Board of
Directors'
Report
More than 50% of us feel less lonely
thanks to our four-legged friend,
and 54% feel that a pet enhances
their well-being.
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Annual Report 2023Board of Directors' Report
Market outlook 32
Group performance 33
Financial position and cashflow 34
Investments 35
Strategy and financial targets 35
Business segment performance 36
Personnel 38
Information contained in the notes
to the financial statements 39
Governance 39
Shares and shareholders 40
Remuneration 42
Corporate responsibility 42
Risks and uncertainties 43
Seasonality 44
Significant events after the financial year 44
Outlook for the financial year 2024 45
Board of Directors’ proposal for profit
distribution and capital return 45
Financial ratios and alternative performance measures 46
Calculation of financial ratios and
alternative performance measures 47
Reconciliation of key performance indicators 48
Table of contents Board of Directors' Report
for the financial year October 2022 – September 2023
Market outlook
Musti Group operates in the Nordic pet care market, broadly defined as the sale of pet food, products,
services and veterinary care across Finland, Sweden and Norway. Musti Group’s core market consisting
of pet food and products was estimated by Euromonitor at approximately EUR 2.1 billion in 2022, with
Sweden as the largest market, accounting for approximately EUR 0.8 billion, Finland approximately
EUR 0.7 billion and Norway approximately EUR 0.6 billion.
Pet Parenting refers to the tendency of people to treat their pets like family members. As a result
of this trend, people are spending more on higher quality and more premium food, as well as a more
diverse range of products and services. This underlying pet parenting trend that drives the long-term
structural growth of the pet care market remains robust, shifting spend towards higher quality nutrition,
more diverse range of accessories and wider adoption of services.
The COVID-19 pandemic period resulted in a period with increased number of new puppies and
kitten across the Nordic markets. While the number of new puppies and kittens has thereafter stabilized
closer to long term average levels, the larger cohorts 2020–2022 are visible as a step-change in the pet
population and have thus increased the addressable market size for future years with a long tail effect.
Our latest fiscal year proves that the pet care market is by nature resilient, underpinned by non-
discretionary purchasing behavior. Non-discretionary categories such as food and cat litter sum up to
majority of total market spend and are characterized by repeat purchasing behavior. Consumers display
willingness to sustain spending on non-discretionary pet care purchases even under times of economic
pressure when expenditure on alternative retail categories have been affected.
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Group performance
Group key figures
EUR million or as indicated 10/2022–9/2023 10/2021–9/2022 Change %
Net sales 425.7 391.1 8.9%
Net sales growth, % 8.9% 14.7%
LFL sales growth, % 9.5% 6.7%
LFL store sales growth, % 6.7% 4.2%
Online share, % 23.0% 22.2%
Gross margin, % 45.7% 46.4%
EBITDA 74.6 65.4 14.0%
EBITDA margin, % 17.5% 16.7%
Adjusted EBITDA 73.6 66.9 10.1%
Adjusted EBITDA margin, % 17.3% 17.1%
EBITA 43.6 37.3 16.8%
EBITA margin, % 10.2% 9.5%
Adjusted EBITA 42.6 38.8 10.0%
Adjusted EBITA margin, % 10.0% 9.9%
Operating prot 37.8 30.9 22.4%
Operating prot margin, % 8.9% 7.9%
Prot/loss for the period 26.5 22.3 18.6%
Earnings per share, basic, EUR 0.79 0.67 18.7%
Net cash ow from operating activities 79.6 46.1 72.4%
Investments in tangible and intangible assets 11.9 14.2 -16.6%
Net debt / LTM adjusted EBITDA 1.9 2.1 -12.6%
Number of loyal customers, thousands 1,543 1,454 6.1%
Number of stores at the end of the period 342 335 2.1%
of which directly operated 330 319 3.4%
Group net sales
EUR million 10/2022–9/2023 10/2021–9/2022 Change %
Net sales
Group 425.7 391.1 8.9%
Finland 189.9 169.7 11.9%
Sweden 170.9 164.9 3.6%
Norway 64.9 56.5 14.9%
Group net sales increased by 8.9% to EUR 425.7 (391.1) million. The increase was largely due to the
increasing number of customers together with an increased number of directly operated stores and was
significantly affected negatively by currency exchange rate fluctuations. The acquisition of Premium Pet
Food Suomi Oy increased the net sales by EUR 4.2 million.
Currency exchange rate changes affected the growth negatively by 8.5%-points. Weakened SEK
exchange rate decreased sales by EUR 14.4 million bringing 3.7%-points headwind to growth. Weakened
NOK exchange rate decreased sales by EUR 8.2 million bringing 2.1%-points headwind to the growth.
Group net sales growth excluding the changes in the currency exchange rates was 14.6%.
The impact of price increases was 7.7%. Like-for-like growth, which is calculated in local currencies,
amounted to 9.5% (6.7%), with higher growth in food and consumables than in discretionary categories.
Store sales increased by 7.3% to EUR 322.3 (300.3) million. We added a net 11 directly operated stores
during the last 12 months to our network. Like-for-like store sales growth was 6.7% (4.2%). Online sales
increased by 12.4% to EUR 97.8 (87.0) million. Like-for-like online sales growth was 19.0% (14.7%). Online
sales accounted for 23.0% (22.2%) of total net sales.
The number of loyal customers increased by 6.1% to 1,543 thousand (1,454 thousand on 30
September 2022). Rolling 12 months average spend per loyal customer was EUR 182.7 as per 30
September 2023 (EUR 181.5 as per 30 September 2022). Excluding the currency exchange rate
fluctuations, the development was clearly positive.
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Group result
Group adjusted EBITA increased by 10.0% to EUR 42.6 (38.8) million. Recent movements of the local
currencies SEK and NOK had a negative impact of EUR 3.1 million on adjusted EBITA (EUR 0.6 million
negative in the comparison period). The acquisition of Premium Pet Food Suomi Oy increased the EBITA
by EUR 0.9 million. Adjusted EBITA margin was 10.0% (9.9%).
Gross margin decreased to 45.7% (46.4%). Gross margin was negatively impacted by increased
inflation and unfavorable currency exchange rate development, despite the positive development in
supply chain performance and production integration during the second half of the financial year. The
share of sales of own and exclusive brands was 52.4% (52.7%). The share of employee benefits and other
operating expenses as percentage of sales was 29.4% (30.3%).
Depreciation amounted to EUR 31.0 (28.2) million and amortization amounted to EUR 5.8 (6.4) million.
Main driver is the growing store network via IFRS 16 impact.
There were EUR 0.9 million (EUR 1.5 million positive) negative adjustments to EBITA in the reporting
period. The adjustments include a fair value gain of EUR 2.4 million on the previously held share of
Premium Pet Food Suomi Oy, which was acquired in April, EUR 0.5 million restructuring costs and
EUR 0.4 million value added taxes for IPO costs that were recognized as expense relating to tax audit.
Operating profit increased by 22.4% to EUR 37.8 (30.9) million, affected negatively by EUR 3.1 million
by the currency exchange rates.
Profit before taxes amounted to EUR 33.7 (28.4) million. The main contributor was a fair value gain
of EUR 2.4 million on the previously held share of Premium Pet Food Suomi Oy, which was acquired
in April. The impact of financial income and expenses (net) on profit before taxes was EUR 4.1 million
negative (EUR 2.4 million negative), as hedging partly offset the unfavorable currency rates and
increased interest rates. Profit for the period was EUR 26.5 (22.3) million and basic earnings per share
was 0.79 (0.67).
Musti Group has been subject to a tax audit of Musti Group Oyj, Musti Group Finland Oy and Musti
Group Nordic Oy regarding financial years 2018–2020. Musti Group Oyj has in October 2021 received a
tax audit report from the Finnish tax authorities. The tax audit report included subsequent taxes and tax
increases amounting to a total of EUR 0.9 million, relating to the VAT deductibility of IPO related costs. Tax
and increases have been paid in November 2021. The company disagrees with the interpretation made in
the tax audit. The company has been reassessed in accordance with the interpretations set out in the tax
audit report but, the company filed a claim for adjustment to the Finnish Tax Administration’s Assessment
Adjustment Board. In May 2023, the Board issued a decision remitting the decision to the Tax Administration
for reconsideration. Based on the decision of the Board of Adjustment and the latest court rulings, the
company made a new estimate of the amount of deductible VAT and, on that basis, recognized EUR 0.4
million of it as an expense. The case is still pending with the tax administration. There were no repercussions
of the tax audit for the financial years 2018–2020 of Musti Group Finland Oy’s and Musti Group Nordic Oy’s.
Financial position and cashflow
The net cash flow from operating activities totaled EUR 79.6 (46.1) million during the financial year.
Change in net working capital had an impact of EUR 14.7 (-15.4) million to the cash flow during the
financial year. Cash flow used in investing activities during the financial year amounted to EUR 18.6
(33.0) million.
Cash and cash equivalents at the end of the period amounted to EUR 22.0 (10.0) million. Total
consolidated assets amounted to EUR 394.2 (371.4) million.
Equity attributable to owners of the parent company totaled EUR 164.3 (160.3) million.
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Gearing at the end of the reporting period was 83.9% (89.4%) and net debt amounted to EUR 137.9 (143.4)
million. At the end of the period, the interest-bearing loans and commercial papers included in net debt
amounted to EUR 79.4 (74.8) million and lease liabilities EUR 79.8 (80.7) million.
Musti Group focuses on maintaining sufficient liquidity in the group. In addition to the cash and cash
equivalents of EUR 22.0 million at the end of the period, Musti Group had an unutilized EUR 5.0 million
bank overdraft, a EUR 50 million commercial paper program of which EUR 40.5 million undrawn and an
undrawn EUR 40.0 million revolving credit facility.
Investments
In October 2022 – September 2023, investments in tangible and intangible assets amounted to
EUR 11.9 (14.2) million. Investments were mainly related to new and relocated stores, production
equipment, as well as IT and digital platform development projects.
Musti Group acquired the full ownership of the pet food manufacturer Premium Pet Food Suomi Oy on
3 April 2023 and the company became a fully owned subsidiary of Musti Group. Prior to the transaction,
Musti Group held 49.2% of the shares in the company. In addition, in October 2022 – September 2023
EUR 4.7 million were invested in business acquisitions of stores in Sweden and Norway. Musti Group
acquired 6 pet stores, 5 in Sweden and one in Norway as business acquisitions during the financial year.
Strategy and financial targets
Our strategy is to continue developing the Musti concept and value proposition in the Nordic markets
to serve existing customers better and to acquire new customers, with focus on Pet Parents.
Winning new customers
Musti Group is well positioned to continue our track record of winning new customers from the large
and growing Nordic pool of 5.8 million dogs and cats.
Success in new customer acquisition is a key driver of continued market share gain across our Nordic
markets. Acquisition of puppies and kittens is especially important from a lifetime value perspective.
This is supported by our concept, our leading brand awareness, and customer focus. The underlying pet
parenting trend, favoring Musti Group’s concept, continues strong.
Musti has gained share of new puppies over the recent years augmented by two initiatives, new
puppy and kitten clubs launched in financial year 2020 followed by an upgraded breeder club launched
in financial year 2022. Both concepts have been continuously improved since their launch. These
investments into early stages of the pet parenting journey continue to pay off.
The number of loyal customers, Friends of Musti, now stands at 1.5 million across the Nordic
countries.
Grow share of wallet
Growing the share of wallet within our base of 1.5 million loyal customers is a clear opportunity
for Musti Group. To deepen the engagement of our customers, Musti is developing an ecosystem
approach for Nordic pet parents with an ‘All you need is Musti’ mentality across the pet lifecycle.
Supported by data we are able to customize our value proposition to individual needs of Nordic pets
and their parents.
Rolling 12 months average spend per loyal customer increased to EUR 182.7 in financial year 2023
(EUR 181.5 on 30 September 2022), despite unfavorable currency exchange rate effects.
Expand store network and number of service points
We continue rolling out further stores to win new customers through our strong concept and increased
convenience, with local presence in Nordic communities enabling customers to switch to the Musti Group
platform. This is complemented by a strong online offering, representing 23.0% (22.2%) of sales.
Musti Group has the largest pet specialty store footprint in the Nordic countries. Expansion
investments come with long term benefits, as the number of directly operated stores has increased
from 231 end of financial year 2020 to 330 after financial year 2023, a significant share of our network is
currently at ramp-up stage. We continue to see ample room for expansion especially in the Norwegian
market to support further market share gains through the added convenience of local presence.
Along with expanding the store network, Musti Group has invested into adding services to our
network. At current, over 100 stores have a dedicated service point, bringing physical services to the
reach of most cities across the Nordics. With this platform, Musti is clearly the largest grooming operator
in the Nordic countries along with other services such as lighter nail clipping available in most stores.
The number of directly operated stores increased by net 11 stores during financial year 2023.
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Focusing on driving gross margins through increased O&E share and
leveraging scale
A core element of Musti Group’s strategy is developing the offering of own and exclusive products sold
only in Musti Group’s channels. This comes with three main benefits of the uniqueness of our offering,
loyalty especially in food and other consumable categories, and higher gross margin profile.
Musti Group has strong historical track record in driving gross margin improvement. Own
and exclusive brands are a cornerstone of our high gross margins as these brands typically carry
10–15%-points higher margins compared to global brands.
In financial year 2023, gross margin decreased to 45.7% (46.4%) affected by the unfavorable
development of local currencies SEK and NOK. This trend stabilized towards the last quarter of the
fiscal year with a year-on-year improvement in gross margin.
Increasing Musti Group’s ownership of Premium Pet Food Suomi Oy factory in Lieto (Finland) to 100%
was a key event of 2023. Full ownership of the ‘Musti kitchen’ allows Musti to respond to increased
demand for locally and sustainably produced pet food. Having our own production asset directly
supports developing our own branded food offering, and further investments to increase capacity are
underway.
Share of sales of own and exclusive brands continued stable at 52.4% (52.7%) during the year.
Leveraging broadly invested platform to drive operating leverage and
scale benefits
Significant investments to Musti Group’s IT, digital platforms, warehouse and production facility are
expected to drive increased operating leverage and scale benefits to further increase Musti Group’s
profitability as topline growth is expected to continue while fixed costs may be spread across larger net
sales. In the financial year 2023, group functions cost, excluding the impact of the acquired pet food
factory, brought clear operating leverage, supporting Group profitability.
Financial targets
The long-term financial targets updated by the Board of Directors on 3 May 2021 are:
Long-term nancial target Outcome in nancial year 2023
Growth Net sales to reach at least EUR 500
million by the nancial year 2024 by
continuation of strong customer
acquisition momentum and increasing
share of wallet.
Net sales 425.7 million,
growth 8.9%.
Protability Mid- to long-term adjusted EBITA margin
of at least 13% with steadily improving
prole. Margin increase is expected to be
realized through steady gross margin and
improving operating leverage.
Adjusted EBITA margin 10.0%.
Capital structure Maintain net debt in relation to adjusted
EBITDA below 2.5x in the long term.
Net debt / LTM adjusted EBITDA 1.9.
Dividend policy To pay a dividend corresponding to
60–80% of net prot. Any potential
dividend shall take into account
acquisitions, the company’s nancial
position, cash ow and future growth
opportunities.
The capital return corresponds to
approximately 76%* of the group’s
prot for the nancial year.
The nancial targets are forward-looking statements and are not guarantees of future nancial performance.
*Board of Directors’ proposal to the Annual General Meeting planned to be held on 31 January 2024.
Business segment performance
Musti Group’s reporting segments are based on geographical regions Finland, Sweden and Norway. The
segment structure is based on geographical division where Finland, Sweden and Norway are separated
to individual operating segments based on how the chief operating decision-maker monitors the
business operations. In other items, Musti Group reports the Group functions, including the operations
of the headquarters, the central warehouse and the production facility.
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Finland
Finland is Musti Group’s most mature market. Musti Group holds approximately 32% share of the
total pet food and products market. Musti’s network has nationwide coverage, and a vast majority of
Finnish pet parents are within convenient reach of a Musti store, which are typically located at high
traffic locations such as large hypermarkets and popular retail areas. Management continuously seeks
opportunities to further optimize convenience to meet the needs of pet parents.
In Finland, Musti Group focus is both on serving existing customers better to increase share of
wallet and to continue winning new customers, both of which support like-for-like growth. Musti’s
brands in Finland include Musti ja Mirri (store and omnichannel) and Peten Koiratarvike (online focus
complemented by select stores).
EUR million or as indicated 10/2022–9/2023 10/2021–9/2022 Change %
Net sales 189.9 169.7 11.9%
Net sales growth, % 11.9% 11.2%
LFL segment sales growth, % 9.7% 2.7%
EBITDA 52.6 44.5 18.2%
EBITDA margin, % 27.7% 26.2%
Adjusted EBITDA 52.6 44.5 18.2%
Adjusted EBITDA margin, % 27.7% 26.2%
EBITA 41.5 34.2 21.1%
EBITA margin, % 21.8% 20.2%
Adjusted EBITA 41.5 34.3 21.1%
Adjusted EBITA margin, % 21.9% 20.2%
Number of stores 136 140 -2.9%
of which directly operated 136 140 -2.9%
Net sales in Finland increased by 11.9% to EUR 189.9 (169.7) million. Sales growth was a result of steady
growth in both online channels and stores underpinned by good traffic and price increases and the
acquisition of Premium Pet Food Suomi Oy pet food factory. Like-for-like growth was 9.7%.
EBITA increased by 21.1% to EUR 41.5 (34.2) million. Adjusted EBITA increased by 21.1% to EUR 41.5
(34.3) million. The increase in profitability was mainly due to healthy gross margin development, the
acquisition of Premium Pet Food Suomi Oy pet food factory and cost control, despite the inflationary
environment. Adjusted EBITA margin was 21.9% (20.2%).
During the financial year, one directly operated store was merged to another store and three directly
operated stores were closed. No new stores were opened.
Sweden
In Sweden, Musti Group’s focus is on further expansion and increasing efficiency. Musti is the overall
market leader with approximately 28% market share. Musti’s brands in Sweden are Arken Zoo (store
and omnichannel) and VetZoo (online focus).
Musti’s goal in Sweden is to continue strong like-for-like growth across all channels through
customer acquisition and gaining share of wallet, continued network expansion and strong margin
improvement. Significant network expansion has taken place in FY2020 to FY2023, taking directly
operated store count from 68 at end of FY2019 to 119 by end of FY2023 and strengthening our position
across Swedish cities. Ramping up newer store cohorts is a key growth and margin driver, along with
increasing own and exclusive brands share of sales and online channel profitability towards the levels in
Finland.
EUR million or as indicated 10/2022–9/2023 10/2021–9/2022 Change %
Net sales 170.9 164.9 3.6%
Net sales growth, % 3.6% 11.8%
LFL segment sales growth, % 8.6% 8.9%
EBITDA 36.3 37.3 -2.7%
EBITDA margin, % 21.2% 22.6%
Adjusted EBITDA 36.5 37.3 -2.1%
Adjusted EBITDA margin, % 21.4% 22.6%
EBITA 25.5 26.9 -5.3%
EBITA margin, % 14.9% 16.3%
Adjusted EBITA 25.7 26.9 -4.5%
Adjusted EBITA margin, % 15.0% 16.3%
Number of stores 131 129 1.6%
of which directly operated 119 113 5.3%
Net sales in Sweden increased by 3.6% to EUR 170.9 (164.9) million. The weakened SEK exchange rate
decreased sales by EUR 15.2 million. The growth excluding the adverse effect from the currency exchange
rate change was 12.8%. The like-for-like growth, which is calculated in local currencies, was 8.6%.
EBITA decreased by 5.3% to EUR 25.5 (26.9) million. Adjusted EBITA decreased by 4.5% to EUR 25.7 (26.9)
million. The decrease was due to gross margin pressure and negative development of the currency exchange
rate. Adjusted EBITA margin decreased to 15.0% (16.3%).
During the reporting period, three franchise stores and two third party stores were acquired in
Sweden. One new directly operated store was opened and one franchise store left the chain.
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Norway
In Norway, Musti Group’s focus is on market share gain through continued customer acquisition
supported by store roll-out, and on increasing country profitability. Norway remains a more fragmented
market compared to Finland and Sweden with Musti holding approximately 16% share of the total pet
food and products market. Musti Group’s brands in Norway are Musti (store and omnichannel) and
VetZoo (online).
Musti entered Norway in October 2016, and average age profile of the 75 stores (at end of FY2023)
is young with many stores in ramp-up mode. Ramp-up has progressed according to Musti Group’s plans
and maturation of the network continues to be a key driver of growth and country profitability.
