| 14.02.2007 |
FINANCIAL STATEMENTS BULLETIN January 1 - December 31, 2006
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE February 14, 2007 at 8.30 a.m.
FINANCIAL STATEMENTS BULLETIN January 1 - December 31, 2006
FINANCIAL YEAR 2006
. Consolidated net sales came to EUR 408.7 (2005: EUR 433.0, EUR 383.3 excluding
discontinued business operations) million.
. Net sales of the continuing business operations increased by 6.6%.
. The operating profit came to EUR 14.5 (16.3) million and the profit before
taxes to EUR 17.8 (14.9) million.
. The operating profit excluding non-recurring items stood at EUR 12.9 (12.1)
million.
. The earnings per share were EUR 2.10 (1.81).
. The Board will propose a dividend of EUR 0.84 (0.73) per share to the Annual
General Meeting.
Key figures illustrating performance, EUR million
Group total
1-12/2006 1-12/2005
Net sales 408.7 433.0
Operating profit 14.5 16.3
Operating profit without
non-recurring items 12.9 12.1
Profit before taxes 17.8 14.9
Profit before taxes and
without non-recurring items 13.4 11.8
Profit after taxes 13.1 11.4
Earnings per share, EUR 2.10 1.81
FOURTH QUARTER 2006
. Consolidated net sales in October-December came to EUR 117.4 (122.5, 111.1
without discontinued business operations) million.
. Net sales of the continuing business operations increased by 5.6%.
. The operating profit came to EUR 8.1 (12.6, 4.7 without discontinued business
operations) million, and the profit before taxes to EUR 10.0 (12.8) million.
. The operating profit excluding non-recurring items was EUR 5.8 (6.3, 5.2
without discontinued business operations) million.
. Earnings per share were EUR 1.18 (1.52).
Key figures illustrating performance, EUR million
Group total
10-12/2006 10-12/2005
Net sales 117.4 122.5
Net sales for continuing operations 117.4 111.1
Operating profit 8.1 12.6
Operating profit without
non-recurring items 5.8 6.3
Operating profit of continuing
operations without non-recurring items 5.8 5.2
Profit before taxes 10.0 12.8
Profit before taxes and
without non-recurring items 7.5 7.6
Profit after taxes 7.3 10.0
Earnings per share, EUR 1.18 1.52
The comparable net sales for the Food Division in the last quarter, excluding the
net sales for sugar, came to EUR 28.4 (28.7) million. The sugar sales for the
comparative period in 2005 amounted to EUR 10.4 million. The net sales for the
Feeds segment came to EUR 59.8 (59.9) million. Mildola Oy, which was part of the
Animal Feeds segment accounted for EUR 7.2 (9.0) million. The net sales for Grain
Trading operations came to EUR 34.0 (26.0) million, and the net sales for other
operations were EUR 0.0 (1.8) million.
The operating profit of the Food Division for the fourth quarter, excluding sugar
sales, was EUR 2.5 (1.7) million without non-recurring items, and EUR 2.0 (1.7)
million after the reduction of non-recurring items. The sale of the Turku factory
premises of Apetit Frozen Foods had a non-recurrent negative effect of EUR 0.5
million on the profit of the last quarter. In 2005, the operating profit was EUR
10.1 million, including the profit from the discontinued sugar business
operations.
The good progress in the financial performance of the Apetit Frozen Foods and
Jams unit continued due to the growth in the sales of its own brands and improved
cost-effectiveness. The net sales of Apetit Kala during the last quarter were
close to those of the comparable period last year. Christmas sales fell slightly
short of the previous year's results. While the annual operating profit of Apetit
Kala fell short of the previous year, it was clearly positive. The profit was
reduced by high raw material prices and an increase in fixed costs.
The operating profit of the Feeds segment without non-recurring items was EUR 3.6
(3.6) million and after non-recurring items EUR 4.4 (3.6) million. The financial
performance includes a total of EUR 0.7 million non-recurrent profit from the
sale of the Vaasa premises and the cancellation of the price-differential
provisions of previous years for raw material prices. The improved performance of
the Feeds segment was due to better cost-effectiveness. Mildola's contribution to
the result of the fourth quarter was EUR 0.6 (0.9) million.
The operating profit for Grain Trading operations was EUR 0.8 (0.5) million. The
improved performance is due to growth in international sales.
The Other Operations segment comprises operations that are common to the Group
and unallocated to a particular segment. The financial performance excluding non-
recurrent items resulted in a loss of EUR -1.0 (-0.5) million. The change from
last year is mainly due to Group restructuring expenses. The profit after non-
recurrent items was EUR 1.0 (-1.5) million. The profit of the last quarter
includes the cancellation of a previous cost reserve of EUR 1.9 million in
relation to discontinued business operations, and a profit of EUR 0.1 million on
the sale of premises, which in total come to EUR 2.0 (-1.0) million.
LÄNNEN TEHTAAT PLC
Board of Directors
More information: Matti Karppinen, CEO, tel. +358 10 402 4001
Distribution:
Helsinki Stock Exchange
Principal media
www.lannen.fi
Board of Directors' report 2006
Lännen Tehtaat's vision is to be one of the leading Finnish food companies.
GROUP STRUCTURE
During the financial year, the Food Division was managed as two strategic
business units: Apetit Frozen Foods and Jams, and Apetit Kala. In addition to
these, joint operations included marketing, sales, controlling, information
management, human resources management and environmental management.
In June, Lännen Tehtaat plc purchased 49% of the shares of Apetit Kala Oy from
Antti Räsänen. Following the purchase, Apetit Kala is fully owned by Lännen
Tehtaat plc. Operations by Lännen Sugar, which was a business unit in the Food
Division, were discontinued at the end of 2005, since Sucros Ltd terminated the
sales contract for Dansukker consumer products on December 31, 2005.
The Agricultural Division's companies operated as independent units with their
own product brands. The Division comprised Lännen Tehtaat plc's subsidiaries
Suomen Rehu Ltd and Avena Nordic Grain Oy. Suomen Rehu Ltd's subsidiaries are
Lännen Rehu Oy, Hiven Oy, Rehu Eesti Oü, Mildola Oy and SIA Baltic Feed and its
subsidiary UAB Baltijos Pasarai, which began its operations at the beginning of
2006. The operations of Rehu Eesti Oü were discontinued at the end of the year.
The companies are managed through internal Board work. The segments reporting in
the Agricultural Division are the Animal Feeds segment, consisting of Suomen Rehu
Ltd and its subsidiaries, and the Grain Trading segment, which consists of Avena
Nordic Grain Oy and its subsidiaries ZAO Avena St. Petersburg and UAB Avena
Nordic Grain.
In April, Suomen Rehu Ltd acquired 17.5% of the shares of the vegetable oil and
protein feed manufacturer Mildola Oy from Maatalouskesko Oy. Following the
purchase, Suomen Rehu Ltd gained full ownership of Mildola. Following an internal
sale within the Group, Lännen Tehtaat plc acquired the Mildola shares at the end
of December. For the purposes of reporting by segments, Mildola Oy was part of
the Feeds segment during 2006.
In spring 2006, ZAO Scandic Feed, a joint venture owned by Lännen Tehtaat and
Raisio, signed a contract concerning the acquisition of the Tosno feed factory.
The acquisition failed in August as the seller withdrew from the deal. In the
autumn, Lännen Tehtaat and Raisio decided to dissolve ZAO Scandic Feed. The
dissolution is likely to take place at the end of 2007.
The Other Operations segment comprised operations that are common to the Group
and unallocated to a particular segment, and Harviala Ltd. Lännen Tehtaat sold
the shares of Harviala Ltd to Saarioisten Taimistot Oy in March.
NET SALES
Lännen Tehtaat's consolidated net sales totalled EUR 408.7 (2005: 433.0) million.
Net sales for continuing operations was EUR 383.3 million in the comparison year.
Net sales for continuing business operations increased by 6.6%. Food accounted
for 27% (35%) of this figure and the Animal Feeds segment 53% (47%). Grain
Trading accounted for 20% (17%) and Other Operations for 0% (2%).
The Food Division's net sales were EUR 109.1 (105.3 continuing operations)
million, an increase of 3.6%. The increase was due to an 8% rise in Apetit Kala's
net sales. Net sales for Apetit Frozen Foods and Jams fell slightly on the
previous year. This was due to a decrease in the sales of farm supplies. Sales of
frozen foods and jams increased by about 1%. All in all, retail sales of frozen
foods grew by about 2% on the previous year. Sales of frozen foods under the
Apetit brand went up by almost 6%, while sales under the retailers' own brands
fell. Sales of pre-prepared frozen food and pizzas grew by over 10% and frozen
potato products by over 8% on the previous year. Sales of frozen vegetables under
the Apetit brand grew by almost 7%, but sales under the retailers' own brands
decreased with Lännen Tehtaat losing the production of the retailers' brands to
imported products. Retail sales of jams and marmalades went down by about 6%.
Sales to the hotel, restaurant and catering sector increased, as did exports.
Industrial and bakery sales fell short of the 2005 results. The Lännen Sugar
retail sugar sales were discontinued at the end of 2005. The 2005 net sales
included sugar sales to the amount of EUR 44.2 million. The total 2005 net sales
for the Food Division were EUR 149.5 million.
Net sales for the Feeds segment were EUR 218.2 (205.1) million, an increase of
over 6%. The comparable net sales, which exclude Mildola, grew by about 2% on the
previous year. The volume of feed sales dropped slightly. The rise in net sales
is due to the impact of higher raw-material prices on selling prices. Mildola
accounted for EUR 29.8 (20.1) million of the Feeds segment's net sales.
Net sales for Grain Trading were EUR 96.3 (86.6) million. The growth in net sales
was due to both increased volume and a higher market price level for grains and
oil plants compared with the previous year.
Net sales for the Other Operations segment were EUR 0.0 (7.1) million. The
decrease was due to the sale of the business operations of the Lännen Plant
Systems unit at the beginning of April 2005, and the sale of Harviala Ltd in
March 2006.
Net sales for the parent company Lännen Tehtaat plc were EUR 50.2 (99.0) million.
The 2005 net sales include EUR 46.5 million of sales by the discontinued Lännen
Plant Systems and Lännen Sokeri. Net sales for continuing operations were EUR
52.5 million in 2005.
PROFITS
The consolidated profit before tax excluding non-recurring items was EUR 13.4
(11.8) million, and including non-recurring items EUR 17.8 (14.9) million. Profit
for the period was EUR 13.1 (11.4) million. Earnings per share were EUR 2.10
(1.81).
Lännen Tehtaat's consolidated operating profit excluding non-recurring items came
to EUR 12.9 (12.1) million. The impact of non-recurring items on the operating
profit was EUR +1.6 (+4.2) million. Non-recurring items amounted to EUR -0.1
(+7.3) million for the Food Division, EUR +0.3 (-2.1) million for the Feeds
segment, and EUR +1.4 (-1.0) million for the Other Operations segment. Non-
recurring items recorded for the final quarter of the year, totalling EUR +2.3
(+6.3) million, are due to sales of premises and the cancelling of the cost
provisions of previous years. Of the profit from sold premises, EUR 0.5 million
was recorded for the Feeds segment, and EUR 0.1 million for the Other Operations
segment. A EUR 0.5 million loss on a property sale was recorded for the Food
Division. In the Other Operations segment, a previous provision of EUR 1.9
million to cover costs related to the discontinued operations was cancelled. The
Feeds segment recorded as income a differential in raw material prices of EUR 0.2
million.
The operating profit of the continuing operations of the Food Division excluding
non-recurring items, amounted to EUR 3.3 (-0.1) million and EUR 3.2 (-0.1)
million including non-recurring items. The division's performance improved
significantly on the comparison year because of the improvement in the growth and
productivity of Apetit Kala, as well as the increase in the proportion of
products sold under the Apetit brand and the programme trimming fixed costs in
Apetit Frozen Foods and Jams. The improvement in the financial performance of
Apetit Kala was slowed down during the second half of the year, as a strong rise
in raw material prices that began in the spring could not be fully transferred to
selling prices.
The Food Division's operating profit for both continuing and discontinued
operations was EUR 3.2 (9.6) million. The comparative figures in 2005 include
operating profit for the discontinued sugar business operations, a non-recurring
profit of EUR 7.6 million due to the termination of the sugar sales contract, and
a non-recurring expense of EUR 0.3 million.
The operating profit for the Feeds segment excluding non-recurring items was EUR
12.0 (11.5) million and including non-recurring items EUR 12.3 (9.4) million. The
operating profit for the Feeds segment excluding non-recurring items and Mildola
was EUR 9.1 (9.3) million.
The operating profit for Grain Trading amounted to EUR 2.0 (1.4) million. Value
changes in the derivative contracts taken to hedge the raw material positions
reduced the comparative 2005 figure by EUR 0.2 million. As of the beginning of
2005, hedge accounting has been applied to efficient hedging of purchases and
sales under the IAS 39 Standard.
The operating profit for Other Operations excluding non-recurring items was EUR
-4.4 (-3.1) million, and including non-recurring items EUR -3.0 (-4.1) million.
Other Operations' profit includes non-recurring items of EUR +1.4 (-1.0) million
for Other Operations. The cancellation of the provision in relation to the
discontinued operations in the last quarter improved the profit by EUR 1.9
million; the sale of the Harviala Ltd shares in the first quarter weakened it by
EUR -0.6 million; and the profit on the sale of a property in the final quarter
improved it by EUR 0.1 million.
Net financial income totalled EUR 1.6 (-1.2) million. The financial income
includes non-recurring profits of about EUR 2.5 million on sales of quoted and
other shares, as well as a composition of EUR 0.2 million from the Mildola
product development loan. The Group's share in the profit/loss of associated
companies was EUR 1.6 (-0.1) million. In the comparison year 2005, the
termination of the sugar sales contract between Lännen Tehtaat and Sucros reduced
the share in the profit of associated companies by EUR 1.1 million as a one-off.
FINANCING AND CASH FLOW
The Group's financial position and liquidity continued to be good. Cash flow from
operations after interest and taxes stood at EUR -6.4 (17.8) million. The
difference between 2006 and 2005 is primarily due to changes in working capital.
The net cash flow from investments was EUR -2.7 (-8.0) million. A total of EUR
4.6 (4.1) million was paid out in dividends.
