LÄNNEN TEHTAAT PLC Interim report 6 November 2009, 8.30 am
INTERIM REPORT 1 January - 30 September 2009
July-September (third quarter), continuing operations:
- Consolidated net sales amounted to EUR 64.1 (76.3) million, a year-on-year
drop of 16%.
- Operating profit, excluding non-recurring items, totalled EUR 1.3 (0.3)
million; non-recurring items amounted to EUR -0.3 (2.5) million.
- Profit for the period came to EUR 1.1 (1.6) million, and earnings per share
amounted to EUR 0.18 (0.26).
- Profit for the period, excluding non-recurring items, came to EUR 1.4 (-0.2)
million, and earnings per share amounted to EUR 0.22 (-0.03).
January-September, continuing operations:
- Net sales amounted to EUR 194.3 (268.2) million, a year-on-year drop of 28%.
- Operating profit, excluding non-recurring items, totalled EUR 2.2 (2.7)
million; non-recurring items amounted to EUR -0.8 (7.3) million.
- Profit for the period came to EUR 1.6 (7.5) million, and earnings per share
amounted to EUR 0.26 (1.18).
- Profit for the period, excluding non-recurring items, came to EUR 2.2 (0.8)
million, and earnings per share amounted to EUR 0.36 (0.11).
The information in this interim report has not been audited.
Matti Karppinen, CEO:
“Thanks to the good result posted by Grains and Oilseeds, the third-quarter
operating profit less non-recurring items for the Group's continuing operations
was significantly better than anticipated and a significant improvement
year-on-year. Frozen Foods continued on a steady track and turned in a result
slightly above that of the same period a year earlier. Our greatest challenges
are still in the Seafood business, where the result was down year-on-year.
Seafood's foreign operations were brought on to an upward track in the second
quarter, but in its Finnish-based operations the market continued to be
difficult.
“Implementation of Seafood's domestic strategy, approved in the spring, is
continuing as planned. The Finnish fish-processing sector has been suffering
from unhealthy price competition and profitability problems, and there is a
fundamental need for urgent restructuring of the sector. We intend to be an
active participant in these developments.
“As a Group-internal measure, we decided in the summer to combine the operations
of the Grain Trading and Vegetable Oils businesses. This will enable the new
Grains and Oilseeds business to provide an even better service to its customers
in the future.”
Net sales 64.1 76.3 194.3 268.2 349.1
Operating profit 1.0 2.7 1.4 10.0 13.9
Operating profit,
excl. non-recurring items 1.3 0.3 2.2 2.7 5.4
Profit before taxes 1.4 2.2 2.1 8.3 10.7
Profit for the period 1.1 1.6 1.6 7.5 10.0
Profit for the period,
excl. non-recurring items 1.4 -0.2 2.2 0.8 1.8
Earnings per share, EUR 0.18 0.26 0.26 1.18 1.60
Earnings per share,
excl. non-recurring items, EUR 0.22 -0.03 0.36 0.11 0.28
CHANGES IN GROUP STRUCTURE AND NEW SEGMENT DIVISION
Maritim Food AS, which is a Norwegian subsidiary of the Lännen Tehtaat Group,
and Cinvest AS, which was the minority owner of fish-processing company
Sandanger AS, agreed a deal at the end of June, under which Cinvest AS's 49%
holding in Sandanger AS was transferred to the ownership of Maritim Food AS.
Following this, Maritim Food AS now owns the entire share capital of Sandanger
AS.
In August, in an intra-Group transaction, Lännen Tehtaat plc sold the entire
share capital of its vegetable oils company, Mildola Oy, to its trading
specialist in grains, oilseeds and feeding stuffs, Avena Nordic Grain Oy. The
aim of this is to combine the commodity market expertise of Avena Nordic Grain
with Mildola's expertise in oil milling. The new ownership arrangement is being
introduced in two stages. At the first stage, carried out in early September,
the administration, purchasing, sales and logistics functions of Mildola Oy were
transferred to Avena Nordic Grain Oy. The second stage will be the asset deal
taking place towards the end of 2009, when Mildola Oy's vegetable oils business,
excluding its oil milling operation, will be transferred to Avena Nordic Grain
Oy, leaving Mildola Oy to continue its oil milling operation as a production
unit of Avena.
Since the vegetable oils business will no longer form a separate entity for
monitoring purposes, the former Grain Trading and Vegetable Oils segments, which
were reported separately, will, from the start of the third quarter, appear in
the Group's financial reporting under a new segment name, Grains and Oilseeds.
NET SALES AND PROFIT
July-September (third quarter):
Net sales from the continuing operations in July-September came to EUR 64.1
(76.3) million, a decrease of 16% on the same quarter in 2008. The year-on-year
drop in third-quarter net sales was mainly the result of a drop in grain and
oilseed market prices.
The July-September operating profit from the continuing operations, excluding
non-recurring items, was EUR 1.3 (0.3) million. Non-recurring items totalled EUR
-0.3 (+2.5) million. These non-recurring items consisted of integration expenses
in Seafood's foreign operations (EUR -0.2 million) and the costs of combining
operations in the Grains and Oilseeds business (EUR -0.1 million). In Frozen
Foods, in Grains and Oilseeds, and in Other Operations, the operating profit,
excluding non-recurring items, improved on the figure for the same period a year
earlier. In the Seafood business, the result was down on the previous year's
figure.
January-September:
Continuing operations
Net sales from the continuing operations for January-September amounted to EUR
194.3 (268.2) million, a year-on-year drop of 28%.
The operating profit from the continuing operations, excluding non-recurring
items, was EUR 2.2 (2.7) million. The operating profit includes the share of the
profits of associated companies, which, excluding non-recurring items, totalled
EUR 0.7 (0.7) million. Non-recurring items for January-September totalled EUR
-0.8 (7.3) million, of which EUR -0.7 million was in the Seafood business and
EUR -0.1 million in the Grains and Oilseeds business.
Financial income and expenses from the continuing operations totalled EUR +0.7
(-1.6) million. This figure includes valuation items of EUR +0.6 (+0.1) million
with no cash flow implications. The financial expenses also include EUR -0.4
(-0.4) million as the share of Avena Nordic Grain Oy's profit attributable to
the Avena employee shareholders.
Profit before taxes from the continuing operations was EUR 2.1 (8.3) million.
Profit before taxes, excluding non-recurring items, was EUR 2.9 (1.0) million.
The continuing operations' profit for the period came to EUR 1.6 (7.5) million,
and the earnings per share amounted to EUR 0.26 (1.18).
Discontinued operations
The share of the profit of the associated company Suomen Rehu and the profit
from the sale of the minority holding in Suomen Rehu were both included under
discontinued operations in the January-September 2008 income statement. In the
balance sheet figures for September, the non-current assets held for sale
include Seafood's Kerava property.
The profit for the period from discontinued operations came to EUR 0.0 (7.1)
million.
Profit for the period
The profit for January-September from both the continuing and discontinued
operations came to a total of EUR 1.6 (14.5) million, and the earnings per share
amounted to EUR 0.26 (2.31). The profit for the period from both the continuing
and discontinued operations, excluding non-recurring items, came to a total of
EUR 2.2 (1.3) million, and the earnings per share amounted to EUR 0.36 (0.19).
FINANCING AND BALANCE SHEET
The consolidated balance sheet continued to strengthen and the Group is
debt-free. Both the financing situation and liquidity were at a good level.
The net cash flow from operating activities in January-September after interest
and taxes amounted to EUR 23.3 (4.5) million. The impact of the change in
working capital was EUR 18.1 (2.6) million. The net cash flow from investing
activities came to EUR -11.5 (18.7) million. The impact of liquid asset
investments in short-term fixed income funds on cash flow from investing
activities was, in terms of net value, EUR -12.0 (-9.9) million. The cash flow
from financing activities came to EUR -16.8 (-21.9) million, and this included
EUR -5.3 (-5.6) million in dividend payments.
At the end of the period, the Group had EUR 5.6 (17.3) million in
interest-bearing liabilities and EUR 20.9 (24.3) million in liquid assets. Net
interest-bearing liabilities totalled EUR -15.4 (-7.0) million. The consolidated
balance sheet total stood at EUR 172.7 (200.7) million. At the end of September,
equity totalled EUR 132.1 (134.6) million and the equity ratio was 76.7%
(67.1%). Commercial papers issued for the Group's short-term financing stood at
a total value of EUR 0.0 (12.0) million at the end of September. The Group's
liquidity over the next few years is secured with committed credit facilities; a
total of EUR 25 (25) million was available in credit at the end of September. No
credit facilities were used during the review period.
INVESTMENT
Gross investment in non-current assets in January-September came to EUR 2.0
(5.7) million.
PERSONNEL
The average number of personnel in the continuing operations during the review
period was 656 (755).
Like-for-like net sales in Frozen Foods, excluding the sale of jam and marmalade
products, grew by 2% in the third quarter, compared with the previous year's
figure. In the retail sector, the growth in sales of frozen products continued
to be good. Exports were also up, due to an increase in the export of peas. The
level of demand fell in the hotel, restaurant and catering sector and in sales
to the food industry. Among the different retail product groups, frozen pizza
sales improved considerably as a result of an increase in marketing. Sales of
frozen ready meals also continued at a good level.
Frozen Foods' third-quarter operating profit improved on the previous year's
figure as a result of higher productivity, centralisation of production and more
efficient operations.
Like-for-like net sales in Frozen Foods for January-September were up on the
previous year by about 4%. Sales growth in retail frozen foods was approximately
9%. This was partly due to the recent new product launches, such as potatoes
plus chopped vegetables for soups, a range of family soups, and lactose-free
spinach soup. Sales in the hotel, restaurant and catering sector were up
slightly, while sales to the food industry and exports were down, year-on-year.
In January-September the operating profit of Frozen Foods, excluding
non-recurring items, was up on the previous year's figure, in line with
expectations.
Processing of crops from Finnish contract growers was at the midway stage at the
end of September. The harvested crop in autumn 2009 was good in both quantity
and quality, especially in comparison with the two previous seasons. The good
crop means an increase in the home-grown content of products, as there is no
need to import supplementary raw materials.
The number of personnel in Frozen Foods during the review period was 199 (231).
The reduction in personnel was a result of the sale of the jams and marmalades
business in autumn 2008, the discontinuation of the Turku factory at the end of
2008, and the centralisation of functions at Säkylä.
Investment during January-September totalled EUR 1.4 (3.9) million. This was
mainly in the renewal of the enterprise resource planning system and the
contract grower data system, the completion of the investment arising from the
centralisation of production at Säkylä and the modernisation of the soups
department and the vegetable patty line. The contract grower data system was
integrated with the enterprise resource planning system and began operating
during the summer.
The third-quarter net sales of the Seafood business were down by 15% on the
previous year's figure. This drop in net sales occurred both in Finland and in
foreign operations.
In Finland, price competition in consumer-packaged retail products was
unhealthily intense, with the focus being on low value-added fillets of salmon
and rainbow trout. The drop in net sales in the domestic Seafood business was
also due to the reduced number of Kalatori service counters compared with the
previous year and the debate concerning counter sales of fresh meat and fish
products, which received a lot of media attention in the late summer and
resulted in a temporary drop in demand.
Calculated in local currencies, the net sales of Seafood's foreign operations
were down by about 5%. This was due to the discontinuation of unprofitable
products and the lower sales of fresh fish products compared with a year
earlier. Sales of ready-to-eat fish products were unchanged from the previous
year. The strong growth in shellfish sales continued on the Norwegian market.
There was also considerable growth in the renewed range of dressings. In Sweden,
demand for shellfish products in the hotel, restaurant and catering sector
declined.
The third-quarter operating result, excluding non-recurring items, was a loss
and was down year-on-year. The result for the Seafood's foreign operations was
at the level of a year earlier, namely a small loss. The profitability of
Seafood's foreign operations improved significantly after the early part of the
year, once the worst of the pressures on raw material prices had subsided. In
the domestic Seafood business, the result was adversely affected by a drop in
sales and by the high purchase price of salmon and rainbow trout during the
summer. The total of EUR -0.2 (0.0) million in non-recurring items for the
period consisted of expenses from the organisational changes made after the
acquisition of the minority holding in Sandanger AS.
Seafood's net sales for January-September were down by 17% on the same period in
2008. Its operating result, excluding non-recurring items, was a loss and was
down year-on-year. Non-recurring items for the period totalled EUR -0.7 (-0.1)
million. The non-recurring items were related to the sale of Apetit Kala's
Kerava property in June, and the organisational changes following the
acquisition of the minority holding in Sandanger AS.
Implementation of the domestic strategy for the Seafood business, approved in
the spring, continued as planned.
The picking and dispatch functions at Apetit Kala Oy's Kerava logistics centre
were transferred in mid-July to logistics service operator SwanLine Oy. As part
of the business transfer, 21 employees at Kerava were also transferred to
SwanLine Oy. The outsourcing of logistics services has proceeded according to
plan. The aim of the Kerava property sale and the transfer of the logistics
functions agreed in June is to achieve improved profits of around EUR 0.4
million annually. This figure is not expected to be achieved in full until 2010.
Productivity investments in line with the Group's strategic plans were
undertaken at the Kuopio production plant during the summer, and they aim to
achieve annual cost savings of about EUR 0.2 million. The investment programme
includes a new layout for the filleting and trimming line and investment in the
packaging line to allow redesign of consumer packages. These investments will
also enable an improvement in production quality.
In Seafood's foreign operations, the acquisition of the minority holding in
Sandanger AS carried out at the end of June enables more efficient utilisation
of synergy benefits and more effective business development in the Maritim Food
group. With the transfer of Sandanger AS in full to Maritim Food AS, Jan Brevik
was appointed Managing Director of Sandanger AS. He also continues as Managing
Director of Maritim Food AS and Maritim Food Sweden AB, thus being responsible
for the Group's Seafood business in Norway and Sweden.
The number of personnel in the Seafood business totalled 385 (445). The
reduction in personnel occurred mainly in Seafood's Finnish-based operations. To
bring production and costs into line, both blue-collar and white-collar
personnel at the Kuopio production plant were laid off for one to two weeks
during the first six months of the year.
Investment in the Seafood business totalled EUR 0.4 (1.2) million and was mainly
in information system and productivity investments.
Third-quarter net sales in the Grains and Oilseeds business were down 17%
year-on-year. This drop in net sales was the result of considerably lower market
prices than a year earlier and the smaller delivery volumes in both grain sales
and vegetable oil exports.
The operating profit of the Grains and Oilseeds business, excluding
non-recurring items, improved significantly year-on-year. Non-recurring items
totalled EUR -0.1 (0.0) million. The improved result was a consequence of
success in managing changes in market prices and in developing processes,
operating methods and the organisation in general, and the good oil yield.
In August, in an intra-Group share transaction, Lännen Tehtaat plc sold the
entire share capital of its vegetable oils company, Mildola Oy, to its trading
specialist in grains, oilseeds and feeding stuffs, Avena Nordic Grain Oy. The
aim of this is to combine the commodity market expertise of Avena Nordic Grain
with Mildola's expertise in oil milling and to achieve annual synergy benefits
of approximately EUR 0.5 million from 2010 onwards.
The first stage in combining the operations of Avena and Mildola was undertaken
in early September, when the administration, purchasing, sales and logistics
functions of Mildola Oy were transferred to Avena Nordic Grain Oy. At the same
time these functions were reorganised. As a result of the operations being
combined, five jobs were lost in the Grains and Oilseeds business. The combining
of operations gave rise to non-recurring costs of about EUR 0.1 million, which
were recognised in the third-quarter result.
The second stage of the arrangement will be the asset deal taking place towards
the end of the year, when Mildola Oy's vegetable oils business, excluding its
oil milling operation, will be transferred to Avena Nordic Grain Oy, leaving
Mildola Oy to continue its oil milling operation as a production unit of Avena.
January-September net sales in the Grains and Oilseeds business were down 36%
year-on-year. Operating profit, excluding non-recurring items, was at the
previous year's level.
The grain crop in autumn 2009 exceeded earlier estimates, and in almost all the
world's main production areas the crop was above average. With considerable
stocks also remaining from the record-high 2008 crop, there was an abundant
supply of grain on the world market. This pushed grain prices down everywhere,
including the EU, to a low not seen for years. In the EU, the rapeseed crop was
more than 2 million tonnes up on the previous year's figure. Oilseed prices,
however, were maintained by the tight supply situation for soybeans and, towards
the end of the review period, by the harvesting delay in the United States due
to poor weather.
In Finland the grain crop was above average for the third successive year. The
area under oilseed cultivation was up on the previous year's figure, and the
crop was one third greater than in 2008.
The Grains and Oilseeds business employed 62 (65) people. To bring production
and costs into line, Mildola's personnel were laid off for about one week during
the review period.
The investment of EUR 0.2 (0.2) million in the Grains and Oilseeds business was
primarily in the new enterprise resource planning system introduced in grain
trading in June. Investment at Mildola was in minor replacements.
Other Operations comprise the service company Apetit Suomi Oy, Group
Administration, items not allocated under any of the business segments, and the
associated companies Sucros Ltd and Ateriamestarit Oy. The cost impact of the
services produced by Apetit Suomi Oy is an encumbrance on the operating result
of the Group's businesses in proportion to their use of the services.
In the third quarter, net sales from the sale of services were at the previous
year's level. The reduction in January-September net sales was a result of the
discontinuation of service fees for sales and product development when these
functions were transferred from Apetit Suomi Oy to the business areas at the
start of April 2008.
The January-September operating profit, excluding non-recurring items, totalled
EUR -2.1 (-2.4) million. This figure includes EUR +0.7 (+0.7) million as the
share of the profits of associated companies.
Investment in Other Operations totalled EUR 0.0 (0.2) million.
AUTHORISATIONS GRANTED TO THE BOARD OF DIRECTORS
The Annual General Meeting on 2 April 2009 authorised the Board of Directors to
decide on issuing new shares and on the transfer of Lännen Tehtaat plc shares
held by the company, in one or more lots as a share issue of a total of no more
than 761,757 shares. The share issue authorisation covers all Lännen Tehtaat plc
shares in the company's possession, i.e. 130,000 shares. The maximum number of
new shares that can be issued is 631,757.
The authorisation is valid until the next Annual General Meeting.
The Board of Directors had not yet exercised the authorisation granted to it to
issue new shares or to transfer Lännen Tehtaat plc shares held by the company.
SHARES AND TRADING
The number of Lännen Tehtaat plc shares traded on the stock exchange during the
review period was 1,105,775 (900,875), representing 17.5% (14.3%) of the total
number of shares. The euro-denominated share turnover was EUR 14.0 (13.1)
million. The highest share price quoted was EUR 15.20 (17.00) and the lowest EUR
11.90 (13.20). The average price of shares traded was EUR 12.64 (14.49).
At the end of September, the market capitalisation totalled EUR 93.1 (97.6)
million.
FLAGGING ANNOUNCEMENTS
On 28 May 2009, Nordea Investment Fund Company Finland Ltd announced that on 27
May 2009 the level of ownership in Lännen Tehtaat plc held by investment funds
managed by Nordea Investment Fund Company Finland Ltd rose to over 5%; the
proportion of the votes and share capital at the time of the flagging
announcement had risen to 5.46%, or 345,325 shares.
SALE OF SHARES IN JOINT ACCOUNT
Lännen Tehtaat plc shares that were in the joint book-entry account and not
transferred to the book-entry system were sold on behalf of the respective
holders on 23 February 2009 in trading on the NASDAQ OMX Helsinki Ltd exchange.
The assets from the sale, less the expenses of notification and selling, were
deposited with the State Provincial Office of Western Finland. The assets are
redeemable on or before 17 March 2019. At the end of September, the unredeemed
assets totalled EUR 0.8 million.
SEASONALITY OF OPERATIONS
In accordance with the IAS 2 standard, the historical cost of inventories
includes a systematically allocated portion of the fixed production overheads.
In production that focuses on seasonal crops, raw materials are processed into
finished products mainly during the final quarter of the year, which means that
the inventory volumes and their balance-sheet values are at their highest at the
end of the year. Since the entry of the fixed production overheads included in
the historical cost as an expense item is deferred until the time of sale, most
of the Group's annual profit is accrued in the final quarter. The seasonal
nature of operations is most marked in Frozen Foods and in the associated
company Sucros, due to the link between production and the crop harvesting
season.
