AnnuAl RepoRt

Transcription

AnnuAl RepoRt

Mackmyra Svensk Whisky AB
2011
Annual Report
Mackmyra in brief
Mackmyra Svensk Whisky AB was founded in 1999 and is
the first producer of malt whisky in Sweden. The business is
run with production in Mackmyra Whisky Village and the
Mackmyra Bruk just outside of Gävle. The Whisky Village is
the focal point for both whisky production and the experience and cask offering that is an important part of the
company’s strategy.
personal casks and the experience, for example, of the
Whisky Village. These elements create the ambassadors
who represent a key, integral component of Mackmyra’s
marketing strategy. The ambassadors spread the message
about Mackmyra and their experiences, thereby helping to
increase brand awareness and product recognition within
and outside Sweden.
Maturation storage takes place in Bodås, Fjäderholmarna,
Häckeberga and Smögen. The office for administration,
marketing and sales is in Stockholm.
The personal casks, which were launched in 2002, were
the company’s first whisky product. The concept offers the
customer the opportunity to buy a personal 30-litre cask
of Swedish malt whisky, and then follow it throughout the
entire process from filling to bottling.
Mackmyra’s vision is to be the natural choice for new
whisky experiences. The business concept is that people
who enjoy the good things in life in Sweden, the Nordic
regionand the rest of the world shall be offered an attractive range of whisky and whisky-related products via the
strong Mackmyra brand.
The Mackmyra business model is based on close interaction
with the company’s customers in order to generate strong
loyalty. Mackmyra’s offering includes bottled products,
Mackmyra’s bottled whisky has been sold at Systembolaget
(The Swedish sales- and distribution monopoly) and restaurants since 2006. Today Mackmyra offers a wide product
portfolio for all high-end segments of the market. Products in
the super premium and premium segments are offered in the
ordinary range of products at Systembolaget. The products
are available for sale outside of Sweden through duty-free,
travel and retail and through selected distributors.
Contents
2
Mackmyra Annual Report 2011
The year in brief 3
CEO’s report 4
Business model 6
Market overview 10
Production 14
Customer offer 18
Five-year summary 23
Board of Directors 24
Management 25
Report of the Board of Directors 26
Financial statements 32
Supplemental disclosures 36
Accounting policies and
notes to the financial
statements
38
Signatures 42
Auditors’ report 43
Share and ownership 44
Annual General Meeting and calendar
45
Glossary, definitions and addresses
46
The year in brief
The year in brief
Financial year 2011
Events after the end of the period
• Net sales increased by 2% (2) and totalled SEK 81.7m
(80.3). Operating loss was SEK 0.7m (profit: 6.5). Loss
after financial items was SEK 3.8m (profit: 5.2). Net loss
after tax was SEK 3.8m (profit: 3.5), corresponding to
SEK -0.94 (1.17) per share.
• Fine-tuning of the Gravitation distillery is currently
underway. Casks filled with the first drops of distillate from the new distillery are being offered to cask
owners and shareholders exclusively until the Annual
General Meeting on 5 May.
• Production for the year corresponds with 525,000
bottles of whisky (567,000). Thus the maturation stock
increased by SEK 11.7m (11.7), or 13% (15) and at yearend was SEK 102.5m (90.8).
• Erik Penser Bankaktiebolag guarantees the liquidity of
the share on First North from 1 January 2012.
• Underlying operating profit from operating activities,
adjusted for non-recurring items, is positive and on a
par with 2010.
• During the year, the company raised SEK 81.3m (33.7)
through new share issues.
• The Mackmyra share was listed on First North with the
first trading day on 16 December 2011, under the ticker
symbol MACK-B.
• In 2010 and 2011 a new platform was designed to
promote growth.
• The Board of Directors will not propose a dividend.
• Mackmyra’s First Edition whisky was purchased by
SAQ, the Canadian provincial monopoly in Quebec,
and was launched in the SAQ Signature product line in
February 2012.
• The Liquor Control Board (LCBO) monopoly in Ontario,
Canada chose Mackmyra as the spring’s Distillery
Feature, which entails marketing four of Mackmyra’s
whiskies during May 2012.
• In February 2012, Altia Finland, the largest wine and
spirits house in the Nordic region, began selling and
distributing Mackmyra whisky in Finland.
• Swedish Systembolaget has included Mackmyra’s
unaged distillate Vit Hund (White Dog) in its
permanent line (T9), which means that store managers
can order the product for the store shelves, based on
demand.
FINANCIAL HIGHLIGHTS
Outcome 2011
Of which
non-recurring items
Of which
operating activities
81.7
80.3
-40.7
-1.9
-38.8
-37.7
Gross profit/loss
41.0
-1.9
42.9
42.6
Gross profit, %
50%
53%
53%
SEKm
Net sales
Cost of goods sold
Total
81.7
Outcome
2010
Selling expenses
-29.5
-1.3
-28.2
-24.4
Administrative expenses
-12.4
-0.9
-11.5
-11.7
Other operating income
Operating profit/loss (EBIT)
Profit/loss before depreciation, amortisation
and impairment losses (EBITDA)
0.2
0.2
-
-
-0.7
-3.9
3.2
6.5
5.8
-3.9
9.7
11.9
It is key that the underlying operating profit from operating activities, adjusted for non-recurring items, is positive and on a par with 2010.
3
CEO’s report
We are now emerging
from the build-up
phase
Dear shareholders,
Mackmyra’s position has been built up by our ambassadors
– our customers and shareholders. It is thanks to your
enthusiasm and commitment that our products first became
available for special order and then included in the regular
product line at Systembolaget.
We are now entering a new period of growth. Our new
platform will enable us to boost both production and sales.
We have also built up a stock of quality products to offer to
meet increasing demand from both the Swedish and international markets.
The presence at Systembolaget and the well-known Mackmyra
brand open up opportunities for more sales, not only through
the 400 stores in Sweden, but also on neighbouring markets
and to the restaurant industry. This strategy creates bestsellers that will benefit the company for a long time. Relevant
examples are Mackmyra – Den Första Utgåvan (The First Edition), Mackmyra Brukswhisky (The Swedish Whisky), and Vit
Hund (White Dog). The latter was also included in Systembolaget’s regular product line in spring 2012.
To boost sales, we will expand and intensify our international marketing campaigns. These campaigns have already
brought success in the form of a foothold in the large
Canadian market and an initial presence in the important
premium market in New York. We also continue to consolidate our position in the neighbouring markets in the Nordic
countries, while we see great opportunities for expansion in
selected parts of Western Europe. To date, our international
launch has evolved as expected.
With the support of our shareholders, we can now leave the
build-up phase behind us and embark upon a new period
of growth. Now we are ready to capitalise on the assets we
have created.
In addition to our current offering, we continue to develop
our product portfolio with new varieties of whisky and
whisky-related products. The
goal, of course, is that they
will also take strong positions
in Systembolaget’s regular
product line.
With the support of our
The past two years spent building the Mackmyra of today
have included the new distillery, which opened in December
2011. We started the Whisky
Village, restructured our
financing, expanded the ownership base to give us a total of
6,000 shareholders, listed the
Mackmyra share on NASDAQ OMX First North, and laid the
foundation for new products and new markets.
shareholders, we can now
leave the build-up phase
behind us and embark upon
a new period of growth.”
It has been a hectic period. Our resources are limited and
the activities entailed dedicating our focus and resources
to construction and production issues, financing solutions, issuances, listing on First North and preparing for
sales. Sales growth has quite simply been impacted, which,
combined with the weaker economy, especially in the last
quarter of 2011, resulted in lower than expected growth.
Nevertheless, our sales volumes have performed well and
our products have continued to win prizes and receive international recognition for taste and quality. I would say that
Mackmyra today is significantly stronger, both as a brand
and a company, than it was two years ago.
4
Whisky production is not
governed by the fluctuations of
the economy. What is produced
during a recession can be sold
during boom times and vice
versa. Mackmyra’s success is therefore based on a longterm, methodical approach in which production follows
long-term plans to build up an adequate stock of mature
whisky to match the demand we create through methodical
skilled sales in Sweden and abroad.
Our challenge is to first recapture and then guide our
growth at a steady pace so that future production volumes
are balanced in relation to marketing campaigns for optimal
introduction at the right price and volume in new markets.
Growth must also occur without the whisky stocks drying
up at a critical moment and without capital being tied up
along the way so as to pose a challenge for liquidity.
1998 The founders, eight old classmates, reunite
in a cottage in Sälen. Each one brings a
bottle of single malt whisky and late one
night the idea of creating the first Swedish
whisky is born.
CEO’s report
Mackmyra’s history
1999 After one year of preparations, Mackmyra
Svensk Whisky AB is founded in March 1999.
A pilot distillery with the necessary licenses is
started the same year. The first drops of raw
whisky are distilled on 18 December 1999.
The expansion of the Whisky Village outside Gävle is an
important milestone for Mackmyra and creates a focus
for our operation and sales. We can advertise and link
our offering in this venue, where we can also give our
ambassadors a complete experience when they follow
their drops from the malt smoking facility and distillery
to cask storage. In connection with Mackmyra Day, 5 May,
our ambassadors who have chosen to order a cask with the
“first drops”, i.e., the first distillate produced at the new
distillery, will see their casks begin to be filled.
I would say that today
Mackmyra is significantly
stronger, both as a brand
and a company, than it was
two years ago.”
Whisky production is a long-term business, and we know
that many of our shareholders are also long-term and are
more than willing to help promote our brand. We are convinced that broad public ownership reinforces the company’s ability to grow and gain market share at the same
time that we have a greater opportunity to communicate
and improve conditions for the Swedish whisky industry. I
am confident that with these measures, together with the
excellent, enthusiastic efforts of our employees, Mackmyra
is heading in the right direction.
2000 Visitor and experience activities are
launched at Mackmyra Bruk.
2001 A distillery on a commercial scale is built
and brought onstream at Mackmyra Bruk.
2002 Mackmyra Reserve is developed and launched.
2003 A main warehouse is built in Bodås,
outside Hofors.
2004 Distillery production gradually increases
up to the equivalent of 500,000-600,000
bottles a year.
2005 The first bottles from Mackmyra Reserve
are sold in December via Systembolaget.
2006–2007 The first bottles of Buteljerat (Mackmyra Preludium) are sold at Systembolaget
and in duty-free shops.
2008 Mackmyra – Den Första Utgåvan (The First
Edition), the company’s first regular bottled
product, is launched.
2009 The Company presents Vision 2019, its new
long-term strategic plan.
2010 Construction and grand opening of the
Forest Maturation Warehouse, the first
building at Mackmyra Whisky Village.
2011 Visitor activities begin at Mackmyra Whisky
Village, the first bottles are sold in New
York and the Gravitation Distillery opens.
Magnus Dandanell
CEO
Mackmyra raises a total of about SEK 185
million through an initial public offering and funding. The shares are listed at
First North NASDAQ OMX in Stockholm on
16 December. After the IPO Mackmyra has
more than 6,000 shareholders!
5
Business model
close interaction
with customers
Vision
Brand platform
To be the natural choice for new whisky experiences.
The “Mackmyra” brand platform forms the basis of
the company’s activities and also serves as a basis for
decision-making when deciding on direction and product
development.
Business concept
That people who enjoy the good things in life in Sweden, the
Nordic region and the rest of the world shall be offered an
attractive range of whisky and whisky-related products via
the strong Mackmyra brand.
Operational objectives 2012–2014
• Strengthen Mackmyra’s position in Sweden and the
rest of the Nordic region to increase sales.
• Launch at least one new regular product per year at
Systembolaget and neighbouring markets.
• Establish Mackmyra Whisky Village as a nationally
recognised destination for whisky experiences. Grand
opening for a permanent visitor center with whisky
tasting and capacity for up to 50,000 visitors per year
during the period.
product
Mission
Craftsmanship and
a high-class whisky
experience
positioning
Innovation, openness,
traceability and local
ingredients
Style
Committed
Targeted
