LÄNNEN TEHTAAT PLC Interim Report 8 May 2008 8.30 am
INTERIM REPORT 1 January - 31 March 2008
- Net sales for the Group's continuing operations totalled EUR 90.9 (71.5)
million, up 27% on the same quarter in 2007;
- Continuing operations showed a first-quarter profit of EUR 5.0 (0.1) million,
and earnings per share came to EUR 0.78 (0.01);
- Operating profit in continuing operations (excluding non-recurring items) was
EUR 0.6 (0.1) million.
The figures for this interim report have not been audited.
CEO Matti Karppinen:
“Net sales growth in our continuing operations has remained high, and growth
occurred in all segments. The operating profit in continuing operations,
excluding non-recurring items, was higher than in the same quarter a year ago.
The January-March profit was boosted by the recognition of substantial one-off
items from the associated company Sucros Ltd.
We've achieved good results with the measures to improve productivity,
cost-efficiency and operational quality, and we'll be making a determined effort
to continue this work.
The Group carried out a number of restructuring measures in support of its
business strategy during January-March. In line with the Frozen Foods strategy,
Apetit Pakaste sold its jams business to Saarioisten Säilyke Oy. In Grain
Trading, a commitment plan was introduced for personnel in Avena Nordic Grain,
giving them the opportunity to obtain a stake in the ownership of Avena Nordic
Grain Oy.
The international raw material and food markets are becoming increasingly
volatile. Higher world demand for raw materials and low raw material stocks have
resulted in rapid increases in both raw material and product prices. At the same
time, the global economy is slowing down and there is a great deal of
uncertainty about the future. In this kind of uncertainty, where significant
changes can occur very quickly, it is essential to be ready to react.
The current economic situation has put more pressure on the food industry to
consolidate. There are more companies on offer on the acquisitions market and
buyers are now in a stronger position than before.”
KEY INDICATORS, EUR million
Continuing operations Q1/2008 Q1/2007
Net sales 90.9 71.5
Operating profit 5.4 0.2
Operating profit without non-recurring items 0.6 0.1
Profit before taxes 5.0 0.1
Profit for the period 5.0 0.1
Earnings per share, EUR 0.78 0.01
RESTRUCTURING
Ownership arrangements in Avena Nordic Grain Oy
In February, Lännen Tehtaat plc decided to offer Avena Nordic Grain personnel
the chance to become indirect owners of their company. The offer was part of the
commitment plan for Avena Nordic Grain personnel. The arrangement was put into
effect by setting up a new company Foison Oy, which acquired 20% of the shares
in Avena Nordic Grain Oy from Lännen Tehtaat. Nearly all Avena Nordic Grain's
personnel joined the scheme, subscribing 73.1% of the new company's shares. The
remaining 26.9% of the shares was subscribed by Lännen Tehtaat plc. The Foison
shares owned by Lännen Tehtaat can be used for share-based commitment
arrangements covering new Avena staff should Lännen Tehtaat plc so decide.
Following the arrangements, Lännen Tehtaat plc owns, directly and indirectly,
85.4% of Avena Nordic Grain's shares. There are restrictions concerning the
transfer of Foison Oy's shares as they may only be sold to Lännen Tehtaat plc.
At the same time, Lännen Tehtaat plc has a buy-back obligation on the shares.
Under the arrangement, Avena's profits will be distributed to shareholders as
dividends each year. Consequently, the ownership of Foison Oy will appear as a
liability in the consolidated financial statements and the obligation to pay
dividends on the basis of the financial year's results to Foison Oy will be
treated as a financing cost.
The arrangements referred to above had no other impact on the profits of the
Lännen Tehtaat Group.
Sale of the jams business
In March, Apetit Pakaste Oy concluded an agreement with Saarioisten Säilyke Oy
on the sale of the Apetit Pakaste jams business. Under the agreement, the
development, production, sales and marketing of jams and marmalades will be
transferred to Saarioisten Säilyke Oy in autumn 2008. The deal also includes
transfer of the Dronningholm trademark.
CHANGE IN REPORTING PRACTICE
Lännen Tehtaat has decided to alter its reporting practice in respect of the way
in which it presents its share of the profit/loss of associated companies from
the start of 2008. Under the new practice, the share of the profit/loss of
associated companies related to the food businesses will be included in the
operating profit, and the share of the profit/loss of associated companies not
forming part of Lännen's core businesses will be shown below the operating
profit. The share of the profit/loss from Sucros Ltd and Ateriamestarit Oy is
included in Other Operations. The figures for the previous year have been
adjusted accordingly. The share of the profit/loss from Sandanger AS from 1
March to 31 August 2007 is reported above the operating profit for the Fish
business.
Lännen Tehtaat's share of the profit from the associated company Suomen Rehu is
shown below the operating profit.
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE
In the consolidated balance sheet the assets and liabilities directly associated
with discontinued operations and with assets held for sale are presented
separately from other assets and liabilities as non-current assets held for sale
and as liabilities associated with non-current assets held for sale. In the
balance sheet and income statement for the first quarter of the previous year
the Suomen Rehu Group was reported under discontinued operations. In the balance
sheet for the first quarter 2008, the assets of the jams business sold to
Saarioinen are disclosed as assets held for sale.
NET SALES AND PROFIT
The January-March profit for continuing and discontinued operations totalled EUR
5.0 (1.9) million, and earnings per share amounted to EUR 0.78 (0.31).
Continuing operations
January-March net sales for the Group's continuing operations totalled EUR 90.9
(71.5) million, which was 27% higher than in the first quarter the previous
year. There was growth in all business segments.
The operating profit of the continuing operations came to EUR 5.4 (0.2) million.
The operating profit without non-recurring items was 0.6 (0.1) million.
Non-recurring items amounted to EUR 4.8 (0.1) million. The reported operating
profit includes EUR 4.9 (-0.4) million as the share of associated companies'
profits/losses. The figure of EUR 4.9 million consists of non-recurring items
received as compensation for the sale of sugar and isoglucose quotas in
connection with the sugar reform.
The net financial expenses of the continuing operations totalled EUR 0.7 (0.1)
million. Included in this total is Foison Oy's EUR 0.2 million share of Avena
Nordic Grain's first-quarter profit. Lännen Tehtaat's share of the associated
company Suomen Rehu's profits came to EUR 0.3 million. Profit before taxes
amounted to EUR 5.0 (0.1) million, and the profit for the period came to 5.0
(0.1) million.
Discontinued operations
Net sales of discontinued operations totalled EUR 0.0 (47.2) million, and the
profit for the period was 0.0 (1.8) million.
FINANCING AND CASH FLOW
The Group's financial position and liquidity remained good throughout the
period. Cash flow from operations in January-March, after interest and taxes,
totalled EUR -7.4 (5.5) million. The impact of the change in working capital was
EUR -7.2 (7.3) million. Net cash flow from investments totalled EUR 3.6 (-10.2)
million, and cash flow from financing activities was EUR 4.2 (3.3) million. The
cash flows of the previous year include those of the discontinued operations.
At the end of the first quarter, interest-bearing liabilities came to EUR 37.8
(59.2) million, and liquid assets amounted to EUR 9.5 (6.0) million. Net
interest-bearing liabilities totalled EUR 28.4 (53.2) million. The figures for
the first quarter a year earlier include the interest-bearing liabilities and
liquid assets of the discontinued operations. The consolidated balance sheet
total stood at EUR 207.6 (235.8) million and equity ratio was 64.0 (49.1)%.
Commercial papers issued for the Group's short-term financing totalled EUR 32.0
(28.0) million at the end of the quarter. Liquidity is secured with committed
credit facilities, and at the end of the quarter, the credit facilities
available totalled EUR 25 (23) million.
INVESTMENT
In the period January-March, gross investment in non-current assets in
continuous operations came to EUR 1.3 (0.8) million.
PERSONNEL
The average number of personnel in continuing operations in January-March
totalled 746 (617). The number of personnel working in Frozen Foods was 220
(224), in Fish 448 (317), in Vegetable Oils 35 (36), in Grain Trading 30 (29)
and in Other Operations 13 (11). The personnel at Apetit Suomi Oy are allocated
under both Frozen Foods and Fish in proportion to the services charged. The
increase in the number of personnel in the Fish business is mainly due to the
acquisition of Maritim Food.
BUSINESS SEGMENTS
Frozen Foods
Net sales of Frozen Foods in January-March totalled EUR 13.5 (13.3) million,
which was about 2% up on the first quarter of the previous year. Sales of retail
products grew by about one per cent overall, and at the same time there was a
further decline in the sales of retailers' private label brands. The number of
sales days in the first quarter of the previous year was two more than in the
quarter under review. New products and active marketing gave a further boost to
the sales of Apetit frozen potato products. Apetit's creamed potatoes have
gained in popularity and the new, larger pack of traditional mashed potato has
also been well received. Furthermore, new frozen vegetable products, such as
potatoes and chopped vegetables for soup, are also selling well. Sales in the
hotel, restaurant and catering sector were 7% up on the figure for the same
quarter the previous year, adjusted to allow accurate comparison, while sales to
the food industry were unchanged. Exports of peas to other European countries
continued during the early months of the year. Total exports were up 30% from
the same quarter in 2007.
Excluding non-recurring items, the Frozen Foods business posted an operating
profit of EUR 0.4 (0.5) million, which was almost the same as a year earlier.
Higher raw material and energy prices have resulted in substantial increases in
production costs. Lännen Tehtaat has been able to soften the impact of these by
raising sales prices and by keeping fixed costs under tight control.
In order to ensure that operations in the Frozen Foods business area are more
customer-oriented and demand-driven, the sales and product development functions
were reorganized. As part of these changes, the sales and product development
staff were transferred from the service company Apetit Suomi Oy to Apetit
Pakaste Oy.
In March, Apetit Pakaste and Saarioisten Säilyke Oy concluded an asset deal
under which the development, production, sales and marketing of jams and
marmalades will be transferred to Saarioisten Säilyke Oy in autumn 2008. The
deal also includes transfer of the Dronningholm trademark. The sale will
generate a one-off sales profit of approximately EUR 2.5 million, which will be
entered in the third quarter results. As a consequence of the sale, Apetit
Pakaste can, in accordance with its strategy, focus on frozen foods. The net
sales of the jams and marmalades business in 2007 totalled about EUR 6 million
and had a slightly positive impact on the operating profit.
The facilities used for jam production will be converted to handle the frozen
food production transferred from Turku. Moving this production from Turku will
generate almost thirty new jobs in Säkylä. Most of these jobs will be taken up
by former jam production employees now offered jobs in frozen food production.
Construction of the packaging plant required as part of the transfer of
production from Turku continued during the period under review. The Turku
production is scheduled for transfer to Säkylä by the end of 2008. The
centralization of production is expected to result in greater productivity and
cost-efficiency and, consequently, an increase of about EUR 0.9 million in
operating profits from 2009.
The project to introduce a new enterprise resource planning system continued
during the first quarter. The aim is to introduce the new system in Frozen Foods
during 2008.
Investment in the Frozen Foods business in January-March totalled EUR 0.8 (0.2)
million. The most important investment concerned the construction of new
facilities at Säkylä required for the production transfer from Turku and the
updating of the enterprise resource planning system.
Fish
The net sales of the Fish business totalled EUR 21.5 (16.4) million, which was
31% higher than the same quarter in 2007. Maritim Food and Sandanger,
incorporated into the Group in March and September 2007, respectively, increased
the segment's net sales by EUR 6.5 million.
The operating profit of the Fish business (excluding non-recurring items)
totalled EUR -0.5 (-0.2) million. Non-recurring items amounted to EUR -0.1 (0.0)
million. The non-recurring items resulted from the organizational changes
carried out during the period under review. The Fish business did not achieve
its result targets on the Finnish market. However, the results of the Maritim
Food Group were in line with expectations.
The first-quarter net sales of the Fish business in Finland were down on those
for the same period a year earlier, primarily as a result of a decline in prices
for salmon and rainbow trout and the consequent drop in the sales prices of
fresh-fish products. Since autumn, sales have also been affected by poor
availability of wild fish and the raw material for hot-smoked whitefish. The
shellfish products produced by Maritim Food and sold under the Apetit Maritim
brand, introduced on the Finnish market in autumn, have been selling better than
expected. There was tougher price competition in low value-added consumer-packs
of salmon and rainbow trout fillets and in salmon and rainbow trout fillets sold
at service counters. Measures aimed at improving productivity and price
competitiveness in this product category were started during the period under
review.
The work to improve internal efficiency and processes at Apetit Kala, which was
started in the autumn, has proceeded as planned. Labour and raw-material
productivity have improved and delivery reliability has remained at targeted
levels. The reorganization of sales, production, product development and
logistics continued, with the aim of clarifying responsibilities, achieving
higher reaction speeds and increasing cost-efficiency. As part of the
organizational changes, the staff responsible for product sales and customer
accounts at Apetit Kala were transferred from Apetit Suomi Oy to Apetit Kala Oy.
The aim is to ensure that operations are more customer-oriented and
demand-driven.
Apetit Kala has signed an agreement with Saarioinen Oy concerning cooperation in
the hotel, restaurant and catering sector, starting on 1 September 2008. The aim
is to achieve substantial improvements in the availability of Apetit Kala and
Maritim Food products for customers in the catering sector.
Regarding the Kalatori service counters, Apetit Kala has decided to take over
those sales points previously run under the franchise model, in order to expand
sales and introduce greater standardization. Most of these franchised Kalatori
sales points were taken over by Apetit Kala in April 2008.
The net sales of Maritim Food Group increased compared with the same period in
2007. Sales of Maritim Food in Norway remained at the previous year's level. On
the Norwegian market the product group posting the strongest growth in sales was
shellfish products. A drop in the sales prices of salmon products led to a fall
in net sales of fish products. With Easter occurring in March, there were two
sales days fewer in the first quarter than a year ago, which had a negative
impact on sales. On the Swedish market, first-quarter sales grew by about one
third from the previous year's figure. This growth occurred in sales to both
existing and new customers.
Delivery reliability of the Norwegian and Swedish companies has remained good.
Work productivity has improved, raw-material losses have decreased and
short-term absenteeism has dropped, particularly at the end of the period. To
achieve further improvements in productivity and to ensure adequate service
levels for HoReCa customers, the Swedish company will make investments in
production lines and packaging machinery during 2008.
The integration of Maritim Food into Lännen Tehtaat has continued as planned and
its operations have now been largely separated from those of the previous owner
group. Key resources such as procurement and financial administration, which
until now have been provided by the previous owner as outsourced services, are
now part of Maritim Food.
Sami Haapasalmi, appointed to head the Fish business, took up his duties in
mid-April. He is responsible for the profitability of the Fish business and for
developing and expanding the business through organic growth and acquisitions.
Investment in the Fish business totalled EUR 0.3 (0.5) million. The most
important investments concerned the renewal of the company's enterprise resource
planning system, and productivity improvements in Maritim Food.
Vegetable Oils
In Vegetable Oils, net sales totalled EUR 14.2 (10.0) million, up 42% on the
first quarter figure for the previous year. The increase was due to higher sales
prices, higher volumes of rapeseed oil and rapeseed expeller, and the higher
added value of products sold.
Operating profit totalled EUR 0.2 (0.4) million. The drop was caused by a
decline in the refining margin and higher energy and wage costs compared with
the same period in 2007. The rapid rise in the prices of rapeseed and rapeseed
oils that began a year ago continued in January-February. Since then, the market
has been characterized by sharply fluctuating prices.
Investment in the Vegetable Oils business totalled EUR 0.0 (0.1) million and
consisted of small replacement investments.
Grain Trading
The strong growth in Grain Trading continued during the first quarter. Net sales
totalled EUR 42.1 (32.1) million, which was 32% more than a year earlier. The
growth was the result of higher prices. Grain Trading posted higher net sales in
both exports and in trading between third countries. In Finland, however, sales
were slightly lower than in the same quarter of 2007.
Poorer than expected harvests in the most important grain production areas, low
stocks and growing demand led to sharp increases in the world prices of grain,
oilseeds and feed raw materials during the autumn. Prices remained at fairly
high levels during the early part of the first quarter, but, in anticipation of
the new harvest and with larger areas now under cultivation, started declining
at the end of the first quarter.
Grain Trading was successful in seizing opportunities in different markets and,
as a result, was able to increase its first-quarter operating profit to EUR 1.7
(0.8) million.
Other Operations
The Other Operations segment is made up of the service company Apetit Suomi Oy,
Group Administration, items not belonging to any of the other business segments,
and the associated companies Sucros Oy and Ateriamestarit Oy. The cost effect of
services produced by Apetit Suomi Oy is an encumbrance on the operating result
in proportion to the use of services. Apetit Suomi's sales and product
development staff were transferred to the Frozen Foods and Fish businesses at
the end of the period under review.
The first-quarter net sales of the Other Operations segment were unchanged from
the previous year, totalling EUR 1.0 (1.0) million.
The operating profit of the segment (excluding non-recurring items) was EUR
-1.2 (-1.5) million. The non-recurring items amounted to EUR 4.9 (0.1) million.
The operating profit for January-March contains a share of the associated
companies' profits/losses amounting to EUR 4.9 (-0.4) million. The sum of EUR
4.9 million consists of non-recurring items received as compensation in
connection with the EU sugar reform. About EUR 3.5 million of this total is
related to the EU restructuring aid in connection with the closure of the Salo
sugar factory, and now all the compensation for the closure of the Salo factory
has been recognized in the accounts. Other non-recurring items, totalling about
EUR 1.5 million, are compensation granted in March under the EU sugar reform for
the sale of sugar quota of the Säkylä factory and isoglucose quota of the
Jokioinen plant. Excluding the non-recurring items, Lännen Tehtaat's share of
the associated company's profits/losses totalled EUR 0.0 (-0.4) million.
Investment in Other Operations totalled EUR 0.1 (0.0) million.
DECISIONS BY THE ANNUAL GENERAL MEETING
The Annual General Meeting of Lännen Tehtaat plc, held on 2 April 2008, approved
the financial statements of the parent company and the consolidated financial
statements and discharged the members of the Supervisory Board and the Board of
Directors and the CEO from liability for the 2007 financial year.
Dividend
The Annual General Meeting decided to distribute as dividend EUR 0.85 per share
on the financial year 2007. The AGM decided to pay the dividend on 15 April
2008.
Amending the Articles of Association
The Annual General Meeting approved the Board of Directors' proposal concerning
an increase in the maximum age at which a person may be elected to the Board of
Directors and to the Supervisory Board. Under the decision, a member of the
Board of Directors or the Supervisory Board who has attained the age of 68 is
ineligible for re-election to the post.
Authorization to acquire Lännen Tehtaat shares
The Annual General Meeting authorized the Board of Directors to decide on the
acquisition of a maximum total of 250,878 Lännen Tehtaat shares for the company
using non-restricted equity, under the following conditions:
Shares may be acquired for the purpose of developing the company's capital
structure, financing or implementing corporate acquisitions or other
arrangements, implementing share-based incentive systems, or for onward transfer
or annulment.
Shares may be acquired in one or more lots, to a maximum total of 250,878
shares. The combined number of Lännen Tehtaat shares held by the company
following this acquisition must not, however, exceed five (5) per cent of the
total number of Lännen Tehtaat shares. The Board is entitled to decide on how to
proceed in acquiring shares.
The shares will be acquired in public trading on the OMX Nordic Exchange
Helsinki, and the current value at the time of the transaction will be paid for
the shares. During the validity of the authorization, the minimum price of the
shares shall be the lowest price quoted in public trading, and the maximum price
correspondingly shall be the highest price quoted in public trading. The
acquisition price will be paid to the parties selling the shares within the
period of payment specified by the rules of the OMX Nordic Exchange Helsinki and
the Finnish Central Securities Depository.
Because this acquisition will be performed by buying shares in public trading,
the shares will not be acquired in accordance with the holding percentages of
the shareholders. The share acquisition will decrease the company's
distributable non-restricted equity. The Board was authorized to decide on any
other terms and conditions related to the company's acquisition of its own
shares.
The authorization is valid until the next AGM.
Authorization for share issue
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 in one or more lots in a share issue, to a total of no more than 947,635
shares, under the following conditions:
The share issue authorization covers all the Lännen Tehtaat shares already held
by the company (65,000 shares). The authorization further covers all the Lännen
Tehtaat shares to be acquired by the company under the authorization, given on 2
April 2008, to acquire Lännen Tehtaat shares. The maximum number of Lännen
Tehtaat shares that may be acquired under this authorization is 250,878. The
maximum number of new shares that can be issued is 631,757, and the maximum
number of Lännen Tehtaat shares held by the company that can be issued is
315,878.
