Management report
Linda Nektar’s (the ‘Company’) business developed favourably in 2021. The Company’s sales volume, net sales and operating profit improved on the previous year. In 2021 the Company’s turnover was in-line with updated management guidance and amounted to EUR 3,110,589. This marked an increase of 23.8% year-on-year (12 months 2020: 2,512,281). 12 months 2021 generated a net profit of EUR 122,715 (12 months 2020 EUR 65,523).
The fermented low alcohol category continues to offer attractive long-term volume and value growth opportunities. The Company´s portfolio choices (which are then customised for clients) therefore target these. In addition, we see further attractive growth prospects for selected categories beyond cider. In 2021 we continued our innovation adding new exotic ferments to the portfolio, with sales starting in the beginning of 2022.
The major challenge of 2021 has been the dramatic rise in certain input costs. The increases in electricity and gas prices affect not only our suppliers but also other companies operating in the same and other industrial sectors. The availability and pricing of liquid sugars has been a case in point for the beverages industry, as global demand for European starch derivatives has increased faster than supply. 2022 will therefore require both flexible and attentive planning and purchase strategies to minimise such impacts. With higher raw material and energy costs in 2022, the Company is making pricing-based adjustments to compensate for the changed conditions.
As at 31 December 2021, the Company’s total assets came to EUR 3,809,320 (31.12.2020: EUR 3,864,511), down 1.43% year-on-year. Current assets amounted to EUR 1,532,607 (31.12.2020: EUR 1,717,386) or 40.2% of total assets. Fixed assets amounted to EUR 2,276,713 (31.12.2020: EUR 2,147,125) or 59.8% of the balance sheet total. The liabilities of AS Linda Nektar totalled EUR 153,870 (31.12.2020: EUR 178,796). Equity capital amounted to EUR 3,655,450 (31.12.2020: EUR 3,685,715).
As of 31 December 2021, there were no loan commitments, while cash and cash equivalents came to EUR 651,135 (31.12.2020: EUR 835,166). The Company retains its conservative financial leverage policy.
Operating cash flow for the 12 months of 2021 was a positive EUR 560,581 (12 months 2020: EUR 398,018).
The planned investments were implemented successfully, supporting future development targets and improving production efficiency. A total of EUR 554,705 was invested into fixed assets (12 months 2020: EUR 398,429). Depreciation costs for the 12 months of 2021 were largely unchanged and amounted to EUR 399,020 (12 months 2020: EUR 386,952).
Linda Nektar continues to engage in activities to reduce its operational impacts on the environment. A significant part of the energy used for cooling comes from solar panels installed on the Company’s premises, allowing for a high degree of self-sufficiency and green energy. In addition, we work to reduce water usage and enhance wastewater treatment processes. Further supporting the Company´s environmental sustainability goals a total of EUR 138,975 were invested into an industrial wastewater pre-treatment system.
In 2021, the Company paid EUR 158,014 euros in dividends (12 months 2020: EUR 126,009). The income tax cost on dividends was EUR 28,514 (12 months 2020: EUR 24,176).
As of 31 December 2021, the Company had 13 employees, one Management Board Member, and four Supervisory Board Members. Labour costs for the 12 months of 2021 (including taxes) amounted to EUR 431,138 (12 months 2020: EUR 393,193).
During H1 2021 the Company’s first executive share option programme matured, as a result of which 5,034 shares were issued to a supervisory board member. The Company has in place the opportunity to allocate a further 3% of issued capital for another similar programme.
Linda Nektar´s strategic focus remains set on products with low alcohol and premium fermented products. The alcoholic beverages market trend of including “naturalness” is bringing further noteworthy attention and perspectives towards natural ingredients and production processes. On top of this, we are looking to engage further into the high growth in fermented ready to drink (RTD) beverages, as well as the continuing movement towards healthier beverages. Further investments (including via R&D) are continuing to be made in these areas.
After carefully considering market conditions, management’s guidance for revenues in 2022 is EUR 3.6m. This reflects ca. 16% year on year growth (incorporating both volume and pricing considerations).