Challenging
Small-scale
Produced by craftsmen
Here comes the new*
school in terms of
high-quality whisky!
We
demand
more!
Vision
The natural choice
for whisky experiences
values
Long-term approach
Authenticity
Creativity
Experience
High quality
• Increase the number of ambassadors, i.e., shareholders
and/or cask owners, who spread awareness of the
Mackmyra brand and products both inside Sweden and
abroad. This objective has become easier to achieve
through listing on First North.
*Combination of new and old: age is not an end in itself. Good, local
ingredients, traceability, craftsmanship using new technology, no additives,
maximum volume, hygienic and the opportunity to create personally
designed malt whisky.
• Expand Mackmyra’s whisky on existing markets outside the Nordic region with sustainable sales through
established distribution channels.
Market strategy
• Introduce Mackmyra’s whisky on selected new markets.
Since its inception, Mackmyra has chosen to gradually
introduce the brand onto the market.
Operations in Sweden began in 1999. The Company’s
marketing strategy then was based on building up a client
base and demand through visits to the distillery, tastings
and cask sales. The strategy was successful and engaged
customers spread awareness of the Mackmyra brand
throughout Sweden. The initiative resulted in spontaneous
demand at Systembolaget, which decided to carry
Mackmyra’s first bottlings in its new product line in 2006
and as a regular product beginning in 2009.
The Swedish market is the foundation of the operation and
a requirement for continued expansion abroad. It is therefore important for Mackmyra both to continue growth in
the Swedish market and maintain its position as the leading
end brand in the high-end segments at Systembolaget.
6
Business model
Step 3 - Expansion of step 2 markets
Mackmyra’s growth is planned in three steps:
Step 3 entails the expansion of step 2 markets. This
initiative will begin in 2012 by marketing the existing
volume of mature whisky in the maturation warehouses.
Beginning in 2017, the company will have even greater
opportunities to gear up markets from Step 2 since larger
volumes of mature whisky from the Gravitation Distillery
will then become available.
Step 1
Step 2
Step 3
Market selection and growth strategy
Expansion of step 2 markets
Selected markets outside of the Nordic region
Examples: the UK, France, Spain, Germany,
New York, Quebec, Ontario
Sweden and the rest of the Nordic region
Denmark, Norway, Finland, Ferries, Airports, Charter
travel, travel-related commerce. Wide range of bottled
products including whisky-related product offering
Product differentiation
Mackmyra currently offers mature malt whisky in different
versions and editions, in casks and in bottles. Mackmyra
is also working with product differentiation by developing
whisky-related products. A first example is the product Vit
Hund – Mackmyra’s unaged bottled spirit, which is marketed under its own brand.
Customer relationship
Step 1 - Sweden and the rest of the Nordic region
Mackmyra is currently an established brand in Sweden and
the rest of the Nordic region. Marketing activities focus on
selling Mackmyra’s entire line of products to a broader customer base in Sweden, Finland, Denmark and Norway. The
market also includes traditional travel-related commerce in
the area. Mackmyra has signed distribution agreements for
several of these markets and is a market leader in the highend segments on the Swedish market.
Step 2 - Selected markets outside the Nordic region
Mackmyra launched sales at Western European whisky
dealers in 2007 and kicked off its overseas campaign in 2010
with the goal of establishing the company in some carefully
selected key markets throughout the world. The trend to
date has been positive in both Western Europe and North
America. Mackmyra has been launched in the UK, Germany,
France, the Netherlands, New York, Ontario and Quebec.
Mackmyra’s business model is based on close interaction
with the company’s customers, in which experiences and
casks serve as the foundation for a strong commitment that
contributes towards customer-driven marketing. Mackmyra
works with several different channels to provide customers
with the opportunity to come into contact with the brand
and the products. The most important marketing channels
are the company’s dealers, ambassadors, visits to the
Whisky Village, various types of events and digital channels.
Experiences and casks are the foundation
Growth by product group, diagram:
Whisky-related
Ordinary
Limited
Cask
Experiences
1999
2002
2006
2009
2011
Mackmyra’s ambassadors are an important part of
Mackmyra’s marketing strategy. The ambassadors
spread the message about Mackmyra and their personal
experiences, thereby helping to increase brand and
product awareness both in Sweden and abroad.
7
Business model
Strategic resources
Distillery
In December 2011, Mackmyra celebrated the grand
opening of the new distillery in Mackmyra Whisky Village
outside Gävle. The new distillery complements the original
distillery at Mackmyra Bruk. The two facilities now have
a combined production capacity equivalent to 2.4 million
bottles of distillate per year. The increased distillery
capacity is a strategic success factor and a prerequisite for
the international launch.
Maturation and supply
Mackmyra takes a long-term and methodical approach to
establishing the brand and sales of whisky and whiskyrelated products in Sweden, the Nordic region and other
selected markets.
Delivery capacity over time is a key demand from buyers
around the world because they are reluctant to see investments in marketing and brand-building go to waste because
of inadequate stocks of aged whisky or delivery problems
with the supplier.
All whisky producers who intend to market their own single
malt whisky must therefore be able to guarantee a longterm supply of mature whisky for bottling. Consequently,
over the past five years Mackmyra has distilled a larger
volume of distillate than planned sales once the whisky has
matured. The strategy more than doubles the capacity of
finished whisky beginning in 2012, thereby creating a buffer
that can be used as a bridge to a more rapid increase in
sales until the new volumes from the Gravitation Distillery
are finished.
Mackmyra Whisky Village
Customer visits to the distillery, maturation warehouse
and tastings are different experiences that together create
the Mackmyra Whisky brand. The initiative to build and
develop Mackmyra Whisky Village is a key strategy and a
long-term platform for global growth.
8
age structure of maturing stocks,
thousands of bottles (31 Dec 2011)
600
500
400
300
200
100
0
‹ 1 year 1–2 years 2–3 years 3–4 years 4–5 years › 5 years
Core competencies
Mackmyra’s operations are based on its employees’
high commitment and understanding of the business.
Mackmyra depends on the knowledge capital that
employees contribute and work with continuously by
documenting procedures, processes, recipes and other
activities that are important for running the business.
Mackmyra’s strategic core competencies are Taste
and Design, Distilling, Aging and Bottling, and PR &
Communications.
Taste and Design
Mackmyra chose from the start to develop its own whisky
recepies. This was based on a systematic development
plan over a three-year period and comments from visiting
customers with the goal of developing the first Swedish
whisky recipe with domestic ingredients and Swedish
flavours. Mackmyra’s Master Blender has a key role in
shaping Mackmyra’s different products, but groups of
several people are engaged in the process of developing
the various editions of whisky and systematic
documentation is created to ensure continuity.
Mackmyra’s cask is extremely important for the experience
and product quality. The small size and high quality of the cask
are factors that contribute to more intense taste and faster
maturation. The hand-crafted casks made of Swedish oak from
Visingsö are a key flavour ingredient in Mackmyra’s whisky.
Business model
The development of the packaging design and large scale
deliveries of bottles to customers have created important
skills within the company. Experts and customers have
reviewed the many customer casks that have been bottled
and delivered, as well as the many more whisky bottlings
produced and sold. Mackmyra has also conducted its own
analyses of the delivered products. These analyses and
evaluations serve as a basis for continuous improvement,
while providing feedback on the basic processes, thereby
contributing to skill-building.
The finished whisky is sold in various special editions, as
well as in the regular products Mackmyra – Den Första
Utgåvan and Mackmyra Brukswhisky. To emphasise the
impression of a premium product and to enhance the
experience, great care is taken in designing the bottles and
packaging.
Distilling, maturing and bottling
Mackmyra has developed its distilling, maturing and bottling
skills from the start in the small pilot distillery and pilot
storage building where the recipes were developed between
1999 and 2002. The business grew into a commercial scale
operation from 2002 and 2011, in part through the distillery
at Mackmyra Bruk and the five maturation warehouses that
were started up in different parts of Sweden, and in part
through the two bottling plants.
PR & Communication
Mackmyra Whisky’s mission is to develop high-quality
whisky and whisky-related products, as well as to
build a global brand with a strong base in Sweden and
headquarters in Mackmyra. Therefore the qualities of
Swedish craftsmanship and the “genuine” experience
are underscored in all products and customer offering.
Experts, opinion leaders and customers will be able to visit
Mackmyra’s facilities and then share their experiences
through various channels in Sweden and abroad.
Revenue model
Mackmyra revenues come partly from cask sales and
associated experiences, and partly from the sale of
bottled finished whisky.
Cost of production up to the dotted line is recognised as
maturing stock on the balance sheet. The figure below
is schematic and percentages represent an example that
changes depending on the product.
About 5%
About 10% About 20%
Barley/malt Distilling
delivery
1 week
About 15%
About 50%
Cask
maturation
Mixing/
bottling/
finished
goods
inventory
Gross
margin
≥ 5 years
4 weeks
Sales, experiences, brand-building
Approximately two thirds of the company’s sales are
attributable to bottles and one third is attributable to
casks and experiences. With bottle sales, production is
related to the maturing stock, while with sales of casks
and experiences, production is based on orders. The latter
case achieves a positive cash flow, which partially offsets
the capital tied up in the mature stock required for the
sale of bottles.
9
Market overview
Swedish
whisky market
The Swedish whisky industry is at an early stage, where
Mackmyra Whisky has been the groundbreaking pioneer
that has placed Swedish whisky on the map. It is only natural that Mackmyra’s initiatives have led to the emergence
of several whisky producers. The premises for high-quality
production in Sweden are excellent with its raw materials
and clean water, a favourable climate and clear legislation.
As the domestic whisky industry grows and more Swedish
producers join the ranks, awareness of Swedish whisky will
also grow, which is expected to increase Swedish whisky’s
share of total consumption in Sweden. This growth will
also add a dimension to the international launch of Swedish
whisky. As market leader, Mackmyra should benefit from
this trend with better prospects for greater growth.
Regulated market
The Swedish alcohol market is controlled by Swedish
alcohol legislation. This means the market is regulated,
where all the participants that work in the production and
sales of alcohol must obtain a permit to operate. The legislation restricts the forms of marketing, which influences the
design of advertising and types of tastings, and stipulates
that all sales of alcohol to consumers must be made via
Systembolaget or restaurants.
Swedish taxes on alcohol are among the highest in the
world and are higher than the EU average. Some forces
suggest that in the long term, alcohol taxation levels are
likely to be harmonised across the EU. How such changes
would affect Sweden is still uncertain.
Size and growth
Whisky is Systembolaget’s largest category of spirits in
terms of both volume and value. Swedish interest in malt
whisky has grown sharply over the past decade and its
percentage of total whisky sales continues to grow, from
17% in 2004 to 22% in 2009, which can be compared with
the global average of 6.8% and 7.1%, respectively. (Source:
IWSR Global market review of malt whisky – forecasts to
2015, 2011 edition)
In Sweden over ten million bottles of whisky are sold each
year (10,700,000 million bottles in 2011) via Systembolaget,
plus private imports in conjunction with travel, and sales
made through restaurants.
The following consumer trends, which can be derived
from Systembolaget’s 2011 launch plan, indicate continued
growth in malt whisky sales:
Revenue distribution per bottle sold
The picture illustrates the revenue distribution of whisky
in all price categories, with lower consumer prices to the
left and higher consumer prices to the right.
SEK
SEK
500
500
400
400
300
300
200
200
100