The Group's interest-bearing liabilities came to a total of EUR 56.1 (45.9)
million and liquid assets to EUR 7.5 (11.2) million at the end of the financial
period. Net interest-bearing liabilities amounted to EUR 48.5 (34.7) million. The
consolidated balance sheet total stood at EUR 237.5 (232.2) million. Equity
totalled EUR 119.2 (116.1) million at the end of the financial year. The equity
ratio was 50.3 (50.0) %. Commercial papers issued for the Group's short-term
financing stood at EUR 38.0 (19.0) million at the end of the review period. The
increase in commercial papers is due to larger than usual procurement of fish and
grain raw materials. Liquidity is secured with long-term committed credit
facilities. No credit facilities were used during the financial period.
KEY FIGURES
2006 2005 2004
Net sales, EUR mill. 408.7 433.0 473.8
Net sales excluding non-recurring
items, EUR mill. 12.9 12.1 15.4
Net sales excluding non-recurring
items % 3.2 2.8 3.3
Operating profit, EUR mill. 14.5 16.3 11.4
Operating profit % 3.5 3.8 2.4
Profit for the financial period, EUR mill. 13.1 11.4 10.5
Profit for the financial period % 3.2 2.6 2.2
Earnings per share, EUR 2.10 1.81 1.68
Return on equity % 10.5 10.2 10.1
Return on investments % 11.2 10.8 8.7
Equity ratio % 50.3 50.0 49.6
INVESTMENT
Consolidated gross investment in non-current assets came to EUR 7.6 (7.3)
million. Investment by the Food Division excluding corporate acquisitions
totalled EUR 1.4 (1.4) million, by the Feeds segment EUR 6.1 (5.6) million, by
Grain Trading EUR 0.0 (0.0) million and by Other Operations EUR 0.1 (0.3)
million.
The Food Division's main investments were in packaging machinery in both the
Apetit Frozen Food and Jams and Apetit Kala. Investment by the Feeds segment
primarily related to the extension and renovation of the Baltic Feed factory in
Latvia, the extension to the Lännen Rehu factory in Säkylä, and the loading dock
for bulk feed at the Seinäjoki factory of Suomen Rehu. Other Group investment in
non-current assets concerned productivity and replacements.
The most significant of the share and corporate acquisitions, which totalled EUR
3.0 (4.4) million, were the purchase of a minority holding in Apetit Kala Oy and
in Mildola Oy.
SHARES AND SHARE CAPITAL
The shares of Lännen Tehtaat plc are all in one series. All shares carry the same
voting and dividend rights. The Articles of Association prescribe that the number
of votes a shareholder is entitled to exercise cannot exceed one tenth of the
votes represented at a shareholders' meeting. The shares have a nominal value of
EUR 2 each, and the number of shares is 6,317,576. The minimum share capital is
EUR 10,000,000 and the maximum EUR 40,000,000.
Board of Directors' authorizations
The Annual General Meeting of March 29, 2006 authorized the Board of Directors to
raise share capital by new share issues and/or to issue a convertible bond in one
or more instalments. The authorization is valid one year, starting from the date
of the AGM decision. In a new share issue and/or an issue through a convertible
bond, the share capital can be raised by a maximum total of EUR 1,263,514 in such
a way that a maximum of 631,757 shares with a nominal value of EUR 2.00 are
offered for subscription.
The Board of Directors was authorized to diverge from the shareholders' pre-
emptive subscription right to new shares and/or to convertible bonds on condition
that the company has a pressing financial reason to do so. The authorization also
covers the right to decide on the subscription prices, those entitled to
subscribe shares, subscription terms, terms concerning a convertible bond and
other terms and aspects related to a new share issue and/or issue of a
convertible bond.
So far the Board has not exercised its right to raise share capital by issuing
new shares or a convertible bond.
The Annual General Meeting decided to authorize the Board of Directors to decide
to surrender the company's own shares. The authorization concerns the 65,000
company shares acquired using the authorization granted by the AGM on April 5,
2001. The Board is authorized to decide to whom and in what order the company's
own shares are surrendered. The shares can be surrendered in one or more
tranches. The Board may decide to surrender the Company's own shares otherwise
than in proportion to the pre-emptive right of shareholders.
The shares can be surrendered in one or more tranches, as decided by the Board,
in connection with corporate acquisitions or other corporate arrangements or for
some other similar purpose that the Board may consider suitable. Surrender of the
shares can also be carried out via public trading on Helsinki Stock Exchange. The
share price is the current value at the time of surrender, determined in public
trading on Helsinki Stock Exchange. The shares may also be surrendered against
other than monetary consideration. The authorization is valid for one year,
starting from the date of the AGM decision.
The Board has not yet made use of the authorization. The 65,000 Lännen Tehtaat
plc shares in the company's possession represent 1.0% of the total share capital
and total votes.
Dividend distribution
The AGM of Lännen Tehtaat plc decided on March 29, 2006 to pay a dividend of EUR
0.73 (0.65) per share.
Share Trading
In the period under review, 1,622,123 (3,768,866) company shares were traded on
the Stock Exchange, i.e. 25.7% (59.7%) of the total stock. The highest share
price was EUR 24.70 (18.29) and the lowest EUR 15.26 (11.71). The share turnover
totalled EUR 32.8 (54.0) million. The price at the end of the year was EUR 24.30
(18.00) and the market capitalization EUR 153.5 (113.7) million.
Flagging announcements
There were no flagging announcements during the financial period.
IFRS REPORTING
Lännen Tehtaat's consolidated financial statements have been drawn up in
accordance with the International Financial Reporting Standards (IFRS) adopted by
the European Union. The Group transferred to IFRS reporting at the beginning of
2005. The transition was reported in a separate information bulletin issued on
April 27, 2005.
SEASONALALITY OF OPERATIONS
The transition to IFRS reporting has had a noticeable impact on the accrual of
Lännen Tehtaat's profits over the financial year.
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 year's final quarter, which means that the
inventory volumes and their balance-sheet values are at their highest at the end
of the year. As entering as an expense of the fixed production overheads included
in the historical cost 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
features most strongly in the Food Division and in the associated company Sucros,
which is part of that division. There is also some seasonal fluctuation in the
Feeds segment. Apetit Kala's sales depend largely on seasonal holidays. A major
proportion of the entire year's profit depends on the success of Christmas sales.
R&D
The Group's product development expenses were EUR 3.2 (3.1) million, i.e. 0.8%
(0.7%) of the net sales.
In the Food Division, the focus of development was on ready-made frozen foods and
fish products. New products included mashed potato products, an improved range of
wok vegetables, a completely new range of microwave casserole dishes and new
additions to the grilled fish and vegetable patty series.
Mildola developed and launched a range of flavoured special rape seed oils.
In animal feeding solutions, the emphasis was on the development and launching of
feeding concepts and new products, that are based on intestinal health research.
RISKS AND UNCERTAINTIES
The Group companies and the business units regularly assess the risks involved in
their operations and the adequacy of the control methods needed. The purpose of
these risk assessments, which support strategy work and decision-making, is to
ensure sufficient action to control risks.
No significant individual risks have come up in the Group's risk assessments that
would call for special action in addition to measures falling within normal
business operations and defined in the risk management process.
The new European Union sugar regime, which took effect on July 1, 2006, has a
negative impact on the operating conditions in this sector in Finland. Lännen
Tehtaat's associated company Sucros Ltd decided to sell part of its production
quota and continue with a sugar quota of 90 million kilos. The consequent
production cut was achieved by closing down the Salo sugar factory after the
processing of the autumn 2006 sugar beet crop. Sucros will continue to
manufacture beet sugar at its Säkylä factory. The sugar regime reform and the
consequent changes will reduce the dividends received by Lännen Tehtaat from
Sucros Ltd and the share of profit to be entered in the profit and loss account
in the next few years. Lännen Tehtaat plc owns 20% of the shares of Sucros Ltd,
which engages in sugar production in Finland. Following the closure of its Salo
factory and the partial sale of its production quota, Sucros Ltd lodged an
application in November with the Ministry of Agriculture and Forestry for aid for
restructuring. Sucros applied for aid in relation to the relinquished quota of 56
tonnes. The one-off payment is about EUR 34 million and will compensate for the
continuing loss of income due to the reduced production quota, and for the
expenses incurred due to the closure of the Salo factory. The write-off and
estimated closing down expenses will amount to about EUR 15 million.
CORPORATE GOVERNANCE AND MANAGEMENT
The Supervisory Board of Lännen Tehtaat plc elected Tom Liljeström Chairman and
Juha Nevavuori Vice Chairman of the Supervisory Board at its meeting on April 10,
2006.
The Supervisory Board elected the following members to the Board of Directors:
Harri Eela, Aappo Kontu, Matti Lappalainen, Simo Palokangas, Hannu Simula, Soili
Suonoja and Tom v. Weymarn. Tom v. Weymarn was elected Chairman of the Board of
Directors and Hannu Simula Vice Chairman. Simo Palokangas resigned from the Board
of Directors on November 29, 2006.
The CEO of Lännen Tehtaat plc is Matti Karppinen.
PERSONNEL
The most crucial areas for personnel development are management, professional
training and workplace interactive skills.
The Group employed an average of 981 (2005: 1,033 and 2004: 1,072) people in
2006.
Distribution of personnel by business area:
2006 2005 2004
Food 579 581 445
Feeds 355 348 326
Grain trading 29 28 25
Other business areas 18 74 94
Discontinued operations - - 182
Total 981 1,033 1,072
During the financial year, recruitment for key personnel continued in the Food
Division and Group administration. A Director of Sales & Marketing and a Director
of SBU business concepts were recruited to the management of the Food Division;
Group administration appointed a Chief Financial Officer.
During the financial period, personnel received salaries and other remuneration
to the amount of EUR 32.3 (2005: 32.6 and 2004: 33.8) million.
ENVIRONMENT
Lännen Tehtaat observes the principles of continuous improvement and sustainable
development throughout its operations. The company operates in a responsible
manner and takes account of social and environmental considerations throughout
its operations. The aim is efficient production that is in harmony with the
environment.
Lännen Tehtaat's management has defined the company's environmental goals as part
of its overall operating policy.
All production units required to have an environmental permit have a current
permit.
Lännen Tehtaat is not aware of any significant individual environmental risks at
the time of completion of the financial statements.
OVERVIEW ON EARLY 2007
In order to clarify the management model for the Group, it was decided to
corporatize the frozen foods unit Apetit Frozen Foods and Jams and the Group's
service business operations. As of the beginning of 2007, Apetit Frozen Foods and
Jams became Apetit Pakaste Oy and the service business operations Apetit Suomi
Oy. Apetit Suomi Oy will be in charge of developing, marketing and selling
products made by Apetit Pakaste Oy and Apetit Kala Oy. In addition, it will
produce IT, human resources, business controlling, cash management, and
environmental services for the companies in the Lännen Tehtaat Group. The parent
company, Lännen Tehtaat plc, will act mainly as a holding company that owns the
shares of subsidiary companies and properties, and also has a small Group
administration unit.
On January 19, 2007, Lännen Tehtaat plc and Hankkija-Maatalous Oy signed a share-
purchase agreement whereby 51% of the shares in Suomen Rehu Ltd and Avena Nordic
Grain Oy will be transferred to the ownership of Hankkija-Maatalous Oy. The
enterprise value of the business operations of Suomen Rehu and Avena has been
agreed at approximately EUR 81 million. The price for the 51 per cent of the
shares in the companies to be sold will be about EUR 28 million. The purchaser
will also assume responsibility for the net debts of Suomen Rehu and Avena at the
moment when the closing takes place. The exact price for the shares will be
determined on the basis of the assets and liabilities of the companies to be sold
at the moment when the closing takes place. The transaction will not include the
shares of the oil seed processing company Mildola Oy, which have been transferred
to the ownership of Lännen Tehtaat plc in an internal transaction.
The sale of the majority shareholding is expected to take place in the second
quarter of 2007 and generate a tax-exempt profit of about EUR 7 to 8 million. 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 and Avena Nordic Grain Oy 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 closing of the deal for the majority holding.
At the beginning of 2006, Lännen Tehtaat conducted a feasibility study on the
launching of ethanol production in western or south-western Finland. The study
shows that this part of Finland has the best potential for producing ethanol for
fuel purposes. The region has sufficient grain-growing capacity to supply the raw
material for an ethanol plant. It is also home to one of the two main pig-farming
areas in Finland, which is important for utilizing the animal feed by-products
from an ethanol plant. The region also has a number of feed factories that could
use some of the by-products from an ethanol plant as raw material for their
animal feeds. The total cost of the investment was put at some EUR 55 million.
The Ministry of Trade and Industry has granted Lännen Tehtaat an investment
subsidy of EUR 1 million for the project. Lännen Tehtaat considers Säkylä to be a
highly suitable location for the plant in terms of the procurement of the grain
raw material and ready infrastructure. On January 19, 2007, the company announced
that it will not take responsibility for building an ethanol plant, but is
prepared to consider a minority share in a company that would construct the plant
in Säkylä. The decision to withdraw from implementing the project is based on
Lännen Tehtaat's strategic policy of focusing on the food business operations and
is linked with an announcement the same day to sell the feeds business and grain
trading operations.
In order to accelerate the growth of its fish product operations, Lännen Tehtaat
plc decided to purchase the shares of Maritim Food AS, one of the leading fish
product manufacturers in Norway, at the beginning of February. Lännen Tehtaat plc
and the vendor Brynild Gruppen AS signed the deed of purchase on February 6,
2007, thereby transferring the shares of Maritim Food AS to Lännen Tehtaat. The
deal includes Maritim Food AS and its wholly-owned Swedish subsidiaries Maritim
Food Sweden AB and Maritim Food Sweden Egendom AB, as well as its 47.5% minority
interest in the Norwegian Sandanger AS. In addition, the deal includes a call
option which will enable Maritim Food AS to increase its holding in Sandanger AS
to 51% in the future. The enterprise value of Maritim Food AS has been determined
at approximately EUR 15 million. Upon completion of the purchase, Lännen Tehtaat
plc will pay approximately EUR 10 million for the shares of Maritim Food AS, and
assume responsibility for net liabilities of approximately EUR 4 million. The
final purchase price of the shares will be affected by the development of the
assets and liabilities of the companies between June 30, 2006 and the date of
completion of the purchase. In addition to the purchase price payable upon
completion, the parties have agreed on an additional purchase price of EUR 0-1.3
million which is dependent on the 2007 results for Maritim Food and Sandanger AS.
