period and which are

expected to apply when the related deferred tax asset is realised, or the deferred tax liability is settled.

Deferred tax is not recognised for temporary differences related to initial recognition of goodwill.

Deferred tax assets and liabilities are netted to the extent that the company has a legally enforceable

right to net current tax assets and liabilities and when the deferred taxes are related to the taxes of the

same tax authority. Tax assets and tax liabilities based on the taxable income for the period are netted

when the organisation has a legally enforceable right, and it intends either to settle on a net basis or to

realise the asset item and settle the liability simultaneously.

EUR million

1 Feb 2022 - 31 Jan 2023

1 Feb 2021 - 31 Jan 2022

Current income tax on profits for the year:

9.2

8.1

Total current income tax

9.2

8.1

Deferred income tax:

Change in deferred tax assets

-0.2

0.1

Change in deferred tax liabilities

-0.2

-0.1

Total deferred tax

-0.4

0.0

Income tax expense

8.8

8.0

Reconciliation of the tax expense recognised in the consolidated income statement and the taxes

calculated using the Finnish tax rate (20% for all financial periods):

EUR million

1 Feb 2022 - 31 Jan 2023

1 Feb 2021 - 31 Jan 2022

Profit before tax

43.9

39.9

Tax calculated at domestic tax rate of 20 %

8.8

8.0

Income not subject to tax

0.0

Expenses not deductible for tax purposes

0.1

0.0

Taxes in income statement

8.8

8.0

Feb

Recognised

through profit

or loss

Recognised

in equity

Jan

Reporting period 2022

Deferred tax assets

Difference between accounting depreciation and tax

depreciation

0.0

Leases

0.5

0.1

0.6

Share-based incentive plan

0.0

Total

0.5

0.1

0.6

Reporting period 2022

Deferred tax liabilities

Intangible assets

3.1

-0.2

2.9

Difference between accounting depreciation and tax

depreciation

0.0

Arrangement fees of loans from financial institutions

0.0

Total

3.2

-0.2

3.0

Feb

Recognised

through profit

or loss

Recognised

in equity

Jan

Reporting period 2021

Deferred tax assets

Difference between accounting depreciation and tax

depreciation

0.1

0.0

0.1

Leases

0.4

0.1

0.5

Net interest from previous financial year, deductible during the

financial year

0.2

-0.2

Total

0.6

-0.1

0.5

Reporting period 2021

Deferred tax liabilities

Intangible assets

3.4

-0.2

3.1

Difference between accounting depreciation and tax

depreciation

0.0

Arrangement fees of loans from financial institutions

0.2

-0.2

0.0

Listing expenses

0.3

-0.3

Total

3.6

-0.1

-0.3

3.2

3 WORKING CAPITAL

Note 3.1 Inventories

Accounting policy

The cost of inventories, i.e. goods intended for retail, corresponds to the purchasing cost of the product

in question determined using the weighted average cost method. The cost of finished goods comprises

all costs of purchase, including direct freight and handling costs. 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 the estimated necessary costs of sales. The cost of inventory does not include

borrowing costs.

Key judgements and discretionary solutions – Inventory valuation

The Group regularly reviews inventories for possible obsolescence and turnover, and for possible

reduction of the net realisable value below cost and recognises a write-down of inventory when

necessary. Such reviews require estimates of future demand for products. Possible changes in these

estimates may cause changes in inventory measurement in future periods.

EUR million

31 Jan 2023

31 Jan 2022

Finished goods

86.1

80.3

Goods in transit

3.1

10.6

Prepayments

0.7

1.3

Total

89.9

92.2

The balance sheet valuation of inventories on the balance sheet date includes a write-down of

inventories for obsolescent and slowly moving products, with the impairment of EUR 0.5 million on 31

January 2023 (EUR 0.4 million).

The cost of goods sold has been presented in Note 2.3.

Note 3.2 Trade and other receivables

Accounting policy

Trade receivables are receivables that consist of products sold to customers in the ordinary course of

business. They fall due within 14–30 days and are, therefore, all classified as current. Trade receivables

are initially recognised in the amount of the invoice issued to the customer. Trade receivables do not

include financial components.

The fair value of current trade and other receivables are estimated to equal their book values due to

their short maturities.

Trade and other receivables consist of the following:

EUR million

31 Jan 2023

31 Jan 2022

Trade receivables

4.1

4.0

Other receivables

0.0

Prepaid expenses

1.3

1.4

Total

5.4

The aging analysis of trade receivables

EUR million

31 Jan 2023

31 Jan 2022

Not overdue

3.8

3.7

Overdue

Less than 14 days

0.2

0.3

14-30 days

0.0

31-60 days

0.0

Over 60 days

0.0

Total

4.1

4.0

A credit loss of EUR 0.0 million was recognised at profit or loss on trade receivables in the 2022 financial

period (EUR 0.0 million). The receivables do not involve significant credit risk concentrations and the

maximum amount of the credit risk corresponds to the carrying amount of the receivables at the end of

the financial period. Trade receivables include an impairment amounting to EUR 0.0 million (EUR 0.0

million). The expected credit loss risk is not significant due to the low volume of invoicing sales. Credit

risk is described in more detail in Note 5.4.

Material items included in prepaid expenses

EUR million

31 Jan 2023

31 Jan 2022

Annual bonuses for purchases

0.5

0.4

Product reclamation

0.0

0.2

Social security costs

0.2

Expenses paid in advance

0.6

0.4

Other

0.0

0.2

Total

1.3

1.4

Note 3.3 Trade and other payables

Accounting policy

Trade payables and other payables concern goods and services which Puuilo has received prior to the

end of financial period which were not paid by the end of the financial period. The amounts are

unsecured and mainly paid according to the payment term of 30–60 days. Trade and other payables

are presented as current liabilities if they are due within 12 months after the financial period. The carrying

amounts of trade payables and other payables are considered to be the same as their fair values, due

to their short-term nature.

Trade and other payables consist of the following:

EUR million

31 Jan 2023

31 Jan 2022

Current

Trade payables

16.1

13.2

Advances received

0.3

Income tax liabilities

2.0

4.1

Other current liabilities

3.7

5.2

Accrued expenses

6.2

5.8

Total current

28.2

28.6

Other current liabilities mainly consist of value added tax liabilities and withholding tax liabilities.