100
0
0
• Searching for the real thing
Alcolhol tax (SEK)
Systembolaget (SEK)
VAT (SEK)
Supplier (sales price requirement)
• The focus is on me
• Enjoying luxury
• Experiences
The trend of locally produced food and drink also suggests
continued growth in sales of locally produced malt whisky.
The price of a bottle of whisky is made up of four main parts:
• Production costs
• Distribution costs
• Alcohol tax
• VAT
Alcohol tax and VAT depend on the specific market and are
regulated by legislation in each country.
10
Market overview
11
Market overview
Distribution costs include logistics costs and compensation to any importers or agents and retailers. Costs for
marketing may be taken into account by the manufacturer,
importer or distributor, and will vary from case to case.
In Sweden, retail is regulated by Systembolaget, which
charges relatively low distribution and retail margins.
Abroad, high taxes on alcohol are often replaced by higher
distribution, import and retail costs. This situation also
applies to tax-free markets; the tax portion does not exist,
but compensation to the distributor is often much higher.
Participants/stakeholders/competitors
The Swedish customer at Systembolaget can choose
from a large selection of whisky types and brands in
different price ranges. Competition for the customer’s
awareness is in other words intense and the possibility of
branding via traditional advertising channels is limited
by the legislation. The main competition in the high-end
segments primarily comes from Scottish single malt whisky.
Other Swedish whisky manufacturers are still in early
start-up and production phases. Two of them have come so
far that they have bottled a small number of bottles that
have matured beyond the three-year limit required by law
for the product to be called whisky.
Mackmyra’s position in Sweden
Mackmyra targets the premium segment and above. The
venture has been successful and in a short time Mackmyra
has established itself as market leader in the Swedish
whisky market in the top three segments – Super Premium,
Limited Edition and Exclusive. In the large premium segment, Mackmyra Brukswhisky joined the top ten during its
first regular year at Systembolaget
Prices in these segments are about SEK 350 per bottle and
up. The high-end segments entail higher margins for suppliers, as well as lower volumes since the target is a smaller
and more exclusive customer base.
The table below shows the top sales at Systembolaget in
2011 for each whisky segment/price range. Sales value is
stated as a percentage of the total market for the segment.
Sales peak at Systembolaget 2011
Exclusive
• Moment
• Over SEK 1,000
Limited Edition
• Special
• SEK 450–800
Super Premium
• Den Första Utgåvan
• SEK 450–700
Premium
• Mackmyra Brukswhisky
• SEK 350–450
Source: Systembolaget sales statistics 2011
12
#
Whisky
SEK
%
1
Mackmyra Moment Norrsken
1,295
10
2
Mackmyra Moment Rimfrost
1,195
9
3
Mackmyra Moment Drivved
1,295
8
4
Highland Park Earl Haakon
1,730
8
1
Mackmyra Special:06
595
20
2
Mackmyra Special:07
649
18
3
Ardbeg Alligator
799
11
4
Lagavulin Distillers Edition
729
4
1
Mackmyra DFU
498
18
2
Lagavulin
549
14
3
The Macallan
489
9
4
Ardbeg 10
479
9
1
Bowmore
399
9
2
Caol Ila
389
8
3
Glenmorangie
399
8
9
Mackmyra Brukswhisky
398
4
Mackmyra whisky has been well-received internationally
and has drawn attention in competitions and at trade fairs
in Asia, Europe and North America.
Since its inception, Mackmyra has established a network
of importers in selected parts of the world. Some importers
are larger, while others are small and clear niche retailers.
Sales in each market vary from small to medium volumes.
Mackmyra strives to develop the markets gradually.
Mackmyra is currently represented in Denmark, Norway,
Finland, Germany, Britain, France, Canada, the US, Taiwan
and China. Since 2011 the company has had its own
marketing staff for the New York market, which is essential
in terms of PR.
Mackmyra’s international sales are still a low percentage of
total sales, but the international activities are building the
brand and spreading knowledge of the characteristics and
quality products among priority target groups.
The travel market, however, is relatively large for Mackmyra
whisky. About one third of the whisky in traditional bottles
is sold outside Sweden and the trend is rising.
This growth has been achieved even though the global
travel market has had a tough couple of years and declined
slightly as a result of reduced travel during the recent financial crisis. Nevertheless, research company IWSR predicts
that the tax-free market for Scotch malt whisky will grow
by about 13% by 2015.
Whisky – a global market
Whisky can be found everywhere in the world where spirits
are available and 99% of the whisky market is outside Sweden.
Whisky is an international product.
According to research firm IWSR, a total of around
3.2 billion bottles of whisky were consumed in 2009.
The largest consumer countries are India, the US, France,
Britain, Japan, Spain and Canada. With the exception of
India, the largest volumes are mainly produced in the
traditional manufacturing countries of Scotland, Ireland,
the US, Canada and Japan. (Source: The IWSR Whisky
Forecast Report 2009–2013)
According to research company Euromonitors, the global
whisky market will grow by up to 5% annually over the next
three years. This growth will mainly occur in the emerging
markets in Asia and the Pacific, especially China and India.
Euromonitors also predicts that the premium trend (interest
in more expensive luxury whiskies) will persist, though the
segment is expected to grow more slowly. The market trend
is hampered by poor economic prospects in many countries.
Expected trend 2011-2016 for the global market.
• Producers that stand for “New World Whisky” are
capturing market share.
• Producer countries such as Scotland, the US and
Canada are losing market share.
• The producer countries Ireland and India are increasing
their production volumes and gaining market share.
(Source: The IWSR Whisky Forecast Report 2009-2013)
Market overview
Mackmyra and Whisky in an
international perspective
Mackmyra is active in the premium segment. To get a
picture of the market for this segment, a comparative study
can be made of
malt whisky and other premium whisky.
According to IWSR, about 80 million bottles of Scotch malt
whisky were consumed in 2009. The largest consumption
occurred in the US, France, Britain, Taiwan, Germany, Italy
and Canada.
IWSR predicts long-term volume growth for Scotch malt
whisky of 15 percent from 2009 to 2015, which is considered very positive. Among the major consumer countries
where the highest growth is predicted during the period
are the US (18%), Canada (17%), Taiwan (14%) and Germany
(7%). Forecasted top growth, albeit from a lower level, India
(199%) and China (114%).
IWSR’s analysis also shows that:
• “Premiumisation” and “connoisseurship” are two
strong trends driving the single malt market. Premium
consumers demand a high level of credibility for the
product and want to know the story of the brand. They
are looking for origins, traceability and craftsmanship
in manufacturing.
• Many new small whisky distilleries are started in new
countries. However, the volumes are still small.
• One potential and significant trend is the emergence of
craft micro-distilleries in the US and Canada. Although
these distilleries are not yet very large, they promote
interest in whisky and new styles.
• Lack of access to premium whisky is one of the limiting
factors for growth in the high-end segment of whisky
from the US, Ireland and India.
These observations benefit Mackmyra, which is well ahead
in the new world of whisky with innovative style, and which
also has a larger supply capacity than many of the small
distilleries that have recently started operations.
(Sources: IWSR Global market review 2011 edition: - of malt whisky
forecasts to 2015 and - of non-Scotch whiskies)
13
Production
from barley
to bottle
Barley, water and yeast comprise the basis of whisky. Mackmyra bases its
manufacturing entirely on Swedish ingredients. The water comes from the
nearby ridge at Valboåsen, the barley from the fields outside the distillery,
as well as crops that bear the Swedish Seal of Quality from Strömsta Manor
in Enköping. The yeast comes from Kronjäst and the peat comes from
Karinmossen. The juniper branches grow outside the door.
Whisky production is a long and time-consuming process.
In the first step, the harvested grain is steeped in water and
allowed to germinate. Some barley is malted on-site in the
Whisky Village in Mackmyra’s own malthouse. During germination the starch begins to convert into the sugars that
are needed to create alcohol.
After a short period, germination is stopped when the
barley, or malt as it is now called, is allowed to dry. Traditionally, drying occurs both by air-drying and by burning
peat during malting, which also provides the smoky flavor
that many buyers appreciate. The longer the malt is exposed
to peat and juniper smoke, the smokier the taste of the
finished whisky. In order to be able to offer smoky whisky,
Mackmyra has built its own malt smokehouse, but it also
uses unsmoked malt for some distilling.
The finished malt – either unsmoked or smoked – is now
ready to move on to the distillery.
The core of Mackmyra whisky production consists of the
35-metre high Gravitation Distillery, which now stands
in what is called the Whisky Village. The height, which is
unusual for a distillery, is no accident. It allows Mackmyra
to use the law of gravity for almost the entire production
process, which in turn means that fewer pumps and moving
parts are necessary, so production becomes much more
climate smart than in the traditional distillery.
The malt is stored in a silo on the side of the Gravitation
Distillery. At the top, just below a newly decorated sky bar
intended for visitors, are mills that grind the malt into flour,
which is then led down, using gravity, to mash vessels. The
flour is now steeped in warm water to continue the conversion of sugars and leach them out to the aqueous phase.
14
The result is called sweet wort. Here Mackmyra removes
the solids, which are used for purposes such as production
of biogas.
The sweet wort runs to the yeast vessel, where a small dose of
yeast is added. The sweet wort is then allowed to ferment for a
few days to become wort. The length of time that fermentation
is allowed to continue affects the character of the finished
whisky. Usually fermentation takes about three days.
When fermentation is complete, the mash which is now
a liquid resembling beer, enters the distillery. The first
distillation is done in a “wash still”. When complete, the
distillate has an alcohol content of about 25%. This process
is followed by a second distillation, this time in a “spirit
still”. Here, the distiller plays an important role during
the distillation process by controlling which parts of the
distillate go in the barrel. The finished spirit is around 70%
alcohol by volume. With the new distillery, Mackmyra has
production capacity equivalent to 2.4 million bottles of spirit
per year. In 2011, the company produced the equivalent of
525,000 bottles.
At the bottom of the Gravitation Distillery Mackmyra
has an area used to fill the casks that were pre-ordered
by customers, or that will serve as the basis for future
products. Mackmyra uses 30, 100 and 200-litre casks.
The Company’s strategy is to use small high-quality casks
because they allow for faster maturation.
The 30-litre, 100-litre and 200-litre casks are handcrafted,
usually out of oak from Visingsö. The Gravity Cask
combines Swedish oak with the character of the American
bourbon cask, but other types of casks are also used to
create the right nuances.
Production
Mackmyra’s Gravitation
Distillery is tailor-made
for our visitors
By using the force of gravity in a unique
manner in the process, Mackmyra’s
whisky production becomes both climate
and energy efficient.
The distillery is tailored to the cask
business and visitors.
15
Production
The special edition to be launched in spring 2012 under
the name Handplockat (Handpicked) has been matured
in Sauternes casks for some time during the maturation
process. Other products use other types of casks, such as
sherry casks, during maturation.
Not all spirit is poured into casks. Some is diluted directly
and poured into bottles to be marketed and sold without
maturation as the new product, Vit Hund, a product that
is not whisky, but has its origin in the same process. It is
an example of what Mackmyra calls a “whisky-related”
product.
Unlike many other industries, maturation in casks is in
itself an important step in the production process for a
whisky manufacturer. The maturation process that transforms the spirit into whisky occurs while matured in casks.
By law, spirit must be matured for at least three years to be
called whisky. Mackmyra Whisky usually matures its casks
for a period of five years. About 3 percent of the whisky
evaporates from the oak casks annually during maturation.
This is referred to as the angels’ share.
Mackmyra´s first maturation warehouse was a storeroom
at Mackmyra Bruk. Afterwards the mine in Bodås was
Mackmyra’s most important maturation warehouse. It was
soon apparent that the whisky benefited from being kept