Apetit Kala's sales peak at weekends and on seasonal holidays. A major
proportion of the entire year's profit in the Seafood business depends on the
success of Christmas sales.
Net sales in grain trading vary from one year and quarter to the next, being
dependent on the demand and supply situation and on the price levels
domestically and on other markets.
SHORT-TERM RISKS AND UNCERTAINTIES
The most significant short-term risks for the Lännen Tehtaat Group are: the
effects of the economic downturn on demand from consumers and customers; the
solvency of customers and the delivery performance of suppliers; the quantity
and quality of Finnish vegetable crops; the management of raw material price
changes and currency risks; changes in the operating environments of the Group's
businesses and in customerships; and corporate acquisitions and the subsequent
integration processes.
SIGNIFICANT EVENTS SINCE THE END OF THE REVIEW PERIOD
There have been no significant events since the end of the review period.
ASSESSMENT OF 2009
The net sales from Lännen Tehtaat's continuing operations are affected
particularly by changes in the price level of grains and oilseeds. Based on the
grain and oilseed price level, the Group's net sales for the full year are
expected to be below the corresponding figures for 2008.
Thanks to the measures taken to develop the Group's different businesses, the
fourth-quarter operating profit, excluding non-recurring items, is expected to
show a year-on-year improvement, and the full-year operating profit, excluding
non-recurring items, is expected to be around the same level as in 2008.
Investment in non-current assets will be significantly below the level of a year
earlier.
Current assets
Inventories 46.3 60.1 55.1
Receivables 24.6 33.4 38.7
Income tax receivable 0.0 0.1 0.7
Financial assets at fair value
through profits 16.1 18.0 3.8
Cash and cash equivalents 4.8 6.3 9.9
Current assets total 91.9 117.9 108.0
Non-current assets classified
as held for sale 3.6 - -
Total assets 172.7 200.7 192.3
EUR million 30 Sep 30 Sep 31 Dec
2009 2008 2008
EQUITY AND LIABILITIES
Equity attributable to the equity
holders of the parent 132.1 134.0 135.1
Minority interest - 0.6 0.5
Total equity 132.1 134.6 135.6
Current liabilities
Short-term financial liabilities 1.9 12.5 10.7
Income tax payable 1.3 1.8 0.7
Trade payables and other liabilities 29.5 42.6 36.1
Current liabilities total 32.7 56.9 47.4
Total liabilities 40.6 66.1 56.8
Liabilities directly associated with
non-current assets classified as
held for sale - - -
Total equity and liabilities 172.7 200.7 192.3
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR million 1-9/ 1-9/ 1-12/
2009 2008 2008
Net profit for the period 1.6 14.5 17.1
Adjustments, total 4.5 -9.9 -8.5
Change in net working capital 18.1 2.6 -5.1
Interests paid -1.2 -1.8 -2.4
Interests received 1.0 0.5 0.4
Taxes paid -0.8 -1.3 -1.8
Net cash flow from operating activities 23.3 4.5 -0.4
Investments in tangible and intangible assets -2.0 -5.7 -8.1
Proceeds from sales of tangible
and intangible assets 0.4 3.0 3.0
Acquisition of subsidiaries deducted by cash - -0.4 -0.4
Transactions with minority -1.2 1.5 1.5
Acquisition of associated companies - -0.4 -0.4
Proceeds from sales of associated companies - 27.0 27.0
Purchases of other investments -15.0 -14.0 -14.0
Proceeds from sales of other investments 3.0 4.1 18.1
Dividends received from investing activities 3.3 3.6 3.6
Net cash flow from investing activities -11.5 18.7 30.3
Repayments of short-term loans -10.2 -14.7 -18.4
Repayments of long-term loans -1.4 -0.5 -0.1
Payment of financial lease liabilities 0.0 -0.1 -0.1
Purchases of own shares - -1.0 -1.0
Dividends paid to minority - -0.3 -0.3
Dividends paid -5.3 -5.3 -5.3
Cash flows from financing activities -16.8 -21.9 -25.1
Net change in cash and cash equivalents -5.0 1.3 4.8
Cash and cash equivalents at the
beginning of the period 9.9 5.1 5.1
Cash and cash equivalents at the
end of the period 4.8 6.3 9.9
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
EUR million
A = Share capital
B = Share premium account
C = Net unrealised gains
D = Other reserves
E = Own shares
F = Translation differences
G = Retained earnings
H = Attributable to equity holders of the parent
I = Minority interest
J = Total equity
A B C D E F G H I J
Shareholders'
equity at
1 Jan 2008 12.6 23.4 0.4 7.2 -0.8 0.1 84.5 127.3 0.7 128.0
Transactions
with minority - - - - - - 0.4 0.4 - 0.4
Dividend
distribution - - - - - - -5.3 -5.3 -0.3 -5.6
Other changes - - - - -1.0 - -0.4 -1.4 - -1.4
Total comprehensive
income - - -1.1 - - -0.5 14.5 12.9 0.1 13.0
Shareholders'
equity at
30 Sep 2008 12.6 23.4 -0.7 7.2 -1.8 -0.4 93.7 134.0 0.6 134.6
The interim report has been prepared in accordance with IAS 34, Interim
Financial Reporting, as adopted by the EU. The accounting policies adopted are
consistent with those of the Group's annual financial statements for the year
ended 31 December 2008.
At the beginning of the year the new IFRS 8 did not change the information shown
in these segments because the Group's earlier segment-based reporting was based
on the Group's internal reporting structures. In August 2009 the Group decided
on a new intra-group ownership arrangement, where vegetable oils business
including administration, purchasing, sales and logistics functions, excluding
oil milling operations, are transferred to Avena Nordic Grain Oy. Since the
vegetable oils business will no longer form a separate entity for monitoring
purposes, the former Grain Trading and Vegetable Oils segments are reported
under a new segment name, Grains and Oilseeds.
The amendment of IAS 1 has an impact on the presentation method of the profit
and loss account and the changes in equity.
SEGMENT INFORMATION
A Frozen Foods
B Seafood
C Grains and Oilseeds
D Other Operations
E Continuing operations total
F Discontinued operations
G Total
Operating segments 1-9/2009
EUR million A B C D E F G
Total external sales 34.6 54.9 104.7 1.3 195.5 - 195.5
Intra-group sales 0.0 0.0 0.0 -1.2 -1.2 - -1.2
Net sales 34.6 54.9 104.7 0.1 194.3 - 194.3
Share of profits of
associated companies
included in operating
profit - - - 0.7 0.7 - 0.7
Finland 140.8 155.1 209.9
Scandinavia 31.7 53.5 65.8
Baltic countries and Russia 2.2 4.1 7.6
Other countries 19.6 55.5 65.9
Continuing operations total 194.3 268.2 349.1
DISCONTINUED OPERATIONS
The sale of the majority holding of 51% in Suomen Rehu Ltd was completed at the
start of June 2007, when Suomen Rehu and its subsidiaries were transferred to
Hankkija-Maatalous Oy. Lännen Tehtaat plc and SOK subsidiary Hankkija-Maatalous
Oy signed an agreement on 1 September 2008, transferring the remaining 49% of
shares owned by Lännen Tehtaat in Suomen Rehu Ltd to Hankkija-Maatalous Oy.
Lännen Tehtaat recognised a non-recurring tax-free profit of EUR 6.6 million for
the sale of these minority shares in its financial performance for the 2008
third quarter.
NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE
Non-current assets classified as held for sale in the reporting period belong to
Apetit Kala Oy's logistics functions located in Kerava that will be sold during
the fourth quarter in 2009.
Gross investments in non-current
assets, EUR million,
continuing operations 2.0 5.7 8.1
Corporate acquisitions and other
share purchases, EUR million,
continuing operations 1.2 0.4 0.5
Average number of personnel,
continuing operations 656 755 755
Average number of shares, 1 000 pcs 6 188 6 232 6 221
The key figures in this interim financial report are calculated with same
accounting principles than presented in year 2008 annual financial statements.
CONTINGENT LIABILITIES
EUR million 30 Sep 30 Sep 31 Dec
2009 2008 2008
Guarantees given for debts
Real estate mortgages 5.6 8.9 8.6
Corporate mortgages - 1.3 -
Other guarantees 10.0 9.8 10.8
Non-cancellable other leases,
minimum lease payments
Real estate leases 4.7 4.2 5.1
Other leases 0.7 0.8 0.9
Lännen Tehtaat had investment commitments in Frozen Foods a total of EUR 0.4
million as of 30 September 2009.
CHANGES IN TANGIBLE ASSETS
EUR million 1-9/ 1-9/ 1-12/
2009 2008 2008
Book value at the beginning of the period 43.5 43.5 43.5
Acquisitions 1.2 4.1 5.9
Disposals and transfers to assets
classified as held for sale -4.1 -0.2 -0.2
Depreciations and impairments -3.4 -3.5 -4.8
Other changes 0.8 -0.2 -1.0
Book value at the end of the period 38.1 43.6 43.5
TRANSACTIONS WITH ASSOCIATED COMPANIES AND JOINT VENTURES
EUR million 1-9/ 1-9/ 1-12/
2009 2008 2008
Sales to associated companies 0.3 12.8 13.4
Sales to joint ventures 5.1 5.4 8.2
Purchase from associated companies 1.4 0.7 0.7
Purchase from joint ventures 0.0 0.0 0.0
Long-term receivables from associated companies 1.5 2.6 2.7
Long-term receivables from joint ventures 0.1 - -
Trade receivables and other
receivables from associated companies 1.6 1.5 1.6
Trade receivables and other
receivables from joint ventures 1.0 1.0 0.6
Trade payables and other liabilities
to associated companies 0.0 0.0 0.0
LÄNNEN TEHTAAT PLC
Board of Directors
Further information: CEO Matti Karppinen, tel. +358 10 402 4001
Distribution:
NASDAQ OMX Helsinki Ltd
Principal media
www.lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE 16 October 2009, 9.30 am
THIRD-QUARTER OPERATING PROFIT (EXCLUDING NON-RECURRING ITEMS) BETTER THAN
ANTICIPATED, BUT FULL-YEAR RESULT EXPECTATION UNCHANGED
In Lännen Tehtaat's second-quarter interim report published on 14 August 2009,
the Group summed up its profit expectations for the rest of the year as follows:
“Thanks to the measures taken to develop the Group's different businesses, the
third-quarter operating profit from the continuing operations, excluding
non-recurring items, is estimated to be at about the same level as in 2008. On
the basis of the profit performance for the first half-year, the full-year
operating profit, excluding non-recurring items, from the Group's continuing
operations is expected to be at around the previous year's level.”
With the profit of the Grains and Oilseeds business being better than expected,
the continuing operations' third-quarter operating profit, excluding
non-recurring items, is about EUR 1.3 (0.3) million, based on preliminary
figures. Expectations regarding the Group's full-year operating profit remain
unchanged.
The preliminary figures are unaudited and are not based on an interim report
approved by the Board of Directors. Lännen Tehtaat plc's interim report for 1
January - 30 September 2009 will be published on 6 November 2009 at 8.30 am.
LÄNNEN TEHTAAT PLC
Matti Karppinen
CEO
Further information: Matti Karppinen, CEO, tel. +358 10 402 4001
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE 14 August 2009, 9.00 am
QUARTERLY COMPARATIVE INFORMATION BASED ON THE NEW SEGMENT FORMAT
Lännen Tehtaat announced today the combination of the vegetable oils business
and the grain trading business. Since the vegetable oils business will no longer
form a separate entity for monitoring purposes, the former Grain Trading and
Vegetable Oils segments will, from the start of the third quarter, appear in the
Group's financial reporting under a new segment name, Grains and Oilseeds.
Attached is the operating segment data for the period Q1/2008 to Q2/2009 based
on the new segment structure.
LÄNNEN TEHTAAT PLC
Matti Karppinen
CEO
Further information: Matti Karppinen, CEO, tel. +358 10 402 4001
Attachments:
Operating segment data for the period Q1/2008 to Q2/2009, using the new segment
structure.
Copies to:
NASDAQ OMX Helsinki Ltd
Main media
www.lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE 14 August 2009, 8.30 am
DECISION TO COMBINE THE OPERATIONS OF MILDOLA AND AVENA
The Lännen Tehtaat Group has decided on a new intra-Group ownership arrangement
whereby Lännen Tehtaat plc will sell the entire share capital of its vegetable
oils company, Mildola Oy, to its trading specialist in grains, oilseeds and
feeding stuffs, Avena Nordic Grain Oy. The aim of this is to combine the
commodity market expertise of Avena Nordic Grain with Mildola's expertise in oil
milling. The intention is to achieve annual synergy benefits of approximately
EUR 0.5 million.
The new arrangement will be introduced in two stages. At the first stage, the
administration, purchasing, sales and logistics functions of Mildola Oy will be
transferred to Avena Nordic Grain Oy. This outsourcing of Mildola's functions
will entail the transfer of nine of its employees to Avena. The second stage
will be the asset deal taking place towards the end of the year, when Mildola
Oy's vegetable oils business, excluding its oil milling operation, will be
transferred to Avena Nordic Grain Oy, leaving Mildola Oy to continue its oil
milling operation as a production unit of Avena. The new arrangement is expected
to give rise to non-recurring costs of about EUR 0.1 million, which will be
entered in the third-quarter result.
Since the vegetable oils business will no longer form a separate entity for
monitoring purposes, the former Grain Trading and Vegetable Oils segments will,
from the start of the third quarter, appear in the Group's financial reporting
under a new segment name, Grains and Oilseeds. The operating segment data for
the period Q1/2008 to Q2/2009 based on the new segment structure will be
published today as a separate stock exhcange release.
The Grains and Oilseeds business will be the responsibility of Avena Nordic
Grain Oy's Managing Director, Kaija Viljanen, who, as of 14 August 2009, will
also be Managing Director of Mildola Oy.
LÄNNEN TEHTAAT PLC
Matti Karppinen
CEO
Further information: Matti Karppinen, CEO, tel. +358 10 402 4001
Copies to:
NASDAQ OMX Helsinki Ltd
Main media
www.lannen.fi
LÄNNEN TEHTAAT PLC Interim report 14 August 2009 8.30 am
INTERIM REPORT 1 January - 30 June 2009
April-June, continuing operations:
- Consolidated net sales amounted to EUR 65.5 (101.0) million,
a year-on-year drop of 35%.
- Operating profit, excluding non-recurring items, came to EUR 1.6 (1.8)
million; non-recurring items totalled EUR -0.5 (0.0) million.
- Profit for the period came to EUR 0.8 (1.1) million, and earnings per share
amounted to EUR 0.12 (0.18).
January-June, continuing operations:
- Net sales amounted to EUR 130.2 (191.9) million, a year-on-year drop of 32%.
- Operating profit, excluding non-recurring items, came to EUR 0.9 (2.3)
million; non-recurring items totalled EUR -0.5 (4.9) million.
- Profit for the period came to EUR 0.5 (5.9) million, and earnings per share
amounted to EUR 0.08 (0.92).
The information in this interim report has not been audited.
Matti Karppinen, CEO:
“The Group's second-quarter operating profit from its continuing operations,
excluding non-recurring items, was considerably better than in the first quarter
and almost reached the level of a year ago. In all our operating segments the
operating result was an improvement on the first-quarter figures. The
year-on-year drop in consolidated net sales was mainly the result of the sharp
fall in grain and oilseed market prices.
”The strategy for Seafood's Finnish-based operations was updated in late spring,
and a review of the strategy for its foreign operations is in progress.
”The economic downturn has redirected demand for consumer products on the
Finnish market towards basic products with a lower added value and a lower
price. Sales of consumer-packaged fresh fillets of salmon and rainbow trout have
increased considerably and, correspondingly, sales of higher priced cold-smoked
and raw pickled products have fallen. In frozen food products, demand has risen
for traditional mixed vegetables and root vegetables, and for soups. In
Seafood's operations abroad, sales of the lower priced private label products
have grown, and demand in the hotel, restaurant and catering sector has fallen.
In the prevailing economic circumstances, it is reassuring that our product
range also includes basic food products that are currently attracting a great
many consumers.
”The company's balance sheet at the end of the second quarter showed a further
improvement, and cash flow increased too, which means we are well placed for
further development in line with the Group's strategy.”
Net sales 65.5 101.0 130.2 191.9 349.1
Operating profit 1.1 1.8 0.4 7.2 13.9
Operating profit,
excluding non-recurring
items 1.6 1.8 0.9 2.3 5.4
Profit before taxes 1.0 1.4 0.6 6.1 10.7
Profit before taxes
excluding non-recurring
items 1.4 1.4 1.0 1.3 2.3
Profit for the period 0.8 1.1 0.5 5.9 10.0
Earnings per share, EUR 0.12 0.18 0.08 0.92 1.60
CHANGES IN GROUP STRUCTURE AND CORPORATE TRANSACTIONS
Maritim Food AS, which is a Norwegian subsidiary of the Lännen Tehtaat Group,
and Cinvest AS, which was the minority owner of fish-processing company
Sandanger AS, agreed a deal at the end of June, under which Cinvest AS's 49%
holding in Sandanger AS was transferred to the ownership of Maritim Food AS. The
acquisition cost of these minority shares was approximately EUR 1.2 million.
Following this, Maritim Food AS now owns the entire share capital of Sandanger
AS. The new ownership arrangement allow Maritim Food to benefit more effectively
from the synergies and to further develop the business as part of the Maritim
Food group.
NET SALES AND PROFIT
April-June:
Net sales from the continuing operations in April-June came to EUR 65.5 (101.0)
million, a decrease of 35% on the same quarter in 2008. The year-on-year drop in
second-quarter net sales was mainly the result of a drop in grain and oilseed
market prices.
The second-quarter operating profit from the continuing operations, excluding
non-recurring items, was EUR 1.6 (1.8) million. In the Frozen Foods and
Vegetable Oils businesses, the operating profit was up on the first-quarter
figure and also improved year-on-year. In the Seafood business and in Grain
Trading, the operating profit improved on the first quarter but was down
year-on-year. In the Other Operations segment, the operating profit was about
the same as a year earlier.
January-June:
Continuing operations
Net sales from the continuing operations for January-June amounted to EUR 130.2
(191.9) million, a year-on-year drop of 32%.
The January-June operating profit from the continuing operations, excluding
non-recurring items, was EUR 0.9 (2.3) million. The operating profit includes
the share of the profits of associated companies, which, excluding non-recurring
items, totalled EUR 0.4 (0.5) million. Non-recurring items totalled EUR -0.5
(4.9) million and concerned the sale of the Seafood business's Kerava property
in 2009. The non-recurring items for the same period in 2008 comprised EUR 4.9
million in EU sugar reform compensation recorded for the associated company
Sucros Ltd.
Financial income and expenses from the continuing operations totalled EUR +0.2
(-1.1) million. This figure includes valuation items of EUR +0.5 (+0.2) million
with no cash flow implications. The financial expenses also include EUR -0.3
(-0.4) million as the share of Avena Nordic Grain's profit attributable to the
Avena employee shareholders.
Profit before taxes from the continuing operations was EUR 0.6 (6.1) million.
Profit before taxes, excluding non-recurring items, was EUR 1.0 (1.3) million.
The continuing operations' profit for the period came to EUR 0.5 (5.9) million,
and the earnings per share amounted to EUR 0.08 (0.92).
Discontinued operations
The January-June 2008 income statement included the share of the profit of the
associated company Suomen Rehu under discontinued operations. The non-current
assets held for sale in the balance sheet figures for January-June 2009 include
Seafood's Kerava property, while the figure for the same period in 2008 included
the assets of Frozen Foods' jams and marmalades business.
The profit for the period from discontinued operations came to EUR 0.0 (0.4)
million.
Profit for the period
The profit for the period from both the continuing and discontinued operations
came to a total of EUR 0.5 (6.3) million, and the earnings per share amounted to
EUR 0.08 (0.98). The profit for the period from both the continuing and
discontinued operations, excluding non-recurring items, came to a total of EUR
0.9 (1.4) million, and the earnings per share amounted to EUR 0.14 (0.21).