Material items included in current accrued expenses

EUR million

31 Jan 2023

31 Jan 2022

Salary accruals

1.6

1.4

Social security costs

1.3

Interest expenses

0.3

0.1

Holiday pay expenses

3.0

3.1

Total

6.2

5.8

4 CAPITAL EMPLOYED

Note 4.1 Goodwill

Accounting policy

Goodwill is measured at acquisition cost less any accumulated impairment losses. At the time of

acquisition, goodwill is allocated to those cash-generating units which are considered to benefit from

the acquisition. Goodwill is not subject to annual amortisation, because it is considered to have an

indefinite useful life.

Goodwill is tested for impairment annually, or more frequently if events or changes in circumstances

indicate that goodwill might be impaired. An impairment loss is recognised for the amount by which the

asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an

asset item’s fair value less costs of disposal or the higher of value in use. Often it is not possible to

estimate the recoverable amount for an individual asset. In the case of goodwill, the recoverable amount

is determined for the cash-generating unit to which the goodwill belongs. Impairment loss recognised

for goodwill is not reversed under any circumstances.

Key judgements and estimates in goodwill impairment testing

Puuilo’s goodwill has arisen in connection with the acquisition of Puuilo business in 2015 when the

current Puuilo Group was established. Therefore, the entire goodwill was generated from a single

acquisition covering the entire business of Puuilo. At the end of the financial period, goodwill stood at

EUR 33.5 million (EUR 33.5 million).

Goodwill is tested for impairment annually, or more frequently if events or changes in circumstances

indicate that goodwill was impaired. The recoverable amount of a cash-generating unit is determined

based on the value in use calculation which requires the use of assumptions. Estimates and judgements

are required when determining the components of the recoverable amount. These components include

the discount rate, the terminal growth rate, net sales and the adjusted operating profit before the

amortisation of the trademark (adjusted EBITA). The discount rate reflects the time value of money and

the market risk premiums. The risk premiums reflect risks and uncertainties for which the future cash

flow estimates have not been adjusted. The calculations use cash flow projections based on financial

budgets approved by management covering a four-year period. Cash flows beyond the four-year period

are extrapolated using the estimated growth rate.

Goodwill impairment test

Puuilo’s management has been monitoring goodwill on the Group level from the date the goodwill was

generated. Therefore, for the purpose of annual goodwill impairment testing, management has discrete

and reliable financial information available on the Group level. Puuilo’s management considers the

Group to consist of one cash-generating unit, and therefore, goodwill is tested for impairment on the

Group level.

The key assumptions of the impairment calculations are the estimated growth rate of net sales and the

estimated EBITA level for the period of four years. Cash flows beyond this period have been

extrapolated based on the forecast growth of 2.0% (2.0%). The discount rate used is the weighted

average cost of capital (WACC) after tax. The WACC formula inputs are the risk-free rate of return,

market risk premium, industry-specific beta factor, target capital structure and borrowing cost. The pre-

tax WACC used was 12.2% (11.2%). The changes in the WACC used in the goodwill test arise from the

higher risk-free interest rate than in the comparison period. No goodwill impairment has been recognised.

In addition, management has estimated that no reasonably possible change in the key assumption of

the impairment testing would have resulted in a goodwill impairment.

Note 4.2 Intangible assets

Accounting policy

Intangible assets comprise of the capitalised costs of the Puuilo trademark, the ERP system and the

other IT system. Their carrying amount corresponds to cost less accumulated amortisations and

impairment losses. The capitalised cost of the ERP system consists of invoices from external service

providers and license fees as well as Puuilo’s internal project work related to the implementation of the

new ERP system.

Other intangible assets are amortised on a straight-line basis over their estimated useful lives as follows:

Puuilo trademark 20 years

Software and licences 5 years

The costs related to the maintenance of IT systems and software are recognised in the financial period

during which they incur.

Key judgements and estimates in measurement of the Puuilo trademark

The useful life of the Puuilo trademark is estimated to be 20 years, and it represents the Group’s

assessment of the period over which the trademark is expected to generate cash flows to the Group.

The actual useful life may, however, be shorter or longer, depending on changes in the operating

environment. Any identified changes in the useful life of the Puuilo trademark are reflected in the

amortisation period and the recognition of impairment losses, when needed.

The management assesses at each balance sheet date whether there is any indication that the value

of the Puuilo trademark may be impaired. For the Puuilo trademark, changes in the retail business

environment, for example, could be an indication of impairment. For the trademark, the recoverable

amount cannot be estimated on an asset-by-asset basis. As it is estimated that Puuilo has one cash-

generating unit, Puuilo’s trademark, like goodwill, is tested on the Group level.

The impairment is recognised through profit or loss. The impairment loss recognised earlier on an asset

item is reversed if the recoverable amount of the asset has increased. However, the maximum reversal

is the carrying amount that would have prevailed for the asset before the impairment was recognised.

EUR million

Goodwill

Intangible

rights

Other

intangible

assets

Total

Cost on 1 February 2022

33.5

24.0

7.0

64.6

Additions

0.8

Cost on 31 January 2023

33.5

24.0

7.8

65.4

Accumulated depreciation and impairment on 1 February

2022

-8.4

-3.3

-11.7

Amortisation and impairment

-1.1

-1.6

-2.8

Accumulated amortisation and impairment on 31 January

2023

-9.5

-5.0

-14.5

Net carrying amount on 1 February 2022

33.5

15.7

3.7

52.9

Net carrying amount on 31 January 2023

33.5

14.6

2.8

50.9

EUR million

Goodwill

Intangible

rights

Other

intangible

assets

Total

Accumulated depreciation and impairment on 1 February

2021

33.5

24.0

3.9

61.5

Additions

3.1

Cost on 31 January 2022

33.5

24.0

7.0

64.6

Cost on 1 February 2021

-7.2

-2.5

-9.8

Amortisation and impairment

-1.1

-0.8

-1.9

Accumulated amortisation and impairment on 31 January

2022

-8.4

-3.3

-11.7

Net carrying amount on 1 February 2021

33.5

16.8

1.4

51.8

Net carrying amount on 31 January 2022

33.5

15.7

3.7

52.9

No impairment was recognised in intangible assets during the financial period or the comparison period.

Note 4.3 Property, plant and equipment

Accounting policy

Property, plant and equipment consist mainly of store buildings and related leasehold improvements,

as well as machinery and equipment. They are measured at cost less accumulated depreciation and

impairment losses. The measurement of leased properties is covered in section 4.4 Leases. Historical

cost includes expenditure that is directly attributable to the acquisition of asset items or internally

developed assets and subsequent costs incurred by the replacement of parts that meet the criteria for

asset recognition. Depreciation is calculated on a straight-line basis over the estimated useful life of the

asset or, in the case of leasehold improvements and leased assets, over the period of the lease or the

useful life of the asset, whichever is shorter.