at a constant and relatively low temperature. The method
16
was also both less costly and more climate friendly than
comparable methods.
The Fjäderholmarna Archipelago Warehouse in the middle
of the inlet to Stockholm, the Häckeberga Manor Warehouse
in Skåne, the West Coast Warehouse in Smögen and the
Forest Warehouse in the Whisky Village were all subsequently added in that order. Mackmyra cask owners can
choose to store their casks here. In the Forest Warehouse,
just a few hundred metres from the new distillery, thousands of numbered and labeled casks are currently resting
at a temperature between ten and twelve degrees while
waiting for their cask owners. The warehouse is designed
so that it can be expanded as volumes increase. Moreover,
the Forest Wareouse is not just a maturation warehouse,
but also an important part of Mackmyra’s Whisky Village,
which is gradually being developed into a tourist destination and thus an integral component of Mackmyra’s experience offer.
The last part of the production process consists of bottling.
The contents of the casks are poured into custom-designed
bottles in two special bottling plants. Some of them entail
bottling to be delivered to Swedish Systembolaget or out
into the world. Others belong to the cask owners who have
carefully monitored their casks for five years. A 30-litre cask
corresponds to about 48 bottles of Mackmyra whisky.
MALTING
The barley is allowed
to germinate for 4-5 days
and turned over several times
Drying and smoking
take 1-2 days
Water
Barley
Production
BIRTH OF A MALT WHISKY
The barley is
steeped in water
for 1-2 days
MALT
MASHING
2nd water added:
to about 80 °C
The byproduct
is great for
delicious bread
FERMENTATION
1st water added:
to about 65 °C
Malt is
crushed
Yeast
Cooling to
about 20 °C
After three days
the wort has an
alcohol content
of about 6%
SWEET WORT
Mashing takes
about four hours
WORT
Low wine distillation takes
about seven hours,
alcohol content about 25%
DISTILLATION
Samples are
taken from the
spirit lamp
LOW WINE
Condensation
Spirit distillation takes
about five hours, alcohol
content about 70 %
Intermediate
Head and tail
go back for
redistillation
Newly distilled
spirit diluted with
water to a strength
of about 63%
WHITE DOG
Condensation
MATURATION
The casks, made of oak and charred on the inside, are filled
and matured for at least three years. The size of the casks
can vary. Mackmyra uses 30, 100 and 200 liter casks.
17
The product range
Casks, experiences
and bottles
Mackmyra’s range of products and services can be divided into the areas
of bottles, casks and experiences. At the same time that the three areas
serve as independent units, together they form a strong whole that helps
to attract customers and strengthen the brand.
The entire offering is currently available in Sweden, while
in export markets a gradual development is underway in
which local conditions determine the pace and scope.
Casks and experiences
Mackmyra Reserve
Mackmyra Reserve offers customers the opportunity to
create their own unique malt whisky and to mature it in a
30-litre cask at Mackmyra.
By owning a cask and creating their own whisky, customers can also customise the experience and the content. The
basic character is set by the distillate, where Mackmyra offers either an unsmoked or a smoked version, the latter with
elements of Swedish peat and juniper.
The cask also has a major impact on the final product, and
this includes the Gravity Cask which melds tradition and
innovation by combining the character of the bourbon cask
with Swedish oak.
Participation in filling the cask, annual tastings and the
final delivery of the personal whisky are all parts of the
total offering.
Cask ownership has mainly been a Swedish phenomenon,
with strong and growing demand since the launch in 2002.
With the new opportunities offered in Mackmyra Whisky
Village, it will also be possible to offer personal casks
to international whisky lovers. In 2011, work began on
developing an international offering and a first test launch
was conducted during the fourth quarter of 2011.
18
Through the Gravitation Distillery, which was custombuilt for visitors, and the forest warehouse and malt
smoking facility, Mackmyra Whisky Village already offers
a unique experience and customised facility to deliver the
cask business. At the same time, additions will be made
to strengthen the offer and create a good experience for
customers and visitors.
The Mackmyra Whisky Tour
The Mackmyra Whisky Tour is the name of Mackmyra’s
main offering for Swedish whisky experiences. The Mackmyra Whisky Tour offers the customer the opportunity
to experience Mackmyra from the inside by following the
journey of a cask. Knowledgeable whisky guides allow small
groups of customers to follow a 30-litre whisky barrel from
filling in the distillery to maturation in the Forest Warehouse at Mackmyra Whisky Village.
Local warehouses
In addition to the above products, various experiences are
offered in association with Mackmyra malt whisky, largely
through personal meetings with shareholders, cask owners,
visitors to the facilities and other stakeholders. Activities
include distillery and maturation warehouse visits, fairs,
cask tastings and cask-owner days as well as Facebook
meetings.
Mackmyra’s own visitor destinations include Mackmyra
Whisky Village, Mackmyra Bruk Distillery, Mackmyra Mine
Warehouse in Bodås, Mackmyra Archipelago Warehouse on
the Fjäderholmarna island, Mackmyra Manor Warehouse
in Häckeberga and Mackmyra West Coast Warehouse on
Smögen.
The product range
19
The product range
Bottles
Mackmyra Whisky – Den Första Utgåvan
(The First Edition)
Den Första Utgåvan is continually bottled and is currently
available at all Systembolaget shops, as well as in restaurants, duty-free shops in the Nordic countries and selected
whisky dealers in Europe. Since spring 2011 it has also been
marketed in New York.
Den Första Utgåvan is the epitome of Mackmyra’s Swedish
malt whisky, made from Swedish raw materials and without
any additives. It has tones of roasted Swedish oak, soft
vanilla and dried fruit, and has been aged in small handcrafted casks. Den Första Utgåvan has a spicy aroma and a
fruity elegant taste with traces of citrus and caramel.
Mackmyra Brukswhisky (The Swedish Whisky)
Mackmyra Brukswhisky is available at about 300
Systembolaget shops, as well as in restaurants, duty-free
shops in the Nordic countries and in selected whisky dealers
in Europe. Mackmyra Brukswhisky is a well-balanced whisky
with a young, fruity character and a spicy hint of toffee.
The flavours are inspired by the Swedish countryside and
Mackmyra Brukswhisky is distinguished for its aromas of
butter toffee, licorice, citrus, pear, foam banana and mint. In
2012, a new package design is planned.
Mackmyra Special
Mackmyra Special is a range of limited editions of malt
whisky, in which each bottling has an individual character.
20
Current editions of Mackmyra Special in 2011 and 2012
include:
Mackmyra Special:01-06 Collection Edition
Mackmyra Special: 01–06 is an exclusive, limited edition
(1,111 bottles) malt whisky with one sample from each edition of the Special series, from Special: 01 Eminent Sherry
to Special: 06 Sommaräng (Summer Meadow).
Special:07 Framtidstro (Hope)
This edition was launched in November 2011. Special: 07
Framtidstro is a robust whisky with hints of cloudberry,
juniper, butter toffee and dried fruit. The colour is golden
yellow.
Special:08 Handplockat (Handpicked)
In spring 2012 Special: 08 Handplockat will be launched.
It was aged in casks that once contained Sauternes wine.
Mackmyra Moment
Mackmyra Moment is a range of very limited editions of
malt whisky. It is adapted to Systembolaget’s exclusive
range and small excess volumes are exported through other
selected channels.
Vit Hund (White Dog)
Vit Hund is the unaged origin of what becomes Mackmyra
whisky after aging in casks. Production is handcrafted with
no additives. Vit Hund is made of a spirit that is a distillate
from unsmoked malt and then diluted to an alcohol content
of 46.1%. This is the first of Mackmyra’s upcoming whiskyrelated products – products based on Mackmyra’s whisky
knowledge, but that are not whisky.
Awards and recognition
Awards at international competitions underscore the high quality of the whisky and are important in contacts with
purchasers around the world. Many people appreciate the
taste and style of the products, and gold medals in the right
competitions strengthen both the brand and the attractiveness of the product in dialogue with distributors and
buyers.
The Mackmyra history and the proof of the company’s
potential to deliver increase the credibility of the international launch, as was confirmed by the largest purchaser
of alcohol, the Canadian alcohol monopoly in Ontario, LCBO,
which chose Mackmyra Brukswhisky as “Distillery
Feature” of the year and bought four different bottlings.
Earlier, the provincial monopoly in Quebec launched
Mackmyra – Den Första utgåvan – in its product range.
Other recognitions:
• Mackmyra – Den Första Utgåvan – won Gold at the 2011
International Wine & Spirit Competition (IWSC).
• Mackmyra Brukswhisky was named European Whisky
of the Year, with 95.5 points out of a possible 100 in Jim
Murray’s Whisky Bible 2011. ”Mackmyra Brukswhisky
stood head and shoulders above those in its category;
this is a beautifully structured whisky of great integrity and depth – another Mackmyra masterpiece!”
• Mackmyra Moment Medvind (Tailwind), Gold 2011
(Best in Class, IWSC).
• Mackmyra Moment Drivved (Driftwood), Gold 2011
(Best in Class, IWSC).
• Mackmyra Reserve Elegant Swedish Oak 30 litre cask,
Gold 2011 (IWSC).
• Mackmyra Special:07 was awarded a gold medal at the
2011 Stockholm Beer & Whisky festival.
Angela, who joined Mackmyra back in 2004, has extensive
experience in the whisky industry, including working for Scotch
whisky producers. Because of her extensive knowledge she is
also involved in international work, such as serving as a judge in
various whisky competitions.
product range
Angela D’Orazio, Mackmyra’s
Master Blender, is one of the key
people in Mackmyra’s development team. Her sensitive nose
and palate determines which of
the different whisky casks to mix,
and in what proportions, to ensure both high
quality and the distinctive “Mackmyra Flavour”
in Mackmyra’s different bottlings.
The
Angela D’Orazio –
Master Blender at
Mackmyra Whisky
Initially the job at Mackmyra focused on carrying out whisky
tastings and contributing sensory knowledge for the maturing
whisky stock, but over time she grew into the role of Mackmyra’s
Master Blender.
“Some people just have a natural born talent; they know
exactly how they want it from the start. For me it was more
about training. The complexity is the same, albeit in different
ways, both when working with spirits like Vit Hund and
when developing a Special Whisky. It's an incredibly fun and
stimulating job,” says Angela.
Besides the role of Master Blender, Angela also loves to cook and
experiment in the kitchen.
“The best part is not following recipes. When I find something
that works, I can start to add and subtract.”
Her favourite Mackmyra product depends on what was created
in the kitchen. After a tasty meat dish with sauce, accompanied
by a really fine wine – perhaps a Moment Jord (Earth) or why not
Special 07?
Angela summarises the latest products as follows:
• Den Första Utgåvan: The perfect representative of the best
from Mackmyra’s house style: the typical almond paste with
citrus, pear and green fruit as well as soft herbs. It’s rounded
off by our small casks and the spiciness from the Swedish
oak, it's all there.
• Mackmyra Brukswhisky: The flavour and mouthfeel is like
fresh and spicy lemon sorbet. An easy to drink everyday
whisky.
• Vit Hund: To be enjoyed after a good dinner, a perfectly
rounded malt grappa to accompany an espresso.
• Special:08: A subtle Mackmyra with an extra hint of soft
grapiness. For times when you want to take it easy on your
taste buds – such as after the first asparagus of the spring,
served with melted butter.
21
22
Net sales (SEKm)
Sales growth
Net sales* excluding alcohol tax, SEKm
Sales growth excluding alcohol tax
2011
2010
2009
2008
2007
81.7
80.3
78.6
66.4
41.6
2%
2%
18%
60%
64%
62.3
61.3
61.5
52.9
35.7
2%
0%
16%
48%
64%
Gross profit/loss, SEKm
41.0
42.7
40.7
34.3
21.7
Gross profit margin
50%
53%
52%
52%
52%
Operating profit/loss, SEKm
-0.7
6.5
13.7
10.4
6.9
Operating margin
-1%
8%
17%
16%
17%
Result after tax, SEKm
-3.8
3.5
7.8
5.3
3.9
Change in maturing stocks, SEKm
11.7
11.7
14.4
5.4
9.5
Change in maturing stocks
13%
15%
18%
8%
16%
Investments (SEKm)
57.7
37.0
8.8
11.3
6.6
Cash flow, SEKm
16.3
3.2
-0.1
-9.3
13.8
147%
98%
92%
119%
124%
Cash flow
Interest coverage ratio (multiple)
Equity (SEKm)
Equity ratio
No. of shares
-0.2
5.0
8.8
4.7
4.0
175.0
98.3
62.0
54.2
48.9
61%
48%
43%
41%
42%
4,015,396
2,965,040
2,343,594
2,343,594
2,343,594
Return on equity
-3%
4%
13%
10%
11%
Return on capital employed
-1%
5%
14%
12%
6%
-0.94
1.17
3.33
2.30
1.68
49
44
38
33
26
Earnings per share, SEK
Average number of employees
Five-year summary
Five-year summary
*Net sales include alcohol tax on sales in Sweden. Alcohol tax is also included in cost of goods sold in an equivalent amount and therefore does
not affect the result.
23
Board
Board
Ulf Mattsson
Chairman of the board since 2011
Carl-Johan