Financial Ratios:
| 2021 | 2020 | ||
| Current Ratio = Current Assets / Current Liabilities | x | 9.96 | 9.61 |
| Quick ratio = (Current Assets – Inventories) / Current Liabilities | x | 7.92 | 7.07 |
| Working Capital = Current Assets - Current Liabilities | 1 378 737 | 1 538 590 | |
| Equity Ratio = Total Equity / Total Assets*100 | % | 95.96 | 95.37 |
| Net Profit Margin= Net Profit / Sales Revenue*100 | % | 3.95 | 2.61 |
| Debt to Assets= Total Liabilities / Total Assets | x | 0.04 | 0.05 |
Statement of financial position
(In Euros)
| 31.12.2021 | 30.06.2021 | 31.12.2020 | 30.06.2020 | |
| Assets | ||||
| Current assets | ||||
| Cash and cash equivalents | 651 135 | 577 163 | 835 166 | 697 377 |
| Receivables and prepayments | 568 144 | 672 351 | 429 059 | 625 591 |
| Inventories | 313 328 | 365 189 | 453 161 | 445 345 |
| Total current assets | 1 532 607 | 1 614 703 | 1 717 386 | 1 768 313 |
| Non-current assets | ||||
| Receivables and prepayments | 20 | 4 | 12 | 12 |
| Property, plant and equipment | 2 269 900 | 2 179 875 | 2 136 844 | 1 997 004 |
| Intangible assets | 6 793 | 8 531 | 10 269 | 5 139 |
| Total non-current assets | 2 276 713 | 2 188 410 | 2 147 125 | 2 002 155 |
| Total assets | 3 809 320 | 3 803 113 | 3 864 511 | 3 770 468 |
| Liabilities and equity | ||||
| Liabilities | ||||
| Current liabilities | ||||
| Payables and prepayments | 153 870 | 169 987 | 178 796 | 112 398 |
| Total current liabilities | 153 870 | 169 987 | 178 796 | 112 398 |
| Total liabilities | 153 870 | 169 987 | 178 796 | 112 398 |
| Equity | ||||
| Issued capital | 1 580 143 | 1 580 143 | 1 575 109 | 1 575 109 |
| Share premium | 617 517 | 617 517 | 617 517 | 617 517 |
| Statutory reserve capital | 73 948 | 73 948 | 70 672 | 70 672 |
| Other reserves | 0 | 0 | 26 177 | 11 416 |
| Retained earnings (loss) | 1 261 127 | 1 261 127 | 1 330 717 | 1 330 717 |
| Reporting period profit (loss) | 122 715 | 100 391 | 65 523 | 52 639 |
| Total equity | 3 655 450 | 3 633 126 | 3 685 715 | 3 658 070 |
| Total liabilities and equity | 3 809 320 | 3 803 113 | 3 864 511 | 3 770 468 |
Income statement
(In Euros)
| 2021 | 2021 H2 | 2020 | 2020 H2 | |
| Revenue | 3 110 589 | 1 545 852 | 2 512 281 | 1 196 612 |
| Other income | 3 587 | 4 575 | 773 | 0 |
|
Changes in inventories of finished goods and work in progress |
-129 648 | -75 088 | 1 402 | -19 989 |
| Raw materials and consumables used | -1 800 469 | -908 273 | -1 497 379 | -689 484 |
| Other operating expenses | -177 526 | -93 967 | -131 200 | -66 294 |
| Employee expenses | -431 138 | -228 737 | -393 193 | -211 678 |
| Depreciation and impairment loss (reversal) | -399 020 | -197 133 | -386 952 | -196 302 |
| Significant impairment of current asset | -23 783 | -23 783 | -16 046 | 0 |
| Other expenses | -1 431 | -1 156 | -73 | -30 |
| Operating profit (loss) | 151 161 | 22 290 | 89 613 | 12 835 |
| Interest income | 68 | 34 | 86 | 49 |
| Profit (loss) before tax | 151 229 | 22 324 | 89 699 | 12 884 |
| Income tax expense | -28 514 | 0 | -24 176 | 0 |