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 OMX Nordic
Exchange Helsinki. 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 building 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; and
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 29 March 2007, and the
authorization to transfer Lännen Tehtaat shares held by the company given on the
same date.
SHARES AND TRADING
During the period under review, a total of 383,666 (322,015) company shares, or
6.1 (5.1)% of the total number of shares, were traded in the stock exchange. The
highest share price was EUR 16.46 (24.50) and the lowest EUR 13.20 (22.20).
Share turnover in January-March totalled EUR 5.4 (7.7) million. At the end of
the period, the market value of the share stock stood at EUR 94.6 (145.3)
million.
FLAGGING ANNOUNCEMENTS
No flagging announcements were made during the period under review.
GOVERNANCE
In its organizational meeting on 7 April 2008, the Supervisory Board of Lännen
Tehtaat plc elected Helena Walldén as its chairman and Juha Nevavuori as deputy
chairman.
At the same meeting, the Supervisory Board elected Harri Eela, Heikki
Halkilahti, Aappo Kontu, Matti Lappalainen, Hannu Simula, Soili Suonoja and Tom
v. Weymarn as members of the Board of Directors of the company. Tom v. Weymarn
was elected chairman and Hannu Simula as vice chairman of the Board of
Directors.
SEASONAL NATURE OF OPERATIONS
Under the IAS 2 standard, the acquisition cost of inventories includes a
systematically allocated portion of the fixed production overheads. In
production based on seasonal harvests, raw materials are mostly processed into
finished products during the final quarter, which means that inventories and
their balance-sheet values peak at the end of the year. As fixed production
overheads included in acquisition costs are not entered as an expense until the
time of sale, the Group generates most of its annual profits during the final
quarter. Because of the emphasis on seasonal harvests, the seasonal nature of
Lännen Tehtaat's operations is most marked in the Frozen Foods business and the
operations of the associated company Sucros Ltd.
Apetit Kala generates a considerable proportion of its sales during weekends and
public holidays. The full-year result for the Fish business depends to a great
extent on the success of Christmas sales.
Annual and quarterly net sales in the Grain Trading business depend very much on
demand and supply factors and on the price level in Finland and other markets.
RISKS AND UNCERTAINTIES IN THE NEAR FUTURE
The most significant near-future risks for the Lännen Tehtaat Group are
connected with the management of changes in raw material prices, changes
occurring in the Group's business sectors and in customer relationships, the
transfer of production from the Turku plant, the introduction of the new
enterprise resource planning system, corporate acquisitions and the integration
of acquired operations.
IMPORTANT EVENTS AFTER THE PERIOD UNDER REVIEW
On 2 April 2008, the Lännen Tehtaat plc Board of Directors decided to introduce
a share reward scheme as part of a long-term commitment plan for the Group's key
personnel. Under the plan, key personnel will have the opportunity to receive
company shares as a reward for achieving defined targets for the earning period.
The earning period is 1 January 2008 to 31 December 2008. Any reward paid on
this 2008 earning period will be paid during 2009 partly in company shares and
partly in cash. The aim is that the amount paid in cash would cover the taxes
and tax-related charges incurred on the reward. Transfer of all or any of the
shares within the restriction period of two years after the end of earning
period is prohibited. If a key personnel member terminates his or her employment
contract or contract of engagement during the restriction period, any shares the
person has received under the reward scheme must be returned to the company
without compensation. The amount of any reward available under the scheme for
the 2008 earning period will be based on the Group's earnings per share for its
continuing operations (EPS). A maximum of 17,000 Lännen Tehtaat plc shares and
additionally a maximum cash payment equal to the total value of these shares
will be paid on the 2008 earning period. A quota equal to a maximum 14,300
shares had been allocated to 13 key staff members by the end of the period under
review.
In early April, Apetit Kala signed an agreement with Saarioinen Oy concerning
cooperation in the hotel, restaurant and catering (HoReCa) sector. Under the
agreement, Saarionen will, as of 1 September 2008, sell and market Apetit Kala
and Maritim Food products to customers in the Finnish HoReCa sector. The aim of
the arrangement is to achieve substantial improvements in the availability of
the products in the HoReCa sector.
OUTLOOK FOR 2008
The full-year net sales for the continuing operations are expected to be up and
the operating profit excluding non-recurring items is expected to improve on the
previous year.
Following the sale of the jams business, the net sales of Frozen Foods are
expected to remain at the previous year's level. Sales of Apetit's own brands
are expected to grow, while sales to the hotel, restaurant and catering sector
and to the food industry are likely to remain steady and exports are expected to
decline. Apetit Pakaste's financial performance will be adversely affected by
higher raw material and energy costs and by the overlapping and non-recurring
expenses from the transfer of production from Turku to Säkylä and the
introduction of the enterprise resource planning system. The positive impact of
production centralization will begin to show in 2009.
The net sales of the Fish business are expected to grow with the first full year
of the added net sales of Maritim Food and Sandanger. Apetit Kala's net sales
are expected to increase through livelier demand and improved delivery
performance, and as existing Kalatori franchises are transferred to Apetit Kala.
The performance of the Fish business is expected to improve and to end up
significantly in profit as a result of process development and
productivity-improving measures. The operating profit will also improve with the
first full year of Maritim Food being part of the Group.
Higher product prices are expected to increase the net sales of the Vegetable
Oils business compared with 2007. Because of higher raw material prices and
market volatility during the early part of the year, the segment's operating
profit is expected to remain at previous year's level.
With good performance during the early months of 2008, Grain Trading is expected
to post higher net sales and operating profits than in 2007.
The use of IFRS reporting standards means that the Group will generate most of
its profits during the final months of the year.
CONSOLIDATED INCOME STATEMENT
EUR million
1-3/ 1-3/ 1-12/
2008 2007 2007
3 mths 3 mths 12 mths
Continuing operations
Net sales 90.9 71.5 309.6
Other operating income 0.3 0.3 1.4
Operating expenses -89.4 -70.2 -302.3
Depreciation -1.3 -1.1 -5.0
Impairments - - -0.5
Share of profit/loss of accociated companies 4.9 -0.4 2.1
Operating profit 5.4 0.2 5.3
Financial income and expenses -0.7 -0.1 -0.8
Share of profit of associated
companies 0.3 0.0 1.4
Profit before taxes 5.0 0.1 6.0
Income taxes 0.0 0.0 -0.4
Profit for the period,
continuing operations 5.0 0.1 5.6
Discontinued operations
Profit for the period,
discontinued operations - 1.8 7.8
Profit for the period 5.0 1.9 13.4
Attributable to:
Equity holders of the parent 4.9 1.9 13.3
Minority interests 0.1 - 0.1
Earnings per share, calculated of
the profit attributable to the
shareholders of the parent company
Basic and diluted earnings per
share, EUR, total 0.78 0.31 2.13
Basic and diluted earnings per
share, EUR, continuing operations 0.78 0.01 0.88
Basic and diluted earnings per
share, EUR, discontinued operations - 0.29 1.25
CONSOLIDATED BALANCE SHEET
EUR million
31 March 31 March 31 Dec
2008 2007 2007
ASSETS
Non-current assets
Intangible assets 4.8 3.3 4.7
Goodwill 7.0 6.2 7.0
Tangible assets 43.1 38.0 43.5
Investment in associated companies 44.9 23.4 39.2
Available-for-sale investments 0.1 0.1 0.1
Receivables 4.5 5.7 4.6
Deferred tax assets 0.6 0.2 0.3
Non-current assets total 105.0 76.9 99.4
Current assets
Inventories 63.2 24.3 64.4
Receivables 28,3 10.1 28.6
Income tax receivable 0.4 0.9 0.4
Financial assets at fair value
through profit and loss 4.0 - 8.1
Cash and cash equivalents 5.5 4.6 5.1
Current assets total 101.4 39.9 106.6
Non-current assets classified
and held for sale 1.2 119.0 -
Total assets 207.6 235.8 205.9
EQUITY AND LIABILITIES
Equity attributable to the equity
holders of the parent company 132.1 115.6 127.3
Minority interest 0.8 - 0.7
Total equity 132.9 115.6 128.0
Current liabilities
Short-term financial liabilities 32.8 12.6 28,2
Income tax payable 1.2 0.6 0.7
Trade payables and other liabilities 31.4 23.9 38.7
Current liabilities total 65.4 37.1 67.6
Liabilities directly associated with
non-current assets classified as held for sale 0.0 75.3 -
Net profit for the period 5.0 1.9 13.4
Adjustments, total -4.4 -2.6 -1.5
Change in working capital -7.2 7.3 -3.3
Interests paid from
operating activities -0.6 -0.8 -2.8
Interests received from
operating activities 0.3 0.2 0.7
Taxes paid -0.4 -0.4 -1.2
Net cash flow from operating activities -7.4 5,5 5.3
Investments in tangible and intangible assets -1.3 -1.1 -7.6
Proceeds from sales of tangible
and intangible assets 0.1 0.0 0.2
Acquisition of subsidiaries deducted by cash -0.4 -8.1 *) -9.9
Proceeds from sales of subsidiaries - - 42.0
Transactions with minority 1.5 - -
Acquisition of associated companies -0.4 -1.1 *) 0.0
Proceeds from sales of associated companies - - 0.6
Purchases of other investments 0.0 - -35.1
Proceeds from sales of other investments 4.0 - 27.0
Dividends received from investing activities - - 5.3
Net cash flow from investing activities 3.6 -10.2 22.5
Raising of short-term loans 4.5 5.0 -
Repayments of short-term loans - - -16.7
Repayments of long-term loans -0.2 -1.7 -8.1
Payment of financial lease liabilities 0.0 0.0 -0.1
Dividends paid - - -5.3
Cash flows from financing activities 4.2 3.3 -30.2
Net change in cash and cash equivalents 0.4 -1.5 -2.4
Cash and cash equivalents at the
beginning of the the period 5.1 7.5 7.5
Cash and cash equivalents at the
end of the period 5.5 6.0 5.1
*) Control over Sandanger AS was obtained during the third quarter in 2007 when
share ownership raised to 51% after additional share acquisition.
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 2007 12.6 23.4 0.4 7.3 -0.8 -0.2 76.5 119.2 0.0 119.2
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
Translation
differences - - - - - -0.1 - -0.1 - 0.0
Other changes - - - - - - -0.1 -0.1 - -0.1
Profit for the period - - - - - - 2.0 2.0 - 2.0
Total recognised
income and
expenses - - -0.1 - - -0.1 1.9 1.7 - 1.8
Dividend
distribution - - - - - - -5.3 -5.3 - -5.3
Shareholders'
equity at
31 March 2007 12.6 23.4 0.3 7.3 -0.8 -0.3 73.2 115.6 0.0 115.6
Cash flow hedges:
gains recorded
in equity - - -0.4 - - - - -0.4 - -0.4
Taxes related to
items entered into
equity and removed
from equity - - 0.1 - - - - 0,1 - 0,1
Increase/decrease
in subsidiary - - - - - - 0.4 0.4 - 0.4
Translation
differences - - - - - -0.1 - -0.1 - -0.1
Other changes - - - - - - -0.1 -0.1 - -0.1
Profit for the
period - - - - - - 4.9 4.9 0.1 5.0
Total recognised
income and
expenses - - -0.3 - - -0.1 5.2 4.8 0.1 4.9
Dividend
distribution - - - - - - - - - -
Shareholders'
equity at
31 March 2008 12.6 23.4 0.1 7.2 -0.8 0.0 89.7 132.1 0.8 132.9
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 2007.
SEGMENT INFORMATION
A Frozen Foods
B Fish
C Vegetable Oils
D Grain trading
E Other Operations
F Continuing operations total
G Discontinued operations
H Total
Net sales
EUR million
1-3/ 1-3/ 1-12/
2008 2007 2007
3 mths 3 mths 12 mths
Finland 46.9 47.0 189.2
Scandinavia 19.9 7.1 45.8
Baltic states and Russia 1.0 1.1 10.0
Other countries 23.1 16.3 64.6
Continuing operations total 90.9 71.5 309.6
Discontinued operations - 40.9 67.2
Total 90.9 112.4 376.8
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. Suomen Rehu Ltd is presented as discontinued operations
apart from continuing operations of Lännen Tehtaat till the point of sale. In
2007 the net profit from discontinued operations includes a sale profit related
to the sold 51% share ownership totalling EUR 5.6 million. From the beginning of
June 2007 Lännen Tehtaat's 49% ownership in Suomen Rehu Ltd is presented as an
associated company.
In connection with the sale of the majority shareholding an option scheme has
also been agreed under which Lännen Tehtaat will, if it wishes, have the right
to sell the remaining 49% of the shares in Suomen Rehu Ltd to
Hankkija-Maatalous. The latter, for its part, has a right to buy for the
remaining shares, which it will be able to put into effect at the earliest 15
months after the purchase of the majority holding.
In the case of option exercise, Lännen Tehtaat receives the same price per share
for the remaining 49% ownership as for the sold majority shareholding in Suomen
Rehu Ltd, including the share price adjustment. In addition, the sale price is
affected by the financial result of Suomen Rehu Ltd from the beginning of June
2007.
NON-CURRENT ASSETS HELD OF SALE
Lännen Tehtaat's group company Apetit Pakaste Oy sells its jams and marmelades
business to Saarioinen group's Saarioinen Säilyke Oy. The sale transaction is
executed in fall 2008. Assets held for sale are presented separately on the
balance sheet apart from continuing operations' assets and liabilities.
Non-current assets held for sale in the comparison period include Suomen Rehu
group.
KEY INDICATORS
31 March 31 March 31 Dec
2008 2007 2007
Shareholders' equity per share, EUR 21.12 18.50 20.36
Equity ratio, % 64.0% 49.1% 62.1%
Gearing, % 21.3% 46.0% 16.0%
Gross investments in non-
current assets, EUR million,
continuing operations 1.3 0.8 6.9
Corporate acquisitions and other
share purchases, EUR million,
continuing operations - 10.5 11.6
Average number of personnel,
continuing operations 746 617 705
Average number of shares, 1 000 pcs 6 253 6 253 6 253
The key figures in this interim financial report are calculated with same
accounting principles than presented in year 2007 annual financial statements.
CONTINGENT LIABILITIES
EUR million
31 March 31 March 31 Dec
2008 2007 2007
Mortgages given for debts:
Real estate mortgages 9.6 37.5 7.3
Corporate mortgages 1.3 51.4 1.3
Shares pledged - 13.0 -
Other quarantees 5.5 - 7.7
Guarantees 5.1 1.6 5.1
Additional purchase price, estimate - 0.0-2.0 -
Non-cancellable other leases,
minimum lease payments:
Real estate leases 4.7 5.5 5.3
Other leases 0.8 1.0 0.8
SUOMEN REHU - OPTION SCHEME
The calculatory unrecognised value for the result based component included in
the option scheme as of 31 March 2008 is approximately EUR 0.2 million.
Book value at the beginning of the period 43.5 67.4 67.4
Acquisitions 0.9 1.1 6.5
Acquisitions of operations - 3.2 7.6
Disposals -0.1 0.0 -0.2
Disposals of operations - - -32.6
Depreciations and impairments -1.2 -1.2 -5.1
Other changes 0.0 -0.1 -0.1
Book value at the end of the period 43.1 70.4 43.5
TRANSACTIONS WITH ASSOCIATED COMPANIES AND JOINT VENTURES
Sales to associated companies 3.7 0.7 14.3
Sales to joint ventures 2.2 2.3 8.1
Purchase from associated companies 0.0 0.1 12.0
Purchase from joint ventures 0.0 2.7 0.1
Long-term receivebles from associated
companies 3.8 5.2 3.9
Trade receivables and other
receivables from associated companies 3.0 2.9 3.1
Trade receivables and other
receivables from joint ventures 0.7 0.8 0.8
Trade payables and other liabilities
to associated companies 0.1 0.0 0.0
The sale 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. 010 402 4001
Copies to:
OMX Nordic Exchange Helsinki
Principal media
www.lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE 9 April 2008 at 4;30 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
Chairman of the Supervisory Board and Juha Nevavuori as Vice Chairman of the
Supervisory Board.
Harri Eela, Aappo Kontu, Matti Lappalainen, Hannu Simula, Soili Suonoja and Tom
v. Weymarn were re-elected as members of the Board of Directors. Heikki
Halkilahti was elected as a new member to the Board. Tom v. Weymarn was
re-elected as Chairman of the Board and Hannu Simula as Vice Chairman of the
Board.
LÄNNEN TEHTAAT PLC
Matti Karppinen
CEO
More details: Matti Karppinen, tel. +358 10 402 00
Distribution:
OMX Nordic Exchange Helsinki
Main media
www.lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE 2 April 2008 6;00 p.m.
LÄNNEN TEHTAAT PLC'S BOARD DECIDES ON INCENTIVE PLAN FOR KEY PERSONNEL
On 2 April 2008, Lännen Tehtaat plc's Board of Directors took the decision to
introduce a share reward scheme as part of the Group's long-term commitment plan
for key personnel. Under the scheme, key personnel will have the opportunity to
receive Lännen Tehtaat plc shares as a reward for achieving defined targets for
the earning period.
The earning period for the scheme is 1 January 2008 to 31 December 2008. Any
reward paid on this 2008 earning period will be paid during 2009 partly in
Lännen Tehtaat plc shares and partly in cash. The aim is that the amount paid in
cash would cover the taxes and tax-related costs incurred on the reward.
Transfer of all or any of the shares within the restriction period of two years
after the end of the earning period is prohibited. If a key personnel member
terminates his or her employment contract or contract of engagement during the
restriction period, any shares given under the share reward scheme shall be
returned to the company without compensation.
The amount of any reward available under the scheme for the 2008 earning period
will be based on the Group's earnings per share for its continuing operations.
The share reward scheme will cover 13 key personnel during the 2008 earning
period.
A maximum of 17,000 Lännen Tehtaat plc shares and, additionally, a maximum cash
payment equal to the total value of these shares will be paid on the 2008
earning period.
LÄNNEN TEHTAAT PLC
Board of Directors
More information: Matti Karppinen, CEO, tel. +358 10 402 4001
DISTRIBUTION:
OMX Nordic Exchange Helsinki
Principal media
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LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE 2 April 2008 at 4;45 p.m.
DECISIONS BY THE ANNUAL GENERAL MEETING OF LÄNNEN TEHTAAT PLC
The Annual General Meeting on 2 April, 2008 approved the financial statements
for the financial year 1 January - 31 December 2007, 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 acquire Lännen
Tehtaat shares and to issue new shares were approved without changes.
DIVIDEND
The Annual General Meeting decided to distribute as dividend EUR 0.85 per share
on the financial year 2007. The dividend will be paid on 15 April 2008 to
shareholders whose shares are registered by the Finnish Central Securities
Depository 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 maximum age at which a person may be elected to the Board of Directors and
to the Supervisory Board.
New section 5 paragraph 1:
By decision of the Supervisory Board the Board of Directors consists of no fewer
than five and no more than seven members. Persons aged 68 or above may not be
elected to the Board of Directors.
New section 8 paragraph 1:
The Supervisory Board consists of no fewer than 15 and no more than 20 members
elected by the shareholders' meeting. Persons aged 68 or above may not be
elected to the Supervisory Board.
AUTHORIZATION TO ACQUIRE LÄNNEN TEHTAAT SHARES
The Annual General Meeting authorized the Board of Directors to decide on the
acquisition of a maximum total of 250,878 Lännen Tehtaat shares for the company
using untied equity, under the following conditions:
Shares may be acquired for the purpose of developing the company's capital
structure, financing or implementing corporate acquisitions or other
arrangements, implementing share-based incentive systems, or for onward transfer
or annulment.
Shares may be acquired in one or more lots, to a maximum total of 250,878
shares. The combined number of Lännen Tehtaat shares held by the company
following this acquisition must not, however, exceed five (5) per cent of the
total number of Lännen Tehtaat shares. The Board is entitled to decide on how to
proceed in acquiring shares.
The shares will be acquired in public trading on the Helsinki stock exchange
(OMX Nordic Exchange Helsinki Oy), and the current value at the time of the
transaction will be paid for the shares. During the validity of the
authorization, the minimum price of the shares shall be the lowest price quoted
in public trading, and the maximum price correspondingly shall be the highest
price quoted in public trading. The acquisition price will be paid to the
parties selling the shares within the period of payment specified by the rules
of OMX Nordic Exchange Helsinki Oy and the Finnish Central Securities
Depository.
Because this acquisition will be performed by buying shares in public trading,
the shares will not be acquired in accordance with the holding percentages of
the shareholders.