Kastengren
Born 1964
Board member since 1999
Degree in business administration,
Stockholm University PMD, Harvard
Business School
Born 1967
Degree in Engineering, Royal
Institute of Technology
Other current assignments:
Chairman of the board of
Academedia, board member of
Sanitec, Gambro and Pahlen, as well
as industrial advisor to EQT
Other current assignments: CEO
of Gillesvik AB, CEO and board
member of EFIB AB, board member
of Fastighetsägarna Stockholm and
member of Hyresnämnden
Previous assignments: CEO of
Capio AB (publ), CEO of Mölnlycke
Health Care AB, President & CEO
of Domco Tarkett Inc. (publ.),
Chairman of Securitas Direct AB.
(publ.), Chairman Flextrus AB, board
member of Q-Med (publ.), Nybron AB
and Pelly Industrier AB
Previous assignments:
Administrative Director and board
member of Gillesvik AB
Holdings: 18,000 Class A shares,
43,500 Class B shares
6 Reserve casks
Holdings: 15,000 Class B shares
Carl Klingberg
1 Reserve cask
Born 1961
Clas Eriksson
Stockholm School of Economics
Born 1949
Management consultant in own
company Pay&Pray AB, board member
of Scandinavian WeldTech AB
Bachelor of Laws, Stockholm
University
Consultant, board member of Swecon
Baumachinen and AS Factor AB
Previous assignments: CEO of
Ongame/bwin Games AB
Previous assignments: Acting
President and Deputy CEO at
Lantmännen agricultural cooperative
Holdings: 32,000 Class B shares
Holdings: 420 Class B shares
Malin Lövemark
7 Reserve casks
1 Reserve cask
Born 1969
David Hedman
Born 1974
Other assignments Business
developer at Atrium Ljungberg AB
Stockholm School of Economics
Previous assignments: Business
manager for real estate investments
and project development at property
company AP Fastigheter AB
Investments and consultant in his
own company, DH Consulting AB
Previous assignments: CEO We
International AB and Executive Vice
President WeSC (publ.) AB
3 Reserve casks
No shareholding
Auditors:
Hans Boberg, born 1958
Annika Wedin, born 1961
Authorised auditors Öhrlings PricewaterhouseCoopers AB
Auditors at Mackmyra Whisky AB since 1999
24
Magnus Dandanell
Jonas Berg
CEO
Employed 1999
Production director, project manager
Born 1967
Employed 2008
Born 1966
Management
Executive Management
Previous assignments: Supervisor
PEAB
3 Reserve casks and 2 Gravity casks
7 Reserve casks
Rikard Lundborg
Ulf Söderlund
Deputy CEO, director of marketing
CFO
Employed 1999
Employed 2011
Born 1968
Born 1964
Business degree, Stockholm
University
Previous assignments: Many years
of experience as CFO, most recently
from Sundström Safety AB
4 Reserve casks
No shareholding
Other senior executives:
Sara Carlsson
Supply Chain
coordinator
Angela D’Orazio
Master Blender
Johanna Harrysson
Production Manager
Mikael Mossvall
Sales Manager
Susanne Tedsjö
Communications
Manager
Lotta Åkesson
Events Manager
25
REPORT OF THE BOARD OF DIRECTORS
REPORT OF
THE BOARD OF DIRECTORS
The Board of Directors and Chief Executive Officer for Mackmyra Svensk
Whisky AB (Publ), org.nr 556567-4610, hereby submit the Annual Report for
the financial year 2011.
MACKMYRA WHISKY
SUMMARY, operating activities
Mackmyra Svensk Whisky AB (Publ) was founded in 1999 and is
Sweden’s first producer of malt whisky. The business includes
product development, manufacturing, sales and marketing of
whisky, whisky-related products and experiences.
Mackmyra has since its inception established the brand in the Nordic region by successfully launching the first Swedish malt whisky
in a personal 30-litre cask and traditional malt whisky in bottles.
In 2010 and 2011, the company built a solid platform with increased
capacity for manufacturing, visitor operations and sales and also
prepared for new product/new market launches.
The company has about 6,000 shareholders and the Mackmyra
share was listed on NASDAQ OMX First North in December 2011.
The listing and expansion of ownership are strategically important for marketing the brand and shareholders are encouraged to
become customers.
Operations are concentrated primarily at Mackmyra Whisky Village
outside Gävle, with management and marketing in Stockholm. In
2011 the company had a presence in New York as part of the preparations for establishment.
Sales AND PROFIT/LOSS
Net sales for 2011 was SEK 81.7m, up from SEK 80.3m in 2010. The
lower sales growth was partly due to a major focus on building a
new platform (production, new products and markets, the listing
and financing, and organisation) to drive faster growth, and partly
due to the weaker economy, which particularly impacted the last
quarter.
Operating loss was SEK 0.7m (profit: 6.5). Costs related to completion of the second phase of the construction project initiated in
2010 had a major impact on financial performance. These initiatives
are also clearly evident from the higher level of investment. Costs
according to plan amounting to SEK 4.5m (2.0) for international
market investments, primarily in Finland, the USA (New York), and
Canada (Ontario and Quebec) had a negative impact on the result for
the year.
In addition, costs of about SEK 3.9m (1.0) attributable to conversion
to the new platform for production, visitor operation and administration also had a negative impact on financial performance.
Outcome 2011
SEKm
Of which
non- Of which
recurring operating
items activities
Total
Net sales
81.7
81.7
80.3
Cost of goods sold
-40.7
-1.9
-38.8
-37.7
Gross profit/loss
41.0
-1.9
42.9
42.6
Gross profit, %
50%
53%
53%
Selling expenses
-29.5
-1.3
-28.2
-24.4
Administrative
expenses
-12.4
-0.9
-11.5
-11.7
0.2
0.2
-
-
-0.7
-3.9
3.2
6.5
5.8
-3.9
9.7
11.9
Operating profit/loss
(EBIT)
Profit/loss before depreciation, amortisation
and impairment losses
(EBITDA)
It is key that the underlying operating profit from operating activities, adjusted for non-recurring items, is positive and on a par with
2010. Loss after tax was SEK 3.8m (profit: 3.5), which is also detailed
in subsequent income statements.
MARKETING AND SALES
In 2011 sales of bottles comprised 64% (64) of net sales, while sales
of casks and experiences comprised 36% (36) of net sales.
The table below shows seasonal variations in sales based on the last
three financial years.
sales per quarter, %
50
40
30
20
10
0
26
Outcome
2010
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Casks and Experiences
Mackmyra was first in the whisky market to provide the cask experience in its current form, which since its inception is a cornerstone of the company’s operations. In 2011 the business area was
strengthened with the Whisky Village as a platform for both casks
and experiences. Experience activities such as Mackmyra’s various
visitor destinations promote bottle and cask sales, while further
growing the brand.
In 2011, cask sales increased by 4% to SEK 25.1m (24.1).
Sales of experiences totalled SEK 4.0m (4.5).
Bottles
Sales of bottles began on a larger scale in 2007 and ever since then
have demonstrated strong growth. In 2011, sales volumes increased to
183,000 bottles (177,000), representing a 4% increase (33) over 2010.
Sales of bottles increased a total of 2% and amounted to SEK 52.5m
(51.7). Excluding alcohol tax, sales amounted to SEK 33.2m (32.7).
sales, thousands of bottles
200
The response to date has been positive and a first impression was
established, resulting in the sales launch currently underway on a
smaller scale in Canada.
Product development and quality
Mackmyra constantly works on developing products and offering. In
2011, the company launched the whisky-related product, Vit Hund.
Over the next few years, the company plans to launch at least one
new regular product per year.
Products are subjected to continuous quality assurance procedures,
including a strong focus on delivered products. Such procedures
cover everything from sensory analysis for all whisky produced and
delivered to the dialogue with customers and other expertise, as
well as improvement of administrative system support.
As the number of bottled products grows, including many new
products, great care is dedicated to achieving high standards for the
whisky, packaging and materials.
Awards at international competitions underscore the high quality of
the whisky and are important in contacts with purchasers around
the world. Many people appreciate the taste and style of the products, and gold medals in the right competitions strengthen both the
brand and the attractiveness of the products.
Sales are affected by seasonal variations in the industry. Opportunities to smooth seasonal variations are created, for example, through
targeted marketing activities and further development of the range
of products. Some sales activities are also conducted through the
company’s branch in Denmark.
PRODUCTION
Distilling
In 2011, the distillery at Mackmyra Bruk produced 525,000 bottles
(567,000) of high and consistent quality spirit. The slightly lower
distillate volume is due to a slightly lower yield from this year’s crop
of malting barley.
150
100
Distillation per year, thousand bottles
50
700
600
0
2007
2008
2009
2010
2011
500
400
Net sales growth includes increased volumes of Mackmyra Bruks
whisky, which was launched in spring 2010 and has been included
in Systembolaget’s regular product line since 1 April 2011. It has
also been marketed in a one-litre bottle for the international market
since spring 2011. In 2011, a total of 47,000 bottles of Mackmyra
Brukswhisky were sold.
Since 2010, Mackmyra has also been engaged in a sales and marketing campaign on selected markets outside the Nordic region.
Mackmyra initiated a pilot study in 2010 to analyse opportunities for international expansion. In spring 2011 the first bottles of
Mackmyra Whisky – Den Första Utgåvan (The First Edition) went on
sale in the US. This achievement is a milestone because it is the first
regular product distributed outside of Europe.
300
200
100
0
2006
2007
2008
2009
2010
2011
In Mackmyra Whisky Village, a malting and smoking facility was
built and launched where large quantities of high-quality peat and
juniper-smoked malt will be produced. The smoked malt is used
to be able to offer a personal cask of smoky whisky, as well as an
upcoming smoky version of Mackmyra whisky, which the company
plans to distribute through channels such as Systembolaget.
27
Most of this year’s spirit was filled into casks which will be aged to
become Mackmyra’s traditional whisky products. About 10% was
filled in customer-ordered 30-litre casks and a small portion was
used for production of the new regular product, Vit Hund, which
was launched in the second half of 2011.
600
500
Commissioning of the Gravitation Distillery
The new distillery was commissioned on 17 December 2011. This
milestone creates conditions to allow production of larger volumes
of spirit between 2012 and 2014 to ensure future growth.
The distillery is fully adapted to hosting visitors, who will get a
close-up look at the process, and for the cask-owner experience of
participation and filling their own casks.
The distillery uses gravity for a fully environmentally friendly production process. As in the past, production uses local Swedish ingredients.
The new distillery flows and processes were designed to be climate
smart and with strong consideration taken to the environment, minimising energy consumption and using renewable energy. The distillery
offers employees an excellent, modern working environment.
The combined annual production capacity of Mackmyra’s two distilleries is 2.4 million bottles of spirit.
Maturation warehouse
Valuation of the maturing stock is based on production costs. After
withdrawals for bottling for the year, the maturing stock increased
by SEK 11.7m (11.7) to SEK 102.5m (90.8) as of 31 December. Annual
growth of the maturing stock since 2007 has ranged between 8%
and 18%. The increase is essential to meet future sales growth
needs.
Mackmyra’s whisky is usually aged for five years prior to delivery.
Special editions often require longer maturation and/or a larger
percentage of unique casks. These products also command a higher
selling price.
Below is an analysis of the age structure of the maturing stock
at year end. The stock situation shows that Mackmyra has good
capacity to meet increased demand for Swedish whisky over the
next few years.
Whisky manufacturing requires an aging period of at least three
and typically five years or more before products are ready for sale,
which places extra demands on the relationship between sales and
production: stocks and production capacity are essential both for
sales growth and to attract retailers and distributors. Building up
inventory ties up capital and will have a negative impact on the
company’s cash flow during periods when the company’s stocks of
maturing whisky are being built up to achieve higher future sales.
Bottling
In 2011 Mackmyra bottled the ordinary products Den Första Utgåvan, Brukswhisky and Vit Hund. The Company also produced a number of “limited editions” such as Special: 06 and 07, and the Moment
series. Certain modifications for the international market were also
carried out during the year.
28
age structure of maturing stocks,
thousands of bottles (31 Dec 2011)
400
300
200
100
0
‹ 1 year 1–2 years 2–3 years 3–4 years 4–5 years › 5 years
INVESTMENTS
In 2011, construction of the new distillery was completed and the
distillery was commissioned on 17 December 2011. The distillery is
undergoing fine-tuning during first quarter 2012. In December 2011,