FINANCING AND BALANCE SHEET
The consolidated balance sheet continued to strengthen in the second quarter and
the Group is now debt-free. Both the financing situation and liquidity are at a
good level.
The cash flow from operating activities in January-June after interest and taxes
amounted to EUR 21.2 (17.5) million. The impact of the change in working capital
was EUR 17.6 (14.6) million. The net cash flow from investing activities was EUR
-11.1 (1.0) million, of which EUR -9.0 (4.0) million was the investment of
liquid assets in short-term fixed income funds. The cash flow from financing
activities came to EUR -11.9 (-16.5) million, and this included EUR -5.3 (-5.6)
million in dividend payments.
At the end of the period, the Group had EUR 10.1 (23.4) million in
interest-bearing liabilities and EUR 21.0 (11.3) million in liquid assets. Net
interest-bearing liabilities totalled EUR -10.9 (12.1) million. The consolidated
balance sheet total stood at EUR 170.7 (183.9) million. At the end of June,
equity totalled EUR 130.7 (128.3) million and the equity ratio was 76.7%
(69.7%). Commercial papers issued for the Group's short-term financing stood at
a total value of EUR 3.0 (18.0) million at the end of June. The Group's
short-term liquidity over the next few years is secured with committed credit
facilities; a total of EUR 25 (25) million was available in credit at the end of
June. No credit facilities were used during the review period.
INVESTMENT
Gross investment in non-current assets in January-June came to EUR 1.5 (3.8)
million.
PERSONNEL
The average number of personnel in the continuing operations during January-June
was 655 (746). The number of personnel in Frozen Foods was 188 (229), in the
Seafood business 396 (440), in Vegetable Oils 34 (35), in Grain Trading 29 (30)
and in Other Operations 10 (13). The personnel at Apetit Suomi Oy have been
divided between Frozen Foods and Seafood in proportion to the service fees.
Like-for-like net sales in Frozen Foods, excluding the sale of jam and marmalade
products, grew by 3% in the second quarter, compared with the previous year's
figure. Sales were up substantially in the retail sector and in the hotel,
restaurant and catering sector. Retail frozen food sales were up by about 6%.
This growth was attributable to the increase in volume and average price. Among
these retail product groups, sales of frozen vegetables and pizzas did extremely
well, and growth was also good in frozen potato products. Sales in the hotel,
restaurant and catering sector were up by almost 10%, while sales to the food
industry and exports were down, year-on-year.
Frozen Foods' operating profit improved on the previous year's figure as a
result of higher productivity, centralisation of production and more efficient
operations. Introduction of the new enterprise resource planning system in
Frozen Foods at the start of May proceeded smoothly.
Like-for-like net sales in Frozen Foods for January-June were up on the previous
year by about 5%. Sales growth in retail frozen foods was approximately 8%. The
good sales growth in frozen mixed vegetables and root vegetables for soups
continued, and sales of the various new products increased. Examples of
extremely successful recent product launches include potatoes and chopped
vegetables for soups, a range of family soups, and lactose-free spinach soup.
Sales in the hotel, restaurant and catering sector were up by about 7%, while
sales to the food industry and exports were down, year-on-year.
The January-June operating profit of Frozen Foods, excluding non-recurring
items, was up on the previous year's figure, in line with expectations.
The number of Frozen Foods personnel in January-June was 188 (229). The
reduction in personnel was primarily a result of the sale of the jams and
marmalades business in autumn 2008, the discontinuation of the Turku factory at
the end of 2008, and the centralisation of functions at Säkylä.
Investment during January-June totalled EUR 1.2 (2.6) million. This was mainly
the completion of the investment arising from the centralisation of production
at Säkylä and the renewal of the enterprise resource planning system and the
contract grower data system.
The second-quarter net sales of the Seafood business were down by 21% on the
figure for the same quarter a year earlier. This drop in net sales occurred in
both in Finland and in operations abroad.
The second-quarter operating result, excluding non-recurring items, was up on
the first-quarter figure but down year-on-year, and was recorded as a loss. In
Seafood's foreign operations, the operating result was down year-on-year but
improved considerably on the first-quarter figure. In Seafood's Finnish
operations, the operating result was almost unchanged from a year earlier.
Non-recurring items for January-June, totalling EUR -0.5 (0.0) million, were
from the sale of the Kerava property.
The drop in Seafood's net sales in Finland was a result of the reduction in
Kalatori service counters, the focus of consumer demand on campaign-price
products and lower added value fillet products, and also due to tougher
competition in consumer-packaged retail products.
The strategy for the Finnish-based Seafood operations was updated in the spring.
One of the profit improvement measures decided during the second quarter was to
improve the efficiency of logistics operations. In June, Apetit Kala Oy and
Swanline Oy agreed on a transfer of business, whereby the picking and dispatch
functions at Apetit Kala Oy's Kerava logistics centre were transferred to
logistics service operator Swanline Oy. The transfer occurred on 13 July 2009,
and as part of the business transfer 21 employees at Kerava also transferred to
Swanline Oy.
In the Finnish-based Seafood business the decision was also taken to sell the
Kerava property. A deal was agreed by Apetit Kala Oy in June, under which the
Kerava property would be sold to a Finnish industrial operator. The aim of the
property sale and the transfer of the logistics functions is to achieve improved
profits of around EUR 0.4 million annually. This figure is not expected to be
achieved in full until 2010. The sale will also release a significant amount of
tied-up capital. Non-recurring expenses of approximately EUR 0.5 million on the
property sale were recognised in the second-quarter operating result of the
Seafood business.
In Seafood's foreign operations, the year-on-year decrease in second-quarter
euro-denominated net sales was to a marked extent attributable to the weakening
of the Norwegian and Swedish currencies. Calculated in local currencies, the net
sales of Seafood's foreign operations were down by about 10%. This was a result
of the reduced sales of fresh fish products and processed fish products.
Shellfish sales continued to grow.
At the end of June, Maritim Food AS agreed a deal with Cinvest AS, the minority
owner of fish-processing company Sandanger AS, under which Cinvest AS's 49%
holding in Sandanger AS has been transferred to the ownership of Maritim Food
AS. The acquisition cost of these minority shares was approximately EUR 1.2
million. The new ownership arrangements will allow the Maritim Food group to
benefit more effectively from the synergies and to further develop the business
as part of the Maritim Food group.
Seafood's net sales for January-June were down by 17% on the same quarter in
2008. Its operating result, excluding non-recurring items, was also down and was
recorded as a loss.
The number of personnel in the Seafood business totalled 396 (440). The
reduction in personnel occurred mainly in Seafood's Finnish-based operations. To
bring production and costs into line, both blue-collar and white-collar
personnel at the Kuopio production plant were laid off for one to two weeks
during the review period.
As a result of renewing the management system in the Seafood business at the
start of the year, the directors of the Finnish-based processed fish products
business and concept business and the director of Seafood's business in Norway
and Sweden have been reporting directly to the CEO, Matti Karppinen. With the
transfer of Sandanger AS in full to Maritim Food AS, Jan Brevik was appointed
Managing Director of Sandanger AS at the start of July. He also continues as
Managing Director of Maritim Food AS and Maritim Food Sweden AB.
Investment in the Seafood business totalled EUR 0.1 (1.0) million.
Second—quarter net sales in the Vegetable Oils business decreased by 24% on the
same quarter in 2008. This drop in net sales was the result of significantly
lower market prices and smaller delivery volumes than a year earlier. Delivery
volumes fell both in sales of protein feeds and in vegetable oil exports. In
Finland, vegetable oil sales continued to be stable.
Operating profit in the Vegetable Oils business improved significantly
year-on-year. The improved result was a consequence of success in managing
changes in market prices and in developing processes, operating methods and the
organisation in general, and the good oil yield.
Net sales in January-June were down by 17% year-on-year, while operating profit
improved significantly on the previous year's figure.
In the current season the area of Finnish rapeseed under cultivation grew from
65,000 hectares to 80,000 hectares. With good growing conditions, the Finnish
oilseed crop is expected to be significantly better than the previous season's
crop. This will reduce the need to import oilseeds.
The number of personnel in the Vegetable Oils business was 34 (35). To bring
production and costs into line, the Vegetable Oils personnel were laid off for
about one week during January-June.
Investment in the Vegetable Oils business consisted of minor expenditure on
replacements, totalling EUR 0.1 (0.1) million.
Second-quarter net sales in Grain Trading were down by 52% year-on-year. This
was a result of the significantly lower market prices and smaller sales volumes
than a year earlier. Sales in Finland were up on the previous year's figure.
Trade with third countries and the overall level of exports were down
year-on-year. Despite the drop in net sales, the second-quarter operating profit
reached a good level, improving significantly on the first-quarter figure.
Net sales in January-June were down by 51% year-on-year, and the operating
profit fell short of the record high of a year earlier. The internal efficiency
of operations was improved, and fixed costs were below those for January-June
2008.
In the season just ended there was a plentiful supply of grain on the world
market as a result of the good crops and slightly lower demand, which meant that
prices fell in comparison with a year earlier. The demand and supply situation
for soybeans continued to be tight, and prices for the 2008 crop have remained
high. The new grain crop is currently expected to be good in the most important
production regions. With no major crop problems likely and with stocks having
risen since 2008, the prices for the new crop have remained low.
The number of personnel in the Grain Trading business totalled 29 (30).
Investment in Grain Trading in January-June amounted to EUR 0.1 (0.0) million
and was for the renewal of its enterprise resource planning system. This system
was introduced during the second quarter.
Other Operations comprise the service company Apetit Suomi Oy, Group
Administration, items not allocated under any of the business segments, and the
associated companies Sucros Ltd and Ateriamestarit Oy. The cost impact of the
services produced by Apetit Suomi Oy is an encumbrance on the operating result
of the Group's businesses in proportion to the use of the services.
In the second quarter, net sales from the sale of services were at the previous
year's level. The reduction in January-June net sales was a result of the
discontinuation of service fees for sales and product development when they were
transferred from Apetit Suomi Oy to the business areas half way through the
January-June period in 2008.
The January-June operating profit, excluding non-recurring items, totalled EUR
-1.6 (-1.8) million. This figure includes EUR +0.4 (+0.5) million as the share
of the profits of associated companies.
Investment in Other Operations totalled EUR 0.0 (0.1) million.
DECISIONS OF THE ANNUAL GENERAL MEETING
Lännen Tehtaat plc's Annual General Meeting of 2 April 2009 adopted the parent
company's financial statements and the consolidated financial statements, and
discharged the members of the Board of Directors and of the Supervisory Board
and the Chief Executive Officer from liability for the financial year 2008.
Dividend distribution
The Annual General Meeting decided to pay a dividend of EUR 0.85 per share on
the profit for the financial year 2008. The dividend was paid on 17 April 2009.
Amendments to the Articles of Association
The Annual General Meeting approved the Board's proposals for amending article 2
of the Articles of Association, on the company's sphere of operations, and
article 10, paragraph 1, on the invitation to the AGM.
Authorisations to issue shares
The Annual General Meeting authorised the Board of Directors to decide on
issuing new shares and on the transfer of Lännen Tehtaat plc shares held by the
company, in one or more lots as a share issue of a total of no more than 761,757
shares. The share issue authorisation covers all of the Lännen Tehtaat plc
shares already in the company's possession, i.e. 130,000 shares. The maximum
number of new shares that can be issued is 631,757.
The authorisation is valid until the next Annual General Meeting.
The decisions of the Annual General Meeting are given in more detail in the
stock exchange release dated 2 April 2009 and in the Interim Report published on
7 May 2009.
USE OF THE AUTHORISATIONS GRANTED TO THE BOARD OF DIRECTORS
Authorisations to issue shares
The Board of Directors had not yet exercised the authorisation granted to it to
issue new shares or to transfer Lännen Tehtaat plc shares held by the company.
SHARES AND TRADING
The number of Lännen Tehtaat plc shares traded on the stock exchange during the
January-June was 692,388 (762,832), representing 11.0% (12.1%) of the total
number of shares. The euro-denominated share turnover was EUR 8.4 (10.9)
million. The highest share price quoted was EUR 14.43 (16.46) and the lowest EUR
11.90 (13.20). The average price of shares traded was EUR 12.17 (14.30).
At the end of June, the market capitalisation totalled EUR 77.0 (94.8) million.
FLAGGING ANNOUNCEMENTS
On 28 May 2009, Nordea Investment Fund Company Finland Ltd announced that on 27
May 2009 the level of ownership in Lännen Tehtaat plc held by investment funds
managed by Nordea Investment Fund Company Finland Ltd rose to over 5%; the
proportion of the votes and share capital at the time of flagging was 5.46%, or
345,325 shares.
SALE OF SHARES IN JOINT ACCOUNT
On 23 February 2009, a total of 51,910 Lännen Tehtaat plc shares that were in
the joint book-entry account were sold in trading on the NASDAQ OMX Helsinki Ltd
exchange. The sale was based on the decision of the Lännen Tehtaat plc Annual
General Meeting of 29 March 2007 to sell, on behalf of the respective holders,
the company's shares held in the joint book-entry account and not transferred to
the book-entry system.
The assets from the sale, less the expenses of notification and selling, were
deposited with the State Provincial Office of Western Finland. By presenting a
share certificate to the State Provincial Office, holders of shares that were in
the joint account, or other holders of the right, are entitled to a proportion
of the income from the share sale that corresponds to the shares they held. The
assets from the sale of the shares, less expenses, and the dividends for
2005-2007 come to EUR 15.69 per share. The assets are redeemable on or before 17
March 2019.
GOVERNING BODIES
At its organisational meeting on 17 April 2009, Lännen Tehtaat plc's Supervisory
Board elected Helena Walldén as its chairman and Juha Nevavuori as its deputy
chairman.
The Supervisory Board elected the following as members of the company's Board of
Directors: Harri Eela, Heikki Halkilahti, Aappo Kontu, Matti Lappalainen, Hannu
Simula, Soili Suonoja and Tom v. Weymarn. Tom v. Weymarn was elected chairman of
the Board of Directors and Matti Lappalainen was elected deputy chairman.
SEASONALITY OF OPERATIONS
In accordance with the IAS 2 standard, the historical cost of inventories
includes a systematically allocated portion of the fixed production overheads.
In production that focuses on seasonal crops, raw materials are processed into
finished products mainly during the final quarter, which means that the
inventory volumes and their balance-sheet values are at their highest at the end
of the year. Since the entry of the fixed production overheads included in the
historical cost as an expense item is deferred until the time of sale, most of
the Group's annual profit is accrued in the final quarter. The seasonal nature
of operations is most marked in Frozen Foods and in the associated company
Sucros, due to the link between production and the crop harvesting season.
Apetit Kala's sales peak at weekends and on seasonal holidays. As Easter can
take place in either the first or the second quarter, this can affect the
comparability of Seafood's net sales and profit from one year to the next. A
major proportion of the entire year's profit in the Seafood business depends on
the success of Christmas sales.
Net sales in Grain Trading vary from one year and quarter to the next, being
dependent on the demand and supply situation and on the price levels
domestically and on other markets.
SHORT-TERM RISKS AND UNCERTAINTIES
The most significant short-term risks for the Lännen Tehtaat Group are: the
effects of the economic downturn on demand from consumers and customers; the
solvency of customers and the delivery performance of suppliers; the quantity
and quality of Finnish vegetable, grain and oilseed crops; the management of raw
material price changes and currency risks; changes in the operating environments
of the Group's businesses and in customerships; and corporate acquisitions and
the subsequent integration processes.
SIGNIFICANT EVENTS SINCE THE END OF THE REVIEW PERIOD
Lännen Tehtaat has decided to combine the business operations of Avena Nordic
Grain Oy and Mildola Oy. The aim of this is to combine the commodity market
expertise of Avena Nordic Grain with Mildola's expertise in oil milling and to
achieve synergy benefits in purchasing, sales, logistics and administration.
This arrangement is explained in more detail in a separate stock exchange
release.
ASSESSMENT OF 2009
The net sales from Lännen Tehtaat's continuing operations will be affected
particularly by changes in the price level of grains and oilseeds. Based on
grain and oilseed prices in the first half of the year, the Group's net sales
for the third quarter and for the entire year are expected to be below the
corresponding figures for 2008.
The focus of consumer demand on lower priced basic products as a result of the
economic downturn is expected to have both negative and positive effects on the
profitability of the Group's businesses. Thanks to the measures taken to develop
the Group's different businesses, the third-quarter operating profit from the
continuing operations, excluding non-recurring items, is estimated to be at
about the same level as in 2008.
On the basis of the profit performance for the first half-year, the full-year
operating profit, excluding non-recurring items, from the Group's continuing
operations is expected to be at around the previous year‘s level. Due to the
seasonal nature of the Group's operations, a high proportion of the annual
profit is accrued in the final quarter of the year.
The need for investment in non-current assets is significantly less than in
2008.