The share purchase is expected to provide Lännen Tehtaat with a Group goodwill
amounting to not more than EUR 7 million.
In 2005, the net sales of Maritim Food AS were approximately EUR 27 million and
the profit about EUR 1.2 million. The balance sheet total was around EUR 10
million. Maritim Food employs an average of 95 people. The net sales of Sandanger
AS were approximately EUR 9 million and profit about EUR 0.3 million. The company
employs about 50 people.
OUTLOOK FOR 2007
In the new year Apetit Pakaste Oy, Apetit Suomi Oy, Apetit Kala Oy, business
operations that will be acquired and Mildola Oy and expenses that are common to
the Group and unallocated to a particular segment will report as Continuing
Operations.
From the beginning of 2007 until the completion of the majority shareholder sale,
the profit/loss of Lännen Tehtaat's feeds business and grain trading will be
reported as a single line item under discontinued operations. Once the
transaction has been completed, the profit/loss will be recorded as a share of
the profit/loss for the relevant associated company.
In the Food Division, the net sales for Apetit Pakaste Oy are expected to remain
at the 2006 level. Product sales are expected to grow by about 5%. With the
transfer of contract farming of sugar beet to the care of Sucros Oy, sales of
farm supplies will be reduced by almost EUR 3 million. Sales under the Apetit
brand are predicted to grow due to a volume increase and changes in the product
mix. Hotel, restaurant and catering sales and industrial sales are also expected
to make good progress. Sales under retailers' own brands and exports are expected
to fall.
Sales by Apetit Kala are expected to continue to grow with further processing of
products and as the proportion of industrially packaged fish in relation to all
the retailed fish grows.
The performance of Apetit Pakaste is expected to continue to make good progress.
It is anticipated that Apetit Kala's ability to achieve results will improve
following productivity measures. The business service unit Apetit Suomi Oy will
record a small profit.
Mildola Oy's net sales are predicted to increase slightly on the 2006 level
because of a small increase in volume and product prices. As the world market
prices for raw materials rise, the processing margins are expected to fall and
the operating profit to be more modest than the exceptionally good results of
2005 and 2006.
Net sales for the feeds business are expected to grow slightly as a result of an
increase in selling prices and volume. The operating profit is expected to grow
due to the increase in net sales, productivity measures and a reduction in fixed
costs.
Net sales for grain trading are expected to grow because of a volume increase.
Due to an increase in the gross margin, the financial performance of Avena Nordic
Grain Oy is predicted to improve slightly on the 2006 level.
Due to the increase in net sales for Apetit Kala and Mildola, the consolidated
net sales for the continuing operations are expected to grow slightly on 2006.
The operating profit for continuing operations excluding non-recurring items is
predicted to increase over the 2006 operating profit excluding non-recurring
items.
As a result of an increase in the net sales of Apetit Pakaste Oy and Apetit Kala
Oy, the net sales for continuing operations are expected to go up slightly on the
2006 level during the first quarter of the year. The operating profit during the
first quarter for continuing operations excluding non-recurring items is expected
to remain at the 2006 level.
The transfer to IFRS reporting will cause the consolidated profit to accrue in
the latter part of the year.
Lännen Tehtaat's vision is to be one of the leading Finnish food companies, which
means the emphasis is on developing food operations. Action to expand the Group's
food business began in autumn 2005. The goal is significant expansion in Finland
and in the northern Baltic region. In order to be able to focus on food in line
with its vision, Lännen Tehtaat has decided to sell the majority holdings in its
feeds and grain trade business operations. The arrangement will strengthen Lännen
Tehtaat's room for manoeuvre and improve the company's chances of developing its
food sector either through corporate acquisition or via other restructuring.
PROPOSED DIVIDEND
The goal of the Lännen Tehtaat Board of Directors is to ensure that an investment
in the company's shares produces a good yield and stable value. In accordance
with its dividend distribution policy, the company distributes dividends worth at
least 40 per cent of the profit for the financial year to the owners of the
parent company. The Board proposes to the Annual General Meeting that for the
financial year 2006, a dividend of EUR 0.84 (0.73) be paid per share, i.e. 40
(40) % of the yield per share.
The parent company's distributable funds totalled EUR 40,066,946.30 on December
31, 2006, of which EUR 2,364,913.53 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 0.84 per share, a total of EUR 5,252,163.84,
and leave the remaining EUR 34,814,782.46 in its equity.
No significant changes have taken place in the financial standing of the company
since the end of the financial year. The company's liquidity is good, and in the
view of the Board of Directors, will not be jeopardized by the proposed
distribution of dividends.
CONSOLIDATED INCOME STATEMENT
EUR million
10-12/ 10-12/ 1-12/ 1-12/
2006 2005 2006 2005
3 mths 3 mths 12 mths 2 mths
Net turnover 117.4 122.5 408.7 433.0
Other operating income 2.1 8.2 5.2 10.9
Operating expenses -109.3 -115.6 -391.0 -416.3
Depreciation in value -2.0 -2.1 -8.2 -8.3
Impairments - -0.3 -0.2 -3.0
Operating profit 8.1 12.6 14.5 16.3
Financial income and expenses 0.0 -0.4 1.6 -1.2
Share of profit of associated
companies 1.9 0.6 1.7 -0.1
Profit before taxes 10.0 12.8 17.8 14.9
Income taxes -2.7 -2.8 -4.7 -3.6
Profit for the period 7.3 10.0 13.1 11.4
Attributable to:
Equity holders of the parent 7.3 9.6 13.1 11.3
Minority interest 0.0 0.4 0.0 0.1
Earnings per share, EUR
basic and diluted 1.18 1.52 2.10 1.81
NET TURNOVER BY BUSINESS SEGMENT
EUR million
10-12/ 10-12/ 1-12/ 1-12/
2006 2005 2006 2005
3 mths 3 mths 12 mths 12 mths
Food segment 28.4 39.1 109.1 149.5
Feed segment 59.8 59.9 218.2 205.1
Grain trading segment 34.0 26.0 96.2 86.6
Other operations segment 0.0 1.8 0.0 7.1
Intra-group sales -4.8 -4.3 -14.8 -15.3
Total 117.4 122.5 408.7 433.0
OPERATING PROFIT/LOSS BY BUSINESS SEGMENT
EUR million
10-12/ 10-12/ 1-12/ 1-12/
2006 2005 2006 2005
3 mths 3 mths 12 mths 12 mths
Food segment 2.0 10.1 3.2 9.6
Feed segment 4.4 3.6 12.3 9.4
Grain trading segment 0.8 0.5 2.0 1.4
Other operations segment 1.0 -1.5 -3.0 -4.1
Total 8.1 12.6 14.5 16.3
NET TURNOVER BY GEOGRAPHICAL SEGMENT
EUR million
10-12/ 10-12/ 1-12/ 1-12/
2006 2005 2006 2005
3 mths 3 mths 12 mths 12 mths
Finland 91.1 105.2 342.3 382.8
Other EU member states 10.2 13.5 37.7 34.2
Other countries 16.1 3.8 28.7 16.0
Total 117.4 122.5 408.7 433.0
CONSOLIDATED BALANCE SHEET
EUR million
Dec. 31.2006 Dec. 31.2005
ASSETS
Non-current assets
Intangible assets 1.5 1.7
Goodwill 17.4 17.4
Tangible assets 67.4 72.2
Investment in associated
companies 23.1 21.3
Available-for-sale investments 0.1 3.2
Receivables 5.8 6.9
Deferred tax assets 0.3 1.3
115.6 123.9
Current assets
Inventories 65.3 54.5
Tax receivables 0.3 1.0
Trade receivables and
other reserves 48.7 41.5
Cash and cash equivalents 7.5 11.2
121.9 108.2
Total assets 237.5 232.2
EQUITY AND LIABILITIES
Equity attributable to the
equity holders of the parent
company 119.2 112.4
Minority interest - 3.7
Total equity 119.2 116.1
Non-current liabilities
Deferred tax liabilities 7.0 7.4
Interest-bearing
Long-term borrowings 7.0 16.0
Long-term provisions - 0.9
Non-current liabilities total 14.0 24.3
Current liabilities
Trade payables and other
liabilities 54.2 58.5
Interest-bearing
Short-term borrowings 49.1 29.9
Tax liabilities 1.0 2.4
Short-term provisions - 0.9
Current liabilities total 104.3 91.7
Total liabilities 118.3 116.1
Total equity and liabilities 237.5 232.2
CONSOLIDATED CASH FLOW STATEMENT
EUR million
1-12/2006 1-12/2005
12 mths 12 mths
Cash flow from operating
activities -6.4 17.8
Cash flow from investing
activities -2.7 -8.0
Cash flow from financing
activities
Change in net debt 10.1 -4.5
Dividends paid -4.6 -4.1
Net increase/decrease in cash
and cash equivalents -3.7 1.0
Cash and cash equivalents
at beginning of the period 11.2 10.2
Cash and cash equivalents
at end of the period 7.5 11.2
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 = Equity 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, 2005 12.6 23.4 1.1 7.3 -0.8 -0.3 61.0 104.3 2.5 106.8
Available-for-sale
financial assets:
gains/losses
from fair value
measurement - 0.4 - - - - 0.4 - 0.4
Cash flow hedges:
gains recorded
in equity - 0.3 - - - - 0.3 - 0.3
Taxes related to
items entered into
equity and removed
from equity - 0.0 - - - - 0.0 - 0.0
Translation
differences - - - - 0.1 - 0.1 - 0.1
Dividend
distribution - - - - - -4.1 -4.1 -0.1 -4.2
Business
combinations - - - - - - 0.0 1.2 1.2
Other changes 0.0 - - - 0.0 - 0.0
Profit for the
period - - - - - 11.4 11.4 0.0 11.4
Shareholders'
aquity at
Dec. 12,2005 12.6 23.4 1.8 7.3 -0.8 -0.2 68.3 112.4 3.7 116.1
Shareholders'
aquity at
Jan. 1, 2006 12.6 23.4 1.8 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
Translation
differences - 0.0 0.0
Dividend
distribution - - - - -4.6 -4.6 - -4.6
Increase of
ownership in
subsidiary - - - - 0.0 -3.7 -3.7
Other changes - - - - -0.3 -0.3 - -0.3
Profit for the period - - - - 13.1 13.1 - 13.1
Shareholders'
equity at
Dec. 31, 2006 12.6 23.4 0.4 7.3 -0.8 -0.2 76.5 119.2 - 119.2
KEY INDICATORS
Dec 31. 2006 Dec 31. 2005
Shareholders' equity per
share, EUR 19.06 18.56
Equity ratio, % 50.3% 50.0%
Gearing % 40.7% 29.9%
Return on equity, % 10.5% 10.2%
Return on investment, % 11.2% 10.8%
Investments, EUR million 10.6 11.7
Average number of personnel 981 1 033
Average number of shares, 1 000 6 253 6 161
CONTINGENT LIABILITIES
EUR million
Dec 31, 2006 Dec 31, 2005
Mortgages given for debts:
Real estate mortgages 37.5 40.7
Corporate mortgages 51.4 51.4
Share pledged 3.6 3.6
Other securities given for own
commitments
Real estate mortgages 0.0 0.1
Pledges 0.0 0.0
Leasing liabilities 1.1 1.3
Non-cancellable other leases,
minimum lease payments 2.8 3.0
Contingent liabilities for own
commitments:
Repurchasing commitments 0.0 0.1
Other commitments 0.0 -
Contingent liabilities on behalf
of the associated companies:
Repurchasing commitments - 0.1
OUTSTANDING VALUES OF DERIVATIVE INSTRUMENTS
Forward currency contracts 4.5 1.5
Commodity derivative instruments 4.6 5.0
Interest rate swaps 25.0 25.0
|
| 14.02.2007 |
BOARD OF DIRECTORS' PROPOSALS TO LÄNNEN TEHTAAT PLC ANNUAL GENERAL MEETING
LÄNNEN TEHTAAT PLC Stock Exchange Release February 14, 2007 8;30 a.m.
BOARD OF DIRECTORS' PROPOSALS TO LÄNNEN TEHTAAT PLC ANNUAL GENERAL MEETING
I DIVIDEND
The Board of Directors proposes to the Annual General Meeting that a dividend of
EUR 0.84 per share be paid for the financial year 2006.
II SHARE ISSUE AND AUTHORIZATION TO INCREASE SHARE CAPITAL
The Board of Directors proposes that the Board be authorized to decide on issuing
new shares in the form of an issue against payment and on surrendering company
shares held by the company in one or more tranches. A maximum total of 631,757
new shares may be issued, and a maximum of 65,000 shares held by the company may
be surrendered. The subscription price for the new shares is a minimum of their
nominal value, i.e. EUR 2.00. The surrender price for the company shares held by
the company is a minimum of the current value at the time of surrender determined
on the basis of the price in public trading on the Helsinki Stock Exchange.
The authorization consists of the right
. to diverge from the shareholders' pre-emptive subscription right to new shares
(targeted issue) on condition that the company has a pressing financial reason
to do so, such as development of the capital structure or financing and
implementing corporate acquisitions or other arrangements
. to offer shares not only against money payment but also against capital
consideration in kind or on some other specified conditions or by using the
right of set-off
. to decide on the subscription price and other terms and aspects related to
share issues.
The authorization is valid until the next Annual General Meeting. The
authorization repeals the previous share issue authorization given on March 29,
2006 and the authorization given on the same date to surrender the company's own
shares.
III SALE OF SHARES IN THE JOINT BOOK-ENTRY ACCOUNT
The Board proposes that the Annual General Meeting decide on the sale through
public trading of shares which have been entered in the joint book-entry account
opened with the Finnish Central Securities Depository under chapter 3a, section
3a of the Companies Act (734/1978) and section 8 of the Implementing Act of the
new Companies Act (624/2006) and for which registration of the ownership right in
a book-entry account has not been demanded in spite of the fact that five years
have passed from the date of the registration date. Shareholders must within one
year from a request based on the decision of the Annual General Meeting demand
that their ownership right be registered or they will forfeit their right to the
shares and only keep the right to the funds obtained from the sale of the shares.