the company acquired additional land, as planned, for SEK 2.0m
adjacent to the new distillery.
Investments in 2011 amounted to SEK 57.7m (37.0), including
SEK 47.4m relating to completion of the new distillery. Below is a
breakdown of investments:
Investments (SEKm)
Distillery
2011
2010
47.4
14.7
Visitor activity facilities (including land)
5.5
-
Casks for maturation
3.6
7.7
-
13.9
Facilities for maturation
Other investments
1.2
0.7
57.7
37.0
CASH FLOW
Cash flow from operating activities for 2011 was SEK 0.2m (8.0).
Change in operating capital change was negative at SEK 18.5m
(neg: 12.9), of which the build-up of the maturing stock comprised
SEK -11.7m (-11.7). Cash flow for investments was SEK -55.1m (-37.0)
and cash flow from financing was SEK 89.7m (45.1).
Overall, 2011 cash flow was positive at SEK 16.3m (3.2).
The company’s cash flow in 2011, as in previous years, was significantly impacted by the gradual development of the company’s stocks
of maturing whisky.
SIGNIFICANT AGREEMENTS
Per the balance sheet date, cash and cash equivalents amounted to
SEK 25.0m (8.6) and unutilised overdraft facilities totalled SEK 5.0m
(5.0).
The company is not bound by or dependent on agreements that are
decisive for the company’s business.
In 2011, Mackmyra amortised a total of SEK 38.9m (24.5) and raised
new loans totalling SEK 48.1m (36.8). Non-current liabilities as
at 31 December 2011 were SEK 80.2m (70.9), of which SEK 52.9m
(43.9) relates to bank loans and loans from other credit institutions,
SEK 25.3m (14.2) other interest-bearing loans including convertible
bonds of SEK 6.7m (6.7).
In addition, on the balance sheet date the company had non-interest
bearing liabilities of SEK 17.9m (17.8). These liabilities relate to
loans from customers to finance their own casks. Of the convertible
debentures, SEK 3.0m were converted into shares in January 2012.
In addition to non-current liabilities as at the end of the
reporting period, Mackmyra has loan commitments from banks,
Norrlandsfonden and ALMI Gävleborg equivalent to SEK 130m,
of which SEK 25m was utilised after the closing date. These loan
commitments are subject to customary market-based terms.
Consequently, together with this year’s new share issues, the
company has a long-term financing solution for its operations and
continued expansion.
EQUITY
In 2011 shareholders raised a total of SEK 81.3m, net of issue costs of
5.3 million, through several private placements totalling SEK 22.7m,
and a rights issue of SEK 63.9m. Shareholders’ equity at the end of 2011
was SEK 175.0m (98.3), which represents an equity ratio of 61% (48).
THE MACKMYRA SHARE
The share was listed on First North with the first trading day on 16
December 2011, under the ticker symbol MACK-B, at an introductory
price of SEK 84 per B share. The share closing price on 30 December
2011 was SEK 60.25.
PERSONNEL AND ORGANISATION
In 2011 the company had an average of 49 full-time highly skilled
and dedicated employees (44). Since its inception the company
has built up a high level of knowledge within the organisation for
whisky production and product development. The same applies to
communications and marketing of the company’s products.
Management consists of the CEO, VP/Marketing Director, Chief
Financial Officer (CFO) and project director.
During the year, Ulf Mattsson was elected to serve as the new
Chairman of the Board at the extraordinary general meeting
in October 2011. David Hedman was elected at the 2011 Annual
General Meeting to serve as a new board member.
The company owns about three acres of land for the initial installations in Mackmyra Whisky Village and has an agreement with Gävle
Municipality for an option to buy additional land if necessary.
In addition, the company has customary leases for other production
and storage facilities. In 2011, the company renegotiated the lease
for the premises at Mackmyra Bruk. The new lease has a term of five
years.
Since autumn 2011 the company has been a member of the Swedish
Food Federation (Confederation of Swedish Enterprise) and had
previously signed a collective agreement with the Swedish Food
Workers Union and the Union.
The company also has an agreement with NASDAQ OMX relating to
trading with shares at First North.
PERMITS
LIQUIDITY AND FINANCING
Since 1999 the company has held all necessary permits for the
manufacturing, storage, wholesale trading and export of alcoholic
drinks.
Mackmyra views the authorities’ controls as an important aspect
of its operations. The results of inspections carried out to date
show that the company more than meets requirements, which is a
strength for future growth.
INCENTIVE SCHEMES
Senior executives have an incentive scheme in which the achievement of budget figures and a number of key targets means maximum flexible remuneration corresponding to up to three months’
extra salary.
As stated in the notice to attend the 2012 Annual General Meeting,
the Board also has a long-term incentive scheme in the form of
personnel convertibles for all employees. The purpose is to further
stimulate employee performance in order for the company to
achieve its long-term objectives.
ENVIRONMENT
The company runs a business that requires a permit under the
Environmental Code in respect of the production of distilled
alcoholic drinks. Emissions from the production operation consist
primarily of grain residue from the mashing stage, waste water
from cleaning of equipment and ethanol emissions. The company
has a permit for its business under the Environmental Code. The
company operates according to an environmental plan with in-house
controls drawn up in consultation with the supervisory authority.
The production organisation was strengthened during the year and
is working since late 2011/early 2012 based on a new platform, with
commissioning of the new distillery in the Whisky Village. Along
with the original distillery, Mackmyra Bruk, production capacity
has more than quadrupled.
In the autumn of 2011 Mackmyra built up its business support function (Business/Finance/IR/HR/IT). From February 2012, business
support was also strengthened to increase the focus on the organisation’s human resource management and performance.
29
RISK MANAGEMENT
Exposure to risks is part of ongoing operations, as is reflected in Mackmyra’s risk management with the overall goal of identifying and
preventing risks, as well as implementing measures and improvements to minimise potential risks, regardless of the area.
The following account of risk factors does not purport to be exhaustive, and the risks are not listed in order of importance. Additional risks
not currently known to the company, or which the company currently considers insignificant, could have a significant impact on Mackmyra’s
operations, financial position or performance.
Risk categories
Potential risks
Risk management
Market risks
Malt whisky is defined by the perceived
quality. Reviews and ratings form a complete
picture. Long-term profitability can be
damaged by rumours, negative reviews, or
an early or major launch that does not meet
quality standards and/or delivery capacity
requirements.
The company’s strategy is to grow incrementally with small
initial investments.
Inadequate delivery ability leads to negative
goodwill among distributors, dealers and end
customers.
In the long run, increased competition may
arise from other Swedish whisky brands that
are better received.
Changes in legislation or new health findings
could lead to reductions or restrictions in
consumption that would impact sales.
Production risks
It is difficult to calculate the optimal balance
between production, size of maturing stocks
and marketing efforts because sales are at
least five years in the future.
Consequently, both overproduction and
underproduction pose risks. Overproduction
leads to large stocks that substantially tie up
capital. Low production in relation to demand
could lead to depleted inventory and delivery
problems.
Product liability
risks
Any defects in Mackmyra products could lead
to demands for accountability and damages, as
well as loss of credibility, which would affect
the brand.
In addition to Sweden, the company currently has sales in selected markets such as Denmark, Finland, Norway, Germany, Britain,
France, and within the framework of the charter, border, airport
and ferry trade in the Scandinavian markets and the countries
around the Baltic Sea.
Mackmyra launches its product portfolio for bottles to selected
groups of customers and markets and emphasises presenting
the product in its proper context. For Mackmyra casks, the risk
of false expectations is lower because the customer is offered a
major experience component.
With its current stocks of maturing whisky, Mackmyra has a
good supply capacity that can be substantially increased in the
coming years.
Mackmyra continuously develops the unique cask business as
well as other products. More players on the Swedish market will
inspire a growing interest in Swedish whisky worldwide, which
benefits Mackmyra’s long-term development.
Mackmyra has planned production and marketing campaigns for
a strong but reasonable growth in demand over the period 2012 to
2014. If the marketing campaigns do not lead to increased demand,
production can be adapted to slower market growth. The whisky
could be aged somewhat longer, which would increase the sales
value of the final product. The new production platform provides
the company with a significantly higher production capacity to
meet increased demand.
The company has extensive experience in delivering products
in both bottles and casks and has built up the necessary quality
control processes.
The company’s insurance coverage is well suited for the business.
Quality assurance, complaint management and continuous
improvement are integrated in all procedures.
Dependence on
permits
30
Risk of withdrawal and or changes in permits,
or changes in legislation that would limit
operations.
Since 1999 the company has engaged in licensed operations in the
facilities in compliance with several laws and established rules.
The company has all permits currently required for the operation.
Potential risks
Risk management
Financial risks
The company’s sales and performance may not
developed sufficiently to ensure cash flow.
Through the 2011 issuance and bank financing, that company has
largely ensured the liquidity and financing needs of the next few
years. If necessary, the production rate could be further adjusted
based on sales growth.
In the future the company will export a large
part of production based in foreign currencies,
which will increase the risk of currency
effects.
In current operations risk exposure to exchange rate effects is
limited because most transactions are denominated in Swedish
kronor. To the extent that sales are invoiced, or equipment and
materials are purchased in a foreign currency, significant currency
risk is primarily managed using currency futures.
The strategy is to limit trade to a few currencies for controlled
flows and, where possible, to take out currency forwards to minimise risk and adapt operations to foreign exchange effects.
Dependence on key
personnel
Dependence on key personnel is a critical
factor in a company the size of Mackmyra.
The company is in a phase in which dependence on personnel is
limited in the short term. However, new projects and launches will
require utilisation of the accumulated skills and experience.
In 2011 Mackmyra has added skills and is increasing its focus on
the supply of talent within the organisation.
Other risks
Production stoppage due to fire, theft or other
damage suffered by facilities and/or maturation warehouse areas could cause problems
in production and delivery capabilities.
Risk categories
The company has procedures in place and takes preventive
measures to minimise such risks.
The maturation warehouses are fire resistant and divided into fire
cells; they are also located in different geographic locations.
The facilities have been equipped with adapted perimeter
protection and alarms.
EVENTS AFTER THE END OF THE PERIOD
PROPOSED APPROPRIATION OF PROFIT
As at 31 January 2012, Almi converted convertible debentures to
60,000 Class B shares, for a total of SEK 3m.
The Board proposes that the retained earnings (SEK thousand):
Premium fund
Fine-tuning of the Gravitation Distillery is currently underway.
Casks filled with the first drops of distillate from the new distillery
are being offered to cask owners and shareholders exclusively until
the Annual General Meeting on 5 May.
Retained earnings
Erik Penser banking company provides the liquidity guarantee for
shares on First North, from 1 January 2012.
be dealt with such that
Mackmyra’s Den Första Utgåvan (The First Edition) was purchased
by SAQ, the Canadian provincial monopoly in Quebec, and was
launched in the SAQ Signature product line in February 2012.
The LCBO monopoly in Ontario, Canada chose Mackmyra as the
spring’s Distillery feature, which means it will market four of
Mackmyra’s whiskies beginning in May 2012.
Loss for the year
129,189
10,894
-3,775
136,308
be carried forward to the new accounts
136,308
136,308
The company’s financial performance and position are shown in the
following income statement and balance sheet, cash flow statement
and supplemental disclosures.
In February 2012, Altia Finland, the largest wine and spirits house