CONSOLIDATED INCOME STATEMENT
EUR million 4-6/ 4-6/ 1-6/ 1-6/ 1-12/
2009 2008 2009 2008 2008
Continuing operations
Net sales 65.5 101.0 130.2 191.9 349.1
Other operating income 0.3 0.3 0.7 0.6 3.8
Operating expenses -63.8 -98.7 -128.2 -188.1 -342.8
Depreciation -1.4 -1.3 -2.6 -2.6 -5.1
Impairments 0.0 - 0.0 - -0.2
Share of profits of
accociated companies 0.4 0.5 0.4 5.4 9.1
Operating profit 1.1 1.8 0.4 7.2 13.9
Financial income and expenses -0.1 -0.4 0.2 -1.1 -3.3
Profit before taxes 1.0 1.4 0.6 6.1 10,7
Income taxes -0.2 -0.3 -0.1 -0.3 -0.7
Profit for the period,
continuing operations 0.8 1.1 0.5 5.9 10.0
Discontinued operations
Profit for the period,
discontinued operations - 0.1 - 0.4 7.1
Profit for the period 0.8 1.3 0.5 6.3 17.1
Attributable to
Equity holders of the parent 0.7 1.3 0.5 6.2 17.0
Minority interests 0.1 0.0 - 0.1 0.1
Basic and diluted earnings per
share, calculated of the profit
attributable to the shareholders
of the parent company, EUR
STATEMENT OF COMPREHENSIVE INCOME
EUR million 4-6/ 4-6/ 1-6/ 1-6/ 1-12/
2009 2008 2009 2008 2008
Profit for the period 0.8 1.3 0.5 6.3 17.1
Other comprehensive income
Cash flow hedges -0.3 0.4 0.6 0.0 -1.6
Taxes related to cash flow hedges 0.1 -0.1 -0.2 0.0 0.4
Translation differences -0.1 0.0 0.6 -0.1 -2.1
Total comprehensive income 0.6 1.6 1.5 6.2 13.8
Attributable to
Equity holders of the parent 0.5 1.6 1.5 6.1 13.8
Minority interests 0.1 0.0 - 0.1 0.0
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
EUR million 30 June 30 June 31 Dec
2009 2008 2008
ASSETS
Non-current assets
Intangible assets 6.1 5.5 5.3
Goodwill 6.4 7.1 5.9
Tangible assets 38.3 43.7 43.5
Investment in associated companies 25.4 45.2 25.0
Available-for-sale investments 0.1 0.1 0.1
Receivables 1.7 3.3 3.1
Deferred tax assets 1.5 1.2 1.4
Non-current assets total 79.4 106.1 84.3
Current assets
Inventories 42.0 40.4 55.1
Receivables 24.4 25.3 38.7
Income tax receivable 0.3 0.1 0.7
Financial assets at fair value
through profits 12.9 4.0 3.8
Cash and cash equivalents 8.1 7.2 9.9
Current assets total 87.7 77.1 108.0
Non-current assets classified
as held for sale 3.6 0.8 -
Total assets 170.7 183.9 192.3
EUR million 30 June 30 June 31 Dec
2009 2008 2008
EQUITY AND LIABILITIES
Equity attributable to the equity
holders of the parent company 130.7 127.7 135.1
Minority interest - 0.6 0.5
Total equity 130.7 128.3 135.6
Current liabilities
Short-term financial liabilities 6.5 18.5 10.7
Income tax payable 1.1 1.3 0.7
Trade payables and other liabilities 24.7 26.8 36.1
Current liabilities total 32.3 46.5 47.4
Total liabilities 40.0 55.7 56.8
Liabilities directly associated with
non-current assets classified as held for sale - 0.0 -
Total equity and liabilities 170.7 183.9 192.3
CONSOLIDATED STATEMENT OF CASH FLOW
EUR million 1-6/ 1-6/ 1-12/
2009 2008 2008
Net profit for the period 0.5 6.3 17.1
Adjustments, total 4.1 -1.7 -8.5
Change in net working capital 17.6 14.6 -5.1
Interests paid -1.1 -1.2 -2.4
Interests received 0.4 0.3 0.4
Taxes paid -0.3 -0.9 -1.8
Net cash flow from operating activities 21.2 17.5 -0.4
Investments in tangible and intangible assets -1.5 -3.8 -8.1
Proceeds from sales of tangible
and intangible assets 0.4 0.1 3.0
Acquisition of subsidiaries deducted by cash - -0.4 -0.4
Transactions with minority -1.2 1.5 1.5
Acquisition of associated companies - -0.4 -0.4
Proceeds from sales of associated companies - - 27.0
Purchases of other investments -9.0 - -14.0
Proceeds from sales of other investments - 4.0 18.1
Dividends received from investing activities 0.2 - 3.6
Net cash flow from investing activities -11.1 1.0 30.3
Repayments of short-term loans -6.5 -9.8 -18.4
Repayments of long-term loans -0.2 -0.5 -0.1
Payment of financial lease liabilities 0.0 -0.1 -0.1
Purchases of own shares - -0.4 -1.0
Dividends paid to minority - -0.3 -0.3
Dividends paid -5.3 -5.3 -5.3
Cash flows from financing activities -11.9 -16.5 -25.1
Net change in cash and cash equivalents -1.7 2.2 4.8
Cash and cash equivalents at the
beginning of the the period 9.9 5.1 5.1
Cash and cash equivalents at the
end of the period 8.1 7.2 9.9
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
EUR million
A = Share capital
B = Share premium account
C = Net unrealised gains
D = Other reserves
E = Own shares
F = Translation differences
G = Retained earnings
H = Attributable to equity holders of the parent company
I = Minority interest
J = Shareholders' equity total
A B C D E F G H I J
Shareholders'
equity at
1 Jan 2008 12.6 23.4 0.4 7.2 -0.8 0.1 84.5 127.3 0.7 128.0
Transactions with
minority - - - - - - 0.4 0.4 - 0.4
Dividend
distribution - - - - - - -5.3 -5.3 -0.3 -5.6
Other changes - - - - -0.4 - -0.4 -0.8 - -0.8
Total comprehensive
income - - 0.0 - - -0.1 6.2 6.1 0.1 6.2
Shareholders'
equity at
30 June 2008 12.6 23.4 0.4 7.2 -1.2 0.0 85.3 127.6 0.6 128.3
Shareholders'
equity at
1 Jan 2009 12.6 23.4 -0.8 7.2 -1.8 -1.9 96.6 135.1 0.5 135.6
Transactions with
minority - - - - - - -0.7 -0.7 -0.5 -1.2
Dividend
distribution - - - - - - -5.3 -5.3 - -5.3
Total comprehensive
income - - 0.4 - - 0.6 0.5 1.6 - 1.6
Shareholders'
equity at
30 June 2009 12.6 23.4 -0.4 7.2 -1.8 -1.3 91.0 130.7 - 130.7
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The interim report has been prepared in accordance with IAS 34, Interim
Financial Reporting, as adopted by the EU. The accounting policies adopted are
consistent with those of the Group's annual financial statements for the year
ended 31 December 2008.
The amendment of IFRS 8 will not change the information shown in these segments
because the Group's earlier segment-based reporting was based on the Group's
internal reporting structures. The amendment of IAS 1 has an impact on the
presentation method of the profit and loss account and the changes in equity.
SEGMENT INFORMATION
A Frozen Foods
B Seafood
C Vegetable Oils
D Grain Trading
E Other Operations
F Continuing operations total
G Discontinued operations
H Total
Net sales
EUR million 1-6/ 1-6/ 1-12/
2009 2008 2008
Finland 93.5 100.3 209.9
Scandinavia 21.3 39.7 65.8
Baltic countries and Russia 1.8 3.7 7.6
Other countries 13.5 48.1 65.9
Discontinued operations total 130.2 191.9 349.1
DISCONTINUED OPERATIONS
The sale of the majority holding of 51% in Suomen Rehu Ltd was completed at the
start of June 2007, when Suomen Rehu and its subsidiaries were transferred to
Hankkija-Maatalous Oy. Lännen Tehtaat plc and SOK subsidiary Hankkija-Maatalous
Oy signed an agreement on 1 September 2008, transferring the remaining 49% of
shares owned by Lännen Tehtaat in Suomen Rehu Ltd to Hankkija-Maatalous Oy.
Lännen Tehtaat recognized a non-recurring tax-free profit of EUR 6.6 million for
the sale of these minority shares in its financial performance for the 2008
third quarter.
NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE
Non-current assets classified as held for sale in the reporting period belong to
Apetit Kala Oy's logistics functions located in Kerava that will be sold during
the fourth quarter in 2009.
Non-current assets classified as held for sale in the comparison period belong
to Apetit Pakaste Oy's jams and marmalades business that was sold to Saarioisten
Säilyke Oy in autumn 2008.
IMPAIRMENT TEST
An impairment test has been performed in Seafood's domestic operations based on
the updated strategy. The impairment test did not result in an impairment of
assets.
KEY INDICATORS
30 June 30 June 31 Dec
2009 2008 2008
Gross investments in non-current
assets, EUR million,
continuing operations 1.5 3.8 8.1
Corporate acquisitions and other
share purchases, EUR million,
continuing operations 1.2 0.4 0.5
Average number of personnel,
continuing operations 655 746 755
Average number of shares, 1 000 pcs 6 188 6 249 6 221
The key figures in this interim financial report are calculated with same
accounting principles than presented in year 2008 annual financial statements.
CONTINGENT LIABILITIES
EUR million 30 June 30 June 31 Dec
2009 2008 2008
Mortgages given for debts
Real estate mortgages 7.7 9.5 8.6
Corporate mortgages - 1.3 -
Guarantees 10.0 10.1 10.8
Non-cancellable other leases,
minimum lease payments
Real estate leases 4.8 4.4 5.1
Other leases 0.7 0.7 0.9
Lännen Tehtaat has investment commitments in Frozen Foods a total of EUR 0.6
million as of 30 June 2009.
CHANGES IN TANGIBLE ASSETS
EUR million 1-6/ 1-6/ 1-12/
2009 2008 2008
Book value at the beginning of the period 43.5 43.5 43.5
Acquisitions 0.8 2.9 5.9
Disposals and transfers to assets
classified as held for sale -4.1 -0.2 -0.2
Depreciations and impairments -2.3 -2.4 -5.3
Other changes 0.4 -0.1 -0.5
Book value at the end of the period 38.3 43.7 43.5
TRANSACTIONS WITH ASSOCIATED COMPANIES AND JOINT VENTURES
EUR million
1-6/ 1-6/ 1-12/
2009 2008 2008
Sales to associated companies 0.2 8.8 13.4
Sales to joint ventures 3.9 4.0 8.5
Purchase from associated companies 1.3 0.3 0.7
Purchase from joint ventures 0.0 0.1 0.3
Long-term receivebles from associated companies 0.0 2.6 2.7
Trade receivables and other
receivables from associated companies 1.5 2.7 1.6
Trade receivables and other
receivables from joint ventures 0.6 0.8 0.6
Trade payables and other liabilities
to associated companies 0.0 0.1 0.0
LÄNNEN TEHTAAT PLC
Board of Directors
Further information: CEO Matti Karppinen, tel. +358 10 402 4001
Copies to:
NASDAQ OMX Helsinki Ltd
Principal media
www.lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE 2 July 2009, 9.10 a.m.
MARITIM FOOD AS ACQUIRED REMAINING SHARES OF SANDANGER AS, JAN BREVIK APPOINTED
MANAGING DIRECTOR OF SANDANGER
Maritim Food AS, which is the Norwegian subsidiary of the Lännen Tehtaat Group,
and Cinvest AS, which is the minority owner of fish-processing company Sandanger
AS, have agreed a deal by which Cinvest's 49% holding in Sandanger AS is
transferred to the ownership of Maritim Food AS. The acquisition cost of these
minority shares was approximately EUR 1.2 million.
Jan Brevik has been appointed Managing Director of Sandanger AS as of 1 July
2009. He will continue as Managing Director of Maritim Food AS and Maritim Food
Sweden AB. As a result of this organisational change, non-recurring expenses of
approximately EUR 0.1 million will be recognised in the third-quarter result of
the Seafood business. The new ownership arrangements will allow the Maritim Food
group to benefit more effectively from the synergies and to further develop the
business as part of Maritim Food group.
Sandanger AS operates a fish-processing plant at Gjerdsvika in western Norway.
Its main product groups are fresh fish products, Norwegian-style canned fish
products, and processed fish products such as terrines, fish puddings and
fishcakes. The company's brand name is Sunnmöre. The product range includes not
only consumer products but also products for the hotel, restaurant and catering
sector. Besides its sales on the Norwegian market, Sandanger AS also exports a
certain amount of its products.
Sandanger AS's net sales in 2008 amounted to EUR 12 million, and its operating
profit was EUR 0.5 million. The company employs 63 people.
LÄNNEN TEHTAAT PLC
Matti Karppinen
CEO
Further information: Matti Karppinen, CEO, tel. +358 10 402 4001
Copies to:
NASDAQ OMX Helsinki Ltd
Main media
www.lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE 23 June 2009, 13.15 p.m.
LÄNNEN TEHTAAT IMPROVES LOGISTICS EFFICIENCY OF ITS SEAFOOD BUSINESS IN FINLAND
An improvement in the efficiency of logistics functions represents a further
step in the efficiency improvements being implemented by Apetit Kala Oy, a
subsidiary of Lännen Tehtaat plc. Apetit Kala Oy and Swanline Oy have agreed on
a transfer of business, whereby the picking and dispatch functions at Apetit
Kala Oy's Kerava logistics centre will be transferred on 13 July 2009 to
logistics service operator Swanline Oy. As part of the business transfer, 21
employees at Kerava will also transfer to Swanline Oy. Apetit Kala Oy also took
the decision to sell the Kerava property, and this has now been sold to a
Finnish industrial operator.
With the property sale and the transfer of the logistics functions, the aim is
to achieve improved profits of around EUR 0.4 million annually, this first being
achieved in full during 2010. The sale will also release a significant amount of
tied-up capital. Non-recurring expenses of approximately EUR 0.5 million on the
property sale will be recognised in the second-quarter operating result of the
Seafood business.
Apetit Kala Oy develops and produces fresh fish products at its plant in Kuopio
and sells fish products and other fresh products at its Kalatori service
counters, which operate under the shop-in-shop principle in the largest
supermarkets. The company's brand name is Apetit. Apetit Kala's main product
groups are cold- and hot-smoked, raw pickled and marinated fish products. The
main ingredients used by the company are farmed rainbow trout and salmon, and
Finnish and Canadian whitefish.
LÄNNEN TEHTAAT PLC
Matti Karppinen
CEO
Further information: Matti Karppinen, CEO, tel. +358 10 402 4001
Copies to:
NASDAQ OMX Helsinki Ltd
Main media
www.lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE ANNOUNCEMENT 28 May 2009 at 10;35 am
ANNOUNCEMENT PURSUANT TO CHAPTER 2, SECTION 10 OF THE SECURITIES MARKETS ACT
Nordea Rahastoyhtiö Suomi Oy, business ID 1737785-9, has today according to the
Securities Markets Act chapter 2, section 9, notified that the ownership of the
Funds managed by Nordea Rahastoyhtiö Suomi Oy in Lännen Tehtaat plc has risen
above 5% and is 345.325 shares. This corresponds to 5,46% of Lännen Tehtaat's
share capital and voting rights. The ownership has changed on 27 May 2009.
LÄNNEN TEHTAAT PLC
Riitta Jaakkola
Financial Manager
For additional information:
Lännen Tehtaat plc, Matti Karppinen, CEO, tel +358 10 402 00
Distribution:
NASDAQ OMX Helsinki Ltd
Main media
www.lannen.fi
LÄNNEN TEHTAAT PLC Interim report 7 May 2009, 8.30 am
INTERIM REPORT 1 January - 31 March 2009
- Equity ratio increased to 76.5% (64.0%); the company is debt-free.
- Cash flow from operating activities was EUR +8.1 (-7.4) million.
- Consolidated net sales from continuing operations totalled EUR 64.7 (90.9)
million; most of the decrease was in Grain Trading.
- Operating profit from continuing operations, excluding non-recurring items,
came to EUR -0.7 (0.6) million; non-recurring items totalled EUR 0.0 (4.8)
million.
- Profit before taxes from continuing operations, excluding non-recurring
items, was EUR -0.4 (-0.1) million.
- Profit for the period came to EUR -0.3 (5.0) million, and earnings per share
amounted to EUR -0.04 (0.78).
The information in this interim report has not been audited.
Matti Karppinen, CEO:
“The Group's financial position and balance sheet strengthened further in the
first quarter. Our equity ratio rose to 76.5 per cent. Consolidated profit was
below that of a year ago, which was expected. The fall in profit was
attributable above all to the drop in net sales in Grain Trading and the impact
of the weakened Norwegian and Swedish currencies on raw material costs. Positive
factors supporting the profit level, however, were the improvements in
productivity and cost-efficiency in most of the businesses, and the good sales
and successful product launches in Frozen Foods.
”During the first quarter we closely monitored the downturn in the economy, made
an assessment of the impact on the behaviour of consumers and customers and
sought to forecast the impact of these changes on our business activities. The
development of management, functions and processes within the Group companies
has continued, with the aim of boosting cash flow and adding to strategic
agility.
”From the start of the year, Seafood's business units have been reporting
directly to the Group CEO. Under Group management control, Seafood's Finnish and
foreign business management models and reporting practices have been reshaped,
which has improved the manageability, transparency and predictability of
operations.
”Work continued on achieving the Group's strategic growth target. The strong
financial position and balance sheet provide a sound foundation for further
development of the Group.”
KEY FIGURES ILLUSTRATING PERFORMANCE, EUR million
Continuing operations Jan-Mar 2009 Jan-Mar 2008
Net sales 64.7 90.9
Operating profit -0.7 5.4
Operating profit, excluding non-recurring items -0.7 0.6
Profit before taxes -0.4 4.7
Profit before taxes, excluding non-recurring items -0.4 -0.1
Profit for the period -0.3 4.7
Earnings per share, EUR -0.04 0.74
NET SALES AND PROFIT
Continuing operations
Net sales from the continuing operations in January-March totalled EUR 64.7
(90.9) million, a decrease of 29% on the same quarter in 2008. Most of this
decrease was in Grain Trading, where the level of market prices in the first
quarter was significantly below that for the same period in 2008, and volumes
were also considerably lower.
The operating profit from the continuing operations, excluding non-recurrent
items, was EUR -0.7 (0.6) million. The non-recurring items totalled EUR 0.0
(4.8) million. The operating profit includes the share of the profits of
associated companies, which, excluding non-recurring items, totalled EUR 0.0
(0.0) million; if non-recurring items are included, the figure is EUR 0.0 (4.9)
million. The first-quarter 2008 comparison figure for the associated companies'
profit comprised the compensation paid as part of the EU's sugar reform, which
was entered as income from non-recurring items.
Financial income and expenses from the continuing operations totalled EUR +0.3
(-0.7) million. This figure includes valuation gains of EUR +0.4 (0.0) million
with no cash flow implications. The financial expenses also include EUR -0.1
(-0.2) million as the share of Avena Nordic Grain's profit attributable to the
Avena employee shareholders.
The profit before taxes was EUR -0.4 (4.7) million. The continuing operations'
profit for the period came to EUR -0.3 (4.7) million, and the earnings per share
amounted to EUR -0.04 (0.74).
Discontinued operations
The share of the profit of the associated company Suomen Rehu is presented under
discontinued operations in the first quarter 2008 figures in the income
statement. In the balance sheet figures for the first quarter of 2008, the
non-current assets held for sale include the assets of the jams and marmalades
business.
The profit for the period from discontinued operations came to EUR 0.0 (0.3)
million.
Profit for the period
The profit for the period from both the continuing and discontinued operations
came to a total of EUR -0.3 (5.0) million, and the earnings per share amounted
to EUR -0.04 (0.78).
FINANCING AND CASH FLOW
The Group's financial position strengthened further and its liquidity remained
at a good level.
The fist-quarter cash flow from operating activities after interest and taxes
amounted to EUR 8.1 (-7.4) million. The impact of the change in working capital
was EUR +6.3 (-7.2) million. The net cash flow from investing activities came to
EUR -0.5 (3.6) million, and cash flow from financing activities came to EUR -8.2
(4.2) million. The net change in cash and cash equivalents was EUR -0.5 (0.4)
million.
At the end of the quarter, the Group had EUR 8.6 (37.8) million in
interest-bearing liabilities and EUR 13.0 (9.5) million in liquid assets. Net
interest-bearing liabilities totalled EUR -4.5 (28.4) million. The consolidated
balance sheet total stood at EUR 178.4 (207.6) million. At the end of the
quarter, equity totalled EUR 136.5 (132.9) million. The equity ratio increased
to 76.5% (64.0%). Commercial papers issued for the Group's short-term financing
totalled EUR 1.0 (32.0) million at the end of the quarter. The Group's financing
over the next few years is secured with committed credit facilities; a total of
EUR 25 (25) million was available in credit at the end of the quarter. No credit
facilities were used during the quarter.
INVESTMENT
Gross investment in non-current assets in the first quarter came to EUR 0.5
(1.3) million.
PERSONNEL
The average number of personnel during the period was 646 (729). The number of
personnel in Frozen Foods was 179 (220), in the Seafood business 394 (431), in
Vegetable Oils 35 (35), in Grain Trading 28 (30) and in Other Operations 10
(13). The personnel at Apetit Suomi Oy have been divided between Frozen Foods
and Seafood in proportion to the service fees.
Like-for-like net sales in Frozen Foods, excluding the sale of jam and marmalade
products, grew by EUR 0.8 million, or 6%. The growth in net sales is
attributable to the increase in volume and in the average price. The net sales
growth was greatest in retail frozen foods, at over 10%. Among these retail
product groups, sales of frozen potato products and frozen ready meals did
extremely well, and growth was also good in frozen vegetables. Sales of basic
products were good in the first quarter, and sales were also boosted by new
products. Examples of extremely successful product launches include potatoes and
chopped vegetables for soups, a range of family soups, and lactose-free spinach
soup. Sales in the hotel, restaurant and catering sector grew by about 6%. Sales
to the food industry were at the level of the first quarter of 2008. Export
sales were down as a result of a reduction in the export of peas.
The operating profit of Frozen Foods, excluding non-recurring items, was at the
level of the first quarter of 2008. Non-recurring items totalled EUR 0.0 (-0.1)
million. The wet autumn meant that some of the Finnish root vegetable crop could
not be harvested. This led to a need for imported raw materials, which increased
Apetit Pakaste's costs. The adverse profit impact of the sale of the jams and
marmalades business and the greater use of imported raw materials was
compensated by the centralising of production and the improved efficiency of
operations.
The start-up of the production transferred from Turku to Säkylä at the end of
2008 and the outsourcing of the finished-product storage facilities and dispatch
operations proceeded successfully.
The number of Frozen Foods personnel in the first quarter was 179 (220). The
reduction in personnel was primarily the result of the sale of the jams and
marmalades business and the discontinuing of the Turku factory towards the end
of 2008, and the centralisation of functions at Säkylä. During the first
quarter, the Frozen Foods personnel were extensively involved in the user
training and testing of the new enterprise resource planning system.