EUR million or as indicated 10/2022–9/2023 10/2021–9/2022 Change %
Net sales 64.9 56.5 14.9%
Net sales growth, % 14.9% 38.7%
LFL segment sales growth, % 11.3% 13.9%
EBITDA 15.1 14.6 3.3%
EBITDA margin, % 23.2% 25.8%
Adjusted EBITDA 15.1 14.6 3.5%
Adjusted EBITDA margin, % 23.2% 25.8%
EBITA 9.4 9.9 -5.4%
EBITA margin, % 14.5% 17.6%
Adjusted EBITA 9.4 9.9 -5.2%
Adjusted EBITA margin, % 14.5% 17.6%
Number of stores 75 66 13.6%
of which directly operated 75 66 13.6%
Net sales in Norway increased by 14.9% to EUR 64.9 (56.5) million, driven by like-for-like growth of
11.3% and ramp-up of the stores opened during the latest twelve months. The NOK exchange rate in the
reporting period had a EUR 7.3 million negative impact on net sales. The growth excluding the adverse
effect from the currency exchange rate change was 27.9%.
EBITA decreased by 5.4% to EUR 9.4 (9.9) million and adjusted EBITA decreased by 5.2% to EUR 9.4
(9.9) million. The decrease was mainly due to a negative gross margin development caused by currency
exchange rates with an increasing adverse impact during the second half of the financial year. Adjusted
EBITA margin was 14.5% (17.6%).
During the reporting period, nine directly operated stores were opened, one third party store was
acquired, and one directly operated store was closed in Norway.
Group functions
The EBITA impact of the Group functions was EUR -32.8 (-33.8) million. Adjusted EBITA was EUR -34.0
(-32.4) million. The adjustments include a fair value gain of EUR 2.4 million on the previously held share
of Premium Pet Food Suomi Oy, which was acquired in April. Adjusted Group functions cost in relation
to group net sales improved to 8.0% (8.3%). The improvement was driven by the scalability achieved in
the Group head office and the improved efficiency in the central warehouse. During the second half of
the financial year the integration of production added to the Group functions costs.
Personnel
At the end of the reporting period on 30 September 2023, the number of personnel was 1,643 (1,587) of
whom 664 (664) were employed in Finland, 664 (650) in Sweden and 316 (274) in Norway.
Personnel
1 Oct 2022–
30 Sep 2023
1 Oct 2021–
30 Sep 2022
1 Oct 2020–
30 Sep 2021
1 Oct 2019–
30 Sep 2020
1 Oct 2018–
30 Sep 2019
Personnel by average 1,640 1,523 1,284 1,145 1,084
Personnel by area
30 Sep 2023 30 Sep 2022 30 Sep 2021 30 Sep 2020 30 Sep 2019
Finland 664 664 616 566 583
Sweden 664 650 578 438 425
Norway 316 274 203 158 112
Total 1,643 1,587 1,397 1,162 1,120
Wages and salaries
1 Oct 2022–
30 Sep 2023
1 Oct 2021–
30 Sep 2022
1 Oct 2020–
30 Sep 2021
1 Oct 2019–
30 Sep 2020
1 Oct 2018–
30 Sep 2019
Wages and salaries total 59,370 56,303 47,489 38,042 35,756
More information on the remunerations is available for reading at the Remuneration Report published
in accordance with the Financial Statements and the Board of Directors’ Report.
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Information contained in the notes to the financial
statements
Related party transactions are disclosed in note 6.1.
Governance
Musti Group is committed to good corporate governance through compliance with laws and regulations
in all its operations and to implementing recommendations for good corporate governance. The
governance of the Musti Group complies with the Company’s Articles of Association, Finnish and EU
laws and regulations, the Finnish Companies Act, the Accounting Act, securities markets regulations
and other decrees and regulations relevant to the governance of a public limited liability company.
Furthermore, Musti Group’s operations are guided by values and internal operating principles ratified
by the company. In its governance, Musti Group also complies with the Finnish Corporate Governance
Code for listed companies issued by the Securities Market Association in 2020. If Musti Group deviates
from a recommendation of the Code, it will specify the deviation and justify it. The Code is available at
www.cgfinland.fi.
The governance of Musti Group is described in more detail in the Corporate Governance
Statement published in accordance with the Financial Statements and the Board of Directors’ Report.
AGM decisions
Musti Group plc's (the "Company") Annual General Meeting was held on 30 January 2023 in Helsinki.
The Annual General Meeting adopted the annual accounts for the financial year 1 October 2021 – 30
September 2022, discharged the persons who have acted as the members of the Board of Directors and
CEO during the financial year from liability, and resolved to approve the remuneration report for the
governing bodies.
The Annual General Meeting resolved, in accordance with the proposal of the Board of Directors,
that the profit for the financial year 1 October 2021 – 30 September 2022 be added to retained earnings
and that no dividend will be paid. In addition, the Annual General Meeting decided that shareholders
will be paid a capital return of EUR 0.50 per share from the invested unrestricted equity reserve, and
that the capital return will be paid in two instalments. The first capital return instalment was paid on 8
February 2023 and the second capital return instalment was paid on 29 August 2023.
The Annual General Meeting decided, in accordance with the proposal of the Board of Directors that
the members of the Board of Directors be paid the following annual remuneration:
• Chair of the Board of Directors: EUR 65,000
• Other members of the Board of Directors: EUR 35,000
The Annual General Meeting also decided, in accordance with the proposal of the Board of Directors, that
the annual remuneration for the members of the Board of Directors be paid in Company shares and cash
so that 50% of the annual remuneration will be used to purchase Company shares in the name and on
behalf of the members of the Board of Directors from the market at a price determined in public trading,
and the rest of the annual remuneration will be paid in cash. The shares will be purchased within two
weeks of the publication of the interim report for the period 1 October 2022 – 31 December 2022 or as
soon as possible in accordance with applicable legislation. The Company will pay any costs and transfer
tax related to the purchase of Company shares. In case the remuneration cannot be paid in Company
shares due to legal or other regulatory restrictions or due to other reasons related to the Company or a
member of the Board of Directors, the annual remuneration will be paid fully in cash.
In addition, members of the Audit Committee and the Remuneration Committee of Board of
Directors will be paid the following annual remuneration:
• Chair of the Committee: EUR 7,500
• Other Committee members: EUR 5,000
The Annual General Meeting decided that the number of members of the Board of Directors shall be
five (5). Jeffrey David, Ingrid Jonasson Blank, Ilkka Laurila, Inka Mero and Johan Dettel were re-elected
as members of the Board of Directors for a term of office expiring at the end of the next Annual General
Meeting.
Ernst & Young Oy, Authorized Public Accountants, was re-elected auditor of the company for a term of
office ending at the end of the next Annual General Meeting. Johanna Winqvist-Ilkka, Authorized Public
Accountant, acts as the auditor with principal responsibility. It was decided that the remuneration to the
auditor shall be paid against a reasonable invoice approved by the Audit Committee.
Musti's Year Musti's Direction Corporate Governance Financial Statements 39
Annual Report 2023Board of Directors' Report
The Annual General Meeting authorized the Board of Directors to decide on the repurchase of the
company´s own shares and/or on the acceptance as pledge of the company´s own shares as follows.
The number of own shares to be repurchased and/or accepted as pledge based on this authorization
shall not exceed 3,185,000 shares in total, which corresponds to approximately 9.5% of all the shares in
the company. However, the company together with its subsidiaries cannot at any moment own and/or
hold as pledge more than 10% of all the shares in the company.
The Annual General Meeting also authorized the Board of Directors to decide on the issuance of
shares as well as the issuance of special rights entitling to shares referred to in chapter 10 section 1 of
the Finnish Companies Act as follows. The number of shares to be issued based on this authorization
shall not exceed 3,185,000 shares, which corresponds to approximately 9.5% of all the shares in the
company. The authorization covers both the issuance of new shares as well as the transfer of treasury
shares held by the company.
The Annual General Meeting decided, in accordance with the proposal of the Board of Directors,
that an addition will be made to section 7 § of the Articles of Association to include the possibility
by the the Board of Directors, at their discretion, to arrange a General Meeting as a hybrid meeting.
In addition, the amendment will enable arranging a General Meeting as a virtual meeting without a
meeting venue.
Pursuant to the resolution by the Annual General Meeting, section 7 § of the Articles of Association
will read as follows after the amendment:
"7 § The shareholders exercise their power of decision in the company’s affairs at the General
Meeting.
The Annual General Meeting of shareholders shall be held annually within six (6) months of the
expiration of the financial year. An Extraordinary General Meeting of shareholders shall be held when
the Board of Directors considers it necessary or when the law so requires.
The Board of Directors convenes the General Meeting and decides on the place, manner of
arrangement and time of the General Meeting. The notice of the General Meeting shall be delivered
to the shareholders no earlier than three (3) months and no later three (3) weeks prior to the General
Meeting, however, no later than nine (9) days before the record date of the General Meeting. The notice
shall be delivered to shareholders by means of a notice published on the company’s website or at least in
one national daily newspaper designated by the Board of Directors. To be entitled to attend the General
Meeting, a shareholder must register with the company no later than on the date specified in the notice of
the General Meeting, which date may not be earlier than ten (10) days prior to the General Meeting.
The Board of Directors may decide that shareholders may participate in the General Meeting in a
manner whereby shareholders exercise their full decision-making powers during the General Meeting
using telecommunications and technical means (hybrid meeting).
The Board of Directors may decide that the General Meeting is arranged without a meeting venue
in a manner whereby shareholders exercise their full decision-making powers in real time during the
General Meeting using telecommunications and technical means (virtual meeting).”
Musti Group’s Annual General meeting 2024 is planned to be held on 31 January 2024.
Changes in Group structure
Musti Group acquired full ownership of the pet food factory Premium Pet Food Suomi Oy in Lieto,
Finland on 3 April 2023.
Changes in Group management
There were no changes in Group management during October 2022 – September 2023.
Shares and shareholders
Issued shares and share capital
At the end of the reporting period on 30 September 2023, Musti Group’s share capital was
EUR 11,001,853.68 and total number of shares outstanding was 33,535,453. The company has one share
class. Each share carries one vote and entitles to the same dividend.
Trading of shares
Trading of Musti Group’s share commenced on the Prelist of Nasdaq Helsinki Ltd on 13 February 2020
and on the Official List on 17 February 2020.
Musti's Year Musti's Direction Corporate Governance Financial Statements 40
Annual Report 2023Board of Directors' Report
Own shares
On 30 September 2023 Musti Group held 147,566 (244,000) own shares representing 0.44% (0.73%) of the
total number of shares and votes. During the reporting period Musti Group did not purchase own shares.
Authorizations of the Board of Directors
The Annual General Meeting authorized the Board of Directors to decide on the repurchase of the
company´s own shares and/or on the acceptance as pledge of the company´s own shares as follows.
The number of own shares to be repurchased and/or accepted as pledge based on this authorization
shall not exceed 3,185,000 shares in total, which corresponds to approximately 9.5% of all the shares in
the company. However, the company together with its subsidiaries cannot at any moment own and/or
hold as pledge more than 10% of all the shares in the company.
Own shares can be repurchased only using the unrestricted equity of the company at a price formed
in public trading on the date of the repurchase or otherwise at a price determined by the markets. The
Board of Directors decides on all other matters related to the repurchase and/or acceptance as pledge of
own shares. Own shares can be repurchased using, inter alia, derivatives. Own shares can be repurchased
otherwise than in proportion to the shareholdings of the shareholders (directed repurchase).
This authorization cancelled the authorization given by the Annual General Meeting held on 27
January 2022 to decide on the repurchase the company’s own shares and/or to accept the company’s
own shares as pledge. The authorization is effective until the next Annual General Meeting, however, no
longer than until 31 March 2024.
The Annual General Meeting also authorized the Board of Directors to decide on the issuance of
shares as well as the issuance of special rights entitling to shares referred to in chapter 10 section 1 of
the Finnish Companies Act as follows. The number of shares to be issued based on this authorization
shall not exceed 3,185,000 shares, which corresponds to approximately 9.5% of all the shares in the
company. The authorization covers both the issuance of new shares as well as the transfer of treasury
shares held by the company.
The Board of Directors decides on all the conditions of the issuance of shares and of special rights
entitling to shares. The issuance of shares and of special rights entitling to shares may be carried out in
deviation from the shareholders` pre-emptive rights (directed issue).
This authorization cancelled the authorization given by the Annual General Meeting held on 27
January 2022 to decide on the issuance of shares as well as on the issuance of special rights entitling
to shares. The authorization is effective until the next Annual General Meeting, however, no longer than
until 31 March 2024.
The closing price of the share was EUR 18.02 on 3 October 2022. The closing price of the share on
the last trading day of the financial year on 29 September 2023 was EUR 18.00. The highest price of the
share during the financial year was EUR 20.50, the lowest EUR 14.36. The average closing price during
the financial year was EUR 17.44 and the average volume per day was 54,548 shares.
Musti Group’s market capitalization was EUR 603.6 million on 29 September 2023.
Musti's Year Musti's Direction Corporate Governance Financial Statements 41
Annual Report 2023Board of Directors' Report
Shareholders
At the end of the reporting period, the number of registered shareholders was 11,899. The proportion
of nominee-registered shareholders was 68.02% of the company’s shares. The 20 largest shareholders
registered in the book-entry register maintained by Euroclear Finland Oy held a total of 23.61% of Musti
Group’s shares and votes at the end of the financial year.
Shareholders, Musti Group, 29 September 2023
Number of shares % of shares
1 Varma Mutual Pension Insurance Company 2,057,020 6.13
2 Ilmarinen Mutual Pension Insurance Company 944,988 2.82
3 Evli Finnish Small Cap Fund 705,000 2.10
4 Elo Mutual Pension Insurance Company 639,000 1.91
5 Nordea Finland Investment Fund 443,758 1.32
6 Mandatum Life Insurance Company Limited 434,598 1.30
7 Säästöpankki Kotimaa investment fund 415,779 1.24
8 Säästöpankki Small Cap investment fund 352,846 1.05
9 Aktia Capital investment fund 260,000 0.78
10 Kaleva Mutual Insurance Company 259,077 0.77
10 largest total 6,512,066 19.42
100 largest total 9,204,800 27.45
Nominee registered total 22,810,946 68.02
Number of shares total 33,535,453 100.00
Shareholders by number of shares held, Musti Group, 29 September 2023
Number of shares
Number of
shareholders % of shareholders Number of shares % of shares
1–100 8,458 71.08 290,607 0.87
101–500 2,803 23.56 621,454 1.85
501–1000 349 2.93 258,832 0.77
1001–5000 206 1.73 432,364 1.29
5001–10000 26 0.22 17 7,061 0.53
10001–50000 26 0.22 662,863 1.98
50001–100000 8 0.07 609,937 1.82
100001–500000 16 0.13 358,3514 10.69
500001– 7 0.06 2,689,8821 80.21
Total 11,899 100.00 33,535,453 100.00
Shareholders by sector, Musti Group, 29 September 2023
Shareholders by sector Number of shares % of shares
Public sector 3,746,835 34.94
Financial and insurance corporations 3,626,302 33.81
Households 1,438,518 13.41
Non-nancial corporations 1,461,117 13.62
Non-prot institutions 436,899 4.07
Rest of the world 14,836 0.14
Total 10,724,507 100.00
Nominee registered 22,810,946 68.02
Number of shares total 33,535,453 100.00
During October 2022–September 2023, Musti Group received the following announcement under
Chapter 9, Section 5 of the Securities Markets Act:
• On 14 April 2023 Musti Group plc received a notication in accordance with Chapter 9, Section 10 of
the Finnish Securities Market Act, according to which the total direct and indirect holdings of Varma
Mutual Pension Insurance Company had on 14 April 2023 increased above 5% of the company´s
shares and votes.
A list of the largest registered shareholders is available on the company’s website at
www.mustigroup.com/investors.
Remuneration
The objective of Musti Group’s remuneration program is to promote the company’s competitiveness
and to support the execution of the company’s strategy. Furthermore, the remuneration programs aim
to retain key persons and the whole staff and create long-term commitment in order to achieve shared
goals and to create shareholder value.
The remuneration in Musti Group is described in more detail in the Remuneration Report published
in accordance with the Financial Statements and the Board of Directors’ Report.
Corporate responsibility
Musti Group is committed to developing its responsibility policies and best practices on a long-term
basis and it is committed to being a responsible forerunner in its industry. Musti Group is the only pet
Musti's Year Musti's Direction Corporate Governance Financial Statements 42
Annual Report 2023Board of Directors' Report
specialty company to have committed to the United Nations Global Compact. The company has built
a strong responsibility foundation and key performance indicators to measure the results and revises
responsibility program and targets regularly as part of a continuous improvement to stay relevant in the
responsibility work.
Conducting operations in a sustainable, responsible, and environmentally friendly way requires
focused and purposeful actions at all levels of the organization. The basis of all Musti Group’s
responsibility approach is a responsible supply chain, reducing environmental impact as well as
good governance and high ethics. In addition, the company has identified three particular focus
areas, themes, in order to communicate with its stakeholders: pets and their parents, employees
and communities. The most important themes under pets and their parents are high-quality and safe
products and services as well as satisfied and loyal customers. Under employees, the most important
themes are thriving experts and well-being at work, and under communities, working for the common
good and openness for new inventions.
Musti Group sets high standards for quality, safety and expertise, putting the welfare of pets, people
and the environment first. The company has already taken concrete actions to this end, having been
a member of amfori Business Social Compliance Initiative (amfori BSCI) since 2017. The company also
expects its major suppliers to commit to Musti Group’s requirements regarding responsible business
practices. Following the Musti Group Supplier Code of Conduct and all national laws and regulations
is imperative. The company is conducting visits to the supplier sites in Europe, also the BSCI visits the
company´s supplier sites in risk countries. Furthermore, the company has a third-party partner in China
who visits and audits the sites in Asia. The company has initiated more systematic processes for supply
chain sustainability, especially in risk countries and in risk countries 100% of our tier one suppliers have
been audited.
Musti Group’s responsibility targets are available at https://www.mustigroup.com/responsibility/
responsibility-targets/.
Musti Group’s Non-Financial Information Report for the financial year 2023 has been published
together with the Financial Statements and the Board of Directors’ report.
Risks and uncertainties
Musti Group’s risk profile follows the general risk level of the retail and grocery trade. The industry is
not particularly cyclical and not subject to rapid changes. The company regularly monitors changes in
the risks and their impact on the business. The company implements risk management continuously
and systematically according to a scheduled process. The risk management process ensures that risks
related to the Group are identified, estimated, and controlled in a proactive way and the management
of risks is monitored. The company’s risk management includes, among others: identification and
review of risks, risk assessment, determining and implementing control measures for the identified
risks, and monitoring and reporting of risks.
The following describes the risks and uncertainties that are considered significant for Musti Group.
Risks relating to the macroeconomic environment and inflation
Increasing geopolitical instability could have a significant impact on the global economy and business
environment. Although Musti Group sells products, a recession may have a negative impact on
consumer confidence and sales.
General cost level has risen in 2023 following price increases in energy, raw materials, and freights.
Musti Group’s cost level has increased accordingly and is reflected in higher retail prices to maintain
profitability. Higher inflation will also contribute to higher interest rates. These may have an impact on
consumer behavior and price competition.
Risks relating to changes in the competitive environment
Pet products and services retail industry has become increasingly competitive. Musti Group´s
competitors include large grocery retailers, smaller pet specialist stores, online competitors (including
general online stockists and internet pure plays), home and garden stores, pet service providers, as
well as veterinary clinics. Many are competing for the same customers with similar offerings, and it is
easy to make comparisons between competitors. The large share of own and exclusive products partly
mitigates this risk. If Musti Group fails in this competition, its sales and profitability would decrease.
Risks relating to quality of products and services
A failure in product safety control or supply chain quality assurance may result in financial losses, loss
of customer trust or in the worst case, a health hazard to a pet. In 2023, Musti Group acquired the pet
food manufacturer Premium Pet Food Suomi Oy. The production processes are subject to risks, such as
equipment breakdown, raw material availability, accidents, damage, and interruption risks. These risks
are managed through certifications and continuous EHSQ work.
Customers may also make allegations against Musti Group publicly concerning the quality of the
company’s product or services. This could result in a reputational loss for Musti Group.
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Annual Report 2023Board of Directors' Report
Risks relating to changes in customer preferences
Customers’ buying patterns may change more rapidly than what the company has anticipated. With the
rising trend of online shopping customers expect a simple and consistent shopping experience and fast
delivery regardless of the sales channel. Brick-and-mortar stores are expected to offer experiences, a
place to meet, and information. Various sustainability aspects in products and services are increasingly
important to customers. If the company fails to address the new purchasing patterns and sustainability
requirements, there is a risk that the investment in assortment, sales channels and services will not
generate the intended results.
Risks relating to sourcing of products
A loss of significant supplier or an inability to source products from such suppliers that meet Musti
Group´s standards and requirements, or a supply reduction or cost increases demanded by suppliers
may have a material adverse effect on the customer relationships and competitive position.
Risks relating to inventories
A lot of the company’s capital may be tied up in carrying the inventory if the company is unable
to forecast accurately customer demand. Operative difficulties in managing the inventory and
obsolescence may increase costs of inventory or result in selling the goods at discount which may have
a negative impact on profitability.