The estimated useful lives are as follows:

Buildings 15–30 years

Machinery and equipment 3–10 years

Other tangible assets 5–10 years

Leased assets over the lease term

Residual values, depreciation methods and useful lives are reviewed and adjusted, if needed, at the

end of each reporting period. An item of property, plant and equipment is derecognised upon disposal

or when no future financial benefits are expected from its use. Sales gains and losses are determined

by comparing disposal proceeds with the carrying amount of the disposed asset. Sales gains and losses

are recognised within other operating income or expenses in the income statement in the period on

which the disposal occurs. Sales gains are presented in Note 2.1.

The management assesses at each balance sheet date whether there is any indication that the value

of property, plant and equipment may be impaired. In the case that there is such evidence, an

assessment is made of the recoverable amount of the asset which is the higher of the fair value of the

asset less the costs of disposal or the value in use. In many cases, the recoverable amount cannot be

estimated on an asset-by-asset basis. In that case, the recoverable amount is determined for the cash-

generating unit to which the asset item belongs. Due to the nature of Puuilo’s operations, the Group has

only one cash-generating unit.

The impairment is recognised through profit or loss. The impairment loss recognised earlier on an asset

item is reversed if the recoverable amount of the asset has increased. However, the maximum reversal

is the carrying amount that would have prevailed for the asset before the impairment was recognised.

Puuilo’s property, plant and equipment is divided into owned and leased assets as follows. Leased

assets are covered in Note 4.4. Leases.

EUR million

31 Jan 2023

31 Jan 2022

Leased

53.0

44.4

Owned

2.6

2.3

Total

55.6

46.8

Changes in property, plant and equipment. The figures do not include changes in leases. Leases are

covered in Note 4.4.

EUR million

Buildings and

structures

Machinery

and

equipment

Total

Cost on 1 February 2022

0.8

5.2

6.0

Additions

1.2

Disposals

0.0

Cost on 31 January 2023

0.8

6.4

7.2

Accumulated depreciation and impairment on 1 February 2022

-0.6

-3.0

-3.6

Depreciation and impairment

-0.1

-0.8

-1.0

Accumulated depreciation and impairment on 31 January 2023

-0.7

-3.9

-4.6

Net carrying amount on 1 February 2022

0.1

2.2

2.3

Net carrying amount on 31 January 2023

0.0

2.5

2.6

EUR million

Buildings and

structures

Machinery

and

equipment

Total

Cost on 1 February 2021

0.8

4.3

5.1

Additions

0.9

Disposals

0.0

Cost on 31 January 2022

0.8

5.2

6.0

Accumulated depreciation and impairment on 1 February 2021

-0.5

-2.3

-2.8

Depreciation and impairment

-0.1

-0.7

-0.8

Accumulated depreciation and impairment on 31 January 2022

-0.6

-3.0

-3.6

Net carrying amount on 1 February 2021

0.3

2.0

2.2

Net carrying amount on 31 January 2022

0.1

2.2

2.3

Depreciation, amortisation, and impairment

EUR million

1 Feb 2022 - 31 Jan 2023

1 Feb 2021 - 31 Jan 2022

Depreciation, amortization and impairment by asset class

Intangible rights

1.1

Other intangible assets

1.6

0.8

Buildings and structures

0.1

Machinery and equipment

0.8

0.7

Total

3.7

2.8

Right-of-use assets

9.8

8.7

Depreciation, amortization and impairment total

13.5

11.5

No impairment was recognised on property, plant and equipment during the financial period or the

comparison period.

Depreciation of right-of-use assets is covered in greater detail in Note 4.4.

Note 4.4 Leases

Accounting policy

Puuilo’s leases mainly consist of store building and office leases, as well as machinery and equipment

used in the business operations and IT leases. At the inception of the contract, the Group makes an

assessment of whether the contract is a lease or contains a lease. A contract is deemed to be a lease

if it conveys the right to control the use of an identified asset for a period of time in exchange for

consideration. At the inception of a lease, Group recognises a right-of-use asset as well as a lease

liability. Puuilo has not used the exemptions for short-term leases (lease term less than 12 months) or

low value leases permitted by IFRS 16.

Lease liability is measured at the present value of those lease payments that have not been paid at the

lease commencement date. The lease payments are discounted at the interest rate implicit in the lease

if the rate in question is readily determinable. If the rate is not readily determinable, the Company’s

incremental borrowing rate will be used. Puuilo has used an interest rate implicit in the lease as the

discount rate in machinery and equipment leases and the incremental borrowing rate in the valuation of

the store and office leases. The discount rates vary between 2.5% and 4.0%.

The lease term used in the measurement of lease liability is the non-cancellable period of a lease. The

lease term includes a period covered by an option to extend and/or to terminate the lease if it is

reasonably certain that the lessee will use the extension option or does not use the option to terminate.

The lease term of the leases valid until further notice is based on the probable lease term as estimated

by the management.

Each lease payment is allocated between amortisation of the lease liability and finance cost. The finance

costs are recognised at profit or loss over the lease period so as to produce a constant periodic rate of

interest on the remaining balance of the liability for each period.

The right-of-use asset is measured at cost at the commencement date of the lease. The cost comprises

of the amount of the initial measurement of the lease liability at the commencement date, any lease

payments at or before the lease commencement date, as well as any restoration costs. Lease payments

for store and office leases are mainly tied to the cost-of-living index. Lease liability is adjusted when the

index changes. Right-of-use assets are adjusted with the items resulting from the remeasurement of the

lease liability.

The right-of-use assets based on leases are depreciated on a straight-line basis over the shorter of the

lease term or their estimated useful lives. The depreciations are made starting from the date the asset

item was commissioned. The estimated useful lives are as follows:

Machinery and equipment: 3–5 years

Stores: 5–10 years

Offices: 1–4 years

Puuilo has asset restoration obligations related to leased store buildings. Puuilo has recognised a

provision for estimated restoration costs. More information is provided in Note 4.5.

Key judgements and estimates applied in accounting for the leases

When determining the lease term, the management must consider all facts and circumstances that

create an economic incentive to exercise an extension option. Judgement is also used in determining

the lease term for leases that are valid until further notice. Extension options are included in the lease

term only if it is reasonably certain that the option will be used. The lease term of the leases valid until

further notice is based on the probable lease term as estimated by the management.

The Group leases various properties as well as machinery and equipment. Leases of store properties

are typically made for fixed periods of 5 to 10 years but may also include extension options. The

management has assessed the use of each extension option and if the use of an option has been

assessed to be reasonably certain, the option has been included in the lease term. The assessment of

the use of extension options is affected by, among other things, the length of the original lease, the

location and the condition of the property and the amount of rent. Lease terms are negotiated on an

individual basis and they can include other terms and conditions.