Investment during the quarter totalled EUR 0.4 (0.8) million. This included
completing the investment arising from the centralisation of production at
Säkylä and the renewal of the enterprise resource planning system and the
contract grower data system. These systems will be introduced during the second
quarter of the year.
The net sales of the Seafood business were down by 14% on the figure for the
same quarter a year earlier. The operating profit, excluding non-recurring
items, fell short of the previous year's figure and was negative. Non-recurring
items in the quarter totalled EUR 0.0 (-0.1) million.
The drop in Seafood net sales in Finland was due to the reduction in Kalatori
service counters and because consumer demand was focused particularly on
campaign-priced, low value added fillet products. Profitability improved
considerably in comparison with the same quarter in 2008, but a slightly
negative first-quarter profit was nevertheless posted. The improved level of
profitability was due to an increase in productivity in production and
logistics, and a decrease in fixed costs as a result of strict cost management.
In operations abroad, the decrease in euro-denominated net sales in comparison
with those of a year earlier was especially attributable to the weakening of the
Norwegian and Swedish currencies. Calculated in local currencies, the net sales
of operations abroad were down by about 2%. The net sales of the
krone-denominated Norwegian units showed a year-on-year decline, while the
krona-denominated Swedish unit's net sales were up on the first-quarter 2008
figures, due to the higher sales prices of shellfish products and the volume
growth brought by new customers.
The profitability of operations abroad declined in comparison with that for the
first quarter of 2008. Profit was adversely affected particularly by the rise in
raw material prices caused by exchange-rate fluctuations, which concerned
shellfish products especially, and the sales emphasis on lower-margin products.
The situation improved towards the end of the first quarter, when it was
possible to raise prices to compensate for the increase in raw material prices.
The number of personnel in the Seafood business totalled 394 (431). The
reduction in personnel occurred mainly in Seafood's Finnish-based operations.
With the aim of bringing production and costs into line, co-determination talks
with personnel were begun at the Kuopio production plant in January concerning
lay-offs affecting both blue-collar and white-collar personnel. Some of the
personnel were laid off for one to two weeks during the first quarter.
The Seafood business's management system was renewed at the start of the year.
Jarno Järvinen, the director responsible for processed fish products in Finland,
Heljä Mantere, the director heading the concept business, and Jan Brevik, the
director for the Norwegian and Swedish seafood business have been reporting
directly to the CEO, Matti Karppinen, since the start of the year.
Investment in the Seafood business totalled EUR 0.0 (0.3) million.
The net sales of the Vegetable Oils business were down by 10% on the figure for
the same quarter a year earlier. This drop in net sales was due to the lower
volumes in both vegetable oil exports and in sales of the protein feeds.
There was a plentiful supply of rapeseed oil on the market due to the reduction
in biodiesel use. The excess of supply over demand led to lower prices for
edible oils. The raw material market price was distinctly lower than in both the
first and final quarters of 2008. The use of Finnish raw materials was
significantly lower than in the first quarter a year ago.
The Vegetable Oils profit showed a slight year-on-year improvement. The refining
margin based on market prices was low, and the market conditions were difficult.
Mildola's internal performance capability was enhanced by the further
development of processes, operating methods and the organisation in general.
Mildola's food safety management system was granted an ISO 22000:2005
certificate in January. The certified operations include the manufacture, sale
and marketing of vegetable oil and plant protein products, as well as production
methods for these and product research and development.
The number of personnel in the Vegetable Oils business was 35 (35). To bring
production and costs into line, the Vegetable Oils personnel were laid off for
about one week during the first quarter.
Investment in the Vegetable Oils business totalled EUR 0.0 (0.0) million.
The net sales of the Grain Trading business were down by about 50% on the figure
for the same quarter a year earlier. The drop in first-quarter net sales was the
result of lower market prices and smaller sales volumes than a year earlier. The
volume of Finnish grain trading grew in comparison with the first quarter of
2008, but exports and also trade with third countries fell short of the figures
a year ago.
Due to the good harvests obtained in different parts of the world, there was a
plentiful supply of grains and oilseeds on the market, which held prices low and
kept grain in the hands of growers, both in the EU and elsewhere. The food and
feed industries had already covered a major share of their needs earlier on, and
made additional purchases only on a short-term basis.
The operating profit of the Grain Trading business was at the forecast level,
representing a decrease on the figure for the previous year as a result of the
fall in net sales. The internal efficiency of operations was improved, and fixed
costs were below those for the first quarter of 2008.
The number of personnel in the Grain Trading business totalled 28 (30).
First-quarter investment in Grain Trading amounted to EUR 0.1 (0.0) million and
was for the renewal of its enterprise resource planning system. The system will
be introduced during the spring.
Other Operations comprise the service company Apetit Suomi Oy, Group
Administration, items not allocated under any of the operating segments, and the
associated companies Sucros Ltd and Ateriamestarit Oy. The cost impact of the
services produced by Apetit Suomi Oy is an encumbrance on the operating result
in proportion to the use of services.
Net sales in Other Operations amounted to EUR 0.4 (1.0) million. The
year-on-year decrease in net sales was a result of the transfer of the Frozen
Foods and Seafood sales and product development personnel from Apetit Suomi Oy
to Apetit Pakaste Oy and Apetit Kala Oy at the end of March 2008, and the
termination of the service fees associated with these operations.
The segment's operating profit, excluding non-recurring items, was EUR -1.1
(-1.2) million, including EUR 0.0 (0.0) million as the share of the profits of
associated companies. The non-recurring items totalled EUR 0.0 (4.9) million.
The non-recurring items in the first quarter of 2008 consisted of the EU sugar
reform compensation included in the profit of the associated company Sucros Ltd.
At the end of February, the majority holding in Sucros Ltd was transferred to
the German company Nordzucker AG following the deal on the sale of Danisco A/S's
sugar division. Lännen Tehtaat plc continues to have a 20% holding in Sucros
Ltd.
Investment in Other Operations totalled EUR 0.0 (0.1) million.
DECISIONS OF THE ANNUAL GENERAL MEETING
Lännen Tehtaat plc's Annual General Meeting of 2 April 2009 adopted the parent
company's financial statements and the consolidated financial statements, and
discharged the members of the Board of Directors and of the Supervisory Board
and the Chief Executive Officer from liability for the financial year 2008.
Dividend distribution
The Annual General Meeting decided to pay a dividend of EUR 0.85 per share on
the profit for the financial year 2008. The dividend was paid on 17 April 2009.
Amendments to the Articles of Association
The Annual General Meeting approved the Board's proposals for amending article 2
of the Articles of Association, on the company's sphere of operations, and
article 10, paragraph 1, on the invitation to the AGM. The references to
engaging in the animal feed and plant seedling technology businesses were
removed from article 2. Article 10, paragraph 1, concerning the invitation to
the AGM was amended such that the meeting invitation must now be published on
the company's website and, if so decided by the Board of Directors, in at least
one national newspaper determined by the Board of Directors, at the earliest two
months and at the latest 21 days before the meeting.
Authorisations to issue shares
The Annual General Meeting authorised the Board of Directors to decide on
issuing new shares and on the transfer of Lännen Tehtaat plc shares held by the
company, in one or more lots as a share issue of a total of no more than 761,757
shares. The share issue authorisation covers all of the Lännen Tehtaat plc
shares already in the company's possession, i.e. 130,000 shares. The maximum
number of new shares that can be issued is 631,757.
The subscription price for each new share must be at least its nominal value,
EUR 2. The transfer price for Lännen Tehtaat plc shares held by the company must
be at least the current value of the share at the time of transfer, determined
by the price quoted in public trading on the NASDAQ OMX Helsinki exchange, but
when implementing share-based incentive plans, shares can also be issued without
consideration.
The authorisation concerns the following: the right to deviate from the
shareholders' pre-emptive subscription right (targeted issue), if the company
has a substantial financial reason to do so, such as developing the company's
capital structure, financing and executing corporate acquisitions or other
arrangements, or implementing a share-based incentive system; the right to offer
shares instead of money, also against capital consideration in kind or otherwise
under certain conditions or by using right of set-off; and the right to decide
on the share subscription price and other terms and circumstances concerning the
share issue.
The authorisation is valid until the next Annual General Meeting. The
authorisation revoked the earlier authorisation to issue shares, given on 2
April 2008, and the authorisation to transfer Lännen Tehtaat plc shares, given
on the same date.
SHARES AND TRADING
The number of Lännen Tehtaat plc shares traded on the stock exchange during the
first quarter was 156,317 (383,666), representing 2.5% (6.1%) of the total
number of shares. The highest share price quoted was EUR 14.43 (16.46) and the
lowest EUR 12.64 (13.20). The share turnover was EUR 2.1 (5.4) million. At the
end of the quarter, the market capitalisation totalled EUR 81.8 (94.6) million.
FLAGGING ANNOUNCEMENTS
No flagging announcements were made during the first quarter.
SALE OF SHARES IN JOINT ACCOUNT
On 23 February 2009, a total of 51,910 Lännen Tehtaat plc shares that were in
the joint book-entry account were sold in trading on the NASDAQ OMX Helsinki
exchange. The sale was based on the decision of the Lännen Tehtaat plc Annual
General Meeting of 29 March 2007 to sell, on behalf of the respective holders,
the company's shares held in the joint book-entry account and not transferred to
the book-entry system.
The proceeds from the sale, less the expenses of notification and selling, were
deposited with the State Provincial Office of Western Finland. By presenting a
share certificate to the State Provincial Office, holders of shares that were in
the joint account, or other holders of the right, are entitled to a proportion
of the income from the share sale that corresponds to the shares they held. The
proceeds from the sale of the shares, less expenses, and the dividends for
2005-2007 come to EUR 15.69 per share. The proceeds are redeemable on or before
17 March 2019.
GOVERNING BODIES
At its organisational meeting on 17 April 2009, Lännen Tehtaat plc's Supervisory
Board elected Helena Walldén as its chairwoman and Juha Nevavuori as its deputy
chairman.
At the same meeting, the Supervisory Board elected the following as members of
the company's Board of Directors: Harri Eela, Heikki Halkilahti, Aappo Kontu,
Matti Lappalainen, Hannu Simula, Soili Suonoja and Tom v. Weymarn. Tom v.
Weymarn was elected chairman of the Board of Directors and Matti Lappalainen was
elected deputy chairman.
SEASONALITY OF OPERATIONS
In accordance with the IAS 2 standard, the historical cost of inventories
includes a systematically allocated portion of the fixed production overheads.
In production that focuses on seasonal crops, raw materials are processed into
finished products mainly during the final quarter, which means that the
inventory volumes and their balance-sheet values are at their highest at the end
of the year. Since the entry of the fixed production overheads included in the
historical cost as an expense item is deferred until the time of sale, most of
the Group's annual profit is accrued in the final quarter. The seasonal nature
of operations is most marked in Frozen Foods and in the associated company
Sucros, due to the link between production and the crop harvesting season.
Apetit Kala's sales peak at weekends and on seasonal holidays. As Easter can
take place in either the first or the second quarter, this can affect the
comparability of Seafood's net sales and profit from one year to the next. A
major proportion of the entire year's profit in the Seafood business depends on
the success of Christmas sales.
Net sales in Grain Trading vary from one year and quarter to the next, being
dependent on the demand and supply situation and on the price levels
domestically and on other markets.
SHORT-TERM RISKS AND UNCERTAINTIES
The most significant short-term risks for the Lännen Tehtaat Group are: the
effects of the economic downturn on demand from consumers and customers; the
solvency of customers and the delivery performance of suppliers; the management
of raw material price changes and currency risks; changes in the operating
environments of the Group's businesses and in customerships; introduction of the
new enterprise resource planning system in Frozen Foods and in Grain Trading;
and corporate acquisitions and the subsequent integration processes.
SIGNIFICANT EVENTS SINCE THE CLOSE OF THE FIRST QUARTER
No significant events have occurred since the close of the first quarter.
FUTURE PROSPECTS
The global economic downturn may have an impact on Lännen Tehtaat's businesses
during the year. Forecasting changes in consumer demand and in customer
behaviour is difficult, however, but it is widely believed that consumer demand
for food products will increasingly be channelled towards basic foodstuffs and
low value added products.
The net sales from Lännen Tehtaat's continuing operations will be affected
particularly by changes in the price level of grains and oilseeds. Based on the
prevailing prices of grains and oilseeds, the Group's half-year net sales are
expected to be significantly below the 2008 comparison figure.
The sluggish state of the grain trade and the fall in prices mean that Grain
Trading's second-quarter profit will not rise to the record level of a year
earlier, and the Group's second-quarter operating profit, excluding
non-recurring items, is forecast to be down on the second quarter 2008 figure.
Thanks to the development measures taken by the Group's businesses, the
performance of the continuing operations has improved on that in 2008. However,
given the economic conditions, an assessment of the situation for the latter
part of the year is more difficult to make than under normal circumstances,
which is why the company does not at this stage wish to present any estimate of
the full-year profit for 2009.
The need for investment in non-current assets is significantly less than in
2008.
CONSOLIDATED INCOME STATEMENT
EUR million
1-3/2009 1-3/2008 1-12/2008
Continuing operations
Net sales 64.7 90.9 349.1
Other operating income 0.3 0.3 3.8
Operating expenses -64.4 -89.4 -342.8
Depreciation -1.3 -1.3 -5.1
Impairments - - -0.2
Share of profits of associated companies 0.0 4.9 9.1
Operating profit -0.7 5.4 13.9
Financial income and expenses 0.3 -0.7 -3.3
Profit before taxes -0.4 4.7 10.7
Income taxes 0.1 0.0 -0.7
Profit for the period,
continuing operations -0.3 4.7 10.0
Discontinued operations
Profit for the period,
discontinued operations - 0.3 7.1
Profit for the period -0.3 5.0 17.1
Attributable to
Equity holders of the parent -0.2 4.9 17.0
Minority interests -0.1 0.1 0.1
Basic and diluted earnings per share,
calculated of the profit attributable
to the shareholders of the parent
company, EUR
STATEMENT OF COMPREHENSIVE INCOME
EUR million
1-3/2009 1-3/2008 1-12/2008
Profit for the period -0.3 5.0 17.1
Other comprehensive income
Cash flow hedges 0.9 -0.4 -1.6
Taxes related to cash flow hedges -0.3 0.1 0.4
Translation differences 0.7 -0.1 -2.1
Other 0.0 -0.1 0.1
Total comprehensive income 1.0 4.5 13.9
Attributable to
Equity holders of the parent 1.0 4.4 13.9
Minority interests 0.0 0.1 0.0
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
EUR million
31 March 31 March 31 Dec
2009 2008 2008
ASSETS
Non-current assets
Intangible assets 5.8 4.8 5.3
Goodwill 6.4 7.0 5.9
Tangible assets 43.0 43.1 43.5
Investment in associated companies 25.1 44.9 25.0
Available-for-sale investments 0.1 0.1 0.1
Receivables 3.1 4.5 3.1
Deferred tax assets 1.2 0.6 1.4
Non-current assets total 84.6 105.0 84.3
Current assets
Inventories 49.4 63.2 55.1
Receivables 31.1 28,3 38.7
Income tax receivable 0.2 0.4 0.7
Financial assets at fair value
through profits 3.7 4.0 3.8
Cash and cash equivalents 9.3 5.5 9.9
Current assets total 93.7 101.4 108.0
Non-current assets classified
as held for sale - 1.2 -
Total assets 178.4 207.6 192.3
EQUITY AND LIABILITIES
Equity attributable to the equity
holders of the parent company 136.1 132.1 135.1
Minority interest 0.4 0.8 0.5
Total equity 136.5 132.9 135.6
Current liabilities
Short-term financial liabilities 4.0 32.8 10.7
Income tax payable 1.0 1.2 0.7
Trade payables and other liabilities 27.9 31.4 36.1
Current liabilities total 32.8 65.4 47.4
Total liabilities 41.8 74.7 56.8
Liabilities directly associated with non-current
assets classified as held for sale - 0.0 -
Total equity and liabilities 178.4 207.6 192.3
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR million
1-3/2009 1-3/2008 1-12/2008
Net profit for the period -0.3 5.0 17.1
Adjustments, total 1.5 -4.4 -8.5
Change in net working capital 6.3 -7.2 -5.1
Interests paid -0.2 -0.6 -2.4
Interests received 0.3 0.3 0.4
Taxes paid 0.4 -0.4 -1.8
Net cash flow from operating activities 8.1 -7.4 -0.4
Investments in tangible and intangible assets -0.5 -1.3 -8.1
Proceeds from sales of tangible
and intangible assets 0.0 0.1 3.0
Acquisition of subsidiaries deducted by cash - -0.4 -0.4
Transactions with minority - 1.5 1.5
Acquisition of associated companies - -0.4 -0.4
Proceeds from sales of associated companies - - 27.0
Purchases of other investments - - -14.0
Proceeds from sales of other investments - 4.0 18.1
Dividends received from investing activities - - 3.6
Net cash flow from investing activities -0.5 3.6 30.3
Repayments of short-term loans -8.1 4.5 -18.4
Repayments of long-term loans -0.1 -0.2 -0.1
Payment of financial lease liabilities 0.0 0.0 -0.1
Purchase of own shares - - -1.0
Dividends paid to minority - - -0.3
Dividends paid - - -5.3
Cash flows from financing activities -8.2 4.2 -25.1
Net change in cash and cash equivalents -0.5 0.4 4.8
Cash and cash equivalents at the
beginning of the period 9.9 5.1 5.1
Cash and cash equivalents at the
end of the period 9.3 5.5 9.9
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
EUR million
A = Share capital
B = Share premium account
C = Net unrealised gains
D = Other reserves
E = Own shares
F = Translation differences
G = Retained earnings
H = Attributable to equity holders of the parent company
I = Minority interest
J = Shareholders' equity total
A B C D E F G H I J
Shareholders'
equity at
1 Jan 2008 12.6 23.4 0.4 7.2 -0.8 0.1 84.5 127.3 0.7 128.0
Total comprehensive
income - - - 0.6 - 0.7 -0.2 1.0 -0.1 1.0
Shareholders'
equity at
31 March 2009 12.6 23.4 -0.8 7.8 -1.8 -1.2 96.3 136.1 0.4 136.5
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The interim report has been prepared in accordance with IAS 34, Interim
Financial Reporting, as adopted by the EU. The accounting policies adopted are
consistent with those of the Group's annual financial statements for the year
ended 31 December 2008.
The amendment of IFRS 8 will not change the information shown in these segments
because the Group's earlier segment-based reporting was based on the Group's
internal reporting structures. The amendment of IAS 1 has an impact on the
presentation method of the profit and loss account and the changes in equity.
SEGMENT INFORMATION
A Frozen Foods
B Seafood
C Vegetable Oils
D Grain Trading
E Other Operations
F Continuing operations total
G Discontinued operations
H Total
Finland 45.9 46.9 209.9
Scandinavia 11.6 19.9 65.8
Baltic countries and Russia 0.9 1.0 7.6
Other countries 6.3 23.1 65.9
Continuing operations total 64.7 90.9 349.1
DISCONTINUED OPERATIONS
The sale of the majority holding of 51% in Suomen Rehu Ltd was completed at the
start of June 2007, when Suomen Rehu and its subsidiaries were transferred to
Hankkija-Maatalous Oy. Lännen Tehtaat plc and SOK subsidiary Hankkija-Maatalous
Oy signed an agreement on 1 September 2008, transferring the remaining 49% of
shares owned by Lännen Tehtaat in Suomen Rehu Ltd to Hankkija-Maatalous Oy.
Lännen Tehtaat recognized a non-recurring tax-free profit of EUR 6.6 million for
the sale of these minority shares in its financial performance for the 2008
third quarter.
NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE
Non-current assets classified as held for sale in the comparison period belong
to Apetit Pakaste Oy's jams and marmalades business that was sold to Saarioisten
Säilyke Oy in autumn 2008.