LÄNNEN TEHTAAT PLC
Board of Directors
More details: Matti Karppinen, CEO, tel. +358 10 402 00
Distribution:
Helsinki Stock Exchange
Main media
www.lannen.fi
|
| 06.02.2007 |
LÄNNEN TEHTAAT PLC BUYS NORWEGIAN FISH PRODUCT MANUFACTURER MARITIM FOOD AS
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE February 6, 2007 at 1.00 p.m.
LÄNNEN TEHTAAT PLC BUYS NORWEGIAN FISH PRODUCT MANUFACTURER MARITIM FOOD AS
Lännen Tehtaat will strengthen its Food Division and accelerate the growth of its
fish product operations by purchasing the shares of the Norwegian Maritim Food AS
from Brynild Gruppen AS. The deed of purchase has been signed today. The
finalisation of the purchase is subject to the approval of the Norwegian
competition authorities, expected in February-March. The deal will include
Maritim Food AS and its wholly-owned Swedish subsidiaries Maritim Food Sweden AB
and Maritim Food Sweden Egendom AB, as well as its 47.5% minority interest in the
Norwegian Sandanger AS. In addition, the deal includes a call option which will
enable Maritim Food AS to increase its holding in Sandanger AS to 51% in the
future.
The enterprise value of Maritim Food AS has been determined at approximately EUR
15 million. Upon completion of the purchase, Lännen Tehtaat plc will pay
approximately EUR 10 million for the shares of Maritim Food AS, and assume
responsibility for net liabilities of approximately EUR 4 million. The final
purchase price of the shares will be affected by the development of the assets
and liabilities of the companies between June 30, 2006 and the date of completion
of the purchase. In addition to the purchase price payable upon completion, the
parties have agreed on an additional purchase price of EUR 0-1.3 million which is
dependent on the 2007 results for Maritim Food and Sandanger AS. The share
purchase is expected to provide Lännen Tehtaat with a Group goodwill amounting to
not more than EUR 7 million.
In 2005, the net sales of Maritim Food AS were approximately EUR 27 million and
the operating profit about EUR 1.2 million. The balance sheet total was around
EUR 10 million. Maritim Food employs an average of 95 people. The net sales of
Sandanger AS were approximately EUR 9 million and operating profit about EUR 0.3
million. The company employs an average of 50 people.
Maritim Food is one of the leading fish product manufacturers in Norway. The
company has clients in the retail and hotel/restaurant/catering industries. The
company sells and markets fish and shellfish products in Norway, Sweden and
Finland. Its main product groups are smoked and marinated fish (salmon, rainbow
trout and mackerel), fish products, canned shellfish and prawn, and sauces. The
company has two factories in Fredrikstad, Norway, and one in Munkedal, Sweden.
Sandanger AS, which focuses on fish products, pre-prepared meals and canned fish
products, has a production unit in Gjerdsvika, Norway.
In accordance with its operational strategy, Lännen Tehtaat is focusing on the
food business and aims to strengthen its position as one of the leading Finnish
food manufacturers. The acquisition is in line with the company's operational
strategy. Together Maritim Food AS and Apetit Kala Oy will be one of the leading
Nordic fish product manufacturers. In Norway and Finland, their products will be
distributed within the nationwide retail sector, and in Sweden, comprehensively
throughout the country within the hotel/restaurant/catering industry. The
companies aim to utilise their joint know-how, particularly in the procurement of
raw materials, and in manufacturing and selling of products within the Northern
Baltic region.
The corporate acquisition is expected to have a slight positive impact on the
operating profit of the Lännen Tehtaat Group as early as 2007.
Lännen Tehtaat Group comprises Apetit Pakaste Oy, Apetit Kala Oy, Apetit Suomi Oy
and Mildola Oy, as well as Suomen Rehu Ltd, Avena Nordic Grain Oy and their
subsidiaries, which are currently being sold. In 2006, the consolidated net sales
were over EUR 400 million and the Group employed about 1,000 people.
The financial statements for 2006 will be released on February 14, 2007.
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
|
| 19.01.2007 |
LÄNNEN TEHTAAT REJECTS MAJORITY SHAREHOLDING IN BIOETHANOL PROJECT
Lännen Tehtaat plc STOCK EXCHANGE RELEASE January 19, 2007 at 9;20 a.m.
LÄNNEN TEHTAAT REJECTS MAJORITY SHAREHOLDING IN BIOETHANOL PROJECT
Lännen Tehtaat said in a stock exchange release in April
2006 that it had conducted a feasibility study into the launching of ethanol
production in western/south-western Finland. Surveys show that this part of
Finland has the best potential for this purpose. The region has sufficient grain-
growing capacity to supply the raw material for an ethanol plant. It also home to
one of the two main pig-farming areas in Finland, which is important for
utilizing the animal feed by-products from an ethanol plant. The region also has
a number of feed factories that could use some of the by-products from an ethanol
plant as raw material for their animal feeds. The total cost of the investment
was put at some EUR 55 million.
Lännen Tehtaat considered Säkylä to be a highly suitable location for the plant
in terms of the procurement of the grain raw material and ready infrastructure.
The company has, however, decided that it will not implement the project in the
way planned. Lännen Tehtaat, however, is prepared to take part in the project by
providing good location conditions for a production plant at Säkylä, and it is
ready to consider a minority shareholding in the company that would construct the
plant there.
The decision to withdraw from implementing the project is based on Lännen
Tehtaat's strategic policy of focusing on the food business operations and is
linked with today's news of the sale of majority shareholdings in Suomen Rehu Ltd
and Avena Nordic Grain Oy to Hankkija-Maatalous Oy.
Under a decision taken on December 21, 2006 the Ministry of Trade and Industry
granted the project an investment subsidy of EUR one million. Lännen Tehtaat has
today informed Pori Employment and Economic Development Centre and the Ministry
of Trade and Industry that the project will not be conducted by Lännen Tehtaat.
LÄNNEN TEHTAAT PLC
Matti Karppinen
CEO
More details: Erkki Lepistö, tel. +358 10 402 7000.
Distribution:
Helsinki Stock Exchange
Main media
www.lannen.fi
|
| 19.01.2007 |
LÄNNEN TEHTAAT TO FOCUS ON FOOD AND SELL MAJORITY SHAREHOLDING IN SUOMEN REHU LTD
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE January 19, 2007 at 9;10 a.m.
LÄNNEN TEHTAAT TO FOCUS ON FOOD AND SELL MAJORITY SHAREHOLDING IN SUOMEN REHU LTD
AND AVENA NORDIC GRAIN OY TO HANKKIJA-MAATALOUS OY
Lännen Tehtaat plc and SOK subsidiary Hankkija-Maatalous Oy have today signed a
share-purchase agreement whereby 51% of the shares in Suomen Rehu Ltd and Avena
Nordic Grain Oy will be transferred to the ownership of Hankkija-Maatalous Oy.
The transaction will be finally closed once the competition authorities have
given their approval.
The enterprise value of the business operations of Suomen Rehu and Avena has been
agreed at EUR 81 million. The price for the 51 per cent of the shares in the
companies to be sold will be about EUR 28 million. The purchaser will also assume
responsibility for the net debts of Suomen Rehu and Avena at the moment when the
closing takes place. The exact price for the shares will be determined on the
basis of the assets and liabilities of the companies to be sold at the moment
when the closing takes place.
The transaction will not include the shares of the oil seed processing company
Mildola Oy, which have been transferred to the ownership of Lännen Tehtaat plc.
The sale of the majority shareholding is expected to take place in the second
quarter of 2007 and generate a tax-exempt profit of about EUR 7 to 8 million.
Lännen Tehtaat plc's board of directors will propose, as an exception to the
company dividend policy, that the profit will be used for developing the 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 and Avena Nordic Grain Oy
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.
The combined net sales of the companies to be sold in 2005 was EUR 272 million
and the operating profit under IFRS standards was EUR 7.4 million. The
corresponding figures for January-September 2006 were EUR 198 million and EUR 7.0
million. There are about 330 people working for Suomen Rehu and Avena.
After the sale, the Lännen Tehtaat Group will comprise the Food Division, the oil
seed processing company Mildola Oy and the 49% holdings in the sold companies
Suomen Rehu and Avena, which will report as associated companies.
The Food Division will consist of Apetit Pakaste Oy, which manufactures frozen
foods and jams, Apetit Kala Oy, which processes and sells fish products, and the
service company Apetit Suomi Oy. Lännen Tehtaat plc will also have a 20 per cent
interest in Sucros Ltd, which processes and sells sugar in Finland, and a 50%
interest in the catering products company Ateriamestarit Oy. Once the transaction
has been completed, the Lännen Tehtaat Group will be employing an average of 590
people.
"Lännen Tehtaat plc's aim is to be one of the leading food companies in Finland.
The company is actively seeking growth opportunities for its food business
operations in the northern Baltic region. In order to be able to focus on food in
line with its vision, Lännen Tehtaat has decided to sell the majority holdings in
its feed and grain trade business operations. The arrangement will strengthen
Lännen Tehtaat's room for manoeuvre and improve the company's chances of
developing its food sector either through corporate acquisition or via other
restructuring," says CEO Matti Karppinen.
LÄNNEN TEHTAAT PLC
Matti Karppinen
CEO
More details: Matti Karppinen, CEO, tel. +358 10 402 4001
Distribution:
Helsinki Stock Exchange
Main media
www.lannen.fi
Invitation to briefing
A briefing will be held today, Friday January 19, 2007, at 11 a.m. in the Urho
conference room at the Sokos Hotel Presidentti, Eteläinen Rautatienkatu 4,
Helsinki.
SOK CEO Kari Neilimo, Lännen Tehtaat CEO Matti Karppinen and Hankkija-Maatalous
Oy Managing Director Ensio Hytönen will be presenting details of this corporate
transaction.
We look forward to seeing you.
Lännen Tehtaat plc Hankkija-Maatalous Oy
|
| 20.12.2006 |
LÄNNEN TEHTAAT PLC'S FINANCIAL INFORMATION IN 2007
LÄNNEN TEHTAAT PLC STOCK EXCHANGE ANNOUNCEMENT December 20, 2006 at 1.00 pm
LÄNNEN TEHTAAT PLC'S FINANCIAL INFORMATION IN 2007
Lännen Tehtaat plc will publish during the year 2007 the following financial
reports:
Financial statement bulletin 2006 February 14, 2007
Annual Report 2006 in week 12, 2007
Interim report for January-March May 8, 2007
Interim report for January-June August 9, 2007
Interim report for January-September November 1, 2007
The financial reports are also published in English.
The Annual General Meeting of Lännen Tehtaat plc is scheduled for Thursday, March
29, 2007. 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
|
| 29.11.2006 |
SIMO PALOKANGAS HAS RESIGNED FROM HIS POSITION AS A BOARD MEMBER
LÄNNEN TEHTAAT PLC Stock exchange release November 29, 2006 at 1.00 pm
SIMO PALOKANGAS HAS RESIGNED FROM HIS POSITION AS A BOARD MEMBER
Simo Palokangas, Chairman of the Board of Raisio plc, has resigned from his
position as a Board Member of Lännen Tehtaat plc with effect from November 29,
2006.
LÄNNEN TEHTAAT PLC
Matti Karppinen
CEO
More details: Matti Karppinen, tel. +358 10 402 4001.
Distribution:
Helsinki Stock Exchange
Main media
www.lannen.fi
|
| 20.11.2006 |
LÄNNEN TEHTAAT TO BRING CLEARER DEFINITION TO BUSINESS STRUCTURE BY CORPORATIZING
LÄNNEN TEHTAAT PLC STOCK EXCHANGE RELEASE November 20, 2006 at 14;00 p.m.
LÄNNEN TEHTAAT TO BRING CLEARER DEFINITION TO BUSINESS STRUCTURE BY CORPORATIZING
FROZEN FOOD AND SERVICE BUSINESS OPERATIONS
The Board of Directors of Lännen Tehtaat plc has decided to make separate limited
liability companies out of the Apetit Pakaste strategic business unit and the
operations that the parent company handles in order to serve the business units.
The rearrangement will take place under the transfer of business operations in
accordance with section 52d of the Corporate Taxation Act. The new companies will
start their operations on January 1, 2007.
The rearrangement will bring a clearer definition to the Group's business
structure and support the management model, which is based on independent
companies.
The designated name for the frozen foods company is Apetit Pakaste Oy and for the
service company Apetit Suomi Oy.
Apetit Pakaste Oy will produce frozen foods, jams and marmalades. It will be the
market leader in frozen vegetables and food and in jams and marmalades. It will
have production plants at Säkylä, Turku and Pudasjärvi. Its net sales will be
about EUR 50 million and it will employ some 190 permanent and 60 temporary
staff.
Apetit Suomi Oy's commercial unit will be in charge of developing, marketing and
selling products made by Apetit Pakaste Oy and Apetit Kala Oy. In addition to
commercial services, Apetit Suomi Oy will produce human-resource, IT,
environmental and financial-administration services for the companies in the
Lännen Tehtaat Group. Apetit Suomi Oy's personnel numbers around 60.
After the transfers of the business operations the parent company, Lännen Tehtaat
plc, will become a holding company administering the shares of subsidiary
companies and properties. About ten people who are part of the Group
administration will remain in the parent company's service.
After the rearrangement, the Food Division in the Lännen Tehtaat Group will
comprise Apetit Pakaste Oy, which engages in frozen-food operations, Apetit Kala
Oy, which is engaged in the fish business, and Apetit Suomi Oy, which will be
producing services for Group companies. The Group's reporting segments will still
be the Food Division, Feeds business, Grain Trading and Other Operations.
Lännen Tehtaat's consolidated net sales in 2006 are expected to exceed EUR 400
million, of which food will account for more than a quarter, the animal feeds
business more than a half and grain trading just under a quarter.
LÄNNEN TEHTAAT PLC
Matti Karppinen
CEO
More details: Matti Karppinen, tel. +358 10 402 4001
Distribution:
Helsinki Stock Exchange
Main media
www.lannen.fi
|
| 15.11.2006 |
LÄNNEN TEHTAAT SOLD ITS FROZEN FOOD FACTORY PROPERTY IN TURKU AND WILL TRANSFER
Lännen Tehtaat plc Stock Exchange Release November 15, 2006 at 15;45 p.m.
LÄNNEN TEHTAAT SOLD ITS FROZEN FOOD FACTORY PROPERTY IN TURKU AND WILL TRANSFER
THE FACTORY'S PRODUCTION TO SÄKYLÄ
Lännen Tehtaat plc has sold the food factory property of its Apetit Frozen Foods
unit in Turku to a Finnish property investor. In connection with the sale, Lännen
Tehtaat agreed to lease the factory premises from the buyer up to the end of
2008.