When determining the appropriate incremental borrowing rate to be applied in the calculation of the

lease liability of property leases.

Right-of-use assets

EUR million

31 Jan 2023

31 Jan 2022

Premises and facilities

51.9

43.3

Machinery and equipment

1.2

1.1

Total

53.0

44.4

Lease liabilities

EUR million

31 Jan 2023

31 Jan 2022

Non-current

43.5

36.3

Current

9.9

8.0

Total

53.4

44.3

The additions to the right-of-use assets during the financial period that ended were EUR 10.2 million

(EUR 6.6 million).

Maturity analysis, contractual discounted cash flows

EUR million

31 Jan 2023

31 Jan 2022

Less than one year

9.9

8.0

From one to five years

30.8

25.4

Over five years

12.7

11.0

Total

53.4

44.3

Maturity analysis, contractual undiscounted cash flows

EUR million

31 Jan 2023

31 Jan 2022

Less than one year

11.4

9.2

From one to five years

34.1

28.0

Over five years

13.4

11.1

Total

58.9

48.4

Amounts recognized in the statement of profit or loss

Depreciation charge of the right-of-use asset

EUR million

1 Feb 2022 - 31

Jan 2023

1 Feb 2021 - 31

Jan 2022

Premises and facilities

9.1

8.0

Machinery and equipment

0.7

Total

9.8

8.7

Interest expenses included in the finance cost

1.4

1.3

Cash flow

Total cash outflow for leases

10.0

8.9

Liability for lease agreements that will enter into force in the future are presented in Note 5.7.

Note 4.5 Provisions

Accounting policy

A provision is recognised when the Group has a legal or actual obligation as a result of past events, and

it is probable that a cash outflow will be required to settle the obligation and the amount can be estimated

reliably. Provisions are not recognised on any estimated future operating losses. The interest expense

arising from the discounting of provisions to their current value is recognised in financial expenses.

Provisions are allocated between amounts expected to be realised within 12 months of the balance

sheet date (current) and amounts expected to be realised later (non-current).

Key judgements and estimates applied in restoration obligation

Puuilo’s provisions consist of restoration provisions of leased store premises. The provisions include the

estimated costs of restoring the store to its original state (asset retirement obligation). A corresponding

asset item of an amount equivalent to the provision is recognised in property, plant and equipment and

depreciated during the useful life of the asset. The provision and the corresponding asset item are

recognised in the balance sheet at the beginning of the lease term, in other words, at the same time as

the lease is recognised in the balance sheet.

The provisions for restoration obligations related to stores are determined on the basis of the net present

value of Puuilo’s total estimated unavoidable dismantling costs. The estimates are based on the future

estimated cost level, taking into account the effect of inflation, the cost development and discounting.

Assumptions are also used when assessing the time periods for which restoration costs are incurred.

Because the actual outflows can differ from the estimates due to changes in technology, prices and

conditions and can take place after many years in the future, the carrying amounts of the provisions are

regularly reviewed and adjusted to take into account any such changes.

The management estimates that the restoration obligations will be realised within 1–10 years.

The changes in the restoration provisions during the financial year:

Provisions

EUR million

On 1 February 2022

0.7

Additions

0.1

Amounts charged against provision

0.0

On 31 January 2023

0.8

of which

Current

Non-current

0.8

Total

0.8

EUR million

On 1 February 2021

0.6

Additions

0.1

Amounts charged against provision

0.0

On 31 January 2022

0.7

of which

Current

Non-current

0.7

Total

0.7

5 CAPITAL STRUCTURE AND FINANCING

Note 5.1 Capital management and net debt

The Group’s objective for the capital management is to safeguard the ability to continue as a going

concern, so that it can continue to provide returns for the shareholders and benefits for other

stakeholders and maintain an optimal capital structure in order to reduce the cost of capital.

The capital structure is regularly assessed by the Board of Directors when the Board monitors equity

and the level of net debt.

Interest-bearing net debt is calculated based on the consolidated balance sheet as follows:

EUR million

31 Jan 2023

31 Jan 2022

Non-current financial liabilities

Loans from financial institutions

69.9

69.8

Lease liabilities

43.5

36.3

Total non-current financial liabilities

113.4

106.1

Current financial liabilities

Lease liabilities

9.9

8.0

Total current financial liabilities

9.9

8.0

Total financial liabilities

123.2

114.1

Cash and cash equivalents

28.8

16.5

Net debt

94.4

97.6

Changes in net debt

Non-cash changes

EUR million

Net debt 1

Feb. 2022

Cash flows

New lease

agreements

Other

changes

Net debt 31

Jan. 2023

Cash and cash equivalents

16.5

12.3

28.8

Proceeds from loans from financial

institutions

8.0

Repayments of loans from financial

institutions

-8.0

Loans from financial institutions

69.8

0.0

0.1

69.9

Lease liabilities

44.3

-8.6

10.2

7.4

53.4

Net debt

97.6

3.6

10.2

7.5

94.4

Non-cash changes

EUR million

Net debt 1

Feb. 2021

Cash flows

New lease

agreements

Other

changes

Net debt 31

Jan. 2022

Cash and cash equivalents

11.2

5.4

16.5

Proceeds from loans from financial

institutions

70.0

Repayments of loans from financial

institutions

-91.0

Loans from financial institutions

89.9

-21.0

0.9

69.8

Lease liabilities

43.1

-7.6

6.6

2.2

44.3

Net debt

121.8

-23.2

6.6

3.1

97.6

Other changes include non-cash flow changes and interest payments, which are presented as operating

cash flows in the statement of cash flows.

Puuilo has a Group financing agreement totalling EUR 90 million. The refinancing agreement consist of

terms loans totalling EUR 70.0 million and a credit limit of EUR 20.0 million. The credit limit amounting

to EUR 8.0 million has been used during the financial period. The credit limit has been repaid during the

2022. (the limit has not been used during the comparison period). The loan will mature in full in June

2025.

The financing agreement includes standard covenants and terms and conditions concerning situations

in which the loan would mature. The agreement terms and conditions concerning the financial covenants

measure the company’s indebtedness by means of the net debt to EBITDA ratio. In addition, the interest

rate margin of the financing agreement is tied to the ratio of net debt and EBITDA. The loans under the

financing agreement are unsecured.

Compliance with the covenants and loan terms and conditions is monitored as part of the Group’s

financial reporting, and they are reported to the Board of Directors monthly and to the lenders on a

quarterly basis. No covenants were breached during the financial period or the comparison period.