KEY INDICATORS
31 March 31 March 31 Dec
2009 2008 2008
Shareholders' equity per share, EUR 21.99 21.12 21.83
Equity ratio, % 76.5 64.0 70.5
Gearing, % -3.3 21.3 1.1
Gross investments in non-
current assets, EUR million,
continuing operations 0.5 1.3 8.1
Corporate acquisitions and other
share purchases, EUR million,
continuing operations - - 0.5
Average number of personnel,
continuing operations 646 729 755
Average number of shares, 1 000 pcs 6,188 6,253 6,221
The key figures in this interim financial report are calculated with same
accounting principles than presented in year 2008 annual financial statements.
CONTINGENT LIABILITIES
EUR million
31 March 31 March 31 Dec
2009 2008 2008
Mortgages given for debts
Real estate mortgages 8.8 9.6 8.6
Corporate mortgages - 1.3 -
Guarantees 10.4 10.6 10.8
Non-cancellable other leases,
minimum lease payments
Real estate leases 4.8 4.7 5.1
Other leases 0.8 0.8 0.9
Lännen Tehtaat does not have significant investment commitments as of 31 March
2009.
CHANGES IN TANGIBLE ASSETS
EUR million
1-3/2009 1-3/2008 1-12/2008
Book value at the beginning of the period 43.5 43.5 43.5
Acquisitions 0.2 0.9 5.9
Disposals 0.0 -0.1 -0.2
Depreciations and impairments -1.2 -1.2 -5.3
Other changes 0.5 0.0 -0.5
Book value at the end of the period 43.0 43.1 43.5
TRANSACTIONS WITH ASSOCIATED COMPANIES AND JOINT VENTURES
EUR million
1-3/2009 1-3/2008 1-12/2008
Sales to associated companies 0.1 3.7 13.4
Sales to joint ventures 2.0 2.2 8.5
Purchase from associated companies 0.4 0.0 0.7
Purchase from joint ventures 0.0 0.0 0.3
Long-term receivables from associated
companies 2.7 3.8 2.7
Trade receivables and other
receivables from associated companies 1.5 3.0 1.6
Trade receivables and other
receivables from joint ventures 0.9 0.7 0.6
Trade payables and other liabilities
to associated companies 0.0 0.1 0.0
LÄNNEN TEHTAAT PLC
Board of Directors
Further information: Matti Karppinen, CEO, tel. +358 10 402 4001
Copies to:
NASDAQ OMX Helsinki Ltd
Principal media
www.lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE 17 April 2009 at 4;00 p.m.
ORGANIZATION OF THE SUPERVISORY BOARD AND ELECTION OF THE BOARD OF DIRECTORS
The Supervisory Board of Lännen Tehtaat plc today elected Helena Walldén as
Chairwoman of the Supervisory Board and Juha Nevavuori as Deputy chairman of the
Supervisory Board.
Harri Eela, Heikki Halkilahti, Aappo Kontu, Matti Lappalainen, Hannu Simula,
Soili Suonoja and Tom v. Weymarn were re-elected as members of the Board of
Directors. Tom v. Weymarn was elected as Chairman of the Board and Matti
Lappalainen as Deputy chairman of the Board.
LÄNNEN TEHTAAT PLC
Matti Karppinen
CEO
More details: Matti Karppinen, tel. +358 10 402 00
Distribution:
NASDAQ OMX Helsinki Ltd
Main media
www.lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE 2 April 2009 at 4;15 p.m.
DECISIONS BY THE ANNUAL GENERAL MEETING OF LÄNNEN TEHTAAT PLC
The Annual General Meeting on 2 April, 2009 approved the financial statements
for the financial year 1 January - 31 December 2008, discharged the members of
the Supervisory Board and the Board of Directors and the CEO from liability. The
AGM decided to distribute a dividend of EUR 0.85 per share. The Board of
Directors' proposals to amend the articles of association, to issue new shares
and to transfer Lännen Tehtaat shares held by the company were approved without
changes.
DIVIDEND
The Annual General Meeting decided to distribute as dividend EUR 0.85 per share
on the financial year 2008. The dividend will be paid on 17 April 2009 to
shareholders registered on the company´s register of shareholders kept by
Euroclear Finland Ltd on the record date 7 April 2008. No dividend will be paid
on shares held by the company.
AMENDING THE ARTICLES OF ASSOCIATION
The Annual General Meeting approved the Board of Directors' proposal concerning
the section 2 of the company's articles of association, concerning the sphere of
operation, and section 10 paragraph 1, concerning the summons to a shareholders'
meeting, be amended as follows:
New section 2:
The Company engages in commercial activities concerning food and other related
activities in Finland and abroad either directly or through subsidiaries or
associated companies. The Company may own and manage real estate and shares and
other securities and engage in trade in them.
New section 10 paragraph 1:
The summons to the shareholders' meeting shall be published on the company's web
pages and, if so decided by the Board of Directors, in at least one national
newspaper determined by the Board of Directors, at the earliest two months and
at the latest 21 days before the shareholders' meeting.
AUTHORIZATION FOR SHARE ISSUE AND FOR TRANSFER OF LÄNNEN TEHTAAT SHARES
The Annual General Meeting authorized the Board of Directors to decide on the
issuing of new shares and on the transfer of Lännen Tehtaat shares held by the
company (share issue) in one or more lots in a share issue, to a total of no
more than 761,757 shares. The share issue authorization covers all the Lännen
Tehtaat shares held by the company (130,000 shares). The maximum number of new
shares that can be issued is 631,757.
The subscription price for each of the new shares must be at least the nominal
share value of EUR 2. The transfer price for Lännen Tehtaat shares held by the
company must be at least the current value of the share at the time of transfer,
which is determined by the price quoted in public trading on the NASDAX OMX
Helsinki Ltd. However, in the case of share-based incentive systems, shares can
be issued without remuneration.
The authorization includes the right
- to deviate from the shareholders' pre-emptive subscription right (targeted
issue) if the company has a substantial financial reason to do so, such as
development of the company's capital structure, financing and implementing
corporate acquisitions or other arrangements, or implementing a share-based
incentive system;
- to offer shares not only against money payment but also against capital
consideration in kind or under other specified terms or by exercising right of
set-off;
- to decide on the subscription price of shares and other conditions of and
matters related to the share issue.
The authorization is valid until the next AGM. The authorization will revoke
the earlier authorization to issue shares, given on 2 April 2008, and the
authorization to transfer Lännen Tehtaat shares held by the company given on the
same date.
ELECTION OF THE MEMBERS OF THE SUPERVISORY BOARD AND THE AUDITORS
Matti Eskola, Pasi Jaakkola, Markku Länninki and Ilkka Markkula were re-elected
to the Supervisroy Board. Laura Hämäläinen and Timo Kaunisto were elected as new
members.
Hannu Pellinen, APA, and PricewaterCoopers Oy Authorized Public Accountants
with Tomi Moisio, APA, CPFA as responsible auditor, were elected as auditors.
The Annual General Meeting decided that the yearly fee paid to the Supervisory
Board's chairman is EUR 7,500, and to the deputy chairman EUR 5,000. The meeting
allowance paid to the members of the Supervisory Board is EUR 250. In addition,
daily allowances and compensation for travelling expenses are paid in accordance
with the general travel rules of Lännen Tehtaat. The auditors' fees are paid
according to invoice approved by the company.
LÄNNEN TEHTAAT PLC
Matti Karppinen
CEO
More details: Matti Karppinen, tel. +358 10 402 4001
Distribution:
NASDAQ OMX Helsinki Ltd
Main media
www.lannen.fi
LÄNNEN TEHTAAT PLC Stock exchange release 17 March 2009 at 9;00 a.m.
LÄNNEN TEHTAAT PLC ANNUAL REPORT 2008 AND SUMMARY OF STOCK EXCHANGE RELEASES
PUBLISHED
Lännen Tehtaat plc Annual Report for 2008 with financial statements has been
published today in Finnish and English. An annual summary of stock exchange
releases and announcements is available in the Annual Report.
The Annual Report can also be read at www.lannen.fi/en/investor_information.
The Annual Report will be mailed in week 12 to the shareholders with more than
100 shares. A printed version of the Annual Report can be ordered by telephone
+358 10 402 00 or by e-mail .
Lännen Tehtaat plc
Eero Kinnunen
CFO
tel +358 10 402 00
Distribution:
NASDAQ OMX Helsinki Ltd
Main media
www.lannen.fi
Lännen Tehtaat plc Stock exchange release 11 March 2009
Invitation to the Annual General Meeting of Lännen Tehtaat plc
The shareholders of Lännen Tehtaat plc are hereby invited to the Annual General
Meeting, which will be held on Thursday 2 April 2009, at 2;00 p.m. in the Lännen
Tehtaat staff restaurant Myllynkivi in Iso-Vimma, Säkylä. The reception of
persons who have registered for the meeting and the distribution of voting
tickets will commence at 12;00.
A. The following issues will be handled in the meeting:
1. Opening of the meeting
2. Election of chairman of the meeting
3. Election of secretary of the meeting
4. Recording the legality of the meeting
5. Election of persons to scrutinize the minutes and to count the votes
6. Approving the agenda and addressing the meeting
7. Recording the attendance at the meeting and adopting the list of votes
8. Presentation of the financial statements 2008
9. Presentation of the auditor's report
10. Presentation of the statement given by the Supervisory Board
11. Adoption of the financial statements and consolidated financial statements
12. Distribution of the profits shown on the balance sheet and resolution on the
payment of dividend
The Board of Directors proposes that a dividend of EUR 0.85 per share be paid
for the financial year 2008 on the basis of the adopted balance sheet. The
dividend will be paid to shareholders registered in the company´s register of
shareholders kept by Euroclear Finland Ltd (former Finnish Securities Depository
Ltd) on 7 April 2009, which is the record date for the dividend payment. The
Board of Directors proposes to the Annual General Meeting that the dividend
payment date be 17 April 2009.
13. Resolution on discharging the members of the Supervisory Board and the Board
of Directors, and the CEO from liability
14. Resolution on the number and remuneration of members of the Supervisory
Board
15. Election of the members of the Supervisory Board
16. Resolution on the number and remuneration of the Auditors
The Board of Directors proposes that the number of the auditors be two (2). The
Board of Directors proposes that the auditors' fee be paid according to invoice
approved by the company.
17. Election of Auditors
The Board of Directors proposes that the auditors Hannu Pellinen, APA and
PricewaterhouseCoopers Oy, Authorized Public Accountants with Tomi Moisio, APA,
CPFA , as the auditor with principal responsibility, be re-elected as auditors
to the close of the Annual General Meeting.
18. Resolution on amending the articles of association
The Board of Directors proposes that the articles of association be amended as
follows;
a. section 2 concerning the sphere of operation be amended so that animal feed
and seedling technology be deleted
b. section 10 paragraph 1, concerning the summons to a shareholders' meeting, be
amended so that the summons to the shareholders' meeting shall be published on
the company's web pages and, if so decided by the Board of Directors, in at
least one national newspaper determined by the Board of Directors, at the
earliest two months and at the latest 21 days before the shareholders' meeting.
19. Authorization of the Board of Directors to decide on the acquisition of the
company´s own shares
Board of Directors' proposes that the Board be authorized to decide on the
acquisition of a maximum total of 185,878 Lännen Tehtaat´s shares for the
company using untied equity. Shares may be acquired for the purpose of
developing the company's capital structure, for use in the financing or
implementing corporate acquisitions or other arrangements, for implementing
share-based incentive systems, or otherwise to be assigned further or to be
annulled.
The authorization covers acquisition of shares in public trade in NASDAQ OMX
Helsinki Ltd and also outside of the public trade. The compensation paid for the
acquired shares shall be based on the market value. The authorization entitles
the Board of Directors to decide on acquisition otherwise than in proportion to
the holdings of the shareholders (targeted acquisition) as provided in the law.
The authorization would be valid until the next AGM.
20. Authorization of the Board of Directors to decide on the issuing of new
shares and on the transfer of Lännen Tehtaat shares held by the company (share
issue)
Board of Directors' proposes that the Board be authorized to decide on share
issues by issuing of new shares or by transferring Lännen Tehtaat shares held
by the company. The authorization would cover a maximum total of 947,635 shares,
and the maximum number of new shares would be 631,757, and the number of Lännen
Tehtaat shares held by the company 315,878.
The subscription price for each of the new shares must be at least the nominal
value of EUR 2. The transfer price for Lännen Tehtaat shares held by the company
must be at least the market value of the share at the time of transfer, which is
determined by the price quoted in public trading on NASDAX OMX Helsinki Ltd. The
shares can also be transferred against a compensation other than money. However,
in the case of share-based incentive systems, shares can be issued without
remuneration.
The authorization includes the right to deviate from the shareholders'
pre-emptive subscription right (targeted issue) if the company has a substantial
financial reason to do so, such as development of the company's capital
structure, financing and implementing corporate acquisitions or other
arrangements, or implementing a share-based incentive system. The authorization
would be valid until the next AGM.
21. Closing of the meeting
B. Documents of the Shareholders' Meeting
The proposals of the Board of Directors as well as the invitation to the meeting
are available on Lännen Tehtaat's website at www.lannen.fi/en. The Annual Report
of the company, including the financial statements will be available on the
above-mentioned website no later than 25 March 2009. Copies of these documents
will be sent to shareholders upon request and they are also available at the
meeting. The minutes of the meeting will be available on the above-mentioned
website as from 16 April 2009.
C. Instructions for the participants in the Annual General Meeting
Right to participate and registration
A shareholder whose shares have been registered in the register of shareholders
kept by Euroclear Finland Ltd not later than 23 March 2009 has the right to
attend the Annual General Meeting.
Shareholders wishing to attend the Annual General Meeting shall notify the
company not later than 31 March 2009 by 4;00 p.m. local time either by writing
to Lännen Tehtaat plc, P.O Box. 100, FI-27801 Säkylä, or by telefax +358 10 402
4022 or by telephone +358 10 402 4002/Arja Antikainen or by e-mail
. If notice is given by letter, this shall arrive
before the above mentioned time. Possible proxies should be forwarded to the
company before the end of the notification period.
Pursuant to chapter 5, section 25 of the Company's Act, a shareholder who is
present at the Annual General Meeting has the right to request information with
respect to the matters to be considered at the meeting.
Proxy representative and powers of attorney
A shareholder may participate in the Annual General Meeting by way of proxy
representation. A proxy representative shall produce a dated proxy document or
otherwise in a reliable evidence of his/her right to represent the shareholder
at the Annual General Meeting.
Possible proxy documents should be delivered in originals to Lännen Tehtaat plc
no later than on 31 March 2009 at 4;00 p.m.
Holders of nominee registered shares
Holders of nominee registered shares wishing to attend the Annual General
Meeting, shall be registered in the register of the company´s shareholders on 23
March 2009 which is the record date of the meeting. A holder of nominee
registered shares is advised to request necessary instructions regarding the
registration in the shareholders' register of the company, the issuing of proxy
documents and registration for the Annual General Meeting from his/her custodian
bank.
Other information
On the date of this notice the total number of shares and votes in Lännen
Tehtaat plc is 6,317,576.
The Annual Report is published in week commnecing on 16 March 2009 in Finnish
and English. A printed version of the Annual Report can be ordered by telephone
+358 10 402 4002 on weekdays at 8;00-16;00 or by e-mail from
. At the same time you can also sign up for the
publication mailing list. The Annual Report is also availabe on the company web
pages.
Säkylä, 18 February 2009
Lännen Tehtaat plc
Board of Directors
Distribution:
NASDAQ OMX Helsinki Ltd
www.lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE 23 February at 17;00 p.m.
SALE OF SHARES IN THE JOINT BOOK-ENTRY ACCOUNT COMPLETED
In total 51,910 shares held in the joint book-entry account of Lännen Tehtaat
plc have been sold in public trading on NASDAQ OMX Helsinki Ltd. These shares
represent approximately 0.8 percent of the share capital and voting rights of
Lännen Tehtaat plc.
The sale was based on the decision made by Lännen Tehtaat plc's Annual General
Meeting on 29 March 2007 to sell the company's shares in the joint book-entry
account that have not been transferred to book-entry system in the name of the
owners of the shares according to the old Securities Market Act (29 September
1978/734) Chapter 3a Section 3a and section 8 of the Implementing Act of the new
Companies Act (624/2006).
Proceeds deducted by the announcement and sales costs will be deposited to the
State Provincial Office of Western Finland. The owner or other right holder of
the shares previously on the joint account is then entitled to a share of
proceeds corresponding to the amount of his/her share holdings. Withdrawal of
the share of proceeds can be made after the deposition has been approved by the
State Provincial Office.
To claim their portion of the proceeds from the sale of the shares, shareholders
or other right holder must present a claim and submit their share certificates
and any evidence of title to the Turku office of the State Provincial Office of
Western Finland. The percentage of the sales proceeds to which a claimant is
entitled will be paid out of the funds deposited with the State Provincial
Office of Western Finland upon presentation of the aforementioned documents. The
right to proceeds from the sale of the shares will expire in ten years' time
from the date of depositing the funds with the State Provincial Office.
LÄNNEN TEHTAAT PLC
Asmo Ritala
Corporate councel
More details: Asmo Ritala, tel. +358 10 402 4005
Distribution:
NASDAQ OMX Helsinki Ltd
Main media
www.lannen.fi
LÄNNEN TEHTAAT PLC Financial Statement Release 19 February 2009 at 8.30 a.m.
FINANCIAL STATEMENTS BULLETIN 1 January - 31 December 2008
Financial year (Jan-Dec):
- Consolidated profit for the financial year totalled EUR 17.1 (2007: 13.4)
million.
- Earnings per share came to EUR 2.73 (2.13).
- Net sales from continuing operations totalled EUR 349.1 (309.6) million, up
13% on the 2007 total.
- Operating profit from continuing operations amounted to EUR 13.9 (5.3)
million.
- Operating profit from continuing operations excluding non-recurring items came
to EUR 5.4 (4.9) million.
- The Board will propose a dividend of EUR 0.85 (0.85) per share to the Annual
General Meeting.
Fourth quarter (Oct-Dec):
- Net sales from continuing operations totalled EUR 80.9 (96.5) million, down
16% on the same quarter in 2007.
- Operating profit from continuing operations
amounted to EUR 4.0 (4.4) million.
- Operating profit from continuing operations excluding non-recurring items came
to EUR 2.8 (4.6) million.
The information in this bulletin has not been audited.
Matti Karppinen, CEO:
“The Lännen Tehtaat Group's consolidated profit for the financial year 2008 was
the best it has ever posted. The robust result has further strengthened the
Group's balance sheet and financial position, to the extent that the Group is,
in practice, debt-free. Our equity ratio rose to 70.5%, and the company's
financing over the next few years has been secured with committed credit
facilities.
The operating profit from our continuing operations, excluding non-recurring
items, was up on the previous year's figure, which can be seen as a satisfactory
result in view of the circumstances. With the centralization of Frozen Foods
production, the organizational streamlining of the Seafood business and the
introduction of the new ERP systems and operating models, the performance of our
businesses is forecasted to improve.
The profit for the financial year was boosted by a number of significant
non-recurring items. We sold the remaining 49% of the Suomen Rehu shares to
Hankkija-Maatalous during the year, and we also sold the jams and marmalades
business, as it did not suit the strategy in our Frozen Foods business. The
significant positive non-recurring items from these deals were entered as
income. Non-recurring items entered as income were also included in the share of
the profit of the associated company Sucros.
The deepening and difficultly forecastable economic recession will affect
consumer behaviour and the demand for food products on the company's domestic
market. It is possible that even if the food sales volume were to remain steady
in our sphere of operations, the sales value could fall if consumer demand
focuses more strongly on basic foodstuffs and low added value products. In my
view, Lännen Tehtaat plc's business portfolio is well suited to these possible
shifts in demand.
Our strong balance sheet and financial position give us an excellent chance to
benefit from new emerging opportunities for corporate arrangements.”
Profit before taxes 2.4 3.7 10.7 4.6
Profit for the year 2.5 3.2 10.0 4.2
Earnings per share, EUR 0.41 0.50 1.60 0.66
Discontinued operations
Net sales - - - 78.8
Profit for the year - 0.8 7.1 9.2
Earnings per share, EUR - 0.13 1.13 1.48
NET SALES AND PROFIT
Fourth quarter (Oct-Dec):
The net sales from continuing operations in October-December totalled EUR 80.9
(96.5) million, a decrease of 16% on the same quarter in 2007. This decrease was
largely attributable to the fall in Grain Trading's fourth-quarter net sales.