Risks relating to logistics
The company’s distribution center in Eskilstuna is its distribution hub. Most goods from suppliers are
delivered to Eskilstuna and then distributed to shops and online customers. Collecting the logistics
in one location carries certain risks, for example, disruptions to communications and information
technology infrastructure, as well as fire and strikes, which may result in business discontinuity or lower
sales.
Risks relating cybercrimes
The frequency of professional cybercrimes is growing especially after the war in Ukraine begun. This
has increased the risk relating to business continuity and loss of critical information. Cyber-attacks may
target, for example, data systems critical for business continuity, or personal data. Cyber-attacks may
result in disruptions in sales, personal data leakages, financial losses, compensation for damages or
reputational damages.
Risks relating to employees
If Musti Group is not perceived as an attractive and sustainable employer brand, the company may not
be able to safeguard skilled and motivated employees. The prerequisite for execution of strategy and
reaching the set targets is to be able to maintain insightful and motivated employees.
Risks relating to currency fluctuations
As a significant part of Musti Group’s business is in countries outside the eurozone, Musti Group’s
balance sheet and results are exposed to fluctuations in foreign currency exchange rates. The main
transaction exposure currencies are USD and GBP in which Musti Group of companies has outflows
related to purchases. Translation exposure arises from subsidiaries reporting in SEK and NOK as results
and balance sheet items are consolidated to Musti Group level.
Seasonality
Musti Group’s business is characterized by a generally limited seasonality effect, with the high share of
recurring food and stable products of net sales translating into low seasonality within years. However,
there are certain intra-year fluctuations that affect cash flows, sales and profitability, which are made
evident by Musti Group’s financial year being from 1 October to 30 September. Usually, the period
between July to December has higher sales and profitability margins compared to January to June,
driven by higher sales of accessories and other seasonal products.
The volumes and timing of Musti Group’s sales may vary somewhat due to weather conditions, with
sales of pet clothing being primarily impacted. Cold winters and rainy weather generally result in higher
sales of coats and shoes for pets.
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Annual Report 2023Board of Directors' Report
Significant events after the financial year
The company has withdrawn three batches of SMAAK pet food following customer claims during the
first and second week of November. The high concentration of glycoalkaloids in a batch of imported
potato flakes was identified as the reason for the symptoms caused by the withdrawn products. At the
moment the company estimates that the incident might have a minor impact on the company's net sales
or profitability. In addition, the Company will recognize impairment charges, estimated approximately
EUR 0.3–0.4 million to inventory in fiscal year 2024 as a result of the case.
The Company will incur some costs for the investigation of the matter, the product recall and the
customer claims, for which the Company expects to receive at least partial insurance compensation.
A consortium comprising Sonae, Jeffrey David, Johan Dettel and David Rönnberg announced a
recommended public tender offer through Flybird Holding Oy for all shares in Musti Group Plc on
29 November 2023. The Board of Directors of the Company, represented by a quorum comprising
the non-conflicted members of the Board of Directors who are not members of the Consortium, has
unanimously decided to recommend that the shareholders of the Company accept the tender offer.
The consortium expects to publish a tender offer document with detailed information on the tender
offer on or about 15 December 2023. The offer period under the tender offer is expected to commence
on or about 18 December 2023 , and to expire on or about 12 February 2024. The offer price under the
tender offer is EUR 26.00 for each share. The completion of the tender offer is not expected to have any
immediate material effects on the operations, or the position of the management or employees, of the
Company. Further information on the tender offer is available in the stock exchange release published
on 29 November 2023.
Outlook for the financial year 2024
The underlying trend of pet parenting that drives the long-term structural growth of the pet care market
remains robust. During 2023 the pet space has again proven to be resilient in challenging economic
times. Musti Group expects it is able to continue its performance aligned with strategy and financial
targets focusing on the high-quality products and services the pet parents seek.
Board of Directors’ proposal for profit distribution and
capital return
The Board of Directors of Musti Group plc proposes to the Annual General Meeting that shareholders
will be paid a capital return of EUR 0.60 per share from the invested unrestricted equity reserve totaling
approximately EUR 20.0 million and that no dividend will be paid for the financial year that ended on
30 September 2023. The capital return corresponds approximately 76% of Musti Group’s profit for the
financial year.
The parent company’s distributable funds total EUR 131,026,903.86 of which the profit for the
financial year is EUR 3,671,767.82.
The Board of Directors proposes that the capital return be paid in two instalments. The first
instalment of EUR 0.30 per share would be paid to the shareholders who are registered in the
shareholders` register of the Company maintained by Euroclear Finland Ltd on the record date of the
first capital return instalment on 2 February 2024. The Board of Directors proposes that the first capital
return instalment would be paid on 9 February 2024.
The second capital return instalment of EUR 0.30 per share would be paid in August 2024. The
second instalment would be paid to shareholders who are registered in the shareholders` register of
the Company maintained by Euroclear Finland Ltd on the record date of the second capital return
instalment on 22 August 2024. The Board of Directors proposes that the second capital return
instalment would be paid on 29 August 2024.
The Board of Directors also proposes that the Annual General Meeting would authorize the Board
of Directors to resolve, if necessary, on a new record date and date of payment for the second capital
return instalment should the rules of Euroclear Finland Ltd or statues applicable to the Finnish book-
entry system change or otherwise so require.
Helsinki, 14 December 2023
Board of Directors
Musti's Year Musti's Direction Corporate Governance Financial Statements 45
Annual Report 2023Board of Directors' Report
Financial ratios and alternative performance measures
EUR millions or as indicated 10/2022–9/2023 10/2021–9/2022 Change %
Net sales 425.7 391.1 8.9%
Net sales growth, % 8.9% 14.7%
LFL sales growth, % 9.5% 6.7%
LFL store sales growth, % 6.7% 4.2%
LFL online sales growth, % 19.0% 14.7%
Store sales 322.3 300.3 7.3%
Online sales 97.8 87.0 12.4%
Online share of net sales, % 23.0% 22.2%
Gross margin, % 45.7% 46.4%
EBITDA 74.6 65.4 14.0%
EBITDA margin, % 17.5% 16.7%
Adjusted EBITDA 73.6 66.9 10.1%
Adjusted EBITDA margin, % 17.3% 17.1%
EBITA 43.6 37.3 16.8%
EBITA margin, % 10.2% 9.5%
Adjusted EBITA 42.6 38.8 10.0%
Adjusted EBITA margin, % 10.0% 9.9%
Operating Prot 37.8 30.9 22.4%
Operating Prot margin, % 8.9% 7.9%
Prot/loss for the period 26.5 22.3 18.6%
Earnings/Share, basic, EUR 0.79 0.67 18.3%
Earnings/Share, diluted, EUR 0.79 0.66 18.4%
Cash ow from operating activities 79.6 46.1 72.4%
Investments in tangible and intangible assets 11.9 14.2 -16.6%
Net debt 137.9 143.4 -3.8%
Gearing, % 83.9% 89.4%
Net debt / LTM Adjusted EBITDA 1.9 2.1 -12.6%
Equity ratio, % 41.7% 43.2%
Number of loyal customers, thousands 1,543 1,454 6.1%
Number of stores at end of period 342 335 2.1%
of which directly operated 330 319 3.4%
Own & Exclusive share, % 52.4% 52.7%
Share performance indicators
EUR millions or as indicated 10/2022–9/2023 10/2021–9/2022 10/2020–9/2021
Earnings per share, basic, EUR 0.79 0.67 0.62
Earnings per share, diluted, EUR 0.79 0.66 0.62
Equity per share, EUR 4.90 4.78 4.68
Dividend payout per share and capital return
total 0.60 0.50 0.44
Dividend payout and return of capital, total of
result, % 76.0% 75.1% 70.6%
Eective dividend yield, % 3.3% 2.8% 1.4%
Price/earnings ratio (P/E) 22.71 26.60 49.46
Highest share price, EUR 20.46 36.64 3 7.22
Lowest share price, EUR 14.63 15.35 18.41
Share price as at 30 September 18.00 17.82 30.9
Market capitalisation 603,638,154 597,601,772 1,036,245,498
Share turnover during the nancial year, % 40.7% 48.7% 72.1%
Shares outstanding at the end of the period 33,535,453 33,535,453 33,535,453
Shares outstanding at the end of the period,
diluted 33,644,244 33,623,919 33,576,033
Weighted average adjusted number of shares
during the nancial period, basic 33,374,823 33,337,805 33,410,411
Weighted average adjusted number of shares
during the nancial period, diluted 33,598,167 33,578,629 33,655,418
Musti's Year Musti's Direction Corporate Governance Financial Statements 46
Annual Report 2023Board of Directors' Report
Calculation formulas of key performance indicators
Key Performance Indicator Denition
Gross prot Net sales - Material and services
Earnings before interest, taxes, depreciation and
amortization (EBITDA)
Operating prot + Depreciation, amortization and
impairment
Adjusted earnings before interest, taxes, depreciation
and amortization (Adjusted EBITDA)
Operating prot + Depreciation, amortization and
impairment +adjustments
Earnings before interest, taxes and amortization (EBITA)
Operating prot + amortization and impairment of
intangible assets
Adjusted earnings before interest, taxes and
amortization (Adjusted EBITA)
Operating prot + amortization and impairment
of intangible assets + Adjustments
Net Debt
Interest bearing liabilities - Loan receivables +/ -
Derivative nancial instruments - Cash and cash
equivalents
Gearing (%)
Net debt
Equity
Net debt/LTM (last twelve months) Adjusted EBITDA
Net debt
LTM adjusted EBITDA
Equity ratio (%)
Total equity
Total assets - Advances received
LFL (Like-for-like) sales growth (%)
Sales of online channels and stores that have been
open more than 13 months
Sales from corresponding online channels and stores
in the same time period
Key Performance Indicator Denition
Own & Exclusive share (%)
Sales of own and exclusive product sales
Product sales in own channels
Online share (%)
Online sales
Net sales
Earnings per share, basic
Prot/loss for the period - Non-controlling interests
Average number of shares
Earnings per share, diluted
Prot/loss for the period - Non-controlling interests
Average diluted number of shares
Equity per share, EUR
Equity attributable to equity holders of the parent
Adjusted number of shares at the balance sheet date
Dividend payout and return of capital, total of result, %
(Dividend/share)+(return of capital/share) x 100
(Earnings/share)
Eective dividend yield, %
(Dividend/share) x 100
Share price at balance sheet date
Market capitalization, EUR million Share price at balance sheet date x Number of shares
Price/earnings ratio (P/E)
Share price at balance sheet date
Earnings per share, basic
Musti's Year Musti's Direction Corporate Governance Financial Statements 47
Annual Report 2023Board of Directors' Report
Reconciliation of key performance indicators
EUR millions or as indicated 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Gross prot
Net sales 425.7 391.1
Material and services -231.3 -209.6
Gross prot 194.5 181.5
Gross margin (%) 45.7% 46.4%
Earnings before interest, taxes, depreciation and
amortization (EBITDA)
Operating prot 37.8 30.9
Depreciation, Amortization and Impairment 36.8 34.5
Earnings before interest, taxes, depreciation and
amortization (EBITDA) 74.6 65.4
EBITDA margin (%) 17.5% 16.7%
Adjusted earnings before interest, taxes, depreciation
and amortization (Adjusted EBITDA)
Operating prot 37.8 30.9
Depreciation, amortization and Impairment 36.8 34.5
Adjustments -0.9 1.5
Adjusted earnings before interest, taxes, depreciation
and amortization (Adjusted EBITDA) 73.6 66.9
Adjusted EBITDA margin (%) 17.3% 17.1%
Adjustments (EBITDA)
Restructuring related expenses 0.5 0.0
Acquisition/IPO related expenses 0.4 0.0
Other items aecting comparability -1.4 1.5
Adjustments (EBITDA) -0.9 1.5
Earnings before interest, taxes and amortization (EBITA)
Operating prot 37.8 30.9
amortization and impairment 5.8 6.4
Earnings before interest, taxes and amortization (EBITA) 43.6 37.3
EBITA margin (%) 10.2% 9.5%
EUR millions or as indicated 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Adjusted earnings before interest, taxes and
depreciation (Adjusted EBITA)
Operating prot 37.8 30.9
amortization and impairment of intangible assets 5.8 6.4
Adjustments -0.9 1.5
Adjusted earnings before interest, taxes and
depreciation (Adjusted EBITA) 42.6 38.8
Adjusted EBITA margin (%) 10.0% 9.9%
Adjustments (Operating prot)
Restructuring related expenses 0.5 0.0
Acquisition/IPO related expenses 0.4 0.0
Other items aecting comparability -1.4 1.5
Adjustments (Operating prot) -0.9 1.5
Earnings per share, basic
Prot/loss for the period 26.5 22.3
Non-controlling interest 0.0 0.0
Average number of shares 33.4 33.3
Earnings per share, basic 0.79 0.67
Earnings per share, diluted
Prot/loss for the period 26.5 22.3
Non-controlling interest 0.0 0.0
Average number of shares* 33.6 33.6
Earnings per share, diluted 0.79 0.66
*Includes shares from Restricted Share Plan (PSP)
Net debt
Interest-bearing liabilities 161.2 155.5
Derivative nancial instruments -1.3 -2.1
Cash and cash equivalents 22.0 10.1
Net debt 137.9 143.4
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EUR millions or as indicated 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Gearing (%)
Net Debt 137.9 143.4
Equity 164.4 160.4
Gearing (%) 83.9% 89.4%
Net debt/LTM Adjusted EBITDA
Net debt 137.9 143.4
LTM adjusted EBITDA 73.6 66.9
Net debt/LTM adjusted EBITDA 1.9 2.1
Equity ratio (%)
Total equity 164.4 160.4
Total assets 394.2 371.4
Advances received 0.3 0.3
Equity ratio (%) 41.7% 43.2%
LFL sales growth (%)
Net sales 425.7 391.1
Net sales growth % 8.9% 14.7%
Other growth % -0.6% 8.1%
LFL sales growth (%) 9.5% 6.7%
LFL store sales growth (%)
Store sales 322.3 300.3
Store sales total growth % 7.3% 20.1%
Other growth % 0.6% 15.9%
LFL store sales growth (%) 6.7% 4.2%
EUR millions or as indicated 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Net sales
Store sales 322.3 300.3
Online sales 97.8 87.0
Other sales 5.7 3.8
Net sales 425.7 391.1
Online share (%)
Net sales 425.7 391.1
Online sales 97.8 87.0
Online share (%) 23.0% 22.2%
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Financial
Statements
Group financial statements 52
Parent company financial statements 93
Auditor's report 102
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4. Net working capital 73
4.1 Inventories 73
4.2 Trade and other receivables 74
4.3 Trade and other payables 74
5. Capital structure and financial instruments 75
5.1 Financial risk management 75
5.2 Financial assets and liabilities 80
5.3 Commitments and contingencies 86
5.4 Financial income and expenses 87
5.5 Capital Management 87
5.6 Equity 87
6. Other notes 90
6.1 Related party transactions 90
6.2 Taxes 91
6.3 Subsequent events 92
7. Parent company financial statement, FAS 93
Musti Group plc’s Board of Directors’ proposal to the Annual General
Meeting for the distribution of distributable funds and signing of the
financial statements and Board of Directors’ review 101
Auditor’s report 102
Musti Group plc Financial Statements 30 September 2023
Table of contents
Group financial statements, IFRS 52
Consolidated statement of income, IFRS 52
Consolidated statement of financial position, IFRS 53
Consolidated statement of changes in equity 54
Consolidated statement of cash flows, IFRS 55
1. Basis of preparation 56
1.1 General information 56
1.2 Accounting principles 56
1.3 Material accounting estimates and determinations based
on the management's judgement 57
1.4 Group information 57
1.5 New and amended IFRS standards and IFRIC interpretations 58
2. Operating results 59
2.1 Segment reporting and net sales 59
2.2 Other operating income 62
2.3 Other operating expenses 62
2.4 Share-based payments 63
3. Capital employed 65
3.1 Business combinations 65
3.2 Intangible assets 67
3.3 Goodwill and impairment testing 68
3.4 Investments in joint ventures 68
3.5 Property, plant and equipment 70
3.6 Leases 71
No assurance has been obtained for the ESEF tagging of the digital financial statements.
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housand | Note | 1 Oct 2022–30 Sep 2023 | 1 Oct 2021–30 Sep 2022 |
Net sales | 2.1 | ||
Other operating income | 2.2 | ||
Share of prot of a joint venture | 3.4 | ||
Materials and services | 4.1 | - | - |
Employee benet expenses | 2.3 | - | - |
Other operating expenses | 2.3 | - | - |
| 3.2, 3.3, | |||
| Depreciation, amortization and impairment | 3.5, 3.6 | - | - |
Operating prot | |||
Financial income | 5.4 | ||
Financial expenses | 5.4 | - | - |
Financial income and expenses, net | - | - | |
Prot before taxes | |||
Income tax expense | 6.2 | - | - |
Prot/loss for the period | |||
| Attributable to: | |||
Owners of the parent | |||
Non-controlling interest | |||
| Earnings per share (EUR) for prot | |||
| attributable to owners of the parent | |||
Basic EPS (EUR) | |||
Diluted EPS (EUR) |
EUR thousand | Note | 1 Oct 2022–30 Sep 2023 | 1 Oct 2021–30 Sep 2022 |
Prot/loss for the period | |||
| Other comprehensive income | |||
Items that may be reclassied to prot or loss in subsequent periods: | |||
Translation dierences | - | - | |
Tax on items that may be reclassied to prot or loss | |||
Total comprehensive income | |||
| Attributable to: | |||
Owners of the parent | |||
Non-controlling interest | - |
Group Financial Statements, IFRS
Consolidated statement of income,
IFRS
Consolidated statement of
comprehensive income, IFRS
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EUR thousand | Note | 30 Sep 2023 | 30 Sep 2022 |
| ASSETS | |||
| Non-current assets | |||
Goodwill | 3.1, 3.2, 3.3 | ||
Other intangible assets | 3.2 | ||
Right-of-use assets | 3.6 | ||
Property, plant and equipment | 3.5 | ||
Investments in joint ventures | 1.4, 3.4 | ||
Deferred tax assets | 6.2 | ||
Derivative nancial instruments | 5.2 | ||
Other non-current receivables | |||
Total non-current assets | |||
| Current assets | |||
Inventories | 4.1 | ||
Trade and other receivables | 4.2, 5.1 | ||
Derivative nancial instruments | 5.2 | ||
Income tax receivables | 6.2 | ||
Cash and cash equivalents | 5.2 | ||
Total current assets | |||
TOTAL ASSETS |
EUR thousand | Note | 30 Sep 2023 | 30 Sep 2022 |
| EQUITY AND LIABILITIES | |||
| Equity attributable to owners of the parent | |||
Share capital | 5.6 | ||
Other reserves | 5.6 | ||
Own shares | 5.6 | - | - |
Translation dierences | 5.6 | - | - |
Retained earnings | |||
Total equity attributable to owners of the parent | |||
Equity attributable to non-controlling interest | |||
Total equity | |||
| LIABILITIES | |||
| Non-current liabilities | |||
Loans from credit institutions | 5.2 | ||
Lease liability | 3.6 | ||
Deferred tax liabilities | 6.2 | ||
Other liabilities | 5.2 | ||
Total non-currentliabilities | |||
| Current liabilities | |||
Commercial papers | 5.2 | ||
Lease liability | 3.6 | ||
Trade and other payables | 4.3 | ||
Derivative nancial instruments | 5.2 | ||
Income tax liabilities | 6.2 | ||
Provisions | |||
Total current liabilities | |||
Total liabilities | |||
TOTAL EQUITY AND LIABILITIES |
Consolidated statement of financial position, IFRS
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Consolidated statement of changes in equity
EUR thousand | Attributable to owners of the parent | Non-controlling interest | Total equity | |||||
Share capital | Other reserves | Treasury shares | Translation dierences | Retained earnings | Total | |||
Equity at 1 Oct 2021 | - | - | ||||||
| Prot/loss for the period | ||||||||
| Translation dierences | - | - | - | - | ||||
Tax on other comprehensive income | ||||||||
Total comprehensive income | 0 | 0 | 0 | - | - | |||
Other changes | - | |||||||
Capital returns | - | - | - | |||||
Dividends | - | - | ||||||
Share-based incentive plan | ||||||||
| Equity at 30 Sep 2022 | - | - | ||||||
EUR thousand | Attributable to owners of the parent | Non-controlling interest | Total equity | |||||
Share capital | Other reserves | Treasury shares | Translation dierences | Retained earnings | Total | |||
Equity at 1 Oct 2022 | - | - | ||||||
| Prot/loss for the period | ||||||||
| Translation dierences | - | - | - | - | ||||
Tax on other comprehensive income | ||||||||
Total comprehensive income | 0 | 0 | 0 | - | ||||
Other changes | - | |||||||
Capital returns | - | - | - | |||||
Acqusition of own shares | ||||||||
Share-based incentive plan | - | - | - | |||||
| Equity at 30 Sep 2023 | - | - | ||||||
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Consolidated statement of cash flows, IFRS
EUR thousand | Note | 1 Oct 2022–30 Sep 2023 | 1 Oct 2021–30 Sep 2022 |
| Cash ows from operating activities | |||
Prot before taxes | |||
| Adjustments | |||
Depreciation, amortization and impairment | |||
Financial income and expenses, net | |||
Other adjustments | - | ||
| Cash ows before changes in working | |||
capital | |||
| Change in working capital | |||
Increase (-) / decrease (+) in trade and other receivables | 4.2 | - | - |
Increase (-) / decrease (+) in inventories | 4.1 | - | |
Increase (+) / decrease (-) in trade and other payables | 4.3 | ||
Cash ows from operating activities before nancial items and taxes | |||
Income taxes paid | - | - | |
Net cash from operating activities |
EUR thousand | Note | 1 Oct 2022–30 Sep 2023 | 1 Oct 2021–30 Sep 2022 |
| Cash ows from investing activities | |||
Investments in tangible and intangible assets | 3.2, 3.5 | - | - |
| Acquisition of subsidiaries and business | |||
acqusitions, net of cash acquired | 3.1 | - | - |
Net cash from investing activities | - | - | |
| Cash ows from nancing activities | |||
Capital returns paid | 5.6 | - | - |
Dividends paid | - | ||
Proceeds from non-current loans | |||
Repayments of non-current loans | - | - | |
Issuance of commercial papers | 5.2 | - | |
Repayments of lease liabilities | - | - | |
Interest and other nancial expenses paid | - | - | |
Interest and other nance income received | |||
Net cash ow from nancing activities | - | - | |
Net change in cash and cash equivalents | - | ||
Cash and cash equivalents at start of period | 5.1, 5.2 | ||
Foreign exchange dierences and cash of acquired subsidiary | - | ||
Cash and cash equivalents at end of period |
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Notes to Musti Group plc’s financial statements
1.1 General information
its registered address is Mäkitorpantie 3 B, FI-00620 Helsinki, Finland . The parent company’s shares
are listed on Nasdaq OMX Helsinki Stock Exchange. A copy of the consolidated financial statements is
available at the Group’s website www.mustigroup.com or at the company’s headquarters Mäkitorpantie
3 B, FI-00620 Helsinki, Finland .
The Board of Directors of Musti Group plc has approved the financial statements for publication
on 14 December 2023. Under the Finnish Limited Liability Companies Act, the shareholders may
accept or reject the financial statement in the Annual General meeting of the shareholders held after
the publication. The Annual General Meeting is also entitled to amend the consolidated financial
statements.