Note 5.2 Equity

Puuilo’s equity consists of the share capital, the reserve for invested unrestricted equity, and retained

earnings. All of the company’s shares are presented as share capital. If the company purchases its

own shares, the purchase will be deducted from equity.

Puuilo Plc’s share capital is EUR 80,000 (EUR 80,000). The company has one type of shares. Each

share conveys one vote in the general meeting and a similar dividend. The shares do not have a nominal

value.

The reserve of invested non-restricted equity, EUR 29.0 million (EUR 29.0 million), includes the share

subscription prices to the extent not designated to be included in share capital.

Puuilo Group held 315,000 treasury shares on the balance sheet date of 31 January 2023 or (no treasury

shares in the comparison period). The acquisition cost of the shares, approximately EUR 1.5 million,

have been deducted from retained earnings in equity.

The Annual General Meeting held on 6 May 2021 decided on a share issue to the shareholders without

payment (“a split”). In the share issue without payment, new shares were issued in the proportion of

holding so that one (1) new share was issued per each existing share. After the share issue, the number

of the company’s shares totalled 80,215,860. The issued 40,107,930 shares were entered in the Trade

shares. At the end of the financial year, the number of shares was 84,776,953.

In the 2022 financial period, the total amount of dividends distributed was EUR 25.4 million (EUR 0.30

per share). No dividends were paid in the 2021 financial period. The dividend proposed by the Board of

Directors to the Annual General Meeting has not been deducted from equity. Instead, dividends are

recognised on the basis of the resolution by the Annual General Meeting.

Share issue in connection to the IPO 2021

Trading in Puuilo Plc’s shares began on 24 June 2021. The listing consisted of a share issue and a

share sale. In the IPO, 4,561,093 new shares were issued and the total number of the company’s shares

after the listing was 84,776,953. The new shares were registered in the Finnish Trade Register on 23

June 2021. Puuilo received EUR 30.0 million in gross assets from the IPO, which were recognised in

the invested unrestricted equity fund. The company’s listing expenses in the financial year 2021 were

EUR 4.2 million, of which listing expenses recognised in equity were approximately EUR 1.4 million less

a tax effect of EUR 0.3 million. EUR 2.8 million of the expenses were recognised in profit and loss.

Note 5.3 Earnings per share

Accounting policy

The undiluted earnings per share was calculated by dividing the profit in accordance with the Group’s

income statement by the weighted average of the issued shares. The earnings per share adjusted by

the dilution effect is calculated otherwise in the same manner, but the weighted average takes into

account the diluting effect caused by the conversion of diluting potential shares to shares.

The earnings per share and the diluted earnings per share are shown in the following table:

EUR million

1 Feb 2022 -

31 Jan 2023

1 Feb 2021 -

31 Jan 2022

Basic earnings per share

Profit attributable to the owners of the Company

35.1

31.9

Profit used to determine basic earnings per share

35.1

31.9

Weighted average number of shares outstanding during the period

84 586 851

83 002 500

Basic earnings per share (EUR)

0.41

0.38

Diluted earnings per share

Profit used to determine diluted earnings per share

35.1

31.9

Weighted average number of shares outstanding during the period

84 586 851

83 002 500

Diluted earnings per share (EUR)

0.41

0.38

Note 5.4 Financial risk management

The Group’s operation exposes it to a variety of financial risks: a foreign exchange risk, cash flow interest

rate risk, credit risk and liquidity risk. The Group’s financial risk management strives to ensure liquidity

and minimize potential adverse effects of market fluctuations and unpredictability to Group’s financial

performance, balance sheet and cash flows.

The Board of Directors is responsible for the principles for overall risk management. The Group

management team is responsible for the practical implementation of financial risk management. This

includes the identification and assessment of risks and the tools needed to protect from them.

Foreign exchange risk

Puuilo is exposed to exchange rate risks through its purchases of goods. Unfavourable changes in

foreign exchange rates may increase the cost of products purchased in currencies other than euro, and

Puuilo may not be able to pass all such costs on to sales prices. Puuilo’s main foreign currency is the

US dollar. In the financial period that ended on 31 January 2023, approximately 90% of Puuilo’s

purchases were made in euros and approximately 10% in US dollars (80% and 20%, respectively, in

the 2021 financial period). Puuilo does not hedge its purchases in dollars. The table below shows

Puuilo’s transaction position at the balance sheet date and the sensitivity analysis. The sensitivity

analysis of the transaction position shows the impact of the Group’s order book on profit or loss before

taxes if the exchange rate change was +/-10%. The decrease in the transaction position arises from the

levelling off of the import purchases.

EUR million

31 Jan 2023

31 Jan 2022

Transaction exposure

6.3

9.5

Open exposure

6.3

9.5

Change +10%

-0.6

-1.1

Change -10%

0.7

0.9

Interest rate risk

The Group’s loans from financial institutions have variable interest rates, which exposes the Group’s

cash flow to interest rate risk. The carrying amount of these loans was EUR 70 million on 31 January

2023 (EUR 70 million). The Group has not used interest rate hedging, as the management has assessed

the interest rate risk to be insignificant, taking into account the moderate interest rate level increase.

Puuilo’s management assesses that the interest level increase will not have a significant effect on

Puuilo’s business operations or solvency. If necessary, Puuilo can use its cash assets to make additional

repayments in order to manage interest expenses.

The Group’s exposure to interest rate risk is presented in the table below:

EUR million

31 Jan 2023

31 Jan 2022

Fixed interest rate

Loans from financial institutions

Lease liabilities

53.4

44.3

Floating interest rate

Cash and cash equivalents

1.2

Loans from financial institutions

69.9

69.8

Floating interest rate position, total

69.9

71.0

If interest rates had been 1.0 percentage points higher and all other factors were unchanged, the post-

tax profit for the financial period would have been EUR 0.4 million (EUR 0.3 million) lower as a result of

interest expenses of the floating rate interest-bearing liabilities. If interest rates had been 1.0 percentage

points lower and all other factors were unchanged, the post-tax profit for the financial period would have

been EUR 0.1 million higher as a result of interest expenses of the floating rate interest-bearing liabilities.

The decrease in the interest rate level would not have affected profit after tax, as the reference rate was

negative during the comparison period. The sensitivity analysis is based on the risk position at the end

of each financial period.