The share acquisition will decrease the company's distributable untied equity.
The Board will decide on any other terms and conditions related to the company's
acquisition of its own shares.
The authorization is valid until the next AGM.
AUTHORIZATION FOR SHARE ISSUE
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 in one or more lots in a share issue, to a total of no more than 947,635
shares, under the following conditions:
The share issue authorization covers all the Lännen Tehtaat shares held by the
company on the date of the Board proposal (65,000 shares). The authorization
further covers all the Lännen Tehtaat shares to be acquired by the Board for the
company under the authorization, given on 2 April 2008, to acquire Lännen
Tehtaat shares. The maximum number of Lännen Tehtaat shares that may be acquired
under this authorization is 250,878.
The maximum number of new shares that can be issued is 631,757, and the maximum
number of Lännen Tehtaat shares held by the company that can be issued is
315,878.
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 Helsinki stock
exchange (OMX Nordic Exchange Helsinki Oy). 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 building 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 29 March 2007, 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
Marja-Liisa Mikola-Luoto, Juha Nevavuori, Tuomo Raininko, Helena Walldén and
Mauno Ylinen were re-elected to the Supervisroy Board. Mika Leikkonen and Esko
Suomala 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 as
per invoice.
LÄNNEN TEHTAAT PLC
Matti Karppinen
CEO
More details: Matti karppinen, tel. +358 10 402 4001
Distribution:
OMX Nordic Exchange Helsinki
Main media
www.lannen.fi
LÄNNEN TEHTAAT PLC Stock exchange announcement 18 March 2008
LÄNNEN TEHTAAT PLC ANNUAL REPORT 2007 AND SUMMARY OF STOCK EXCHANGE RELEASES
PUBLISHED
Lännen Tehtaat plc Annual Report for 2007 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
Riitta Jaakkola
Financial Manager
tel +358 10 402 00
Distribution:
OMX Nordic Exchange Helsinki
Main media
www.lannen.fi
Lännen Tehtaat plc Stock exchange announcement 11 March 2008
Invitation to the Annual General Meeting of Lännen Tehtaat plc
Company shareholders are hereby invited to the Annual General Meeting, which
will be held on Wednesday 2 April 2008, at 2:00 p.m. in the Lännen Tehtaat staff
restaurant in Iso-Vimma, Säkylä.
The AGM will deal with the following:
1) Items to be dealt with by the AGM under section 11 of the Articles of
Association.
2) A Board of Director's proposal that the Board be authorized to decide on
the
acquisition of Lännen Tehtaat shares for the company using untied equity, under
the following conditions:
Shares may be acquired for the purpose of developing the company's capital
structure, financing or implementing corporate acquisitions or other
arrangements, implementing share-based incentive systems, or for onward transfer
or annulment.
Shares may be acquired in one or more lots, to a maximum total of 250,878
shares. The combined number of Lännen Tehtaat shares held by the company
following this acquisition must not, however, exceed five (5) per cent of the
total number of Lännen Tehtaat shares. The Board is entitled to decide on how to
proceed in acquiring shares.
The shares will be acquired in public trading on the Helsinki stock exchange
(OMX Nordic Exchange Helsinki Oy), and the current value at the time of the
transaction will be paid for the shares. During the validity of the
authorization, the minimum price of the shares shall be the lowest price quoted
in public trading, and the maximum price correspondingly shall be the highest
price quoted in public trading. The acquisition price will be paid to the
parties selling the shares within the period of payment specified by the rules
of OMX Nordic Exchange Helsinki Oy and the Finnish Central Securities
Depository.
Because this acquisition will be performed by buying shares in public trading,
the shares will not be acquired in accordance with the holding percentages of
the shareholders. The share acquisition will decrease the company's
distributable untied equity. The Board will decide on any other terms and
conditions related to the company's acquisition of its own shares. The
authorization is valid until the next AGM.
3) A Board of Director's proposal that the Board be authorized to decide on
the
issuing of new shares and on the transfer of Lännen Tehtaat shares held by the
company in one or more lots in a share issue, to a total of no more than 947,635
shares. The share issue authorization covers all the Lännen Tehtaat shares held
by the company on the date of the Board proposal (65,000 shares). The
authorization further covers all the Lännen Tehtaat shares to be acquired by the
Board for the company under the authorization to acquire Lännen Tehtaat shares
to be proposed to the AGM on 2 April 2008. The maximum number of Lännen Tehtaat
shares that may be acquired under this authorization is 250,878.
The maximum number of new shares that can be issued is 631,757, and the maximum
number of Lännen Tehtaat shares held by the company that can be issued is
315,878.
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 Helsinki stock
exchange (OMX Nordic Exchange Helsinki Oy). 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 building 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 29 March 2007, and the
authorization to transfer Lännen Tehtaat shares held by the company given on the
same date.
4) The Board of Directors proposes to the AGM that section 5 paragraph 1 of
the
company's articles of association, concerning the number of members on the Board
of Directors and the maximum age at which a person may be elected to the Board,
and section 8 paragraph 1, concerning the number of members on the Supervisory
Board and the maximum age at which a person may be elected to the Supervisory
Board, be amended as follows:
Present section 5 paragraph 1
By decision of the Supervisory Board, the Board of Directors consists of no
fewer than five and no more than seven members. Persons aged 65 or above may not
be elected to the Board of Directors.
New section 5 paragraph 1
By decision of the Supervisory Board, the Board of Directors consists of no
fewer than five and no more than seven members. Persons aged 68 or above may not
be elected to the Board of Directors.
Present section 8 paragraph 1
The Supervisory Board consists of no fewer than 15 and no more than 20 members
elected by the shareholders' meeting. Persons aged 65 or above may not be
elected to the Supervisory Board.
New section 8 paragraph 1
The Supervisory Board consists of no fewer than 15 and no more than 20 members
elected by the shareholders' meeting. Persons aged 68 or above may not be
elected to the Supervisory Board.
Distribution of dividend
The Board of Directors proposes to the Annual General Meeting that a dividend of
EUR 0.85 per share be paid for the financial year 2007. The dividend will be
paid to shareholders whose shares are registered by the Finnish Central
Securities Depository Ltd, not later than the record date, 7 April 2008. The
dividend will be paid on 15 April 2008.
Right to attend the Annual General Meeting
A shareholder whose shares have been registered in the register of shareholders
maintained by the Finnish Central Securities Depository Ltd not later than 20
March 2008 has the right to attend the Annual General Meeting.
A shareholder who was entered in the company's share register prior to 20 May
1995 also has the right to attend the Annual General Meeting. In these
circumstances, the shareholder must at the Annual General Meeting present his
share certificates or some other evidence that the right of ownership to the
shares has not been entered into a book-entry account.
Notification of intended participation at the Annual General Meeting must be
given to the company not later than 31 March 2008 before 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 phoning +358 10 402 4121/Aila Koivuniemi or by
e-mail . If notice is given by letter, this should
arrive before the above mentioned time. Possible proxies should be forwarded to
the company before the end of the notification period.
The financial statement documents and other documents required under the
Companies Act can be inspected during the week before the shareholders' meeting
at the company's head office, Lännen Tehtaat plc, Maakunnantie 4, 27820 Säkylä.
Copies of documents will be sent to shareholders on request.
Säkylä, 20 February 2008
LÄNNEN TEHTAAT PLC
Board of Directors
Distribution:
OMX Nordic Exchange Helsinki
www.lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE 20 February 2008 at 3;00 p.m.
PROPOSALS OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING OF LÄNNEN
TEHTAAT PLC
I DIVIDEND
The Board of Directors proposes to the Annual General Meeting that a dividend of
EUR 0.85 per share be paid on the financial year 2007.
II ACQUIRING LÄNNEN TEHTAAT SHARES
The Board of Directors proposes that it be given authorization by the AGM to
decide on the acquisition of Lännen Tehtaat shares for the company using untied
equity, under the following conditions:
Shares may be acquired for the purpose of developing the company's capital
structure, financing or implementing corporate acquisitions or other
arrangements, implementing share-based incentive systems, or for onward transfer
or annulment.
Shares may be acquired in one or more lots, to a maximum total of 250,878
shares. The combined number of Lännen Tehtaat shares held by the company
following this acquisition must not, however, exceed five (5) per cent of the
total number of Lännen Tehtaat shares. The Board is entitled to decide on how to
proceed in acquiring shares.
The shares will be acquired in public trading on the Helsinki stock exchange
(OMX Nordic Exchange Helsinki Oy), and the current value at the time of the
transaction will be paid for the shares. During the validity of the
authorization, the minimum price of the shares shall be the lowest price quoted
in public trading, and the maximum price correspondingly shall be the highest
price quoted in public trading. The acquisition price will be paid to the
parties selling the shares within the period of payment specified by the rules
of OMX Nordic Exchange Helsinki Oy and the Finnish Central Securities
Depository.
Because this acquisition will be performed by buying shares in public trading,
the shares will not be acquired in accordance with the holding percentages of
the shareholders.
The share acquisition will decrease the company's distributable untied equity.
The Board will decide on any other terms and conditions related to the company's
acquisition of its own shares. The authorization is valid until the next AGM.
III AUTHORIZATION FOR SHARE ISSUE AND FOR TRANSFER OF LÄNNEN TEHTAAT SHARES
The Board of Directors proposes that it be given authorization by the AGM to
decide on the issuing of new shares and on the transfer of Lännen Tehtaat shares
held by the company in one or more lots in a share issue, to a total of no more
than 947,635 shares. The share issue authorization covers all the Lännen Tehtaat
shares held by the company on the date of the Board proposal (65,000 shares).
The authorization further covers all the Lännen Tehtaat shares to be acquired by
the Board for the company under the authorization to acquire Lännen Tehtaat
shares to be proposed to the AGM on 2 April 2008. The maximum number of Lännen
Tehtaat shares that may be acquired under this authorization is 250,878.
The maximum number of new shares that can be issued is 631,757, and the maximum
number of Lännen Tehtaat shares held by the company that can be issued is
315,878.
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 Helsinki stock
exchange (OMX Nordic Exchange Helsinki Oy). 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 building 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 29 March 2007, and the
authorization to transfer Lännen Tehtaat shares held by the company given on the
same date.
IV AMENDING THE ARTICLES OF ASSOCIATION
The Board of Directors proposes to the AGM that section 5 paragraph 1 of the
company's articles of association, concerning the number of members on the Board
of Directors and the maximum age at which a person may be elected to the Board,
and section 8 paragraph 1, concerning the number of members on the Supervisory
Board and the maximum age at which a person may be elected to the Supervisory
Board, be amended as follows:
Present section 5 paragraph 1
By decision of the Supervisory Board, the Board of Directors consists of no
fewer than five and no more than seven members. Persons aged 65 or above may not
be elected to the Board of Directors.
New section 5 paragraph 1
By decision of the Supervisory Board, the Board of Directors consists of no
fewer than five and no more than seven members. Persons aged 68 or above may not
be elected to the Board of Directors.
Present section 8 paragraph 1
The Supervisory Board consists of no fewer than 15 and no more than 20 members
elected by the shareholders' meeting. Persons aged 65 or above may not be
elected to the Supervisory Board.
New section 8 paragraph 1
The Supervisory Board consists of no fewer than 15 and no more than 20 members
elected by the shareholders' meeting. Persons aged 68 or above may not be
elected to the Supervisory Board.
LÄNNEN TEHTAAT PLC
Board of Directors
For additional information, please contact:
Matti Karppinen, CEO, tel +358 10 402 4001
Distribution:
Helsinki Stock Exchange
Main media
www.lannen.fi
LÄNNEN TEHTAAT PLC Stock exchange release 15 February 2008 at 8.30 a.m.
FINANCIAL STATEMENTS BULLETIN 1 January - 31 December 2007
January-December:
- Consolidated profit for the financial year totalled EUR 13.4 million (2006:
EUR 13.1 million).
- Earnings per share amounted to EUR 2.13 (2.10).
- Net sales of the continuing operations totalled EUR 309.6 (244.5) million, up
27% on the previous year.
- Operating profit of the continuing operations excluding non-recurring items
came to EUR 3.5 (3.8) million; non-recurring items totalled EUR -0.3 (+1.5)
million.
- The Board will propose a dividend of EUR 0.85 (0.84) per share to the Annual
General Meeting.
Fourth quarter:
- Net sales of the continuing operations totalled EUR 96.5 (71.9) million, up
34% on the same quarter in 2006.
- Operating profit of the continuing operations excluding non-recurring items
came to EUR 3.3 (3.0) million; non-recurring items totalled EUR -0.2 (+1.4)
million.
The information in this report has not been audited.
Matti Karppinen, CEO:
“The past financial year was one of significant decisions at Lännen Tehtaat. The
company took systematic and major steps towards its vision of being one of
Finland's leading food companies, with operations in the northern Baltic region.
The first step was the decision to discontinue the animal feed business, which
was incompatible with our strategy. The sale of a majority of the shares was
agreed on with Hankkija-Maatalous in January. Another major step was the
acquisition of Maritim Food, a Norwegian fish-processing company, at the
beginning of the year.
In addition to completed sales and acquisitions, we also conducted a
considerable number of studies into other potential corporate acquisitions and
restructuring arrangements during 2007. Some of these explorations are not yet
completed, and others ended with the parties not being able to reach a mutually
satisfactory conclusion. During the year, the mergers and acquisitions market
was a seller's market, and accordingly prices were high. However, towards the
end of the year the market began to cool down, and the buyer's position will no
doubt be stronger now.
In connection with its stratey review, the Board of Directors of Lännen Tehtaat
outlined the Group's growth targets, aiming to double net sales over a period of
three years. The Board also confirmed the other long-term targets: an operating
profit of at least 5% of the net sales, a return on equity of at least 12%, and
an equity ratio of at least 40%.
Our best-performing businesses in 2007 were Frozen Foods and Grain Trading. In
Frozen Foods, the targeted improvement in financial performance was achieved as
a result of sales growth and measures to improve productivity and
cost-efficiency. In Grain Trading, Avena Nordic Grain managed to increase its
sales volume in difficult market conditions while maintaining a reasonably good
level of profitability.
Apetit Kala produced a profit in the final quarter, but the result for the year
as a whole was disappointing. The Maritim Food group performed as expected. In
the course of the year, Apetit Kala undertook measures to improve operating
efficiency and productivity, the most significant of these being the
centralization of all its production in Kuopio. These measures involved certain
non-recurring and overlapping costs. The benefits of the centralization are
expected to be felt from the beginning of 2008. The Vegetable Oils business
performed slightly less well than expected in the latter half of the year
because product prices were raised later than the rise in raw material prices.
Achieving our growth target will be the most important challenge facing the
Group in the near future, and will require both organic growth and corporate
acquisitions.”
KEY FIGURES ILLUSTRATING PERFORMANCE, EUR million
Oct-Dec Oct-Dec Jan-Dec Jan-Dec
2007 2006 2007 2006
All operations, total
Net sales 96.5 117.4 376.8 408.7
Operating profit 3.0 8.1 12.3 14.5
Profit before taxes 4.5 10.0 14.6 17.8
Profit for the period 4.0 7.3 13.4 13.1
Earnings per share, EUR 0.62 1.18 2.13 2.10
Continuing operations
Net sales 96.5 71.9 309.6 244.5
Operating profit without
non-recurring items 3.3 3.0 3.5 3.8
Operating profit 3.1 4.4 3.2 5.3
Profit before taxes 4.6 6.8 6.0 10.2
Profit for the period 4.1 4.9 5.6 7.5
Earnings per share, EUR 0.63 0.78 0.88 1.20
Discontinued business operations
Net sales 0.0 52.5 78.8 164.2
Operating profit -0.1 3.7 9.1 9.2
Profit for the period -0.1 2.4 7.8 5.6
Earning per share, EUR -0.01 0.40 1.25 0.90
NET SALES AND PROFIT
Fourth quarter (Oct-Dec):
The net sales of the continuing operations in October-December totalled EUR 96.5
(71.9) million, an increase of 34% on the same quarter in 2006. Growth occurred
in all business operations, although the majority of it was in Grain Trading and
Fish. Adding Maritim Food to the Group increased the net sales of the Fish
business by EUR 9.7 million compared to the same quarter a year earlier. The net
sales of the Vegetable Oils business also increased significantly, and the net
sales of the Frozen Foods business increased slightly.
The operating profit of the continuing operations in October-December excluding
non-recurring items was slightly better than a year earlier, at EUR 3.3 (3.0)
million. Non-recurring items totalled EUR -0.2 (+1.4) million. The comparable
year-on-year figures show improved fourth-quarter performance in Grain Trading,
Frozen Foods and Other Operations, while the performance of the Fish business
remained the same, and that of the Vegetable Oils business deteriorated.
The fourth-quarter pre-tax profit of the continuing business operations was EUR
4.6 (6.8) million, while profit for the quarter came to EUR 4.1 (4.9) million.
The taxes on the profit for the quarter amounted to EUR -0.5 (-1.9) million. The
profit includes the share in the profit of associated companies, EUR 2.2 (1.9)
million — EUR 1.4 (1.9) million from Sucros and EUR 0.9 (0.0) million from
Suomen Rehu.
Financial year (Jan-Dec):
Consolidated profit for the financial year totalled EUR 13.4 (13.1) million.
This includes non-recurring EUR 5.6 million profit from the sale of the majority
holding in Suomen Rehu. The profit for 2006 includes EUR +3.7 million in
non-recurring items. The earnings per share came to EUR 2.13 (2.10).
Continuing operations
The net sales of the continuing operations in the financial year came to EUR
309.6 (244.5) million, an increase of EUR 65.1 million or 27% on the previous
year. The growth occurred mainly in the Fish and Grain Trading businesses.
The operating profit of the continuing operations excluding non-recurrent items
was EUR 3.5 (3.8) million. Non-recurring items totalled EUR -0.3 (+1.5) million.
The performance of Frozen Foods, Grain Trading and Other Operations improved on
the previous year, while that of the Fish and Vegetable Oils businesses
declined.
Net financial expenses for the financial year were EUR -0.8 (+3.2) million. In
the previous year, this figure included approximately EUR 2.6 million profit
from the sale of shares unrelated to the Group's business.
The share in the profit of associated companies was EUR 3.5 (1.6) million: EUR
2.1 (1.8) million from Sucros, and EUR 1.4 million from the 49% holding in
Suomen Rehu following the sale of the majority holding in June. The share in the
profit of Sucros includes the non-recurrent transitional aid to full-time
refiners of EUR 0.7 million, paid on the basis of the sugar production reform of
2006.
The pre-tax profit of the continuing operations was EUR 6.0 (10.2) million. This
includes EUR -0.2 (+4.2) million in non-recurring items. The profit for the
financial year was EUR 5.6 (7.5) million. Taxes for the financial year came to
EUR -0.4 (-2.7) million.
Discontinued operations
The Group's discontinued operations comprise Suomen Rehu. The income statement
for the previous year has been divided into continuing and discontinued
operations, as if Suomen Rehu had been discontinued from the beginning of 2006.
The profit for the discontinued operations for 2007 includes the profit of
Suomen Rehu from January to the beginning of June plus the profit from the sale
of the majority holding in Suomen Rehu less the costs of the transaction. A
tax-free profit of EUR 4.1 million on the sale of the majority holding based on
a fixed share price was recognized in the second quarter. The final sales price
was determined on the basis of the balance of the majority holding at the time
of the transaction. The correction to the sale price for the majority holding,
EUR 1.5 million, was recognized in the third quarter.
The profit of the discontinued operations for the financial year was EUR 7.8
(5.6) million.
FINANCING AND CASH FLOW
The cash flow from operating activities in the financial year after interest and
taxes amounted to EUR 5.3 (-6.4) million. The impact of the change in working
capital was EUR -3.3 (-23.1) million. The cash flow from investing activities
came to EUR 22.5 (-2.7) million. The impact of the sale of the majority holding
in Suomen Rehu on the cash flow in investing activities was EUR 42.4 million.
The cash flow from loans was EUR -24.9 (10.1) million. EUR 5.3 (4.6) million was
paid out in dividends.
At the end of the financial year, the Group had EUR 33.6 (56.0) million in
interest-bearing liabilities and EUR 13.2 (7.5) million in liquid assets. Net
interest-bearing liabilities totalled EUR 20.4 (48.5) million. The consolidated
balance sheet stood at EUR 205.9 (237.5) million. Equity totalled EUR 128.0
(119.2) million at the end of the financial year, and the equity ratio was 62.1%
(50.3%). Commercial papers issued for the Group's short-term financing stood at
EUR 27.5 (38.0) million at the end of the financial year. Liquidity is secured
with committed credit facilities. No credit facilities were in use at the end of
the financial year.