1.2 Accounting principles
Musti Group’s consolidated financial statements have been prepared in compliance with the
International Financial Reporting Standards (IFRS) adopted in the European Union, including IAS
and IFRS standards and their SIC and IFRIC interpretations in effect on 30 September 2023. In the
Finnish Accounting Act and ordinances based on its provisions, IFRS refer to the standards and their
interpretations adopted for application in the EU in accordance with the procedures as set in regulation
(EC) No 1606/2002. The notes to the consolidated financial statements also satisfy the requirements of
the Finnish accounting and corporate legislation that complements the IFRS standards.
Consolidated financial statements are presented in thousand euros and figures have been rounded
to the nearest thousand, and due to this, the total sum of the presented individual figures may differ
from the presented total sum. The consolidated financial statements have been prepared based on
initial acquisition costs, except for financial instruments described later that are measured at fair value
through profit and loss.
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The company’s operating currency is euro, which is also the company’s and the Group’s reporting
currency.
Translation of items in foreign currencies
The items in the financial statements of the Group companies are valued in the currency of each
company’s main economical operating environment (operating currency). The figures presented in the
consolidated financial statements are in thousand euros, unless stated otherwise.
Transactions conducted in foreign currencies are converted to the operating currency using
exchange rates prevailing on the transaction date. Exchange rate gains and losses arising from
payments related to these transactions and conversion of monetary assets and liabilities nominated in
foreign currencies using the exchange rates prevailing at the end of the period are recognized through
profit and loss.
In the consolidated financial statements, the profit and loss statements of the foreign subsidiaries
have been converted into euros using the average rate of the financial year, and the balance sheet items
have been translated using the exchange rates prevailing on the balance sheet date. The translation
differences arising from subsidiary net investments and non-current subsidiary loans without agreed
settlement dates are recognized through Other Comprehensive Income (OCI) to cumulative translation
adjustments under equity. The Group classified certain intercompany loans as net investments in the
second quarter of the financial year 2022 and the translation differences arising from them are recorded
in OCI.
Sources of uncertainty and determinations based on the management’s judgement, which have been
identified in the Group and are deemed to satisfy these criteria, are presented in connection with the
items that are deemed to be affected by them. The table below sets forth the most significant situations
where estimates or the management’s judgement have been applied, as well as references to their
descriptions.
Accounting estimates and management judgement Note
Net sales and contractual liabilities 2.1 and 4.3
Business combinations 3.1
Goodwill impairment testing 3.3
Inventory valuation 4.1
Leases 3.6
1.3 Material accounting estimates and determinations based on the
management's judgement
The Group’s material accounting principles are mainly described in the note that relates to the matter in
question. Preparation of Musti Group’s consolidated financial statements requires estimates, judgement
and assumptions that may impact the application of the accounting principles and the amounts
presented in the balance sheet as at its date. In addition, they impact on the amount of income and
costs recognized for the financial year. The actual amounts may differ from previous estimates and
determinations based on the management’s judgement.
The estimates and determinations based on judgement are reviewed regularly. Changes in
accounting estimates are recognized for the period when the estimate was adjusted, as well as for all
subsequent periods.
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1.5 New and amended IFRS standards and IFRIC interpretations
Amendments and annual improvements to IFRS standards
Musti Group has applied amendments and annual improvements to IFRS standards effective from the
beginning of October 2022. Amendments and annual improvements have not had a major impact on the
financial statements.
The Group will apply the new or amended standards as they become effective. Musti Group
estimates that IFRS standards or IFRIC interpretations that are published at the time when these
financial statements have been prepared and will become effective in the future, will not have a material
impact on the Group’s financial statements.
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2. OPERATING RESULTS
This section focuses on financial results of Musti Group. In the notes on the following pages, the
operating profit of the group is explained by component.
Musti Group provides pet food products and accessories to its customers, as well as various welfare
and veterinary services in its specialised stores and pet clinics. Pet food products and accessories are
available in stores and online. Musti Group's chain included 342 stores on 30 September 2023 (30
September 2022: 335), of which own stores amounted to 330 (30 September 2022: 319).
allocated to the segments. For other parts, the management monitors performance in accordance with
IFRS. Financial income and expenses are not allocated to the segments, as the Group Treasury manages
the Group’s cash and cash equivalents and financial liabilities. Similarly, share of profits in associates
and income taxes are not allocated to the segments.
In its reporting, the Group’s Management Team does not allocate balance sheet items to the
segments, and as such, they are not allocated to segments this Note.
Segments 2023
EUR thousand Finland Sweden Norway
Group
functions Group
Net sales* 189,908 170,899 64,933 0 425,740
% split of net sales between
segment 45% 40% 15% 0% 100%
EBITDA 52,569 36,282 15,072 -29,368 74,555
Adjustments 68 215 23 -1,239 -933
Adjusted EBITDA 52,637 36,497 15,095 -30,607 73,623
Depreciation and impairment
of right-of use assets and
tangible assets -11,116 -10,781 -5,667 -3,416 -30,980
EBITA 41,453 25,500 9,405 -32,783 43,575
Adjustments 68 215 23 -1,239 -933
Adjusted EBITA 41,521 25,716 9,428 -34,023 42,643
Amortization and impairment
of intangible assets -5,776
Operating profit 37,800
Financial income 6,522
Financial expenses -10,605
Profit before taxes 33,717
Income tax expense -7,229
Profit/loss for the period 26,487
*Net sales include sales of products and services to external customers. There are no internal net sales between the segments.
2.1 Segment reporting and net sales
Reporting segment
Musti Group’s reporting segments are based on geographical regions, and they are Finland, Sweden
and Norway. Segments are not combined to reporting segments.
The segment structure is based on geographical division where Finland, Sweden and Norway are
separated to individual operating segments based on how the chief operating decision-maker monitors
the business operations. In other items, Musti Group reports the Group functions, including the the
headquarters and the central warehouse as well as production.
Segment information is reported in a manner consistent with the internal reporting provided to the
chief operating decision-maker. The chief operating decision-maker is the Group’s Management Team,
including the CEO. The Management Team is responsible for allocation of resources and reviewing
performance, considering its composition and active involvement in material strategic and operative
decision-making. The net sales of the reporting segments are derived from retail sales, as well as
franchising sales and wholesales in Finland, Sweden and Norway. Online sales of Vetzoo is reported
fully under Sweden.
Country directors of the geographical regions are responsible for their business area, and they are
members of the Group’s Management Team. Decisions on the offering, product pricing and marketing
measures are determined at the country level. The business needs vary among the countries, as their
maturity is very different. Finland is a very stable and mature market; Sweden is growing, and Norway is
still in growth phase, and as such, their investment needs and profitability differ significantly from each
other.
The Group’s Management Team reviews the results of the segments based on net sales, adjusted
EBITDA and operating profit before amortisation of intangible assets (EBITA). Transactions outside
the scope of the ordinary course of business is treated as items impacting comparability, and they are
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Segments 2022
EUR thousand Finland Sweden Norway
Group
functions Group
Net sales* 169,704 164,905 56,512 0 391,122
% split of net sales between
segment 43% 42% 14% 0% 100%
EBITDA 44,486 37,273 14,586 -30,920 65,425
Adjustments 39 0 0 1,424 1,463
Adjusted EBITDA 44,525 37,273 14,586 -29,497 66,888
Depreciation and impairment
of right-of use assets and
tangible assets -10,252 -10,335 -4,644 -2,892 -28,124
EBITA 34,234 26,938 9,941 -33,813 3 7, 30 0
Adjustments 39 0 0 1,424 1,463
Adjusted EBITA 34,273 26,938 9,941 -32,389 38,763
Amortization and impairment
of intangible assets -6,418
Operating profit 30,882
Financial income 6,395
Financial expenses -8,837
Profit before taxes 28,440
Income tax expense -6,109
Profit/loss for the period 22,330
*Net sales include sales of products and services to external customers. There are no internal net sales between the segments.
Revenue recognition
Accounting principles
IFRS 15 establishes a five-step model that is applied to the amount and timing of recognition of sales
revenue. Under the standard, revenue is recognized when the entity satisfies its performance obligation,
meaning that the customer obtains control of the goods or services. Control is transferred either over
time or at a certain moment, and the revenue is recognized in an amount that reflects the consideration
to which the entity expects to be entitled for those goods or services. IFRS 15 principles are applied
using the following five-step model:
1. Identify the contract with a customer
2. Identify the performance obligations in the contract
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations in the contract
5. Recognise revenue
The standard requires the entity to exercise judgement when applying the five-step model to contracts
with its customers. When exercising judgement, material facts and circumstances used for determining
if the performance obligation has been satisfied and the revenue is to be recognized are taken into
consideration.
Significant determinations based on the management's judgement
Musti Group’s management has utilized significant judgement in connection with the right to return
products and the loyalty club bonuses. The amount of the consideration to which Musti Group expects
to be entitled may vary based on the above-mentioned sub-areas. These sub-areas based on the
management’s judgement are addressed more in detail in the section for recognition below.
Sales of goods and revenue recognition (stores, online and franchising stores)
Majority of the Group’s sales revenue originates from retail sales of goods in its stores. The goods sold
in the stores comprise pet food and accessories. The sales are mainly carried out in cash or using credits
cards, and the revenue from the sales of goods is recognized at the time of transfer when the customer
gains control of the goods.
Customers may also purchase gift cards and use them for paying goods in the stores. At the time of
selling a gift card, Musti Group recognizes a corresponding liability in its balance sheet. Sales revenue is
recognized when the customer uses the gift card.
Revenue from orders made online and sales to franchising partners is recognized when all products
related to the order have been delivered to the customer or the franchising partner, and control of the
goods is transferred to the buyer at a specific moment of time. A liability is recorded on the goods in
transit delivered from online stores. The provision on goods in transit is included in the contractual
liabilities.
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Revenue from contract manufacturing of pet food is recognized at the time of transfer when the
customer gains control of the goods.
Net sales are measured at the fair value of the consideration received or to be received. Net sales
include proceeds from the sales of goods and franchising fees at the price which the company expects
to receive adjusted with the indirect taxes, actual and estimated product returns, campaign discounts,
Loyalty club bonuses and indirect taxes, as well as translation differences from sales in foreign
currencies.
Contingent considerations: right to return products
Goods sold directly to consumers in stores and online include a right to return products within a period
of 14 days in Finland and 30 days in Sweden and Norway. Net sales are adjusted by the expected
amount of returns. For more information of the return policy, see Note 4.3 Trade and other liabilities. In
addition, a customer may receive a discount, for example, in the form of campaign discounts.
For the right to return products, Musti Group estimates the amount of the consideration that it is
entitled to receive against the transfer of promised goods to the customer.
Musti Group includes in the transaction price the estimated amount of the contingent consideration
only to the extent that it is very likely that the recognized sales revenue is not required to be reversed
significantly when the uncertainty related to the contingent consideration ceases to exist at a later
moment of time. Musti Group estimates the contingent consideration based on the most likely amount
of money.
Franchising fees
Musti Group carries out franchising operations in Sweden, the franchising fees are based on an upfront
fee and a fee based on the franchising stores net sales. Fees related to franchising agreements are
recognized over time.
Sales of services and revenue recognition
Musti Group provides welfare, veterinary and trimming services. A customer benefits from these
services when it is provided, and as such, the revenue is recognized over time when Musti Group
satisfies its performance obligation.
Net sales by channel
EUR thousand 1 Oct 2022–30 Sep 2023 % 1 Oct 2021–30 Sep 2022 %
Store sales 322,278 75.7 300,291 76.8
Online sales 97,808 23.0 86,996 22.2
Other sales 5,653 1.3 3,834 1.0
Total 425,740 100.0 391,122 100.0
Sales of services are included in the retail store sales. The share of services in the net sales is not
significant, and as such, it is not presented separately. Other sales items include franchising fees and
wholesales. Franchising fees are recognized over time. Musti Group does not have any individual
customer with a share of over 10% of Musti Group’s total net sales.
Customer loyalty programs
Companies in Finland and Sweden operate a loyalty program where the members accrue bonuses from
their purchases made in the stores. The net sales of these companies are adjusted with the customer
refunds in the loyalty program as a part of the sales transaction. Simultaneously, accrued liability on
bonus is recognized on the balance sheet. Corresponding sales in recognized when the customer
refunds are used, or they expire. The expected refunds of the loyalty program bonuses are based on
historical information. Musti updates the estimate quarterly.
Contractual amounts recorded in balance sheet
The Groups recognizes in trade receivables the expected considerations to which it is entitled when
goods are transferred, or services provided to a customer before the customer pays the consideration
(see Note 4.2 Trade and other receivables).
Correspondingly, a liability is presented in Note 4.3 Trade and other liabilities when a customer pays
the consideration before the goods are transferred or services provided to the customer. In addition,
the contractual liabilities include liabilities related to gift cards, Loyalty club bonuses, right to return
products and goods in transit.
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Employee benefit expenses
EUR thousand 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Wages and salaries 59,370 56,303
Pension costs - defined contribution
plans 13,942 12,709
Share based payments 590 1,349
Other employee benefit expenses 2,880 2,231
Total 76,782 72,592
Other operating expenses
EUR thousand 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Rental expenses 10,447 9,068
Maintenance, IT and equipment
expense 6,353 6,245
Sales and marketing 16,511 15,887
Travel costs 1,581 1,240
Voluntary staff expenses 2,194 1,731
Other business expense* 11,440 11,907
Total 48,527 46,078
Auditor's fees
EUR thousand 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Ernst &Young
Audit fees 345 340
Tax advisory 16 83
Other services 26 44
Total 387 466
2.2 Other operating income
Accounting principles
Other operating income includes income that does not relate to the income from regular sales
operations. Other operating income includes, among others, received marketing contributions and
subsidies, insurance compensations, capital gains on fixed assets and rental income.
Other operating income
EUR thousand 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Rental income 437 349
Marketing contribution 1,835 1,360
Other received contribution 220 471
Fair value gains on acquisition 2,440 0
Other items 120 337
Total 5,052 2,516
Number of personnel
Personnel* 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Personnel on average 1,640 1,523
Personnel at the end of period 1,643 1,587
*Full time equivalent
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2.4 Share-based payments
The Note below provides information and describes the impacts of the Group’s share-based
incentive plans. More information on share-based incentive plans can be found in the separate
Remuneration statement.
Accounting principles
The fair value of share-based payments is measured on the day which the share-based payment plan is
agreed upon between the counterparties and will be recognized as an expense over the vesting period.
The settlement, if the set targets are met, is a combination of shares and cash. The component settled
in shares is recognized in shareholders’ equity and the payment settled in cash in liabilities. However,
for awards with net settlement features, the cash-settled component for withholding tax payment is
treated as equity-settled and recognized in shareholders’ equity. At each statement of financial position
date, the Group revises its estimates of the number of shares that are expected to be distributed. The
impact of the revision of the original estimates, are recognized in the statement of income.
Significant determinations based on management’s judgement
At each balance sheet date, the management revises its estimates for the number of shares that
are expected to vest. As part of its evaluation, Musti Group considers the expected turnover of the
personnel benefiting from the incentive plan and other pertinent information impacting the number
of shares to be vested. In addition, the measurement of the fair value for the arrangement and the
parameters used in the measurement of the fair value requires judgement from the management.
Share-based commitment and incentive schemes
The Board of Directors of Musti Group plc decided on 7 May 2020 on a share-based long-term incentive
plan for the management team and the key employees, the Performance Share Plan (PSP) 2020–2024.
On 16 December 2022, the Board of Directors of Musti Group plc decided to launch a new share-based
incentive plan for Musti Group’s key employee, the Performance Share Plan (PSP) 2023–2027.
The aim of a share-based compensation plan is to align the objectives of the shareholders and key
employees for increasing the value of the company in the long-term. The plan is also to commit the key
employees to the company and to offer them competitive incentive schemes that are based on earning
and accumulating shares.
The Performance Share Plan 2020–2024 consists of three performance periods, covering the financial
years of 2020–2022, 2021–2023 and 2022–2024. The Board of Directors will decide separately for each
performance period the plan participants, performance criteria, and the related targets, as well as the
minimum, target, and maximum reward potentially payable based on target attainment at the beginning
of a performance period.
The Performance Share Plan 2023–2027 consists of three consecutive performance periods, covering
the financial years of 2023–2025, 2024–2026 and 2025–2027. The Board of Directors decides on the
plan’s performance criteria and targets to be set for each criterion at the beginning of each performance
period.
The potential reward based on the plans will be paid party in the company’s shares and partly in cash
after the end of each performance period. The cash proportion is intended for covering taxes and tax-
related costs arising from the reward to a participant.
In performance period 2020–2022 the plan has 11 participants at most and the targets for the
Performance Share Plan (PSP) relates to the Group’s total shareholder return (TSR) and adjusted EBITA.
The maximum number of shares to be paid based on the first performance period is approximately
250.000 Musti Group plc’s shares, which corresponds to approximately EUR 3.0 million calculated
with the volume weighted average share price on the trading day preceding the Board’s decision. The
number of shares represents gross earning, from which the withholding tax and possible other applicable
contributions are deducted, and the remaining net amount is paid in shares. However, the company has
the right to pay the reward fully in cash under certain circumstances. Potential rewards from the first
performance period were paid out during the winter of 2023.
The total expense for the share-based payments has been recognized over the vesting period,
which was 29 months in the plan commencing 2020–2022. For the plan commencing 2020–2022, the
compensation is measured during performance period in cash, and only after performance period at
grant date translated into shares. The expense recognized for 2023 amounted to 0 thousand euros
(2022: 796 thousand euros). The cost related to share-based payments is recognized in staff costs. The
share price at the grant date of the PSP was EUR 11.78. The fair value of the share plan at the grant date
was in total EUR 1.6 million. The fair value of the share plan was determined from Musti Group’s share
price at the grant date less the present value of dividends expected to be paid during the performance
period. Performance conditions and service conditions were accounted for by adjusting the number of
instruments.
In performance period 2021–2023, the plan has 30 participants at most and the targets for the
Performance Share Plan (PSP) relates to the Group’s total shareholder return (TSR) and adjusted EBITA.
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The maximum number of shares to be paid based on the second performance period is approximately
137,600 Musti Group plc’s shares, which corresponds to approximately EUR 2.9 million calculated
with the volume weighted average share price on the trading day preceding the Board’s decision.
The number of shares represents gross earning, from which the withholding tax and possible other
applicable contributions are deducted, and the remaining net amount is paid in shares. However, the
company has the right to pay the reward fully in cash under certain circumstances. Potential rewards
from the second performance period will be paid out during the winter of 2024.