Credit risk

The Group’s credit risk consists of credit risk related to business risks and the counterparty risk of other

financial instruments. The majority of the Group’s sales are cash transactions, sales on credit is possible

only to B2B customers. Trade receivables from B2B customers do not include a credit risk concentration,

as the Group’s customer base is widespread, and no customer or customer group is dominant from the

Group’s perspective. Credit losses affecting the result for the financial periods presented in these

financial statements were insignificant. Counterparty risk related to cash and cash equivalents is

managed by depositing cash and cash equivalents in large Nordic banks with solid ratings. The Group’s

cash and cash equivalents are fully available to the Group.

The maximum amount of the Group’s credit losses corresponds to the carrying amount of the financial

assets at the end of the financial period. The information is presented in Note 5.5.

Liquidity risk

Puuilo’s CFO monitors the Group’s liquidity situation and reports regularly to the Board of Directors and

CEO to ensure that the Group has sufficient cash for business needs and loan management. The Group

follows the financing required in business operations by analysing the operating cash flow forecasts and

inventory turnover in order to have sufficient liquid assets to fund the operations and to repay loans from

the financial institutions at maturity.

At the end of the financial period, the Group’s cash and cash equivalents totalled EUR 28.8 million (EUR

16.5 million). At the end of the financial period, the Group’s trade receivables totalled EUR 4.1 million

(EUR 4.0 million), including bank and credit card receivables. The Group had a revolving credit facility

of EUR 15.0 million (credit limit of EUR 2.3 million and revolving credit limit facility of EUR 15.0 million).

The revolving credit facility amounting to EUR 8.0 million has been used during the financial period. The

credit facility limit has been repaid during 2022 and the withdrawable amount have corresponded to the

total amounts of the credit facility. The credit facility has not been used during the comparison period.

In addition to financial assets and liabilities, Puuilo’s liquidity is based on cash flow from operations and

management of the change in net working capital. The net working capital is mainly affected by the

inventory turnover and trade payables. Puuilo’s net cash flow generated from operating activities was

EUR 50.4 million (EUR 9.7 million) in the 2022 financial period. A significant portion of Puuilo’s net sales

is generated from sales paid with cash or with credit cards. In addition, the company has some trade

receivables mainly from sales to corporate customers, as described above. Puuilo has a strong cash

flow generated from the operating activities, which it plans to use to finance the payments described in

the table below. If necessary, Puuilo can also utilise its unused revolving credit facility in liquidity

management.

The table below shows the Group’s financial liabilities by maturity group based on the remaining maturity

at the balance sheet date. The amounts presented are contractual, undiscounted cash flows.

EUR million

Under 1

year

1-2 years

3-5 years

Over 5

years

Contractual

undiscounted cash

flows

Carrying

value

31 Jan 2023

Non-derivatives

Loans from financial

institutions

2.7

71.3

76.6

69.9

Lease liabilities

11.4

10.5

23.6

13.4

58.9

53.4

Trade payables

16.1

Other payables

0.3

Total

30.4

13.1

94.9

13.4

151.9

139.6

EUR million

Under 1

year

1-2 years

3-5 years

Over 5

years

Contractual

undiscounted cash

flows

Carrying

value

31 Jan 2022

Non-derivatives

Loans from financial

institutions

0.8

70.4

71.9

69.8

Lease liabilities

9.2

8.6

19.5

11.1

48.4

44.3

Trade payables

13.2

Other payables

0.1

Total

23.3

9.4

89.8

11.1

133.5

127.4

Other payables do not include advances received, income tax liabilities, value-added tax liabilities as

well as liabilities related to salaries and social security expenses, as they are not classified as financial

liabilities. Other payables in the table include accrued interest related to the loans from financial

institutions. Other accrued expenses are not classified as financial liabilities and are not included in the

table. Other liabilities are presented in Note 3.3.

Note 5.5 Financial assets and liabilities

Accounting policy

Financial assets

The Group’s financial assets consist of trade receivables, other financial receivables and cash and cash

equivalents.

The Group applies a simplified approach in accordance with IFRS 9 that takes into account the expected

life of receivables for all trade receivables and contractual receivables. The Group management

estimates that the credit risk of trade receivables is insignificant. The IFRS 9 impairment requirement

also applies to cash, but the impairment loss is insignificant.

Trade receivables are written down if the Group does not have a reasonable expectation of recovery.

Indicators that there is no reasonable expectation of recovery include, amongst others, include the

debtor’s non-commitment to a repayment plan.

Impairment losses on trade receivables are presented as a net amount in operating profit. Subsequent

payments on previously recognised credit losses are recognised in the same line item.

Cash and cash equivalents include cash on hand as well as bank deposits. Financial assets are held to

collect contractual cash flows. The contractual cash flows consist exclusively of principal and interest

on the principal amount outstanding. Financial assets are initially measured at fair value and

subsequently measured at amortised cost. Impairment losses are presented in other operating

expenses in the statement of comprehensive income.

Financial assets are derecognised when the rights to receive cash flows from the financial asset have

expired or the item included in the financial assets has been transferred from the Group, and when the

risks related to ownership have been transferred from the Group.

Cash and cash equivalents

EUR million

31 Jan 2023

31 Jan 2022

Cash in hand and at bank

28.8

16.5

Total

28.8

16.5

Key judgements and estimates applied in accounting for credit losses

Trade receivables for the financial period or the comparison period did not include material overdue

receivables. The amount of trade receivables and impairment losses recognised on them has been

insignificant. In addition, the amount of the company’s trade receivables in relation to the volume of

business has been low, as a significant portion of the company’s sales is paid in the company’s stores

at the time of purchase. Due to the above, the Group management has exercised judgement and

estimated that the credit loss risk of trade receivables is not considered to be essential and has not

recognised the expected credit losses in the financial statements.

Financial liabilities

The financial liabilities include loans from financial institutions, accrued interests, lease liabilities and

trade payables.

Financial liabilities are initially recognised at their fair value less the transaction costs incurred. After the

initial recognition, financial liabilities are measured at amortised cost using the effective interest rate

method.

A financial liability is classified as current when it will be settled within 12 months from the reporting date

or when the Group does not have an unconditional right to defer settlement of the liability to more than

12 months after the reporting date. Financial liabilities which fall due within 12 months after reporting

date are classified as current, even if the long-term refinancing agreement has been completed after

the reporting date and prior to the approval of the financial statements. If a covenant is breached on or

before the reporting date with the effect that the liability becomes payable on demand, the liability is also

classified as current. If liabilities are classified as current due to a covenant breach, they are presented

in the amount to be redeemed.

A financial liability is derecognised from the balance sheet when it is discharged, cancelled or it expires.