INVESTMENT
Gross investment in non-current assets excluding corporate acquisitions came to
EUR 7.5 (7.6) million. Investment by Frozen Foods totalled EUR 1.6 (0.8)
million, by the Fish business EUR 4.1 (0.6) million, by Vegetable Oils EUR 0.4
(0.4) million and by Other Operations EUR 0.8 (0.2) million. Investment by the
Feeds business up to the date of sale of the majority holding was EUR 0.6 (5.7)
million.
Investment in shares during the financial year totalled EUR 11.6 (3.0) million
and concerned the acquisition of shares in the Norwegian fish-processing company
Maritim Food AS and in Sandanger AS.
PERSONNEL
The most important areas for personnel development are management, professional
competence and workplace interactive skills.
The average number of personnel in the continuing operations during the
financial year was 725 (662). The average number of personnel in Frozen Foods
was 266 (275), in the Fish business 381 (303), including 89 at Maritim Food
(from 1 March 2007), in Vegetable Oils 36 (36), in Grain Trading 29 (29) and in
Other Operations 11 (19). The personnel at Apetit Suomi Oy have been included
under Frozen Foods or Fish, depending on which section they work in. The
personnel listed under Other Operations in 2006 included those employed by
Harviala Ltd up to 28 February.
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. A major
proportion of the entire year's profit in the Fish business depends on the
success of Christmas sales.
OVERVIEW OF EACH BUSINESS
Frozen Foods
Net sales in Frozen Foods totalled EUR 49.3 (50.2) million. The slight decline
in net sales was due to the transfer of both sugar beet contract growing and
sales of the related supplies to Sucros Ltd at the beginning of 2007. The net
sales associated with contract growing in the previous financial year totalled
EUR 2.9 million. Food sales increased by about 4%, including an increase of
about 1% in sales of retail frozen foods. Apetit's own brand once again
accounted for a higher proportion of sales than in the previous year. Sales of
Apetit's frozen potato products and frozen pizzas grew by more than 15%. Active
marketing campaigns and new product launches expanded the overall market as well
as Apetit Pakaste's share of that market. Sales in other retail product groups
remained at the previous year's level. Sales in the hotel, restaurant and
catering sector grew by more than 10% due to the improved competitiveness of
Finnish vegetables in relation to imports. Among the different sales channels,
the largest growth in relative terms was in exports. A good pea crop in Finland
enabled peas to be exported not only to Italy but to central Europe too, where
the crop was exceptionally poor due to unfavourable weather conditions. Exports
increased by almost 40% on the previous year.
The operating profit of Frozen Foods, excluding non-recurring items, was EUR 3.5
(2.2) million. The profit was adversely affected by a non-recurring EUR 0.2
million write-down on fixed assets removed from service. Non-recurring items in
the previous year totalled EUR -0.5 million. The improved profit was the result
of improved product sales and changes in the product range. Systematic
improvement of productivity and cost-efficiency also had a favourable impact on
the profit of Apetit Pakaste. In order to continue this improvement, Apetit
Pakaste decided to transfer production from its Turku plant to Säkylä, which
will require an investment of about EUR 4 million at Säkylä during 2008.
Excavation for the necessary construction work was begun in the autumn, and the
construction is scheduled for 2008, the plan being to move production from the
Turku plant to Säkylä by the end of the year. This centralization of production
is expected to improve the operating profit by about EUR 0.9 million as of 2009.
Investment in Frozen Foods totalled EUR 1.6 (0.8) million in 2007. The most
significant item was a renewal of the freezing technology, which will enhance
energy efficiency and improve production logistics and product quality. Further
packaging automation was also introduced.
Fish
The net sales of the Fish business totalled EUR 81.7 (58.9) million. The
increase in net sales due to the acquisition of Maritim Food and Sandanger,
merged into the Group at the beginning of March and the beginning of September,
respectively, was EUR 26.0 million. Apetit Kala's sales and market share
declined slightly on the previous year as a result of delivery problems in the
summer and the poor availability of fresh fish and of the raw material for
hot-smoked whitefish in the autumn. Apetit Kala introduced several new products
during the year, including sliced hot-smoked fillets, and shellfish products
from Maritim Food sold under the Apetit Maritim brand came onto the market in
Finland in the autumn. Also sold under the Apetit Maritim brand are the new
rainbow trout and shrimp gourmet salads launched towards the end of the year.
Net sales at Maritim Food increased slightly on the previous year, mostly due to
an increase in the sales of shellfish and processed fish products. Sales of
dressings were roughly the same as the previous year. Sales of fish products
declined, mainly because of a drop in raw material prices. Sales to Maritim
Food's principal customer grew well during the year.
The full-year operating profit for the Fish business excluding non-recurring
items was EUR -1.5 (1.1) million. Non-recurring items totalled EUR -0.3 (+0.4)
million and comprised the write-down on Apetit Kala's Kustavi facility. The
allocation of the acquisition cost of Maritim Food caused a negative impact of
just over EUR -0.5 million. The non-recurring impact of the allocation was EUR
-0.3 million, and the long-term effect adding to depreciation is approximately
EUR -0.2 million annually. The contribution of Maritim Food to the operating
profit of the Fish business for the full year was slightly positive as
estimated.
Apetit Kala's profitability in the early part of the year was adversely affected
by high raw material prices, equipment failures and breaks in the production
process. The transfer of production from Kustavi and Kerava to Kuopio also led
to additional and overlapping costs. In the second half of the year, limited
availability of the raw material for hot-smoked whitefish affected the delivery
reliability of consumer-packaged products.
The functions of the Kustavi production plant were moved to Kuopio during
April/May, and the production and packaging functions of the Kerava plant during
August/September. Following this, the company's entire production is now
concentrated at a single plant in Kuopio. The logistics centre remains in
Kerava. The cost savings from this centralization are expected to gain full
effect from the beginning of 2008.
Management positions at Apetit Kala were filled during the year through the
recruitment of a managing director and production and purchasing managers. The
aim was to bring more expertise to the development of the company's core
processes, production control, quality, productivity and purchasing. Delivery
reliability and productivity have improved as a result of efficiency measures in
production control introduced in August. In purchasing, the focus has been on
developing procurement channels, agreement procedures and the purchasing
process.
In retail concepts, procedures were standardized among the Kalatori service
counters with the introduction of new concept manuals, regular concept
assessments and a self-assessment model. At the end of the financial year, there
were 66 Kalatori service counters.
Investment in the Fish business during the financial year totalled EUR 4.1 (0.6)
million. Of this, EUR 2.9 million was allocated to the expansion of the premises
in Kuopio in accordance with the production centralization plan. Other
significant investments involved replacing smoking ovens and improving the
filleting process. Maritim Food investments came to EUR 0.2 million.
Vegetable Oils
The net sales of the Vegetable Oils business increased by 13% to EUR 46.0 (40.6)
million. The increase was due to a growth in volume, higher added value products
and higher sales prices.
Operating profit excluding non-recurring items was EUR 0.8 (2.9) million. The
non-recurring items, EUR +0.1 (+0.2) million, include the profit from the sale
of the storage silo property at Kirkniemi in Lohja. The decrease in operating
profit was due to a decrease in the refining margin. The sales prices of
vegetable oils and protein feed have been slower to rise than the prices of raw
materials, which decreased the refining margin particularly in the latter half
of the year.
Gross investment in the Vegetable Oils business totalled EUR 0.4 (0.4) million.
The most significant individual investment was the renewal of the company's
enterprise resource planning system.
Grain Trading
Growth in the Grain Trading business continued to be strong throughout the year.
Net sales for the year were up by 38% to EUR 132.8 (96.3) million, growing on
both the domestic and international market. The growth was attributable to a
volume increase of about 10% and the exceptionally high market prices for grain
and oilseeds.
The Lithuanian subsidiary UAB Avena Nordic Grain consolidated its position as a
grain trader in the region and contributed to the net sales growth in the Grain
Trading business. In Kazakhstan, the volume of Avena's grain trading for export
exceeded the level of recent years by a considerable margin.With the aim of
expanding its grain procurement in Finland, Avena Nordic Grain opened an office
in Salo in August, mainly to serve growers in southwest Finland.
The full-year operating profit of the Grain Trading business almost doubled,
rising to EUR 3.9 (2.0) million.
Other Operations
Other Operations comprise the service company Apetit Suomi Oy, Group
Administration and items not allocated under any of the business segments.
The cost effect of services produced by Apetit Suomi is an encumbrance on the
operating result in proportion to the use of services.
Net sales in Other Operations amounted to EUR 4.4 (0.0) million. This figure
consists of service sales by Apetit Suomi Oy; in 2006, these sales were included
under other Frozen Foods operating income.
The operating profit of Other Operations, excluding non-recurring items, came to
EUR -3.0 (-4.5) million. This includes Apetit Suomi Oy's positive contribution
of +0.5 (0.0) million. The non-recurring items concerning previous business
divestments or discontinued business operations and real estate deals totalled
EUR +0.1 (+1.5) million.
AUTHORIZATIONS GRANTED TO THE BOARD OF DIRECTORS
The shareholders' meeting of Lännen Tehtaat plc held on 29 March 2007 authorized
the Board of Directors to decide on a new issue of shares and on the transfer of
Lännen Tehtaat plc shares held by the company, in one or more lots as share
issues based on the subscription price. The maximum number of new shares that
can be issued is 631,757, and the maximum number of Lännen Tehtaat shares held
by the company that can be transferred is 65,000. The subscription price for
each new share must be at least its nominal value, 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, determined by the price quoted in public
trading on the Helsinki stock exchange (OMX Nordic Exchange Helsinki Oy). This
authorization includes the right to deviate from the shareholders' pre-emptive
subscription right if the company has a pressing financial reason to do so; the
right 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; and the right to decide on the subscription price of shares and other
conditions of and matters related to the share issue.
This authorization is valid until the next Annual General Meeting. The
authorization revoked the earlier authorization to issue shares, given on 29
March 2006, and the authorization to transfer the company's own shares, given on
the same date.
To date, the Board of Directors has not exercised the authorization to issue
shares.
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
65,000, representing 1.0% of the entire share capital, with a nominal value of
EUR 130,000. No changes occurred in the amount of share capital or in the number
of Lännen Tehtaat shares held by the company during the financial year or the
previous financial year.
The number of Lännen Tehtaat plc shares traded on the stock exchange during the
financial year was 923,450 (1,622,123), representing 14.6% (25.7%) of the total
number of shares. The highest price quoted was EUR 24.50 (24.70) and the lowest
EUR 15.65 (15.26). The share turnover was EUR 19.3 (32.8) million. The share
price quoted at year end was EUR 16.19 (24.30), and the combined market value of
all shares was EUR 102.3 (153.5) million.
FLAGGING ANNOUNCEMENTS
On 19 October 2007, Skagen Funds administered by the Norwegian company Skagen AS
announced under chapter 2, section 9 of the Securities Markets Act, that it had
purchased Lännen Tehtaat plc shares and that its holding on 18 October 2007
totalled 318,200 shares, which represents 5.04% of the total number of Lännen
Tehtaat plc shares and of the voting rights conferred by the shares.
MANAGEMENT
The Board of Directors appointed the Group's CFO Eero Kinnunen as Deputy CEO.
The appointment takes effect on 1 January 2008.
RISKS, UNCERTAINTIES AND RISK MANAGEMENT
To improve risk management within the Group, risk surveys and risk assessments
of all activities were carried out in each of the business segments during the
year. The results were used to document a comprehensive risk management system.
Under this system, all Group companies and business units will regularly assess
and report the risks involved in their operations and the adequacy of the
control and 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 Board of Directors of Lännen Tehtaat plc has confirmed the Group's risk
management policy and risk management principles.
No significant individual risks have emerged in the Group's risk assessments
that would warrant special measures over and above those defined in the risk
management process and forming part of normal business operations.
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.
The main operating risks concern raw material availability, the time lags
between purchasing and selling or use of raw materials, and fluctuations in raw
material prices. Managing price risks is especially important in the Group's
Grain Trading, Vegetable Oils and Fish 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 most significant currency
risks concern the US dollar and the Norwegian krone.
In accordance with the Group's risk management policy, all major open currency
positions are hedged. Further details concerning the management of currency
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 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.
The renewal of Lännen Tehtaat's enterprise resource planning system was begun in
autumn 2007. The aim is to replace all of the Group's separate operating and
financial control systems with a single system. The Frozen Foods and Fish
businesses and the Group's common functions will switch over to the new system
during 2008. Lännen Tehtaat is aware of the risks involved in transferring to
the new system, and these risks are being regularly monitored by steering and
working groups as the project progresses.
EVENTS SINCE THE END OF THE FINANCIAL YEAR
Apetit Kala's retail concept business, the Kalatori service counters, has been
run both by the company and as franchises. Apetit Kala has now decided to
discontinue the franchise model. The 11 Kalatori sales points which are now
franchises will be taken over by Apetit Kala during the spring.
In January, Sami Haapasalmi was appointed to head the Lännen Tehtaat Group's
domestic and international fish business. He is responsible for the
profitability of the Fish business segment and for expanding the business both
organically and through acquisition.
Continuation of beet sugar production in associated company
In September 2007, the agriculture ministers of the European Union member states
approved the new decisions on cutting sugar production. The key element of the
new arrangements is that the cut in production is intended to be achieved by
encouraging growers and the industry to give up production voluntarily.
Following the EU's decisions, the continuation of production at Sucros Ltd's
Säkylä sugar mill has hung in the balance. In December, the producer
organizations (the Central Union of Agricultural Producers and Forest Owners
(MTK) and the Central Union of Swedish-Speaking Agricultural Producers in
Finland (SLC)) and Sucros Ltd signed a seven-year sectoral agreement on the
terms and conditions for beet growing and sugar production. A sufficient number
of growers expressed the desire to continue growing sugar beet, and the
necessary number of contracts to secure production at the Säkylä sugar mill were
signed during January and February 2008.
On 8 February 2008, Sucros Ltd and its owners Danisco Sugar A/S and Lännen
Tehtaat plc took the decision to continue beet sugar production at the Säkylä
mill.
Lännen Tehtaat plc has a 20% holding in sugar producer Sucros Ltd. This holding
is valued at about EUR 19.2 million on the consolidated balance sheet. The new
sectoral agreement dispelled the uncertainty over future sugar production in
Finland. On this basis, Lännen Tehtaat will recognise more than EUR 3 million
related to the EU restructuring aid for the closure of the Salo sugar mill as
non-recurring income from the associated company Sucros Ltd in the first quarter
of 2008, which means that all the compensation will have been recognised in the
accounts.
Alteration to reporting practice
Lännen Tehtaat has decided to alter its reporting practice in respect of the way
in which it presents its share of the profit/loss of associated companies from
the start of 2008. In future, the share of the profit/loss of associated
companies related to food businesses will be included in the operating profit,
and the share of the profit/loss of associated companies not forming part of
Lännen's core businesses will be shown below the operating profit. The share of
the profit/loss of Sucros Ltd, Ateriamestarit Oy and Sandanger AS will be shown
above the operating profit. The share of the profit/loss from Sucros Ltd and
Ateriamestarit Oy will be reported under Other Operations, and the share from
Sandanger AS from 1 March to 31 August 2007 will be reported under the Fish
business.
The share of the profit/loss from Suomen Rehu will be shown below the operating
profit.
Strategy review
Following a review of strategy, the Lännen Tehtaat plc Board of Directors
confirmed the company's updated vision and mission statements and its corporate
values. Lännen Tehtaat plc's vision is to be one of Finland's leading food
companies, with operations in the northern Baltic region. The company's mission
is to produce added value for its shareholders on a long-term basis. This will
be achieved by means of profitable organic and external growth. The Group's
corporate values are a commitment to customer focus, corporate social
responsibility and renewal.
The Board of Directors also approved the Group's long-term financial targets.
The aim is to double net sales over a period of three years and to achieve an
operating profit equal to 5% of net sales, a return on equity of 12% and an
equity ratio in the longer term of at least 40%.
OUTLOOK FOR 2008
The full year's net sales for the continuing business operations are expected to
be up, and the operating profit excluding non-recurring items is expected to
improve on the previous year.
The net sales of the Frozen Foods business are expected to increase slightly on
2007. Sales of Apetit's own brands are expected to grow, while sales to the
hotel, restaurant and catering sector and to the food industry are likely to
remain steady and exports are expected to decline. Apetit Pakaste's financial
performance will be adversely affected by higher raw material and energy costs
and the non-recurring expenses from the transfer of production from Turku to
Säkylä and the introduction of the enterprise resource planning system. The
positive impact of production centralization will begin to show in 2009.
The net sales of the Fish business are expected to grow with the first full year
of the added net sales of Maritim Food and Sandanger. Apetit Kala net sales are
expected to increase through livelier demand and improved delivery performance,
and as existing Kalatori franchises are transferred to Apetit Kala. The
performance of the Fish business is expected to improve and to end up
significantly in profit as a result of process development and
productivity-improving measures. The operating profit will also improve with the
first full year of Maritim Food being part of the Group.
The net sales of the Vegetable Oils business are expected to increase from their
2007 level due to rising product prices. The refining margin is expected to grow
and the operating profit to improve on 2007.
The net sales of the Grain Trading business are expected to remain at the
previous year's level. The operating profit is expected to be good, though
slightly below the exceptionally good level seen in 2007.
The transition to IFRS reporting means that a considerable proportion of the
Group's profits are accrued late in the year.
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 at least 40% of the profit for
the financial year in dividends to the equity attributable to the shareholders
of the parent company.
The Board of Directors proposes to the Annual General Meeting that the dividend
to be paid on the financial year 2007 be 40% of the profit for the financial
year. The Board's proposal for dividend is thus EUR 0.85 (0.84) per share.
The parent company's distributable funds totalled EUR 61,598,627.82 on 31
December 2007, of which EUR 26,783,845.36 is profit for the financial year. The
Board of Directors will propose to the Annual General Meeting that Lännen
Tehtaat plc pays a dividend of EUR 0.85 per share from the distributable funds,
or EUR 5,314,689.60 in total, and leaves the remaining EUR 56,283,938.22 in its
equity.