Net sales of the Vegetable Oils business were up on the same quarter's figure a
year earlier.
The fourth-quarter operating profit from continuing operations totalled EUR 4.0
(4.4) million. The same figure but excluding non-recurrent items amounted to EUR
2.8 (4.6) million. Profit in the Frozen Foods business was around the same as in
the fourth quarter of 2007, while profit in the other businesses fell short of
the corresponding figure a year earlier.
The financial income and expenses from continuing operations in October-December
totalled EUR -1.6 (-0.7) million. Profit before taxes was EUR 2.4 (3.7) million,
and taxes on the profit for the quarter came to EUR +0.2 (-0.5) million. The
profit from continuing operations came to EUR 2.5 (3.2) million, and the
earnings per share amounted to EUR 0.41 (0.50).
Financial year (Jan-Dec):
The profit for the year came to EUR 17.1 (13.4) million, and the earnings per
share amounted to EUR 2.73 (2.13).
Continuing operations
The net sales from continuing operations in the financial year came to EUR 349.1
(309.6) million, an increase of EUR 39.5 million or 13% on the previous year.
The growth occurred mainly in the Vegetable Oils and Grain Trading businesses.
The operating profit from continuing operations totalled EUR 13.9 (5.3) million.
The same figure but excluding non-recurrent items was EUR 5.4 (4.9) million.
Net financial expenses for the financial year were EUR -3.3 (-0.8) million.
Interest and other financial income totalled EUR +0.9 (+2.0) million. Other
financial income includes unrealized valuation gains of EUR +0.4 (+1.0) million
with no cash flow implications. Interest and other financial expenses totalled
EUR -4.1 (-2.7) million. Other financial expenses include EUR -0.5 (0.0) million
as the share of the Avena Nordic Grain profit apportioned to the Avena employee
shareholders, and unrealized valuation losses of EUR -1.6 (-0.1) million with no
cash flow implications.
The profit before taxes from continuing operations was EUR 10.7 (4.6) million.
This includes EUR +8.2 (+0.4) million as the effect of non-recurring items. The
most significant non-recurring items concerned the business activities of the
associated company Sucros Ltd and the sale of the jams and marmalades business.
Taxes for the financial year came to EUR -0.7 (-0.4) million. The continuing
operations' profit for the year came to EUR 10.0 (4.2) million, and the earnings
per share amounted to EUR 1.60 (0.66).
Discontinued operations
In both 2008 and 2007, the discontinued operations consisted of the Suomen Rehu
group. The net sales from discontinued operations in 2007 totalled EUR 78.8
million.
The profit from discontinued operations in 2008 came to EUR 7.1 (9.2) million,
and the earnings per share amounted to EUR 1.13 (1.48). The profit for the year
includes a profit of EUR 6.6 million on the sale of the minority holding in
Suomen Rehu, and EUR 0.5 million as the share of the associated company Suomen
Rehu's profit for January-August. The corresponding figures for 2007 included
the Suomen Rehu group's profit of EUR 2.3 million for January-May, the profit of
EUR 5.6 million on the sale of the majority holding in Suomen Rehu and EUR 1.4
million as the share of the associated company Suomen Rehu's profit for
June-December.
FINANCING AND BALANCE SHEET
The Group's financial position strengthened and its liquidity improved. The
biggest impact on the financial position was the sum of EUR 27 million received
from the sale of the minority holding in Suomen Rehu.
The cash flow from operating activities in the financial year after interest and
taxes amounted to EUR -0.4 (+5.3) million. The impact of the change in working
capital was EUR -5.1 (-3.3) million. The cash flow from investing activities
came to EUR +30.3 (+22.5) million, and included the sale of Suomen Rehu shares.
The cash flow from financing activities came to EUR -25.1 (-30.2) million, and
included EUR -5.3 (-5.3) million in dividend payments. The cash flow figures for
2007 included cash flow from discontinued operations. The net change in cash and
cash equivalents was EUR +4.8 (-2.4) million.
At the end of the financial year, the Group had EUR 15.2 (33.6) million in
interest-bearing liabilities and EUR 13.7 (13.2) million in liquid assets. Net
interest-bearing liabilities totalled EUR 1.5 (20.4) million. The consolidated
balance sheet total stood at EUR 192.3 (205.9) million. Equity totalled EUR
135.6 (128.0) million at the end of the financial year, and the equity ratio was
70.5% (62.1%). Commercial papers issued for the Group's short-term financing
stood at EUR 9.0 (27.5) million at the end of the financial year. The Group's
liquidity is secured with committed credit facilities; a total of EUR 25.0
(15.0) million was available in credit at the end of the financial year. No
credit facilities were used during the financial year.
INVESTMENT
Gross investment in non-current assets excluding corporate acquisitions came to
EUR 8.1 (7.5) million. Investment by Frozen Foods totalled EUR 6.0 (2.0)
million, by the Seafood business EUR 1.5 (4.3) million, by Vegetable Oils EUR
0.2 (0.4) million, by Grain Trading EUR 0.3 (0.0) million and by Other
Operations EUR 0.2 (0.2) million. In 2007, investment by the Feeds business up
to the date of sale of the majority holding was EUR 0.6 million.
Investment in shares during the financial year totalled EUR 0.5 (11.6) million,
of which the purchase of Foison Oy shares accounted for EUR 0.4 million.
PERSONNEL
The average number of personnel in the continuing operations during the
financial year was 755 (705). The average number of personnel in Frozen Foods
was 237 (248), in the Seafood business 441 (379), in Vegetable Oils 35 (36), in
Grain Trading 30 (29) and in Other Operations 12 (11). The personnel at Apetit
Suomi Oy have been divided between Frozen Foods and Seafood in proportion to the
service fees. The increase in Seafood business personnel was due to the
incorporation of the companies of the Maritim Food group into the Lännen Tehtaat
Group in 2007 and the growing number of personnel in the concept business
following the transfer of previously franchised Kalatori service counters to be
managed by Seafood personnel.
SEASONALITY OF OPERATIONS
In accordance with the IAS 2 standard, the historical cost of inventories
includes a systematically allocated portion of the fixed production overheads.
In production that focuses on seasonal crops, raw materials are processed into
finished products mainly during the final quarter, which means that the
inventory volumes and their balance-sheet values are at their highest at the end
of the year. Since the entry of the fixed production overheads included in the
historical cost as an expense item is deferred until the time of sale, the
accumulation of consolidated profit occurs especially in the final quarter of
the year. The seasonal nature of operations is most marked in Frozen Foods and
in the associated company Sucros, due to the link between production and the
crop harvesting season.
Apetit Kala's sales peak at weekends and on seasonal holidays. A major
proportion of the entire year's profit in the Seafood business depends on the
success of Christmas sales.
Net sales in Grain Trading vary from one year and quarter to the next to a
greater extent than in the other businesses, being dependent on the demand and
supply situation and on the price levels domestically and on other markets.
OVERVIEW OF BUSINESS SEGMENTS
Frozen Foods
EUR million Oct-Dec/ Oct-Dec/ Jan-Dec/ Jan-Dec/
2008 2007 2008 2007
Net sales 11.5 13.2 49.3 49.3
Operating profit without
non-recurring items 1.6 1.6 3.1 3.5
Fourth quarter (Oct-Dec):
The net sales of Frozen Foods were up by more than 4% in the last quarter
compared with the like-for-like figure for the same quarter in 2007 (i.e.
adjusted for the effects of the sale of the jams and marmalades business). Sales
of retail products were up by 6%, particularly in frozen vegetable and potato
products and frozen ready meals. Sales to the hotel, restaurant and catering
sector as a whole were up by over 10% due to the good level of frozen vegetable
and frozen ready meal sales. Growth in sales to the food industry was just 2% on
account of the jams and marmalades business being discontinued. Exports were
down on the previous year's fourth-quarter figure due to the reduction in sales
of frozen peas. The figure for the last quarter of 2007 included EUR 2.1 million
in sales of jams and marmalades.
Frozen Foods' fourth-quarter profit excluding non-recurring items was at about
the same level as a year earlier. The quarter's non-recurring items totalled EUR
-0.5 (0.0) million and were connected with the transfer of production from
Turku.
The sale of the jams and marmalades business to Saarioisten Säilyke Oy took
effect at the start of September. The premises formerly used by the jams and
marmalades business were refurbished during the autumn for use in frozen ready
food production following transfer of this production from Turku. The jam and
marmalade production personnel underwent an intensive five-week training and
induction period to work in the new frozen ready foods production plant.
Production of frozen ready foods began smoothly at Säkylä in December, as
planned. For the transfer of the packaging operation from Turku it was necessary
first to enlarge the Säkylä premises, after which the packaging operation was
then begun in November. The lease on the Turku property formerly used by Frozen
Foods terminated at the end of the financial year. Non-recurring expenses of
about EUR -0.5 million were incurred in the final quarter on account of the
transfer of the Turku frozen ready meals factory and packaging operation. This
centralization of production is expected to improve the annual profit by about
EUR 0.9 million, starting in 2009.
Financial year (Jan-Dec):
Like-for-like net sales were up by 4% for the full financial year, adjusted for
the effects of the sale of the jams and marmalades business. This growth
occurred evenly across all the distribution channels, with the exception of
exports, which were down slightly. In retailing, the active marketing campaigns
and new product launches boosted sales of Apetit products. The highest growth
was in sales of frozen potato products, up almost 20%. Sales of frozen
vegetables and frozen ready meals also did well, while frozen pizza sales fell
as a result of the reduced level of marketing. Apetit Pakaste brought a number
of new frozen vegetable products to the retail market during the year, including
potato and chopped vegetables for soups and a brand new product range of frozen
vegetables in different sauces.
The operating profit of Frozen Foods, excluding non-recurring items, was EUR 3.1
(3.5) million. Non-recurring items totalled EUR +2.0 (-0.2) million and
consisted of EUR +2.5 million from the sale of the jams and marmalades business,
and EUR -0.5 million from the transfer of the Turku factory production. Apetit
Pakaste raised its prices during the year to compensate for the increase in
costs.
Investment in Frozen Foods totalled EUR 6.0 (2.0) million. The investment in
property and equipment necessary for the transfer of production from Turku
amounted to EUR 4.6 million. Other investment was in renewing the company's
enterprise resource planning system and in small-scale replacements. It was
decided to postpone the introduction of the enterprise resource planning system
in Frozen Foods until 2009.
Seafood
EUR million Oct-Dec/ Oct-Dec/ Jan-Dec/ Jan-Dec/
2008 2007 2008 2007
Net sales 23.8 25.0 89.7 81.7
Operating profit without
non-recurring items -0.3 0.5 -1.6 -1.5
Fourth quarter (Oct-Dec):
The fourth-quarter net sales of the Seafood business were down by 5%. Total
sales of Seafood products on the Finnish market fell short of the figure for the
same quarter a year earlier, and the sales shifted to the products with a lower
added value. In Norway, Christmas sales were down on the previous year's figure,
especially for hot-smoked salmon products, though the sales growth for shellfish
in brine, dressings and fishballs continued during the last quarter of the year.
On the Swedish market, shellfish sales were up substantially.
On the Finnish market, the Seafood business posted a fourth-quarter profit
excluding non-recurring items of about the same level as a year earlier, while
in markets abroad, the profit fell short of that posted a year earlier. The
lower profit was because of a fall in profitability as a result of higher prices
for the main raw materials due to the strong deterioration in the exchange rate
with both the Swedish krona and the Norwegian krone, which could not be
compensated for with price increases in final products.
The organizational structure in the Seafood business was streamlined at the end
of the year by discontinuing the positions of director of the Seafood business,
sales director in Sweden and project manager. These organizational changes
produced cost savings, which will improve the profit of the Seafood business by
about EUR 0.5 million as of the start of 2009.
Financial year (Jan-Dec):
The full-year net sales of the Seafood business were up by around 10% on the
previous year's figure. The incorporation of Maritim Food into the Group at the
start of March 2007 and of Sandanger at the start of September 2007 boosted net
sales by EUR 11 million.
In Seafood, the full-year operating profit excluding non-recurring items was at
about the same level as a year earlier. The non-recurring items in 2008
amounted to EUR -0.8 (-0.3) million and consisted of the expenses incurred in
streamlining the organizational structure, write-downs on machinery and
equipment removed from service, and non-recurring expenses concerning storage
arrangements. The non-recurring items in 2007 comprised a write-down on real
estate.
Full-year net sales of the Seafood business in Finland were down slightly on the
previous year. Apetit Kala's sales were adversely affected in the first half of
the year by disruptions in deliveries of the raw material for hot-smoked
whitefish, the poor availability of wild fish (which continued into the second
half of the year), the consumer trend towards low added value fillets of salmon
and rainbow trout, and the changes in the Kalatori network.
Seafood's profitability in Finland increased significantly as a result of the
improvements in labour and raw material productivity and delivery performance.
The retail sector's active sales campaigns for salmon and rainbow trout fillets
continued, and this has steered consumption towards the campaign-priced low
added value salmon and rainbow trout fillets and weakened the profitability of
Seafood's consumer-packaged fillet products and of the Kalatori service
counters.
The organizational changes made in Apetit Kala's sales, production, product
development and logistics continued in the spring, with the aim of simplifying
responsibilities, improving reaction speeds and boosting cost efficiency. As
part of this process, the personnel in charge of Apetit Kala sales and customer
relationships were transferred from Apetit Suomi Oy to Apetit Kala Oy at the
start of April. This reinforced the customer-oriented and demand-driven resource
planning process and simplified the responsibilities for performance.
In Finnish production of fish products, the measures aimed at further improving
labour productivity were continued. In concept sales on the Finnish market,
efforts are focusing on improving profitability through renewing customer
agreements, making the structure of the sales network more efficient and
developing the product range.
In international markets, Seafood's net sales for 2008, calculated in the
respective local currencies and adjusted for year-on-year comparison, were close
to the 2007 figure. The sales growth of shellfish in brine and processed fish
products continued, and sales of dressings turned on to a growth track. The
sales volume of fresh fish products was down on the previous year's total.
In international operations, profitability was adversely affected by the rise in
shellfish product raw material prices, which could not be passed on to sales
prices because of the long agreement periods. Profit was also affected by the
fall in labour and raw material productivity in the Swedish operations. The
lines of responsibility for production control in Sweden were simplified in the
autumn.
Sales price increases compensating for the rise in costs were made in the
international units, and the measures to improve operating efficiency and
productivity were continued.
At Apetit Kala Oy, Jarno Järvinen took up the post of Managing Director at the
start of September, and Jan Brevik was appointed Managing Director of Maritim
Food Sweden AB, also continuing as Managing Director of Maritim Food AS. As of
the start of 2009, Heljä Mantere took up the responsibility for the concept
business.
Investment in the Seafood business during the financial year totalled EUR 1.5
(4.3) million. In Finland, investment focused mainly on the renewal of Seafood's
enterprise resource planning system. The new system was introduced at Apetit
Kala at the start of October and has proceeded smoothly. In the international
units, investment focused on both the renewal of Seafood's enterprise resource
planning system and machinery and equipment for improving productivity. The most
significant of the investments was the packaging line introduced in the Swedish
unit for products intended for the hotel, restaurant and catering sector.
Vegetable Oils
EUR million Oct-Dec/ Oct-Dec/ Jan-Dec/ Jan-Dec/
2008 2007 2008 2007
Net sales 16.4 14.7 62.0 46.0
Operating profit without
non-recurring items -0.1 0.0 -0.0 0.8
Fourth quarter (Oct-Dec):
The net sales of the Vegetable Oils business were up by 12% on the figure for
the same quarter in 2007, as a result of volume growth and higher sales prices.
The raw material price of rapeseed began to fall in the summer, and this
continued to the end of the year. The market has fluctuated a lot, with sharp
and substantial price changes occurring on a daily basis. Due to the long
pricing periods there is a delay between changes in sales and purchasing prices
and changes in market prices.
The fourth-quarter profit excluding non-recurring items was at about the same
level as a year earlier.
The total rapeseed crop in Finland fell to 86,000 tonnes (2007: 113,000 tonnes)
on account of the reduced area under cultivation. This meant an increase in the
use of imported rapeseed raw material, the shipping charges of which increased
Mildola's costs. Profit was also adversely affected by the cut made in a
significant, previously agreed export deal because of financial difficulties
faced by the customer. The refining margin improved towards the end of the
quarter, but the volume fell short of the planned level.
Financial year (Jan-Dec):
Full-year net sales were up on the previous year by 35%. This was the result of
considerable increases in sales prices, the volume growth in sales of oils and
the residual material from crushing, and an increase in the added value of
products sold.
Operating profit excluding non-recurring items was EUR -0.0 (0.8) million.
Non-recurring items totalled EUR -0.1 (+0.1) million. Due to the poor
availability of Finnish raw materials it was necessary to use an amount of
imported raw materials. The shipping charges for this, together with the higher
energy costs in comparison with 2007, served to weaken profitability. On account
of the long-term delivery contracts, it was not possible to raise Mildola's
sales prices to the extent that would have been needed to compensate for the
higher costs.
Vegetable oil raw material prices are determined on world markets. The period
2007-2008 saw an unprecedented increase in the price of rapeseed followed by a
powerful decline, after which the raw material market has been unsettled. The
traditional mode of operation, with its long agreement periods, has proved
unworkable in the present market environment, and so to improve profitability in
Vegetable Oils, Mildola has adopted new mode of operation on the final products
market and on the raw material market. The further development of Mildola's
internal operation and the renewal of its management procedures, begun in the
spring, will continue.
Erkki Lepistö took up the post of Managing Director at Mildola at the start of
July.
Investment in the Vegetable Oils business consisted of minor expenditure on
replacements, totalling EUR 0.2 (0.4) million.
Grain Trading
EUR million Oct-Dec/ Oct-Dec/ Jan-Dec/ Jan-Dec/
2008 2007 2008 2007
Net sales 29.0 43.5 148.5 132.8
Operating profit without
non-recurring items 0.8 1.2 5.4 3.9
Fourth quarter (Oct-Dec):
Both the fourth-quarter net sales and operating result in Grain Trading fell
short of the corresponding figures for the last quarter in 2007. The drop in net
sales was due to smaller volumes and the lower price level. The volume of
Finnish sales was greater than a year earlier, but the volume of exports and the
volume of trade with third countries were below the figures of a year earlier.
Due to the good crops obtained in different parts of the world, there was a
plentiful supply of grains and oilseeds on the market, which held prices low and
kept grain in the hands of growers after the threshing season. The food and feed
industries covered some of their needs with the new crop and made additional
short-term purchases.
Financial year (Jan-Dec):
Full-year net sales in Grain Trading were up on the previous year by 12%. The
operating profit of the Grain Trading business rose to a total of EUR 5.4 (3.9)
million as a result of good performance in the early part of the year.
In the first six months, the scarcity of supply for all agricultural commodities
pushed up prices to record levels. For several years in a row, the global grain
crop had only been at average levels, though the demand for grains and oilseeds
for both food and energy purposes continued to grow. This reduced the world's
stocks very considerably and caused concern over the adequacy of supply. Growers
around the world reacted to the high prices by increasing the area under
cultivation for the next season wherever this was feasible. With the growing
conditions being favourable, the supply of grains and oilseeds became plentiful
in the second half of the year, pushing prices down significantly. As the autumn
wore on, trading in grains slackened off throughout the EU as growers waited for
prices to improve later in the season.
Avena adapted well to these changing market conditions. In 2008, Avena Nordic
Grain Oy accounted for about a quarter of all the grain sold in Finland, almost
half of the exports of grain and more than half of imported grain. The company
was also an important player in the feed raw material trade.
The new branch office opened in Salo in 2007 was fully operational, allowing
Avena to improve the efficiency of its grain purchasing, especially in southwest
Finland. The representative office in Kazakhstan was moved from Almaty to the
new capital, Astana, which is closer to the actual grain-producing regions. A
new regional office was also opened in Lithuania.