An approximate one-off loss of EUR 0.5 million will be recorded on the sale in
Lännen Tehtaat's profit for the last quarter in 2006.
Lännen Tehtaat plc management has today closed statutory negotiations with staff
on the closing down the factory in Turku and the transfer of production to
Säkylä. The statutory negotiations between staff and management concerned 53
employees working in production at Apetit Frozen Foods' Turku factory; 40-45 of
them can be offered work in Säkylä.
By concentrating production in Säkylä, Apetit Frozen Foods is looking for a
positive effect of some EUR 0.9 million on profit as of 2009. The planned
transfer of production has a minor negative effect on the 2007 and 2008 profits.
Transfer of production from Turku to Säkylä will require investment of about EUR
3,5 million. The transfer is scheduled to take place by the end of 2008.
The net turnover of the Apetit Frozen Foods unit is approximately EUR 50 million
and the unit employs some 300 people.
LÄNNEN TEHTAAT PLC
Matti Karppinen
CEO
More details:
Matti Karppinen, tel. +358 10 402 4001
Antti Kerttula, tel. +358 10 4301
Distribution:
Helsinki Stock Exchange
Main media
www.lannen.fi
|
| 01.11.2006 |
SCANDIC FEED, LÄNNEN TEHTAAT'S AND RAISIO'S JOINT VENTURE, TO BE DISSOLVED
LÄNNEN TEHTAAT PLC Stock Exchange release November 1, 2006 at 8.30 am
SCANDIC FEED, LÄNNEN TEHTAAT'S AND RAISIO'S JOINT VENTURE, TO BE DISSOLVED
Lännen Tehtaat plc and Raisio plc have decided to dissolve the joint venture
company ZAO Scandic Feed, which was established to start local animal feed
business and feed production in northwest Russia. As announced in our stock
exchange release on August 24, 2006, ZAO Scandic Feed's venture to make a
corporate acquisition in the St Petersburg area was cancelled in August when the
seller refused to take the transaction through to a conclusion. As a result of
the cancellation, Lännen Tehtaat recorded a non-recurring expense of EUR 0.2
million in the third quarter's financial performance.
Lännen Tehtaat still looks on northwest Russia as an interesting market. Exports
by Suomen Rehu to Russia have progressed well and the company will continue to
export feed as before.
LÄNNEN TEHTAAT PLC
Matti Karppinen
CEO
More details: Matti Karppinen, tel. +358 10 402 4001
Distribution:
Helsinki Stock Exchange
Main media
www.lannen.fi
|
| 01.11.2006 |
INTERIM REPORT FOR JANUARY 1 - SEPTEMBER 30, 2006
LÄNNEN TEHTAAT PLC Stock Exchange release November 1, 2006 at 8.30 am
INTERIM REPORT FOR JANUARY 1 - SEPTEMBER 30, 2006
Third quarter
. The Group's continuing divisions achieved net sales of EUR 91.6 million (EUR
91.7 million) which was at the level of July-September in the comparative year.
. Because of the absence of sugar sales, overall net sales decreased by 16%
compared with the corresponding quarter in 2005.
. The operating profit was EUR 4.5 million (EUR 3.6 million).
. The operating profit excluding non-recurring items was EUR 4.0 million (EUR 3.6
million).
. The profit before taxes was EUR 4.3 million (EUR 3.3 million).
. Earnings per share were EUR 0.56 (EUR 0.38).
. Lännen Tehtaat plc acquired the remaining 49.1% of Apetit Kala Oy's shares in
July.
. It was decided to shut down the fish-processing plant at Kustavi and transfer
production to Kuopio.
. Production at the Vaasa feed plant was terminated, as planned.
. The acquisition of ZAO Scandic Feed in Russia was cancelled when the seller
withdrew from the transaction.
This interim report has been drawn up according to the IFRS recognition and
valuation principles. Not all requirements of IAS standard 34, Interim Financial
Reporting, have been observed.
The information in the report is unaudited.
Key indicators, EUR million
7-9/2006 7-9/2005
Net sales 91.6 109.0
Operating profit 4.5 3.6
Operating profit excluding
non-recurring items 4.0 3.6
Profit before taxes 4.3 3.3
Profit for period 3.5 2.4
Earnings per share, EUR 0.56 0.38
The net sales of the Food Division in July-September were EUR 24.5 million (EUR
39.9 million). The comparable net sales went up by about 5% when the effect of
the terminated sugar sales (EUR 16.6 million) is eliminated from the net sales of
the comparative period.
The net sales of the Apetit Frozen Foods business unit were 4% higher than in the
comparative period. Sales of retail products went up by about 4%, and the sales
by the hotel, restaurant and catering sector by about 5%. Exports also increased
but industrial sales fell slightly short of the comparative period. Sales of
retail frozen foods went up by about 6%. The highest growth was recorded in
frozen vegetables and pizzas sold under the Apetit brand.
Apetit Kala's net sales rose by 5% from the comparative period last year, boosted
by increases in sales prices, which were a consequence of higher raw-material
prices. The focus was on consumer-packaged fish products. Shop-in-shop sales also
progressed well.
The operating profit of the Food Division in July-September was EUR 1.5 million
(EUR 0.9 million). Non-recurring items improved the profit by EUR 0.5 million
(EUR 0.0 million). The effect of sugar sales on the operating profit of the Food
Division during the comparative period was EUR 0.6 million. Because of higher
gross margins resulting from an increase in the share of Apetit products and cost
cutting, the Apetit Frozen Foods business unit performed better than in the
comparative period. Apetit Kala's financial performance was also better than that
of the comparative period. The unusually strong rise in the prices of fish raw
materials that started in the spring slowed down the improvement in the profit
because the price rises were not passed on in full to the sales prices. The non-
recurring items refer to the acquisition of the 49% minority interest in Apetit
Kala (+EUR 0.7 million) and the decision to close down the Kustavi production
plant (-EUR 0.2 million).
The net sales of the Feeds business amounted to EUR 53.3 million (EUR 52.2
million). The operating profit of the Feeds segment was EUR 3.5 million (EUR 3.0
million). The demand for feed was at last year's level. The improvement in
productivity and successful implementation of a programme to cut fixed costs
compensated for the fall in the sales margin, which was caused by higher raw-
material costs.
The net sales of Grain Trading fell by 9%. During the third quarter they totalled
EUR 17.4 million (EUR 19.2 million). Grain Trading's volume was lower than in the
comparative period in Finland and in exports but higher in third-country trade.
The operating profit was EUR 0.4 million (EUR 0.5 million).
The Other Operations segment comprises operations that are common to the Group
and unallocated to the segments. The segment's net sales were EUR 0.0 million
(EUR 1.0 million). The net sales of Harviala Ltd, which later exited the Group,
are included in the comparative period. The segment's operating loss was EUR -0.9
million (EUR -0.7 million), which was mainly caused by the absence of Harviala
and by Group reorganization expenses. The comparable cost-effectiveness of Other
Operations segment showed a marked improvement from the comparative period.
Period under review January 1 - September 30, 2006
1-9/2006 1-9/2005
Net sales 291.3 310.5
Operating profit 6.4 3.6
Operating profit excluding
non-recurring items 6.9 5.7
Profit before taxes 7.8 2.1
Profit for period 5.8 1.4
Earnings per share, EUR 0.92 0.29
Net sales
Lännen Tehtaat's net sales in January-September totalled EUR 291.3 million (EUR
310.5 million). Mildola Oy, acquired in May 2005, contributed EUR 21.7 million
(EUR 11.1 million) to the consolidated net sales. The terminated operations
caused the net sales to decrease by EUR 38.3 million. Net sales of continuing
divisions increased by 7% from the comparative period.
The net sales of the Food Division totalled EUR 80.7 million (EUR 110.4 million).
Its comparable net sales went up by 5%, if the effect of the terminated sugar
sales, EUR 33.8 million, is eliminated from the figures of the comparative
period. Apetit Kala's net sales rose as a result of an increase in sales volumes
and in sales prices. The net sales of the Apetit Frozen Foods business unit were
slightly lower than in the comparative year, because of a reduction in the sales
of the agricultural department. Product sales increased. Sales of retail products
went up by about 2.5%. Sales of ready-made frozen foods, pizzas and frozen potato
products increased on the previous year. Sales of frozen vegetables sold under
Apetit brand were also up over the previous year. Sales of jam and marmalade went
down. Sales of the hotel, restaurant and catering sector and exports increased on
the comparative year. Industrial sales were below the comparative period as
domestic production lost ground to imports.
The net sales of the Feeds business in January-September rose by 9% to EUR
158.4 million (EUR 145.2 million). The effect of corporate acquisitions on the
growth in the segment's net sales was EUR 11.4 million.
Net sales of Grain Trading rose by 3% to EUR 62.2 million (EUR 60.6 million).
The net sales of the Other Operations segment in January-September were EUR 0.0
million (EUR 5.3 million). The net sales of the comparative period were mostly
net sales of the Lännen Plant Systems and Harviala Ltd.
Profit
Lännen Tehtaat's operating profit in January-September was EUR 6.4 million (EUR
3.6 million). The net impact of non-recurring items in the period under review
was EUR -0.6 million (EUR -2.1 million). The loss of EUR -1.6 million in non-
recurring items comprise provisions made for reductions in personnel (EUR -0.9
million) and the loss incurred in selling the shares in Harviala Ltd (EUR -0.6
million) and a write-off entry of EUR -0.2 million arising from the decision to
close down the Apetit Kala factory at Kustavi. The non-recurring revenue, EUR 1.0
million, came from the realization of the negative goodwill generated by the
purchase of Mildola shares in the second quarter and of Apetit Kala shares in the
third. Excluding the non-recurring items, the operating profit for January-
September was EUR 6.9 million (EUR 5.7 million).
The operating profit of the Food Division was EUR 1.2 million (loss EUR -0.5
million), the effect of non-recurring items being EUR +0.4 million (EUR 0.0
million). The now terminated sugar sales caused the operating profit of the Food
Division in the comparative period to improve by EUR 1.3 million.
The financial performance of the Apetit Frozen Foods business unit improved as a
result of enhanced cost-efficiency. The financial performance of Apetit Kala
improved considerably due to increased net sales and productivity measures.
The operating profit of the Feeds segment in January-September was EUR 7.9
million (EUR 5.8 million). Non-recurring items had an effect of EUR -0.4 million
(EUR -2.1 million) on the profit. Excluding the non-recurring items, the profit
was EUR 8.3 million (EUR 7.9 million).
The operating profit of Grain Trading increased to EUR 1.2 million (EUR 0.9
million). Derivative financial instruments to which hedge accounting could not
be applied had an adverse effect of EUR 0.2 million on the result in the
comparative period.
The operating loss of the Other Operations segment was EUR -4.0 million (EUR -2.5
million). The loss for the period under review includes non-recurring expenses of
EUR 0.6 million that mainly comprised the sale of the shares in Harviala Ltd in
the first quarter. Expenses incurred in Group restructuring also reduced the
profit. The cost-effectiveness of Other Operations showed a marked improvement as
a result of the efficiency measures carried out at the end of last year.
Consolidated net financial revenue/expenses totalled EUR 1.6 million (expenses
EUR -0.9 million). The financial revenue includes a profit of about EUR 2.6
million on sales of shares not related to business activities. The Group's
share in the profit/loss of associated companies was EUR -0.2 million (EUR -0.7
million).
The consolidated operating profit before taxes was EUR 7.8 million (EUR 2.1
million) and after taxes EUR 5.8 million (EUR 1.4 million).
Financing and cash flow
The Group's financing situation and liquidity remained good. The cash flow from
operations after interest and taxes stood at EUR 11.3 million (EUR 11.9 million).
The change is mainly the result of adjustments in the working capital. The net
cash flow from investment was EUR -5.1 million (EUR -4.7 million). Dividends paid
totalled EUR 4.6 million (EUR 4.1 million).
At the end of the period under review, the Group had interest-bearing
liabilities amounting to EUR 37.6 million (EUR 44.4 million) and liquid assets
of EUR 4.3 million (EUR 7.3 million). Net interest-bearing liabilities totalled
EUR 33.3 million (EUR 37.1 million). The consolidated balance sheet total was
EUR 207.7 million (EUR 215.8 million). The equity ratio was 54.2% (49.0%).
Commercial papers issued for the Group's short-term financing stood at EUR 17.0
million (14.0 million). There was EUR 23.0 million (EUR 23.0 million) in unused
credit limits.
Investment, divestments and Group restructuring
The gross investment in non-current assets in January-September excluding
corporate acquisitions was EUR 5.4 million (EUR 3.9 million). A further EUR 3.0
million (EUR 4.2 million) was spent on the acquisition of shares in subsidiaries
and joint ventures.
Investment by the Food Division excluding corporate acquisitions totalled EUR 1.1
million, and investment by the Feeds segment excluding corporate acquisitions EUR
4.3 million. In the Food Division, the most important investment was the new
packaging line for Apetit Frozen Foods. In the Feeds segment, the most
significant investments were associated with the extension and renovation of the
Baltic Feed factory in Latvia, the extension to the Lännen Rehu factory at Säkylä
and a loading station for bulk feed at Suomen Rehu's Seinäjoki factory. Other
investment concerned mainly productivity and replacements.
The Group sold its investments in shares of other listed companies and other
shares outside its business. The sales profits of EUR 2.6 million realized from
these sales have been entered under financial income.
Suomen Rehu Ltd's Latvian subsidiary, SIA Baltic Feed, established a subsidiary,
UAB Baltijos Pasarai, in Lithuania for the direct sale of feeds. The company has
already started operations.
At the end of March, Lännen Tehtaat plc sold its shares in Harviala Ltd to
Saarioisten Taimistot Oy. The Group recorded a loss of EUR 0.6 million from this
sale. Harviala Ltd was included in the consolidated income statement until the
end of February.
In April, Suomen Rehu Ltd acquired the 17.5% minority share in Mildola Oy. After
this transaction, Mildola Oy became wholly owned by the Group. In its minority
acquisitions, Lännen Tehtaat applies what is called the parent company model in
which minority acquisitions generate goodwill, profits or losses. In connection
with the acquisition of the minority shareholding in Mildola Oy, Lännen Tehtaat
entered negative goodwill of EUR 0.3 million for the second quarter.