Financial income and expenses -0.7 0.4 -0.8 3.2
Share of profit of associated
companies 2.2 1.9 3.5 1.6
Profit before taxes 4.6 6.8 6.0 10.2
Income taxes -0.5 -1.9 -0.4 -2.7
Profit for the period,
continuing operations 4.1 4.9 5.6 7.5
Discontinued operations
Profit/loss for the period,
discontinued operations -0.1 2.4 7.8 5.6
Profit for the period 4.0 7.3 13.4 13.1
Attributable to:
Equity holders of the parent 3.9 7.3 13.3 13.1
Minority interests 0.1 0.0 0.1 -
Earnings per share, calculated of
the profit attributable to the
shareholders of the parent company
Basic and diluted earnings per
share, EUR, total 0.62 1.18 2.13 2.10
Basic and diluted earnings per
share, EUR, continuing operations 0.63 0.78 0.88 1.20
Basic and diluted earnings per
share, EUR, discontinued operations -0.01 0.40 1.25 0.90
CONSOLIDATED BALANCE SHEET
EUR million
Dec 31, 2007 Dec 31, 2006
ASSETS
Non-current assets
Intangible assets 4.7 1.5
Goodwill 7.0 17.4
Tangible assets 43.5 67.4
Investment in associated companies 39.2 23.1
Available-for-sale investments 0.1 0.1
Receivables 4.6 5.8
Deferred tax assets 0.3 0.3
99.4 115.6
Current assets
Inventories 64.4 65.3
Receivables 28.6 48.7
Income tax receivable 0.4 0.3
Financial assets at fair value
through profit and loss 8.1 -
Cash and cash equivalents 5.1 7.5
106.6 121.9
Total assets 205.9 237.5
EQUITY AND LIABILITIES
Equity attributable to the equity
holders of the parent company 127.3 119.2
Minority interest 0.7 -
Total equity 128.0 119.2
Non-current liabilities
Deferred tax liabilities 4,8 7,0
Long term financial liabilities 5,3 7.0
Non current provisions 0.1 -
Non-current liabilities total 10.2 14.0
Current liabilities
Short-term financial liabilities 28,2 49,1
Income tax payable 0.7 1.0
Trade payables and other liabilities 38.7 54.2
Current liabilities total 67.6 104.3
Total liabilities 77.9 118.3
Total equity and liabilities 205.9 237.5
CONSOLIDATED CASH FLOW STATEMENT
EUR million
1-12/2007 1-12/2006
Net profit for the period 13.4 13.1
Adjusments, total -1,5 8.5
Change in working capital -3,3 -23.1
Interests paid from
operating activities -2.8 -1.9
Interests received from
operating activities 0.7 0.3
Taxes paid -1.2 -3.2
Net cash flow from operating activities 5,3 -6.4
Investments in tangible and intangible assets -7.6 -7.7
Proceeds from sales of tangible
and intangible assets 0.2 4.6
Acquisition of subsidiaries deducted by cash -9.9 -2.8
Proceeds from sales of subsidiaries 42,0 0.0
Acquisition of associated companies 0.0 -0.2
Proceeds from sales of associated companies 0.6 0.0
Purchases of other investments -35.1 -0.1
Proceeds from sales of other investments 27.0 3.4
Dividends received from investing activities 5.3 0.0
Net cash flow from investing activities 22.5 -2.7
Raising of long-term loans - 1.9
Raising of short-term loans - 19.1
Repayments of short-term loans -16.7 0.0
Repayments of long-term loans -8.1 -10.8
Payment of financial lease liabilities -0.1 -0.1
Dividends paid -5.3 -4.6
Cash flows from financing activities -30.2 5.5
Net change in cash and cash equivalents -2.4 -3.7
Cash and cash equivalents at the
beginning of the the period 7.5 11.2
Cash and cash equivalents at the
end of the period 5.1 7.5
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
Jan. 1, 2006 12.6 23.4 1.9 7.3 -0.8 -0.2 68.3 112.4 3.7 116.1
Available-for-sale
financial assets:
transferred to
income statement
on sale - - -2.1 - - - - -2.1 - -2.1
Cash flow hedges:
gains recorded
in equity - - 0.5 - - - - 0.5 - 0.5
Taxes related to
items entered into
equity and removed
from equity - - 0.2 - - - - 0.2 - 0.2
Other changes - - - - - - -0.3 -0.3 - -0.3
Business combination - - - - - - - - -3.7 -3.7
Profit for the period - - - - - - 13.1 13.1 - 13.1
Total recognised
income and
expenses 12.6 23.4 0.5 7.3 -0.8 -0.2 81.1 123.8 - 123.8
Dividend
distribution - - - - - - -4.6 -4.6 - -4.6
Shareholders'
equity at
Dec 31,2006 12.6 23.4 0.5 7.3 -0.8 -0.2 76.5 119.2 - 119.2
Cash flow hedges:
gains 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 recognised
income and
expenses 12.6 23.4 0.4 7.2 -0.8 0.1 89.8 132.6 0.7 133.4
Dividend
distribution - - - - - -5.3 -5.3 - -5.3
Shareholders'
equity at
Dec 31, 2007 12.6 23.4 0.4 7.2 -0.8 0.1 84.5 127.3 0.7 128.0
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The year-end report have 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 2006.
Lännen Tehtaat has adopted the following new amendments and interpretations to
published standards as well as new standards from January 1, 2007:
- IFRS 7 Financial Instruments: Disclosures.
- IAS 1 (Amendment) Capital Disclosures.
- IFRIC 9 Reassessment of Embedded derivatives
- IFRIC 10 Interim Financial Reporting and Impairment.
The adopted standards and interpretations have not had any significant effects
on this year-end report.
SEGMENT INFORMATION
A Frozen Foods
B Fish
C Grain trading
D Vegetable Oil
E Other Operations
F Continuing operations total
G Discontinued operations
H Total
Net sales
EUR million
1-12/2007 1-12/2006
12 mths 12 mths
Finland 189.2 188.6
Scandinavia 45.8 22.4
Baltic states and Russia 10.0 2.3
Other countries 64.6 31.2
Continuing operations total 309.6 244.5
Discontinued operations 67.2 164.2
Total 376.8 408.7
DISCONTINUED OPERATIONS
The sale of the majority holding in Suomen Rehu Ltd was completed at the start
of June, when Suomen Rehu and its subsidiaries were transferred to
Hankkija-Maatalous Oy. Suomen Rehu Ltd is presented as discontinued operations
apart from continuing operations of Lännen Tehtaat till the point of sale. From
the beginning of June Lännen Tehtaat's 49% ownership in Suomen Rehu Ltd is
presented as an associated company.
Based on the change in Suomen Rehu Ltd's assets and liabilities share price
adjustment was determined during the third interim period and EUR +1.5 million
was recognised in the bookkeeping related to the sold 51% shareholding.
In connection with the sale of the majority shareholding an option scheme has
also been agreed under which Lännen Tehtaat will, if it wishes, have the right
to sell the remaining 49% of the shares in Suomen Rehu Ltd to
Hankkija-Maatalous. The latter, for its part, has a right to buy for the
remaining shares, which it will be able to put into effect at the earliest 15
months after the purchase of the majority holding.
In the case of option exercise, Lännen Tehtaat receives the same price per share
for the remaining 49% ownership as for the sold majority shareholding in Suomen
Rehu Ltd, including the share price adjustment. In addition, the sale price is
affected by the financial result of Suomen Rehu Ltd from the beginning of June
2007.
EUR million 1-5/2007 1-12/2006
5 mths 12 mths
Profits 85.2 176.7
Costs -76.5 -169.1
Profit before taxes 8.6 7.6
Income taxes -0.8 -2.0
Profit for the period 7.8 5.6
Profits 1-5/2007 include revenue from the sale of Suomen Rehu Ltd shares
totalling EUR 5.8 million and costs include sale related expenses totalling EUR
0.2 million.
EUR million 1-5/2007 1-12/2006
5 mths 12 mths
Cash flows from operating activities 7.6 5.4
Cash flows from investing activities -0.6 1.4
Cash flows from financing activities -6.9 -10.5
Total financing activities 0.1 -3.7
The change in the net working capital has a significant effect on the operating
cash flows.
Gross investments in non-
current assets, EUR million,
continuing operations 6.9 1.9
Corporate acquisitions and other
share purchases, EUR million,
continuing operations 11.6 3.0
Average number of personnel,
continuing operations 725 662
Average number of shares, 1 000 pcs 6 253 6 253
The key figures in this interim financial report are calculated with same
accounting principles than presented in year 2006 annual financial statements.
CONTINGENT LIABILITIES
EUR million
Dec 31,2007 Dec 31, 2006
Mortgages given for debts:
Real estate mortgages 7.3 37.5
Corporate mortgages 1.3 51.4
Shares pledged - 3.6
Other quarantees 7.7 -
Non-cancellable other leases,
minimum lease payments:
Real estate leases 5.3 2.8
Other leases 0.8 0.9
Contingent liabilities on behalf of
the Group companies:
Guarantees 5.1 -
SUOMEN REHU - OPTION SCHEME
The calculatory unrecognised value for the result based component included in
the option scheme as of September 30, 2007 is approximately EUR 0.0.
Lännen Tehtaat has investment commitments in frozen foods segment a total of EUR
4.2 million as of December 31, 2007.
TANGIBLE ASSETS
EUR million
1-12/2007 1-12/2006
12 mths 12 mths
Book value at the beginning of the period 67.4 72.2
Acquisitions 6.5 7.3
Acquisitions of operations 7.6 -
Disposals -0.2 -4.2
Disposals of operations -32.6 -0.4
Depreciations and impairments -5.1 -7.7
Other changes -0.1 0.2
Book value at the end of the period 43.5 67.4
TRANSACTIONS WITH ASSOCIATED COMPANIES AND JOINT VENTURES
EUR million
1-12/2007 1-12/2006
12 mths 12 mths
Sales to associated companies 14.3 1.1
Sales to joint ventures 8.1 7.7
Purchase from associated companies 12.0 19.3
Purchase from joint ventures 0.1 0.3
Long-term receivebles from associated companies 3.9 5.2
Trade receivables and other
receivables from associated companies 3.1 5.0
Trade receivables and other
receivables from joint ventures 0.8 0.6
Trade payables and other liabilities
to associated companies 0.0 3.7
The sale 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. 010 402 4001
Copies to:
OMX Nordic Exchange Helsinki Oy
Principal media
www.lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE January 21, 2008 at 8;30 a.m.
SAMI HAAPASALMI TO HEAD LÄNNEN TEHTAAT'S FISH BUSINESS
Sami Haapasalmi, MBA, age 35, has been appointed to head Lännen Tehtaat's
domestic and international fish business as of April 18, 2008. He will be
responsible for the profitability of the fish business and for developing and
expanding the business through organic growth and acquisitions. He will report
directly to CEO Matti Karppinen.
Haapasalmi has considerable experience of the food industry in Finland and
Sweden. He comes to Lännen Tehtaat from Atria Scandinavia AB, where he served as
supply chain director.
The fish business is one of Lännen Tehtaat's strategic focus areas. In recent
years, the Group has built up its fish business through acquisitions in Finland,
Norway and Sweden. It aims to achieve a strong position in the fish business in
the northern Baltic region.
Lännen Tehtaat's fish business comprises Apetit Kala Oy and Maritim Food. Apetit
Kala produces, markets and sells processed fish products under the Apetit brand
and private labels, and sells fresh fish, processed fish products and other
fresh products in its Kalatori outlets. The companies belonging to Maritim Food
produce and sell processed fish products and shellfish products in Norway and
Sweden under private labels and their own Maritim and Sunnmöre brands.
The managing directors of the fish products and concept businesses in Finland,
Sweden and Norway will report to Haapasalmi.
LÄNNEN TEHTAAT PLC
Matti Karppinen
CEO
For additional information, please contact:
Matti Karppinen, CEO, tel +358 10 402 4001
Distribution:
Helsinki Stock Exchange
Main media
www.lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE ANNOUNCEMENT December 11, 2007 at 1.00 pm
LÄNNEN TEHTAAT PLC'S FINANCIAL INFORMATION IN 2008
Lännen Tehtaat plc will publish during the year 2008 the following financial
reports:
Financial statement bulletin 2007 February 15, 2008
Annual Report 2007 in week 12, 2008
Interim report for January-March May 8, 2008
Interim report for January-June August 12, 2008
Interim report for January-September November 4, 2008
The financial reports are published in Finnish and English.
The Annual General Meeting of Lännen Tehtaat plc is scheduled for Wednesday,
April 2, 2008. The Board of Directors of the company will decide on the
summoning of the meeting at a later date.
The financial information is also available on the company web pages at
www.lannen.fi.
LÄNNEN TEHTAAT PLC
Eero Kinnunen
CFO
For additional information:
Lännen Tehtaat plc, Eero Kinnunen, tel +358 10 402 4025
Distribution:
Helsinki Exchanges
Main media
www.lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE NOVEMBER 1, 2007 AT 8.30 AM
INTERIM REPORT JANUARY 1 - SEPTEMBER 30, 2007
July-September
- Third quarter profit totalled EUR 3.1 million (Q3 2006: 3.5 million).
- Earnings per share came to EUR 0.49 (0.56).
- Net sales of continuing operations amounted to EUR 73.6 (51.9) million, or
42% more than in the comparison period.
- The continuing operations showed an operating profit of EUR 0.3 (1.0) million
(excluding non-recurring items); the impact of non-recurring items amounted to
EUR -0.2 (0.5) million.
January-September
- Profit for January-September totalled EUR 9.4 (5.8) million.
- Earnings per share came to EUR 1.51 (0.92).
- Net sales of continuing operations amounted to EUR 213.1 (172.6) million,
which was 23.5% more than in the comparison period.
- The operating profit of the continuing operations was EUR 0.2 (0.8) million
(without non-recurring items); the impact of non-recurring items was EUR -0.1
(0.1) million.
The figures in this interim report have not been audited.
CHANGES IN GROUP STRUCTURE AND CORPORATE TRANSACTIONS IN THE THIRD QUARTER
Maritim Food AS, the Norwegian subsidiary of Lännen Tehtaat plc, exercised a
call option concerning the shares of the fish processing company Sandanger AS in
August and acquired a 3.5 per cent share in the company, as laid down in the
option. As a result, Maritim Food now owns 51% of Sandanger AS. Sandanger AS was
made part of Maritim Food and the Lännen Tehtaat Group at the end of August.
KEY INDICATORS, EUR million
7-9/2007 7-9/2006 1-9/2007 1-9/2006
All operations total
Net sales 73.6 91.6 280.3 291.3
Operating profit 1.6 4.5 9.3 6.4
Profit before taxes 3.1 4.3 10.1 7.8
Profit for the period 3.1 3.5 9.4 5.8
Earnings per share, EUR 0.49 0.56 1.51 0.92
Continuing operations
Net sales 73.6 51.9 213.1 172.6
Operating profit without
non-recurring items 0.3 1.0 0.2 0.8
Operating profit 0.1 1.5 0.1 0.9
Profit before taxes 1.7 1.6 1.4 3.4
Profit for the period 1.6 1.6 1.5 2.6
In July-September, the operating profit of the Group totalled EUR 1.6 (4.5)
million. The profit before taxes was EUR 3.1 (4.3) million and the profit for
the period EUR 3.1 (3.5) million. Earnings per share amounted to EUR 0.49
(0.56).
In July-September, net sales of the continuing operations totalled EUR 73.6
(51.9) million, up 42% on the same quarter the previous year. The increase in
net sales was mainly attributable to Grain Trading and Fish Products Business.
Incorporation of Maritim Food into the Group boosted the net sales of the Fish
Products Business by EUR 7.1 million. At the same time, the net sales of Frozen
Foods Business and Vegetable Oil Business were slightly higher than in the
comparison period.
Third quarter operating profit for continuing operations, excluding
non-recurring items, was EUR 0.3 (1.0) million. The impact of non-recurring
items was EUR -0.2 (0.5) million. The operating profit in the Frozen Foods
Business and in Grain Trading and Other Operations was up on the figure for the
same quarter a year earlier, whereas the Fish Products Business and the
Vegetable Oil Business posted poorer results.
For the Group's continuing operations, profit before taxes in the period
July-September came to EUR 1.7 (1.6) million and profit for the period EUR 1.6
(1.6) million. Taxes corresponding to the profit amounted to EUR 0.0 (-0.1)
million. The profits include a share of EUR 1.6 (0.0) million of the associated
companies' profits.
January-September
In January-September, the operating profit of the Group totalled EUR 9.3 (6.4)
million. Profit before taxes was EUR 10.1 (7.8) million and the profit for the
period EUR 9.4 (5.8) million. The figure includes the sales profit of EUR 5.5
million accumulated from the sale of the majority holding in Suomen Rehu.
Earnings per share were EUR 1.51 (0.92).
January-September net sales for the Group's continuing operations amounted to
EUR 213.1 (172.6) million, up EUR 40.5 million or 23.5% on the same period a
year earlier. Maritim Food and Grain Trading accounted for EUR 16.4 million and
EUR 27.1 million of this total, respectively.
Operating profit for continuing operations, excluding non-recurring items, was
EUR 0.2 (0.8) million. The impact of non-recurring items was EUR -0.1 (0.1)
million. Frozen Foods, Grain Trading and Other Operations all posted improved
results on the same quarter a year earlier, whereas the opposite was true for
the Fish Products Business and the Vegetable Oil Business.
Profit before taxes for the Group's continuing operations came to EUR 1.4 (3.4)
million in January-September, while the profit for the period was EUR 1.5 (2.6)
million. In January-September, taxes corresponding to the profit amounted to EUR
0.1 (-0.8) million. The profits include a share of EUR 1.3 (-0.3) million of the
associated companies' profits.
DISCONTINUED OPERATIONS
The Suomen Rehu Group has been included in discontinued operations. To allow
comparison with the same period a year earlier, the latter has been divided into
continuing and discontinued operations as if Suomen Rehu had been discontinued
from the start of 2006.
The profit of the discontinued operations includes that of the Suomen Rehu Group
from the beginning of January to the beginning of June 2007 and the sales profit
for the sale of majority holding in Suomen Rehu less the expenses incurred in
the transaction. The tax-free sales profit of EUR 4.1 million for the
transaction based on fixed sales price was entered in the second quarter. The
final sales price was determined on the basis of the balance sheet value at the
time of the transaction of the majority shareholding. The EUR 1.5 million
adjustment for the transaction of the majority of shareholding was reported in
the third quarter.
For the discontinued operations, a profit of EUR 1.5 (1.9) million was recorded
in July-September and EUR 7.9 (3.2) million in January-September.
The 49% share of the associated company Suomen Rehu's profits retained after the
sale of the majority holding in early June is included in the profit for
continuing operations.
FINANCING
The Group's financial position and liquidity continued to be good throughout the
period.
For January-September, cash flow from operations after interest and taxes
totalled EUR 0.0 (11.2) million. Effect of the change in the net working capital
is EUR -4.7 (0.2) million. Cash flow from investments was EUR 23.2 (-5.1)
million. Cash flow from loans was EUR -21.8 (-8.4) million.
A total of EUR 5.3 (4.6) million was paid in dividends.
At the end of the review period, the Group's interest-bearing liabilities came
to a total of EUR 36.8 (37.6) million and liquid assets to EUR 18.7 (4.3)
million. Net interest-bearing liabilities amounted to EUR 18.1 (33.2) million.
The consolidated balance sheet total stood at EUR 204.6 (207.7) million. The
equity ratio was 60.9 (54.2)%. Commercial papers issued for the Group's
short-term financing stood at EUR 27.0 (17.0) million at the end of the period
under review. Liquidity is secured with committed credit facilities. At the end
of the period under review there were no credit facilities in use.
The net financial income of the Group's continuing operations came to EUR 0.0
(0.1) million in July-September. Net financial income for January-September
stood at EUR -0.1 (2.8) million. The financial income for the comparison period
included sales profits of approximately EUR 2.6 million on the sale of shares
not comprising part of the Group's business operations.
SHARE OF ASSOCIATED COMPANIES' PROFITS
The profit recorded for the Group's continuing operations in July-September
includes a proportion of the profits of associated companies, amounting to EUR
1.6 (0.0) million. A transitional aid to full-time refiners amounting to EUR 0.7
million received on the basis of the 2006 sugar reform is included in the share
of profits for the associated company Sucros.
The share of the associated companies' profits in the period January-September
amounted to EUR 1.3 (-0.3) million. The figure includes the 49% share of profits
of the Suomen Rehu Group for June-September (EUR 0.5 million).
INVESTMENT
Gross investment in non-current assets in January-September, excluding corporate
acquisitions, amounted to EUR 4.1 (5.4) million. Investment by the Frozen Foods
Business totalled EUR 1.6 (0.7) million, by the Fish Products Business EUR 1.5
(0.3) million, by the Vegetable Oil Business EUR 0.3 (0.4) million and by Other
Operations EUR 0.1 (0.1) million. The investment by the Feeds segment totalled
EUR 0.6 (4.0) million at the time of the sale of the majority holding.
Investment in shares in January-September totalled EUR 11.3 (3.0) million. This
entire sum was for the purchase of shares in the Norwegian fish processing
company Maritim Food AS and Sandanger AS. More details about this are given in
the notes to the interim report.
PERSONNEL
The average number of personnel in the Group's continuing operations in
January-September was 696 (663). The average number of people working in the
Frozen Foods Business was 259 (272), in the Fish Products Business it was 361
(307), including the impact of the staff (71) at Maritim Food Group, as of March
1, 2007, in the Vegetable Oil Business it was 36 (35), in Grain Trading 29 (29)
and in Other Operations 11 (19). The figure for personnel at Apetit Suomi Oy has
been divided up between the Frozen Foods Business and Fish Products Business in
relation to the services charged. The figure given for personnel in Other
Operations in the same period in 2006 includes the personnel at Harviala Oy up
to February 28.
SEASONAL NATURE OF OPERATIONS
The transition to IFRS reporting has had a noticeable impact on the accrual of
Lännen Tehtaat's profits over the financial year. With production linked to the
harvesting season and with inventories being valued in accordance with IAS 2,
most of the Group's annual profit accrues during the final quarter of the year.
The focus on the harvesting season means that the seasonality of operations is
most marked in the Frozen Foods Business and in the operations of the associated
company Sucros.
The sales of the Fish Products Business depend to a great extent on seasonal
holidays. A major proportion of the entire year's profit depends on the success
of Christmas sales.
The net sales of Grain Trading vary both annually and quarterly, depending on
supply and demand and on prices in Finland and on other markets.
BUSINESS SEGMENTS
Frozen Foods Business
Net sales of the Frozen Foods Business in July-September totalled EUR 11.0
(10.5) million, which was about 5% more than a year before. Net sales increased
in all sales channels.