The total expense for the share-based payments is recognized over the vesting period, which is 36
months in the plan commencing 2021–2023. For the plan commencing 2021–2023, the compensation
is measured during performance period in cash, and only after performance period at grant date
translated into shares. The expense recognized for 2023 amounted to EUR 349 (490) thousand. The cost
related to share-based payments is recognized in staff costs. The share price at the grant date of the
PSP was EUR 21.04. The fair value of the share plan at the grant date was in total EUR 1.4 million. The
fair value of the share plan was determined from Musti Group’s share price at the grant date less the
present value of dividends expected to be paid during the performance period. Performance conditions
and service conditions were accounted for by adjusting the number of instruments.
In performance period 2022–2024, the plan has 37 participants at most and the targets for the
performance period relates to company´s total shareholder return (TSR) and adjusted EBITA. The
maximum number of shares to be paid based on the performance period is approximately 104,400
Musti Group plc´s shares. The number of shares represents gross earning, from which the withholding
of tax and possible other applicable contributions are deducted, and the remaining net amount is
paid in shares. However, the company has the right to pay the reward fully in cash under certain
circumstances. Potential rewards from the performance period will be paid out during winter of 2025.
The total expense for the share-based payments is recognized over the vesting period, which is 36
months in the plan commencing 2022–2024. For the plan commencing 2022–2024, the compensation
is measured during performance period in cash, and only after performance period at grant date
translated into shares. The expense recognized for 2023 amounted to EUR 13 (63) thousand. The cost
related to share-based payments is recognized in staff costs. The share price at the grant date of the
PSP was EUR 26.06. The fair value of the share plan at the grant date was in total EUR 0.7 million. The
fair value of the share plan was determined from Musti Group’s share price at the grant date less the
present value of dividends expected to be paid during the performance period. Performance conditions
and service conditions were accounted for by adjusting the number of instruments.
The rewards to be paid based on the performance period 2023–2025 correspond to the value of
an approximate maximum total of 171,000 Musti Group plc shares, including the proportion to be paid
in cash. During the performance period 2023–2025, approximately 35 persons, including the group
management team members, are included in the target group of the plan. During the performance
period 2023–2025, the reward is based on the company’s adjusted EBITA and total shareholder return
during financial year 2023. The number of shares represents gross earning, from which the withholding
of tax and possible other applicable contributions are deducted, and the remaining net amount is
paid in shares. However, the company has the right to pay the reward fully in cash under certain
circumstances. Potential rewards from the performance period will be paid out during winter of 2026.
The total expense for the share-based payments is recognized over the vesting period, which is 36
months in the plan commencing 2023–2025. For the plan commencing 2023–2025, the compensation
is measured during performance period in cash, and only after performance period at grant date
translated into shares. The expense recognized for 2023 amounted to EUR 227 thousand. The cost
related to share-based payments is recognized in staff costs. The share price at the grant date of the
PSP was EUR 15.50. The fair value of the share plan at the grant date was in total EUR 0.7 million. The
fair value of the share plan was determined from Musti Group’s share price at the grant date less the
present value of dividends expected to be paid during the performance period. Performance conditions
and service conditions were accounted for by adjusting the number of instruments.
Assumptions applied in determining the fair value of share award
Performance period
FY2021–23
Performance period
FY2022–24
Performance period
FY2023–25
Number of share awards granted,
maximum, pcs*
137,600 104,400 171,000
Number of plan participants at
end of financial year 27 31 34
Share price at grant date, EUR 21.04 26.06 15.50
Assumed fulfilment of
performance criteria, % 100.0% 0.0% 50.0%
Estimated number of share awards
returned prior to the end of
commitment period, % 11.0% 10.0% 10.0%
*Gross number of shares from which the applicable withholding tax is deducted, and the remaining net amount is paid in shares.
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3. CAPITAL EMPLOYED
This section describes assets that are needed in business operations, as well as business acquisition
carried out by Musti Group. Information on net working capital is presented in section 4.
The Group’s management has assessed the impacts of the war in Ukraine by reviewing the carrying
values of the balance sheet items, the review did not indicate need for asset impairments.
Accounting estimates and the management’s judgement
Net assets acquired in business combinations are measured at fair value. The fair value of acquired net
assets is determined based on the market value of similar assets (tangible fixed assets) or an estimate
of the expected cash flows (intangible assets). The valuation is based on the current repurchase
values, expected cash flows or estimated selling prices, and it requires management’s judgement
and assumptions. The management believes that the estimates and assumptions used are sufficiently
reliable for determination of the fair value.
Acquisitions 1 Oct 2022–30 Sep 2023
During the financial year 2023 Musti Group acquired 5 pet stores in Sweden and one in Norway as
business acquisitions. The total purchase price for the stores was approximately EUR 4.7 million and
the resulting goodwill EUR 4.4 million. Goodwill is based on synergies from the acquisitions. The
acquisitions did not have a material impact on Group's net sales or result.
Musti Group acquired the full ownership of the pet food manufacturer Premium Pet Food Suomi
Oy on 3rd of April 2023 and the company became a fully owned subsidiary of Musti Group. Goodwill
resulting from the acquisition amounted to approximately EUR 3.6 million that is based on several
factors: we can respond to increased demand for locally and sustainably produced pet food as well as
support developing our own branded food offering. Prior to the transaction, Musti Group held 49.2% of
the shares in the company.
The company's net sales from its previous financial year July 2021 – June 2022 was EUR 7.7 million
and FAS EBITDA EUR 1.4 million. Musti Group recognized a fair value gain of EUR 2.4 million relating
to the previously held share of the company in Q3 2023. The acquisition cost includes an estimated
contingent consideration amounting to EUR 2.0 million. The consideration is subject to the operative
effectiveness and production capabilities of the company and is maximum EUR 3.0 million. If the
company had been acquired already in the beginning of the financial year 2023, the Group's net sales
would have been EUR 4.0 million higher, EBIT 0.2 million higher and profit for the period EUR 0.1 million
higher than reported.
Accounting principles
Acquired subsidiaries and businesses are consolidated in the consolidated financial statements from
the date when Musti Group gained control over the acquired entity. Acquisition cost method is applied
to the business combinations. The consideration transferred in the acquisition of a subsidiary includes
the fair value of the transferred assets, incurred liabilities towards the previous owners of the acquired
entity and the shares issued by the Group. Transferred consideration also includes the fair value of the
asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired
and identifiable liabilities assumed in business combinations are initially valued at the fair value on the
acquisition date. The identifiable assets include both tangible and intangible assets, such as customer
relations, brands and technology.
Expenses related to the acquisitions are recognized when they incur, and they are presented in the profit
and loss statement in the other operating expenses.
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The preliminary purchase price allocation for the acquisition is presented below:
EUR thousand
Premium Pet Food
Suomi Oy
Acquisition cost
Purchase price paid in cash 2,000
Contingent consideration 1,957
Fair value of the previously held share of the company 3,838
Fair value of net identifiable assets acquired
Non-current assets
Property, plant and equipment 10,445
Intangible assets 2,161
Current assets
Inventories 1,462
Derivative financial instruments 335
Trade and other receivables 2,109
Cash and cash equivalents -449
Total assets 16,063
Non-current liabilities
Deferred tax liabilities 505
Financial liabilities 8,821
Current liabilities
Financial liabilities 702
Trade and other payables 1,847
Total liabilities 11,874
Net assets acquired 4,189
Goodwill 3,606
Cash flow impact
Purchase price paid in cash -2,000
Cash and cash equivalents of the acquired company -449
Expenses related to the acquisition -77
Impact on cash flows -2,526
Acquisitions 1 Oct 2021–30 Sep 2022
During the period 1 October 2021 – 30 September 2022 Musti Group acquired 15 pet stores in Sweden
and 2 in Norway as business acquisitions. The total purchase price of the stores was approximately
EUR 18.7 million and the resulting goodwill EUR 17.5 million. Goodwill is based on synergies from the
acquisitions. The resulting goodwill is deductible in taxation. The store acquisitions increased the
Group's net sales by EUR 10.9 million and increased operating profit by EUR 1.8 million for the period
1 October 2021 – 30 September 2022. The effect on the Group's net sales would have been
approximately EUR 18.3 million and on the operating profit EUR 3.0 million for the period ended 30
September 2022 if the acquisitions had been consolidated from the beginning of the financial year.
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Accounting principles
Goodwill
Goodwill arises from the acquisition of subsidiaries, and it corresponds to the amount that the
acquisition consideration exceeds the fair value of identifiable net assets.
Goodwill acquired in business combinations is allocated for impairment testing to the cash
generating units that are expected to gain benefit from the synergies created by the combination.
Goodwill is allocated to the unit at the company’s lowest level where the goodwill is monitored
internally for the management purposes.
Goodwill is reviewed for impairment annually or whenever events or changes in circumstances
indicate to a possible impairment. The carrying amount of the cash-generating unit including goodwill
is compared to the recoverable amount that is higher of the value in use or the fair value net of selling
expenses. Possible impairment is recognized as an expense with immediate effect, and it will not be
reversed later.
Other intangible assets
Other intangible assets include developments costs related to webstores, software, and information
technology, as well as licenses and customer relations. Intangible assets are recorded in the balance
sheet when the accounting requirements of IAS 38 standard are satisfied. Intangible assets with a
limited useful life are valued in the original acquisition cost and they are amortised with the straight-
line method over their estimated useful life. Intangible assets are amortised over 3–10 years. Intangible
assets with indefinite useful life are not amortised but tested annually for impairment. Except for
goodwill, Musti Group does not have intangible assets with indefinite useful life.
EUR thousand
Development
expenditure Goodwill
Other
intangible
assets
Advance
payments Total
2023
Cost 1 Oct 2022 0 170,623 4 7,7 6 5 805 219,192
Business combinations 124 3,606 2,037 5,767
Additions 4,465 4,038 1,266 9,769
Exchange differences -4,483 -812 -14 -5,308
Cost 30 Sep 2023 124 174,210 53,028 2,058 229,420
Accumulated amortisation and
impairment at 1 Oct 2022 0 -117 -31,674 0 -31,792
Amortisation -19 -5,747 -5,766
Exchange differences 282 643 925
Accumulated amortisation and
impairment at 30 Sep 2023 -19 164 -36,778 0 -36,633
Net book value at 1 Oct 2022 0 170,505 16,090 805 187,401
Net book value at 30 Sep 2023 105 174,375 16,249 2,058 192,787
2022
Cost 1 Oct 2021 0 158,318 43,540 1,165 203,023
Additions 17,541 5,231 -351 22,420
Exchange differences -5,236 -1,006 -9 -6,251
Cost 30 Sep 2022 0 170,623 4 7,76 5 805 219,192
Accumulated amortisation and
impairment at 1 Oct 2021 0 -487 -26,000 0 -26,486
Amortisation -6,425 -6,425
Exchange differences 369 751 1,120
Accumulated amortisation and
impairment at 30 Sep 2022 0 -117 -31,674 0 -31,792
Net book value at 1 Oct 2021 0 1 5 7, 8 3 1 17,540 1,165 176,536
Net book value at 30 Sep 2022 0 170,505 16,090 805 187,401
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3.3 Goodwill and impairment testing
Accounting estimates and determinations based on the management's judgement
The management uses significant estimates and determinations based on judgement for deciding the
level where goodwill is allocated, as well as for determining whether there are indications of impairment
of goodwill.
The recoverable amount of a cash generating unit is determined based on value-in-use calculations
requiring estimates. The calculations use cash flow projections based on budgets and financial
estimates approved by management covering a five-year period. Cash flow forecasts are based on
the Group’s actual results and the management’s best estimates on future sales, cost development,
general market conditions and applicable tax rates. Cash flows estimates include budgets and rolling
estimates for a period of five years, and cash flows beyond the five-year period are extrapolated using
the estimated growth rates stated above. The growth rates are based on the management’s prudent
estimates on future growth in the business. Management tests the impacts of changes in significant
estimates used in forecasts by sensitivity analyses as described above in this Note.
To carry out impairment testing, the management monitors goodwill at the level of Finland, Sweden
and Norway as the cash generating units (CGU). The CGU level is based on how the management follow
the operative business. The recoverable amount of cash generating units have been determined based
on value in-use calculations using the projected discounted cash flows. These calculations use cash flow
projections based on the budgets and forecasts approved by management covering a five-year period.
The table below sets forth the allocation of consolidated goodwill to the Group’s cash generating units:
Goodwill from business combinations
EUR thousand 30 Sep 2023 30 Sep 2022
Finland 99,009 94,486
Sweden 69,750 71,397
Norway 5,616 4,622
Total 174,375 170,505
Key assumptions in the projections are the development of net sales and key cost items, the discount
rate used in the calculation as well as the cash flow growth rate after the five-year forecast period. The
projections have been prepared to reflect the past performance and conservative expectations for the future
considering the Group’s market position and the general economic environment. Cash flows beyond the
five-year period are extrapolated using the estimated growth rates of 2% (2%). The discount rate used in the
impairment testing is weighted average cost of capital (WACC). The discount rate reflects the total cost of
equity and debt and the market risks related to the Group. Discount rate applied in Finland was 9.0% (10.7%),
in Sweden 8.4% (9.6%) and in Norway 8.5% (9.6%). Impairment test is not fully comparable with the prior
year as the IFRS 16 impact was included in the calculation of the discount rate in the reporting period. Also,
the projections used in the calculations covered a five-year period compared to a three-year period in the
prior year. As the changes in the assumptions affect the present value of the discounted cash flows, they
have a direct impact on the recoverable amounts of the CGUs.
As result of the impairment tests performed no impairment loss has been recognized for any period
presented. In 2023 the recoverable amount calculated on the basis on value-in use exceeded the
carrying value by EUR 286.1 (72.8) million in Finland, EUR 181.5 (52.9) million in Sweden and EUR 149.2
(95.9) million in Norway.
Sensitivity analysis
The management of Musti Group has estimated that it is unlikely that a somewhat possible change in
key assumptions will cause the carrying amount of the cash-generating unit to exceed its recoverable
amount. The key assumptions are based on past experience and reflects the management’s perception
of developments of cost and revenue. The average revenue growth used for the forecast period has
been 8.8%. The long-term EBITDA margin assumption used for the impairment testing of goodwill
is based on past experience about EBITDA margins and reflects the management’s perception of
developments in sales prices and sales volumes during the forecast period.
3.4 Investments in joint ventures
Companies controlled by the Group together with another party and where significant decisions
require the consent of both parties, are treated as joint ventures due to their nature. The Group had
one joint venture, pet food manufacturer Premium Pet Food Suomi Oy, until 31 March 2023 when the
Group acquired the full ownership of the company. Prior to the transaction, Musti Group held 49.2%
of the shares in the company.
Consolidation with the Group’s financial statements has been carried out using Premium Pet Food
Suomi Oy’s figures for the reporting period ended on 31 March 2023. As the balance sheet is presented
as of 30 September, the current reporting period figures are presented as nil since the Group did not
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have any joint arrangement in place at the end of the financial year. The tables below summarize the
former joint venture Premium Pet Food Suomi Oy’s balance sheet as of 30 September from the Group’s
perspective and profit and loss statement from the period before acquisition 1 October 2022 – 31 March
2023.
Summarized balance sheet
EUR thousand 30 Sep 2023 30 Sep 2022
Total non-current assets 0 8,903
Current assets
Cash 0 -67
Other current assets 0 2,703
Total current assets 0 2,636
Total assets 0 11,539
Non-current liabilities
Financial liabilities 0 7,927
Other non-current liabilities 0 0
Total non-current liabilities 0 7,9 2 7
Current liabilities
Financial liabilities 0 600
Other liabilities 0 1,335
Total current liabilities 0 1,935
Total liabilities 0 9,862
Equity 0 1,677
Group’s share of equity 0 822
Summarized statement of profit or loss
EUR thousand 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Net sales 8,779 7,672
Depreciation and amortisation -369 -707
Financial income and expenses -110 -199
Profit before tax 717 536
Appropriations 0 -119
Income tax expense -58 -69
Profit (loss) for the year 659 348
Group’s share of profit for the year 324 171
Changes in the carrying amount of the joint venture
EUR thousand 30 Sep 2023 30 Sep 2022
Book value at the beginning of the
financial year 1,074 990
Disposals -1,398
Share of profit 324 84
Book value at the end of the
financial year 0 1,074
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3.5 Property, plant and equipment
The following tables set forth changes in property, plant and equipment during the financial years
covered by the financial statements.
Musti Group’s land and buildings and structures consist of pet food production facilities. Machinery
and equipment mainly comprise store and office equipment. Other tangible assets mainly include
refurbishment costs of leased premises. The right-of-use items based on lease agreements and
recognized under IFRS 16 are included in the tangible assets in the balance sheet. The right-of-use items
and accounting principles applied to them are presented in the Note 3.6 Leases.
EUR thousand Land
Buildings
and
structures
Machinery
and
equipment
Other
tangible
assets
Advance
payments Total
2023
Cost 1 Oct 2022 0 0 20,507 21,403 60 41,969
Business combinations 192 6,104 3,646 7 9,950
Additions 46 2,521 3,783 199 6,549
Disposals -26 -26
Reclassifications -29 -29
Exchange differences -468 -977 -1 -1,446
Cost 30 September 2023 192 6,150 26,151 24,208 265 56,967
Accumulated depreciation at
1 Oct 2022 0 0 -13,813 -9,620 0 -23,433
Depreciation -131 -2,716 -3,867 -6,714
Impairment -10 -10
Exchange differences 345 414 759
Accumulated depreciation at
30 Sep 2023 0 -131 -16,193 -13,073 0 -29,398
Net book value at 1 Oct 2022 0 0 6,694 11,783 60 18,536
Net book value at 30 Sep 2023 192 6,019 9,958 11,135 265 27,570
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EUR thousand Land
Buildings
and
structures
Machinery
and
equipment
Other
tangible
assets
Advance
payments Total
2022
Cost 1 Oct 2021 0 0 1 7,7 6 5 15,881 89 33,736
Additions 3,283 6,515 -29 9,770
Disposals -70 -70
Exchange differences -542 -924 0 -1,467
Cost 30 September 2022 0 0 20,507 21,403 60 41,969
Accumulated depreciation at
1 Oct 2021 0 0 -11,344 -6,633 0 -1 7, 9 7 7
Depreciation -2,826 -3,334 -6,159
Disposals 65 65
Exchange differences 357 281 638
Accumulated depreciation at
30 Sep 2022 0 0 -13,813 -9,620 0 -23,433
Net book value at 1 Oct 2021 0 0 6,421 9,248 89 15,758
Net book value at 30 Sep 2022 0 0 6,694 11,783 60 18,536
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4. NET WORKING CAPITAL
This section describes the items included in the net working capital. Net working capital comprises
inventory, trade and other receivables, as well as trade and other payables.
EUR thousand 30 Sep 2023 30 Sep 2022
Net working capital
Inventories 58,385 61,401
Trade and other receivables 11,575 9,486
Excluding financial items in other receivables 0 0
Trade and other payables -61,725 -48,571
Excluding financial items in other liabilities 213 29
Total 8,448 22,345
Change of net working capital in the balance sheet 13,897 -15,297
Items that are not included in the change of net
working capital as presented in the cash flow
statement, with their impact included elsewhere in
the cash flow statement* 804 -90
Change of net working capital in the cash flow
statement** 14,700 -15,387
*The major items are related to business combinations.
**An increase in the net working capital decreases the cash flow, and a decrease in the net working capital increases the cash flow.
Accounting principles
Musti Group’s inventories are measured at the lower of cost and net realisable value. Net realisable
value is the estimated selling price in the ordinary course of business less direct costs necessary to
make the sale.
The acquisition cost of inventory is determined using the FIFO method. The acquisition cost
comprises all costs incurred from delivering the inventory to the location and condition at time of the
review.
Inventory is recognized as a cost for the same period when the corresponding sales is recognized.
Impairment and obsolescence of inventory are recorded as costs at the time they incur. In addition,
Musti Group records continuously a provision for losses on the inventory.
A possible reversal of a write-down is recognized in the period in which the change in value is
recognized.
Accounting estimates
The Group regularly reviews inventories for obsolescence and turnover, and for possible reduction of
net realizable value below cost and records an impairment as necessary.
Inventories
EUR thousand 30 Sep 2023 30 Sep 2022
Finished goods 58,085 56,785
Advance payments 300 4,616
Total 58,385 61,401
Inventories recognised as expenses, for which the
carrying amount of inventories was reduced to the net
relisable value 3,650 3,295
EUR thousand 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
The amount of inventories recognized as an expense
during the period 242,117 224,993
4.1 Inventories
The Group’s inventory mainly consists of purchased pet food and other products. The Group’s
production activities are carried out at the wholly owned pet food factory Premium Pet Food Suomi Oy
in Lieto, Finland. At the end of the reporting period, the inventory of the production factory amounted
to EUR 1.7 million.