| Reporting period profit (loss) | 122 715 | 22 324 | 65 523 | 12 884 |
Statement of cash flows
(In Euros)
| 2021 | 2021 H2 | 2020 | 2020 H2 | |
| Cash flows from operating activities | ||||
| Operating profit (loss) | 151 161 | 22 290 | 89 613 | 12 835 |
| Adjustments | ||||
| Depreciation and impairment loss (reversal) | 399 020 | 197 133 | 386 952 | 196 302 |
| Profit (loss) from sale of non-current assets | -1 395 | -1 395 | -58 | 0 |
| Other adjustments | 0 | 0 | 14 084 | 14 084 |
| Total adjustments | 397 625 | 195 738 | 400 978 | 210 386 |
| Changes in receivables and prepayments related to operating activities | -139 093 | 104 191 | -50 854 | 196 532 |
| Changes in inventories | 139 833 | 51 861 | -6 481 | -7 816 |
| Changes in payables and prepayments related to operating activities | 39 569 | -25 385 | -11 062 | -60 |
| Income tax refund (paid) | -28 514 | 0 | -24 176 | 0 |
| Total cash flows from operating activities | 560 581 | 348 695 | 398 018 | 411 877 |
| Cash flows from investing activities | ||||
| Purchase of property, plant and equipment and intangible assets | -619 200 | -302 257 | -320 873 | -274 137 |
| Proceeds from sales of property, plant and equipment and intangible assets | 27 500 | 27 500 | 0 | 0 |
| Interest received | 68 | 34 | 86 | 49 |
| Total cash flows from investing activities | -591 632 | -274 723 | -320 787 | -274 088 |
| Cash flows from financing activities | ||||
| Proceeds from issuing shares | 5 034 | 0 | 0 | 0 |
| Dividends paid | -158 014 | 0 | -126 009 | 0 |
| Total cash flows from financing activities | -152 980 | 0 | -126 009 | 0 |
| Total cash flows | -184 031 | 73 972 | -48 778 | 137 789 |
| Cash and cash equivalents at beginning of period | 835 166 | 577 163 | 883 944 | 697 377 |
| Change in cash and cash equivalents | -184 031 | 73 972 | -48 778 | 137 789 |
| Cash and cash equivalents at end of period | 651 135 | 651 135 | 835 166 | 835 166 |
Statement of changes in equity
(In Euros)
| Issued capital | Share premium | Statutory reserve capital | Other reserves | Retained earnings (loss) | Total | |
| 31.12.2019 | 1 575 109 | 617 517 | 70 672 | 11 416 | 1 456 725 | 3 731 439 |
| Reporting period profit (loss) | 0 | 0 | 0 | 0 | 52 639 | 52 639 |
| Declared dividends | 0 | 0 | 0 | 0 | -126 009 | -126 009 |
| Other changes in equity | 0 | 0 | 0 | 0 | 1 | 1 |
| 30.06.2020 | 1 575 109 | 617 517 | 70 672 | 11 416 | 1 383 356 | 3 658 070 |
| Reporting period profit (loss) | 0 | 0 | 0 | 0 | 12 884 | 12 884 |
| Changes in reserves | 0 | 0 | 0 | 14 761 | 0 | 14 761 |
| 31.12.2020 | 1 575 109 | 617 517 | 70 672 | 26 177 | 1 396 240 | 3 685 715 |
| Reporting period profit (loss) | 0 | 0 | 0 | 0 | 100 391 | 100 391 |
| Issue of equity | 5 034 | 0 | 0 | -26 177 | 26 177 | 5 034 |
| Declared dividends | 0 | 0 | 0 | 0 | -158 014 | -158 014 |
| Changes in reserves | 0 | 0 | 3 276 | 0 | -3 276 | 0 |
| 30.06.2021 | 1 580 143 | 617 517 | 73 948 | 0 | 1 361 518 | 3 633 126 |
| Reporting period profit (loss) | 0 | 0 | 0 | 0 | 22 324 | 22 324 |
| 31.12.2021 | 1 580 143 | 617 517 | 73 948 | 0 | 1 383 842 | 3 655 450 |