in the Nordic region, began selling and distributing Mackmyra
whisky in Finland.
Swedish Systembolaget has included Mackmyra’s unaged Vit Hund
(White dog) spirit in its permanent line (T9), which means that
store managers can order the product for the store shelves based on
demand.
31
Accounts
INCOME STATEMENT
SEK thousand
Note
2011
2010
81,685
80,316
-40,657
-37,655
41,028
42,661
2,3,4,5
-29,514
-24,380
1,2,3,4,5
-12,418
-11,732
249
-
-655
6,549
74
232
Other interest expenses and similar line items
-3,194
-1,555
Profit/loss after financial items
-3,775
5,226
-
-1,767
-3,775
3,459
Net sales
Cost of goods sold
2,3,4,5
Gross profit/loss
Selling expenses
Administrative expenses
Profit from financial investments
Interest income and similar profit items
Tax on profit/loss for the year
Profit/loss for the year
32
6
Accounts
Balance sheet
SEK thousand
Note
31 Dec. 2011
31 Dec. 2010
7
-
35
Buildings and land
8
17,256
17,698
Process equipment
9
17,252
2,314
Refurbishment expenses for other party’s property
10
5,189
5,667
Inventories and conversion of premises
11
29,373
28,827
New construction in progress and advance payments
in respect of tangible non-current assets
12
50,510
16,242
119,580
70,748
119,580
70,783
102,482
90,802
17,472
13,274
119,954
104,076
14,903
12,523
Tax asset
2,363
-
Other receivables
2,452
5,323
Prepaid expenses and accrued income
1,585
1,808
21,303
19,654
24,976
8,637
TOTAL CURRENT ASSETS
166,233
132,367
TOTAL ASSETS
285,813
203,150
ASSETS
NON-CURRENT ASSETS
Intangible non-current assets
Goodwill
Tangible non-current assets
TOTAL NON-CURRENT ASSETS
CURRENT ASSETS
Stock, etc.
Work in progress
Finished goods and goods for resale
Current receivables
Trade and other receivables
Cash and bank balances
13
33
accounts
Balance sheet
SEK thousand
Note
31 Dec. 2011
31 Dec. 2010
4,015
2,965
34,712
34,712
38,727
37,677
129,189
48,987
Retained earnings
10,894
8,189
-3,775
3,459
136,308
60,635
175,035
98,312
EQUITY AND LIABILITIES
EQUITY
14
Restricted equity
Share capital
Statutory reserve
Unrestricted equity
Premium fund
Total equity
LONG-TERM LIABILITIES
Liabilities to credit institutions
15
52,869
43,916
Convertible debentures
16
6,742
6,742
Other liabilities
20,569
20,291
Total long-term liabilities
80,180
70,949
-
2,045
16,621
17,587
-
1,578
1,731
2,325
12,246
10,354
30,598
33,889
285,813
203,150
96,000
55,912
None
None
CURRENT LIABILITIES
Liabilities to credit institutions
15
Trade and other payables
Current tax liabilities
Other liabilities
Accrued expenses and deferred income
Total current liabilities
TOTAL EQUITY AND LIABILITIES
Pledged assets
Contingent liabilities
34
17
accounts
Cash flow statement
SEK thousand
2011
2010
-655
6,549
6,531
5,444
-212
-
285
232
Interest paid
-3,404
-1,555
Income tax paid
-2,363
-2,688
182
7,982
-15,878
-17,210
-2,780
-311
3,135
-5,186
-3,291
9,792
-18,814
-12,915
-18,632
-4,933
-57,669
-37,014
Sale of non-current assets
2,513
-
Cash flow for investments
-55,156
-37,014
Cash flow after investments
-73,788
-41,947
48,148
36,834
-38,917
-24,540
81,252
33,690
-356
-801
90,127
45,183
16,339
3,236 8,637
5,401
24,976
8,637
Cash flow from operating activities
Adjustments for items not included in cash flow
Depreciation
Profit/loss, sale of non-current assets
Interest received
Cash flow before change in working capital
Change in working capital
Increase in stock
Reduction/increase in trade and other receivables
Reduction/increase in current receivables
Reduction/increase in other current receivables
Cash flow after change in working capital
Cash flow for investments
Investments in tangible non-current assets
Cash flow from financing
New loans
Redemptions
New share issue
Dividend
Cash flow for the year
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
35
SUPPLEMENTAL DISCLOSURES
SUPPLEMENTAL
DISCLOSURES
ACCOUNTING POLICIES
General accounting policies
The annual report has been produced in accordance with the Swedish
Annual Accounts Act and the Swedish Accounting Standards Board’s
General Guidelines.
Income statement
Beginning in 2011, the income statement is classified according
to function, since this better reflects the operation and financial
performance. The change has no impact on the reported results.
Measurement principles
Assets, provisions and liabilities have been valued at cost unless
otherwise stated below.
Stock
Stock is valued, applying the first in first out principle, at the lower
of the cost of acquisition and the net realisable value on the balance
sheet date. Deductions for obsolescence have been made at a flat
rate of 3%.
Most stock involves goods in progress (the maturing stock). The
remainder includes stock of finished goods and merchandise. Valuation of the maturing stock is based on normal operating capacity
and actual costs for raw materials, distillation and maturation.
Finished products are measured according to an equivalent principle, but with the addition of costs for bottling and packaging.
Receivables
Receivables have, after individual valuation, been posted at the
amounts at which they are expected to be received.
Foreign currencies
Receivables and liabilities in foreign currency are valued at the
exchange rate on the balance sheet date.
Where hedging measures are implemented, such as forward contracts, the forward rate is used.
Transactions in foreign currency are translated in accordance with
the average sight exchange rate on the transaction date.
The assets and liabilities of the Danish branch are translated at the
closing rate. All income statement items are translated at average
rates. Exchange differences are recognised directly in equity.
Profits and losses on receivables and liabilities of an operating
nature are recorded net under other operating income or other
operating expenses.
36
Income
Sales of goods are posted when products are delivered to the
customer, in accordance with the terms of sale. Sales are posted
net after VAT, discounts and exchange rate differences for sales in
foreign currency.
Net sales include alcohol tax on sales in Sweden. Alcohol tax is also
included in cost of goods sold in an equivalent amount and therefore
does not affect the result.
Depreciation principles for non-current assets
Non-current assets are recorded at cost minus depreciation.
Expenses incurred in improving an asset’s performance over and
above its original level increase the asset’s carrying amount.
Expenses for repairs and maintenance are recorded as expenses.
Non-current assets are written off systematically over the assets’
estimated useful life. When the depreciable amounts of assets are
confirmed, each asset’s residual value is taken into account as
required.
The following depreciation periods are applied for the company’s
tangible and intangible non-current assets:
Process equipment
5 years
Stock
5 years
Goodwill
Conversion of premises
5 years
20 years
Distillery process
10 years
Conversion of distillery premises
20 years
Depreciation is included in the function where the asset is utilised.
Most depreciation/amortisation is included in the income statement
item Cost of goods sold. The remainder of depreciation/amortisation is included in the income statement items selling expenses and
administrative costs.
Borrowing costs
Interest on capital borrowed to finance production of an asset
that necessarily takes a substantial period of time to complete, is
included in the cost to the extent that it relates to the production
period. Other borrowing costs are expensed in the period to which
they relate.
SUPPLEMENTAL DISCLOSURES
Income taxes
Income taxes posted include tax that is to be paid or received in
respect of the current year, adjustments in respect of previous
years’ current tax and changes in deferred tax.
Valuation of all tax assets/liabilities takes place at nominal amounts
and is performed in accordance with the tax rules and tax rates
that have been set or that have been announced and will in all
probability be enforced.
Deferred tax is calculated according to the balance sheet method on
all temporary differences that arise between posted and tax values.
Deferred tax assets in respect of tax loss carryforwards are posted
to the extent that it is likely that the carryforwards can be offset
against any surplus in future taxation.
Lease agreements
All of the company’s lease agreements are reported as operational
leasing. Payments under these agreements are posted as expenses
on a straight-line basis over the period of the lease.
37
NOTES
NOTES
Note 1 Remuneration to auditors
Audit assignment, PwC
Note 3 Employees and staff costs
2011
2010
245
92
Audit activities in addition to the audit
assignment, PwC
273
70
Other services, PwC
242
187
760
349
Average number of employees
2011
2010
Women
23
21
Men
26
23
49
44
Salaries, remuneration and social costs
2011
2010
Salaries and other remuneration to the
Board, the CEO and executive management
3,721
3,158
16,352
13,142
407
354
Pension costs for other employees
1,809
1,382
Other social costs
6,124
5,706
28,413
23,742
Note 2 Lease agreements
Salaries and other remuneration to other
employees
Leasing costs for the year totalled SEK 608k (756).
Pension costs for the Board and the MD
Remuneration of the Board of Directors and senior executives
Directors’ fees/
salary
Name
Function
Ulf Mattsson
Chairman
Jörgen Sallenhag
Former chairman
Clas Eriksson
Board member
2011
139
2010
Flexible
remuneration
2011
2010
Other benefits
2011
2010
Pension costs
2011
2010
159
Total
2011
2010
-
-
139
159
-
-
Carl-Johan Kastengren
Board member
-
-
Carl Klingberg
Board member
-
-
David Hedman
Board member
-
-
Malin Lövemark
Board member
-
-
Larry Svensson 1)
Former member
-
-
Magnus Dandanell
CEO
1,543
1,456
Other executive management
Three people
Total
961
938
124
100
51
64
407
354
2,084
1,657
221
174
141
66
615
565
3,061
2,462
3,184
2,754
345
274
192
130
1,022
919
4,743
4,077
1) In addition to the directorship through 2010, Larry Svensson also acted as a consultant in financial matters in relation to the company.
2011 consultant fees totalled SEK 1,316k (1,225)
38
NOTES
Note 4 Gender distribution in
company management
Note 7 Goodwill
31 Dec. 2011
2011
2010
Board members
Women
Men
1
1
Women
Men
350
350
Closing cost
350
350
-315
-245
Opening depreciation
5
5
Depreciation for the year
6
Closing depreciation
5
4
-35
-70
-350
-315
-
35
31 Dec. 2011
31 Dec. 2010
Carrying amount
5
4
10
8
Note 8 Land and buildings
Opening cost
Note 5 Depreciation of
non-current assets
Purchases
2011
Buildings
Opening cost
6
CEO and other senior executives
2010
31 Dec. 2010
18,006
2,341
2,236
15,665
Sales/disposals
-2,341
Closing cost
17,901
18,006
414
260
-308
-48
Process equipment
1,409
1,200
-414
-260
Inventories and conversion of premises
4,196
3,438
Sales/disposals
Refurbishment expenses for other party’s
property
Goodwill
477
477
35
70
6,531
5,445
77
-
-644
-308
17,256
17,698
31 Dec. 2011
31 Dec. 2010
12,555
12,450
Carrying amount
Note 9 Process equipment
Note 6 Tax on profit for the year
Current tax on profit for the year
2011
2010
-
1,767
Opening cost
Purchases
16,347
105
Closing cost
28,902
12,555
-10,241
-9,041
-1,409
-1,200
-11,650
-10,241
17,252
2,314
Carrying amount
39
NOTES
Note 10 Cost of improvements to
leased property
31 Dec. 2011
31 Dec. 2010
Opening cost
9,101
9,101
Closing cost
9,101
9,101
-3,435
-2,958
-477
-477
-3,912
-3,435
5,189
5,666
Carrying amount
Note 12 New construction in progress and advance payments in respect of tangible non-current assets
31 Dec. 2011
31 Dec. 2010
Opening cost
16,242
4,288
Purchases
34,268
11,954
Closing cost
50,510
16,242
Note 13 Bank overdraft facility
Note 11 Stock and conversion
of premises
Credit authorised
31 Dec. 2011
31 Dec. 2010
43,310
34,099
4,895
9,211
Opening cost
Purchases
-161
-
Closing cost
Sales/disposals
48,044
43,310
-14,483
-11,045
-4,196
-3,438
Sales/disposals
Carrying amount
8
-
-18,671
-14,483
29,373
28,827
31 Dec. 2011
31 Dec. 2010
5,000
5,000
-
-
Credit utilised
Note 14 Change in equity
Opening amount
Share capital
Statutory
reserve
Premium fund
Retained earnings
Profit/loss for
the year
2,965
34,712
48,987
8,189
3,459
3,459
-3,459
Appropriation according to resolution of this
year’s annual general meeting:
Dividend
New share issue
-356
1,050
85,466
Issuance costs
-5,264
Exchange rate differences
-398
Closing amount
40
-3,775
4,015
34,712
129,189
10,894
-3,775
NOTES
Note 15 Liabilities to credit institutions
Due within one year
Due within 2-5 years
Due in more than five years
31 Dec. 2011
31 Dec. 2010
Note 17 Pledged assets
31 Dec. 2011 31 Dec. 2010
-
2,045
52,869
8,570
For long-term debts to credit institutions:
Company mortgages
66,000
54,000
-
30,346
Property mortgages
30,000
1,912
52,869
40,961
96,000
55,912
Note 16 Convertible debentures
Two convertible loans for a total nominal value of SEK 6,000k were
arranged in 2005 and extended in 2007 and 2010. The loan runs at
an interest rate of STIBOR 90 + 2% until 31 January 2012. The period
for notification of conversion runs up to and including 28 January
2012. K4 was subscribed by Stiftelsen Norrlandsfonden and K5 by
ALMI Gävleborg with the following terms:
• Convertible loan 4 (K4): nominal value SEK 3,000k and
subscription price SEK 50/share.
Three convertible loans for a total nominal value of SEK 8,560k were
arranged in 2007 and extended in April 2010. The loan carried an
interest rate of STIBOR 90 + 3% to 31 March 2010. K6 was signed