In an agreement between Lännen Tehtaat plc and Antti Räsänen in June, Antti
Räsänen's 49 percent holding in Apetit Kala Oy was purchased by Lännen Tehtaat
plc. The agreement was put into effect in July, after the competition authorities
had given their approval. The sales price was EUR 1.5 million. Following the
sales agreement, Apetit Kala Oy became wholly owned by Lännen Tehtaat plc. In
relation to the acquisition the Group recorded non-recurring income of EUR 0.7
million generated by negative goodwill in the third quarter.
The acquisition in Russia of ZAO Scandic Feed, a joint-venture company owned
equally by Lännen Tehtaat and Raisio, was cancelled in August. The cancellation
of the purchase of a majority shareholding in Tosno Feed Factory caused write-
offs of EUR 0.2 million in the third quarter, which are shown under the heading
'Share of profits of associated companies'.
Board of Directors' authorizations
The Annual General Meeting authorized the Board of Directors to raise the share
capital by new share issues and/or to issue a convertible bond. The
authorizations are valid until March 29, 2007. In a new share issue and/or an
issue through a convertible bond, the share capital can be raised by a maximum
total of EUR 1,263,514.00 in such a way that a maximum of 631,757 shares with a
nominal value of EUR 2.00 are offered for subscription.
The Board of Directors was authorized to diverge from the shareholders' pre-
emptive subscription right to new shares and/or to convertible bonds if the
company's financial status so requires. The authorization also covers the right
to decide on the subscription prices, those entitled to subscribe for shares,
subscription terms, terms concerning a convertible bond and other terms and
factors related to a new share issue and/or issue of a convertible bond.
The Board of Directors was also authorized to decide on the surrender of the
company's own shares. The authorization concerns the 65,000 company shares
acquired using the authorization granted by the AGM on April 5, 2001. The Board
was authorized to decide to whom and in what order the company's own shares are
surrendered. The shares can be surrendered in one or more tranches. The Board
may decide to surrender the Company's own shares other than in proportion to
the pre-emptive right of shareholders.
So far the Board has not used the authorization granted by the Annual General
Meeting to increase the share capital or surrender the company's own shares.
Shares
During the period under review 1,379,454 (3,210,991) company shares were traded
on the Stock Exchange, i.e. 21.8 (50.8) per cent of the total stock. The highest
share price was EUR 24.19 (EUR 17.65) and the lowest EUR 15.26 (EUR 11.71). The
share turnover for the period totalled EUR 27.6 million (EUR 44.5 million). The
market capitalization at the end of the period under review stood at EUR 132.2
million (EUR 103.0 million).
Flaggings
No flagging notices were made during the period under review.
Personnel and organization
The average number of personnel during the period under review was 955 (1,030),
of whom 38 (32) worked outside Finland. The figure decreased in the Food Division
and Other Operations segment. In the Feeds segment it increased, as a result of
the acquisition of Mildola.
Erkki Lepistö was appointed President of Suomen Rehu Ltd as of July 1, 2006.
Seasonality of operations
The transfer to IFRS reporting has had a major impact on the accrual of Lännen
Tehtaat's profits over the financial year. As a result of seasonal production and
valuation of inventories in accordance with IAS 2, most of the Group's annual
profit accrues during the final quarter.
Because of the harvest production, the seasonal nature of the operations
features most strongly in the Food Division and in the operations of the
associated company Sucros. There is also some seasonal fluctuation in the Feeds
segment.
Most of Apetit Kala's products are sold during festive holidays. The year's
profits are largely determined by the success of Christmas sales.
Grain Trading's net sales fluctuate annually and quarterly depending on the
amount of grain and grain prices. Grain Trading accounts for 20-25 per cent of
the Lännen Tehtaat's consolidated net sales. Fluctuations in its net sales have a
considerable impact on the entire Group's net sales and their periodization.
Prospects for the entire year
The Food Division's net sales will fall from last year because of the absence of
sugar sales. The net sales of the continuing food business operations will
increase and the financial performance will improve significantly due to higher
cost-effectiveness in Apetit Frozen Foods and strong growth in Apetit Kala.
A study was started in autumn 2005 on how the Group can expand its food
business in Finland and the northern parts of the Baltic Rim. The work
continues.
The Feeds business's net sales for the entire year will grow, mostly because of
the acquisition of Mildola. The demand for industrial feeds is still lower than
in the previous year but is expected to grow during the autumn. The financial
performance, excluding non-recurring items, is expected to be at the same level
as in 2005.
The extension and modernization of the Feeds segment's SIA Baltic Feed factory in
Latvia will come into operation at the beginning of November. The transfer of
production at the Vaasa feed factory to other factories was concluded during the
autumn.
Grain Trading's net sales are expected to be higher than those of last year but
still fall short of the EUR 100 million level. The financial performance is
expected to be slightly better than in 2005.
Consolidated net sales are expected to exceed EUR 400 million though they will
remain below last year's figures because of the termination of the sugar sales.
The operating profit for the entire year excluding non-recurring items is
expected to be slightly better than the 2005 equivalent as a result of a better
performance in the fish business, productivity measures and higher cost-
effectiveness.
The financial performance for the last quarter of 2005 included non-recurring
items that improved the performance by a net amount of EUR +6.3 million. As there
are no equivalent items in this years's final quarter, the financial performance
will not come up to that of last year.
CONSOLIDATED INCOME STATEMENT
EUR million
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
2006 2005 2006 2005 2005
3 mths 3 mths 9 mths 9 mths 12 mths
Net sales 91.6 109.0 291.3 310.5 433.0
Other operating income 1.3 0.5 3.1 2.7 10.9
Operating expenses -86.2 -103.7 -281.7 -300.6 -416.3
Depreciation -2.0 -2.1 -6.2 -6.2 -8.3
Impairments -0.2 - -0.2 -2.7 -3.0
Operating profit 4.5 3.6 6.4 3.6 16.3
Financial income and expenses -0.3 -0.4 1.6 -0.9 -1.2
Share of profit of associate
companies 0.0 0.1 -0.2 -0.7 -0.1
Profit before taxes 4.3 3.3 7.8 2.1 14.9
Income taxes -0.8 -1.0 -2.0 -0.7 -3.6
Profitfor the financial period 3.5 2.4 5.8 1.4 11.4
The income taxes are based on the result for the period.
Attributable to:
Equity holders of the parent 3.5 2.4 5.8 1.8 11.3
Minority interests 0.0 -0.0 0.0 -0.4 0.1
Earnings per share, EUR 0.56 0.38 0.92 0.29 1.81
Diluted earnings per share, EUR 0.56 0.38 0.92 0.29 1.81
NET SALES BY BUSINESS SEGMENT
EUR million
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
2006 2005 2006 2005 2005
3 mths 3 mths 9 mths 9 mths 12 mths
Food Division 24.5 39.9 80.7 110.4 149.5
Feed segment 53.3 52.2 158.4 145.2 205.1
Grain Trading segment 17.4 19.2 62.2 60.6 86.6
Other operations segment 0.0 1.0 0.0 5.3 7.1
Intra-group sales -3.6 -3.3 -10.0 -11.1 -15.3
Consolidated 91.6 109.0 291.3 310.5 433.0
OPERATING PROFIT/LOSS BY BUSINESS SEGMENT
EUR million
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
2006 2005 2006 2005 2005
3 mths 3 mths 9 mths 9 mths 12 mths
Food Division 1.5 0.9 1.2 -0.5 9.6
Feed segment 3.5 3.0 7.9 5.8 9.4
Grain Trading segment 0.4 0.5 1.2 0.9 1.4
Other operations segment -0.9 -0.7 -4.0 -2.5 -4.1
Consolidated 4.5 3.6 6.4 3.6 16.3
NET SALES BY GEOGRAPHICAL SEGMENT
EUR million
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
2006 2005 2006 2005 2005
3 mths 3 mths 9 mths 9 mths 12 mths
Finlans 82.1 99.3 251.2 277.6 382.8
Other EU member states 6.5 7.0 27.5 20.7 34.2
Other countries 2.9 2.7 12.6 12.2 16.0
Consolidated 91.6 109.0 291.3 310.5 433.0
CONSOLIDATED BALANCE SHEET
EUR million
Sept.30.2006 Sept.30.2005 Dec.31.2005
ASSETS
Non-current assets
Tangible assets 71.6 71.1 72.2
Goodwill 17.4 17.4 17.4
Other intangible assets 1.5 1.9 1.7
Investment in associated companies 21.3 20.7 21.3
Available-for-sale investments 0.2 3.1 3.2
Receivables 5.7 0.6 6.9
Deferred tax assets 2.4 2.8 1.3
120.0 117.6 123.9
Current assets
Inventories 46.8 52.8 54.5
Receivables 36.6 38.0 42.5
Cash and cash equivalents 4.3 7.3 11.2
87.8 98.2 108.2
Total assets 207.7 215.8 232.2
EQUITY AND LIABILITIES
Equity attributable to the
equity holders of the parent 112.4 102.5 112.4
Minority interests 3.2 3.7
Total equity 112.4 105.7 116.1
Non-current liabilities
Long-term borrowings 9.7 19.9 16.0
Deferred tax liabilities 7.0 8.1 7.4
Non-current provisions 0.9 1.0 0.9
Non-current liabilities total 17.6 29.0 24.3
Current liabilities
Trade payables and other
liabilities 48.9 55.6 60.9
Short-term borrowings 27.9 24.5 29.9
Current provisions 0.9 1.0 0.9
Current liabilities total 77.7 81.1 91.7
Liabilities total 95.3 110.1 116.1
Total equity and liabilities 207.7 215.8 232.2
CONSOLIDATED CASH FLOW STATEMENT
EUR million
1-9/2006 1-9/2005 1-12/2005
9 mths 9 mths 12 mths
Cash flows from operating
activities 11.3 11.9 17.8
Cash flows from investing
activities -5.1 -4.7 -8.0
Cash flows from financing
activities
Change in net debt -8.4 -6.0 -4.5
Dividends paid -4.6 -4.1 -4.1
Net increase/decrease in cash
and cash equivalents -6.9 -2.9 1.0
Cash and cash equivalents
at beginning of the period 11.2 10.2 10.2
Cash and cash equivalents
at end of the period 4.3 7.3 11.2
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
EUR million
A = Share capital
B = Share premium account
C = Net unrealised gains
D = Other reserves
E = Translation differences
F = Retained earnings
G = Equity attributable to equity holders of the parent company
H = Minority interest
I = Shareholders' equity total
A B C D E F G H I
Shareholders'
equity at
Jan 1., 2005 12.6 23.4 1.1 7.3 -0.3 60.2 104.3 2.5 106.8
Available-for-sale
financial assets:
gains/losses
from fair value
measurement 0.6 0.6 0.6
Cash flow hedges:
gains/losses
recorded in
equity
Taxes related to
items entered into
equity and removed
from equity -0.1 -0.1 -0.1
Transition
difference 0.1 0.1 0.1
Dividend
distribution -4.1 -4.1 -0.1 -4.2
Increase of
ownership
in subsidiary 1.3 1.3
Result of the period 1.8 1.8 -0.4 1.4
Other changes 0.0 0.0 0.0
Shareholders'
equity at
Sept. 30.2005 12.6 23.4 1.5 7.3 -0.2 57.8 102.5 3.2 105.7
Shareholders'
equity at
Jan. 1.2006 12.6 23.4 1.9 7.3 -0.2 67.5 112.4 3.7 116.1
Available-for-sale
financial assets:
gains/losses
from fair value
measurement -2.1 -2.1 -2.1
Cash flow hedges:
gains/losses
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
Transition
differences 0.0 0.0 0.0
Dividend
distribution -4.6 -4.6 -4.6
Increase of
ownership
in subsidiary 0.0 -3.7 -3.7
Result of the period 5.8 5.8 5.8
Other changes -0.2 -0.2 -0.2
Shareholders'
equity at
sept.30.2006 12.6 23.4 0.9 7.3 -0.2 68.5 112.4 0.0 112.4
KEY INDICATORS
Sept.30.2006 Sept.30.2005 Dec.31.2005
Shareholders' equity
per share, EUR 17.98 16.91 18.56
Equity ratio % 54.2% 49.0% 50.0%
Gearing, % 29.6% 35.1% 29.9%
Investments, EUR million 8.4 8.1 11.7
Average number of personnel 955 1030 1033
Average number of shares, 1 000 6 253 6 253 6 253
CONTINGENT LIABILITIES
EUR million
Sept.30.2006 Sept.30.2005 Dec.31.2005
Mortgages given for debts:
Real estate mortgages 40.7 40.7 40.7
Corporate mortgages 51.4 51.4 51.4
Share pledged 3.6 3.6 3.6
Other securities given for own
commitments
Real estate mortgages 0.0 0.2 0.1
Pledges 0.0 0.0 0.0
Leasing liabilities 1.1 0.9 1.3
Non-cancellable other leases,
minimum lease payments 2.8 3.1 3.0
Contingent liabilities for own
commitments:
Repurchase commitments 0.0 0.1 0.1
Contingent liabilities on behalf
of the associate companies:
Guarantees 0.0 0.1 0.0
Repurchase commitments 0.1 0.1
Other contingent liabilities:
Redemption liability of
leased buildings - 2.4 -
OUTSTANDING VALUES OF DERIVATIVE INSTRUMENTS
Forward currency contracts 7.5 2.8 1.5
Forward currency contracts 6.4 4.9 5.0
Interest rate swaps 25.0 25.0 25.0
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
|
| 24.08.2006 |
Feed factory acquisition in Russia by Lännen Tehtaat and Raisio joint venture
Lännen Tehtaat plc Stock Exchange Release August 24, 2006 at 1;00 p.m.
Feed factory acquisition in Russia by Lännen Tehtaat and Raisio joint venture
cancelled
In its latest interim report Lännen Tehtaat plc announced that ZAO Scandic Feed,
a joint venture equally owned by Lännen Tehtaat and Raisio, had signed a contract
for the acquisition of a majority shareholding in ZAO Tosno Feed Factory, which
is engaged in the production and marketing of feeds in Russia. The contract was
signed in March, and the Russian competition authorities gave a permit for the
deal.
The Russian seller has now, without justification, refused to close the deal in
the way agreed in the contract, and the deal is cancelled.