Sales of frozen retail products, jams and marmalades increased by more than 6%
on the comparison period. Growth was strongest in the frozen pizza product
group. Active campaigning in August boosted the overall market for pizzas and
the market share of Apetit by well over ten per cent. There was also strong
growth in the sales of frozen potato products. The increase was a result of
strong sales of the new ‘Kermaperunat' (cream potatoes) product both in summer
and in autumn and the active campaigning for Apetit mashed potatoes on
television and in shops at the start of the school year. Sales of frozen foods
and vegetables remained at the level of the comparison period. Tikka Masala
Shrimps and Green Curry Chicken, two new products in the Apetit Quick&Tasty
range, were launched at the start of September. The new items were put on sale
in a number of major Finnish grocery chains and, with the help of advertising
and active input by the retail sector, helped to bring about a slight increase
in the market share of frozen foods.
According to a survey conducted in August on brand awareness, Apetit is
Finland's best known frozen food brand. Overall spontaneous awareness of the
brand was 52%.
Net sales of the Horeca sector grew by more than 10%. The growth was due to the
fact that domestic vegetables have become more competitive vis-a-vis imported
produce. In relative terms, the growth was strongest in exports. As a result of
a good harvest, peas were also exported to Central Europe where the harvest was
unusually poor due to bad weather.
The autumn harvest is still being processed. In addition to peas, the spinach
harvest was also good, both in terms of quantity and quality. The harvest of
root vegetables also seems to be good, in both quantity and quality, except for
the potato, which has been affected by the wet autumn weather.
The Frozen Foods Business posted an operating profit of EUR 1.0 (0.8) million
for the period July-September. The figure does not include non-recurring items.
A non-recurring write-off of EUR 0.2 million on disused non-current assets
affected the profit for the period.
Net sales for the period January-September amounted to EUR 36.1 (37.7) million.
The figure for the comparison period includes EUR 2.7 million in sales of
supplies for sugar beet contract farming and associated operations. These
operations became the responsibility of the associated company Sucros as of
January 1, 2007. Food sales grew by over 3% on the comparison period.
The Frozen Foods Business posted an operating profit of EUR 1.8 (0.4) million
for the period January-September (excluding non-recurring items). Non-recurring
items had an impact of EUR -0.2 (-0.1) million. Results were improved by higher
product sales and changes in the product mix. Systematic improvements in
productivity and higher cost efficiency have also contributed to the improved
profits of Apetit Pakaste. In order to further improve productivity and cost
efficiency, Apetit Pakaste has decided to move the production of its Turku plant
to Säkylä. The plans have been finished and the necessary earth-moving work in
Säkylä has started. The intention is to move the production of the Turku plant
to Säkylä by the end of 2008.
Investments in the Frozen Foods Business in the period January-September
amounted to EUR 1.6 (0.7) million. The most important investments concerned the
upgrading of the freezing technology, which will help to make energy use more
efficient, improve production logistics and boost product quality. Increased
automation also made packaging more efficient.
Fish Products Business
Net sales of the Fish Products Business for the period July-September totalled
EUR 19.8 (14.0) million, a growth of more than 40%. Maritim Food contributed
about EUR 7 million to this increase.
In May, Apetit Kala launched two new sliced hot-smoked fish products. Newspaper
advertising during the summer months, together with active campaigning by the
retail sector helped to boost the hot-smoked fish market, compared with summer
2006. The launching of the new products also helped Apetit to increase its
market share in hot-smoked products. Sales of shellfish products made by the
Maritim Food Group started in Finland in early September under the Apetit
Maritim brand.
According to a survey conducted in August on brand awareness, Apetit is
Finland's best known fresh-fish brand. Overall spontaneous awareness of the
brand is 24%.
The Fish Products Business made a loss of EUR 0.8 million (+0.1) in the third
quarter. The performance of Maritim Food Group was, as expected, slightly
positive. Machinery breakdowns and disruptions during the second quarter still
had a negative impact on Apetit Kala's sales and profits during the third
quarter. As expected, the transfer of production from Kerava to Kuopio in
August-September resulted in overlapping costs. The movement of production and
packaging from Kerava to Kuopio proceeded as planned. The targeted cost savings
are estimated to become reality from the beginning of 2008.
The domestic Fish Products Business has been able to substantially improve its
operations in the late summer and autumn. The focus has been on improvements in
delivery reliability and work and raw-material productivity. Improvements have
been achieved in all focus areas. Deliveries have become more reliable and, as a
result of more efficient production control, productivity has improved.
At the start of August, Ari Laarne became managing director of the company,
while Heljä Mantere was appointed as production director. The managing director
concentrates in particular on the development of the company's core processes
and operational control, while the production director is responsible for
production, productivity improvements, and quality.
Net sales of the Fish Products Business for the period January-September
amounted to EUR 56.7 (43.0) million, up 32%. Maritim Food contributed about EUR
16 million to this increase. Net sales of Maritim Food and Sandanger AS, which
was made part of the Group at the end of August, have been as expected.
Operating profit of the Fish Products Business in January-September (excluding
non-recurring items) was EUR -2.1 (0.6) million. Non-recurring items had an
impact of EUR 0.0 (0.4) million. The costs arising from the movement of
production in Kustavi and Kerava have not been categorized as non-recurring
items. Performance in the early months of the year were affected by lower sales
margins, a result of high raw material prices.
Investments in the Fish Products Business were EUR 1.5 (0.3) million during the
period January-September. The most important investments were connected with the
expansion of the Kuopio plant, which is in accordance with the concentration of
Apetit Kala's production, upgrading of the smoking furnaces and improvement of
filleting procedures.
Vegetable Oil Business
Net sales of the Vegetable Oil Business for the period July-September amounted
to EUR 10.6 (10.1) million. This was 5% more than in the comparison period.
Operating profit was EUR -0.2 (0.5) million. The fall is the result of a drop in
the processing margin, which was expected. Sales prices for vegetable oils and
protein feeds have risen more slowly than the prices of raw materials, which has
weakened processing margins, particularly during the third quarter.
Net sales for the period January-September amounted to EUR 31.3 (30.7) million,
and the comparable operating profit was EUR 0.7 (2.1) million.
Investments in the Vegetable Oil Business totalled EUR 0.3 (0.4) million. The
most important investment was the introduction of the ERP enterprise research
planning.
Grain Trading
The favourable development in the Grain Trading Business continued strongly in
the third quarter. Net sales were EUR 32.1 (17.5) million, showing growth of
almost 85%. The growth was a result of exceptionally high grain prices and
higher volumes.
The third quarter was unusually brisk on the grain market.
Domestic sales were slightly below those of the comparison period, while exports
and sales between third countries increased substantially.
Avena Nordic Grain opened an office in Salo in September so that it can increase
domestic grain purchases.
Operating profit for July-September more than doubled on the comparison period,
and totalled EUR 0.9 (0.4) million.
Net sales for the period January-September grew 44%, to EUR 89.3 (62.2) million.
Operating profit was EUR 2.6 (1.2) million.
Other Operations
The Other Operations segment is made up of the service company Apetit Suomi,
group administration, and various items that do not come under any particular
segment. The cost effect of the services produced by Apetit Suomi is an
encumbrance on the operating result in proportion to the use of services.
Net sales for the segment for the period July-September totalled EUR 1.0 (0.0)
million and the operating loss was EUR 0.6 (0.9) million.
Net sales for the period January-September totalled EUR 2.9 (0.0) million, and
the operating loss without non-recurring items EUR 2.9 (-3.4) million.
Non-recurring items for the period totalled EUR 0.1 (-0.6) million.
Lännen Tehtaat has decided to introduce an ERP system covering the Frozen Foods
Business, the Fish Products Business and the group administration. The project
was launched in September and the new system will be introduced in stages during
2008.
AUTHORIZATIONS BY THE ANNUAL GENERAL MEETING
The Annual General Meeting authorized the Board to decide on a new share issue
and to sell the company's own shares held by the company either together or in
several lots in the form of a rights issue. The maximum number of new shares
that can be issued is 631,757, and the maximum number of shares held by the
company that can be sold is 65,000. The issue price of the new shares will be at
least the nominal share value, i.e. two (2) euros. The sales price of the
company's own shares will be at least the market price at the moment of sale,
defined on the basis of the trading price determined by public trading on the
Helsinki Stock Exchange. The authorization covers the right to depart from the
subscription priority of existing shareholders if there is a pressing financial
reason for so doing from the company's point of view; the right to offer shares
rather than money against apportionment as well, or on some other specific
condition or using right-of-setoff; and the right to decide the issue price of
the shares and any other conditions or matters associated with the share issue.
The authorization will be in force until the next Annual General Meeting. This
authorization supersedes the share issue authorization given on March 29, 2006
and the authorization to sell the company's own shares given on the same date.
The Board has not, as yet, exercised the share issue authorization granted by
the Annual General Meeting.
SHARES AND TRADING
At the end of the period under review, the total number of the company's shares
in circulation was 6,317,576, and the registered share capital was EUR
12,635,152. The company held 65,000 of its own shares, i.e. 1.0% of the entire
share stock. The nominal value of the company's own shares was EUR 130,000. No
changes in the share capital or in the number of the company's own shares held
by the company took place in the year under review or the previous year.
During the period under review, 739,417 (1,379,454) of the company's shares were
traded on the stock exchange, i.e. 11.7% (21.8%) of the entire share stock. The
highest share price was EUR 24.50 (24.19) and the lowest EUR 17.65 (15.26).
Share trading during the period totalled EUR 16.2 (27.6) million. At the end of
the period, the market value of the share stock was EUR 114.3 (132.2) million.
FLAGGING ANNOUNCEMENTS
No flagging announcements were made in the review period. After the end of the
review period, on October 19, 2007, Skagen Funds, administered by Skagen AS,
announced in accordance with chapter 2, section 9 of the Securities Markets Act,
that it had bought some shares of Lännen Tehtaat plc and that on October 18,
2007 it owned a total of 318,200 shares or 5.04% of all company shares and
voting rights.
GOVERNANCE
After the auditor appointed as the accontable auditor of Lännen Tehtaat plc
resigned from PricewaterhouseCoopers Oy, authorized public accountants,
PricewaterhouseCoopers appointed Tomi Moisio, authorized public accountant, as
the new accountable auditor of Lännen Tehtaat plc.
IMPORTANT OCCURRENCES AFTER THE END OF THE REVIEW PERIOD
There were no important occurrences after the end of the period under review.
SHORT-TERM RISKS AND UNCERTAINTIES
The major risks for the Lännen Tehtaat Group are connected with the control of
fluctuations in raw material prices, volume and quality of harvests, and supply
of raw materials.
In the Fish Products Business and the Vegetable Oil Business, and in Grain
Trading, the most important raw material prices are determined on the world
market. These raw materials include salmon, rainbow trout, shellfish, rapeseed,
soya beans and grain. World grain prices, for exemple, are now exceptionally
high because of brisk demand.
Because of the tight competition on the market, it may not be possible to pass
on all rises in raw material prices to sales prices, as this would have a
negative impact on Group profits.
Sugar
On September 26, 2007, the agricultural ministers of the European Union approved
the proposals put forward by the European Commission to cut down sugar
production. According to the decisions, further cuts in production should be
achieved through voluntary abandonment of production by growers and the
industry.
Lännen Tehtaat owns 20% of Sucros Oy, which produces sugar in Finland. After the
dividend of EUR 5.3 million paid by Sucros in September and the entry of the
results for the third quarter, the value of Sucros-ownership in the balance
sheet of the Lännen Tehtaat Group is about EUR 18 million. If Sucros were to
give up its complete production quota and the Säkylä sugar factory were to
close, the closure compensation Sucros would be entitled to because of the sales
of its sugar quota and the present value of Sucros' expected cash flow would at
least equal the balance sheet value of the Sucros ownership.
PROSPECTS FOR THE ENTIRE YEAR
Net sales of continuing operations for the year as whole are expected to rise
above the 2006 level because of the strong growth in the Fish Products Business
and Grain Trading. Operating profit of the continuing operations (excluding
non-recurring items) is expected to be at the same level as in the comparison
year.
Growth in the Frozen Foods Business and Grain Trading will boost the operating
profit of continuing operations. Profits will be affected by production
interruptions in the domestic Fish Products Business, costs arising from
production restructuring and lower processing margins in the Vegetable Oil
Business.
Lännen Tehtaat's vision is to be one of the leading Finnish food companies. In
order to realize the vision, Lännen Tehtaat continues to evaluate potential
structural arrangements and acquisition targets within the food industry.
Financial income and expenses 0.0 0.1 -0.1 2.8 3.2
Share of profit of associated
companies 1.6 0.0 1.3 -0.3 1.6
Profit/loss before taxes 1.7 1.6 1.4 3.4 10.2
Income taxes 0.0 -0.1 0.1 -0.8 -2.7
Profit/loss for the period,
continuing operations 1.6 1.6 1.5 2.6 7.5
Discontinued operations
Profit/loss for the period,
discontinued operations 1.5 1.9 7.9 3.2 5.6
Profit/loss for the period 3.1 3.5 9.4 5.8 13.1
Attributable to:
Equity holders of the parent 3.1 3.5 9.4 5.8 13.1
Minority interests 0.0 0.0 0.0 0.0 -
Earnings per share, calculated of
the profit/loss attributable to the
shareholders of the parent company
Basic and diluted earnings per
share, EUR, continuing operations 0.26 0.26 0.25 0.42 1.20
Basic and diluted earnings per
share, EUR, discontinued operations 0.23 0.30 1.26 0.50 0.90
Current assets
Inventories 58.4 46.8 65.3
Receivables 31.2 36.6 49.0
Financial assets at fair value
through profit and loss 15.0 - -
Cash and cash equivalents 3.7 4.3 7.5
108.2 87.8 121.9
Total assets 204.6 207.7 237.5
EQUITY AND LIABILITIES
Equity attributable to the
equity holders of the parent
company 123.9 112.4 119.2
Minority interest 0.8 - -
Total equity 124.6 112.4 119.2
Non-current liabilities
Long term financial liabilities 6.0 9.7 7.0
Deferred tax liabilities 4.5 7.0 7.0
Long-term provisions 0.1 0.9 -
Non-current liabilities total 10.6 17.6 14.0
Current liabilities
Trade payables and other
liabilities 38.5 48.9 55.2
Short-term financial liabilities 30.9 27.9 49.1
Short-term provisions - 0.9 -
Current liabilities total 69.4 77.7 104.3
Net profit for the period 9.4 5.8 13.1
Adjusments, total -3.2 8.3 8.5
Change in working capital -4.7 0.2 -23.1
Interests paid from
operating activities -2.2 -1.4 -1.9
Interests received from
operating activities 0.9 0.2 0.3
Taxes paid -0.3 -1.8 -3.2
Net cash flow from operating
activities 0.0 11.2 -6.4
Investments in tangible and
intangible assets -4.1 -5.4 -7.7
Proceeds from sales of tangible
and intangible assets 0.1 0.0 4.6
Acquisition of subsidiaries
deducted by cash -9.9 -2.8 -2.8
Proceeds from sales of
subsidiaries 46.3 0.0 0.0
Acquisition of associated
companies 0.0 -0.2 -0.2
Proceeds from sales of
associated companies 0.6 0.0 0.0
Purchases of other investments -35.0 -0.1 -0.1
Proceeds from sales of
other investments 20.0 3.4 3.4
Dividends received from
investing activities 5.3 0.0 0.0
Net cash flow from investing
activities 23.2 -5.1 -2.7
Raising of long-term loans 0.0 0.0 1.9
Raising of short-term loans 0.0 0.0 19.1
Repayments of short-term loans -14.4 -2.1 0.0
Repayments of long-term loans -7.3 -6.2 -10.8
Payment of financial lease
liabilities -0.1 -0.1 -0.1
Dividends paid -5.3 -4.6 -4.6
Cash flows from financing
activities -27.0 -13.0 5.5
Net changes in cash and
cash equivalents -3.8 -6.9 -3.7
Cash and cash equivalents at the
beginning of the the period 7.5 11.2 11.2
Cash and cash equivalents at the
end of the period 3.7 4.3 7.5
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
Jan. 1, 2006 12.6 23.4 1.9 7.3 -0.8 -0.2 68.3 112.4 3.7 116.1
Available-for-sale
financial assets:
transferred to
income statement
on sale - - -2.1 - - - - -2.1 - -2.1
Cash flow hedges:
gains recorded
in equity - - 0.8 - - - - 0.8 - 0.8
Taxes related to
items entered into
equity and removed
from equity - - 0.3 - - - - 0.3 - 0.3
Other changes - - - - - - -0.2 -0.2 - -0.2
Business combination - - - - - - - - -3.7 -3.7
Dividend
distribution - - - - - - -4.6 -4.6 - -4.6
Profit for the period - - - - - - 5.8 5.8 - 5.8
The interim financial statements have 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 2006.
Lännen Tehtaat has adopted the following new amendments and interpretations to
published standards as well as new standards from January 1, 2007:
- IFRS 7 Financial Instruments: Disclosures.
- IAS 1 (Amendment) Capital Disclosures.
- IFRIC 9 Reassessment of Embedded derivatives
- IFRIC 10 Interim Financial Reporting and Impairment.
The adopted standards and interpretations have not had any significant effects
on this interim report.
SEGMENT INFORMATION
A Frozen Foods
B Fish
C Grain trading
D Vegetable Oil
E Other Operations
F Continuing operations total
G Discontinued operations
H Total
Finland 134.6 140.4 188.6
Scandinavia 29.4 7.5 22.4
Baltic states and Russia 7.3 1.7 2.3
Other countries 41.8 23.0 31.2
Continuing operations total 213.1 172.6 244.5
Discontinued operations 67.2 118.7 164.2
Total 280.3 291.3 408.7
DISCONTINUED OPERATIONS
The sale of the majority holding in Suomen Rehu Ltd was completed at the start
of June, when Suomen Rehu and its subsidiaries were transferred to
Hankkija-Maatalous Oy. Suomen Rehu Ltd is presented as discontinued operations
apart from continuing operations of Lännen Tehtaat till the point of sale. From
the beginning of June Lännen Tehtaat's 49% ownership in Suomen Rehu Ltd is
presented as an associated company.
Based on the change in Suomen Rehu Ltd's assets and liabilities share price
adjustment was determined during the third interim period and EUR +1.5 million
was recognised in the bookkeeping related to the sold 51% shareholding.
In connection with the sale of the majority shareholding an option scheme has
also been agreed under which Lännen Tehtaat will, if it wishes, have the right
to sell the remaining 49% of the shares in Suomen Rehu Ltd to
Hankkija-Maatalous. The latter, for its part, has a purchasing option for the
remaining shares, which it will be able to put into effect at the earliest 15
months after the purchase of the majority holding.
In the case of option exercise, Lännen Tehtaat receives the same price per share
for the remaining 49% ownership as for the sold majority shareholding in Suomen
Rehu Ltd, including the share price adjustment. In addition, the sale price is
affected by the financial result of Suomen Rehu Ltd from the beginning of June
2007.
EUR million 1-5/2007 1-9/2006 1-12/2006
5 mths 9 mths 12 mths
Profits 85.2 119.8 176.7
Costs -76.5 -115.5 -169.1
Profit before taxes 8.7 4.3 7.6
Income taxes -0.8 -1.2 -2.0
Profit for the period 7.9 3.2 5.6
Profits 1-5/2007 include revenue from the sale of Suomen Rehu Ltd shares
totalling EUR 5.8 million.
Cash flows from operating activities 7.6 2.0 5.4
Cash flows from investing activities -0.6 -5.3 1.4
Cash flows from financing activities -6.9 3.7 -10.5
Total financing activities 0.1 0.4 -3.7
The change in the net working capital has a significant effect on the operating
cash flows.
ACQUISITIONS
Maritim Food AS, a Norwegian subsidiary of Lännen Tehtaat plc, decided to
exercise an option to purchase shares in the fish-processing company Sandanger
AS. Maritim Food AS purchased 3.5% of Sandanger AS's shares in accordance with
the option agreement. The transaction made Maritim Food the majority shareholder
in Sandanger AS, with its holding rising to 51%. Sandanger AS was incorporated
into the Lännen Tehtaat Group on August 31, 2007.
The purchase price for the 51 % ownership was EUR 1.1 million and resulted to
goodwill of EUR 0.5 million. The acquisition has been recognised on a
preliminary basis in the manner permitted by IFRS 3. Determination of the fair
value of the company's assets and liabilities was still incomplete at the time
the interim report was published.
KEY INDICATORS
Sept 30,2007 Sept 30,2006 Dec 31, 2006
Shareholders' equity per
share, EUR 19.81 17.98 19.06
Equity ratio, % 60.9% 54.2% 50.3%
Gearing, % 14.3% 29.6% 40.7%
Gross investments in non-
current assets, EUR million 4.1 5.4 7.6
Corporate acquisitions and other
share purchases, EUR million 11.3 3.0 3.0
Average number of personnel 863 986 981
Average number of shares, 1 000 6 253 6 253 6 253
The key figures in this interim financial report are calculated with same
accounting principles than presented in year 2006 annual financial statements.