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Accounting principles
Trade receivables are receivables resulting from selling products or providing services to customers
in the ordinary course of business. Receivables that are expected to be paid within one year from the
end of the financial year are classified as current assets. Otherwise, they are presented as non-current
assets. Trade receivables usually fall due within 14 or 30 days, and as such, all of them are classified as
current assets. Note 5.1 describes principles applied to impairment of trade and other receivables, as
well as other accounting principles applied to them.
Other receivables mainly comprise prepayments and accrued income generated in the ordinary
course of the Group’s business.
The Group’s receivables are financial assets not included in the derivatives with fixed or determined
payments that are not quoted on active markets. They are included in the current assets, except for
items maturing over 12 months after the end of the reporting period. Group’s receivables consist of
‘Trade and other receivables’ and ‘Cash and cash equivalents’.
The table below set forth the items included in the trade and other receivables:
Trade and other receivables
EUR thousand 30 Sep 2023 30 Sep 2022
Trade receivables* 6,050 2,660
Prepayments and accrued income 4,132 4,214
Other receivables 1,393 2,612
Total 11,575 9,486
*Credit card receivables are included in the trade receivables.
Of the trade receivables, a total of EUR 13 thousand has been recognized as a credit loss in the
statement of profit and loss in 2023. During 2022 the credit loss in the statement of profit and loss was
EUR 84 thousand.
The credit loss risk is described in more detail in the Note 5.1 Financial risk management.
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The tables below set forth items included in trade and other payables:
Trade and other payables
EUR thousand 30 Sep 2023 30 Sep 2022
Trade payables 35,958 24,263
Advances received 287 287
Other liabilities 11,553 10,841
Accrued expenses 13,927 13,180
Total 61,725 48,571
Material items included in accrued expenses
EUR thousand 30 Sep 2023 30 Sep 2022
Personnel related costs 10,050 9,280
Accrued interests 213 29
Other items 3,664 3,871
Total 13,927 13,180
Material items included in other liabilities
EUR thousand 30 Sep 2023 30 Sep 2022
VAT liabilities 7,640 7,005
Payroll taxes 2,198 2,300
Loyalty program 1,546 1,381
Other items 169 156
Total 11,553 10,841
Trade and other payables comprise trade payables, other payables, advance payments, and accrued
expenses incurring in the ordinary course of business of the Group.
Contractual liabilities comprise rights to return products, as well as products in transit.
The valuation and revenue recognition of the loyalty program requires management’s judgment,
particularly in determining the fair value of bonuses and the expiration of bonuses. The bonus liability
consists of bonuses or stamp card discounts accrued to the loyal customer account (see Note 2.1
Segment reporting and net sales) less the estimated expiration date of the bonuses or discounts based
on historical information.
5. CAPITAL STRUCTURE AND FINANCIAL INSTRUMENTS
This Note describes Musti Group’s exposure to financial risks, how these risks may impact Musti
Group’s financial results and how the management identifies and mitigates exposures.
5.1 Financial risk management
The purpose of the risk management is to ensure access to cost efficient funding and to decrease the
negative impacts on the Group’s profit and balance sheet caused by financial markets.
The financial risk management of the Group is governed by the Treasury Policy. The Chief Financial
Officer presents the policy to the Board of Directors for approval. The implementation of the policy
including funding, identification of exposures and hedging is delegated to the Group Treasurer.
Foreign exchange rate risk
Foreign exchange risk is defined as the uncertainty in cash flows, equity and financial performance
arising from currency exchange rate volatility.
The Group is subject to foreign exchange rate risk arising from subsidiary financing, commercial
cash flows and intra-group invoicing. The Group’s most significant transaction currency risks arise from
the Swedish Krona (SEK), Norwegian Krone (NOK), the US dollar (USD) and the British Pound (GBP).
Transaction risk
Transaction risk arises from commercial cashflows in foreign denominated currency (purchases and
sales) and balance sheet items in foreign denominated currency (such as loans, deposits, and interest
flows).
Forecasted commercial cash flows are hedged up to 12 months in advance. Finnish and Swedish
subsidiaries have hedged forecasted USD and GBP outflows using currency derivative agreements.
Additionally, sales denominated in NOK and purchases in EUR have been hedged in one of the Swedish
subsidiaries. Significant strengthening of the USD and GBP in relation to EUR and SEK and weakening of
the NOK in relation to SEK has a negative impact on the value of the forecasted cashflows.
Intra-group funding is granted in local currency of the subsidiary and is fully hedged with currency
forward agreements excluding loans classified as net investments in foreign subsidiaries.
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 75
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Norway
30 Sep 2023
EUR thousand EUR SEK USD GBP
Trade payables -56 -398
Position, total -56 -398 0 0
30 Sep 2022
EUR thousand EUR SEK USD GBP
Trade payables -264 -163
Position, total -264 -163 0 0
*The Group has entered into foreign exchange derivative agreements to hedge forecasted cashflows in EUR (vs SEK), NOK, USD and
GBP.
This segment level currency exposure is the basis for the sensitivity analysis of foreign exchange risk.
Assuming euro to appreciate 10% against all other currencies, the impact would be:
Finland
30 Sep 2023
EUR thousand SEK NOK USD GBP
EUR +10% 5 -4 -73 -121
30 Sep 2022
EUR thousand SEK NOK USD GBP
EUR +10% -92 -21 -19 -66
Sweden
30 Sep 2023
EUR thousand EUR NOK USD GBP
EUR +10% 700 1,115 -711 -111
30 Sep 2022
EUR thousand EUR NOK USD GBP
EUR +10% 414 666 -552 -191
The foreign currency positions (in euros) of the segments at the end
of the reporting period
Finland
30 Sep 2023
EUR thousand SEK NOK USD GBP
Trade payables -205 -278 -630
Trade receivables
Interest-bearing receivables
Cash and cash equivalents 155 44 23 2
Currency derivatives* 987 1,843
Position, total -50 44 732 1,214
30 Sep 2022
EUR thousand SEK NOK USD GBP
Trade payables -40 -102 -621
Trade receivables 184
Interest-bearing receivables 642
Cash and cash equivalents 130 211 23 9
Currency derivatives* 267 1,268
Position, total 916 211 187 657
Sweden
30 Sep 2023
EUR thousand EUR NOK USD GBP
Trade payables -9,901 -7 -1,853 -838
Trade receivables 734 483
Cash and cash equivalents 13 -163 25 18
Currency derivatives* 2,150 -11,462 8,939 1,932
Position, total -7, 0 0 4 -11,149 7,111 1,111
30 Sep 2022
EUR thousand EUR NOK USD GBP
Trade payables -7,596 -4 -108 -621
Trade receivables 899 743
Cash and cash equivalents -85 1 21 -15
Currency derivatives* 2,640 -7,398 5,611 2,548
Position, total -4,143 -6,658 5,524 1,912
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 76
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Norway
30 Sep 2023
EUR thousand EUR SEK USD GBP
EUR +10% 6 40 0 0
30 Sep 2022
EUR thousand EUR SEK USD GBP
EUR +10% 26 16 0 0
Assuming euro to depreciate 10% against all other currencies, the impact would be the same magnitude
but opposite. The sensitivity analysis as required by IFRS 7, includes financial instruments, such as
trade and other receivables, trade and other payables, interest-bearing liabilities, deposits, non-current
receivables, cash and cash equivalents and derivative financial instruments.
The following items related to exchange rates were recognized for the period through profit and loss:
EUR thousand 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Items recognised through profit and loss
Net exchange rate gains/losses included in the
financial income/expenses -720 -3,001
Exchange rate gains/losses recognised in the result
for the period, total (net) -720 -3,001
Interest rate risk
Changes in interest rates impact the average interest rate of the Group’s loan portfolio, financial
expenditure and hence the profitability of the group. The Group is currently hedging interest rate risk
using interest rate derivatives.
During the financial year ended 30 September 2023, interest-bearing financial assets were EUR 0
(0) thousand and interest-bearing liabilities EUR 162 (156) million. Of the interest-bearing liabilities 66%
(67%) is denominated in euros. For all interest-bearing liabilities, the ratio of fixed rate paying liabilities in
relation to all interest-bearing liabilities was 69% (71%). Excluding leasing agreements, the ratio of fixed
rate paying liabilities was 38% (40%).
Sensitivity of interest expenses has been calculated by assuming a one-off, +1% (100 basis points)
increase in the interest rates of interest-bearing financial liabilities and assuming no change in the net
debt during the year. The calculated impact on the company’s interest expenses is + EUR 0.5 million
(+ EUR 0.5 million).
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fail to meet its contractual obligations. The Group’s credit risks arise principally from trade receivables
and the market value of financial derivatives. The Group’s customer base is very diversified, and the
Group does not have significant credit risk concentrations related to trade receivables.
The Group companies analyse solvency of new invoicing customers locally. Payment methods
mitigating credit risk, such as advance payments, are applied to customers with high risk. The maximum
exposure to credit risk corresponds to the book values of the financial assets presented below.
The procedure under IFRS 9 is applied for credit loss provisions where the amount of the provision
corresponds to the expected credit losses over the whole lifetime of the receivable. Credit loss provision
on the expected credit losses are recognized based on the customers’ payment history and expectations
on the credit losses. The Group’s trade receivables have short maturities and the time value of the money
does not have significant impact when estimating the amount expected of credit losses.
Counterparty risk relating to financial assets and derivatives is mitigated by diversification of
exposures between pre-approved, high creditworthy counterparties. ISDA Master agreements have been
signed with counterparties when transacting in derivative agreements. The Chief Financial Officer and
the Group Treasurer review annually the creditworthiness of financial counterparties using a framework
taking into account credit rating (Moody’s, S&P) and sustainability rating (Sustainalytics ESG).
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 77
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EUR thousand Expected credit loss rate Trade receivables (gross) Deduction related to losses Trade receivables (net)
The table below sets forth the maturity distribution of
receivables and provisions for impairment based on
credit risk estimates. % 30 Sep 2023 30 Sep 2022 30 Sep 2023 30 Sep 2022 30 Sep 2023 30 Sep 2022
Unmatured 0.5% 2,391 915 12 5 2,379 910
1–30 days 1% 256 61 3 1 254 60
31–60 days 5% -32 14 -2 1 -31 13
61–180 days 10% 11 35 1 3 10 31
180–360 days 50% 46 16 23 8 23 8
over 360 days 100% 26 59 26 59 0 0
Total 2,697 1,100 63 76 2,635 1,024
Credit card receivables 0.1% 3,418 1,640 3 8 3,415 1,632
Total 6,116 2,740 66 84 6,050 2,656
Liquidity and refinancing risk
Liquidity risk refers to the risk of the Group not being able to fulfil its payment obligations and
refinancing risk refers to the risk of the Group not being able to refinance its maturing liabilities.
The Treasury Policy governs the mitigation of refinancing and liquidity risk by setting
requirements on refinancing, the amount of committed credit facilities and the level of liquid assets
to be kept available. Group Treasury monitors and forecasts the short and long term needs of the
Group and ensures that sufficient liquidity and credit facilities are available.
As of 30 September 2023 the Group’s liquidity and refinancing position was good. The amount of
cash and cash equivalent was EUR 22.0 (10.0) million and the Group has EUR 40 million of undrawn
revolving credit facilities (maturing in 2025) in place. Additionally, the Group has a 5 million EUR
bank overdraft limit and a EUR 50 million commercial paper programme which 19% was utilized as
of 30 September 2023.
The Group’s financing agreements contain covenants relating to the net debt to EBITDA
(leverage) ratio. Violation of covenant terms may increase financial costs or lead to loan
termination. The covenants are reviewed and reported to the bank’s quarterly. During the financial
year 2023, all quarterly covenant conditions were met.
The table on the next page sets forth the Group’s financial liabilities under the relevant maturity
groups based on the time remaining until the contractual maturity as at the balance sheet date.
The figures presented in the table are contractual undiscounted amounts.
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 78
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Contractual maturities of financial liabilities
30 Sep 2023
EUR thousand FY2024 FY2025 FY2026 FY2027 FY2028 FY2029- Total
Non-current liabilities
Loans from credit
institutions 59,943 10,000 69,943
Lease liability 20,481 13,422 8,379 5,546 7,6 91 55,518
Other non-current
interest-bearing liabilities 2,031 2,031
Current liabilities
Loans from credit
institutions 9,412 9,412
Lease liability 24,307 24,307
Trade and other payables* 36,078 36,078
Total 69,798 80,424 25,452 8,379 5,546 7,6 9 1 197,289
Interest payments 4,680 2,542 1,366 632 387 225 9,832
30 Sep 2022
EUR thousand FY2023 FY2024 FY2025 FY2026 FY2027 FY2028- Total
Non-current liabilities
Loans from credit
institutions 59,898 59,898
Lease liability 20,577 15,501 8,529 4,966 8,202 57,7 76
Other non-current
interest-bearing liabilities 0
Current liabilities
Loans from credit
institutions 14,950 14,950
Lease liability 22,905 22,905
Trade and other payables* 24,386 24,386
Total 62,241 20,577 75,400 8,529 4,966 8,202 179,915
Interest payments 3,076 2,404 1,217 600 364 227 7,8 90
*Other payables include only items classified as financial assets or liabilities.
The Group’s loans from credit institutions on 30 September 2023 amounted to EUR 69.9 (59.9) million.
EUR 60 million of the non-current loans from credit institutions mature on 23 December 2024 and EUR
10 million mature on 29 May 2026.
Fair value hierarchy
Level 1
Quoted unadjusted prices at the balance sheet date in active markets. The market prices are readily
and regularly available from an exchange, dealer, broker, market information service system, pricing
service or regulatory agency. The quoted market price used for financial assets is the current bid price.
Level 1 financial instruments include investments in funds classified as financial instruments at fair value
through profit and loss. Musti Group does not have Level 1 financial instruments.
Level 2
The fair value of financial instruments in Level 2 is determined using valuation techniques. These
techniques utilize observable market data readily and regularly available from an exchange, dealer,
broker, market information service system, pricing service or regulatory agency. Musti Group has
classified derivatives at fair value according to the Level 2.
Level 3
A financial instrument is categorized into Level 3 if the calculation of the fair value cannot be based
on observable market data. Musti Group has classified earn-out liabilities on level 3 of the fair value
hierarchy.
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Fair value hierarchy
30 Sep 2023
EUR thousand Level 1 Level 2 Level 3
Assets
Financial assets at amortised cost
Other non-curret assets 111
Trade and other receivables* 6,050
Cash and cash equivalents 21,954
Financial assets at fair value through profit and loss
Derivative nancial e financial instruments 1,651
Total 29,766
30 Sep 2022
EUR thousand Level 1 Level 2 Level 3
Assets
Financial assets at amortised cost
Other non-curret assets 154
Trade and other receivables* 2,660
Cash and cash equivalents 10,054
Financial assets at fair value through profit and loss
Derivative nancial e financial instruments 2,135
Total 15,004
30 Sep 2023
EUR thousand Level 1 Level 2 Level 3
Liabilities
Financial liabilities at amortised cost
Loans from credit institutions 69,943
Commercial papers 9,412
Lease liability 79,825
Trade and other payables* 36,078
Earn-out liability 2,031
Financial assets at fair value through profit and loss
Derivative nancial e financial instruments 306
Total 195,565 2,031
30 Sep 2022
EUR thousand Level 1 Level 2 Level 3
Liabilities
Financial liabilities at amortised cost
Loans from credit institutions 59,898
Commercial papers 14,950
Lease liability 80,681
Trade and other payables* 24,386
Financial assets at fair value through profit and loss
Derivative nancial e financial instruments 73
Total 179,989
*Other receivables and other payables include only items classified as financial assets and liabilities.
5.2 Financial assets and liabilities
Accounting principles
Musti Group classifies financial assets and liabilities according to IFRS 9 based on the cash flow
properties of the contracts related to them and their original purpose of use in line with the business
model at the time of the acquisition. The classification is changed only if the business model applied
in the investment activities is amended. Financial assets or liabilities are presented as a non-current
item, if the remaining maturity is over 12 months from the end of the period, and as a current item if
the remaining maturity is under 12 months from the end of period. Financial assets and liabilities are
classified as follows:
Under IFRS 9, financial assets are classified into the following categories:
I. financial assets at amortized cost
II. financial assets at fair value through profit and loss
III. financial assets at fair value through other comprehensive income
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 80
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Financial assets
Financial assets and amortized cost
Financial assets are classified as financial assets at amortized cost if the following criteria are met:
I. the financial asset is held to generate cash flows based on the business mode; and
II. the cash flows are contractual capital returns and interest accrued on the capital.
Financial assets at amortized cost are valued using the effective interest rate method. Impairment is
considered in the valuation. Gains and losses are recognized though profit and loss when the financial
asset is reclassified or changed or its value decreases. Interest income is recognized in finance income.
Financial assets at amortized cost include term deposits, interest-bearing loans and other
receivables, trade receivables and non-interest-bearing receivables.
Expected credit loss under IFRS 9 impacts the valuation of financial assets at amortized cost. Musti
Group applies to the valuation of trade receivables the simplified model under IFRS 9 where a provision
for credit losses is recognized in the trade receivables based on the expected credit losses. See Note 5.1
Financial risk management.
Financial assets at fair value through profit and loss
Financial assets at fair value through profit and loss are financial assets acquired for trading purposes.
Financial assets at fair value through profit and loss are derivatives not eligible for hedge accounting.
Changes in fair value, as well as profit and loss in connection derecognition, are presented in the profit
and loss statement.
Financial assets at fair value through other comprehensive income
Financial assets are classified as financial assets at fair value through other comprehensive income, if
the following criteria are met:
I. according to the business model, the financial asset is held to generate cash flows based on a
contract or it is available for sale; and
II. the cash flows are contractual capital returns and interest accrued on the capital.
Financial liabilities
Under IFRS 9, financial liabilities are classified into the following categories:
I. financial liabilities at amortized cost
II. financial liabilities at fair value through profit and loss
Financial liabilities at amortized cost
Musti Group’s loans from financial institutions, commercial papers and trade and other payables are
recognized at the time on acquisition at fair value net of transaction costs. Loans are subsequently
measured using the effective interest rate method. The interest expenses of the loans are recorded
in the profit and loss statement. Trade and other payables are non-interest-bearing current unpaid
payables.
Financial liabilities at fair value through profit and loss
Financial liabilities at fair value through profit and loss are financial liabilities acquired for trading
purposes.
Financial liabilities measured at fair value through profit and loss are derivatives not eligible for
hedge accounting. Changes in fair value, as well as profit and loss in connection derecognition, are
presented in the profit and loss statement.
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Financial assets and liabilities
The table below sets forth the classification of financial assets and liabilities and their book values:
Financial assets
EUR thousand Financial assets at fair value through profit and loss Financial assets at amortised cost Book value Fair value
30 Sep 2023
Non-current assets
Derivative financial instruments 1,257 1,257 1,257
Other non-current assets 111 111 111
Total 1,257 111 1,369 1,369
Current assets
Trade and other receivables 6,050 6,050 6,050
Derivative financial instruments 394 394 394
Cash and cash equivalents 21,954 21,954 21,954
Total 394 28,004 28,398 28,398
Financial assets, total 1,651 28,115 29,766 29,766
EUR thousand Financial assets at fair value through profit and loss Financial assets at amortised cost Book value Fair value
30 Sep 2022
Non-current assets
Other non-current assets 154 154 154
Total 154 154 154
Current assets
Trade and other receivables 2,660 2,660 2,660
Derivative financial instruments 2,135 2,135 2,135
Cash and cash equivalents 10,054 10,054 10,054
Total 2,135 12,714 14,850 14,850
Financial assets, total 2,135 12,869 15,004 15,004
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 82
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Financial liabilities
EUR thousand Financial liabilities at fair value through profit and loss Financial liabilities at amortised cost Book value Fair value
30 Sep 2023
Non-current liabilities
Loans from credit institutions 69,943 69,943 69,943
Lease liability 55,518 55,518 55,518
Other non-current liabilities 2,031 2,031 2,031
Total 127,492 127,492 127,492
Current liabilities
Commercial papers 9,412 9,412 9,412
Lease liability 24,307 24,307 24,307
Trade and other payables 36,078 36,078 36,078
Derivative financial instruments 306 306 306
Total 306 69,798 70,104 70,104
Financial liabilities, total 306 197,289 197,596 197,596
EUR thousand Financial liabilities at fair value through profit and loss Financial liabilities at amortised cost Book value Fair value
30 Sep 2022
Non-current liabilities
Loans from credit institutions 59,898 59,898 59,898
Lease liability 57,7 76 57,7 76 57,7 76
Other non-current liabilities 0 0 0
Total 1 1 7, 6 74 1 1 7, 6 74 1 1 7,6 74
Current liabilities
Loans from credit institutions 14,950 14,950 14,950
Lease liability 22,905 22,905 22,905
Trade and other payables 24,386 24,386 24,386
Derivative financial instruments 73 73 73
Total 73 62,241 62,314 62,314
Financial liabilities, total 73 179,915 179,989 179,989
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 83
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Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 84
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Liquid funds
Deposits with a maturity of up to 3 months from the year end are classified as liquid funds and are
measured at amortized cost. Cash and cash equivalents include readily available cash and bank
deposits, as well as fixed-term deposits.