by Lantmännen Invest AB, Rolf Klingberg, and by the company’s
Founders’ Group. K7 was subscribed by the company’s employees
and Board members. K8 was subscribed by ALMI Gävleborg and
Norrlandsfonden. The terms were as follows:
• Convertible loan 7 (K7): nominal value SEK 600k and
Two convertible loans for a total nominal value of SEK 742k were
subscribed in 2010. The loan is interest-free until 31 January 2012.
The period for notification of conversion runs from the day before
subscription up to and including 28 January 2012. K9 was subscribed
by Stiftelsen Norrlandsfonden and K10 by ALMI Gävleborg with the
following terms:
41
Signatures
Mackmyra on 12 April 2012
Ulf Mattsson
Clas Eriksson
David Hedman
Carl Klingberg
Malin Lövemark
Chairman
Carl-Johan Kastengren
Magnus Dandanell
CEO
Our audit was submitted on 13 April 2012
Öhrlings PricewaterhouseCoopers AB
42
Hans Boberg
Authorised public accountant Annika Wedin
Authorised public accountant
To the Annual General Meeting of Mackmyra Svensk Whisky AB (Publ),
org.nr 556567-4610
Report on the annual accounts
We have audited the annual report for Mackmyra Svensk
Whisky AB (Publ) for 2011. The company’s annual accounts
are included in the printed version of this document on
pages 26-42.
Responsibilities of the Board of Directors and the
Chief Executive Officer for the annual accounts
The Board of Directors and the Chief Executive Officer are
responsible for the preparation and fair presentation of these
annual accounts in accordance with the Annual Accounts
Act, and for such internal control as the Board of Directors
and the Chief Executive Officer determine is necessary to
enable the preparation of annual accounts that are free from
material misstatement, whether due to fraud or error.
Auditors’ responsibility
Our responsibility is to express an opinion on these annual
accounts based on our audit. We conducted our audit in
accordance with International Standards on Auditing and
generally accepted auditing standards in Sweden. Those
standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the annual accounts are free from
material misstatement.
An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the annual
accounts. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material
misstatement of the annual accounts, whether due to fraud
or error. In making those risk assessments, the auditor
considers internal control relevant to the company’s
preparation and fair presentation of the annual accounts
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 company’s
internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the Board
of Directors and the Chief Executive Officer, as well as
evaluating the overall presentation of the annual accounts.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Report on other legal and regulatory
requirements
In addition to our audit of the annual accounts, we have examined the proposed appropriations of the company’s profit
or loss and the administration of the Board of Directors and
the Chief Executive Officer of Mackmyra Svensk Whisky AB
(publ) for the year 2011.
Auditor’s Report
Auditor’s Report
Responsibilities of the board of directors and the
Chief Executive Officer
The Board of Directors is responsible for the proposal for
appropriations of the company’s profit or loss, and the Board
of Directors and the Chief Executive Officer are responsible
for administration under the Companies Act.
Auditors’ responsibility
Our responsibility is to express an opinion with reasonable
assurance on the proposed appropriations of the company’s
profit or loss and on the administration based on our audit.
We conducted the audit in accordance with generally
accepted auditing standards in Sweden.
As a basis for our opinion on the Board of Director’s proposed appropriations of the company’s profit or loss, we
examined whether the proposal is in accordance with the
Companies Act.
As a basis for our opinion concerning discharge from liability,
in addition to our audit of the annual accounts, we examined
significant decisions, actions taken and circumstances of the
company in order to determine whether any member of the
Board of Directors or the Chief Executive Officer is liable to
the company. We also examined whether any member of the
Board of Directors or the Chief Executive Officer has, in any
other way, acted in contravention of the Companies Act, the
Annual Accounts Act or the Articles of Association.
We believe that the audit evidence we have obtained as above
is sufficient and appropriate to provide a basis for our opinion.
Opinions
We recommend to the annual general meeting of shareholders
that the profit be appropriated in accordance with the proposal and that the members of the Board of Directors and the
Chief Executive Officer are discharged from liability for the
financial year.
Opinions
In our opinion, the annual accounts have been prepared
in accordance with the Annual Accounts Act and present
fairly, in all material respects, the financial position of the
parent company as of 31 December 2011 and of its financial
performance and its cash flows for the year that ended in
accordance with Annual Accounts Act. The Report of the
Board of Directors is consistent with the other sections of
the annual report.
Gävle 13 April 2012
Öhrlings PricewaterhouseCoopers AB
Hans Boberg
Annika Wedin
We therefore recommend that the annual general meeting of
shareholders adopt the income statement and balance sheet.
43
The share and shareholder relationships
The share and shareholder
relationships
Share price and turnover
Share data
The share was listed on First North with the first trading day on 16
December 2011, under the ticker symbol MACK-B, at an introductory
price of SEK 84 per B share. The share closing price on 30 December
2011 was SEK 60.25, corresponding with a decline of 28%.
Number of registered shares at end of period: Number of outstanding shares at end of period:
Earnings per share, SEK:
Equity per share, SEK:
Number of shareholders at end of period:
Treasury shares
Mackmyra Whisky AB does not hold any of the total number of
shares.
Shareholders
The ten largest per 31 December 2011
Owners
Class A shares
Class B shares
Capital, %
Votes, %
207,860
390,637
14.9
38.0
Lantmännen agric. coop.
34,940
783,468
20.4
17.4
Fam. Rolf Klingberg
11,000
210,386
5.5
4.9
Fam. Tage Klingberg
22,200
39,600
1.5
4.0
0
2,310,339
57.6
35.6
276,000
3,739,396
100
100
The Founders’ Group
Other shareholders
Total
Total number of shares Class A + Class B:
The above list of major shareholders reflects ownership structure as
of 31 December 2011.
* The Founders’ Group consists of the eight founders (Annika
Berg, Jonas Berg, Astrid Dandanell, Magnus Dandanell, Jennie
Kastengren, Carl-Johan Kastengren, Rikard Lundborg and Malin
Lövemark), Spiritum Spritaktiebolag AB and the Gillesvik AB Group.
Share capital
Share capital in Mackmyra Whisky AB amounts to SEK 4,015,396,
and the number of shares as at 31 December 2011 was 4,015,396,
made up of 276,000 Class A shares and 3,739,396 Class B shares.
Each Class A share carries one vote and each Class B share carries
one tenth of a vote. All shares carry equal dividend rights.
44
4,015,396
4,015,396
-0.94
43, 59
6,057
4,015,396
Dividend policy
When the company has completed the expansion phase that is
now under way, it is the intention of the Board to propose that
the dividend be raised to an amount corresponding to 30-50% of
the profit after taxes, on condition that the company’s need for
consolidation, liquidity and capital for continued development is
satisfied. If the latter factors are not met, in the future dividends
may be reduced in relation to the plan or not paid at all.
Proposal to the annual general meeting
The Board proposes that no dividend should be paid. See also proposals for the agenda on page 45.
Mackmyra Svensk Whisky AB (Publ) will hold its annual
general meeting of shareholders at 10:30 a.m. on Saturday
5 May 2012 at Läkerol Arena, Idrottsvägen 7, Gävle.
Registration and entry scheduled from 9:30 a.m.
Proposed Agenda
1. Opening of the meeting
2. Election of chairman to preside over the Meeting
3. Preparation and approval of voting list.
RIGHT TO PARTICIPATE AND REGISTRATION
4. Approval of the agenda
Those wishing to attend the Annual General Meeting must
be registered in the Euroclear Sweden AB share register
on Friday, 27 April 2012 (record date Saturday 28 April),
and must notify the company of their participation at the
meeting no later than Monday, 30 April 2012.
5. Election of one or two persons to approve the minutes
Notification must be provided in writing to Mackmyra
Svensk Whisky AB, Wallingatan 2, 111 60 Stockholm, by
email: [email protected], or by telephone: +46 (0)8-55 6025
80 or by fax +46 (0)8-55 60 25 81. Notification must include
name, personal identification number/corporate ID number,
address and telephone number. Notification must also
specify the number of advisors (no more than two) that the
shareholder intends to bring to the meeting.
6. Determination of whether the meeting has been duly
convened
7. Presentation of the annual accounts and auditor’s report
8. Resolution on adoption of the income statement and
balance sheet
9. Resolution on allocation of the company’s result pursuant to the adopted balance sheet
Annual General Meeting and calendar
Welcome to the annual
general meeting of
shareholders
10.Resolution on discharge from liability for the directors
and the chief executive officer
11. Resolution on the number of board members and deputies
12.Resolution on fees to board members and the auditor
If participation will be done by proxy, such proxy should be
dated and submitted in connection with the notification.
The validity period of the proxy must be specified with a
maximum of up to five years from issuance.
13.Election of board members, chairman of the board and
any deputies
Proxy forms are available on the company website
www.mackmyra.se, no later than beginning three weeks
prior to the date of the meeting and sent to those shareholders who so request and state their mailing address.
Representatives of legal entities must present registration
certificates or equivalent document showing authorisation
as signatory.
15.Resolution on approval of the Board’s decision to issue
convertibles - K12
Shareholders whose shares are registered with a trustee
must, in order to be entitled to attend the annual general
meeting, temporarily register the shares in their own
names with Euroclear Sweden AB. Shareholders who wish
to request such re-registration must notify the trustee well
in advance of 27 April 2012, when such registration must be
completed.
Financial calendar
14.Resolution on approval of the Board’s decision to issue
convertibles - K11
16.Resolution on the Board's proposal for a decision to issue
convertibles - K14
17. Adjournment of the meeting.
Publication dates for financial information
13 April 2012
Annual Report 2011
5 May 2012
Annual General Meeting
29 May 2012
Interim Report, first quarter 2012
28 August 2012
Interim Report, second quarter 2012
27 November 2012 Interim Report, third quarter 2012
45
Glossary, definitions and addresses
Glossary, definitions
and addresses
Glossary and definitions
Addresses
Bottle:
Mackmyra Svensk Whisky AB (publ)
70 cl spirit or whisky calculated at 40% alcohol content, distributed
and sold via traditional channels.
Casks:
Personal whisky cask ordered and manufactured based on customer
orders. Delivered after an average of five years of maturing in about
48 whisky bottles (50 cl).
Angels’ share:
About 3% of the whisky evaporates from the oak casks annually
during storage. This is referred to as the angels’ share.
Headquarters/marketing office:
Mackmyra Svensk Whisky AB
Gross profit/loss divided by net sales.
Wallingatan 2
SE-111 60 Stockholm
Telephone +46 (0)8 - 55 60 25 80
Fax +46 (0)8 - 55 60 25 81
Operating margin (%)
Operating income divided by net sales.
Nobelvägen 2
SE-802 67 Gävle
Street address: Kolonnvägen 2
Gross profit margin (%):
Cash flow incl. unutilised bank overdraft (%)
Total of current receivables, cash equivalents and unutilised credit
facilities, divided by current liabilities.
Equity ratio (%):
Equity divided by total assets.
Return on equity (%):
Earnings after tax divided by average equity.
Return on capital employed (%):
Profit/loss before interest expense divided by average capital employed.
Capital employed:
Equity and liabilities less interest-bearing liabilities.
Debt/equity ratio (times):
Total liabilities divided by equity.
Interest coverage ratio (times):
Profit/loss before interest expense divided by interest expense.
Earnings per share (SEK):
Earnings after tax divided by number of shares at end of period.
46
Corporate ID no. 556567-4610
E-mail: [email protected]
URL: www.mackmyra.se
Certified advisor:
Erik Penser Bankaktiebolag
Box 7405
SE-103 91 Stockholm
Street address: Biblioteksgatan 9
Telephone: +46 (0)8 - 46 38 000
E-mail: [email protected]
URL: www.penser.se
addresses
addresses
47

AnnuAl RepoRt

Transcription

Similar documents

Fact Sheet - Marussia Beverages

Glenora Distillery

Taste the Beers of the World - Co

November - Boffins

michter`s pdf file - Chatham Imports, Inc.

Momentous Minutes - The Ardbeg Project

inver house distillers

Mactaggart Leisure Centre Newsletter 2015

Rare Whisky Collectors / Investors 2015 Single

W HISKY W H Y