CONTINGENT LIABILITIES
EUR million
Sept 30,2007 Sept 30,2006 Dec 31, 2006
Mortgages given for debts:
Real estate mortgages 33.4 40.7 37.5
Corporate mortgages 31.4 51.4 51.4
Shares pledged 9.4 3.6 3.6
Other securities given for own
commitments:
Non-cancellable other leases,
minimum lease payments:
Real estate leases 5.6 2.8 2.8
Other leases 0.8 1.1 1.1
Contingent liabilities for own
commitments:
Repurchasing commitments 0.0 0.0 0.0
Estimated additional share
purchase price, Maritim 0-1.3 - -
Contingent liabilities on behalf
of the associated companies:
Guarantees 4.9 0.0 -
SUOMEN REHU - OPTION SCHEME
The calculatory unrecognised value for the result based component included in
the option scheme as of September 30, 2007 is approximately EUR 0.2 million.
Book value at the beginning
of the period 67.4 72.2 72.2
Acquisitions 3.7 5.4 7.3
Acquisitions of operations 7.5 - -
Disposals 0.0 -0.2 -4.2
Disposals of operations -32.6 -0.4 -0.4
Depreciations and impairments -3.6 -5.7 -7.7
Other changes 0.1 0.2 0.2
Book value at the end of the period 42.5 71.6 67.4
TRANSACTIONS WITH ASSOCIATED COMPANIES AND JOINT VENTURES
Sales to associated companies 9.6 0.4 1.1
Sales to joint ventures 6.2 5.8 7.7
Purchase from associated companies 17.7 14.4 19.3
Purchase from joint ventures 0.1 0.0 0.3
Long-term receivebles from
associated companies 3.9 5.0 5.2
Trade receivables and other
receivables from associated companies 2.8 2.2 5.0
Trade receivables and other
receivables from joint ventures 1.1 0.5 0.6
Trade payables and other liabilities
to associated companies 0.6 1.5 3.7
The sale 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
More details: Matti Karppinen, CEO, tel. +358 10 402 4001
Distribution:
Helsinki Stock Exchange
Main media
www.lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE ANNOUNCEMENT October 19, 2007 at 11;45 am
ANNOUNCEMENT PURSUANT TO CHAPTER 2, SECTION 10 OF THE SECURITIES MARKETS ACT
Skagen Funds managed by Skagen AS has today notified that they have bought some
shares in Lännen Tehtaat plc and the total ownership is 318,200 shares on
October 18, 2007. This corresponds to 5,04% of Lännen Tehtaat's share capital
and voting rights.
LÄNNEN TEHTAAT PLC
Riitta Jaakkola
Financial Manager
For additional information:
Lännen Tehtaat plc, Matti Karppinen, CEO, tel +358 10 402 00
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE, September 28, 2007 at 2;15 pm
NEW PRINCIPAL AUDITOR DESIGNATED BY ACCOUNTING FIRM
PricewaterhouseCoopers Oy, the Authorized Accounting Firm who are the auditors
for Lännen Tehtaat plc, have appointed Authorized Public Accountant Tomi Moisio
as the new principal auditor for Lännen Tehtaat plc as of September 28, 2007.
Authorized Public Accountant Hannu Pellinen continues as the other auditor for
Lännen Tehtaat plc, elected by the Annual General Meeting.
LÄNNEN TEHTAAT PLC
Matti Karppinen
CEO
Further information: Matti Karppinen, CEO, tel. +358 10 402 4001
Distribution:
Helsinki Stock Exchange
Main media
www.lannen.fi
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE AUGUST 9, 2007 AT 8.30 AM
INTERIM REPORT JANUARY 1 - JUNE 30, 2007
April-June
- Second quarter profit totalled EUR 4.4 million (Q2 2006: 2.0 million).
- Earnings per share came to EUR 0.71 (0.34).
- Second quarter net sales for the Group's continuing operations came to EUR
68.0 (63.5) million, up 7.1% on Q2 2006.
- The continuing operations showed an operating profit/loss of EUR -0.5 (0.6)
million; the effect of non-recurring items was EUR 0.0 (0.3) million.
- The sale of the majority holding in Suomen Rehu Ltd was completed at the
start of June.
January-June
Profit for January-June was EUR 6.3 (2.5) million.
Earnings per share were EUR 1.01 (0.37).
Net sales of continuing operations amounted to EUR 139.5 (120.7) million, which
is 15.6% up on the comparison period.
The operating profit/loss of the continuing operations was EUR 0.0 (-0.6)
million; the effect of non-recurring items on the operating profit was EUR +0.1
(-0.4) million.
The information in the report is unaudited.
CHANGES IN GROUP STRUCTURE AND CORPORATE TRANSACTIONS IN THE SECOND QUARTER
On January 19, 2007 Lännen Tehtaat plc and SOK subsidiary Hankkija-Maatalous Oy
signed a share-purchase agreement under which 51% of the shares in Suomen Rehu
Ltd and Avena Nordic Grain would be transferred to the ownership of
Hankkija-Maatalous Oy. When the competition authorities studied the agreement,
it was evident that the integration of Avena Nordic Grain's business with the
grain trading business of Hankkija-Maatalous would, under competition
legislation, be viewed as leading to the creation of a strong market position,
and so both parties to the agreement decided to omit Avena Nordic Grain from the
deal.
The sale of the majority holding in Suomen Rehu Ltd was completed at the start
of June, when Suomen Rehu and its subsidiaries were transferred to
Hankkija-Maatalous Oy. Following this deal, Suomen Rehu Ltd is now an associated
company of Lännen Tehtaat, which retains a 49% holding in the company. More
details of the deal are given in the notes to the interim report.
Avena Nordic Grain was not part of the deal and will be reported as a separate
segment of the continuing operations.
The dismantling of the feed company ZAO Scandic Feed, jointly owned with Raisio
Nutrition, was completed at the end of the quarter. This had no significant
impact on the financial performance of Lännen Tehtaat.
KEY INDICATORS, EUR million
4-6/2007 4-6/2006 1-6/2006 1-6/2006
Group total
Net sales 94.3 102.8 206.7 199.7
Operating profit 4.5 2.5 7.8 2.0
Profit before taxes 4.5 2.7 7.0 3.7
Profit for the period 4.4 2.0 6.3 2.5
Earnings per share, EUR 0.71 0.34 1.01 0.37
In April-June, the operating profit for the Group totalled EUR 4.5 (2.5)
million. The profit before taxes was EUR 4.5 (2.7) million and the profit for
the period EUR 4.4 (2.0) million. Earnings per share were EUR 0.71 (0.34).
In April-June, net sales for the Group's continuing operations totalled EUR 68.0
(63.5) million, up 7.1% on the same quarter the previous year. The increase in
net sales was attributable to the Group's Grain Trading and Fish Products
Business. Net sales of the Frozen Foods Business were lower than in the
comparison period, while those of the Vegetable Oil Business were at the level
of the comparison period. Following the acquisition of Maritim Food, net sales
of the Fish Products Business increased by EUR 6.6 million.
Second quarter operating profit/loss for continuing operations, excluding
non-recurring items, was EUR -0.5 (0.3) million. Non-recurring items totalled
EUR 0.0 (0.3) million. The operating result in the Frozen Foods Business and in
Grain Trading was up on the figure for the same quarter a year earlier, whereas
the Fish Products Business and the Vegetable Oil Business recorded a poorer
result than in 2006. In Other Operations, the profit was at the level of the
comparison period.
January-June
In January-June, the operating profit for the Group totalled EUR 7.8 (2.0)
million. The profit before taxes was EUR 7.0 (3.7) million and the profit for
the period EUR 6.3 (2.5) million. Earnings per share were EUR 1.01 (0.37).
January-June net sales for the Group's continuing operations amounted to EUR
139.5 (120.7) million, up 15.6% on the same period a year earlier. Maritim Food
accounted for EUR 9.3 million of this total. Net sales in Grain Trading were up
by EUR 12.5 million.
Operating profit/loss for continuing operations, excluding non-recurring items,
was EUR -0.1 (-0.2) million. Non-recurring items totalled EUR 0.1 (-0.4)
million. Frozen Foods and Jams, Grain Trading and Other Operations all turned in
an improved result on the same quarter a year earlier, whereas the opposite was
true for the Fish Products Business and the Vegetable Oil Business.
DISCONTINUED OPERATIONS
The Suomen Rehu Group has been included under discontinued operations. To allow
comparison with the same period a year earlier, the latter has been divided into
continuing and discontinued operations as if Suomen Rehu had been discontinued
from the start of 2006.
The result of the discontinued operations includes that of the Suomen Rehu Group
from the beginning of January 1 untill the beginning of June, 2007 and the fixed
sales price component of the sales proceeds from the majority shareholding in
Suomen Rehu Ltd, and the expenses incurred in the transaction. The tax-free
sales profit on the majority shareholding recongnised in the second quarter
amounted to EUR 4.1 million. The parties to the deal are still determining the
adjustment item affecting the final sales price. The adjustment for the majority
shareholding will be no more than EUR 1.8 million and will be reported in the
third quarter. In accordance with IFRS rules, no depreciation according to plan
has been recorded on discontinued operations after January 19, 2007. This
unrecorded depreciation improved the profit for the first part of the year in
the Suomen Rehu Group by EUR 1.0 million and correspondingly reduced the profit
made on the share deal by about EUR 0.5 million.
For the Group's discontinued operations, a profit of EUR 4.6 (1.1) million was
recorded in April-June and EUR 6.4 (1.3) million in January-June.
INVESTMENT
Gross investment in non-current assets in January-June, excluding corporate
acquisitions, amounted to EUR 3.1 (2.8) million. Investment by the Frozen Foods
Business was EUR 1.1 (0.5) million, by the Fish Products Business EUR 1.1 (0.1)
million, by the Vegetable Oil Business EUR 0.3 (0.2) million and by the Feeds
segment, now sold, EUR 0.6 (2.1) million.
Investment in shares in January-June totalled EUR 11.1 (1.5) million. This
entire sum was for the purchase of shares in the Norwegian fish products company
Maritim Food AS. More details about this are given in the notes to the interim
report.
FINANCING
The Group's financial position and liquidity continued to be good throughout the
period.
Cash flow from operations after interest and taxes stood at EUR 4.8 (4.9)
million for April-June. Net cash flow from investments was EUR 23.0 (-2.6)
million. A total of EUR 5.3 (4.6) million was paid in dividends.
For January-June, cash flow from operations after interest and taxes totalled
EUR 10.3 (9.6) million. Cash flow from investments was EUR 12.8 (0.1) million.
The Group's financing structure changed at the start of June as a result of the
sale of the majority shareholding in Suomen Rehu Ltd. At the end of the review
period, the Group's interest-bearing liabilities came to a total of EUR 29.9
(40.5) million and liquid assets to EUR 25.2 (10.9) million. Net
interest-bearing liabilities amounted to EUR 4.7 (29.6) million. The
consolidated balance sheet total stood at EUR 177.2 (201.2) million. The equity
ratio was 67.9 (55.3)%. Commercial papers issued for the Group's short-term
financing stood at EUR 23.0 (19.0) million at the end of the period under
review. Liquidity is secured with committed credit facilities. At the end of the
period under review there were no credit facilities in use.
The net financial income of the Group's continuing operations came to EUR 0.0
(0.3) million in April-June and EUR 0.0 (2.7) million in January-June. The
financial income for the corresponding period a year earlier included sales
profits of approximately EUR 2.6 million on the sale of shares not comprising
part of the Group's business operations.
SHARE OF ASSOCIATED COMPANIES' PROFITS
The profit recorded for the Group's continuing operations in April-June includes
a proportion of the profits of associated companies. This proportion amounted to
a total of EUR 0.2 (0.2) million. In January-June the corresponding figure was
EUR -0.2 (-0.2) million. This includes a 49% share of the Suomen Rehu Group
profit for June 2007.
TAXES AND PROFIT FOR THE PERIOD
In April-June, the Group's continuing operations recorded a figure of EUR -0.3
(1.1) million as profit/loss before taxes and EUR -0.2 (0.9) million as profit
for the period. The taxes on the profit/loss for the period totalled EUR 0.1
(-0.2) million. In January-June, profit/loss before taxes came to EUR -0.2 (1.8)
million and the profit/loss for the period was EUR -0.1 (1.1) million. The taxes
on the profit/loss for the period were EUR 0.1 (-0.7) million.
The April-June result for continuing and discontinued operations showed a profit
of EUR 4.4 (2.0) million. The corresponding figure for January-June was EUR 6.3
(2.5) million.
PERSONNEL
The average number of personnel in the Group's continuing operations in
January-June was 673 (650). The number of people working in the Frozen Foods
Business was an average of 246 (259), in the Fish Products Business (including
the staff of Maritim Food AS as of March 1, 2007) 351 (306), in the Vegetable
Oil Business 36 (35), in Grain Trading 29 (28) and in Other Operations 11 (21).
The number of people working in the Feeds segment, now sold, during January-May
was an average of 298 (324). In calculating the number of personnel, the figure
for personnel at Apetit Suomi Oy has been divided up between the Frozen Foods
Business and Fish Products Business in relation to the services charged. The
figure given for personnel in Other Operations in the same period in 2006
includes the personnel at Harviala Oy up to February 28.
SEASONAL NATURE OF OPERATIONS
The transition to IFRS reporting has had a noticeable impact on the accrual of
Lännen Tehtaat's profits over the financial year. With production linked to the
harvesting season and with inventories being valued in accordance with IAS 2,
most of the Group's annual profit accrues during the final quarter of the year.
The focus on the harvesting season means that the seasonality of operations is
most marked in the Frozen Foods Business and in the operations of the associated
company Sucros.
Apetit Kala's sales depend to a great extent on seasonal holidays. A major
proportion of the entire year's profit depends on the success of Christmas
sales.
The net sales of Grain Trading vary both annually and quarterly, depending on
supply and demand and on prices in Finland and on other markets.
BUSINESS SEGMENTS
Frozen Foods Business
Net sales of the Frozen Foods Business in April-June were down EUR 2.6 million
to EUR 11.8 (14.4) million. The drop in sales was the result of the transfer of
sugar beet contract farming and associated sales of supplies to Sucros. Food
sales were at the same level as the previous year.
Sales of retail products were down about 7% on the previous period. Sales were
up in the potato and frozen pizza product groups. Sales of frozen foods and
vegetables remained at the previous level. Sales in the hotel, restaurant and
catering sector showed a positive trend with a growth of about 10%. Industrial
sales grew by around 20%, while exports remained at the previous level.
The Frozen Foods Business showed an operating profit of EUR 0.3 (0.2) million
for the period April-June.
Net sales for the period January-June were down EUR 2.1 million to EUR 25.1
(27.2) million. Sales of agricultural supplies were down EUR 2.6 million. Food
sales grew by over 1%.
The drop in sales of retail products was around 2.5% for the period
January-June. Most of the drop was in retailers' own brands. Sales in the hotel,
restaurant and catering sector grew by over 10% as too did industrial sales.
Exports were at the same level as the previous period.
The Frozen Foods Business showed an operating profit/loss of EUR 0.8 (-0.6)
million for the period January-June. Results were improved by changes in the
sales product structure and as a result of improvements in productivity and cost
efficiency.
Investments in the Frozen Foods Business were EUR 1.1 (0.5) million during the
period January-June, the most important ones being associated with the renewal
of freezing lines.
Fish Products Business
Net sales of the Fish Products Business for the period April-June were EUR 20.5
(15.6) million. Net sales were increased by acquiring the Maritim Food Group,
which became part of the Fish Products Business. Net sales of Apetit Kala were
down EUR 1.7 million.
The Fish Products Business made a loss of EUR -1.1 million (-0.0) in the second
quarter, mostly because of Apetit Kala. The Maritim Food Group made a small loss
as expected. Apetit Kala operations were affected in the second quarter by
machinery breakdowns at the Kuopio production plant, which caused delivery
problems and sales losses, and extra costs in production and logistics. There
were also delays from the planned timetable in starting up production
transferred to Kuopio from Kustavi causing overlapping costs in production.
Furthermore, preparing for the threat of a strike in the food industry at the
start of the period also caused extra costs.
Net sales of the Fish Products Business for the period January-June were
EUR 36.9 (29.0) million. The increase in net sales brought by the Maritim Food
Group was EUR 9.3 million. Net sales by Maritim Food grew a little under 10%
compared with the previous year. Net sales by Apetit Kala were down a little
under 5% compared with the same period the previous year. The Fish Products
Business made a loss of EUR -1.3 million (profit 0.4) for the period
January-June.
Investments in the Fish Products Business were EUR 1.1 (0.1) million during the
period January-June. They were associated with the factory extension and
replacement of the smoke ovens in Kuopio in line with the centralized production
programme.
Concentrating Apetit Kala production in Kuopio was implemented as far as the
transfer from Kustavi is concerned. The codetermination negotiations related to
the transfer of production and packaging operations from Kerava were concluded
in June. The aim of concentrating production is to generate substantial
improvements in production and cost efficiency.
Human resources in domestic fish operations were strengthened on August 1, 2007
with the appointment of Ari Laarne as managing director of Apetit Kala. He will
have special responsibility for developing the company's core processes and
operational management. Heljä Mantere was appointed as director in charge of the
company's production, productivity development and quality.
The integration of Maritim Food to Lännen Tehtaat has proceeded according to
plan, and at the beginning of April Anders Ahlberg started to work as director
in charge of Maritim Food Sweden and the integration work.
Vegetable Oil Business
Net sales for the Vegetable Oil Business for the period April-June increased by
over 2% to EUR 10.7 (10.5) million. The comparable operating profit was EUR 0.6
(0.9) million. The fall is the result of an expected drop in the refining
margin.
Net sales for the period January-June were EUR 20.7 (20.6) million, and the
comparable operating profit was EUR 1.0 (1.6) million.
Investments in the Vegetable Oil Business were EUR 0.3 (0.2) million. The most
important investment was the renewal of the ERP-system.
Grain Trading
The favourable development in the Grain Trading Business continued strongly in
the second quarter too. Net sales were EUR 25.1 (23.2) million, showing growth
of 8%. Exports grew substantially, and domestic sales were at the same level as
the previous period. Operating profit doubled on the previous period to EUR 0.9
(0.4) million.
Net sales for the period January-June grew 28% to EUR 57.2 (44.7) million. Net
sales were up in all market sectors, though mostly in exports. Growth in net
sales was also affected by the rise in market prices of grain. Operating profit
was EUR 1.7 (0.8) million.
Other Operations
The Other Operations segment is made up of the service company Apetit Suomi,
group administration, and various items that do not come under any particular
segment. The cost effect of services produced by Apetit Suomi is an encumbrance
on the operating result in proportion to the use of services.
Net sales for the segment for the period April-June were EUR 0.9 (0.0) million
and the operating loss was EUR -1.2 (-1.2) million.
Net sales for the period January-June were EUR 1.9 (0.0) million, and the
operating loss without one-off items was EUR -2.3 (-2.5) million. Non-recurring
items for the period totalled EUR +0.1 (-0.6) million.
RESOLUTIONS BY THE ANNUAL GENERAL MEETING
Dividend
The Annual General Meeting of Lännen Tehtaat plc on March 29, 2007 approved the
distribution of a dividend of EUR 0.84 per share in line with the proposal of
the Board. The total amount of the dividend, EUR 5.3 million, was transferred
from retained earnings to short-term non-interest-bearing liabilities in the
balance sheet at the end of March. The dividend was paid out on April 12, 2007.
Authorizations by the Annual General Meeting
The Annual General Meeting authorized the Board to decide on a new share issue
and to sell the company's own shares held by the company either together or in
several lots in the form of a rights issue. The maximum number of new shares
that can be issued is 631,757, and the maximum number of shares held by the
company that can be sold is 65,000. The issue price of the new shares will be at
least the nominal share value, i.e. two (2) euros. The sales price of the
company's own shares will be at least the market price at the moment of sale,
defined on the basis of the trading price determined by public trading on the
Helsinki Stock Exchange (OMX). The authorization covers the right to depart from
the subscription priority of existing shareholders if there is a pressing
financial reason for so doing from the company's point of view; the right to
offer shares rather than money against apportionment as well, or on some other
specific condition or using right-of-setoff; and the right to decide the issue
price of the shares and any other conditions or matters associated with the
share issue.