LÄNNEN TEHTAAT PLC
Matti Karppinen
CEO
More details: Matti Karppinen, tel. +358 10 402 4001
Distribution:
Helsinki Stock Exchange
Main media
www.lannen.fi
|
| 10.08.2006 |
INTERIM REPORT FOR JANUARY 1 - JUNE 30, 2006
LÄNNEN TEHTAAT PLC Stock Exchange release August 10, 2006 at 8.30 am
INTERIM REPORT FOR JANUARY 1 - JUNE 30, 2006
SECOND QUARTER
. Net sales of continuing divisions in April-June increased by 6.5% from the
comparative year and stood at EUR 102.8 million (EUR 96.5 million).
. Consolidated net sales decreased by 4%, compared with the second quarter of
2005.
. Operating profit excluding non-recurring items EUR 2.4 million was at the same
level as in the comparative year (EUR 2.5 million).
. Operating profit after non-recurring items stood at EUR 2.5 million (EUR 3.6
million).
. Profit before taxes stood at EUR 2.7 million (EUR 3.2 million).
. Earnings per share stood at EUR 0.34 (EUR 0.40).
. Restructuring continued.
. Suomen Rehu Ltd acquired the remaining 17.5% of Mildola Oy's shares in April.
. An agreement was signed in June on the acquisition of the remaining Apetit Kala
Oy's shares.
This interim report has been drawn up according to the IFRS recognition and
valuation principles. Not all requirements of IAS standard 34, Interim Financial
Reporting have been observed.
The information in the report is unaudited.
Key indicators, EUR million
4-6/2006 4-6/2005
Net sales 102.8 107.5
Operating profit excluding non-recurring items 2.4 2.5
Operating profit after non-recurring items 2.5 3.6
Profit before taxes 2.7 3.2
Profit after taxes 2.0 2.4
Earnings per share, EUR 0.34 0.40
The net sales of the Food Division in April-June was EUR 30.0 million (EUR 38.5
million). The comparable net sales went up by 3%, if the effect of the terminated
sugar sales (EUR 9.5 million) is eliminated from the net sales of the comparative
period.
Because of a drop in the sales of the Apetit agricultural department, the net
sales of the Apetit Frozen Foods business unit was lower than in the comparative
period. Sales of retail products went up by about 2%, while the sales of the
hotel, restaurant and catering sector were about 4% higher than in the
comparative period. Industrial sales and exports were below the levels of the
comparative period. The highest growth was recorded in highly processed frozen
food and potato. Sales of frozen vegetables under the Apetit brand also went
well.
Apetit Kala's net sales rose by 17% from the comparative period. Net sales were
boosted by higher volumes and increases in sales prices, which resulted from
higher raw material prices. The focus was on consumer-packaged fish products.
Shop-in-shop sales also showed strong growth.
The operating profit of the Food Division in April-June was EUR 0.2 million (EUR
-0.2 million). Because of higher gross margins resulting from an increase in the
share of Apetit brand products and cost cutting, the Apetit Frozen Foods business
unit performed better than in the comparative period. Apetit Kala's performance
was also better than that of the comparative period. The rapid growth in the
prices of fish raw materials that started in spring continued during the second
quarter and slowed down profit growth. The effect of sugar sales on the
performance of the Food Division during the comparative period was EUR 0.4
million.
The net sales of the Feeds business was EUR 52.2 million (EUR 49.0 million).
Excluding corporate acquisitions, feed sales were at the same level as in the
comparative period.
The operating profit of the Feeds segment excluding non-recurring items was EUR
2.9 million (EUR 3.3 million) and after non-recurring items EUR 3.1 million (EUR
4.4 million). The profitability of feed sales suffered from a decrease in volumes
particularly in cattle feeds. The lower volumes were mainly a result of a good
harvest in Finland in 2005. Higher raw-material prices and competition for
reduced volumes decreased unit margins in cattle, pig and poultry feeds. Due to
productivity measures and a programme for reducing fixed costs, the profit of the
Feeds segment remained at the level of the comparative period. The non-recurring
expenses of EUR 0.2 million consist of reorganization provisions, and the non-
recurring revenue of EUR 0.3 million (EUR 1.1 million) consist of the realization
of the negative goodwill generated by the acquisition of Mildola shares.
The net sales of Grain Trading rose by 7%. The net sales during the second
quarter totalled EUR 23.3 million (EUR 21.7 million). Grain Trading's volume rose
from the comparative period in Finland, in exports and in third-country trade.
Prices were also higher. The operating profit increased to EUR 0.4 million (EUR
0.3 million).
The Other Operations segment comprises operations that are common to the Group
and unallocated to the segments. The segment's net sales were EUR 0.0 million
(EUR 2.5 million). The sales of the subsequently sold Harviala Ltd and the Lännen
Plant Systems business unit are included in the comparative period. The segment's
operating loss was EUR 1.2 million (EUR 0.9 million), which was mainly caused by
the absence of Harviala and by Group reorganization expenses.
PERIOD UNDER REVIEW JANUARY 1 - JUNE 30, 2006
1-6/2006 1-6/2005
Net sales 199.7 201.5
Operating profit excluding non-recurring items 3.1 2.1
Operating profit after non-recurring items 2.0 0.0
Profit/loss before taxes 3.7 -1.2
Profit/loss after taxes 2.5 -1.0
Earnings per share, EUR 0.37 -0.09
NET SALES
Lännen Tehtaat's net sales in January-June totalled EUR 199.7 million (EUR 201.5
million). Mildola Oy, acquired in May, had an effect of EUR 15.0 million (EUR 4.6
million) on consolidated net sales. The effect of the terminated operations on
the net sales of the comparison period was EUR 21.0 million.
The net sales of the Food Division totalled EUR 56.2 million (EUR 70.5 million).
The comparable net sales of the Food Division increased by slightly under 6%, if
the effect of the terminated sugar sales, EUR 17.3 million, is eliminated from
the figures of the comparative period. Apetit Kala's net sales rose due to an
increase in sales volumes and in sales prices. The net sales of Apetit Frozen
Foods business unit were slightly lower than in the comparative year, which was
due mainly to a reduction in the sales of the agricultural department. The net
sales of retail products went up by 2%. Sales of ready-made frozen foods, pizzas
and frozen potato products increased on the previous year and sales of frozen
vegetables sold under own product brand also went well. Sales of jam and
marmalade went down. Sales of the hotel, restaurant and catering sector and
exports increased from the comparative year. Industrial sales were below the
comparative period as domestic production lost ground to imports.
The net sales of the Feeds business in January-June totalled EUR 105.1 million
(EUR 93.0 million). The effect of corporate acquisitions on the growth in the
segment's net sales was EUR 10.4 million.
Net sales of Grain Trading rose by 8% to EUR 44.7 million (EUR 41.4 million).
The net sales of the Other Operations segment in January-June was EUR 0.0 million
(EUR 4.3 million). The net sales of the comparative period were mostly net sales
of the Lännen Plant Systems business unit and Harviala Ltd.
PROFIT/LOSS
Lännen Tehtaat's operating profit excluding non-recurring items in January-June
was EUR 3.1 million (EUR 2.1 million). The net impact of non-recurring items in
the period under review was EUR -1.1 million (EUR -2.1 million). The loss in non-
recurring items, EUR -1.4 million, constituted provisions made for reductions in
personnel totalling EUR -0.8 million and the loss incurred in selling the shares
in Harviala Ltd totalling EUR -0.6 million. The revenue in non-recurring items,
EUR 0.3 million, came from the realization of the negative goodwill generated by
the purchase of Mildola shares in the second quarter.
The operating loss of the Food Division was EUR -0.3 million (EUR -1.4 million).
The performance of the Apetit Frozen Foods business unit improved due to enhanced
cost-efficiency. The performance of Apetit Kala improved due to increased net
sales and productivity measures. The effect of the terminated sugar sales on the
operating profit of the Food Division in the comparative period was EUR 0.7
million.
The operating profit before non-recurring items of the Feeds segment in January-
June was EUR 5.0 million (EUR 4.8 million) and after non-recurring items EUR 4.6
million (EUR 2.7 million).
The operating profit of Grain Trading increased to EUR 0.8 million (EUR 0.4
million). Derivative financial instruments to which hedge accounting could not be
applied had an adverse effect of EUR 0.2 million on the result in the comparative
period.
The operating loss of the Other Operations segment was EUR -3.1 million (EUR -1.8
million). The main constituent of the loss in the period under review is non-
recurring expenses of EUR 0.6 million caused by the sale of the shares in
Harviala Ltd in the first quarter. The performance was also negatively affected
by Group restructuring costs. Measures to improve efficiency introduced late last
year brought about a marked improvement in the cost-effectiveness of Other
Operations.
Consolidated net financial income totalled EUR 1.9 million (expenses EUR -0.5
million). The financial income includes the profit on sales of shares not related
to business activities, totalling about EUR 2.5 million. The Group's share in the
profit/loss of associated companies was EUR -0.2 million (EUR -0.7 million).
The consolidated operating profit before taxes was EUR 3.7 million (loss EUR 1.2
million) and after taxes EUR 2.5 million (loss EUR 1.0 million).
FINANCING AND CASH FLOW
The Group's financing situation and liquidity remained good. The cash flow from
operations after interest and taxes stood at EUR 9.6 million (EUR 6.9 million).
This increase is mainly the result of variations in the working capital. The net
cash flow from investment was EUR 0.1 million (EUR -2.8 million). Dividends paid
totalled EUR 4.6 million (EUR 4.2 million).
At the end of the period under review, the Group had interest-bearing liabilities
amounting to EUR 40.5 million (EUR 50.0 million) and liquid assets of EUR 10.9
million (EUR 10.1 million). Net interest-bearing liabilities totalled EUR 29.6
million (EUR 39.9 million). The consolidated balance sheet total was EUR 201.2
million (EUR 210.2 million) and the equity ratio 55.3% (49.0%). Commercial papers
issued for the Group's short-term financing stood at EUR 19.0 million (EUR 21.0
million). There was EUR 18.0 million (EUR 18.0 million) in unused credit limits.
INVESTMENTS, DIVESTMENTS AND CHANGES IN THE GROUP STRUCTURE
The gross investment in non-current assets in January-June excluding corporate
acquisitions was EUR 2.8 million (EUR 1.6 million). A further EUR 1.5 million
(EUR 4.1 million) was used in the acquisition of shares in subsidiaries and joint
ventures.
Investment by the Food Division excluding corporate acquisitions totalled EUR 0.6
million, and investment by the Feeds segment excluding corporate acquisitions EUR
2.2 million. In the Food Division, the most important investment was the new
packaging line for Apetit Frozen Foods. In the Feeds segment, the most
significant investments were associated with the extension of the Lännen Rehu
factory at Säkylä, a loading station for bulk feed at Suomen Rehu's Seinäjoki
factory and the extension and renovation of the Baltic Feed factory in Latvia.
Other investment concerned mainly productivity and replacements.
The Group sold its investments in shares of other listed companies and other
shares outside its business. The sales profits of EUR 2.5 million realized from
these sales have been entered under financial income.
ZAO Scandic Feed, a joint venture company owned equally by Lännen Tehtaat and
Raisio, has concluded an agreement on the acquisition of the majority of shares
in the ZAO Tosno Feed Factory, which produces and markets feeds. The factory is
situated near St Petersburg in Russia. Russian competition authorities have
approved the sale, and the transaction is expected to be completed during the
autumn.
Suomen Rehu Ltd's Latvian subsidiary, SIA Baltic Feed, established a subsidiary
in Lithuania. The new company, UAB Baltijos Pasarai, has begun the direct sale of
feeds in Lithuania.
In April, Suomen Rehu Ltd acquired a 17.5% minority share in Mildola Oy. After
this transaction, Mildola Oy became wholly owned by the Group. In its minority
acquisitions, Lännen Tehtaat applies what is called the parent company model in
which minority acquisitions generate goodwill, profits or losses. In connection
with the acquisition of a minority shareholding in Mildola Oy, Lännen Tehtaat
entered a negative goodwill of EUR 0.3 million for the second quarter.
At the end of March, Lännen Tehtaat plc sold its shares in Harviala Ltd to
Saarioisten Taimistot Oy. The Group entered a loss of EUR 0.6 million from this
sale. Harviala Ltd was included in the consolidated profit and loss account until
the end of February.
IMPORTANT EVENTS AFTER THE REVIEW PERIOD
In an agreement between Lännen Tehtaat plc and Antti Räsänen in June, Antti
Räsänen's 49 percent holding in Apetit Kala Oy was purchased by Lännen Tehtaat
plc. The agreement was put into effect in July, after competition authorities had
given their approval. The sales price was EUR 1.5 million. Following the sales
agreement, Apetit Kala Oy became wholly owned by Lännen Tehtaat plc.
BOARD OF DIRECTORS' AUTHORIZATIONS
The Annual General Meeting authorized the Board of Directors to raise the share
capital by new share issues and/or to issue a convertible bond. The
authorizations are valid until March 29, 2007. In a new share issue and/or an
issue through a convertible bond, the share capital can be raised by a maximum
total of EUR 1,263,514.00 in such a way that a maximum of 631,757 shares with a
nominal value of EUR 2.00 are offered for subscription.
The Board of Directors was authorized to diverge from the shareholders' pre-
emptive subscription right to new shares and/or to convertible bonds if the
company's financial status so requires. The authorization also covers the right
to decide on the subscription prices, those entitled to subscribe shares,
subscription terms, terms concerning a convertible bond and other terms and
aspects related to a new share issue and/or issue of a convertible bond.
The Board of Directors was also authorized to decide on the surrender of the
company's own shares. The authorization concerns the 65,000 company shares
acquired using the authorization granted by the AGM on April 5, 2001. The Board
is authorized to decide to whom and in what order the company's own shares are
surrendered. The shares can be surrendered in one or more tranche. The Board may
decide to surrender the Company's own shares other than in proportion to the pre-
emptive right of shareholders.
So far the Board has not used the authorization granted by the Annual General
Meeting to increase the share capital or surrender the company's own shares.
SHARES
During the period under review 945,386 (1,775,753) company shares were traded on
the Stock Exchange, i.e. 15.0 (28.1) % of the total stock. The highest share
price was EUR 24.19 (EUR 13.70) and the lowest EUR 15.26 (EUR 11.71). The share
turnover for the period totalled EUR 18.7 million (EUR 23.3 million). The market
capitalization on June 30, 2006 stood at EUR 122.9 million (EUR 83.7 million).