Financial assets and liabilities by valuation category

EUR million, 31 Jan 2023

Measured at

amortised cost

Fair value through

profit or loss

Carrying

amount

Current financial assets

Trade receivables

4.1

Other financial assets

0.0

Cash and cash equivalents

28.8

Total

32.9

EUR million, 31 Jan 2023

Measured at

amortised cost

Fair value through

profit or loss

Carrying

amount

Non-current financial liabilities

Loans from financial institutions

69.9

Lease liabilities

43.5

Current financial liabilities

Lease liabilities

9.9

Trade payables

16.1

Accrued interests

0.3

Total

139.6

EUR million, 31 Jan 2022

Measured at

amortised cost

Fair value through

profit or loss

Carrying

amount

Current financial assets

Trade receivables

4.0

Other financial assets

0.6

Cash and cash equivalents

16.5

Total

21.1

EUR million, 31 Jan 2022

Measured at

amortised cost

Fair value through

profit or loss

Carrying

amount

Non-current financial liabilities

Loans from financial institutions

69.8

Lease liabilities

36.3

Current financial liabilities

Lease liabilities

8.0

Trade payables

13.2

Accrued interests

0.1

Total

127.4

Other financial assets include receivables related to annual discounts on purchases and product

complaints to be invoiced from suppliers. Other prepaid expenses are not classified as financial assets

and are therefore not presented in the table. Prepaid expenses are presented in more detail in Note 3.2.

Accrued liabilities include only accrued interest since other accrued liabilities are not classified as

financial liabilities. Other liabilities are presented in more detail in Note 3.3.

The carrying amounts of current items are estimated to substantially correspond to their fair values. The

fair values of the loans from financial institutions are as follows:

EUR million

Carrying amount

Fair value

31 Jan 2023

69.9

70.0

31 Jan 2022

69.8

70.0

The fair values of loans from financial institutions are based on cash flows discounted at the interest

rate on the reporting date. Loans from financial institutions are classified in level 3 of the fair value

hierarchy because they are determined by using non-observable inputs, such as own credit risk.

Financial assets and liabilities measured at fair value

The levels of the fair value hierarchy describe the extent to which the valuation method is based on

observable data. To determine fair values:

Level 1: Fair values are based on (unadjusted) quoted prices in active markets for identical assets or

liabilities.

Level 2: Financial instruments are not traded in an active and liquid market, but their fair values can be

calculated using market data.

Level 3: If one or more of the significant inputs are not based on observable market data, the instrument

is included in Level 3. This applies to unlisted equity securities.

Note 5.6 Finance income and costs

Accounting policy

Finance costs consist of interest expenses on the loans from financial institutions, interest expenses on

lease liabilities and other finance costs.

Transaction costs related to loans from financial institutions are recognised in the income statement

using the effective interest method. The effective interest rate is the rate that exactly discounts estimated

future cash payments through the expected life of the loan to the present value. The calculation includes

all fees and transaction costs paid by the parties to the contract.

Finance income

EUR million

1 Feb 2022 - 31 Jan 2023

1 Feb 2021 - 31 Jan 2022

Interest income

0.0

Total finance income

0.0

Finance costs

EUR million

1 Feb 2022 - 31 Jan 2023

1 Feb 2021 - 31 Jan 2022

Interest expenses on loans from financial

institutions

1.2

1.9

Interest expenses on lease liabilities

1.4

1.3

Other financial costs

0.5

1.4

Total finance costs

3.1

4.5

Note 5.7 Contingent liabilities

Accounting policy

Contingent liability is a liability that arises from past events and whose existence will be confirmed in the

future, or an existing obligation that is not recognised in the balance sheet because its realisation is not

probable, or the amount of the obligation cannot be determined with sufficient reliability.

Contingent liabilities are not recognised in the balance sheet. They are presented as disclosures unless

the possibility of the realisation the liability is remote.

Puuilo’s contingent liabilities consist of lease liabilities for the leases with the lease term beginning after

the end of the reporting period and are therefore not recognised in the balance sheet. The Group’s

financial institution loan is unsecured.

Puuilo has committed to leases, the lease term of which will begin in the future, and which are, therefore,

not recognised in the balance sheet as right-of-use assets or lease liabilities. The minimum lease

payments under these agreements are shown in the table below:

EUR million

31 Jan 2023

31 Jan 2022

Liability for lease agreements that will enter into force in the future

17.4

19.0

6 OTHER NOTES

Note 6.1 Related parties

Puuilo Group is controlled by Puuilo Plc. In addition, Puuilo’s related parties include key personnel of

the Puuilo Group, their close family members and companies controlled by them. The key personnel

include the members of the Board of Directors, the CEO, and the Group management team.

The Puuilo Group purchases some products it sells in its stores from companies owned by related

parties. These companies manufacture products that are part of Puuilo’s product assortment. In addition,

the company leases business premises from related parties. The Group’s lease liabilities to related

parties include the present value of the future lease payments of the above-mentioned leased premises.

Transactions with related parties have taken place at market price and on normal terms. All Puuilo

employees are entitled to the ordinary personnel discount in Puuilo stores. A related party employed by

Puuilo is entitled to this discount. This information has not been presented as related party transactions.

The following transactions were carried out with related parties:

Income statement

EUR million

1 Feb 2022 - 31 Jan

2023

1 Feb 2021 - 31 Jan

2022

Net sales

0.0

Materials and services

2.4

2.2

Rent and other operating expenses

0.5

Balance sheet

EUR million

31 Jan 2023

31 Jan 2022

Sales receivables

0.0

Trade payables

0.1

Lease liabilities (IFRS 16)

1.8

1.7

The shareholdings of the members of the Board of Directors, the CEO and the other members of the

management team were as follows:

31 Jan 2023

31 Jan 2022

The Board of Directors

5 895 154

6 022 886

CEO

297 712

294 960

Management Team excl. CEO

470 414

433 977

The remuneration of the management team is presented in Note 2.3.

Note 6.2 Group structure and consolidation

Puuilo Plc (the parent company), and its wholly owned subsidiaries Puuilo Invest II Ltd and Puuilo

Tavaratalot Ltd have been consolidated in the financial statements of Puuilo Group. All companies are

domiciled in Helsinki.

Accounting policy

Subsidiaries

The subsidiaries are fully consolidated from the date of acquisition, i.e. from the date on which control

is transferred to the Group until the date that control ceases. Puuilo has control over an entity when

Puuilo is exposed to, or entitled to, the company’s variable returns and has the ability to influence those

returns by prescribing the principles of the entity’s operations.

The Consolidated Financial Statements have been prepared using the acquisition method.

Intercompany transactions, receivables and liabilities and unrealised gains are eliminated. Unrealised

losses are also eliminated unless the transaction indicates an impairment of the asset transferred.