Liquid funds are regularly assessed for impairment, but the risk is limited due to their high credit
rating and short maturity.
Liquid funds
EUR thousand 30 Sep 2023 30 Sep 2022
Cash and cash equivalents 21,954 10,054
Total 21,954 10,054
Interest-bearing liabilities
Net debt is the total amount of loans from credit institutions and lease liabilities included in the current
and non-current liabilities less cash and bank deposits. The targeted net debt and the ratio of net debt
to EBITDA are linked to the covenants included in the financing agreements.
Net debt
EUR thousand 30 Sep 2023 30 Sep 2022
Non-current interest-bearing liabilities 127,492 117,674
Current interest-bearing liabilities 33,719 37,855
Derivative financial instruments -1,345 -2,062
Cash and cash equivalents -21,954 -10,054
Net debt 1 3 7, 91 2 143,413
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Interest-bearing liabilities
Balance sheet values Fair values
EUR thousand 30 Sep 2023 30 Sep 2022 30 Sep 2023 30 Sep 2022
Loans from credit institutions 69,943 59,898 69,943 59,898
Lease liability 55,518 57,7 76 55,518 57,7 76
Other non-current liabilities 2,031 0 2,031 0
Total interest-bearing non-current
liabilities 127,492 1 1 7, 6 74 127,492 1 1 7, 6 74
Commercial papers 9,412 14,950 9,412 14,950
Lease liability 24,307 22,905 24,307 22,905
Total interest-bearing current
liabilities 33,719 3 7, 8 5 5 33,719 3 7, 8 5 5
Derivate financial instruments 306 73 306 73
Total interest-bearing liabilities 161,517 155,603 161,517 155,603
5.3 Commitments and contingencies
This Note presents information on items not included in calculations when preparing the financial
statements, as they do not satisfy accounting requirements yet. These items include guarantees,
pledges and contingent liabilities.
Compliance with covenant conditions
Musti Group has EUR 60 million and EUR 10 million non-current loans from credit institutions. The loan
agreements contain financial covenant relating to the Group’s leverage (net debt to EBITDA) which is
evaluated quarterly. Violation of covenant terms may lead to loan termination. The covenants have been
fulfilled during the financial years 2023 and 2022.
Other commitments
During the periods presented in the financial statements, Musti Group has not been involved in legal
proceedings, arbitration or administrative proceedings that could have a significant impact on the
Group’s financial position or profitability.
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 86
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5.4 Financial income and expenses
This Note presents the Group’s financial income and expenses. The Group has entered into an interest
rate swap agreement to protect itself from the changes of interest of bank loans with variable interest
rates, as well as exchange rate hedges for its purchases in US Dollar and British Pound in Finland and
Sweden.
EUR thousand 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Financial income
Interest income 1,209 31
Exchange gains 1,398 2,495
Exchange gains from derivatives 2,237 0
Gain from changes in the fair value of derivatives 1,651 2,135
Other financial income 26 1,733
Total 6,522 6,395
Financial expenses
Interest expenses on loans valued to amortised cost -3,027 -782
Interest expenses from lease liability -2,334 -2,233
Exchange losses -2,999 -5,496
Exchange losses from derivatives -1,356 0
Loss from changes in the fair value of derivatives -600 -73
Other financial expenses -290 -254
Total -10,605 -8,837
Financial income and expenses, net -4,083 -2,443
The Group’s interest income and other financial income mainly relate to exchange rate gains and
interest income and changes in the fair value of derivatives. Financial expenses mainly relate to loans
from credit institutions and lease liabilities, and to valuation losses from derivatives and exchange
rate losses.
5.5 Capital Management
The company’s Board of Directors is responsible for the capital management strategy. The aim of capital
management is to maintain sufficient equity ratio and to comply with requirements set for leverage in
financing agreements. Capital sources include operating cash flows, equity financing from shareholders
and external loans. Covenants included in financing agreements place requirements relating to the ratio
of net debt to EBITDA (leverage). Other terms and conditions on external capital are not applied to the
Group. In capital management, the Group’s equity consists of equity and liabilities as presented in the
balance sheet.
With capital management, the Group aims to safeguard its continuous operations in order to
provide yield to the shareholders and increase the value of the capital that they have invested. The
Group monitors the adjusted EBITA margin, EBITDA margin-% and the net debt ratio to last twelve
months adjusted EBITDA.
EUR thousand Target level
1 Oct 2022–
30 Sep 2023
1 Oct 2021–
30 Sep 2022
Adjusted EBITA margin, % ≥13% 10.0% 9.9%
Net debt / LTM Adjusted EBITDA <2.5x 1.9 2.1
5.6 Equity
This Note describes items included in the equity of Musti Group.
Accounting principles
The Group’s equity includes instruments that evidences a residual interest in the assets of an entity after
deducting all its liabilities and contains no contractual obligation for the issuer to deliver cash or other
financial asset to another entity. Costs that relate to the issue or repurchase of own equity instruments
are recognized as a deduction in equity.
All company shares are reported as share capital. Any repurchase of its own shares by the company
is deducted from equity.
The total equity consists of the share capital, the invested unrestricted equity reserve, translation
differences and accumulated profits.
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 87
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Share capital
On 30 September 2023 the share capital of Musti Group amounted to EUR 11,001,853.68 and the
number of shares was 33,535,453. The company has one share class. Each share entitles its holder to
one vote at the general meeting and an equal dividend. The company holds 147,566 own shares.
The Annual General Meeting authorized the Board of Directors to decide on the repurchase of the
company's own shares and/or on the acceptance as pledge of the company's own shares as follows. The
number of own shares to be repurchased and/or accepted as pledge based on this authorization shall
not exceed 3,185,000 shares in total, which corresponds to approximately 9.5% of all the shares in the
company. However, the company together with its subsidiaries cannot at any moment own and/or hold
as pledge more than 10% of all the shares in the company.
Own shares can be repurchased only using the unrestricted equity of the company at a price formed
in public trading on the date of the repurchase or otherwise at a price determined by the markets.
The Board of Directors decides on all other matters related to the repurchase and/or acceptance
as pledge of own shares. Own shares can be repurchased using, inter alia, derivatives. Own shares
can be repurchased otherwise than in proportion to the shareholdings of the shareholders (directed
repurchase).
This authorization cancelled the authorization given by the Annual General Meeting held on 27
January 2022 to decide on the repurchase of the company’s own shares and/or to accept the company’s
own shares as pledge. The authorization is effective until the next Annual General Meeting, however, no
longer than until 31 March 2024.
The Annual General Meeting also authorized the Board of Directors to decide on the issuance of
shares as well as the issuance of special rights entitling to shares referred to in chapter 10 section 1 of
the Finnish Companies Act as follows. The number of shares to be issued based on this authorization
shall not exceed 3,185,000 shares, which corresponds to approximately 9.5% of all the shares in the
company. The authorization covers both the issuance of new shares as well as the transfer of treasury
shares held by the company.
The Board of Directors decides on all the conditions of the issuance of shares and of special rights
entitling to shares. The issuance of shares and of special rights entitling to shares may be carried out
in deviation from the shareholders' pre-emptive rights (directed issue). This authorization cancelled the
authorization given by the Annual General Meeting held on 27 January 2022 to decide on the issuance
of shares as well as on the issuance of special rights entitling to shares. The authorization is effective
until the next Annual General Meeting, however, no longer than until 31 March 2024.
Earnings per share
The basic earnings per share figure is calculated by dividing the result for the financial year attributable
to the parent company’s shareholders by the weighted average number of shares outstanding during
the financial year. When calculating the earnings per share adjusted by dilution, the weighted average
of the number of shares takes into account the diluting effect resulting from changing into shares all
potentially diluting shares.
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 88
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Earnings per share
30 Sep 2023 30 Sep 2022
Earnings per share, basic
Net profit attributable to equity owners of the parent
company, EURthous , EUR thousand 26,448 22,328
Weighted average number of shares 33,374,823 33,337,805
Basic earnings per share, EUR 0.79 0.67
Earnings per share, diluted
Net profit attributable to equity owners of the parent
company, EURthous , EUR thousand 26,448 22,328
Weighted average number of shares 33,374,823 33,337,805
Adjustments:
Average number of treasury shares it is possible to be
issued on the basis of the share-based payments 223,344 240,824
Weighted average number of shares for diluted
earnings per share 33,598,167 33,578,629
Diluted earnings per share, EUR 0.79 0.66
Dividend and profit distribution
The Board of Directors of Musti Group plc proposes to the Annual General Meeting that shareholders
will be paid a capital return of EUR 0.60 per share to be distributed from the invested unrestricted
equity reserve totalling approximately EUR 20.0 million and that no dividend will be paid for the
financial year ended 30 September 2023. For the financial year 2022 a capital return was paid totalling
EUR 16.7 million, no dividend has been distributed from the 2022 results.
Musti Group plc’s distributable funds
EUR thousand 30 Sep 2023
Retained earnings at the end of financial year 9,346
Unrestricted equity 123,349
Own shares -5,340
Result for the financial year 3,672
Distributable equity total 131,027
Invested unrestricted equity reserve
Under the Finnish Companies Act, the subscription price of new shares is credited to the share capital,
unless it is provided in the share issue resolution that it is to be credited in full or in part to the invested
unrestricted equity reserve. Contributions to the reserve for invested unrestricted equity can also be
made without share issues.
Translation differences
Translation differences arising on the translation of subsidiaries’ financial statements into euros are
recognized in other comprehensive income and accumulated in equity.
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 89
Annual Report 2023
6. OTHER NOTES
Management compensation
The CEO and Management Team remuneration
The remuneration of the CEO and the members of the Management Team is presented on accrual
basis. The Group management remuneration is described more in detail in the separate Remuneration
Statement and Note 2.4 Share-based payments.
Remuneration paid to Board of Directors
Paid FY2023 Paid FY2022
EUR thousand 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Jeffrey David 70 69
Ingrid Jonasson Blank 45 47
Ilkka Laurila (as of January 21, 2021) 43 40
Johan Dettel (as of January 27, 2022) 43 42
Inka Mero (as of January 27, 2022) 40 40
Total 240 238
The remuneration of the Board of the Directors is presented on accrual basis. According to the
decision of the 2023 Annual General Meeting, the annual fees paid to the Board members were:
Chairman of the Board EUR 65,000 and other Board members EUR 35,000. The annual fees paid to
the members of the Committees were: Chairman of the Committee EUR 7,500 and other Committee
members EUR 5,000.
6.1 Related party transactions
Parties are considered to be related if one party has the ability to control or exercise significant
influence on the other party, or if the parties exercise joint control in making financial and operating
decisions. Musti Group’s related parties include its subsidiaries, joint venture, Board of Directors and
the members of the management team, including the CEO, as well as their family members and entities
controlled by these individuals.
The following transactions were carried out with joint ventures:
Related party transactions are executed with the arm’s length principle, and their terms and conditions
correspond to transactions carried out with independent parties.
During the financial year the Group had a joint venture Premium Pet Food Suomi Oy, of which the
Group acquired the full ownership on 3 April 2023, and it became a fully owned subsidiary. Prior to the
transaction, Musti Group held 49.2% of the shares in the company, therefore, transactions and balances
with Premium Pet Food Suomi Oy have been included in the presentation of related party transactions.
From 3 April 2023 onwards the intercompany transactions with Premium Pet Food Suomi Oy are not
included anymore in the related party transactions table presented above.
The management’s remuneration is presented in the table below. No loans have been granted to the
management, and no other transactions have been conducted with the management.
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 90
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6.2 Taxes
Income taxes
Accounting principles
The taxes recognized in the consolidated income statement include the Group companies’ taxes
on current net profits on an accrual basis, prior period tax adjustments and changes in deferred
taxes. The Group companies’ taxes have been calculated from the taxable income of each company
determined by local jurisdiction. The country of registration of each group company is presented in
Note 1.4 Group information.
Income tax expenses
EUR thousand 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Current tax:
Current tax on profits for the year -3,934 -4,837
Taxes for prior years -172 -40
Total current tax expense -4,106 -4,877
Deferred tax:
Change in deferred taxes -3,123 -1,232
Income taxes -7,229 -6,109
Reconciliation of income tax expense and taxes calculated at the
Finnish tax rate 20%
EUR thousand 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Profit before tax 33,717 28,440
Tax calculated at Finnish tax rate 20% -6,743 -5,688
Effect of other tax rates for foreign subsidiaries -110 -112
Expenses not deductible for tax purposes -218 -444
Income not subject to tax 553 17
Taxes for prior years -172 -40
Temporary differences in taxation -447 0
Change of tax rates 0 29
Other items -92 130
Taxes in income statement -7,229 -6,109
Deferred tax assets and liabilities
Accounting policy
Deferred tax assets and liabilities are recognized on all temporary differences arising between the tax
bases and carrying amounts of assets and liabilities. The most significant temporary differences arise
from right-of-use assets and corresponding liabilities. Deferred tax liability has not been calculated on
goodwill insofar as goodwill is not tax deductible. Deferred tax on subsidiaries’ undistributed earnings
is not recognized unless a distribution of earnings is probable, causing tax implications. A deferred
income tax asset is recognized to the extent that it is probable that it can be utilized against future
taxable income.
Deferred tax has been determined using the tax rates enacted at the balance sheet date, and as the
rates changed, at the known new rate. A deferred income tax asset is recognized to the extent that
it is probable that it can be utilized against future taxable income. The Group’s deferred income tax
assets and liabilities are offset when they relate to income taxes levied by the same taxation authority.
Deferred taxes relating to IFRS 16 right-of-use assets and lease liabilities have been netted on the
consolidated balance sheet but in the specification of the changes below, the gross amounts to the
deferred taxes have been presented.
Determinations based on the management's judgement
Determining to which extent deferred tax assets can be recognized requires management’s judgement.
The management of Musti Group has used judgement when determining if deferred tax asset is
recognized for an unused tax loss carry forward or unused tax credits. Recognition is done only to
the extent that it is probable that future taxable profits will be available against which the loss or
credit carry forward can be utilized. The Group estimates positions taken in tax return with respect
to situations in which applicable tax regulation is subject to interpretation. If necessary, the booked
amounts are adjusted to correspond to amounts expected to be paid to the tax authorities.
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 91
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Changes in deferred taxes during financial year 2023
EUR thousand 1 Oct 2022
Recognized in
profit or loss
Business
acqusitions
Exchange rate
differences 30 Sep 2023
Deferred tax assets
Tax losses 1,289 -1,232 -57 0
Intangible and tangible
assets 846 -148 -45 653
Inventories 1,301 21 1,322
Lease liability 14,969 517 -592 14,894
Other items 11 3 -5 9
Total 18,416 -839 0 -699 16,878
EUR thousand 1 Oct 2022
Recognized in
profit or loss
Business
acqusitions
Exchange rate
differences 30 Sep 2023
Deferred tax liabilities
Intangible and tangible
assets 1,861 713 407 -89 2,892
Right-of-use assets 13,813 549 -308 14,054
Other items 1,656 572 98 -338 1,988
Total 17,330 1,835 505 -735 18,935
Net deferred taxes 30
Sept 2023 -1,085 2,674 505 -36 2,057
Changes in deferred taxes during financial year 2022
EUR thousand 1 Oct 2021
Recognized in
profit or loss
Exchange rate
differences 30 Sep 2022
Deferred tax assets
Tax losses 1,959 -600 -70 1,289
Intangible and tangible
assets 1,056 -174 -36 846
Inventories 986 315 1,301
Lease liability 14,301 1,366 -698 14,969
Other items 12 -1 11
Total 18,314 907 0 -805 18,416
EUR thousand 1 Oct 2021
Recognized in
profit or loss
Exchange rate
differences 30 Sep 2022
Deferred tax liabilities
Intangible and tangible
assets 1,735 118 9 1,861
Right-of-use assets 13,306 1,330 -823 13,813
Other items 949 691 16 1,656
Total 15,990 2,139 0 -798 17,330
Net deferred taxes 30
Sept 2022 -2,325 1,232 0 7 -1,085
At the end of financial year 2023 the Group had no cumulative tax losses for which deferred tax assets
had been booked. Neither the Group had temporary differences on which no deferred tax assets were
booked for which it is uncertain if they will be realized as at 30 September 2023 nor 30 September 2022.
6.3 Subsequent events
The Company has withdrawn three batches of SMAAK pet food following customer claims during the
first and second week of November 2023. The high concentration of glycoalkaloids in a batch of imported
potato flakes was identified as the reason for the symptoms caused by the withdrawn products. At the
moment the company estimates that the incident might have a minor impact on the Company's net sales
or profitability. In addition, the Company will recognize impairment charges, estimated approximately EUR
0.3–0.4 million, to inventory in fiscal year 2024 as a result of the case. The Company will incur some costs
for the investigation of the matter, the product recall and the customer claims, for which the Company
expects to receive at least partial insurance compensation.
A consortium comprising Sonae, Jeffrey David, Johan Dettel and David Rönnberg announced a
recommended public tender offer through Flybird Holding Oy for all shares in Musti Group Plc on 29
November 2023. The Board of Directors of the Company, represented by a quorum comprising the non-
conflicted members of the Board of Directors who are not members of the Consortium, has unanimously
decided to recommend that the shareholders of the Company accept the tender offer. The consortium
expects to publish a tender offer document with detailed information on the tender offer on or about
15 December 2023. The offer period under the tender offer is expected to commence on or about 18
December 2023 , and to expire on or about 12 February 2024. The offer price under the tender offer is EUR
26.00 for each share. The completion of the tender offer is not expected to have any immediate material
effects on the operations, or the position of the management or employees, of the Company. Further
information on the tender offer is available in the stock exchange release published on 29 November 2023.
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 92
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7. PARENT COMPANY FINANCIAL STATEMENT, FAS
Musti Group plc income statement
EUR thousand Note
1 Oct 2022–
30 Sep 2023
1 Oct 2021–
30 Sep 2022
Net sales 7,888 11,552
Other operating income 7.2 946 976
Employee benefit expenses 7.3 -1,676 -1,353
Other operating expenses 7.4 -6,715 -6,398
Operating profit/loss 444 4,777
Financial income 7.5 8,987 7,900
Financial expenses 7.5 -5,945 -8,145
Profit/loss before appropriations and taxes 3,487 4,532
Appropriations 7.6 200 0
Income tax expense 7.7 -15 -913
Profit/loss for the period 3,672 3,619
Musti Group plc balance sheet
EUR thousand Note 30 Sep 2023 30 Sep 2022
ASSETS
Non-current assets
Investments 7.8 132,410 132,410
Total non-current assets 132,410 132,410
Current assets
Long-term receivables 7.10 39,755 40,787
Short-term receivables 7.10 63,871 56,953
Cash and cash equivalents 21,101 9,218
Total current assets 124,727 106,958
TOTAL ASSETS 2 5 7,1 3 7 239,368
EUR thousand Note 30 Sep 2023 30 Sep 2022
EQUITY AND LIABILITIES
Equity
Share capital 7.11 11,002 11,002
Other reserves 7.11 123,349 140,043
Own shares 7.11 -5,340 -6,910
Retained earnings 7.11 9,346 7,298
Profit/loss for the fiscal period 3,672 3,619
Total equity 142,029 155,051
Liabilities
Non-current liabilities 7.12 69,943 59,898
Current liabilities 7.13 45,165 24,418
Total current liabilities 115,108 84,317
TOTAL EQUITY AND LIABILITIES 2 5 7,1 3 7 239,368
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 93
Annual Report 2023
Musti Group plc cash flow statement
EUR thousand
1 Oct 2022–
30 Sep 2023
1 Oct 2021–
30 Sep 2022
Cash flows from operating activities
Profit before appropriations and taxes 3,487 4,532
Unrealised foreign exchange gains and losses 2,065 2,836
Finance income and expenses -5,108 -2,591
Cash flow before change in working capital 444 4,777
Change in working capital
Increase (-) / decrease (+) of current receivables 4,051 867
Increase (+) / decrease (-) of current non-interest
bearing liabilities 821 -2,453
Cash flows from operating activities
before financial items and taxes 5,317 3,191
Interests paid and other finance costs -3,055 -1,267
Interests received 4,901 2,079
Direct income taxes paid -2,340 -1,141
Net cash from operating activities 4,822 4,804
Cash flows from investing activities
Dividends received 3,740 0
Long-term receivables, increase (-) / decrease (+) 642 0
Net cash fom investing activities 4,382 0
Cash flows from financing activities
Capital returns paid -16,694 -14,648
Proceeds from non-current loans 10,044 60,000
Repayments of non-current loans 0 -50,000
Commercial papers issued -5,538 14,977
Change in internal bank account receivables 14,866 -16,125
Net cash fom financing activities 2,678 -5,797
Change in cash and cash equivalents 11,883 -2,934
Cash and cash equivalents at the beginning of the period 9,218 12,152
Cash and cash equivalents at the end of the period 21,101 9,218
Notes to Musti Group plc financial statements
7.1 Accounting principles
Basis of preparation
Musti Group plc is the parent company of Musti Group, domiciled in Helsinki, Finland. The financial
statements of Musti Group plc have been prepared in euros in accordance with the relevant acts and
regulations in force in Finland (Finnish Accounting Standards, FAS).
