Risks and risk management

Business risks and their management

Geopolitical situation
The geopolitical situation has affected the Group’s operating environment. Geopolitical tensions, the war in Ukraine and weather events caused by climate change affect the prices and availability of raw materials, packaging materials and energy in the market and consumer confidence, for example. The change in customs tariffs between the United States and Europe has no direct significant impact on Olvi’s operations and Olvi does not have significant business operations in the United States. Olvi Group is responding to the increase in costs by improving its operational productivity and assessing sales prices and selections to maintain profitability. Availability is ensured through a wide network of partners and long-term contracts.

Consumer behaviour
Historically high consumer prices, higher beverage taxation, stricter alcohol legislation and the deterioration of the general economic outlook due to geopolitical uncertainty reduce consumer confidence and affect consumer behaviour. This increases the shift in consumption to more affordable product options and price competition, for example. Moreover, consumption is declining overall, especially in alcoholic products, and the premiumisation trend may come to a halt. However, there are differences between markets. Olvi Group is responding to the change by developing its product portfolio in line with consumer demand and by maintaining and strengthening market shares.

Operating environment in Belarus
The business operations and financial forecasting in Belarus continue to involve uncertainty. For example, the uncertainty concerns the development of exchange rates, the unpredictability of the operating environment, local legislation and taxation, trade sanctions, and the functioning of financial transactions with Western countries. Olvi’s subsidiary operates independently in Belarus and is responsible for its procurements, among other aspects. In addition, the IT operating environment has been separated. The subsidiary finances its operations with cash flow from its own operations.

The restriction on the payment of dividends by Western-owned companies is valid until the end of 2026. The regulations limit the maximum amount of dividends that can be paid abroad. According to the current interpretation, the dividend that the Belarusian company can legally pay to the parent company is around EUR 2–4 million annually during the validity of the restrictions. According to Olvi Group’s management’s assessment, the now known temporary restriction on the payment of dividends by the Belarusian subsidiary does not impair the parent company’s ability to pay dividends. Restrictions on the sale of shares in Olvi’s subsidiary continue to apply. Olvi has no permission to sell shares in its Belarusian subsidiary. We monitor the legislative situation and actively evaluate the prerequisites and options for operating in the market.

Other current risks
Acquisitions offer growth opportunities, but also involve risks in terms of the success of the acquisition and expectations for growth in enterprise value. The risks may relate to, for example, the extent of due diligence and the implementation of business and integration plans. The benefits of acquisitions and the return on investment depend on the success of the takeover and the implementation of the business plan. Acquisitions often generate goodwill on the consolidated balance sheet, which is regularly tested against fair value. Goodwill is subject to risks of impairment losses if future cash flows do not support the valuation. Olvi manages the risks related to acquisitions by developing its acquisition processes and allocating resources to the implementation of the processes adequately.

Cybersecurity threats have increased because of the escalation of the global geopolitical situation, among other reasons. Olvi Group has prepared for increased data security threats in a variety of ways, and the new requirements under the NIS2 cybersecurity directive have been implemented according to schedule. Cybersecurity-related training, guidelines and threat situation training have been increased. Training is arranged annually for the personnel and information on data security risks and how to avoid them is shared. Olvi Group regularly audits its suppliers’ data security practices and assesses the related risks. There were no third-party data breaches in 2025. Olvi Group’s goal will continue to be zero data breaches. There have been no data breaches in the Group companies during the last three years. Olvi Group has an insurance policy covering data security risks.

The application of the EU Packaging and Packaging Waste Regulation (PPWR) will begin on 12 August 2026. The Regulation also contains a number of transitional provisions for the start dates of the various obligations. In the coming years, the European Commission will issue implementing and delegated acts, as well as guidelines to further specify the requirements and their application. According to the current estimate, the PPWR will increase energy consumption and, consequently, climate emissions of product manufacturing and logistics, as well as water consumption, which will have a direct impact on Olvi Group’s chances of achieving the set environmental targets. Increasing water consumption would also conflict with the EU’s water resilience strategy adopted in June 2025. In addition, the PPWR is likely to cause needs to invest in reusable bottles and transport packaging, and in equipment for product filling and handling. The process of implementing the regulation is being monitored closely, and efforts
are being made to affect its application guidelines so that the sustainability aspects of Olvi Group’s countries of operation are also taken into account.

Sustainability risks are identified through human rights and climate change impact assessments as part of the company’s strategic, business, financial and compliance risks.

As our business and regulatory base expand, Olvi Group is continuously exposed to legal and compliance risks, the supervision of which concerns, for example, competition law, anti-bribery and anti-corruption efforts, sanctions, compliance with tax regulations and health standards. Non-compliance with applicable laws or the Group’s internal guidelines may lead to sanctions such as fines, claims for damages and brand and reputational disadvantages.

Preparedness
Olvi Group has prepared several scenarios related to the development of the business environment and is prepared to respond to changing situations. For example, long-term scenarios to understand the drivers of change in the operating environment and to prepare for them have been prepared during spring 2025. The company is prepared for production disruptions and has drawn up continuity plans related to the availability of labour, raw materials and energy, for example. The company has made investments to secure its energy supply and has also made efforts to ensure the availability of raw materials and packaging materials. Particular attention has been paid to making risk assessments and the adequacy of risk management plans according to them and the introduction of new risk assessment methods in terms of information security and sustainability risks, for example.

A more detailed description of the risks related to business operations is provided in Olvi Group’s Board of Directors’ report and the notes to the financial statements and on the company website at
https://www.olvigroup.fi/en/investors/corporate-governance/corporate-governance/.