The authorization will be in force until the next Annual General Meeting. This
authorization supersedes the share issue authorization given on March 29, 2006
and the authorization to sell the company's own shares given on the same date.
The Board has not, as yet, exercised the share issue authorization granted by
the Annual General Meeting.
SHARES AND SHARE TRADING
At the end of the period under review, the total number of the company's shares
in circulation was 6,317,576, and the registered share capital was
EUR 12,635,152. The company held 65,000 of its own shares, i.e. 1.0% of the
entire share stock. The nominal value of the company's own shares was
EUR 130,000. No changes in the share capital or in the number of the company's
own shares held by the company took place in the year under review or the
previous year.
During the year under review, 478,925 (945,386) of the company's shares were
traded on the stock exchange, i.e. 7.6% (15.0%) of the entire share stock. The
highest share price was EUR 24.50 (24.19) and the lowest EUR 21.00 (15.26).
Share trading during the period totalled EUR 11.2 (18.7) million. At the end of
the period, the market value of the entire share stock was EUR 132.7 (122.9)
million.
ANNOUNCEMENTS PURSUANT TO CHAPTER 2 SECTION 9 OF THE SECURITIES MARKET ACT
Lännen Tehtaat received no notices of disclosure pursuant to chapter 2 section 9
of the Securities Market Act during the period under review.
GOVERNANCE
At a meeting of the Supervisory Board of Lännen Tehtaat held on April 11, 2007,
the following were appointed members of the Board of Directors: Harri Eela,
Aappo Kontu, Matti Lappalainen, Hannu Simula, Soili Suonoja and Tom v. Weymarn.
Tom v. Weymarn was elected Chairman of the Board and Hannu Simula Deputy
Chairman.
IMPORTANT OCCURRENCES AFTER THE END OF THE PERIOD UNDER REVIEW
There were no important occurrences after the end of the period under review.
SHORT-TERM RISKS AND UNCERTAINTIES
The major risks for the Lännen Tehtaat Group are connected with the volume and
quality of the autumn harvests, the control of price changes of raw materials,
the success of the planned production transfer operations and the success of the
integration of the Maritim Group.
In the Fish Product Business and the Vegetable Oil Business, and in Grain
Trading, the most important raw material prices are determined by the global
markets. These raw materials include salmon, rainbow trout, shellfish, rapeseed,
soy beans and grain. Because of the tight competition on the markets, it is not
possible to pass on all rises in raw material prices to sales prices in full,
which would have a negative effect on Group profits.
FUTURE PROSPECTS
Third quarter
Net sales from continuing operations are expected to rise somewhat above the
2006 level during the third quarter because of the growth in net sales of the
Fish Products Business. Operating profit before non-recurring items is expected
to fall short of the level for the previous period and show a loss.
The profit of the Frozen Foods Business and Grain Trading is expected to remain
at the level of the comparison period in the third quarter. The results for
domestic fish operations will be encumbered by non-recurring costs stemming from
overlapping costs in production caused by the reconstruction. The positive
effect of concentrating production will still not be realised in the third
quarter. Results in the Vegetable Oil Business are being weakened by the fall in
the refining margin, which is due to the rise in raw material prices.
The year as a whole
The net sales of the Group's continuing operations are expected to increase over
2006 as a result of growth in the Fish Products Business and Grain Trading. The
operating profit of the continuing operations for the entire year, excluding
non-recurring items, is expected to be at the level of the comparison year.
Net sales for the Frozen Food Business are expected to be at the same level as
the previous year. Product sales are expected to grow about 5%. The transfer of
sugar beet cultivation to Sucros will cut sales of supplies by something
approaching EUR 3 million. Sales of own brands are expected to grow due to
volume growth and due to changes in the product mix. Favourable development in
the hotel, restaurant and catering sector and in industrial sales is expected to
continue. Sales of retailers' own brands and exports are expected to fall.
Operating profit before non-recurring items of the Frozen Food Business for the
year as a whole is expected to be better than in the previous year.
The market for industrially packaged fish is growing at an annual rate of about
10%. Because of delivery problems in the second quarter, Apetit Kala sales for
the entire year are expected to be at the previous year's level. It is estimated
that linking the Maritim Food Group with the Lännen Tehtaat Fish Products
Business at the beginning of March will have increased net sales for the Fish
Products Business for the year by more than EUR 20 million. Due to Apetit Kala's
weak first half-year and third quarter, the Fish Products Business before
non-recurring items is expected to remain weaker than the in previous year.
Net sales in the Vegetable Oil Business are expected to grow slightly from the
2006 level due to growth in volume and rises in product prices. As raw material
prices rose clearly more than product prices, the refining margin and operating
profit before non-recurring items are expected to remain below the exceptionally
good levels of 2005 and 2006.
In Grain Trading, net sales for the whole year are expected to grow to over
EUR 100 million due to the growth in volumes and market prices. Because of the
growth in sales, the operating profit for Avena Nordic Grain is expected to
improve on the 2006 level.
Lännen Tehtaat's vision is to be one of the leading Finnish food companies. In
order to realize the vision, Lännen Tehtaat continues to evaluate potential
structural arrangements and acquisition targets within the food industry.
Financial income and expenses 0.0 0.3 0.0 2.7 3.2
Share of profit of associated
companies 0.2 0.2 -0.2 -0.2 1.6
Profit/loss before taxes -0.3 1.1 -0.2 1.8 10.2
Income taxes 0.1 -0.2 0.1 -0.7 -2.7
Profit for the period,
continuing operations -0.2 0.9 -0.1 1.1 7.5
Discontinued operations
Profit for the period,
discontinued operations 4.6 1.1 6.4 1.3 5.6
Profit/loss for the period 4.4 2.0 6.3 2.5 13.1
Attributable to:
Equity holders of the parent 4.4 2.1 6.3 2.4 13.1
Minority interests - -0.1 - 0.1 -
Earnings per share, calculated of
the profit/loss attributable to the
shareholders of the parent company
Basic and diluted earnings per
share, EUR, continuing operations -0.03 0.17 -0.02 0.16 1.20
Basic and diluted earnings per
share, EUR, discontinued operations 0.73 0.17 1.03 0.21 0.90
CONSOLIDATED BALANCE SHEET
EUR million
June 30,2007 June 30,2006 Dec 31, 2006
ASSETS
Non-current assets
Tangible assets 38.8 71.0 67.4
Goodwill 6.7 17.4 17.4
Other intangible assets 3.4 1.6 1.5
Investment in associated
companies 41.9 21.3 23.1
Available-for-sale investments 0.1 0.3 0.1
Receivables 4.5 5.7 5.8
Deferred tax assets 0.9 1.0 0.3
96.3 118.3 115.6
Current assets
Inventories 32.1 37.1 65.3
Receivables 23.5 34.9 49.0
Financial assets at fair value
through profit and loss 20.1 - -
Cash and cash equivalents 5.2 10.9 7.5
80.9 83.0 121.9
Total assets 177.2 201.2 237.5
EQUITY AND LIABILITIES
Equity attributable to the
equity holders of the parent
company 120.3 108.8 119.2
Minority interest - 2.3 -
Total equity 120.3 111.1 119.2
Non-current liabilities
Long term financial liabilities 3.0 10.6 7.0
Deferred tax liabilities 4.4 6.7 7.0
Long-term provisions 0.1 0.9 -
Non-current liabilities total 7.5 18.2 14.0
Current liabilities
Trade payables and other
liabilities 22.5 41.0 55.2
Short-term financial liabilities 26.9 29.9 49.1
Short-term provisions - 0.9 -
Current liabilities total 49.4 71.9 104.3
Net profit for the period 6.3 2.5 13.1
Adjusments, total -11.4 4.5 8.5
Change in working capital 17.0 6.0 -23.1
Interests paid from
operating activities -1.5 -0.9 -1.9
Interests received from
operating activities 0.5 0.1 0.3
Taxes paid -0.6 -2.6 -3.2
Net cash flow from operating
activities 10.3 9.6 -6.4
Investments in tangible and
intangible assets -3.1 -2.8 -7.7
Proceeds from sales of tangible
and intangible assets 0.1 0.0 4.6
Acquisition of subsidiaries
deducted by cash -8.8 -1.3 -2.8
Proceeds from sales of
subsidiareis 45.1 0.9 0.0
Acquisition of associated
companies -1.1 -0.1 -0.2
Proceeds from sales of
associated companies 0.6 0.0 0.0
Purchases of other investments -20.0 0.0 -0.1
Proceeds from sales of
other investments 0.0 3.4 3.4
Dividends received from
investing activities 0.0 0.0 0.0
Cash flow from investing
activities 12.8 0.1 -2.7
Raising of long-term loans 0.0 0.0 1.9
Raising of short-term loans 0.0 0.0 19.1
Repayments of short-term loans -18.5 0.0 0.0
Repayments of long-term loans -1.7 -5.4 -10.8
Payment of financial lease
liabilities 0.0 -0.1 -0.1
Dividends paid -5.3 -4.6 -4.6
Cash flows from financing
activities -25.5 -10.0 5.5
Net changes in cash and
cash equivalents -2.3 -0.3 -3.7
Cash and cash equivalents at the
beginning of the the period 7.5 11.2 11.2
Cash and cash equivalents at the
end of the period 5.2 10.9 7.5
CONSOLIDATED STATEMENT OF CHANGES IN 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
Jan. 1, 2006 12.6 23.4 1.9 7.3 -0.8 -0.2 68.3 112.4 3.7 116.1
Available-for-sale
financial assets:
transferred to
income statement
on sale - -2.1 - - - - -2.1 - -2.1
Cash flow hedges:
gains recorded
in equity - 0.6 - - - - 0.6 - 0.6
Taxes related to
items entered into
equity and removed
from equity - 0.4 - - - - 0.4 - 0.4
Other changes - - - - - -0.2 -0.2 - -0.2
Business combination - - - - - - 0.0 -1.5 -1.5
Dividend
distribution - - - - - -4.6 -4.6 - -4.6
Profit for the period - - - - - 2.4 2.4 0.1 2,5
Shareholders'
aquity at
June 30,2006 12.6 23.4 0.8 7.3 -0.8 -0.2 65.9 108.8 2.3 111.1
Cash flow hedges:
gains recorded
in equity - 0.0 - - - - 0.0 - 0.0
Taxes related to
items entered into
equity and removed
from equity - - - - - - - - -
Translation
differences - - 0.3 0.3 - 0.3
Other changes - - -0.1 - - -0.1 -0.2 - -0.2
Dividend
distribution - - - - -5.3 -5.3 - -5.3
Profit for the
period - - - - 6.3 6.3 - 6.3
Shareholders'
equity at
June 30, 2007 12.6 23.4 0.4 7.2 -0.8 -0.1 77.4 120.3 - 120.3
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The interim financial statements have 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 2006.
Lännen Tehtaat has adopted the following new amendments and interpretations to
published standards as well as new standards from January 1, 2007:
- IFRS 7 Financial Instruments: Disclosures.
- IAS 1 (Amendment) Capital Disclosures.
- IFRIC 9 Reassessment of Embedded derivatives
- IFRIC 10 Interim Financial Reporting and Impairment.
The adopted standards and interpretations have not had any significant effects
on this interim report.
SEGMENT INFORMATION
A Frozen Foods
B Fish
C Grain trading
D Vegetable Oil
E Other Operations
F Continuing operations total
G Discontinued operations
H Group total
Business segments 1-6/2007
EUR million A B C D E F G H
External sales
Product sales 25.2 36.7 54.3 20.7 - 136.9 78.8 215.7
Services sold - 0.2 2.9 - 1.9 5.0 - 5.0
Total external sales 25.2 36.9 57.2 20.7 1.9 141.9 78.8 220.7
Intra-group sales -0.1 -0.1 -0.5 0.0 -1.7 -2.4 11.6 -14.0
Net sales 25.1 36.8 56.7 20.7 0.2 139.5 67.2 206.7
Unallocated items include tax and financing items together with items common to
the whole Group.
GEOGRAPHICAL SEGMENTS
A Finland
B Scandinavia
C Baltic countries and Russia
D Other countries
E Continuing operations total
F Discontinued operations
G Group total
Geographical segments 1-6/2007
EUR million A B C D E F G
Net sales 92.9 17.0 3.2 26.4 139.5 67.2 206.7
Assets 158.9 18.3 - - 117.2 - 177.2
Gross investments in
non-currents assets 2.5 0.1 - - 2.6 0.6 3.1
Corporate acquisitions
and other share
purchases - 11.1 - - 11.1 - 11.1
Geographical segments 1-6/2006
EUR million A B C D E F G
Net sales 95.5 4.8 1.0 19.4 120.7 79.0 199.7
Assets 121.7 - - - 121.7 79.5 201.2
Gross investments in
non-currents assets 0.7 - - - 0.7 2.1 2.8
Corporate acquisitions
and other share
purchases - - 0.1 - 0.1 1.3 1.5
Geographical segments 1-12/2006
EUR million A B C D E F G
Net sales 188.6 22.4 2.3 31.2 244.5 164.2 408.7
Assets 116.0 - 0.0 - 116.0 121.5 237.5
Gross investments in
non-currents assets 1.9 - - - 1.9 5.7 7.6
Corporate acquisitions
and other share
purchases 3.0 - - - 3.0 - 3.0
DISCONTINUED OPERATIONS
On January 19, 2007 Lännen Tehtaat plc and SOK subsidiary Hankkija-Maatalous Oy
signed a share-purchase agreement under which 51% of the shares in Suomen Rehu
Ltd and Avena Nordic Grain would be transferred to the ownership of
Hankkija-Maatalous Oy. When the competition authorities studied the agreement,
it was evident that the integration of Avena Nordic Grain's business with the
grain trading business of Hankkija-Maatalous would, under competition
legislation, be viewed as leading to the creation of a strong market position,
and so both parties to the agreement decided to omit Avena Nordic Grain from the
deal. The sale of the majority holding in Suomen Rehu Ltd was completed at the
start of June, when Suomen Rehu and its subsidiaries were transferred to
Hankkija-Maatalous Oy.
The price for the 51% of the shares was EUR 23.6 million and Group's profit on
the sale was EUR 4.1 million.
Lännen Tehtaat is entitled to share price adjustment based on the change in
Suomen Rehu Ltd's assets and liabilities. The determination process is still
incomplete at the time the interim report is published and due to this Lännen
Tehtaat has not been able to determine the share price adjustment reliably. The
adjustment has not been recognized in the bookkeeping and it is at the most EUR
+1.8 million related to the sold 51% shareholding.
In connection with the sale of the majority shareholding an option scheme has
also been agreed under which Lännen Tehtaat will, if it wishes, have the right
to sell the remaining 49% of the shares in Suomen Rehu Ltd to
Hankkija-Maatalous. The latter, for its part, has a purchasing option for the
remaining shares, which it will be able to put into effect at the earliest 15
months after the purchase of the majority holding.
In the case of option exercise, Lännen Tehtaat receives the same price per share
for the remaining 49 % ownership as for the sold majority shareholding in Suomen
Rehu Ltd, including the share price adjustment. In addition, the sale price is
affected by the financial result of Suomen Rehu Ltd from the beginning of June
2007. The calculatory value of the result based sale price component is reported
quarterly in the interim reports.
Suomen Rehu Ltd is presented as discontinued operations apart from continuing
operations of Lännen Tehtaat till the point of sale. From the beginning of June
Lännen Tehtaat's 49% ownership in Suomen Rehu Ltd is presented as an associated
company.
EUR million 1-5/2007 1-6/2006 1-12/2006
5 mths 6 mths 12 mths
Profits 83.6 91.1 176.7
Costs -76.4 -89.2 -169.1
Profit before taxes 7.2 1.9 7.6
Income taxes -0.8 -0.5 -2.0
Profit for the period
discontinued operations 6.4 1.3 5.6
Cash flows from operating activities 7.6 3.0 5.4
Cash flows from investing activities -0.6 -3.4 1.4
Cash flows from financing activities -6.9 -2.8 -10.5
Total financing activities 0.1 -3.2 -3.7
The change in the net working capital has a significant effect on the operating
cash flows.
ACQUISITIONS
Lännen Tehtaat did not have business combinations during the second interim
period.
The purchase price calculation presented in the first interim report of 2007 did
not have material changes as the final fair values were determined during the
second quarter.
An additional purchase price affected by the audited development of the assets
and liabilities between June 30, 2006 and the date of closing was EUR 0.6
million and it increased the goodwill. The final purchase price of the shares
will still be affected by the 2007 financial results of Maritim Food and
Sandanger AS, which has an effect between EUR 0 - 1.3 million. The effects of
this additional purchase price element have not yet been able to be determined
reliably and it is not included in the acquisition cost.
Fair value Acquiree's carrying
Feb 28, 2007 amounts
Feb 28, 2007
EUR million
Intangible assets 2.8 0.0
Tangible assets 4.2 3.6
Deferred tax assets 0.0 0.0
Inventories 3.6 3.1
Trade receivables and other receivables 2.6 2.6
Cash and cash equivalents 1.3 1.3
Total assets 14.5 10.7
Acquired portion of the net assets 5.0 2.2
Acquisition cost 11.1
Goodwill 6.1
Purchase consideration settled in cash 11.1
Cash and cash equivalents in subsidiary
acquired 1.3
Cash outflow on acquisition 9.8
The goodwill mainly compromises of synergies related sales, logistics, raw
material purchases and planned savings on the fixed costs.
The turnover of Lännen Tehtaat between January 1, - June 30, 2007 would have
increased by EUR 4.5 million, if Maritim Food acquisition would have taken place
on January 1, 2007. The corresponding effect to the net result would have been
EUR 0.0 million when taking into account the depreciations on the fair value
allocations and calculatory interest expense to purchase cost starting from
January 1, 2007.
KEY INDICATORS
June 30,2007 June 30,2006 Dec 31, 2006
Shareholders' equity per
share, EUR 19.25 17.77 19.06
Equity ratio, % 67.9 55.3 50.3
Gearing, % 3.9 26.6 40.7
Gross investments in non-
current assets, EUR million 3.1 2.8 7.6
Corporate acquisitions and other
share purchases, EUR million 11.1 1.5 3.0
Average number of personnel 923 974 981
Average number of shares, 1 000 6 253 6 253 6 253
The key figures in this interim financial report are calculated with same
accounting principles than presented in year 2006 annual financial statements.
CONTINGENT LIABILITIES
EUR million
June 30,2007 June 30,2006 Dec 31, 2006
Mortgages given for debts:
Real estate mortgages 27.1 40.7 37.5
Corporate mortgages 31.4 51.4 51.4
Share pledged 9.4 3.6 3.6
Non-cancellable other lease agreements,
minimum lease payments:
Real estate leases 5.4 2.6 2.8
Other leases 0.8 1.1 1.1
Contingent liabilities for own
commitments:
Repurchasing commitments 0.0 0.1 0.0
Estimated additional share
purchase price, Maritim 0.0-1.3 - -
Contingent liabilities on behalf
of the associated companies:
Guarantees 1.6 0.1 -
CONTINGENT ASSETS
Suomen Rehu Ltd, additional
purchase price element
change in assets and liabilities 0.0-1.8
SUOMEN REHU - OPTION SCHEME
The calculatory unrecognised value for the result based component included in
the option scheme as at June 30, 2007 is approximately EUR 0.1 million.
Book value at the beginning
of the period 67.4 72.2 72.2
Acquisitions 3.1 2.8 7.3
Acquisitions of operations 3.2 - -
Disposals 0.0 0.0 -4.2
Disposals of operations -32.6 -0.4 -0.4
Depreciations and impairments -2.2 -3.8 -7.7
Other changes -0.1 0.2 0.2
Book value at the end of the period 38.8 71.0 67.4
TRANSACTIONS WITH ASSOCIATED COMPANIES AND JOINT VENTURES
Sales of goods to
associated companies 0.9 0.1 1.0
Sales of goods to joint ventures 4.8 3.9 7.6
Sales of services to
associated companies 0.4 0.3 0.1
Sales of services to joint ventures 0.1 0.0 0.1
Purchase of goods from
associated companies 0.2 3.5 7.1
Purchase of services from
associated companies 5.7 7.6 12.2
Purchase of services from
joint ventures 0.0 0.0 0.3
Long-term receivebles from
associated companies 4.5 5.0 5.2
Trade receivables and other
receivables from associated companies 3.5 1.4 5.0
Trade receivables and other
receivables from joint ventures 0.7 0.8 0.6
Trade payables and other liabilities
to associated companies 0.1 2.8 3.7
The sale 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
More details: Matti Karppinen, CEO, tel. +358 10 402 4001
Distribution:
Helsinki Stock Exchange
Main media
www.lannen.fi