When preparing the financial statements, the management of the company needs to make estimates
and assumptions that affects the financial statements valuations. Actual figures may differ from the
estimates made.
There is a change in the presentation of the income statement from the financial year 2023.
Service fee's from group companies are presented as net sales instead of other operating income. The
comparison period figures from the financial year 2022 are also corrected, so the figures of net sales
and other operating income are comparable.
Valuation and accruing principles and methods
Non-current assets
Investments in subsidiaries are recognized either at acquisition cost or at net realizable value if the
value of the investments has declined permanently.
Pension plans
The statutory pension liability of the Finnish personnel and any additional pensions have been arranged
through a pension insurance company.
Income tax expense
Income tax includes tax calculated on the profit for the current financial year as well as tax adjustments
for previous financial years. No deferred taxes have been booked in the parent company.
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 94
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Foreign currency items
Foreign currency business transactions are booked using the exchange rate of the transaction date. At
the end of the fiscal year all open foreign currency transactions are valued using the exchange rate of
the closing date.
Financial instruments
Financial instruments are valued at fair value in accordance with the chapter 5, paragraph 2a of
the Finnish Accounting Act. The company classifies financial instruments based on the cash flow
properties of the contracts related to them and their original purpose of use in line with the business
model at the time of the acquisition. The classification is changed only if the business model applied
in the investment activities is amended. Financial assets or liabilities are presented as a non-current
item, if the remaining maturity is over 12 months from the end of the period, and as a current item if
the remaining maturity is under 12 months from the end of period. Financial assets and liabilities are
classified as follows:
Financial assets are classified into the following categories:
I. financial assets at amortized cost
II. financial assets at fair value through profit and loss
Financial assets
Financial assets at amortized cost
Financial assets are classified as financial assets at amortized cost if the following criteria are met:
I. the financial asset is held to generate cash flows based on the business mode; and
II. the cash flows are contractual capital returns and interest accrued on the capital.
Financial assets at amortized cost are valued using the effective interest rate method. Impairment is
considered in the valuation. Gains and losses are recognized though profit and loss when the financial
asset is reclassified or changed or its value decreases. Interest income is recognized in finance income.
Financial assets at amortized cost include term deposits, interest-bearing loans and other
receivables, trade receivables and non-interest-bearing receivables.
Financial assets at fair value through profit and loss
Financial assets at fair value through profit and loss are financial assets acquired for trading purposes.
Financial assets at fair value through profit and loss are derivatives not eligible for hedge accounting.
Changes in fair value, as well as profit and loss in connection derecognition, are presented in the profit
and loss statement.
Financial liabilities
Financial liabilities are classified into the following categories:
I. financial liabilities at amortized cost
II. financial liabilities at fair value through profit and loss
Financial liabilities at amortized cost
Musti Group’s loans from financial institutions and trade and other payables are recognized at the
time on acquisition at fair value net of transaction costs. Loans are subsequently measured using the
effective interest rate method. The interest expenses of the loans are recorded in the profit and loss
statement. Trade and other payables are non-interest-bearing current unpaid payables.
Financial liabilities at fair value through profit and loss
Financial liabilities at fair value through profit and loss are financial liabilities acquired for trading
purposes.
Financial liabilities measured at fair value through profit and loss are derivatives not eligible for
hedge accounting. Changes in fair value, as well as profit and loss in connection derecognition, are
presented in the profit and loss statement.
Derivatives are initially recorded at their fair value on the date of the contract, and they are
subsequently valued at their fair value. Derivatives a classified as instruments held for trading and
recorded at fair value through profit and loss.
The Company utilizes derivatives for hedging interest rate risk. The company does not apply hedge
accounting.
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 95
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7.4 Other operating expenses
EUR thousand 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Administration -6,627 -6,313
Other expenses -88 -84
Tot al -6,715 -6,398
Auditors' fees
EUR thousand 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Authorised Public Accountants E&Y
Audit 80 80
Tax consultation 16 83
Other services 12 0
Tot al 108 163
7.2 Other operating income
EUR thousand 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Other income from group companies 946 976
Tot al 946 976
7.3 Employee benefit expenses
EUR thousand 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Salaries and fees -1,406 -1,085
Social security costs -234 -168
Pension costs -33 -99
Other social security costs -2 -2
Tot al -1,676 -1,353
Salary and bonus expenses of Chief Executive
Officer and Members of the Board of Directors
Chief Excecutive Officer 551 626
Board of Directors 240 238
Personnel on average 2 2
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 96
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7.6 Appropriations
EUR thousand 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Group contributions received 200 0
Tot al 200 0
7.7 Income taxes
EUR thousand 30 Sep 2023 30 Sep 2022
Income tax for the financial year -5 -907
Income tax for prior financial years -10 -6
Tot al -15 -913
7.8 Investments
EUR thousand 30 Sep 2023 30 Sep 2022
Investments in Group companies
Acquisition cost 1.10. 132,410 132,410
Increases 0 0
Decreases 0 0
Acquisition cost 30.9. 132,410 132,410
Group companies 30 Sep 2023 Share of parent company %
Musti Group Nordic Oy 100
The Group’s subsidiaries and investments in associates are presented in Note 1.4 in the Consolidated
Financial Statements.
7.5 Financial income and expenses
EUR thousand 1 Oct 2022–30 Sep 2023 1 Oct 2021–30 Sep 2022
Other interest and financial income
From Group companies
Interest income 3,702 2,049
Dividend income 3,740 0
From others
Other financial income 1,545 5,851
Tot al 8,987 7,900
Interest and other financial expenses
To Group companies
Interest expenses -42 0
To others
Interest expenses -2,864 -615
Other financial expenses -3,039 -7,530
Tot al -5,945 -8,145
Financial income and expenses total 3,042 -245
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 97
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7.9 Fair value hierarchy
30 Sep 2023
EUR thousand Level 1 Level 2 Level 3
Assets
Financial assets at amortised cost
Other non-curret assets 87
Trade and other receivables* 54,735
Loan receivables 38,410
Cash and cash equivalents 21,101
Financial assets at fair value through prot and loss
Derivative financial instruments 1,257
Tot al 115,591
30 Sep 2022
EUR thousand Level 1 Level 2 Level 3
Assets
Financial assets at amortised cost
Other non-curret assets 129
Trade and other receivables* 43,127
Loan receivables 41,300
Cash and cash equivalents 9,218
Financial assets at fair value through prot and loss
Derivative financial instruments 1,551
Tot al 95,325
30 Sep 2023
EUR thousand Level 1 Level 2 Level 3
Liabilities
Financial liabilities at amortised cost
Loans from credit institutions 69,943
Commercial papers 9,412
Trade and other payables* 31,597
Tot al 110,952
30 Sep 2022
EUR thousand Level 1 Level 2 Level 3
Liabilities
Financial liabilities at amortised cost
Loans from credit institutions 59,898
Commercial papers 14,950
Trade and other payables* 5,198
Tot al 80,047
*Other receivables and other payables includes only items classified as financial assets and liabilities.
Level 1
Quoted unadjusted prices at the balance sheet date in active markets. The market prices are readily
and regularly available from an exchange, dealer, broker, market information service system, pricing
service or regulatory agency. The quoted market price used for financial assets is the current bid price.
Level 1 financial instruments include investments in funds classified as financial instruments at fair value
through profit and loss. Musti Group plc does not have Level 1 financial instruments.
Level 2
The fair value of financial instruments in Level 2 is determined using valuation techniques. These
techniques utilize observable market data readily and regularly available from an exchange, dealer,
broker, market information service system, pricing service or regulatory agency. Musti Group plc has
classified derivatives at fair value according to the Level 2.
Level 3
A financial instrument is categorized into Level 3 if the calculation of the fair value cannot be based on
observable market data. Musti Group plc does not have Level 3 financial instruments.
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 98
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Short-term receivables
Receivables from Group companies
EUR thousand 30 Sep 2023 30 Sep 2022
Loan receivables 0 642
Trade receivables 139 233
Group contribution receivables 200 0
Group bank account receivables 54,397 42,894
Prepayments and accrued income 6,912 10,391
Tot al 61,648 54,161
Receivables from others
EUR thousand 30 Sep 2023 30 Sep 2022
Prepayments and accrued income
Income taxes 1,418 0
Value added tax receivables 158 133
Other 648 2,659
Tot al 2,224 2,793
Short-term receivables total 63,871 56,953
7.10 Receivables
Long-term receivables
Receivables from Group companies
EUR thousand 30 Sep 2023 30 Sep 2022
Loan receivables 38,410 40,658
Tot al 38,410 40,658
Receivables from others
EUR thousand 30 Sep 2023 30 Sep 2022
Other receivables 1,345 129
Tot al 1,345 129
Long-term receivables total 39,755 40,787
Musti's Year Mustis Direction Corporate Governance Financial StatementsBoard of Directors' Report 99
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7.11 Equity
EUR thousand Share capital
Unrestricted
equity reserve
Treasury
shares
Retained
earnings Equity total
Equity 1 Oct 2022 11,002 140,043 -6,910 10,916 155,051
Capital return -16,694 -16,694
Acqusition of own shares 1,570 -1,570 0
Result for the financial year 3,672 3,672
Equity 30 Sep 2023 11,002 123,349 -5,340 13,018 142,029
Equity 1 Oct 2021 11,002 154,691 -6,910 7,298 166,080
Capital return -14,648 -14,648
Acqusition of own shares 0 0
Result for the financial year 3,619 3,619
Equity 30 Sep 2022 11,002 140,043 -6,910 10,916 155,051
Distributable equity
EUR thousand 30 Sep 2023 30 Sep 2022
Reserve for invested unrestricted equity 123,349 140,043
Own shares -5,340 -6,910
Retained earnings 9,346 7,298
Net result for the financial period 3,672 3,619
Tot al 131,027 144,049
7.12 Non-current liabilities
Liabilities to others
EUR thousand 30 Sep 2023 30 Sep 2022
Loans from financial institutions 69,943 59,898
Tot al 69,943 59,898
Non-current liabilities total 69,943 59,898
7.13 Current liabilities
Liabilities to Group companies
EUR thousand 30 Sep 2023 30 Sep 2022
Trade payables 0 1
Group bank account payables 31,454 5,085
Other liabilities 3,761 3,140
Tot al 35,215 8,226
Liabilities to Group companies
EUR thousand 30 Sep 2023 30 Sep 2022
Commercial papers 9,412 14,950
Trade payables 143 112
Accruals and deferred income
Employee benefit expenses 155 167
Interest liabilities 213 29
Incom tax payables 0 907
Other accruals and deferred income 26 27
Accruals and deferred income total 395 1,130
Tot al 9,950 16,1 92
Current liabilitites total 45,165 24,418
7.14 Commitments and contingent liabilities
EUR thousand 30 Sep 2023 30 Sep 2022
Pledges given on behalf of group companies
Pledges given on behalf of group companies 23 23
Tot al 23 23
Musti Group plc has given letter of guarantees for the following group companies:
Zoo Support Scandinavia AB, Arken Zoo AB and Arken Zoo Holding AB.
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Musti Group plc’s Board of Directors’ proposal to the Annual General Meeting for
the distribution of distributable funds and signing of the financial statements and
Board of Directors’ review
Musti Group plc’s distributable funds on 30 September 2023 amounts to EUR 131,026,903.86, of which
profit for the financial year 2023 is EUR 3,671,767.82.
The Board of Directors of Musti Group plc proposes to the Annual General Meeting that a capital
return of EUR 0.60 per share will be distributed from the invested unrestricted equity reserve totalling
approximately EUR 20.0 million and that no dividend will be paid for the financial year ended 30
September 2023.
There have been no material changes in the company’s financial position since 30 September 2023.
The liquidity of the company remains good, and the proposed capital return does not risk the solvency
of the company.
Helsinki, 14 December 2023
Jeffrey David Ingrid Jonasson Blank
Johan Dettel Ilkka Laurila
Inka Mero David Rönnberg
CEO
The Auditor’s note
Our auditor’s report has been issued today
Helsinki, 14 December 2023
Ernst & Young Oy
Authorized Public Accountant Firm
Johanna Winqvist-Ilkka
Authorized Public Accountant
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Auditor’s report (Translation of the Finnish original)
To the Annual General Meeting of Musti Group Oyj
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Musti Group Oyj (business identity code 2659161-1) for the
year ended 30 September 2023. The financial statements comprise the consolidated balance sheet,
income statement, statement of comprehensive income, statement of changes in equity, statement
of cash flows and notes, including a summary of significant accounting policies, as well as the parent
company’s balance sheet, income statement, statement of cash flows and notes.
In our opinion
• the consolidated financial statements give a true and fair view of the group’s financial position
as well as its financial performance and its cash flows in accordance with International Financial
Reporting Standards (IFRS) as adopted by the EU.
• the financial statements give a true and fair view of the parent company’s financial performance and
financial position in accordance with the laws and regulations governing the preparation of financial
statements in Finland and comply with statutory requirements.
Our opinion is consistent with the additional report submitted to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities
under good auditing practice are further described in the
Auditor’s Responsibilities for the Audit of
Financial Statements
section of our report.
We are independent of the parent company and of the group companies in accordance with the
ethical requirements that are applicable in Finland and are relevant to our audit, and we have fulfilled
our other ethical responsibilities in accordance with these requirements.
In our best knowledge and understanding, the non-audit services that we have provided to the
parent company and group companies are in compliance with laws and regulations applicable in
Finland regarding these services, and we have not provided any prohibited non-audit services referred
to in Article 5(1) of regulation (EU) 537/2014. The non-audit services that we have provided have been
disclosed in note 2.3 to the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
We have fulfilled the responsibilities described in the
Auditor’s responsibilities for the audit of the
financial statements
section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the financial statements. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the accompanying
financial statements.
We have also addressed the risk of management override of internal controls. This includes
consideration of whether there was evidence of management bias that represented a risk of material
misstatement due to fraud.
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Key Audit Matter
How our audit addressed
the Key Audit Matter Key Audit Matter
How our audit addressed
the Key Audit Matter Key Audit Matter
How our audit addressed
the Key Audit Matter
Valuation of Goodwill
We refer to the notes 3.2 and 3.3.
The value of goodwill at the
date of the financial statements
amounted to 174.4 million euros,
representing 44% of total assets
and 106% of equity.
Valuation of goodwill is based on
management’s estimates about
the value-in-use calculations
of cash generating units. There
are a number of underlying
assumptions used to determine
the value-in-use of cash
generating units, including
the development of revenue
and profitability as well as the
discount rate applied on cash
flows.
The estimated value-in-use of
cash generating units may vary
significantly when the underlying
assumptions change. Changes in
the above-mentioned individual
assumptions may result in an
impairment of goodwill.
The valuation of goodwill was
a key audit matter because the
assessment process includes
judgment, and it is based on
assumptions relating to market or
economic conditions extending
to the future and because the
amount of goodwill is significant
to the financial statements.
Valuation of goodwill was also
a significant risk of material
misstatement referred to in EU
Regulation No 537/2014, point (c)
of Article 10(2).
To address the risk of material
misstatement regarding the
valuation of goodwill our audit
procedures included among
others:
• involving EY valuation
specialists to assist us in
evaluating the methodologies,
impairment calculations
and underlying assumptions
applied by management in
impairment testing;
• comparing the principles
applied by management
in the impairment tests to
the requirements set in the
standard IAS 36 Impairment of
assets;
• ensuring the mathematical
accuracy of the impairment
calculations; and
• comparing the key
assumptions applied by
management in the impairment
tests to approved budgets
and long-term forecasts,
information available in
external sources, as well as
our independently calculated
industry averages for example
in the case of the weighted
average cost of capital used in
discounting cashows.
In addition, we compared the
outcome of management’s
impairment test to Musti Group
Plc’s market capitalization.
We also assessed the Group’s
disclosures in respect of
impairment testing.
Revenue Recognition
We refer to the Group’s accounting
policies and the note 2.1.
Musti Group’s revenue is
generated from sales of products
and services in retail stores and
online platforms as well as from
sales to franchise stores. The
Group’s net sales amounted to
425.7 million euros.
Revenue recognition was a key
audit matter due to the high
volume of transactions, the
management judgement involved
in accounting for right of return
and loyalty club bonus, and the
extensive network of stores. In
addition, the Group focuses on
revenue as a key performance
measure which could create
an incentive for revenue to be
recognized before the control of
goods or services has transferred
to the customer.
Revenue recognition was also
a significant risk of material
misstatement referred to in EU
Regulation No 537/2014, point (c)
of Article 10(2).
To address the risk of material
misstatement regarding revenue
recognition our audit procedures
included among others:
• assessing the Group’s
accounting policies over
revenue recognition, including
principles relating to right of
return accounting and loyalty
club bonuses in relation
to applicable accounting
standards;
• testing revenue, product
returns, loyalty club bonuses
and margins with data
analytics;
• testing selected samples
of sales transactions by
comparing them to payments
received;
• understanding the sales
processes and reconciliation
routines for cash and payment
card transactions in selected
retail stores;
• analyzing the timing of revenue
recognition of online sales
based on delivery lead times;
and
• comparing selected accounts
receivable balances to
confirmations received from
counterparties.
We also assessed the Group’s
disclosures in respect of
revenues.
Valuation of inventories
We refer to the Group’s accounting
policies and the note 4.1.
The total value of inventories
at the date of the financial
statements amounted to 58.4
million euros.
Musti Group’s inventories are
valued at the lower of cost or net
realizable value. Inventories are
presented net of an impairment
loss recognized for obsolete and
slow-moving inventories.
Valuation of inventories was a key
audit matter because the carrying
value of inventories is material
to the financial statements and
because valuation of inventories
and the level of allowance for
obsolete and slow-moving
inventories requires management
judgment relating to the future
sales of the goods.
Valuation of inventories was
also a significant risk of material
misstatement referred to in EU
Regulation No 537/2014, point (c)
of Article 10(2).
To address the risk of material
misstatement regarding
valuation of inventories our audit
procedures included among
others:
• assessing the Group’s
accounting policies regarding
inventories, including
compliance with applicable
accounting standards;
• attending physical stock
takings in selected stores and
central warehouses in order to,
among other things, observe
the potential obsolescence of
goods;
• comparing unit prices of
selected inventory items to
latest purchase invoices and to
sales prices; and
• testing slow-moving inventory
items as well as exceptional
values in inventory accounting
with data analytics.
We also assessed the Group’s
disclosures in respect of
inventory.
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Responsibilities of the Board of Directors and the Managing Director
for the Financial Statements
The Board of Directors and the Managing Director are responsible for the preparation of consolidated
financial statements that give a true and fair view in accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU, and of financial statements that give a true and fair view in
accordance with the laws and regulations governing the preparation of financial statements in Finland
and comply with statutory requirements. The Board of Directors and the Managing Director are also
responsible for such internal control as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors and the Managing Director are
responsible for assessing the parent company’s and the group’s ability to continue as going concern,
disclosing, as applicable, matters relating to going concern and using the going concern basis of
accounting. The financial statements are prepared using the going concern basis of accounting unless
there is an intention to liquidate the parent company or the group or cease operations, or there is no
realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit
conducted in accordance with good auditing practice will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the financial statements.
As part of an audit in accordance with good auditing practice, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the parent company’s or the group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s use of the
going concern basis of accounting and based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the parent
company’s or the group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures
in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the parent company or the group to cease to continue as a
going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events so
that the financial statements give a true and fair view.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the group to express an opinion on the consolidated financial statements. We
are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence and communicate with them all relationships
and other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
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Other Reporting Requirements
Information on our audit engagement
We were first appointed as auditors by Annual General Meeting on 29 March 2018, and our
appointment represents a total period of uninterrupted engagement of six years. Musti Group Oyj has
been a public interest entity (PIE) since 13 February 2020.
Other information
The Board of Directors and the Managing Director are responsible for the other information. The other
information comprises the report of the Board of Directors and the information included in the Annual
Report but does not include the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. With respect to the report of the Board of Directors, our responsibility also includes
considering whether the report of the Board of Directors has been prepared in accordance with the
applicable laws and regulations.
In our opinion, the information in the report of the Board of Directors is consistent with the
information in the financial statements and the report of the Board of Directors has been prepared in
accordance with the applicable laws and regulations.
If, based on the work we have performed, we conclude that there is a material misstatement of the
other information, we are required to report that fact. We have nothing to report in this regard.
Helsinki, 14 December 2023
Ernst & Young Oy
Authorized Public Accountant Firm
Johanna Winqvist-Ilkka
Authorized Public Accountant
Musti Group Head Office
Mäkitorpantie 3
00620 Helsinki
Finland
www.mustigroup.com
Our annual report is available in electronic format and is published
annually. To reduce the usage of printing materials, the report is
available only in digital format.
/musti-group /mustigroup@MustiGroup