PERSONNEL AND ORGANIZATION
The average number of personnel during the period under review was 947 (1,006) of
which 37 (29) worked outside Finland. The figure decreased in the Food Division
and Other Operations segment. In the Feeds segment it increased, mainly as a
result of corporate acquisitions.
Erkki Lepistö was appointed President of Suomen Rehu Ltd as of July 1, 2006.
SEASONALITY OF OPERATIONS
The transfer to IFRS reporting has had a major impact on the accrual of Lännen
Tehtaat's profits over the financial year. As a result of seasonal production and
valuation of inventories in accordance with IAS 2, most of the Group's annual
profit accrues during the final quarter.
Because of the harvest production, the seasonal nature of the operations features
most strongly in the Food Division and in the operations of the associated
company Sucros. There is also some seasonal fluctuation in the Feeds segment.
Most of Apetit Kala's products are sold during festive holidays. The year's
profits are largely determined by the success of Christmas sales.
There is quarterly fluctuation in Grain Trading's volumes and prices, depending
on supply and demand and on grain prices on different markets. Grain Trading
accounts for 20-25% of the Lännen Tehtaat's consolidated net sales. Fluctuations
in its net sales have a considerable impact on the entire Group's net sales.
PROSPECTS FOR THE END OF THE YEAR
The Food Division's net sales will fall from last year because of the absence of
sugar sales. The net sales of the continuing food business operations will
increase and the financial performance will improve significantly due to higher
cost-effectiveness in Apetit Frozen Foods and strong growth in Apetit Kala.
In connection with the acquisition of a minority shareholding in Apetit Kala in
July, the Group will enter a non-recurring profit resulting from the negative
goodwill of EUR 0.4 million in the third quarter.
In autumn 2005, the Group launched a study on how it can expand its food business
in Finland and the northern parts of the Baltic Rim. The work continues.
The net sales of the Feeds business will grow, mostly because of the acquisition
of Mildola. The demand for industrial feeds is still lower than in the previous
year but is expected to grow during the autumn if, as expected, the grain and
silage harvests are below normal. Despite lower volumes and profit margins, the
Group's operating profit for 2006 is expected to be at the same level as in 2005
(excluding non-recurring items). The improvement will result from cutting of
fixed costs and productivity measures.
The Feeds segment is continuing its investment by extending and modernizing the
SIA Baltic Feed's factory in Latvia. Russian competition authorities have given
their approval for the acquisition of the Tosno feed plant by the joint venture
company ZAO Scandic Feed and the deal is expected to be finalized in autumn. The
closure of the feed factory in Vaasa and the transfer of production to other
factories will take place in stages during the summer.
Grain Trading's net sales are expected to be around EUR 100 million and it should
post a slightly better financial performance than in 2005.
Consolidated net sales are expected to exceed EUR 400 million though they will
remain below last year's figures because of the termination of the sugar sales.
The operating profit for the entire year excluding non-recurring items is
expected to be slightly better than in 2005. The improvements will result from a
better performance in the fish business, productivity measures and higher cost-
effectiveness.
Because of the seasonal nature of grain trade and the termination of sugar sales,
the net sales in the third quarter are expected to be lower than in the
comparative period. As a result, consolidated financial performance excluding non-
recurring items is expected to be weaker than in the third quarter of 2005.
CONSOLIDATED INCOME STATEMENT
EUR million
4-6/ 4-6/ 1-6/ 1-6/ 1-12/
2006 2005 2006 2005 2005
3 mths 3 mths 6 mths 6 mths 12 mths
Net sales 102.8 107.5 199.7 201.5 433.0
Other operating income 1.1 1.6 1.8 2.2 10.9
Operating expenses -99.4 -103.5 -195.4 -196.9 -416.3
Depreciation -2.0 -2.0 -4.1 -4.1 -8.3
Impairments - - - -2.7 -3.0
Operating profit 2.5 3.6 2.0 0.0 16.3
Financial income and expenses -0.1 -0.2 1.9 -0.5 -1.2
Share of profit of associate
companies 0.2 -0.2 -0.2 -0.7 -0.1
Profit/loss before taxes 2.7 3.2 3.7 -1.2 14.9
Income taxes -0.6 -0.8 -1.3 0.2 -3.5
Profit/loss for the
financial period 2.0 2.4 2.5 -1.0 11.4
The income taxes are based on the result for the period.
Attributable to:
Equity holders of the parent 2.1 2.5 2.3 -0.6 11.3
Minority interests -0.1 -0.1 0.1 -0.4 0.1
Earnings per share, EUR 0.34 0.40 0.37 -0.09 1.81
Diluted earnings per share, EUR 0.34 0.40 0.37 -0.09 1.81
NET SALES BY BUSINESS SEGMENT
EUR million
4-6/ 4-6/ 1-6/ 1-6/ 1-12/
2006 2005 2006 2005 2005
3 mths 3 mths 6 mths 6 mths 12 mths
Food Division 30.0 38.5 56.2 70.5 149.4
Feed segment 52.2 49.0 105.1 93.0 205.1
Grain Trading segment 23.3 21.7 44.7 41.4 86.6
Other operations segment 0.0 2.5 0.0 4.3 7.1
Intra-group sales -2.7 -4.3 -6.4 -7.7 -15.3
Consolidated 102.8 107.5 199.7 201.5 433.0
OPERATING PROFIT/LOSS BY BUSINESS SEGMENT
EUR million
4-6/ 4-6/ 1-6/ 1-6/ 1-12/
2006 2005 2006 2005 2005
3 mths 3 mths 6 mths 6 mths 12 mths
Food Division 0.2 -0.2 -0.3 -1.4 9.6
Feed segment 3.1 4.4 4.6 2.8 9.4
Grain Trading segment 0.4 0.3 0.8 0.4 1.4
Other operations segment -1.2 -0.9 -3.1 -1.8 -4.1
Consolidated 2.5 3.6 2.0 0.0 16.3
NET SALES BY GEOGRAPHICAL SEGMENT
EUR million
4-6/ 4-6/ 1-6/ 1-6/ 1-12/
2006 2005 2006 2005 2005
3 mths 3 mths 6 mths 6 mths 12 mths
Finland 86.9 95.1 169.1 178.3 382.8
Other EU members states 6.2 6.1 17.3 13.7 34.2
Other countries 9.6 6.3 13.3 9.5 16.0
Consolidated 102.8 107.5 199.7 201.5 433.0
CONSOLIDATED BALANCE SHEET
EUR million
June 30, 2006 June 30,2005 Dec, 31, 2005
ASSETS
Non-current assets
Tangible assets 71.0 71.1 72.2
Goodwill 17.4 17.4 17.4
Other intangible assets 1.6 2.1 1.7
Investment in associated companies 21.3 21.7 21.3
Available-for-sale investments 0.3 2.8 3.2
Receivables 5.7 0.6 6.9
Deferred tax assets 1.0 3.3 1.3
118.3 119.0 123.9
Current assets
Inventories 37.1 45.3 54.5
Receivables 34.9 35.8 42.5
Cash and cash equivalents 10.9 10.1 11.2
83.0 91.2 108.2
Total assets 201.2 210.2 232.2
EQUITY AND LIABILITIES
Equity attributable to the
equity holders of the parent 108.8 99.7 112.4
Minority interests 2.3 3.2 3.7
Total equity 111.1 102.9 116.1
Non-current liabilities
Long-term borrowings 10.6 18.6 16.0
Deferred tax liabilities 6.7 7.7 7.4
Non-current provisions 0.9 1.0 0.9
Non-current liabilities total 18.2 27.3 24.3
Current liabilities
Trade payables and other
liabilities 41.0 47.6 60.9
Short-term borrowings 29.9 31.4 29.9
Current provisions 0.9 1.0 0.9
Current liabilities total 71.9 80.0 91.7
Liabilities total 90.1 107.3 116.1
Total equity and liabilities 201.2 210.2 232.2
CONSOLIDATED CASH FLOW STATEMENT
EUR million
1-6/2006 1-6/2005 1-12/2005
6 mths 6 mths 12 mths
Cash flows from operating
activities 9.6 6.9 17.8
Cash flows from investing
activities 0.1 -2.8 -8.0
Cash flows from financing
activities
Change in net debt -5.4 -0.2 -4.5
Dividends paid -4.6 -4.1 -4.1
Net increase/decrease in cash
and cash equivalents -0.3 -0.1 1.0
Cash and cash equivalents
at beginning of the period 10.9 10.2 10.2
Cash and cash equivalents
at end of the period 11.2 10.1 11.2
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
EUR million
A = Share capital
B = Share premium account
C = Net unrealised gains
D = Other reserves
E = Translation differences
F = Retained earnings
G = Equity attributable to equity holders of the parent company
H = Minority interest
I = Shareholders' equity total
A B C D E F G H I
Shareholders'
equity at
Jan.1.2005 12.6 23.4 1.1 7.3 -0.3 60.2 104.3 2.5 106.8
Available-for-sale
financial assets:
gains/losses
from fair value
measurement 0.2 0.2 0.2
Cash flow hedges:
gains/losses
recorded in
equity -0.2 -0.2 -0.2
Taxes related to
items entered into
equity and removed
from equity -
Translation
differences 0.1 0.1 0.1
Dividend
distribution -4.2 -4.2 -0.2 -4.4
Result of the period -0.6 -0.6 -0.4 -1.0
Other changes 1.3 1.3
Shareholders'
equity at
June 30, 2005 12.6 23.4 1.1 7.3 -0.2 55.6 99.7 3.2 102.9
Shareholders'
equity at
Jan 1,2006 12.6 23.4 1.9 7.3 -0.2 67.5 112.4 3.7 116.1
Available-for-sale
financial assets:
gains/losses
from fair value
measurement -2.1 -2.1 -2.1
Cash flow hedges:
gains/losses
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
Transition
differences 0.0
Dividend
distribution -4.6 -4.6 -4.6
Increase of
ownership
in subsidiary 0.0 -1.5 -1.5
Result of the period 2.4 2.4 0.1 2.5
Other changes -0.2 -0.2 -0.2
Shareholders'
equity at
June30,2006 12.6 23.4 0.8 7.3 -0.2 65.1 - 108.8 2.3 111.1
KEY INDICATORS
June 30, 2006 June 30, 2005 Dec 31, 2005
Shareholders' equity
per share, EUR 17.77 16.46 18.56
Equity ratio, % 55.3 % 49.0 % 50.0 %
Gearing, % 26.6 % 38.7 % 29.9 %
Investments, EUR million 4.3 5.7 11.7
Average number of personnel 947 1006 1033
Average number of shares, 1 000 6 253 6 253 6 253
CONTINGENT LIABILITIES
EUR million
June 30, 2006 June 30, 2005 Dec 31, 2005
Mortgages given for debts:
Real estate mortgages 40.7 40.7 40.7
Corporate mortgages 51.4 51.4 51.4
Share pledged 3.6 3.6 3.6
Other securities given for own
commitments
Real estate mortgages 0.0 0.2 0.1
Pledges 0.0 0.0 0.0
Leasing liabilities 1.1 0.9 1.3
Non-cancellable other leases,
minimum lease payments 1.9 2.3 2.1
Contingent liabilities for own
commitments:
Repurchase commitments 0.1 0.2 0.1
Contingent liabilities on behalf
of the associate companies:
Repurchase commitments 0.0 0.2 0.1
Other contingent liabilities:
Redemption liability of
leased buildings - 2.5 -
OUTSTANDING VALUES OF DERIVATIVE INSTRUMENTS
Forward currency contracts 0.4 2.0 1.5
Commodity derivative instruments 3.5 3.4 5.0
Interest rate swaps 25.0 25.0 25.0
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
|
| 29.06.2006 |
APETIT KALA PLANS TO CLOSE ITS KUSTAVI FACTORY IN ORDER TO IMPROVE PRODUCTIVITY
LÄNNEN TEHTAAT PLC Release June 29, 2006 at 1;00 p.m.
APETIT KALA PLANS TO CLOSE ITS KUSTAVI FACTORY IN ORDER TO IMPROVE PRODUCTIVITY
AND COST-EFFICIENCY
The Lännen Tehtaat plc fish-products subsidiary Apetit Kala Oy manufactures fish
products at its production units in Kuopio, Kerava and Kustavi.
Apetit Kala has cut costs by improving process efficiency and by adjusting the
division of activities between its three units. However, if future
competitiveness is to be safeguarded and profitability improved, structural
changes are needed in the fish-products business. Apetit Kala therefore plans to
close its Kustavi factory in order to improve productivity and cost-efficiency.
The company is today to begin statutory codetermination talks between
staff and management on the closure of the Kustavi factory and the transfer of
its production to the unit in Kuopio. The talks concern the jobs of all 17
employees at Kustavi. The workforce at Kuopio would increase by an estimated 10
employees. The Kustavi factory closure is expected to achieve an annual cost
saving of approximately EUR 0.4 million. This saving would occur gradually from
the second half of 2007.
Net turnover at Apetit Kala Oy in 2005 was EUR 54.5 million. Due to the company's
poor performance in the first six months, it posted a loss for the year as a
whole. Apetit Kala employs about 390 people, of whom 210 are part-time.
LÄNNEN TEHTAAT PLC
Matti Karppinen
CEO
More information:
Matti Karppinen, CEO, Lännen Tehtaat plc, tel. +358 10 402 4001
or
Samuli Eskola, Managing Director, Apetit Kala Oy, tel +358 10 402 4501, or
+358 40 522 5259
Distribution:
Helsinki Stock Exchange
Principal media
www.lannen.fi
|
| 29.06.2006 |
Erkki Lepistö appointed President of Suomen Rehu Oy
LÄNNEN TEHTAAT PLC Stock Exchange Release June 29, 2006 at 12;00
Erkki Lepistö appointed President of Suomen Rehu Oy
Erkki Lepistö has been appointed President of Suomen Rehu Oy, effective from July
1, 2006. Mr. Lepistö is currently the director responsible for mergers and
acquisitions at Lännen Tehtaat.
LÄNNEN TEHTAAT PLC
Matti Karppinen
CEO
More information:
Matti Karppinen, CEO, tel. +358 10 402 4001
Distribution:
Helsinki Stock Exchange
Principal media
www.lannen.fi
|