Investment in Grain Trading amounted to EUR 0.3 (0.0) million and was spent on
renewing the company's enterprise resource planning (ERP) system. The new ERP
system will be taken into service during 2009.
Other Operations
EUR million Oct-Dec/ Oct-Dec/ Jan-Dec/ Jan-Dec/
2008 2007 2008 2007
Net sales 1.2 1.5 3.0 4.4
Operating profit without
non-recurring items 0.8 1.2 -1.6 -1.8
Fourth quarter (Oct-Dec):
The reduction in fourth-quarter net sales in this segment was the result of the
discontinuation of service fees for sales and product development when they were
transferred from Apetit Suomi Oy to the business areas.
The fourth-quarter operating profit excluding non-recurring items includes EUR
0.9 (1.3) million as the share in the profits of associated companies. The
non-recurring items, amounting to EUR +2.5 (0.0) million, consisted of income
included in the profit of the associated company Sucros, which was mainly the
sales profit from the sale of the Jokioinen factory's enzyme business and the
sale of Voimavasu Oy shares.
Financial year (Jan-Dec):
The full-year net sales in the Other Operations segment amounted to EUR 3.0
(4.4) million.
Other Operations comprise the service company Apetit Suomi Oy, Group
Administration, items not allocated under any of the business segments, and the
associated companies Sucros Ltd and Ateriamestarit Oy. The cost impact of the
services produced by Apetit Suomi Oy is an encumbrance on the operating result
in proportion to the use of services. At the beginning of April, the sales and
product development personnel of Apetit Suomi Oy were transferred to the Frozen
Foods and Seafood businesses, which reduced Apetit Suomi's net sales.
The full-year operating profit excluding non-recurring items totalled EUR -1.6
(-1.8) million. This figure includes EUR 1.6 (1.3) million as the share of the
profits of associated companies. Non-recurring items for the year totalled EUR
+7.4 (+0.9) million, of which EUR +7.5 (+0.7) million will be reported under the
profit of associated companies.
Investment in Other Operations totalled EUR 0.2 (0.1) million and was spent on
the renewal of the enterprise resource planning (ERP) system and the reporting
system, and on environmental care of the Säkylä industrial estate. The new ERP
system was introduced in the parent company and in Apetit Suomi Oy at the start
of September and implementation proceeded without incident.
AUTHORIZATIONS GRANTED TO THE BOARD OF DIRECTORS
Authorization to purchase own shares
The Annual General Meeting of Lännen Tehtaat plc, held on 2 April 2008,
authorized the Board of Directors to decide on acquiring for the company a
maximum of 250,878 of the company's own shares using funds belonging to its
unrestricted shareholders' equity.
This authorization is valid until the next Annual General Meeting.
Authorization to issue shares
The Annual General Meeting authorized the Board of Directors to decide on
issuing new shares and on the transfer of Lännen Tehtaat plc shares held by the
company, in one or more lots as a share issue of a total of no more than 947,635
shares. The share issue authorization covers all of the Lännen Tehtaat plc
shares in the company's possession at that time, i.e. 65,000 shares, and also
all of the maximum of 250,878 Lännen Tehtaat plc shares coming into its
possession by virtue of the authorization of 2 April 2008 for acquiring the
company's own shares.
The authorization is valid until the next Annual General Meeting. The
authorization revoked the earlier authorization to issue shares, given on 29
March 2007, and the authorization to transfer the company's own shares, given on
the same date.
The decisions of the Annual General Meeting are given in more detail in the
stock exchange release dated 2 April 2008 and in the Interim Report published on
8 May 2008.
USE OF THE AUTHORIZATIONS GRANTED TO THE BOARD OF DIRECTORS
Authorizations to issue shares
By 18 February 2009, the Board of Directors had not exercised the authorizations
granted to it to issue new shares or to transfer Lännen Tehtaat plc shares in
the company's possession.
Acquisition of own shares
On 6 May 2008, the Lännen Tehtaat plc Board of Directors decided to acquire a
maximum of 65,000 of the company's own shares using the authorization granted to
it by the Annual General Meeting. A total of 65,000 shares were acquired in
trading on the NASDAQ OMX Helsinki Ltd exchange during the period 19 May - 20
August 2008. The total acquisition cost of these shares was EUR 1.0 million. The
average price of the shares acquired was EUR 15.25 per share, with the highest
purchase price being EUR 15.89 and the lowest price EUR 14.35.
At the close of the financial year, the company had in its possession a total of
130,000 of its own shares acquired during the year or previously, with a
combined nominal value of EUR 0.26 million. The company's own shares in its
possession represent 2.1% of the company's total number of shares and of the
total number of votes. The company's own shares in its possession carry no
voting or dividend rights.
SALE OF SHARES IN JOINT ACCOUNT
The Lännen Tehtaat plc Annual General Meeting of 29 March 2007 took the decision
to sell, on behalf of the respective holders, the company's shares held in the
joint book-entry account and not transferred to the book-entry system, in
accordance with chapter 3a, section 3a, of the old Companies Act (734/1978) and
section 8 of the Act (625/2006) which implements the Limited Liability Companies
Act (624/2006).
The sale began in September. The subject of the sale, a total of 51,910 Lännen
Tehtaat plc shares that were in the joint book-entry account, represent about
0.8% of the total number of Lännen Tehtaat plc shares and of the voting rights.
SHARES AND TRADING
At the end of the financial year the total number of shares issued by the
company stood at 6,317,576, and the registered share capital totalled EUR
12,635,152. The number of Lännen Tehtaat plc shares held by the company was
130,000, representing 2.1% of the entire share capital.
The number of Lännen Tehtaat plc shares traded on the stock exchange during the
financial year was 962,862 (923,450), representing 15.2% (14.6%) of the total
number of shares. The highest share price quoted was EUR 17.00 (24.50) and the
lowest EUR 13.00 (15.65). The share turnover was EUR 14.0 (19.3) million. The
year-end share price was EUR 13.49 (16.19), and the combined market value of all
shares was EUR 85.2 (102.3) million.
FLAGGING ANNOUNCEMENTS
There were no flagging announcements during the financial year.
MANAGEMENT
At its organizational meeting on 9 April 2008, Lännen Tehtaat plc's Supervisory
Board elected Helena Walldén as chairman and Juha Nevavuori as vice chairman of
the Supervisory Board.
The company's Board of Directors elected by the Supervisory Board on 9 April
2008 comprises Harri Eela, Heikki Halkilahti, Aappo Kontu, Matti Lappalainen,
Hannu Simula, Soili Suonoja and Tom v. Weymarn. Tom v. Weymarn was elected
chairman of the Board of Directors and Hannu Simula was elected vice chairman.
Matti Karppinen has been Lännen Tehtaat plc's CEO since 1 September 2005. The
Board of Directors appointed the Group's CFO, Eero Kinnunen, as Deputy CEO, the
appointment taking effect on 1 January 2008.
Erkki Lepistö was appointed Managing Director of Mildola Oy, effective as of 1
July 2008.
On 1 September 2008, Jarno Järvinen took up the post of Managing Director at
Apetit Kala Oy, and Jan Brevik was appointed Managing Director of Maritim Food
Sweden AB, also continuing as Managing Director of Maritim Food AS. Heljä
Mantere was appointed head of the concept business as of 1 January 2009.
As part of the reorganization carried out towards the end of the year, the
duties of director of the Seafood business and sales director for Maritim Food's
Swedish sales were discontinued. In addition, the duties of Seafood's project
manager and of project manager under the Lännen Tehtaat Group's corporate
management were discontinued.
RISKS, UNCERTAINTIES AND RISK MANAGEMENT
The Board of Directors of Lännen Tehtaat plc has confirmed the Group's risk
management policy and risk management principles. All Group companies and
business units will regularly assess and report the risks involved in their
operations and the adequacy of the control procedures and risk management
methods. The purpose of these risk assessments, which support strategy
formulation and decision-making, is to ensure that sufficient measures are taken
to control risks.
The Lännen Tehtaat Group's risks can be categorized as strategic, operating,
financial and hazard risks.
The Group's most significant strategic risks concern corporate acquisitions and
their integration into the Group, and changes occurring in the Group's business
sectors and in its customer relationships. There are significant concentrations
of customers in the Seafood business in Norway and in the concept business in
Finland.
The main operating risks concern raw material availability, the time lags
between purchasing and sale or use, and fluctuations in raw material prices.
Managing price risks is especially important in the Group's Grain Trading,
Vegetable Oils and Seafood businesses, in which raw materials represent between
65% and 85% of net sales. The prices of grains, oilseeds and the main fish raw
materials are determined on the world market. In both the Vegetable Oils and
Grain Trading businesses, limits are defined for open price risks.
The Group operates in international markets and is therefore exposed to currency
risks associated with changes in exchange rates. The principal foreign
currencies used are the US and Canadian dollars, the Norwegian krone and the
Swedish krona. In accordance with the Group's risk management policy, all major
open currency positions are hedged. Further details concerning the management of
financial risks are given in the notes to the financial statements.
Fire, serious process disruptions and disease epidemics can all lead to major
property damage, losses from breaks in production, and other indirect adverse
impacts on the company's operations. Group companies guard against these risks
by evaluating their own processes, for instance through self-monitoring, and by
taking corrective action where necessary. Insurance policies are used to cover
all risks for which insurance can be justified on financial or other grounds.
Short-term risks
Financial uncertainty has increased the counterparty risks, and so special
attention is being given in Group companies to the management of risks
concerning customers' solvency and the ability of suppliers to deliver.
The economic recession may have both positive and negative effects on the demand
for different products and product groups.
Projects to renew Lännen Tehtaat's enterprise resource planning system were
launched in 2007. In the Vegetable Oils business the new ERP system was
introduced during the same year, while in the parent company and in Apetit Suomi
and Apetit Kala the new systems were introduced in autumn 2008. The aim is to
replace the Group's old operating and financial control systems with integrated
solutions. This will be done in the Frozen Foods and Grain Trading businesses
during 2009. Lännen Tehtaat is aware of the risks involved in transferring to
the new systems, and to ensure that these risks are managed the project's
progress is being regularly monitored by steering and working groups.
EVENTS SINCE THE END OF THE FINANCIAL YEAR
With the aim of bringing production and costs into line, Mildola Oy began
co-determination talks in January concerning lay-offs affecting its entire
personnel. Co-determination talks regarding the need for lay-offs were also
begun in January at Apetit Kala Oy concerning the salaried and waged personnel
at the Kuopio fish processing plant.
OUTLOOK FOR 2009
The global economic downturn may have an impact on Lännen Tehtaat's businesses
during the year. Forecasting changes in consumer demand and in customer
behaviour is difficult, however, but it is widely believed that consumer demand
for food products will increasingly be channelled towards basic foodstuffs and
low value added products.
The net sales of Lännen Tehtaat's continuing operations will be affected
particularly by changes in the price level of grains and oilseeds.
Thanks to the measures taken to develop the Group's different businesses, the
full-year operating profit from continuing operations, excluding non-recurring
items, is estimated to be at about the same level as in 2008. This forecast is
nevertheless subject to considerable uncertainty given the economic
circumstances prevailing in 2009.
In contrast to 2008, the profit accrual in 2009 is expected to be heavily
weighted towards the latter half of the year. The first-quarter operating profit
excluding non-recurring items is expected to fall short of the figure for the
same period in 2008.
The need for investment in non-current assets is significantly less than in
2008.
PROPOSED DIVIDEND
The aim of the Board of Directors of Lännen Tehtaat plc is that the company's
shares provide shareholders with a good return on investment and retain their
value. It is the company's policy to distribute in dividends at least 40% of the
profit for the financial year attributable to shareholders of the parent
company.
The parent company's distributable funds totalled EUR 78,888,764.38 on 31
December 2008, of which EUR 23,596,200.59 is profit for the financial year.
The Lännen Tehtaat Group's profit for 2008 included significant non-recurring
items related to implementation of the strategy of Group companies. For this
reason, the Board of Directors of Lännen Tehtaat plc will propose that the
company deviates from its dividend policy. The Board will propose to the Annual
General Meeting that a dividend of EUR 0.85 (0.85) per share be paid, amounting
to EUR 5,259,439.60, and that EUR 73,629,324.78 remain in its equity. The
proposed dividend is thus 31.1% of the earnings per share.
No significant changes have taken place in the financial standing of the company
since the end of the financial year. The company's liquidity is good, and in the
view of the Board of Directors this will not be jeopardized by the proposed
distribution of dividends.
Current assets
Inventories 55.1 64.4
Receivables 38.7 28.6
Income tax receivable 0.7 0.4
Financial assets at fair value
through profit and loss 3.8 8.1
Cash and cash equivalents 9.9 5.1
Current assets total 108.0 106.6
Total assets 192.3 205.9
EQUITY AND LIABILITIES
Equity attributable to the equity
holders of the parent company 135.1 127.3
Minority interest 0.5 0.7
Total equity 135.6 128.0
Current liabilities
Short-term financial liabilities 10.7 28,2
Income tax payable 0.7 0.7
Trade payables and other liabilities 36.1 38.7
Current liabilities total 47.4 67.6
Net profit for the period 17.1 13.4
Adjustments, total -8.5 -1.5
Change in working capital -5.1 -3.3
Interests paid from
operating activities -2.4 -2.8
Interests received from
operating activities 0.4 0.7
Taxes paid -1.8 -1.2
Net cash flow from operating activities -0.4 5,3
Investments in tangible and intangible assets -8.1 -7.6
Proceeds from sales of tangible
and intangible assets 3.0 0.2
Acquisition of subsidiaries deducted by cash -0.4 -9.9
Proceeds from sales of subsidiaries - 42,0
Transactions with minority 1.5 -
Acquisition of associated companies -0.4 -
Proceeds from sales of associated companies 27.0 0.6
Purchases of other investments -14.0 -35.1
Proceeds from sales of other investments 18.1 27.0
Dividends received from investing activities 3.6 5.3
Net cash flow from investing activities 30.3 22.5
Repayments of short-term loans -18.4 -16.7
Repayments of long-term loans -0.1 -8.1
Payment of financial lease liabilities -0.1 -0.1
Purchase of own shares -1.0 -
Dividends paid to minority -0.3 -
Dividends paid -5.3 -5.3
Cash flows from financing activities -25.1 -30.2
Net change in cash and cash equivalents 4.8 -2.4
Cash and cash equivalents at the
beginning of the period 5.1 7.5
Cash and cash equivalents at the
end of the period 9.9 5.1
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
EUR million
A = Share capital
B = Share premium account
C = Revaluation reserve
D = Other reserves
E = Own shares
F = Translation differences
G = Retained earnings
H = Attributable to equity holders of the parent company total
I = Minority interest
J = Total equity
A B C D E F G H I J
Shareholders'
equity at
1 Jan, 2007 12.6 23.4 0.4 7.3 -0.8 -0.2 76.5 119.2 - 119.2
Cash flow hedges:
gains/losses
recorded in equity - - -0.1 - - - - -0.1 - -0.1
Taxes related to
items entered into
equity and removed
from equity - - 0.0 - - - - 0.0 - 0.0
Increase/decrease
in subsidiary - - - - - 0.2 - 0.2 0.7 0.9
Translation
differences - - - - - 0.1 - 0.1 - 0.1
Other changes - - - -0.1 - - 0.0 -0.1 - -0.1
Profit for the period - - - - - - 13.3 13.3 0.1 13.4
Total recognized
income and
expenses - - -0.1 -0.1 - 0.3 13.3 13.4 0.7 14.2
Dividend
distribution - - - - - - -5.3 -5.3 - -5.3
The year-end report has been prepared in accordance with IAS 34, Interim
Financial Reporting, as adopted by the EU. The accounting policies adopted are
consistent with those of the Group's annual financial statements for the year
ended 31 December 2007.
In addition, the IFRIC has published IFRIC 15, 'Agreements for the Construction
of Real Estate', IFRIC 16, 'Hedges of a Net Investment in a Foreign Operation',
IFRIC 17, 'Distributions of Non-cash Assets to Owners' and IFRIC 18, 'Transfers
of Assets from Customers'. The IASB has published IAS 32/IAS 1 amendment
'Financial Puttable Instruments and Obligations' Arising from Liquidation' and
IAS 39amendment 'Recognition and Measurement Eligible Hedged Items'. These
interpretations and amendments do not have material effect to the Lännen
Tehtaat's financial statements.
SEGMENT INFORMATION
A Frozen Foods
B Seafood
C Vegetable Oils
D Grain Trading
E Other Operations
F Continuing operations total
G Discontinued operations
H Total
Net sales
EUR million
1-12/2008 1-12/2007
12 mths 12 mths
Finland 209.9 189.2
Scandinavia 65.8 45.8
Baltic states and Russia 7.6 10.0
Other countries 65.9 64.6
Continuing operations total 349.1 309.6
Discontinued operations - 67.2
Total 349.1 376.8
DISCONTINUED OPERATIONS
The sale of the majority holding in Suomen Rehu Ltd was completed at the start
of June 2007, when Suomen Rehu and its subsidiaries were transferred to
Hankkija-Maatalous Oy. In 2007 the net profit from discontinued operations
includes a sale profit related to the sold 51% share ownership totalling EUR 5.6
million. Lännen Tehtaat plc and SOK subsidiary Hankkija-Maatalous Oy signed an
agreement on 1 September 2008, transferring the remaining shares owned by Lännen
Tehtaat in Suomen Rehu Ltd to Hankkija-Maatalous Oy. The transaction price for
the 49% shareholding was EUR 27 million. Lännen Tehtaat recognized a
non-recurring tax-free profit of EUR 6.6 million for the sale of these minority
shares in its financial performance for the third quarter.
Because of the transaction, the profit of the associated company Suomen Rehu is
presented differently in the consolidated income statement. Previously shown
beneath the operating profit, the share of profit of associated company Suomen
Rehu for the period 1 January - 31 August 2008 will be presented under
discontinued operations. The information for the comparative year for the period
subsequent to the sale of the majority shareholding, 1 June - 31 December 2007,
will be adjusted accordingly.
Gross investments in non-
current assets, EUR million,
continuing operations 8.1 6.9
Corporate acquisitions and other
share purchases, EUR million,
continuing operations 0.5 11.6
Average number of personnel,
continuing operations 755 725
Average number of shares, 1 000 pcs 6 221 6 253
The key figures in this year-end report are calculated with same
accounting principles than presented in year 2007 annual financial statements.
CONTINGENT LIABILITIES
EUR million
Dec 31,2008 Dec 31, 2007
Mortgages given for debts
Real estate mortgages 8.6 7.3
Corporate mortgages - 1.3
Guarantees 6.9 12.8
Non-cancellable other leases,
minimum lease payments
Real estate leases 3.0 5.3
Other leases 0.9 0.8
Lännen Tehtaat does not have significant investment commitments as of 31
December 2008.
CHANGES IN TANGIBLE ASSETS
EUR million
1-12/2008 1-12/2007
12 mths 12 mths
Book value at the beginning of the period 43.5 67.4
Acquisitions 5.9 6.5
Acquisitions of operations - 7.6
Disposals -0.2 -0.2
Disposals of operations - -32.6
Depreciations and impairments -5.3 -5.1
Other changes -0.5 -0.1
Book value at the end of the period 43.5 43.5
TRANSACTIONS WITH ASSOCIATED COMPANIES AND JOINT VENTURES
EUR million
1-12/2008 1-12/2007
12 mths 12 mths
Sales to associated companies 13.4 14.3
Sales to joint ventures 8.5 8.1
Purchase from associated companies 0.7 12.0
Purchase from joint ventures 0.3 0.1
Long-term receivables from associated companies 2.7 3.9
Trade receivables and other
receivables from associated companies 1.6 3.1
Trade receivables and other
receivables from joint ventures 0.9 0.8
Trade payables and other liabilities
to associated companies 0.0 0.0
The sales of goods and services to the associated companies and joint ventures
are based on valid price catalogues of the Group.
LÄNNEN TEHTAAT PLC
Board of Directors
Further information: CEO Matti Karppinen, tel. +358 10 402 4001
Copies to:
NASDAQ OMX Helsinki Ltd
Principal media
www.lannen.fi