Note 6.3 Significant events after the end of the reporting period

Flagging Notification

On 15 February 2023 Puuilo received a notification in accordance with Chapter 9, Section 6 and 7 of

the Finnish Securities Markets Act. According to the notification, Adelis Holding I AB’s indirect holdings

in shares fell below the flagging threshold of 20% and was 18.66% after the transaction.

Proposal of the Shareholders’ Nomination Board

The shareholders’ Nomination Board of Puuilo Plc proposes that current members of the Board of

Directors Bent Holm, Mammu Kaario, Rasmus Molander and Markku Tuomaala will be re-elected. The

Nomination Board also proposes that Lasse Aho and Tuomas Piirtola will be elected as new members

to the Board of Directors. Current members of the Board of Directors Tomas Franzén and Timo Mänty

have notified that they are no longer available to be elected as members of the Board of Directors. The

Nomination Board proposes to the Annual General Meeting that Lasse Aho will be elected as a

Chairman of the Board of Directors.

The Nomination Board proposes that the remunerations of the members of the Board of Directors fees

are same as the current remuneration fees.

Note 6.4 New accounting standards

At the balance sheet date, there are no new standards or amendments known that are not yet effective

and that are expected to have a material impact on the entity in the current or future reporting periods

and on foreseeable future transactions.

Parent company Financial Statements

Parent company’s income statement

EUR

1 Feb 2022 - 31 Jan 2023

1 Feb 2021 - 31 Jan 2022

Net sales

1,324,482.72

967,157.91

Personnel expenses

Salaries and remuneration

-1,224,284.96

-920,949.98

Personnel expenses

Pension costs

-173,146.53

-119,869.25

Other personnel expenses

-32,240.61

-35,311.89

Personnel cost, total

-1,429,672.10

-1,076,131.12

Other operating expenses

-1,426,090.30

-3,297,307.91

Operating profit (loss)

-1,531,279.68

-3,406,281.12

Financial income and expenses

Revenue from shares in other Group

companies

9,354,773.12

852,077.78

Other interest and financial income

From others

0.00

95.58

Interest expenses and other financial expenses

To Group companies

0.00

-30,000.00

To others

-1,085,572.58

-1,986,646.58

Financial income and expenses, total

8,269,200.54

-1,164,473.22

Profit (loss) before appropriations and taxes

6,737,920.86

-4,570,754.34

Appropriations

Group contribution

Group contributions received

42,934,411.29

36,067,390.66

Appropriations, total

42,934,411.29

36,067,390.66

Income taxes

Taxes for the financial period

-8,375,132.52

-6,311,676.13

Income taxes, total

-8,375,132.52

-6,311,676.13

Profit (loss) for the financial period

41,297,199.63

25,184,960.19

Parent company’s balance sheet

EUR

31 Jan 2023

31 Jan 2022

Assets

Non-current assets

Investments

Shares in Group companies

19,954.85

Investments total

19,954.85

Non-current assets total

19,954.85

Current assets

Receivables

Current

Receivables from Group companies

154,249,516.07

138,926,427.09

Other receivables

25.20

Accrued income

66,357.88

85,794.01

Current total

154,315,899.15

139,012,221.10

Cash at hand and in banks

328,247.20

2,107,663.45

Current assets total

154,644,146.35

141,119,884.55

Assets total

154,664,101.20

141,139,839.40

EUR

31 Jan 2023

31 Jan 2022

Liabilities

Equity

Share capital

80,000.00

Reserve for invested unrestricted equity

30,000,004.98

Profit (loss) for previous financial periods

31,440,985.96

33,185,997.37

Profit (loss) for the financial period

41,297,199.63

25,184,960.19

Equity total

102,818,190.57

88,450,962.54

Liabilities

Non-current

Loans from financial institutions

50,000,000.00

Non-current total

50,000,000.00

Current

Trade payables

95,078.81

93,310.94

Liabilities to Group companies

81,279.78

34,812.27

Other liabilities

109,454.80

110,040.11

Deferred liabilities

1,560,097.24

2,450,713.54

Current total

1,845,910.63

2,688,876.86

Liabilities total

51,845,910.63

52,688,876.86

Liabilities total

154,664,101.20

141,139,839.40

Parent company’s cash flow statement

EUR

1 Feb 2022 - 31

Jan 2023

1 Feb 2021 - 31

Jan 2022

Cash flow from operating activities:

Profit (loss) before appropriations and taxes

6,737 920.86

-4,570,754.34

Adjustments:

Financial income and expenses

-8,269 200.54

1,164,473.22

Other adjustments

0.00

79,931.88

Cash flow before change in working capital

-1,531 279.68

-3,326,349.24

Change in working capital:

Increase(-)/decrease(+) of non-interest-bearing current

accounts receivable

9,506.36

-143,485.39

Increase(-)/decrease(+) of non-interest-bearing current

liabilities

32,468.21

13,925.59

Cash flow from operating activities before financial items and

taxes

-1,489,305.11

-3,455,909.04

Paid interest and payments from other financial expenses from

operating activities

-952,619.16

-603,417.68

Financial income from operating activities

0.00

95.58

Direct taxes paid

-9,429,987.89

-7,409,938.05

Cash flow before extraordinary items

-11,871,912.16

-11,469,169.19

Cash flow from operating activities (A)

-11,871,912.16

-11,469,169.19

Cash flow from investment activities:

Dividends received from investments

Returns of capital from other investments

Cash flow from investment activities (B):

Financing cash flow:

Rights issue

28,591,090.78

Withdrawals of long-term loans

50,000,000.00

Dividends paid

-25,385,835.90

Acquisition of own shares

-1,544,135.70

Change in Group financing

37,022,467.51

-65,365,187.73

Financing cash flow (C):

10,092,495.91

13,225,903.05

Changes in cash and cash equivalents (A+B+C)

increase(+)/decrease(-)

-1,779,416.25

1,756,733.86

Cash and cash equivalents at the beginning of the financial

period

2,107,663.45

350,929.59

Cash and cash equivalents at the end of the financial period

328,247.20

2,107,663.45

Notes to the parent company’s financial statements

Accounting policies

Puuilo Plc’s financial statements have been prepared in accordance with the Finnish Accounting Act

and ordinances and other statutes concerning the preparation of financial statements.

Trade receivables, accrued income and other receivables are recognised at their nominal value or their

lower probable value. Liabilities are recognised at their nominal value.

The financial statements have been prepared in accordance with the measurement and recognition

principles and methods prescribed in chapter 2, section 2 a of the Accounting Ordinance.

Significant events in the financial period